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September 28, 2007, No. 47

Tax treatment of community consultation and environmental baseline costs now clarified

The federal government has released a set of guidelines that it will use to determine whether costs incurred by exploration companies for community consultations, baseline environmental studies, and feasibility studies will qualify as Canadian exploration expenses (CEE). The PDAC has been advocating for this clarification for more than four years, and the announcement by Canada Revenue Agency marks an important development for the industry. Under the CRA guidelines, activities such as environmental assessment or consultation processes undertaken to meet a legal or informal obligation under the terms of an exploration permit will, for the most part, be treated as CEE. Click here for a copy of the guidelines and here for the PDAC’s news release announcing their publication.

Engagement of all stakeholders is essential to mining’s sustainability, say mines ministers

At their annual conference recently, Canada’s mines ministers agreed that engagement of governments, Aboriginal peoples, communities, industry and other interested parties is essential to ensuring the long term sustainability of Canada's mining sector. The ministers directed that steps to facilitate this be taken, including the development of best practices involving government, industry and aboriginal peoples. As part of the conference, John Thompson of Teck Cominco Ltd. gave a presentation on the importance of geoscience, and Doug Brown of NovaGold Resources Inc. spoke about his company’s partnership with the Tahltan First Nation and the importance of flow-through share financing in the development of Galore Creek. PDAC representatives attending the conference included president Patricia Dillon; first and second vice-presidents Jon Baird and Scott Jobin-Bevans; executive director Tony Andrews, Philip Bousquet, director, sustainability, and MaryAnn Mihychuk, director, regulatory affairs. A copy of the news release following the conference is here, and a copy of the PDAC’s submission is here.

New insurance program provides professional liability coverage at reasonable rates

The PDAC has created a professional liability and business insurance program as a service to its members. The program consists of two packages. A Consultants Package provides professional liability and business insurance coverage to members in the independent geological consulting business, and an Explorers and Operators Package supplies coverage to member companies, including junior exploration companies, service and equipment providers, mine site developers and operating mining companies. Both insurance packages can be customized to accommodate specific professional and business needs. Insurance premiums vary according to circumstances. However, the savings on this program can be substantial. According to a consulting geologist, “The premium for my errors and omissions insurance had been $4,833 for coverage of $2 million. I recently purchased insurance through the PDAC insurance program and was able to get the same level of insurance coverage for a premium of $1,620. Needless to say, I was very pleased.” Click here for more details about the program.

Assembly of First Nations National Chief will speak in Toronto on October 12

Tickets are going fast for the Friday, October 12 luncheon when Assembly of First Nations National Chief Phil Fontaine will address the mining community. The topic of his presentation will be Progress through partnerships: Exploring economic opportunities between First Nations and the mineral industry. Tickets are $75 per person or $700 for a table of ten. The luncheon will be held at the Arcadian Court, 401 Bay Street. Click here for registration details.

Members’ views on Canada ’s securities regulatory regime invited

Just a reminder that the deadline for completing the PDAC’s survey on Canada’s securities regulatory system is Monday, October 1. The survey, which is being conducted through the auspices of Angus Reid, is designed to assess members’ needs, interests, and perspectives on securities regulation and related issues. Responses will be kept confidential. Aggregate data collected through the survey will be used to provide direction to the PDAC Securities Committee. To complete the survey, which should take no more than 20 minutes, please click here. As of Friday afternoon, September 28, there appears to have been a large amount of interest in the survey with potential respondents clicking through to it. However, this interest is not reflected in the actual number of surveys completed. We’d like to know the reason for this. If technical difficulties are stopping you from completing it, would you please contact us. If you began the survey before and didn’t finish it, can you let Teresa know the reason. By the way, you still have a chance to participate. Just go to this link and start again. Your views are important to us.

Confidentiality agreements should be carefully worded

Brian Abraham, Partner, Fraser Milner Casgrain LLP has written a commentary on the recent Navidad decision respecting the nature of confidentiality agreements. Mr. Abraham, who is a director of the Association for Mineral Exploration BC, lists 17 factors that companies should consider carefully in the preparation of confidentiality agreements in light of this decision. He has agreed that his commentary, which is available here, be distributed to PDAC members.

The Barrick challenge : extract silver from silica economically

Barrick Gold Corporation is offering US$10 million to anyone who can solve a scientific conundrum: how to unlock the silver from the silica that encapsulates it at the company’s Veladero gold mine in Argentina. The company’s Unlock the Value program invites scientists, engineers and conundrum solvers to propose an economically viable way to increase silver recovery, currently at 6.7%, from the mine. Geologists have determined there are 180 million ounces of silver contained in gold reserves in the ore at the mine. The challenge is how to extract it economically. Details of the challenge are here. Good luck!

Are members interested in receiving CIM’s Exploration and Mining Geology?

We are trying to establish members’ interest in receiving a subscription to Exploration and Mining Geology, a journal of applied geoscience published quarterly by the Geological Society of the Canadian Institute of Mining, Metallurgy and Petroleum. If there is sufficient interest, the PDAC and the publishers are willing to make a permanent arrangement whereby members receive a year’s subscription at a significantly reduced rate. As a trial offer and for a limited period, members can subscribe to the journal for $45 plus GST. This compares to the regular subscription price of $140 per year. Please contact us, indicating your interest in receiving the journal. Contents of recently published issues are available here.