PERTH (miningweekly.com) – The second round of the Junior Minerals Exploration Incentive (JMEI) has been oversubscribed, with 46 companies successfully applying for the available credits for the 2018/19 income year.

Federal Resources Minister Matt Canavan said more than A$31-million has been allocated in the second round, with the individual amounts ranging from A$82 500 up to A$1.57-million.

“Companies have responded enthusiastically to the incentive for this round and in fact it has been ‘oversubscribed’, so not all applications were successful,” Finance Minister Mathias Cormann said.

“The fact this round was oversubscribed indicates an upswing in confidence among mining companies, prepared to get out in the field and spend money on exploration activities.

“These tax incentives are encouraging junior explorers to take risks and to have a go at discovering the next large-scale mineral deposit. We want to back these businesses.

“We are working to get the economic fundamentals right to build a strong prosperous Australia, improve the business climate and unleash our economic potential. We are doing so to create a stable platform for investor confidence and growth.”

Canavan noted that Australia would need to increase its exploration now in order to secure a pipeline of projects for the future, and to remain competitive with other prospective nations.

“It is crucial that new greenfields deposits are discovered and the JMEI is one way the government is tackling the issue,” Canavan said.

The Association of Mining and Exploration Companies (Amec) said that the response to the second round of the JMEI justified the federal government decision to redesign the Exploration Development Incentive (EDI) that was announced by the Prime Minister in August 2017 and had bi-partisan support through the Parliament.  

The JMEI allows mineral exploration companies with no mining income, to raise capital, and renounce and pass future tax deductions to their Australian resident investors. 

The money raised must be spent on greenfields mineral exploration in Australia. 

The first round of applications for the 2017/18 income year saw 23 applicants being successful in accessing A$8.4-million of exploration credits, with the balance remaining from the initial A$15-million allocation for 2017/18 added to the A$25-million exploration credits available for the 2018/19 round. 

“Hitting the JMEI cap vindicates the government’s decision to rework the EDI and shows the returning strength of the mineral exploration sector,” said Amec CEO Warren Pearce.

“Completely distributing the 2018/19 allocation of JMEI funding within two weeks reflects the substantial building confidence in the sector. This means more greenfields exploration, which increases the chances of finding the next mine, and therefore more jobs and more revenues for local businesses.”

The next round of the JMEI opens on June 1, 2019, and will be filled on a first in, first served approach.