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Market given vital boost

JUNIOR exploration companies are likely to benefit from an incentive scheme to limit the risk to investors.
Nanjing Night Net

JUNIOR exploration companies are likely to benefit from an incentive scheme to limit the risk to investors.

The Exploration Development Tax Incentive scheme passed by the Senate will bring Australia into line with jurisdictions like Canada in encouraging exploration investment and activity.

Hammer Metals chief executive officer Alex Hewlett praised the scheme and said it would help entice investors.

‘‘It’s a fantastic move, we are really pleased with it,’’ he said.

While sceptical how far the $100m on offer in the government’s incentive scheme would stretch across the entire industry, Mr Hewlett said it would help give a tough market a vital boost.

Under the scheme, eligible (pure) explorers can convert a portion of their tax loss to exploration credits, which are then available to shareholders as a tax deduction. The scheme starts on July 1, 2015 and will be capped at $100 million over three years before a review.

‘‘The market is extremely thin at the moment,’’ Mr Hewlett said.

‘‘Compared to five years ago … it’s chalk and cheese.’’

Mr Hewlett conceded there was risk involved in investing in a junior company, but said the incentive scheme would help mitigate the gamble by investors.

The toughness of the market was reflected by very little exploration activity in the industry due to the difficulty in companies turning a profit.

Mr Hewlett admitted Hammer Metals was one of only a handful of ‘‘active’’ explorers in the North West, but said the activity was generating employment in the region.

‘‘We employ geophysicists, drillers, geologists, to name a few. Exploration does generate work,’’ he said.

The junior miner has significant deposits in the North West with defined resources in the region at Kalman, Overlander and Mount Philp within the company’s Mount Isa Project Hub.

Mr Hewlett said Hammer’s exploration focus was on Andy’s Hill and Overlander with its Kalman project ‘‘more advanced’’.

The company recently raised $1.25 million to fund its exploration program from German resources company Deutsche Rohstoff AG.

‘‘Results from previous geophysical and magnetic surveys have defined numerous interesting drilling targets at the company’s projects,’’ an investor update said.

‘‘Particularly, modelling of detailed gravity and magnetic data has defined multiple anomalies indicative of large IOCG alteration systems at Overlander, Andy’s Hill and Dronfield.’’

Hammer Metals’ 2015 exploration program.

‘‘Hammer intends to build on the achievements of the 2014 exploration program which included new copper resources at Overlander North and Overlander South, drilling of the highest grade molybdenum-rhenium intercept yet at Kalman, as well as defining large Ernest Henry-style Iron Oxide Copper Gold (IOCG) systems at Overlander, Andy’s Hill, Dronfield and Hammer Time,’’ Hammer Metals said.

This story Administrator ready to work first appeared on Nanjing Night Net.

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