NEW MINERAL EXPLORATION INCENTIVES ANNOUNCED

The government today introduced a number of incentives to spur mineral exploration and support junior mining companies during a time of fluctuations in world financial and commodity markets.

The incentives will help companies maintain their land holdings through initiatives that recognize greater valuation of their existing exploration work on those holdings and through removal or deferral of some rents and charges.

"Saskatchewan had a stellar year for mining activity in 2008, but the new global economic slowdown is having an impact on our junior mining companies," Energy and Resources Minister Bill Boyd said. "Many of these companies are having new difficulties raising investment capital, and we are taking measures to help them ‘stay the course' and build on the investments they have made in recent years."

The incentives include:

• A change to company expenditure requirements on mineral dispositions, recognizing twice the value of exploration work conducted between March 2009 and March 2011. This change helps companies hold their dispositions during the downturn while encouraging continued investment in mineral exploration.
• More flexibility under regulation for companies to allocate exploration expenditures among a number of commonly held mineral dispositions.
• Removal of annual rents for coal permits during the second and third years of their terms, from March 2009 to March 2011. This change allows permit holders time to seek new investors without jeopardizing their current land holdings.
• Deferral of fees associated with the government's new Mineral Administration and Registration System (MARS) until March 2011, thus keeping Saskatchewan's land acquisition costs among the lowest in the country.

Boyd said these incentives complement other actions by government to support the mining industry, including the recent reintroduction of the Mineral Exploration Tax Credit as well as government-led mining investment missions to Asia.

"The mining industry has been a pillar of strength for our economy and our province," Boyd said. "And we want to ensure that it continues to be well positioned to build on its successes of recent years and on its rock-solid foundation."

"The mineral exploration industry appreciates the government's recognition of the challenges that the exploration community is currently facing," Saskatchewan Mining Association Executive Director Pam Schwann said. "These proactive initiatives will help to retain exploration activity and related business development in Saskatchewan."

Boyd announced the incentives during ceremonies to mark the start of Mining Week in Saskatchewan. These changes are expected to cost approximately $1 million to government in foregone fees and rentals through the period ending March 31, 2011.

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For more information, contact:

Bob Ellis
Energy and Resources
Regina
Phone: 306-787-1691
Email: robert.ellis@gov.sk.ca