The British Columbia government has recently announced a few measures that should be welcome news to local companies involved in grassroots mineral exploration in the Province:
- it will be providing Geoscience BC with $10 million in funding over two years to further support its work in encouraging mineral, coal, and oil and gas exploration investment in the Province;
- it is extending the Province’s mining flow-through share tax credit to December 31, 2017. The previous tax credit (which makes the Province more attractive to the exploration sector) expired December 31, 2016; and
- it is proposing to amend the provincial Income Tax Act to make environmental studies and community consultations eligible for the Province’s mining exploration tax credit (“METC”).
The METC is for eligible corporations (and corporations that are active members of partnerships) conducting grassroots mineral exploration in B.C. To be eligible, you must incur qualified mining “exploration expenses” before January 1, 2020 for determining the existence, location, extent or quality of a mineral resource in B.C. The credit applies to exploration for all base and precious metals, coal and some industrial minerals.
“Exploration expenses” may include expenses incurred in the course of prospecting, carrying out geological surveys, trenching, digging test pits or preliminary sampling. Budget 2017 proposes to include expenses incurred after February 28, 2015 for environmental studies and community consultations incurred to obtain a right, licence or privilege for the purpose of determining the existence, location, extent or quality of a mineral resource in B.C.
The credit is calculated as 20% of qualified mining exploration expenses less the amount of any assistance received or receivable. Assistance includes reimbursements a taxpayer has received or is entitled to receive, as well as grants, subsidies, rebates and forgivable loans.
Further information on the METC is available by clicking the following link to the Mining Exploration Tax Credit (CIT 006) bulletin: CIT 006 Bulletin.
If you are interested in learning more about issuing flow-through shares, or if you have other questions concerning your company’s compliance with securities laws, please contact Keith Inman at [email protected] or by phone at 250-869-1195.
Keith Inman is a securities and M&A lawyer with broad experience in the capital markets. Keith regularly advises individuals and companies with respect to capital raises, securities reporting and compliance matters, purchases and sales of businesses and other corporate/commercial matters. Keith is qualified to practice law in both British Columbia and Alberta. You can reach Keith at 250-869-1195 or by email at [email protected].
