If you conduct grassroots mineral exploration in B.C., you may qualify for the mining exploration tax credit (METC).

To be eligible, you must incur qualified mining exploration expenses before January 1, 2020 for determining the existence, location, extent or quality of a mineral resource in B.C.

The credit applies to exploration for all base and precious metals, coal and some industrial minerals. Drilling expenses for oil and gas do not qualify. Exploration expenses may include expenses incurred in the course of prospecting, carrying out geological surveys, trenching, digging test pits or preliminary sampling.

B.C.’s Budget 2017 proposes to include for the first time expenses incurred after February 28, 2015 for environmental studies and community consultation incurred to obtain a right, licence or privilege for the purpose of determining the existence, location, extent or quality of a mineral resource in B.C.

The credit is calculated as 20% of qualified mining exploration expenses less the amount of any assistance received or receivable. Assistance includes reimbursements you have received or are entitled to receive, as well as grants, subsidies, rebates and forgivable loans.

For more details on the METC, see the bulletin Mining Exploration Tax Credit (CIT 006) (PDF).  For more information on issuing flow through shares, contact any member of Clark Wilson LLP’s Capital Markets, Securities, Mergers & Acqusitions Group.