A pro-mining policy, combined with attractive geology and enticing new discoveries, is allowing Quebec to maintain high levels of exploration spending, despite an industry downturn that has slowed exploration to a crawl in many other jurisdictions.
According to federal government forecasts, expenditures in Quebec are expected to reach $153.6 million in 1998, or 20% of the $767 million allocated for exploration in Canada.
That figure, higher than in any other province, represents an increase of 10% over 1997 spending and is just shy of the 20.4% share expected to be captured by the Northwest Territories, where funds dedicated to the diamond hunt have sustained expenditures at unusually high levels for several years.
Although actual expenditures will likely fall below forecasts (owing to depressed price levels for base metals and gold throughout 1998), Quebec still stands out as a strong contender for available capital.
The key to the province’s success is the 175% tax writeoff Quebec grants to those who invest in mineral exploration, says Michael Atkins, president of
“A junior can usually get a financing done just by making a few phone calls in Montreal,” he says. “Quebecers invest in their own province with the writeoff that they get from flow-through funding.”
Exploration expenses in the rest of Canada can be written off at the 100% level, but Quebec is the only province that grants an additional deduction of 75%. For example, an investor making $60,000 a year can save $713 in taxes for every $1,000 flow-through investment in surface exploration.
$5.5-m infusion
The government also contributes directly to the cause. Last year, the province committed $5.5 million to a 3-year program designed to stimulate deep exploration in the Abitibi camp and another $900,000 to sponsor work on ground near
But Quebec’s pro-mining stance would be meaningless without the abundance of attractive geology inside its borders.
For instance, the Abitibi greenstone belt that runs from east to west through Quebec is host to some of the world’s largest deposits, and several other belts in the province have base and precious metal potential that remains untapped.
As a result of this combination of mineral potential and attractive policies, Quebec was ranked the sixth-most attractive place in North America to spend exploration dollars in a survey of mining companies recently conducted by the Fraser Institute, Canada’s right-wing think tank. First place went to Nevada, whereas Prince Edward island came in last (31st).
The province has also been blessed with recent discoveries, the latest of which is the Lac Rocher nickel find along the Lac Evans greenstone belt, northeast of Matagami.
Only weeks after Nuinsco Resources (nwi-t) reported a 61.5-metre intersection grading 1.7% nickel (including 3.3 metres of 10.8% nickel), more than 10,000 claims have been staked in the area, and a recent information session held by Nuinsco at the Toronto Stock Exchange attracted a standing-room-only crowd.
Financiers in Toronto, who have had little opportunity to jump-start the moribund equity market for junior mining stocks, responded quickly to the news, with First Marathon stepping in to raise $5 million for Nuinsco on a bought-deal basis and another $5 million on a best-efforts basis.
Although Lac Rocher’s potential will be impossible to assess until Nuinsco probes the mineralized body further, the find could help fuel exploration investment both inside and outside Quebec.
Barry-Urban belt
Another hotspot is the Barry-Urban gold belt, near Val d’Or, where
The senior has signed option agreements with four juniors that hold ground along the belt. These include Murgor,
Farther north, within the 150-km-long Eastmain River belt,
Several companies are also investing in exploration near their producing mines.
For instance,
Meanwhile,
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