Australia · Edition 005Monday, 26 October 2026
Archive· RSS·
The $500 Ladder

Primary sources. Published arithmetic. No courses.

$500 idea · Pattern-breaking · Australia · Edition 005

Reach Resources is paying A$25,000 and 2,509,008 shares for a A$478 prospecting licence.

The vendor of P59/2210 was Shane John Calegari, an individual, in a deal announced on 13 October 2026. Reach bought two more the same day from Murchison Earthmoving & Rehabilitation Pty Ltd for A$20,000 and 1,427,612 shares. At RR1’s A$0.0110 on 26 October the three licences carry announced consideration of A$88,302.82. Western Australia’s published fee for a prospecting licence application is A$478.00, and rent is A$4.40 a hectare.

Jump to the ladder

The $500 Ladder — Australia Monday, 26 October 2026 Edition 005 14 sources
Context

In Western Australia the minerals belong to the state, and the only way to get at them is to hold a title the state issues. The smallest of those titles is the prospecting licence: a patch of up to 200 hectares that anyone may claim by hammering posts into the ground and lodging a form. Normally the people who hold them are weekend prospectors with metal detectors, and the listed exploration companies that buy them are assumed to be buying rock. This edition is about what those companies are actually paying for, and what it costs to be the person holding it.

The instrument is the Mining Act 1978 (WA) and the Mining Regulations 1981. The price list is the department’s Schedule of Fees and Charges 2026–27, effective 1 July 2026: application A$478.00, rent A$4.40 per hectare or part thereof with a minimum of A$40.70 for nine hectares or less, term four years with one further four-year period, maximum 200 hectares. There is no published qualification, no age bar and no limit on how many a person may hold. To claim one you fix a post projecting at least one metre above the ground at each corner, cut two trenches at least one metre long from each post, pin the Form 20 notice to one of them, and lodge Form 21 within ten days.

The obligation that looks expensive is the expenditure commitment, and it is the hinge of the whole route. Regulation 15(1) requires “not less than $40.00 for each hectare or part thereof of the area of the licence” with “a minimum of $2 000.00 during each year of the term of the licence”. But the same regulation lets a holder who is directly engaged in mining on the licence count “an amount equivalent to the remuneration that the holder would be entitled to if engaged, under a contractual arrangement” for similar work in the district. The expenditure floor is payable in labour. The cash cost of standing on the ground is the fee and the rent.

Now the part that is not about rocks. Reach’s chief executive Jeremy Bower said the three licences “provide the flexibility to expand Pansy and design a deeper, larger pit”, and the ground to the south and west would let the Maranalgo Road be realigned. P59/2210 adjoins the Pansy Pit mining lease M59/786. What was bought was not a deposit. It was the geometry of somebody else’s optimised open pit — the right to stop a pit wall from being laid back, or to let it be. That is readable off a public tenement map and a published pit design before a single post goes in, which is the opposite of how prospecting is usually described.

The scarcity is real and it is countable. At 30 June 2025 there were 6,137 live prospecting licences in Western Australia covering 724,000 hectares — 1.09% of the 66,537,000 hectares under Mining Act tenure — against A$2.57 billion of annual mineral exploration spending and A$29 billion of gold sales, an all-time high and 41% above the previous record. The state charges A$478 to stand in the way of that.

The honest discount: half the money is paper. Of the A$88,302.82 of announced consideration, A$43,302.82 — 49.04% — is Reach scrip, and Reach is a A$15.23 million company whose shares traded between A$0.0070 and A$0.0190 over the last year. Mark the Calegari licence at the 52-week low and it is A$42,563.06; at the high, A$72,671.15. The vendor who takes scrip is lending the explorer their ground and their patience at the same time.

Two statutory obligations on one prospecting licence, as the area grows A$2,000 A$1,500 A$1,000 A$500 A$0 Minimum annual expenditure · A$2,000 at 1 ha and at 50 ha alike 50 ha · the floor stops binding here A$711.14 · this week’s US$500 A$518.70 at one hectare A$698.00 at fifty 1 10 20 30 40 50 Hectares in the one prospecting licence Year-one cash · A$478 + A$4.40/ha Expenditure · max(A$2,000, A$40/ha), payable in your own labour
Scale: x = 110 + 10.9n for n hectares, so one hectare sits at 110 and fifty at 655; y = 290 − 0.109c, so A$0 sits at 290 and A$2,000 at 72. The cash line is A$478.00 + max(A$40.70, A$4.40n): A$518.70 flat to nine hectares, then A$522.00, A$566.00, A$610.00, A$654.00, A$698.00 at ten, twenty, thirty, forty and fifty. It reaches this week’s whole capital at n = (711.14 − 478) ÷ 4.40 = 52.99. The expenditure line never moves across the drawn range, because A$40 × 50 = A$2,000 is exactly where the floor stops binding — hectares one through fifty carry no marginal expenditure at all, and the fiftieth costs A$4.40. Nothing in the statute caps the area at fifty; the capital does.

