Quebec prospectors contemplate industry slowdown

Delegates to the annual convention of the Quebec Prospectors Association (QPA) staged here recently are preparing themselves for a period of transition after a year which saw a boom in mining exploration, a stock- market collapse and an announcement by the federal government that a new financing exploration- incentive scheme will be implemented beginning in 1989.

The 14th annual convention, which attracted more than 600 delegates, was a quiet affair this year compared with 1987, when the upbeat times gave little or no warning of the impending October world stock market collapse.

“Le Krach,” or market collapse, affected all aspects of the financial community; in the mining industry’s case, it became exceedingly more difficult to raise funds for exploration projects.

For 1988-89, the QPA is forecasting mining exploration expenditures of $200-$300 million for all of Quebec, with total annual expenditures not expected to rise much beyond that range for the next few years. (It is estimated that in 1987, exploration expenditures in Quebec totalled $500 million.)

Commenting on the QPA and the approach it must adopt for the changing times, immediate past president Regis Labeaume said part of the association’s task will involve explaining the grant exploration- incentive program to be introduced by the federal government and selling the mining industry to the public.

The new Canadian Exploration Incentive Program (CEIP), to be implemented Jan 1, 1989, will allow mining firms to claim 30% of grass- roots exploration costs up to $10 million per year. CEIP will complement the existing flow-through investment financing scheme, which allows investors in mining exploration companies a tax write-off but which is to be pared back in terms of the amount of tax write-off permitted. The current $1.33 write-off allowed for each dollar invested by an individual will be reduced to $1, or a dollar-for-dollar reduction. New president

Labeaume, succeeded to the QPA presidency at the convention by Rouyn-Noranda lawyer Guy Bourassa, said a shift in emphasis by the industry, encompassing a more global view, is occurring.

The QPA, in its 1987-88 annual report, refers to the potential of the exploration expertise acquired by juniors and the related mining services industry. “The governments will have a major role to play in making known and promoting this expertise and facilitating its access to international markets,” says the report.

According to the report, Quebec’s mining exploration industry has reached a critical stage in its evolution. There exists a solid infrastructure, competent people and efficient governmental services, but the report cautions that the industry must work hard and in concert with the private sector and various public and governmental agencies.

In other news, the Quebec minister responsible for mines, Raymond Savoie, in a supper speech, announced a program to help in the construction of access roads to exploration projects.

(Marcel Masse, minister of Energy, Mines and Resources Canada, was scheduled to speak at a luncheon, but did not appear; his place was taken by Quebec MP and cabinet colleague Lucien Bouchard.)

Among the various presentations were two papers dealing with base metal reserves, one presented by Energy, Mines and Resources Canada and the other by Quebec’s ministry of energy and resources. Another paper dealt with the Canada-U.S. free trade agreement as it relates to the mining industry. Attending the final luncheon as head-table guests were Eveline Kasner ( along with husband Robert), the driving force behind the Save Flow-Through Committee which she co-chaired with Labeaume, and John Larche, president of the Prospectors and Developers Association of Canada.

Named “prospector of the year” was Jean-Pierre Cloutier, regional exploration manager in northwestern Quebec for Falconbridge Ltd. (TSE). Cloutier and his group of geologists won for two gold projects, Lac Rouleau near Senneterre and Pelletier Lake near Rouyn- Noranda. Falconbridge is the operator of both projects; its Lac Rouleau partner is junior Beaufield Resources (TSE), and its Pelletier Lake partner is junior International Thunderwood Explorations (TSE).