The Gold Mines Development Loans Rules

LAWS OF KENYA
THE GOLD MINES DEVELOPMENT LOANS RULES
NO. 1031 OF 1952
Revised and published by the National Council for Law Reporting
with the authority of the Attorney-General as gazetted by the Government Printer
www.kenyalaw.org

published by the National Council for Law Reporting
with the authority of the Attorney-General as gazetted by the Government Printer
www.kenyalaw.org

Kenya
Gold Mines Development Loans Act
The Gold Mines Development Loans Rules
Gazette Notice 1031 of 1952
Legislation as at 5 September 1986
By Kenya Law and Laws.Africa. Share widely and freely.
www.kenyalaw.org | [email protected]
FRBR URI: /akn/ke/act/gn/1952/1031/eng@1986-09-05
There is no copyright on the legislative content of this document.
This PDF copy is licensed under a Creative Commons Attribution NonCommercial ShareAlike 4.0 License (CC BY-NC-
SA 4.0). This license enables reusers to distribute, remix, adapt, and build upon the material in any medium or format
for noncommercial purposes only, and only so long as attribution is given to the creator. If you remix, adapt, or build
upon the material, you must license the modified material under identical terms. CC BY-NC-SA includes the following
elements:
• BY: credit must be given to the creator.
• NC: Only noncommercial uses of the work are permitted.
• SA: Adaptations must be shared under the same terms.
Share widely and freely.

the creator.
• NC: Only noncommercial uses of the work are permitted.
• SA: Adaptations must be shared under the same terms.
Share widely and freely.

The Gold Mines Development Loans Rules (Gazette Notice 1031 of 1952)
Contents
1. Citation ................................................................................................................................................................................................................ 1
2. Interpretation .................................................................................................................................................................................................... 1
3. Notice of application for loan .................................................................................................................................................................... 1
4. Mode of application ....................................................................................................................................................................................... 2
5. Meetings of Board .......................................................................................................................................................................................... 2
6.

................................................................................................................................................. 2
6.

Calculation of development and rate of payment .............................................................................................................................. 2
7. Measurements ................................................................................................................................................................................................... 2
8. Work not to count ........................................................................................................................................................................................... 2
9. Borehole to be kept available for measurement ................................................................................................................................ 3
10. Accounts to be kept ..................................................................................................................................................................................... 3
11. Calculation of loan ...................................................................................................................................................................................... 3
12.

................................................................................................................................................ 3
12.

Repayment of loans ..................................................................................................................................................................................... 3
13. Appeals ............................................................................................................................................................................................................. 3
FIRST SCHEDULE [r. 4] ....................................................................................................................................................................................... 4
SECOND SCHEDULE [Rule 6(1), L.N. 278/1969] ....................................................................................................................................... 4
THIRD SCHEDULE [Rule 6(2), G.N. 1498/1953, L.N. 278/1969] ......................................................................................................... 5
FOURTH SCHEDULE ............................................................................................................................................................................................ 5

.................................................................................................................................................... 5

The Gold Mines Development Loans Rules (Gazette Notice 1031 of 1952) Kenya
GOLD MINES DEVELOPMENT LOANS ACT
THE GOLD MINES DEVELOPMENT LOANS RULES
GAZETTE NOTICE 1031 OF 1952
Published in Kenya Gazette Vol. LIV—No. 53 on 23 September 1952
Commenced on 23 September 1952
[Amended by Gold-mines Development Loans (Amendment)
Rules, 1953 (Gazette Notice 186 of 1953) on 3 February 1953]
[Amended by Gold-mines Development Loans (Amendment) (No. 2) Rules, 1953 (Gazette Notice 1498 of 1953) on 15 September 1953]
[Amended by Gold-mines Development Loans (Amendment)
Rules, 1954 (Gazette Notice 808 of 1954) on 25 May 1954]
[Amended by Laws of Kenya (Revision) Order, 1963 (Legal Notice 142 of 1963) on 19 February 1963]
[Amended by Laws of Kenya (Revision) Order, 1963 (Legal Notice 761 of 1963) on 24 December 1963]
[Amended by Gold Mines Development Loans (Amendment)
Rules, 1969 (Legal Notice 278 of 1969) on 5 December 1969]
[Amended by Revision of Laws (Rectification Order), 1986 (Legal Notice 218 of 1986) on 5 September 1986]
1. Citation
These Rules may be cited as the Gold Mines Development Loans Rules, 1952. 2.

