Write MPs about flow-through shares

The Prospectors & Developers Association of Canada is asking its members to participate in a letter-writing campaign to their members of Parliament in support of measures that would make the “super” flow-through program more attractive and extend it for another year.

While super flow-through financings have arrested the decline in junior company spending at the grassroots level, the industry is well short of anticipated goals.

In order to make the program more attractive to investors, the PDAC is asking for the following adjustments:

o extend the buying period from Dec. 31 to the end of February (thus coinciding with the deadline for registered retirement savings plans);

o designate between 10% and 15% of money raised as eligible for “hard dollar” costs such as prospectuses, broker sponsorship fees, listing and disclosure costs;

o expand eligibility to include not only individuals but also bona fide mining companies; and

o extend the program from Dec. 31, 2003 to Dec. 2004. (One of the problems with the previous Mineral Exploration Depletion Allowance program of the mid-1980s was that companies were required to spend money almost as soon as it was received, leading to issues of non-compliance. The government subsequently extended the spending period to the end of the following year, thus overcoming the problems.)

The PDAC had hoped to have its requests met in a June 2002 technical budget, says David Comba, PDAC issues director.

However, three days into his new job as finance minister, John Manley deferred plans for that budget. The PDAC then wrote to Manley asking that the four issues be addressed in the next economic statement or technical budget.

A budget is expected after the house resumes sitting in the fall, and, says Comba, the PDAC needs the help of its members in making sure their needs are not overlooked.

Says Comba: “We need to do more than just keep our fingers crossed in the hope that our needs are going to be addressed; we need a letter writing campaign.”

Comba urges members to contact him at dcomba@pdac.ca to obtain a sample letter.

— The preceding is an excerpt from In Brief, a publication of the Toronto-based Prospectors & Developers Association of Canada.