Joseph Barr was one of the most popular exhibitors at a recent mining symposium since he was “giving away money.”
As president of the Ontario Exploration Council (OEC), he set up a booth at the Ontario Exploration and Geoscience Symposium Nov. 6 and 7 in Sudbury to inform prospectors of available grants.
OEC is fully owned by the Ontario Prospectors Association (OPA) and the organization was created to replace a former grant program with the provincial government.
“We have a three-phase program,” said Barr. “Prospectors can get up to $85,000.”
If a prospector stakes a claim, a $10,000 grant can be applied for. Half is given initially, and the remaining half is received once an assessment report is filed with the Ministry of Northern Development and Mines.
After the $10,000 is spent, a further $25,000 can be applied for. The money must be spent on the claim, and if it looks promising, this second level of funding can be used for activities such as drilling or sampling.
If the assay results are good from drilling and sampling, a further $50,000 can be applied for.
“It is totally interest-free, and there is no repayment. What we take on the first $10,000 is a one per cent net smelter return (NSR). On the second phase, we take another 0.25 per cent and on the third, another 0.25 per cent,” he said.
Out of the total $85,000 available, OEC retains 1.5 per cent NSR, and 0.75 per cent of the NSR can be purchased back if they are successful with their claims and want to option them to a junior mining company.
“If they decide the claim is not good (after the initial $10,000 is received), and decide to walk away, all we request is a letter stating they have abandoned the claim and we release them from any obligation,” Barr said.
“It's an excellent program. People get a little afraid whenever you are talking about any program that requires you to file with the government. But, now that we are released from the government, our recipients have been very, very happy. The only payback is the royalty.”
The program is not well known, even though it has been in existence for 10 years.
“The first five years the OPA didn't do much to promote it,” he said. “We have only dealt with about 170 claims at this point in time.”
“But right now with the financing industry so tight, we expect to get more applications for funding.”
At the symposium in Sudbury, the OEC booth generated some interest and Barr handed out about 40 applications. The funds are only available for claims in Ontario.
Recently, a building stone contractor from southern Ontario was approved for funding, as well as a soapstone deposit.
“We are looking at things other than just straight mining claims,” Barr said. “We will consider anything, like a gravel pit.”
Two years ago, the program got released from the Northern Ontario Heritage Fund Corp. since it was operating under its umbrella up until then. That left it with more than $2 million.
“Now we can invest in different types of products like building stone,” he said. “We are also looking at putting some of the money into investments to generate income to keep the program going.”
The program was also successful with a couple of the NSR buybacks. After $5,000 was awarded to two prospectors, the program netted $85,000 on the buybacks.
A third-party person, who has experience in the mining industry, looks over the applications and then it goes to the board for approval.
“What we want to do is fund a claim that becomes another Hemlo. I would be happy to have a quarter of one per cent on that,” Barr said.