Order), 1986 (Legal Notice 218 of 1986) on 5 September 1986]
1. Citation
These Rules may be cited as the Gold Mines Development Loans Rules, 1952. 2.

Interpretation
In these Rules, except where the context otherwise requires—
“business” means the business of mining for gold in Kenya;
“company” means a company as defined by the Companies Act (Cap. 486), and a company incorporated
outside Kenya which has delivered to the Registrar of Companies the documents and particulars specified
in section 366(1) of that Act;
“director” has the meaning assigned to it in the Companies Act (Cap. 486), and also includes a person
who—
(a) is the manager of the company or otherwise concerned with the management of its business; and
(b) is remunerated out of the funds of the business; and
(c) is the beneficial owner of not less than 20 percent of the ordinary share capital of the company;
“ordinary share capital” means all the issued share capital (by whatever name called) of the company,
other than capital the holders whereof have a right to a dividend at a fixed rate but have no other right to a
share in the profits of the company;
“total income” has the meaning assigned to it in the Income Tax Act (Cap. 470), but shall be deemed to
apply only to the business of gold mining for the purposes of these Rules. 3.

assigned to it in the Income Tax Act (Cap. 470), but shall be deemed to
apply only to the business of gold mining for the purposes of these Rules. 3.

Notice of application for loan
(1) Written notice, not less than thirty days in advance of the commencement of any work in respect of
which it is intended to apply for a loan, shall be given to the Warden of the Mining District in which
the gold mine is situated; and as soon as practicable, but in any case within thirty days after the
receipt of the notice by the Warden, an officer of the Mines and Geological Department shall visit
1

ble, but in any case within thirty days after the
receipt of the notice by the Warden, an officer of the Mines and Geological Department shall visit
1

The Gold Mines Development Loans Rules (Gazette Notice 1031 of 1952) Kenya
the mine and choose points of reference from which the necessary measurements can be taken, and
shall measure the excavations. (2) Written notice, not less than fifteen days in advance of the expected date of the termination of the
work upon which the application for the loan is based, shall be given to the Warden; and an officer
of the Mines and Geological Department shall visit the mine as nearly as may be practicable upon
the date so given for the termination of the work, and shall make the measurements necessary in
connexion with the application. 4. Mode of application
(1) Applications for loans shall be submitted to the Commissioner of Mines and Geology through the
Warden of the Mining District in which the gold mine is situate. (2) All such applications shall be made in the form in the First Schedule. 5. Meetings of Board
The Board shall meet at intervals for the purpose of considering applications. 6.

hall be made in the form in the First Schedule. 5. Meetings of Board
The Board shall meet at intervals for the purpose of considering applications. 6.

Calculation of development and rate of payment
(1) Subject to rule 8, development in respect of shafts, drives, cross-cuts, winzes, raises and adits for
the purpose of an application for a loan shall be calculated in accordance with the table set out in
the Second Schedule. (2) For the purpose of assessing a loan, the rate of payment per development metre shall be as set out
in the Third Schedule:
Provided that, in the case of a mine producing gold in conjunction with other minerals, the amount
of the loan shall be reduced by multiplying it by the ratio that the value of the gold bears to the
total value of mineral sold during the accounting period immediately preceding the application. 7.

y the ratio that the value of the gold bears to the
total value of mineral sold during the accounting period immediately preceding the application. 7.

