In a much-anticipated turn of events, the Canadian government announced on Thursday, March 28th, the extension of the Mineral Exploration Tax Credit (METC) through to March 31, 2025. This decision, arriving just in the nick of time, has quelled the rising anxiety within the mining sector regarding the future of flow-through financings.

For weeks leading up to the announcement, speculation and concern have been rampant. A recent story by InvestorNews titled Anxiety Rises on the Future of Flow-Through Financings as METC Deadline Looms, Canadian Government Keeps Quiet highlighted the sector’s unease as the March 31, 2024, deadline approached without a word from the federal government. The METC has long been a cornerstone for supporting flow-through share (FTS) pricing for exploration companies, enabling them to raise funds effectively. The lack of confirmation on its renewal posed a significant threat to the cost of capital for these companies, potentially diluting their growth and exploration activities across Canada.

Peter Clausi, a Director for the Critical Minerals Institute (CMI), the CEO of CBLT Inc. (TSXV: CBLT), and a vocal advocate for the mining community, previously expressed deep concern over the government’s silence. The uncertainty, he noted, made planning and investment challenging for junior mining issuers. “Without the METC’s extension, a great deal of investment would not have been made, to the detriment of everyone in the junior mining company’s food chain. The extension of the METC means that the further incentive to invest in junior mining companies with assets in Canada is still there,” Clausi elaborated following the announcement. “Many thanks to everyone who spoke to the government, and especially to PDAC who has been a historical leader in this area.”

The extension is projected to offer support for mineral exploration investments. While the figure mentioned in the announcement was $65 million, industry experts deem this to be an exceptionally modest number. “The $65 million figure seems low compared to the expectations within the industry,” Clausi commented, providing an opportunity to share the perceived discrepancy between the government’s projections and the industry’s expectations.

Despite the last-minute nature of the renewal and the questions surrounding the amount of support provided, the extension has been met with relief. The decision underscores the government’s recognition of the mining sector’s crucial role in Canada’s economy, especially in the sustainable development of natural resources and the promotion of Indigenous economic participation.

Quotes from senior government officials, including The Honourable Chrystia Freeland and The Honourable Jonathan Wilkinson, affirm the government’s commitment to supporting the mining sector. Freeland emphasized the importance of mineral exploration in creating future mining jobs, particularly in northern and remote communities, as part of Canada’s transition to a net-zero economy. Wilkinson highlighted mining’s historic significance to Canada and the current focus on supporting the exploration of critical minerals crucial for clean technology.

The METC’s extension arrives as both a significant relief and a call to action for the mining industry. It not only addresses the immediate financial concerns but also signals the government’s ongoing support for mineral exploration. As Canada continues to navigate its economic and environmental goals, the sustained investment in the mining sector through mechanisms like the METC will be pivotal in unlocking the country’s vast mineral wealth, creating jobs, and fostering a sustainable future.

InvestorNews recently did an interview with Jeff Killeen, Director of Policy and Programs at the Prospectors & Developers Association of Canada (PDAC) who explained how PDAC has played a crucial role in lobbying for the METC’s renewal. Their efforts underscore the collaborative spirit required to ensure the mining sector’s stability and growth. With the extension now in place, the industry can breathe easier, focusing on the exploration and development that are fundamental to Canada’s economic and environmental well-being.

Peter Clausi Analyzes the METC Extension: Understanding Its Impact on Canada’s Mining Industry – Highlights from the Q&A Session:

Q: The Federal Government of Canada announced an extension of the 15% mineral exploration tax credit for investors and flow-through shares until March 31, 2025. What does this mean for the industry?

Peter Clausi: This means that the incentive to invest in junior mining companies with assets in Canada is still there without the mineral exploration tax. But a great deal of investment would not have been made, to the detriment of everyone in the junior mining company’s food chain, including drillers, prospectors, lawyers, accountants, and most importantly, First Nations. With the METC being extended for at least one year, those persons will continue to benefit from continued investments.

Q: Why did the government wait until the last minute to announce the METC extension, and why only for one year?

Peter Clausi: I blame Adam Smith and his invisible hand. I think the liberal government was using the Tax Act as a tool of social policy, which they ever right to…But I think the law of unintended consequences… would have been that those companies would not have seen investment and that’s not healthy for the Canadian mining ecosystem.

Q: How does this extension impact sectors not considered critical minerals?

Peter Clausi: Anything that’s not on the critical minerals list would have been impacted.

Q: The extension is projected to offer $65 million in support for mineral exploration investments. Is this consistent with your understanding of what’s needed?

Peter Clausi: It is. I would expect that $65 million number to be much larger, and that much larger level of support is what’s needed for the non-critical mineral exploration company.

Q: Can you comment on the significance of quotes from Chrystia Freeland and Jonathan Wilkinson in this particular news release?

