While many jurisdictions are working hard to prevent mining or mineral exploration, the province of Quebec is encouraging it. In this exclusive interview with The Gold Report, Alain-Jean Beauregard, founder of Geologica Inc., a geological consulting firm based in Val-d’Or, talks about the shining future of gold mining in Quebec.
The Gold Report: The province of Quebec where Geologica is based offers some of the best infrastructure and mineral exploration incentives of any state or province in North America. Why has Quebec embraced mining when so many other jurisdictions are working hard to prevent mining or mineral exploration at all?
Alain-Jean Beauregard: Like forestry, mining has traditionally been a region developer in the province of Quebec. Native land issues have already been settled for large parts of the province. Mining is an important job creator—one of the most important in the province. It’s good income for the province because of revenues from taxes. Quebec is happy to have mining companies in the province.
The highest salaries are now in mining. Mining regions have the lowest unemployment in the province and a lot of young graduates are back from the larger cities to their families, to the great satisfaction of their parents. Also, a large world-class, web-accessible Quebec Ministry of Natural Resources geoscientific database, SIGEOM, has been in place for several years.
TGR: There are a couple specific incentives Quebec offers that other provinces don’t. You can get up to 50% of the money back that you spend on exploration from mineral deposits. You also have government-sponsored investment funds and, perhaps most notably, a large web-accessible database. Tell us a little bit about those things.
A-JB: The stimulations ultimately encourage companies to reinvest in more exploration, which will bring about more discoveries, more jobs and more wealth to the province. Companies can have a tax credit varying between 30% and 50%, depending on the remoteness of the projects.
The database that the province has put together is an important one. All companies are obliged to file their statutory work reports and make that information available for the other players in the province so that they can benefit from strategic acquisitions and understand the geology better. Moreover, they don’t have to repeat the same exploration surveys or drill the same targets because the information is available.
It increases the efficiency of the exploration companies quite significantly. In Quebec, flow-through funds for surface exploration work after tax cost less than 50% of the original investments. This type of financing is the most generous for investors in all of Canada. Several discoveries were stimulated by these programs in the past 30 years.
TGR: Have you ever used that geoscientific database?
A-JB: We constantly use SIGEOM when reviewing statutory work reports to complete our compilations. Also, when relogging and resampling old core, it is always enlightening to help recognize typical rock alterations and associated typical mineralizations. The geologists then understand and look for the right metallogenic environments favorable for future potential discoveries.
TGR: That database helped Osisko Mining Corp. (OSK:TSX), which at the time was Osisko Exploration, find the Canadian Malartic deposit.
A-JB: When relogging the available in situ core, low gold values were found disseminated all over the porphyritic host rock. The potential for a large-volume, low-grade deposit then became obvious. After seeing how well Kinross Gold Corp. (K:TSX; KGC:NYSE) was doing from its Fort Knox deposit in Alaska, which is a low-grade deposit in northern climatic conditions, people here were inspired, particularly Bob Wares and his Osisko team. The more persevering and persistent they were, the more the price of gold was going up, making their dream possible.
TGR: Quebec has a government-funded mining company called SOQUEM Inc. Have you ever worked with SOQUEM on any projects?
A-JB: Yes. SOQUEM’s mission is to help the provincial mining exploration industry particularly during low periods and bad cycles, as well as to keep opening up potential areas to stimulate mining and joint venture partnerships with their geoscientific research and compilations. It was good to have SOQUEM around and several of their joint venture partners feel very fortunate to have their support.
TGR: With gold around $1,600/ounce (oz), what is business like for Geologica these days?
For the rest of this interview, please go to The Gold Report website: http://www.theaureport.com/pub/na/12109