Measurements
For the purpose of making calculations in connexion with any application for a loan, the following shall
apply—
(a) in the case of workings to which access is given by one shaft, the depth of the workings and of
the shaft providing access to them shall be taken as the distance in metres, measured along the
longitudinal axis of the shaft, from the shaft collar;
(b) in the case of workings to which access is given by two or more shafts, the Board shall use its
discretion, taking into consideration the technical advice of the Mines and Geological Department,
as to which shaft is the more important in determining the cost of operating any particular face,
and shall apply a depth factor commensurate with the depth below that shaft collar;
(c) in the case of a level to which access is obtained by means only of an adit, the factor to be applied to
any working shall be determined by the distance along the adit from its portal at which the working
communicates with the adit. [G.N. 186/1953, G.N. 1498/1953, L.N. 142/1963, Sch.]
8.

y the distance along the adit from its portal at which the working
communicates with the adit. [G.N. 186/1953, G.N. 1498/1953, L.N. 142/1963, Sch.]
8.

Work not to count
The following shall not count as development work for the purpose of such calculations—
(a) stope drives, box holes and any excavations which in the opinion of the Board do not constitute true
development work;
2

ose of such calculations—
(a) stope drives, box holes and any excavations which in the opinion of the Board do not constitute true
development work;
2

The Gold Mines Development Loans Rules (Gazette Notice 1031 of 1952) Kenya
(b) any drive, cross-cut, winze, raise or adit having any area of cross-section of less than 1.5 square
metres;
(c) any shaft or adit which has been sunk to a total incline or vertical depth of less than 16 metres from
the surface level or point of entry;
(d) any cored borehole designed to produce a core of less diameter than twenty-two millimetres. 9. Borehole to be kept available for measurement
(1) In order to qualify for a loan, a borehole shall be available for measurement until measured by an
official of the Mines and Geological Department, or for a period of three months after completion;
and all practicable steps shall be taken by the applicant to preserve in their correct sequence any
core, fragmented rock chippings and sludge from each borehole and to make them available to the
Mines and Geological Department for inspection and assay. (2) Applicants for a loan shall keep and submit to the Board accounts showing the direct cost (in
power, bits and wages of crew, and in cement and such materials when their use is necessary) or the
contract cost of each borehole.

he direct cost (in
power, bits and wages of crew, and in cement and such materials when their use is necessary) or the
contract cost of each borehole.

(3) Subject to section 10 of the Act and rule 8 the loan shall be assessed at 75 per cent of the cost as
calculated on the basis of paragraph 2 of this rule. [L.N. 218/1986, Sch.]
10. Accounts to be kept
Applicants for a loan shall keep and submit to the Board accounts showing the direct cost (in power, bits
and wages of crew, and in cement and such materials when their use is necessary) or the contract cost of
each borehole. 11. Calculation of loan
Subject to the provision of section 10 of the Act and of rule 8 of these Rules, the loan shall be assessed at
75 percent of the cost, as calculated on the basis of rule 10. 12. Repayment of loans
(1) A loan shall be repayable to the Government by the owner or his successor in title of the mine in
respect of which such loan was made upon such terms and conditions as the Board may decide:
Provided that the Board shall ensure that such repayments shall not affect adversely the profit-
earning capacity of the mine.

s the Board may decide:
Provided that the Board shall ensure that such repayments shall not affect adversely the profit-
earning capacity of the mine.

(2) In the event of a change of ownership of a mine in respect of which a loan has been made, the
new owner shall, with the concurrence of the Board, execute a document whereby the liability for
repayment of the loan is accepted by the new owner in discharge of the liability of the original
owner. (3) The method that shall be used to assess profits and, thereafter, loan repayments shall be that set
out in the Fourth Schedule. 13. Appeals
An appeal against a refusal of the Board to grant a loan shall be made in writing to the Minister within
thirty days of the announcement by the Board of the award or decision to which it refers. 3

ant a loan shall be made in writing to the Minister within
thirty days of the announcement by the Board of the award or decision to which it refers. 3

The Gold Mines Development Loans Rules (Gazette Notice 1031 of 1952) Kenya
FIRST SCHEDULE [r. 4]
APPLICATION FOR A LOAN UNDER THE GOLD MINES DEVELOPMENT LOANS ACT
1. Name of gold mine and particulars of the registered number of the lease, special licence, exclusive
prospecting licence or location upon which the work the subject of the appliction has been
performed ................................................. 2. Name and postal address of applicant ..................................................... 3. Position held in connexion with mine ............................................................ 4. Registered number of lease, special lease, special licence, exclusive prospecting licence or
location ............................................................ 5. Date and reference of written notice given to the Warden of the Mining District
concerned ........................................................... 6. Amount of loan applied for ....................................................................... 7.

