$900 million to $1 billion to `flow-through’ this year

There is going to be about $900 million in flow-through money raised this year by cmp, nim and First Exploration, the three largest national exploration fund managers in Canada.

Add to that another $100 million raised by a plethora of smaller limited partnerships and there could be about $1 billion going to mineral exploration this year via this popular tax incentive.

This preliminary estimate is nearly double the amount raised last year by flow-through funding, according to Peter Bradshaw, president and chief executive officer of First Exploration.

He made the comments while making a swing through Toronto this week as part of a national speaking tour designed to reassure investors following Meltdown Monday. Capital raised through flow-through shares increased to $500 million in 1986 from $253 million in 1985 and $34 million in 1983.

“As a result of the stock market crash of October 19, flow-through funds are going to change drivers,” Bradshaw predicts.

“There were so many dollars out there to be changed, that brokerage firms were the drivers. But now that we can offer them no more premiums, only a 10-15% discount on the trading values of the shares, the new drivers are going to be the investors themselves. The brokers are saying the risks are too high.”

Not according to First Exploration. Of the 37 junior exploration companies, this particular fund has financed since 1986, 10 are going to go to the mine feasibility stage, according to Dr Gerald G. Carlson, director of investor relations for Equity Preservation Corp., the publicly traded form of First Exploration ’86. “Our `Gretskys’ could be producing 100,000 oz a year in the very near future,” Carlson says.

First Exploration has raised money for Gordex Minerals of Saint John, N.B., which officially commenced production at an annual rate of about 7,500 oz this year; Coxheath Gold Holdings of Halifax, N.S., which has a number of promising gold properties in that province including the Tangier property; Nexus Resource Corp., which has outlined 750,000 tons grading 0.18 oz gold per ton on a property near Birch Lake, Ont. held jointly with St. Joe Canada; Northfield Minerals, which is working with Golden Shield Resources near Kirkland Lake, Ont.; and St. Genevieve Resources which, together with Jilbey Industries has a very interesting property near Val d’Or, for example.