Ethics Panel

AAPL Standards of Practice
1.
2.
3.
4.
5.
6.
An affirmative duty to engage in continuing education.
Protection of the public against fraud, misrepresentations and unethical practices.
Protection of the interest of an employer or client.
Prohibition against dual compensation.
Nondiscrimination based on race, creed, sex or county of national origin.
Providing a competent level of service.
7. Prohibition against engaging in a transaction where the land professional has a present or contemplated
interest.
8. Without disclosure, the prohibition of the acquisition of an interest in property for which he is called
upon to acquire for his principal, employer or client.
9.
An obligation to reveal all pertinent facts regarding an apparent unethical misconduct.
10. Without disclosure and consent, the prohibition of the acceptance of any monetary consideration out of
a transaction for a principal, employer or client.
11.
Safeguarding and accounting of monies placed in his trust.
12. Unauthorized disclosure of confidential information and the avoidance of a conflicting business interest.
13. Accurate representation in advertising and disclosures to the public.
14. Neither aiding nor abetting the unauthorized use of the designation of CPL, RPL, PL and CPL/ESA.
15. Prohibition against conduct resulting in a conviction of a felony or fraud or other serious crimes.

Question 1
You are reviewing documentation on a warranty deed to be executed
for the purchase of property from a local Economic Development
Authority (EDA). The State statutes require covenants to be inserted
into any deed from an EDA to a private party. These include
restrictions on current and future use and sale of the land, and the
statutes indicate that these restrictions need to run with the land. The
attorney for the EDA has not put the restrictive covenants in the draft
deed.
The purchasing company's attorney has indicated that it is the EDA's
responsibility to determine what needs to be in the deed.
What do you do

Question 2
Your company, Whiz-Bang Mining, is excited about a newly developing
project. The Whiz-Bang exploration team has just drilled several holes with
screaming results. They tell you this is a company-making project but there
is a third-party controlled property interior to the project which is critical to the
project. The promising drill holes are immediately adjacent to this property
and the geologic models indicate that the best mineralization extends under
the third-party property.
What, if any, obligations do you have to disclose the results of the drilling
during your negotiations to acquire the property
Is the disclosure obligation different if the third-party is another mining
company vs. an elderly widow who lives out of state
Is the disclosure obligation different if the widow asks you whether there
has been any recent exploration in the area; why you are interested in
her property; or your intended use of the property
Is your disclosure obligation different if the widow confides in you that
she isn’t knowledgeable about this sort of thing but she thinks you seem
like a nice person and is sure she can trust you not to mislead her

Question 3
Your company, Mine it All Inc., is in a joint venture with Flakey Mining
Company. Your company owns 60% and is manager of the JV. Flakey owns
the remaining 40%. Flakey decided to sell its interest and after shopping
around found a buyer who was willing to pay them $1M. Your company
thinks $1M is a cheap price for the 40% and exercised its right of first refusal
under the JV. Your company and Flakey have started working on drafts of
the purchase agreement to close the transaction and terminate the JV
agreement. Being a diligent company, Flakey issued a press release
disclosing the pending sale. Following this press release you were contacted
by one of the parties Flakey originally approached but who was reluctant to
purchase only 40% of the project. This party is interested in buying out
100% of the project and has indicated they would pay a significant premium
over the value implied by the $1M price for 40%.
Since the purchase agreement has not yet been
signed, do you have any obligation to inform Flakey of
the new information
As manager of the JV do you have any obligation to
inform Flakey of the contact from a potential buyer of
the JV assets

Question 4
Your company, Good as Gold Minerals, signed a confidentiality agreement with Quick
and Loose Mining Company. The term of the confidentiality agreement is due to
expire in 30 days. Quick and Loose has data on several properties including the Big
Bonanza claim group which it holds under lease from the underlying owner. You
think the lease terms are very onerous and will need to be renegotiated if you make a
deal with Quick and Loose. Under terms of the confidentiality agreement Quick and
Loose gave your company access to its drill samples from the Big Bonanza claims.
In order to save money Quick and Loose used Cheapo Labs to assay the drill
samples and the results came back very negative. Your company decided to reassay
the samples and the results were so exceptional it caused the entire
exploration staff to swoon. After recovering his senses the Exploration VP
approached you with a crazed look in his eyes and asked you to purchase the Big
Bonanza claims as quickly as possible. In the meantime, Quick and Loose contacted
you to tell you that based on the poor assay results they dropped the lease on the
Big Bonanza claims.
PART 2: 1: 3:
Assuming When you the contact confidentiality the owner agreement of the Big Bonanza has no express
claims are
restriction obligation you obligated to on disclose, acquiring to are property your assay obligated either results during to disclose or Does after the your the
confidentiality results answer of change your agreement assays if you know to Quick expires that and Quick do Loose you and have Loose Would any has obligation this given
to change their Quick poor if and Quick assay Loose and results before Loose to the you alerted owner contact you before the owners they of dropped the Big
Bonanza the lease claims and wanted Does to this know change if you if had you any wait interest to allow in the
confidentiality property agreement to expire

Question 5
Rusty is a company Landman who in the course of a field check, he
discovers that the federal mining claims his company holds were never
posted on the ground, only paper staked (location monuments, but not
corners).
What should Rusty do
Some prospecting work (i.e. non-invasive) has been done on some of
the "claims" and more is planned on the project in the near future. So
far, the area has not been staked by a competitor.
What does Rusty do
As a consulting landman/surveyor for either the company in question or
for a competitor what would be different about this scenario

Question 6
Rusty Bucket (still a company Landman) and now a little nervous about his
claims, decides to check on some other unpatented mining claims his new
surveyor has just staked. Rusty walks down the road and in the course of
looking for corners, he finds some old mining equipment. To most people, it
would look like trash, but there are some small pieces and they will fit in the
back of Rusty’s pickup, besides, he thinks they will look great in his yard as
“yard art”.
Is this okay Or what should Rusty do
What if I were on company patented ground
Would it matter if it were farm equipment

If there is a concern or confusion relating to the ethical propriety of a situation,
it is best to avoid the situation.
Restated, it is better to err on the side of caution for it is often the appearance
of an impropriety and not an actual impropriety that causes damage.
A vast amount of ethical challenges involve relationships which are strained
with even the appearance of a problem. Always be vigilant of the appearance
of any impropriety.
Jan T. van Loon