PERTH (miningweekly.com) – The Association of Mining and Exploration Companies (Amec) has welcomed an announcement by the Western Australian government that it would invest some A$7.2-million in the search for minerals and petroleum.

The funding would be shared between 61 drilling projects, and formed part of the state government’s Exploration Incentive Scheme (EIS), which was established four years ago to support resources exploration.

Mines and Petroleum Minister Bill Marmion said the projects would involve drilling for a wide spectrum of commodities in 2013/14.

“The co-funded drilling programme provides incentives to drill in underexplored areas to ensure the continued economic prosperity of the state’s resources industry, particularly in the current financial environment,” he said.

“The scheme has already reaped significant rewards with its contribution to the discovery of the Nova deposit with a co-funding grant to Sirius Resources, as well as providing co-funding to commercially promising and scientifically interesting projects, such as deep drilling which led to the reopening of the Mount Magnet gold mine.”
 
The programme provides co-funding of up to 50% of direct drilling costs with caps of A$150 000 for a multi-hole project, A$200 000 or A$400 000 for a single deep hole (depending on the target commodity), and A$30 000 for prospecting projects.

Regional Development Minister Brendon Grylls noted that the programme stimulated increased private-sector resource exploration and partnerships.

“Investment through the EIS contributes to new mineral and energy discoveries - which underpins economic and community development in regional Western Australia,” Grylls said.

Amec CEO Simon Bennison said on Thursday that the latest funding to support the search for minerals and petroleum across Western Australia was a much-needed stimulus for investment in exploration in the region.

“There has been a continuous decline in exploration activity in Australia. Of most concern, is the decrease in greenfield exploration, which fell by 28% in the December 2012 quarter.

“The industry has seen a lack of investor confidence in exploration companies that has made access to equity finance almost impossible.”

Bennison added that the decrease in greenfield exploration had serious consequences for future governments, given greenfield exploration was responsible for finding the mines of tomorrow.