Mineral Exploration

4 Mineral Exploration | amebc.ca GAVIN C. DIROM President & CEO A s fall approaches, many AME members have experienced renewed investor confidence and interest in the mineral exploration and development industry. But after many years weathering a di•icult downturn, we are naturally cautiously optimistic that the continued price increases for precious metals, as well as a recovery of base metal prices (zinc and copper in particular), will lead to a steady return of investment into B.C.'s locally and globally active industry. So with pragmatic hope, the focus of this fall issue of AME's Mineral Exploration magazine is B.C.'s prolific mineral belts. Volunteer writers have teamed up with regional government geologists as well as two of our veteran freelance writers, Vivian Danielson and Ryan Stuart, to examine B.C.'s geology and the projects and people who have made the province so well known for its mineral exploration and development potential. Readers will also notice the look of this fall issue shows renewal in the association – as it is the first issue that reflects AME's updated branding. Successful exploration As we plan for better times ahead, you may find it interesting to know that the proportion of public mineral exploration and mining companies listed on the TSX and TSX-V exchanges based in B.C. has remained steady at just under 60 per cent since 2012. The absolute number has declined from 962 out of 1,673 companies in December 2012 to 713 out of 1,223 companies as of July 2016. There are also an estimated 100 private mineral exploration and mining companies based in B.C. AME member companies are acutely aware that the industry is global in nature and that government incentives for mineral exploration and development are an important competitive advantage for any jurisdiction. If you missed the news, the B.C. government announced last spring a further $5 million in funding toward Geoscience BC initiatives that attract mineral exploration investment to B.C. through generating, interpreting and publicly distributing geoscience data. But incentives must never be taken for granted. Canada's federal government is currently reviewing all tax incentives, including flow-through share (FTS) financings and the 15 per cent Mineral Exploration Tax Credit (METC). AME's Taxation, Securities and Investment committee is working with the Prospectors & Developers Association of Canada (PDAC) in preparing a submission to Finance Canada on the importance of FTS and the METC to the industry in B.C. and across Canada. It is important to know that in 2013 (the most recent year data was collected), METC incentives benefited 68,000 individuals and provided investment dollars for 500 corporations to carry out exploration activities across Canada. The cost of the tax credit is estimated at $125 million for 2016, and peaked at $430 million in 2011. However, this cost is more than o•set by industry's annual investment (estimated at $1.7 billion in 2015) in exploration and deposit appraisal work across Canada – often in remote areas such as B.C.'s Golden Triangle – and ultimately the major socio-economic benefits provided by the industry (job creation; municipal, provincial and federal taxes; and economic growth through use of support services and local vendors). PDAC estimates that flow-through funding accounted for 72 per cent of all exploration financing in Canada between 2012 and 2014. And Finance Canada has estimated that every dollar of flow-through financing generates $2.60 of exploration-related expenditures in Canada. Removing FTS as a viable funding mechanism could drive those exploration investment dollars into jurisdictions other than B.C. and Canada. Su•ice it to say that AME is strongly advocating that the METC be renewed in the 2017 federal budget and that the FTS system be maintained. Aboriginal relations and engagement AME continues to support activities that build understanding and strengthen mutually beneficial relationships between Aboriginal people and the mineral exploration and development industry in B.C. Notably, there are many examples of positive agreements between mineral exploration and mining companies and First Nations. In fact, nearly 500 such agreements have been signed in Canada since 1974, of which 376 have been signed in the last decade, according to Natural Resource Canada's Intergovernmental Working Group on the Mineral Industry. Such agreements, together with active government consultation and industry engagement, have been important to PRESIDENT & CEO'S MESSAGE PHOTO: AME Finance Canada has estimated that every dollar of flow-through financing generates $2.60 of exploration- related expenditures in Canada. Removing FTS as a viable funding mechanism could drive those exploration investment dollars into jurisdictions other than B.C. and Canada.

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