Peter Clausi: It shows how seriously the Liberal government finally took this issue. And when they realized the unintended consequences of not extending the METC, senior officials in the government took action to extend the METC.

FTS Information sources include:

• The Canadian list of Critical Minerals, click here
• Mining Tax Canada
• How the flow-through share (FTS) program works – Canada.ca
• Canada Revenue Agency – Flow-Through Shares
• PDAC – Access to Capital, Flow-Through Shares
• PDAC Brochure on Flow-Through Shares
• Critical Minerals Institute

Welcome to the latest issue of the Technology Metals Report (TMR), brought to you by the Critical Minerals Institute (CMI). In this edition, we compile the most impactful stories shared by our CMI Director’s over the past week, reflecting the dynamic and evolving nature of the critical minerals and technology metals industry. Among the key stories featured in this report are the US’s pledge of $1.28 billion to ASX-listed rare earths firms to lessen China’s dominance in the sector, the looming uncertainty over the future of Flow-Through Financings in Canada as the METC deadline approaches, and Albemarle Corporation’s groundbreaking lithium auction aimed at enhancing pricing transparency. Additionally, the Biden administration’s ambitious rule to expand electric vehicles (EVs) and the examination of factors behind cooling EV sales growth emphasize the ongoing transformations and challenges within the critical minerals sector.

This week’s TMR Report also highlights several significant developments that further shape our understanding and approach to the critical minerals industry. The urging by the US Energy Secretary for Congress to ban uranium imports from Russia supports domestic nuclear fuel development, while China’s rebound in graphite exports for batteries signals geopolitical tensions and strategic resource control. The US’s efforts to incorporate Central Asia into its critical minerals supply chains, Indonesia’s investment in a new HPAL plant by Vale to boost nickel production for EV batteries, and CATL’s enduring ambitions despite a slight dip in quarterly earnings showcase the global landscape’s complexity and interconnectedness. Furthermore, Graphjet Technology’s innovative approach to producing greener graphite and the push to recognize phosphate and potash as critical minerals in the US underscore the ongoing efforts to secure and diversify supply chains. Lastly, Kazakhstan’s emerging potential to rival China in the production of rare-earth metals points to the shifting dynamics of global supply and the continuous search for strategic alternatives to current market dominators.

To become a Critical Minerals Institute (CMI) member, click here (https://criticalmineralsinstitute.com/join)

US pledges $1.28b for ASX rare earths stocks (March 21, 2024, Source) — The US aims to allocate $1.28 billion to ASX-listed rare earths firms, Meteoric Resources NL (ASX: MEI) and Australian Strategic Materials Limited (ASX: ASM) (ASM), to diminish China’s dominance in critical minerals necessary for decarbonization and defense. The US Export Import Bank’s (US EXIM) potential loans aim to support projects in Brazil and New South Wales, contingent upon US companies obtaining project contracts. This funding is part of wider US and Australian efforts to establish non-Chinese critical mineral supply chains, with additional support from the US Department of Defence and other agencies for various projects. This initiative underscores the strategic importance of diversifying global supply chains and bolsters the credibility and development prospects of companies like Meteoric and ASM in the critical minerals sector.

Anxiety Rises on the Future of Flow-Through Financings as METC Deadline Looms, Canadian Government Keeps Quiet (March 20, 2024, Source) — Facing the potential expiration of the Mineral Exploration Tax Credit (METC) at the end of March, the Canadian mining industry is gripped by uncertainty. This credit, crucial for supporting exploration companies through Flow-Through Share pricing, might not be renewed, threatening to raise capital costs by 15-20%. The federal government’s silence on the issue heightens anxiety, affecting planning and investments, especially for junior miners. Provincial credits in Ontario and Saskatchewan face similar fates, though Manitoba and British Columbia have permanent solutions. The industry is anxiously awaiting the federal budget announcement on April 16, hoping for a resolution. The potential loss of METC, combined with recent tax changes, could significantly impact exploration investment in Canada, underscoring the importance of government policy in the sector’s financial health.

Albemarle Lithium Auction offers a bold move forward in pricing transparency in the critical minerals market (March 20, 2024, Source) — Albemarle Corporation (NYSE: ALB), the largest lithium producer, is initiating a landmark auction on March 26 to enhance transparency and address price discovery issues in the lithium market. This move, highlighted by Jack Lifton of the Critical Minerals Institute (CMI), aims to mitigate the opacity and volatility that have long plagued the sector, exacerbated by the electric vehicle (EV) boom. Traditionally, lithium prices have been privately negotiated, lacking a clear global benchmark. Albemarle’s auction represents an innovative step towards establishing more transparent pricing, inviting competitive bidding for a significant lithium quantity. Although this initiative marks progress towards addressing market challenges, Lifton cautions it may not fully resolve the industry’s volatility and unpredictability, signaling a critical evolution in lithium pricing strategies amidst growing global demand.