The evidence

10 findings
ReportedReach Resources Limited (ASX:RR1) · announced 13 October 2026

A named individual sold one prospecting licence for A$25,000 and 2,509,008 shares

P59/2210 was acquired from Shane John Calegari for “$25,000 cash and 2,509,008 fully paid ordinary Reach shares”. P59/2408 and P59/2411 were acquired from Murchison Earthmoving & Rehabilitation Pty Ltd for “$20,000 cash and 1,427,612 fully paid ordinary Reach shares”. Totals: A$45,000 cash and 3,936,620 shares. Consideration shares are to be issued under existing placement capacity under ASX Listing Rule 7.1; cash comes from existing reserves; neither vendor is a related party. The licences adjoin the Pansy Pit mining lease M59/786 and sit immediately south-west of the Shamrock deposit at Murchison South, near Payne’s Find. CEO Jeremy Bower: “These are low-cost acquisitions with a big strategic payoff.” Completion follows delivery of transfer documentation. Read from secondary reports of the announcement, not from the ASX document itself. Kalkine, 13 Oct 2026 · Mining.com.au, 13 Oct 2026

RegulationWA Schedule of Fees and Charges 2026–27 · effective 1 July 2026

The price list: A$478.00 to apply, A$4.40 a hectare to hold

Prospecting licence (maximum 200 ha; term four years, renewable for one further four-year period for licences applied for after 10 February 2006): application fee A$478.00; rent A$4.40 per hectare or part thereof, with a minimum of A$40.70 for nine hectares or less; minimum annual expenditure A$40.00 per hectare with a minimum of A$2,000; exemption from expenditure for one year, per tenement, A$494.00. Transfer of a mining tenement A$159.00. Caveat A$168.00. By contrast a graticular exploration licence of more than one block is A$1,800.00 to apply and A$177.00 a block in rent, with A$10,000 to A$20,000 of expenditure in years one to three. Fees and Charges 2026–27

RegulationMining Regulations 1981 (WA) · reg 15(1)

The expenditure floor is payable in your own hands

Regulation 15(1) sets expenditure at “not less than $40.00 for each hectare or part thereof of the area of the licence” with “a minimum of $2 000.00 during each year of the term of the licence”. Where the holder is directly engaged in mining on the licence, the regulation allows “an amount equivalent to the remuneration that the holder would be entitled to if engaged, under a contractual arrangement” for similar mining activity elsewhere in the district — set by reference to district contract rates, not a fixed hourly figure. Regulation 96C governs allowable and non-allowable expenditure; its text was not read on this run. Mining Regulations 1981

RegulationDMPE, Marking out and applying for mining tenements · regs 59–61, 64B, 66, 92, 146 · Act s 52(1)

Posts, two trenches, Form 20, and ten days

Fix a post “projecting at least one metre above the ground” at or near each corner; from each post cut two trenches or lay two rows of stones “at least one metre long” running toward the boundary lines; fix the Form No. 20 marking-out notice to one post, which becomes the datum post. Shape should be rectangular (reg 92). Lodge Form No. 21 at a Mining Registrar’s office or through Mineral Titles Online within ten days of marking out, with a map and a description precise enough to plot (reg 66). Application fees and the first year’s rent are payable on lodgement. “A security of $5,000 on Form No. 32 must be lodged … within 28 days of lodging the application (Section 52(1)).” Objections may be lodged on Form No. 16 within 35 days. Marking out and applying for mining tenements

ReportedDMPE, Prospecting licences service page

What the licence actually lets you do: 500 tonnes

Prospecting licences allow the holder to “explore or mine in an area less than 200 hectares” and to “extract or disturb up to 500 tonnes of material from the ground including overburden”, with larger tonnages at the Minister’s approval. “There is no limit” on how many licences a person or company may hold. The licence “must be marked out unless otherwise specified”. The page also states that “a $5000 security is required for each licence” and that a separate security is required for each tenement — whether that is cash lodged, a bond, or a signed undertaking is not stated on the page and was not established on this run. DMPE, Prospecting licences

