Editor’s Note A FINE EXAMPLE

This month Canamax Resources will officially open its Bell Creek gold mine at Timmins, Ont. It’s not a huge mine (about 300 tons per day), but it’s significant for several reasons. For one, it’s the first new gold mine in Timmins for some time. There’s a lot of exploration going on in the city, Canada’s largest gold-producing area, and many of the old mines are being looked at for a second or third time, but Bell Creek is the first really new substantial operation since Kidd Creek Mines opened the Hoyle Pond mine.

Second, and probably most important to Canamax, is that Bell Creek is that company’s first operating mine. Make no mistake; Canamax is a going concern, with a production decision already made on another project (the Kremzar deposit, about 100 miles west of Timmins) and at least two other projects that look like future mines. Bell Creek is the official inauguration of gold production for the young company, however, and it plans to mark the occasion in style by chartering aircraft to bring about 100 investors, analysts and reporters to the site for an opening bash.

Third, and probably most important for the mining industry as a whole, is the debt which Bell Creek owes to flow-through financing. Had it not been for flow-through, Canamax says, Bell Creek would never have come about. It’s a concrete example of how tax incentives can work, and I mean work for everyone. It’s an example of a system that allows everyone to win: the investor, the company, the city of Timmins, the province of Ontario and the people of Canada.

Perhaps the tangible results of flow-through will persuade the federal government that doing away with the popular tax shelter mechanism (as recent tax reform proposals seem bound to do) would put an end to one tax “loophole” that serves a constructive purpose. At a time when regional development seems possible only through government grants, here’s a system that, while admittedly spurred by government tax incentives, really relies on the investment of individual Canadians. It takes that money and funnels it into some of the most depressed areas of the country; and the mines that result actually create wealth, rather than just recycle it. Flow-through really has prompted many Canadians to invest in Canada.

Bell Creek is a good example of how flow-through works, but there’s a phenomenal amount of mineral exploration work going on in all parts of Canada by hundreds of other companies, a great deal of it prompted by flow-through. It would be a pity if that were to stop.