............................................. 6. Amount of loan applied for ....................................................................... 7.

Full description of work and calculations in support of appliction [attach an additional sheet if
necessary] ..................................................................................................... 8. I understand that under the terms of the Gold Mines Development Loans Act and the Gold Mines
Development Loans Rules, this loan is payable to the Government. Signed ..................................................................... Date ...................................................................... Remarks by officer of the Mines and Geological Department :-
.......................................................................................... SECOND SCHEDULE [Rule 6(1), L.N. 278/1969]
CALCULATION OF DEVELOPMENT
Adits Shafts, winzes, raises,
drives and cross-cut
Distance from point in
centre ofroot at portal
Depth below surface
Number of development metres per metre
of working in first and second columns
0-30 metres 0-20 metres 1
30-90 metres 20-30 metres 11/2
30-60 metres 2
60-90 metres 3
Exceeding 90 metres
90-120 metres 4
4

first and second columns
0-30 metres 0-20 metres 1
30-90 metres 20-30 metres 11/2
30-60 metres 2
60-90 metres 3
Exceeding 90 metres
90-120 metres 4
4

The Gold Mines Development Loans Rules (Gazette Notice 1031 of 1952) Kenya
120-150 metres 5
150-220 metres 6
220-300 metres 7
Exceeding 300 metres 8
THIRD SCHEDULE [Rule 6(2), G.N. 1498/1953, L.N. 278/1969]
Rate of payment for development metre .............................................................. Sh. 60
FOURTH SCHEDULE
[Rule 12(3), L.N. 278/1969.]
1. Rate of repayment
The total amount of loan indebtedness to be repaid in any one accounting period shall be calculated in the
following manner—
(a) the aggregate profits from the date of the first loan granted in respect of the mine shall be
expressed as a percentage of the aggregate gross revenue from it during the same period;
(b) the percentage figure so arrived at shall be reduced by ten;
(c) the amount to be repaid shall be one four-hundredth of the latter figure multiplied by the sum of all
loans granted up to the end of the accounting period:
Provided that in no case shall the sum so assessed exceed five percent of the gross revenue for the
accounting period. The calculation may be expressed algebraically as—
2.

se shall the sum so assessed exceed five percent of the gross revenue for the
accounting period. The calculation may be expressed algebraically as—
2.

Accounts to be kept
Every person carrying on a business shall make up accounts for successive periods (in this Schedule
referred to as accounting periods) of not more than twelve months. 5

ing on a business shall make up accounts for successive periods (in this Schedule
referred to as accounting periods) of not more than twelve months. 5

The Gold Mines Development Loans Rules (Gazette Notice 1031 of 1952) Kenya
3. Computation of profits and gross revenue
(1) The amount of the profits for any accounting period shall be computed in accordance with such of
the provisions of the Income Tax Act (Cap. 470) as relate to the calculation of total income for the
purposes of that Act, subject to the provisions of paragraph 4 of this Schedule. (2) In determining the ratio of profits to gross revenue as computed under this paragraph, the profits
or losses of all accounting periods commencing with that in which any loan under the Act was first
granted shall be aggregated and compared with the gross revenue for the same period. (3) No deduction shall be made in respect of any interest, annuity, royalty, rent or other annual
payment to the person carrying on the business, and, where such business is carried on by a
company the directors whereof have a controlling interest therein, the directors shall be deemed to
be carrying on the business.

ss is carried on by a
company the directors whereof have a controlling interest therein, the directors shall be deemed to
be carrying on the business.

