Improved tax assistance for Qubec exploration
In mid-August the Qubec government announced a major improvement to the tax credit for resources. Mining corporations will be able to claim a tax credit of up to 60% of exploration expenditures in Qubec, until 2007. The change is intended to encourage new discoveries and renew mining reserves.
The improvement will apply to expenditures incurred for exploration work outside mine sites, up to the amount of Qubec income tax and tax on capital payable by such corporations. For each dollar incurred in exploration activities, mining corporations will benefit from a Qubec assistance of up to 87 cents, considering the whole taxation applicable.
Details are given in information bulletin 2002-9, available at www.finances.gouv.qc.ca.
3.35-carat diamond recovered at Fort la Corne
A joint venture of companies announced in late July the recovery of three previously-unreported macrodiamonds from the 141 kimberlite body in the Fort la Corne diamond project, Saskatchewan. A macrodiamond weighing 3.35 carats was recovered from the upper part of drillhole 141-20 during final diamond recovery from previously unexamined clay-rich samples. The 3.35-carat stone is the largest diamond recovered to date for this project, and on first inspection appears of similar quality to diamonds recovered previously from pipe 141. During a routine tails audit of drill samples acquired in 2001, the group recovered two additional stones weighing 0.28 carat and 0.125 carat.
The Fort la Corne diamond project is a joint venture among De Beers Canada Exploration Inc. (42.25%), Cameco Corp. (5.5%), UEM Inc. (carried 10%), and Kensington Resources Ltd. (42.25%). The 71+ kimberlite bodies of the Fort la Corne Field form one of the largest diamondiferous clusters in the world.
First large-scale agreement to explore in Nunavut
Strongbow Resources Inc. of Vancouver entered into a Memorandum of Understanding (MOU) with Nunavut Tunngavik Inc. (NTI) in mid-August to explore for minerals on at least 566,000 ha of prospective Inuit-Owned Lands (IOLs) in the Kitikmeot Region of Nunavut. These lands include existing resources of base and precious metals as well as sizeable acreages in the heart of the Coronation diamond district.
This is the first large-scale industry-aboriginal partnership to explore for minerals in Nunavut. Strongbow has agreed to make fee payments and incur exploration expenditures on the properties totaling approximately $2 million before the end of December 2003 to earn a 100% interest in the properties. As part of its earn-in commitment, Strongbow must complete a compilation of historical geoscience data and complete aeromagnetic coverage of the properties by either incorporating available existing data or flying new surveys where necessary.
Upon completion of a feasibility study, NTI may take either a 20% participating interest or a 7.5% net profits royalty in the specific area. The properties are not subject to royalty obligations to the federal government, but instead are subject to an underlying 12% net profits royalty payable to NTI.