Editorial Extend flow-through to the Third World

Thanks to the flow-through financing introduced by the federal government, this country is witnessing the greatest gold rush in its history, with upwards of $1 billion to be spent on its exploration this year, J. P. Sheridan told a large luncheon gathering at the Exploration ’87 international convention held in Toronto this week. There were representatives from no less than 77 countries on hand to hear this particular talk on Developments in Precious Metal Exploration.”

High in his praise of the flow-through phenomena which permits an investor to write off a portion of exploration expenditures spent in this country for income tax purposes, this well-known entrepreneur-mining engineer called it “the greatest incentive to exploration we have ever seen” in which the investor deals directly with the explorationist.

Aiming his remarks to representatives of the many Third World countries staggering under crippling debt, he pointed out that no major country in the world has ever paid off its debt “nor don’t even plan to repay.” Canada, for instance, simply floats bigger and bigger loans each and every year. And, of course, is itself going deeper and deeper into debt.

Then he presented a novel idea that certainly won the applause of the Third World explorationists, as well as many of the Canadian engineers, geologists and geophysicists present. Pointing out that very little of our exploration boom has filtered down to those hard-pressed countries, he suggested that the best way we can help them would be to extend our flow-through writeoffs to include exploration expenditures made by Canadian companies in those foreign lands.

Armed with statistics pertaining to the wealth and employment that can be created by a good mineral discovery, he cited the case of an Ontario mine discovered in 1945 that operated continuously for 30 years, turning out $2.2 billion. Its wage bill for that period was $1.2 billion and its direct payments (taxes) to governments amounted to $378 million. And it paid out $24 million in dividends to its shareholders and another $2.5 million in charitable donations.