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Flow-through • Issues & Advocacy

PROSPECTORS AND DEVELOPERS APPLAUD SUPER FLOW-THROUGH EXTENSION

Toronto, February 18, 2003 - Bill Mercer, President of the Prospectors and Developers Association of Canada (PDAC) said that he is delighted with today’s announcement by Finance Minister John Manley that the temporary Investment Tax Credit for Exploration in Canada (ITCE) is to be fine tuned and extended by at least one year. The ITCE program, dubbed “super” flow-through shares by investors, was introduced October, 18, 2000 and was due to end this year. The ‘buy period’ will now close December 31, 2004, the expenditure period December 31, 2005.

“The PDAC estimates the program has helped raise almost $400 million for grass roots mineral exploration in Canada to the end of December 2002,” says Mercer. “The amounts raised are commendable given the rough ride investors have had since October 2000”. Although awareness about “super” flow-through has been slow to develop, for many of the PDAC’s junior exploration company members the temporary program arrived just in time.

“Many of our members have said that “super” flow-through shares have been a real life line while most investors stayed largely on the sidelines,” says PDAC Director of Issues Management David Comba. The Mineral Economics Group (MEG) states that Canada has once again acquired the title as the number one country in the world for mineral exploration spending, wresting the title away from our biggest competitor, Australia, for the first time in eight years. MEG attributes Canada’s regaining top spot in part to the flow-through share program.

“The best news is that flow-through has resulted in an average of one discovery per month since ITCE was introduced. Some examples include:

  • high grade copper/nickel discoveries with high contained platinum/palladium values by FNX and partner Dynatec northeast and southwest of Sudbury and by Canadian Royalties in the Ungava region of Quebec

  • diamond discoveries by Ashton Canada in the Otish Mountains of Quebec and by Stornoway/Empire Minerals/Hunter in the Melville Peninsula area of Nunavut

  • gold discoveries by Claude Resources in Saskatchewan and in Newfoundland by Candente, Linear and Rubicon.”

“One or more of these early stage discoveries is going to go on and develop into something that catches the public’s attention;” says Mercer. “PDAC very much appreciates the extra time the federal government has given the exploration sector to take advantage of some higher commodity prices and spark the interest of investors through our discovery efforts.”

The PDAC is an advocacy association for prospectors, junior companies and operating companies active in the search for and development of mineral deposits. The association annually hosts the largest convention of its kind in the world in Toronto which attracts more than seven thousand people from round the globe. This year’s meeting is to be held March 9-12, 2003 at the Metro Toronto Convention Centre. A mining investment show which runs alongside the convention is free to the public.

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For more information contact:

David Comba (416) 362-1969 Ext 233

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