StatisticsDMPE, Western Australian Mineral and Petroleum Statistics Digest 2024–25

The denominator: 6,137 prospecting licences over 724,000 hectares

Table 4, mining tenements in force at the end of 2024–25: prospecting licences 6,137 (down from 6,289), covering 724,000 ha; exploration licences 8,590 covering 57,679,000 ha; all mining tenements 26,168 covering 66,537,000 ha. Mineral exploration expenditure in WA was A$2.57 billion, 67% of the national total, of which gold was A$1.03 billion and greenfields A$540 million. Gold sales were A$29 billion, “an all-time high” and 41% above the previous record of A$21 billion, on 209 tonnes produced. Statistics Digest 2024–25

Live quoteASX:RR1 · 26 October 2026, 1:42 pm AEDT, delayed

The currency of the trade: A$0.0110 a share

Reach Resources traded at A$0.0110, down 8.33% on the day, with a market capitalisation of A$15.23 million on 1.32 billion shares and a 52-week range of A$0.0070 to A$0.0190. Every valuation of the scrip half of this deal is a point on that range, not a price received: the shares had not been issued at the time of reading, and completion was still pending. ASX:RR1 quote

Regulator filingNex Wongatha JV Pty Ltd · agreement announced 14 August 2026

A second live market, with the price withheld

The Nex Metals Explorations / WTAC joint venture agreed to acquire exploration licences E24/222, E24/223 and E24/224 and prospecting licence P24/5496 from Kalgoorlie Mining Associates Pty Ltd — about 135.1 km² in total, of which P24/5496 is 1.7 km² (169.35 ha). The 2 September 2026 update states the tenements “presently remain owned by the vendor” pending conditions precedent. The consideration is not disclosed in that document, which is why this row cannot price the licence and does not try. Nex Metals, 2 Sep 2026

Tax rulingATO · TR 92/3, paras 6–8 · resident rates 2026–27

Pegging to sell makes the proceeds income, not a capital gain

TR 92/3 paragraph 6: “a profit from an isolated transaction is generally income when both of the following elements are present” — “the intention or purpose of the taxpayer in entering into the transaction was to make a profit or gain” and “the transaction was entered into, and the profit was made, in the course of carrying on a business or in carrying out a business operation or commercial transaction.” Paragraph 7: purpose is judged objectively. Paragraph 8: profit-making need only be a significant purpose, not the sole one. Resident rates for 2026–27: nil to A$18,200; 15c in the dollar to A$45,000; A$4,020 plus 30c to A$135,000; A$31,020 plus 37c to A$190,000; A$51,370 plus 45c above, plus the 2% Medicare levy. GST registration is compulsory at A$75,000 of turnover. TR 92/3 · ATO rates · GST registration

Derivedarithmetic shown · RBA rate 26 October 2026

75.36× the statutory cost, and four sales a year

A$1 = US$0.7031 (RBA, 26 Oct 2026). US$500 = A$711.14; US$5,000/month = A$7,111.36, or A$85,336.37 a year. A fifty-hectare licence costs 478.00 + (4.40 × 50) = A$698.00 in year one, leaving A$13.14 of the capital; fifty is the largest area carrying the A$2,000 expenditure floor rather than A$40/ha. Capital runs out at (711.14 − 478) ÷ 4.40 = 52.99 ha. Valuing scrip at A$0.0110: P59/2210 = 25,000 + (2,509,008 × 0.011) = A$52,599.09, which is 52,599.09 ÷ 698.00 = 75.36× the statutory cost and 110.04× the application fee alone; the two Murchison Earthmoving licences = 20,000 + (1,427,612 × 0.011) = A$35,703.73, or A$17,851.87 each; all three = A$88,302.82, mean A$29,434.27, of which A$43,302.82 (49.04%) is scrip. At the 52-week low P59/2210 is A$42,563.06; at the high, A$72,671.15. The three-licence package is 103.48% of one year at the target. Pre-tax that reads as three sales a year; after tax it is 4.00, and the playbook shows the working. Diagram points: cash = 478 + max(40.70, 4.40n); expenditure = max(2,000, 40n). RBA exchange rates

The ladder

From $500 to $5,000 a month · A$713 → A$7,131

What Reach bought was adjacency: P59/2210 abuts mining lease M59/786, and the stated purpose was a deeper, larger Pansy pit and a realigned road. Open the tenement map against published pit designs and resource outlines, and look for open ground on the low wall, on the haul road, or on the strike extension. You are not looking for gold. You are looking for a constraint.

