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March 22, 2000
(Mines and Energy)

Increased funding for Mineral Exploration Assistance Program

Paul Dicks, Minister of Mines and Energy, says the additional $250,000 approved in this year�s budget for the Mineral Exploration Assistance Program will have a positive effect 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 Assistance Program which seeks to increase mineral exploration and mine development in the province.

"In addition to the increased funding of $250,000, government has made the decision to extend the program from three years to five years," said Mr. Dicks. "It is important to note that this was one of the key recommendations to government during the Jobs and Growth Mining Forum which was held in November of 1999."

Mr. Dicks explained that the Mineral Exploration Assistance Program is now a five-year program with new government funding of $2.25 million for 2000/01.

"This will be matched by industry funding of approximately $2.25 million or more, for a total expenditure of $4.5 million this year," Mr. Dicks said. "The program is now a $22 million, five-year government and industry initiative."

The increased funding will be directed to the Junior Company Exploration Assistance Program, increasing the annual government funding level from $1.5 million to $1.75 million.

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

Total government contributions of $1,480,060 under the Junior Company Exploration Program have generated total project expenditures exceeding $5 million in 1999.

"I am pleased to say that 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," said Mr. Dicks..

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.

"These development will require large capital investment and will bring significant employment opportunities to rural Newfoundland and Labrador," said Mr. Dicks. The remaining 19 projects are at various stages of exploration.

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."

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 Assistance 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 Mineral Exploration Assistance Program is an excellent example of the commitment and confidence that government and industry have 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, Communications, (709) 729-4890.

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