Ontario beefs up grants for juniors

Junior mining companies doing business in Ontario are now eligible for grants of up to $300,000 per year from the Ontario government. It is the first time juniors, beneficiaries of flow-through financing, can receive direct, non-repayable support from the province. Ontario Mines Minister Hugh O’Neil was here recently to make the announcement. The money is being made available through the government’s Ontario Mineral Incentive Program (OMIP).

The grants will be equal to 30% of annual eligible expenses. Diamond drilling and some underground exploration projects will now be eligible under OMIP.

OMIP itself is being expanded to allow funding for marketing studies, laboratory and pilot plant studies for industrial mineral projects. The old OMIP program (prior to the April 24 Ontario budget) only provided grants to the smallest of prospecting and exploration operations.

“Anything that (the government) can do for us is positive because things are so dead right now,” said Stan Hawkins, president of Tandem Resources, a junior exploration company listed onthe Montreal Exchange. But it would be “a hell of a lot more helpful if they changed the capital gains structure for junior resource companies.”

Hawkins explained that he would prefer to see the government implement a tax-free or minimal tax system for capital gains from investments in junior mining companies.

The Ontario government is also trying to stimulate exploration activity in areas hard hit by mining layoffs such as Elliot Lake, where Rio Algom and Denison Mines are laying off 2,000 workers. OMIP will provide up to 50% of eligible expenses for exploration work in Elliot Lake (to a maximum of $300,000). Other areas of the province, presumably in the Temiskaming district, are also expected to qualify for the 50% OMIP funding.

“This additional funding for OMIP will help offset the negative impacts created when the federal government decided to terminate the Canadian Exploration Incentive Program (CEIP) earlier this year,” O’Neil said.

The government has also announced details of how it is beefing up the Ontario Prospectors Assistance Program (OPAP). The ministry of mines is adding one million dollars a year to OPAP, bringing annual OPAP funds to $4 million.

OPAP provides grants of up to $10,000 a year to individual prospectors to help them stake and maintain their claims.

The president of the Porcupine Branch of the Prospectors and Developers Association, Dennis Prince, welcomes both announcements, but has some reservations.

“I think what the minister (O’Neil) should be doing is trying to convince Ottawa that investor tax incentives like the old CEIP program are far more productive and beneficial than direct grants,” Prince said.