$1.4 million announced under Mineral Incentive Program

Ed Byrne, Minister of Natural Resources, today announced funding totaling $1.4 million under the Mineral Incentive Program. Government�s investment of $1.6 million in this year�s budget allowed for the continuance of the Prospectors Assistance and the Junior Company Exploration Assistance components of the Mineral Incentive Program.

Some 71 prospectors have been approved for funding totaling $250,000 under the Prospectors Assistance component while $1.2 million in funding has been allocated to date for 18 projects under the Junior Exploration Assistance component.

"Mineral prospecting and exploration are vital in identifying our mineral potential so that we can develop these resources for the benefit of the province," said Minister Byrne. "It is through government�s partnership with prospectors and exploration companies that over $3 million will be spent in Newfoundland and Labrador this year on these activities."

Since 1999, 479 prospectors assistance grants have been issued totalling over $1.4 million to carry out "grass-roots" and "advanced" prospecting. To-date, these grants have resulted in 38 option agreements with combined work commitments in excess of $8 million. During this same period, 122 junior exploration assistance grants were awarded totalling nearly $6 million. This investment resulted in project exploration expenditures in excess of $14.2 million for advanced exploration, including diamond drilling, geophysics and geochemical surveys.

"The Mineral Incentive Program has proven to be very successful in leveraging private sector investment in mineral prospecting and exploration in this province," said Minister Byrne. "What this means is that for every $1 distributed through the government-sponsored programs, an additional $1.41 is spent on exploration activity in the province. We consider that an excellent return on our investment."

Minister Byrne also indicated that a recent survey showed that more than 75 per cent of participants in both program components would have either not carried out their exploration activity or would have done so at a much reduced level had the program not been in place. Likewise, in excess of 80 per cent of respondents stated that both programs are an important factor in sustaining and increasing exploration activity in the province.

"Our natural resources continue to have a significant impact on this province�s economy," said Minister Byrne. "Our decision to make this strategic investment in the Mineral Incentive Program supports our objective to grow the economy to generate jobs and investment. What is also key about this program is the economic impact prospecting and exploration activity has in rural Newfoundland and Labrador."

Media contact: Carmel Turpin, Communications (709) 729-5282

BACKGROUNDER

Note: A full list of the Prospectors Assistance grant recipients is available upon request by calling (709) 729-2762.

2004 08 23                                        9:30 a.m.