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Economy

‘The sky’s the limit’: mining industry given boost through incentive

Saskatoon-based gold exploration and mining company generates 2014 net profit of $4.6 million compared to $73.4 million net loss in 2013.
Incentives for the mineral industry is helping to create new opportunities for future mining investment in Saskatchewan. Claude Resources / Supplied

An incentive for the mineral industry is increasing the amount of drilling activity in an area near Creighton, creating opportunities for future mining investment in Saskatchewan.

The Targeted Mineral Exploration Incentive (TMEI) is part of the province’s Mineral Development Strategy, announced in 2017.

The 2019-20 budget supports the strategy by providing the overall funding level for the TMEI program, which is established on an annual basis, to a maximum of $750,000 per year.

READ MORE: New incentive to create more mining opportunities in Sask.

Seven successful applications were received for the 2018-19 incentive program, indicating a total of 110 new drill holes, and proposed expenditures of more than $6.5 million in the eligible area.

“We’re very pleased to see that there have been some positive developments out of this,” said Minister of Energy and Resources Bronwyn Eyre.

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“The best-case scenario can be new mines, and we’re also hearing from junior mining companies that because incentives existed in other provinces they were occasionally bypassing Saskatchewan when it came to these non-traditional metals.”

Eligible companies will receive a grant of up to $50,000 per year for drilling in the target area.

Pam Schwann, president of Saskatchewan mining association, said “the focus has been on uranium for decades now.”

“This is an opportunity to look at diversifying the portfolio of products being explored for, including copper, gold, zinc, cobalt, all of which are minerals important to the new economy, for renewables, and electric vehicles.”

Schwann said the fact that the government is on board “provides the right signals to attract investment into Saskatchewan.”

In terms of projected growth, “the sky’s the limit,” said Eyre adding that’s due to “base metals, precious metals, and diamonds and exploration in this targeted area [providing] a sense that there’s real potential. The forecasts are good, and we’ve earned as a province a lot of dividend on mining over the last decade, and that’s I think doubled over the previous decade.”

The industry saw major setbacks that left many projects on the drawing board, but Forum Energy Metals Corp. president and CEO Rick Mazur said the incentive is getting projects moving.

READ MORE: Saskatchewan mining industry expecting labour shortage

“It has been difficult for junior exploration companies to raise capital for some time now,” Mazur said in a release.

“The TMEI was a significant factor in our decision to drill our Janice Lake copper project. We knew, in the long run, the TMEI grant would reduce shareholder dilution. Our drill results confirmed our belief in the project, and successfully revived a base metal project that was dormant for 15 years.”

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Along with economic growth in the province, the program has let to a net increase of more than 628,000 hectares of new mineral dispositions acquired, and over 600 downloads of raw data and maps of provincially-funded geophysical surveys since it’s official launch.

The strategy increases the number of airborne geophysical surveys targeting an area of base metal potential west and southwest of Creighton/Flin Flon and Denare Beach, and ground-based geological investigations in northeastern Saskatchewan by the Saskatchewan Geological Survey, some taking place this summer.

Over $3 billion has been spent on exploration in Saskatchewan since 2003, according to the province. Exploration expenditures in 2018 were $228 million and are estimated to increase to $280 million in 2019. Saskatchewan’s mining industry produced $7 billion in sales in 2018.

The industry impacts the livelihoods of more than 30,000 people in the province.