Integra Mining (ASX: IGR) transitioned from gold explorer to producer in September 2010 after pouring first gold from its flagship Randalls Gold Project.
The company has steadily built up its mineral portfolio through a series of acquisitions, joint ventures and strategic alliances, and now controls a consolidated tenement package of approximately 1,500km2 in the heart of the Eastern Goldfields of Western Australia.
Australia ‘losing the plot' on mining incentives - Integra Mining CEO
Ross Louthean, Minweb.com
Integra Mining Ltd (ASX: IGR) managing director Chris Cairns told the final day of Paydirt's Australian Gold Conference in Perth Tuesday said the lack of incentives places at risk at least 25% of Australia's junior explorers.
In a general commentary on the gold industry, Cairns said Australia had, in 1993, slipped from being a leader in share of global exploration spend, losing its crown to Canada in 2002.
"The one single differentiating factor was Canada's introduction in October 2002 of a 15% exploration tax credit for flow-through shareholders," Cairns said.
"Australia's failure to do likewise since has only resulted in Canada continuing to be the world leader in exploration spend - and therefore discovery - while Australia has continued to decline - to a point it and third placed United States are both a long way off the Canadian pace," Cairns said.
"The impact is no better illustrated than at grassroots level where the short-term funding for explorers in Australia's junior sector - who now account for more than 60% of national exploration expenditure - has left them cash strapped," he said.
"Most have barely more than one year of cash reserves in hand at any one time. At the cash burn needed for successful exploration, these juniors need to be able to work on at least a five year timeframe to allow meaningful exploration and meaningful discovery.
"They remain very under-funded in the type of exploration they need to do and alarmingly, 25% of Australia's junior sector will be out of business if they do not raise more money in the next six months."
Cairns warned against the falsehoods employed by Federal Treasury and inquiries such as the Henry Tax Review in defining the "strength" of Australia's gold inventory and the related argument that it warranted the impost of higher taxes.
"The current level of Australian gold production is underpinned by a handful of gold deposits discovered decades ago and diminishing exploration success, related to lower exploration expenditure for gold.
"In addition, significant project permitting and land access restrictions mean that the future production profile for gold and other metals looks bleak - quite the opposite to what Treasury has been advised."
Chris Cairns said the reality is that many deposits reported to Treasury as being part of Australia's Economic Demonstrated Resources (AEDRs) -- through their location and capital hurdles for development -- may never be economic.
"In the meantime, we are putting at risk the new breed of junior Australian explorers and gold developers who are the real victims of potential changes to the Royalty regime and the mooted Resources Rent Tax.
"A resources rent tax will further diminish Australia's attractiveness for exploration and mining investment.
"To maintain Australia's export income performance, the mining industry needs to invest in exploration, particularly in areas under cover.
"Rather than an ideologically driven profit gouging of the mining industry, the Australian Government must foster an environment of technical initiatives and exploration incentives.
"These need to include tax incentives rather than penalties if it wants to continue to enjoy the significant benefits of resource sector export earnings, tax and royalty revenues, flow-on economic contributions and regional development the mining industry provides."
