South Africa
Mining plan could unlock exploration funding─── 16:21 Mon, 12 Oct 2020
South Africa has among the richest mineral endowments in the world, yet accounts for less than 1% of the $10 billion global exploration budget.
Now the mining industry has proposed a plan to unlock financing for exploration. This involves the adoption of the hugely successful Canadian model of ‘flow-through’ shares.
This type of share allows the exploration company to raise finance through the issue of shares, and pass its tax benefit on to the taxpayer. The taxpayer is then able to sell that share to others looking for a tax benefit.
The introduction would have little or no negative effect on tax revenue and would allow for a potentially huge injection of capital at the local level.
Errol Smart, MD of junior miner Orion Minerals, says the model incentivises profitable businesses and individuals to direct their reinvestment of profits to a deserving industry with large macro-economic impact and immediate job creation.
Moneyweb
