Give us a break
Monday, 14th January, 2013
By Kurtis J Eichler
Carpentaria Explo-ration’s executive chairman, Nick Sheard, is calling on the federal government to consider adopting flow through shares, saying junior miners will struggle as a result of a lack of financial support.
Mr Sheard spoke to the BDT last week from his office in Brisbane about the year ahead for the mining company and the mining sector.
While the future was looking bright for the company’s proposed multi-billion dollar Hawsons iron project, he said pressure would be put on junior miners this year as the uncertain economic climate made raising money harder.
“I think the outlook for junior exploration companies isn’t very good,” Mr Sheard said.
He pointed the finger at the federal government who, he says, should be looking at ways to help explorers find funds.
“There is a simple way of doing this with a flow through tax scheme which the Canadian government use.”
The scheme gives investors, who put money into drilling and exploration companies, upfront tax deductions.
So even if the shares they buy don’t turn out profitable, they still get some money back.
The tax was introduced by late Canadian PM Louis St. Laurent in 1954 as a way of encouraging investment in these companies.
“If you look at the success that the scheme has given to Canada with the amount of exploration dollars... it’s quite extraordinary.”
The Western Australian government four years ago put pressure on then PM Kevin Rudd to introduce the system.
“We are not encouraging exploration in Australia and this is going to have a detrimental impact in ten years time because if you don’t explore you don’t find,” Mr Sheard said.
“You lose employment, you lose taxes and you lose export wealth.
“We are not the only lucky country with that wealth. The state of affairs is the junior companies are going off to places like Africa and South America, and as soon as they make a discovery their offices move over there and they don’t come back.
“So it’s a bit of dilemma.”