  1. Read the pit before you read the rock

    What Reach bought was adjacency: P59/2210 abuts mining lease M59/786, and the stated purpose was a deeper, larger Pansy pit and a realigned road. Open the tenement map against published pit designs and resource outlines, and look for open ground on the low wall, on the haul road, or on the strike extension. You are not looking for gold. You are looking for a constraint.

    A$711.14 − A$0 (maps and announcements) = A$711.14

  2. Mark out, then start the ten-day clock

    A post at least a metre proud at each corner, two one-metre trenches from each post, the Form 20 notice on the datum post. Form 21 must be lodged within ten days of marking out, with a map and a description precise enough to plot. Nothing here needs a licence, a qualification, or anyone’s permission.

    10 days · Form 20 → Form 21

  3. Buy fifty hectares, not one and not two hundred

    The fee is the same whatever the area and the rent is trivial, so the only real constraint is the expenditure floor — and it does not move until fifty hectares. Hectares one to fifty carry no marginal expenditure at all. Above fifty, every hectare adds A$40 a year to what you must spend.

    478.00 + (4.40 × 50) = A$698.00 · A$13.14 left

  4. Resolve the security before you spend the fee

    The department’s guide says a A$5,000 security on Form No. 32 must be lodged within 28 days under section 52(1), and the service page says A$5,000 per licence. Whether that is cash, a bond or a signed undertaking is not stated on either page. If it is cash, this route does not start at US$500, and no amount of arithmetic fixes that. Ring the Mining Registrar and get the answer in writing before the fee is paid.

    A$5,000 · form or funds · unresolved

  5. Pay the expenditure floor in labour, and report it

    Regulation 15(1) lets a holder directly engaged in mining on the licence count the remuneration a contractor would earn for the same work in that district. Do the costeaning, the sampling and the mapping yourself, log the days against district rates, and file the annual report. The alternative is A$494 for a one-year exemption, which buys time but builds no record a buyer can read.

    A$2,000/yr in labour, or A$494 exemption

  6. Sell the title, not the story

    The buyer is a listed explorer with a pit to optimise and a quarter to fill. Price against what the ground blocks, not against what you think is under it, and put a cash floor in the agreement: half of Reach’s consideration was scrip in a A$15.23 million company whose shares have halved and doubled inside a year. Transfer costs A$159.

    A$52,599.09 ÷ A$698.00 = 75.36×

  7. Run the year on four, not three

    Three licences at the mean of the one documented deal is A$88,302.82, which looks like 103% of the target until the Australian Taxation Office is in the room. Pegged with resale intent, the proceeds are ordinary income under TR 92/3, there is no capital gains discount, and GST registration is compulsory past A$75,000. The after-tax requirement is four sales a year, and the playbook carries the arithmetic.

    4 × A$29,434.27 → US$5,000/mo after tax

Interested in the actual playbook?

Sources

14 primary documents
  1. Schedule of Fees and Charges 2026–27 — Department of Mines, Petroleum and Exploration (WA), effective 1 July 2026, read 26 Oct 2026
  2. Mining Regulations 1981 (WA), reg 15(1) — as at 3 Oct 2025, read 26 Oct 2026
  3. Marking out and applying for mining tenements — DMPE, updated 17 June 2025, read 26 Oct 2026
  4. Prospecting licences — DMPE, read 26 Oct 2026
  5. WA Mineral and Petroleum Statistics Digest 2024–25 — DMPE, read 26 Oct 2026
  6. Reach Resources acquires three prospecting licences — Kalkine, 13 Oct 2026
  7. Reach expands Murchison South footprint — Mining.com.au, 13 Oct 2026
  8. Reach Resources acquires ground adjoining Pansy Pit — Discovery Alert, 13 Oct 2026
  9. ASX:RR1 quote — A$0.0110, 26 Oct 2026, 1:42 pm AEDT, delayed
  10. WTAC JV expands East Scotia gold project — Nex Metals Explorations, 2 Sep 2026
  11. TR 92/3 — Australian Taxation Office, read 26 Oct 2026
  12. Tax rates — Australian residents — ATO, 2026–27 scale, read 26 Oct 2026
  13. Registering for GST — ATO, read 26 Oct 2026
  14. Exchange rates — Reserve Bank of Australia, 26 Oct 2026

More like this

Same series or same scarce input

Browse the catalog — every edition, by verdict, scarce input and window