(4) In the case of a company the directors whereof have a controlling interest therein no deduction
shall be allowed in respect of directors’ remuneration:
Provided that “directors’ remuneration” does not include the remuneration of any director who is
required to devote substantially the whole of his time to the service of the company in a managerial
or technical capacity and is not the beneficial owner of or able, either directly or through the
medium of other companies or by any other indirect means, to control more than 5 per cent of the
ordinary share capital of that company. (5) No deduction shall be allowed in respect of any transaction or operation of any nature if and so far
as it appears that the transaction or operation has artificially reduced or would artificially reduce
the profits. (6) There shall be allowed a deduction for each working proprietor of the business; the amount to be
deducted shall be Sh. 24,000 each accounting period of one year, subject however to a maximum
total of Sh. 48,000 in respect of the business, and, where an accounting period is less than one year,
the amount shall be proportionately reduced so as to correspond with the length of the period.

and, where an accounting period is less than one year,
the amount shall be proportionately reduced so as to correspond with the length of the period.

(7) The expression “working proprietor” in subparagraph 6 means a proprietor who has during more
than one-half of an accounting period worked full time in the actual management or conduct of
the business; “proprietor” means, in the case of a business carried on by a partnership, a partner
therein, and, in the case of a company the directors whereof have a controlling interest therein, any
director thereof owning more than 5 percent of the ordinary share capital of the company. 4. Returns
The Commissioner of Income Tax may, by notice in writing, require any person carrying on the business to
furnish him, within three months or such longer period as the Commissioner may deem to be reasonable
after the end of an accounting period of such business, with a return of the profits derived from the
business for that period, and such other particulars as may be required for the purpose of this Schedule. 5. Persons assessable
(1) Repayment in respect of any accounting period shall be assessed on the person or company carrying
on the business during that period.

s assessable
(1) Repayment in respect of any accounting period shall be assessed on the person or company carrying
on the business during that period.

(2) Where two or more persons were carrying on the business jointly during the accounting period, the
assessment shall be made upon them jointly and, in the case of a partnership, may be made in the
partnership name. (3) Where, by virtue of subparagraph 2, an assessment could, but for his death, be made on any person
solely or jointly with any other person, the assessment may be made on his personal representative
either solely or jointly with that other person, as the case may be. (4) Where any person liable to assessment is not resident in Kenya, an assessment may be made upon
any agent, attorney, manager or factor resident in Kenya through whom the business is carried
6

not resident in Kenya, an assessment may be made upon
any agent, attorney, manager or factor resident in Kenya through whom the business is carried
6

The Gold Mines Development Loans Rules (Gazette Notice 1031 of 1952) Kenya
on during the accounting period, or on an attorney appointed under regulation 42 of the Mining
Regulations (Cap. 306, Sub. Leg.). 6. Assessment
The Commissioner of Income Tax shall assess every person chargeable with the repayment, and, subject to
the provisions of this Schedule, the provisions of the Income Tax Act (Cap. 470), shall apply so far as they
are applicable to the assessment of development loan repayment. 7. Appeal against assessment
Any person who, being aggrieved by a loan repayment assessment made upon him and having failed to
agree with the Commissioner of Income Tax may, upon giving notice in writing to the Commissioner
of Income Tax within thirty days after the date of service upon him of the notice of refusal of the
Commissioner of Income Tax to amend the assessment as desired, appeal against such assessment to the
Minister, whose decision shall be final. 8.

f the
Commissioner of Income Tax to amend the assessment as desired, appeal against such assessment to the
Minister, whose decision shall be final. 8.

Repayment when due
Any loan repayment assessed shall be due and payable to the Government at the expiration of forty
days from the date of service of the notice of assessment, and shall be recoverable as a debt due to the
Government from the person on whom it is assessed:
Provided that, where an appeal is pending against the assessment, such part of the assessment as appears
to the Commissioner of Income Tax not to be in dispute shall be collected and paid in all respects as if
it were repayment charged by an assessment in respect of which no appeal was pending, and, upon the
determination of the appeal, any balance chargeable in accordance with the determination shall be paid
and any amount overpaid shall be repaid as the case may be. 9. Forms
All forms of returns and other forms required for the administration of this Schedule shall be in such form
as may from time to time be specified by the Commissioner of Income Tax. 7