PDAC Perspectives Quebec takes steps to help juniors, prospectors

Over the past few months, the Quebec government has announced various measures to soften the blow for junior mining companies and prospectors in the province and to help sustain them through economic hardships.

In his May budget, Quebec Finance Minister Gerard Levesque announced initiatives that directly affect exploration in the province. A special $5-million fund is to be established to help junior mining companies operating in Quebec.

Under this program, financial assistance will be made available to junior companies that are finding it difficult to raise financing for their exploration projects. While details of this program have yet to be announced, the Prospectors and Developers Association of Canada has been informed that only junior companies that have been able to raise some form of venture capital for their operations over the past three years will be eligible for funding.

The program is designed to sustain junior companies and to allow them to continue their operations during these difficult economic times. The program will be administered by the Societe Quebecoise d’Exploration Miniere (SOQUEM), in collaboration with the Ministry of Energy and Resources.

In the same budget, the finance minister announced that the flow-through share program in Quebec, slated to be cancelled at the end of 1991, will be extended to Dec. 31, 1993. The program allows individuals who purchase flow-through shares to take advantage of tax deductions of 1331/3% with respect to underground exploration costs and 1662/3% with regard to surface exploration costs.

As well, Lise Bacon, the Quebec minister of energy and resources, launched a $1.3-million program on April 30 for exploration activities throughout the province’s North Shore region. The $1.3 million, owed by the Iron Ore Company of Canada to the Quebec government under an earlier agreement, is to be re-invested in the region. The fund is to be used primarily to assist prospectors working in the area, although junior exploration companies will also be eligible for assistance.

In what is described as a unique “hands off” approach by the provincial government, the funds will be handed over to a local, non-profit organization established for the purpose. The North Shore Regional Mining Exploration Fund will be administered entirely by this group of local individuals who will be responsible for the selection of grant recipients.

The assistance program for the Chibougamau-Chapais regions, announced last year, continues to be in effect until 1992. In fact, the program will continue until the $4 million allocated to it has been completely spent. The program is designed to offset the consequences of mine closures in the region, and most of the funding ($3.8 million) is being directed toward projects that offer local employment opportunities. Companies with projects at the development stage are being asked to submit applications for funding under this program.

The Quebec government has also indicated that it will be renewing the prospectors assistance programs in the Lower St. Lawrence-Gaspe area and the Estrie-Beauce region. An agreement in principle between the federal government and the Quebec government provides for $1.25 million annually to be spent over the next five years to support prospecting activities in the Lower St. Lawrence-Gaspe region. The agreement calls for funds to be allocated on a 60-40 cost-sharing basis. The Quebec government has committed its share of the fund (40%) and is awaiting confirmation of the 60% commitment by the federal government.

The Estrie-Beauce prospecting program, a $2.4-million program aimed at revitalizing interest in prospecting in the area, came to an end on March 31. Plans are for the program to be renewed although as a slightly watered down version. The Ministry of Energy and Resources has submitted a request for $180,000 a year to support an ongoing prospectors training program and also to fund an educational program aimed at promoting mining in the region.