CMS: Quebec smooths a path for prospectors

The Quebec government’s policy support for mineral exploration and mining has incubated a data accumulation culture leading to a spate of lithium discoveries, a recent industry conference heard.

Understanding historical data and making reams of geological surveys publicly available — which may be unique in Canada — enable exploration success in Quebec, Osisko Gold Royalties (TSX: OR; NYSE: OR) chair Sean Roosen said.

Looking at where things have worked in the past is key for understanding the future, particularly in the lithium business, said Roosen, credited with the discovery of the Canadian Malartic deposit, Canada’s largest open-pit gold mine.

“This layer-by-layer work from the past contributes to the quick succession of discoveries in Quebec,” he said during the Quebec-government-sponsored panel on Oct. 13 at the Canadian Mining Symposium in London

He touched on the value of accumulated data from gold exploration in the same rocks that led to discoveries like Corvette in the James Bay Lowlands.

While interest and investment in Quebec’s mineral potential, especially in lithium extraction, are surging, Jocelyn Douhéret, the director for mining policies at the Natural Resources and Forests ministry, attributes the surge in activity to a range of incentives and streamlined government interfaces as another key enabler.

Quebec is stirring activity through tax incentives that reduce costs, a thriving mining ecosystem that ensures accessibility, and efforts to improve the industry’s image.

Normand Champigny, CEO of Quebec Precious Metals (TSXV: CJC; US-OTC: CJCFF), added that this ecosystem didn’t develop overnight but has resulted in a rich mining culture in Quebec. He credits the stability of regulations across Quebec as playing a significant role in this ecosystem’s sustainability. He contrasts the comparative strength of Quebec’s rules against other jurisdictions, especially as he has experience working in South America.

Unexpected changes can derail a project, “so the alignment and consistent approach in Quebec have been well preserved, adding to the strength of the mining ecosystem,” Champigny said.

Fiscal incentives

Douhéret shed light on Quebec’s supportive fiscal environment for explorers. Combined with federal credits, companies can receive back up to 50% of their expenditures. For example, if a company spends $1,000, they could get back about $500. This system has been set up to counterbalance the higher exploration costs in certain areas.

“Our tax credits, especially in the northern part of Quebec, are designed to propel exploration activities, including those for critical minerals like lithium,” he said.

The province’s funding structure features Investment Quebec, which sometimes partners in funding with the province’s $402-billion pension plan, the Caisse de dépôt et placement du Québec. Resources Quebec, a unit of Investment Quebec, oversees mining funding from the $1 billion Natural Resources and Energy Fund, and $600 million held by Resources Quebec.

The Société Québécoise d’exploration minière, known as Soquem, also funds about $15 million a year in exploration. The smaller Diversification of Exploration Investment Partnership (Sidex) is separate from Investment Quebec, with a funding budget of about $7 million a year. Sidex has aided many lithium projects in a hotspot east of James Bay, making up almost half of Canada’s more than 400 mostly early-stage lithium projects.

Quebec’s regulatory framework and rich mining culture enhance the ‘accessibility’ and ‘acceptability’ aspects of its strategy. This foundation ensures a favourable investment environment, especially in the burgeoning lithium market.

“The mining ecosystem in Quebec has been nurtured over time, making it robust and resilient,” Champigny told the panel.

Tackling talent challenges

Despite the enthusiasm around lithium and other minerals, the panel heard the industry grapples with talent acquisition challenges. “The challenge is to get younger generations interested. Many now prefer their digital screens over the allure of mining,” Roosen commented.

However, educational initiatives are bridging this gap. Champigny, an advocate of the Mining Matters initiative, shared its vision. “Educating children, especially from Indigenous communities, about minerals and mining is paramount. We aim to inspire them to see the potential in mining,” he said.

The lithium boom has prompted the government to sharpen its communication efforts as part of the policy strategy to attract investment, Douhéret said.

“We are focusing on better communication about critical minerals in Quebec,” he said. “Lithium is playing a crucial role in our strategy.”