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February 15, 2000
(Mines and Energy)


Government pleased with success under Mineral Exploration Program

Paul Dicks, Minister of Mines and Energy, says the Mineral Assistance Program is having a positive affect on mineral exploration and development in Newfoundland and Labrador.

Government allocated $2 million in the 1999/2000 Budget for the first year of a new three-year Mineral Exploration Program which seeks to increase mineral exploration and mine development in the province.

Program components include: (1) Junior Company Exploration Assistance Program; (2) Prospectors Assistance Program and (3) Dimension Stone Incentive Program.

Junior Company Exploration Program

Mr. Dicks said five of the 26 advanced exploration projects that benefitted from the Junior Company Exploration Program will likely begin final feasibility and preparations for development and production in the 2000 year.

They include: Christmas Pond Project which will see the development of black granite near Bishop's Falls; the Hammerdown Project, a gold deposit near King's Point; the Duck Pond/Boundary Project, a copper and zinc deposit located southeast of Buchans; the Shabogamo Mining Project, a silica development at Labrador City, and the Blue Beach/Tarefare Deposits, a fluorspar development at St. Lawrence.

Mr. Dicks said: "These development will require large capital investment and will bring significant employment opportunities to rural Newfoundland and Labrador."

The total amount of contribution under the Junior Company Exploration Program for the fiscal year is now at $1,480,060 with total project costs exceeding $5 million. The remaining 19 projects are at various stages of exploration.

Prospectors Assistance Program

A total of 101 prospectors, including 15 in Labrador, have received financial support in the amount of $250,000 for a great variety of mineral commodities and prospecting projects.

Seven of the total prospects were optioned by prospectors to junior and major exploration companies and these option agreements will attract mineral exploration expenditures well in excess of $1million.

"Should any of these prospects proceed to development, commercial activity, employment and economic return to the province will be greatly increased," Mr. Dicks said. "It is most accurate to say that the performance of our Newfoundland and Labrador prospectors clearly demonstrates the value of our assistance program."

Dimension Stone Incentive Program

The Dimension Stone Incentive Program has three approved agreements signed, bringing total contributions to approximately $115,000 which will give rise to an expenditure of approximately $278,000 by industry.

Mr. Dicks said much success is being achieved under the dimension stone industry which is just beginning to develop throughout Newfoundland and Labrador.

To date, a stone processing plant has been built at Jumper's Brook near Bishop's Falls and nearby quarries are providing granite blocks for production of slabs and monuments; successful quarries have been established near Nain which produce granite blocks for export to high-end European markets; and a new plant will be established in Hopedale to fabricate monuments and furniture using Labrador stone. Additionally, two new granite quarries were opened and preliminary appraisals are reported as being favourable.

"The resource base is excellent and we believe that, with the cooperative industry and government efforts, commercial production can flourish," Mr. Dicks said.

The minister said activity in the mineral exploration industry is increasing and the province has diversified commodity targets, adding that the overall response to the Mineral Exploration Program has been extremely positive.

"Our incentive programs are well subscribed and widely acclaimed by prospectors and the mineral industry. They are contributing to the search for mineral wealth and are attracting substantial investment. This is leading to employment and growth opportunities in our provincial economy," said Mr. Dicks.

The minister said the Mineral Exploration Program is an excellent example of the commitment and confidence that government and industry has in the future of the Newfoundland and Labrador mining sector.

"Exploration is the backbone of this wealth-creating industry and private-sector investment, in this high-risk business, in an indispensable element and is the focus of our incentive program," said Mr. Dicks." These cost-shared, non refundable grants to prospectors are serving in a significant way to advance exploration and dimension stone projects throughout the province."

Media contact: Gary Callahan, (709) 729-4890.

BACKGROUNDER

MINERAL EXPLORATION PROGRAM EXPANDED PROSPECTORS ASSISTANCE PROGRAM

The new expanded program has increased the total available funding from $100,000 to $250,000 annually.

This increase has enabled 60 new prospectors to receive grants who had not been able to obtain support because of limited funds.

Grants are awarded up to an amount of $4,000 for individual independent prospectors working in Newfoundland and Labrador.

The individual prospectors spend at least a matching amount of "in-kind" expenditures.

The program has been in place since 1991 and has resulted in 293 prospecting projects, 40 option agreements and $5.5 million in expenditures by the private sector.

Since 1991, 29 new prospecting companies have been formed.

JUNIOR COMPANY EXPLORATION ASSISTANCE PROGRAM

This new program will provide $1.5 million annually in government support, matched by $1.5 million in industry expenditure.

The program provides 50/50 cost-sharing of eligible costs with junior exploration companies with advanced exploration projects on known mineral prospects.

The Department of Mines and Energy has entered into project specific agreements with Newfoundland and Labrador-based junior companies to cost-share eligible expenditure up to a limit per project.

An internal committee of the Department of Mines and Energy screens applications and manages the program.

The former program, in place from 1993 to 1995, provided $1.2 million over three years. It supported 17 companies with 24 projects, generated private sector expenditures of $6 million, resulted in three new mines (Roycefield, Ming, Richmont) and one future mine (Hammerdown).

DIMENSION STONE INCENTIVE PROGRAM

The program provides for 50/50 cost-sharing of eligible up-front costs of new quarry and plant development for dimension stone projects.

Government will provide funding in the amount of $250,000 annually, to be matched by the private sector.

Funding will be primarily for trial quarry development and preliminary infrastructure support.

The Department of Mines and Energy will screen applicants, manage the programs and enter into project-specific agreements with developers to cost-share eligible expenditures up to a specific limit per project.

There was a similar program in place from 1995 to 1996.

ENHANCED PROMOTION PROGRAM FOR INVESTMENT IN MINERAL EXPLORATION

The Department of Mines and Energy has an ongoing promotion program for participation in promotional events at major national and international mining conferences and trade shows.

The Newfoundland and Labrador Chamber of Mineral Resources will partner with government at these events in the future with an enlarged and collaborative program aimed at attracting new mining companies to the province.

This year the department and the chamber participated in promotional efforts at the North Atlantic Mineral symposium in Dublin, Ireland and will again have joint efforts at the upcoming Mining Millennium Conference in Toronto, March 5 to March 10.

2000 02 15                                                                 5:20 p.m.


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