Biden Administration Announces Rule Aimed at Expanding Electric Vehicles (March 20, 2024, Source) — The Biden administration unveiled a pivotal climate regulation, aiming to revolutionize the U.S. auto industry by ensuring a majority of new passenger vehicles sold by 2032 are electric or hybrid. This marks a major step in tackling climate change, given transportation’s status as the top carbon emitter in the country. Despite electric vehicles (EVs) constituting only 7.6% of car sales last year, this rule mandates a significant increase to meet a 56% EV sales target, with hybrids contributing an additional 16%. President Biden highlighted the initiative’s potential for economic growth, job creation, and significant environmental benefits, including a projected reduction of over seven billion tons of carbon dioxide emissions over three decades. However, the transition faces challenges, including manufacturing and infrastructure overhaul, political opposition, and consumer acceptance. The regulation, which introduces stringent emissions caps, has garnered both support for its environmental impact and criticism for its feasibility and potential economic implications. Critics argue it may impose undue pressure on the auto industry and consumers, while supporters see it as a crucial step toward a more sustainable future.

The cars, the chargers or the customers? A look at what’s behind cooling EV sales growth (March 20, 2024, Source) — Facing cooling growth in electric vehicle (EV) sales, automakers are adjusting their production strategies amidst increasing model availability. The sector balances optimism with skepticism regarding the shift away from fossil fuels, underlined by challenges like inadequate charging infrastructure impacting consumer choices. Events like CERAWeek by S&P Global highlight EVs’ potential to reduce oil demand, emphasizing the transition’s significance. Despite slower sales growth, companies like Ford report significant increases, pointing to the essential role of EVs in future automotive competitiveness. Addressing consumer concerns, particularly around charging reliability and infrastructure, alongside educating an evolving customer base, is pivotal for sustaining the industry’s growth momentum.

US energy secretary encourages Congress to ban uranium supplies from Russia (March 20, 2024, Source) — U.S. Energy Secretary Jennifer Granholm has urged Congress to ban uranium imports from Russia to support domestic nuclear fuel development. This call comes in light of legislation passed by the U.S. House last December, aimed at halting these imports as part of the response to Russia’s invasion of Ukraine. However, the Senate has faced delays due to a hold by Senator Ted Cruz on unrelated issues. Granholm emphasized that passing this ban would release funds for expanding domestic uranium enrichment and producing high assay low enriched uranium (HALEU) for advanced nuclear reactors. She expressed optimism during a House hearing on her department’s budget, highlighting the urgency of this action to advance domestic nuclear energy capabilities.

China’s exports of graphite for batteries rise from December low (March 20, 2024, Source) — China’s natural graphite exports, essential for electric vehicle batteries, rebounded after Beijing’s December controls aimed at tightening its grip on vital minerals for advanced manufacturing. From a December low of 3,973 tonnes, exports rose to 6,275 tonnes in January and 10,722 tonnes in February, despite previously averaging about 17,000 tonnes monthly. The restrictions, viewed as a response to Western trade barriers, notably impact trade flows. Rising tensions are evident as the U.S. considers blacklisting Chinese semiconductor firms linked to Huawei Technologies, signaling an escalation in the technological rivalry. These developments underscore the strategic importance of graphite in the global tech industry and the geopolitical tensions surrounding access to critical manufacturing resources.

US Looks to Draw Central Asia Into Critical Minerals Supply Chains (March 18, 2024, Source) — The United States is actively seeking to integrate Central Asia into its critical minerals supply chains, a move underscored by the February 2024 inauguration of the Critical Minerals Dialogue (CMD) in the C5+1 format. This initiative, bolstered by the collective will of the U.S. and Central Asian nations—Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan—aims to bolster Central Asia’s role in global supply chains, thereby enhancing economic cooperation, facilitating clean energy transitions, and protecting regional ecosystems. Central Asia, rich in critical minerals like nickel, cobalt, palladium, rare earth elements (REEs), and others vital for high-tech, defense, and green technologies, represents a strategic alternative to China’s dominance in these supply chains. The U.S. is particularly keen to mitigate risks associated with China’s control over a significant portion of the world’s critical minerals processing and production. Through the CMD and other partnerships, the U.S. seeks to foster investment in Central Asia’s vast mineral resources, promising a potential shift in global economic and technological power dynamics while confronting strategic vulnerabilities and enhancing national security.

Indonesia says nickel miner Vale to build another $2 bln HPAL plant (March 18, 2024, Source) — Nickel miner PT Vale Indonesia is considering a $1.91 billion investment in a new high-pressure acid leaching (HPAL) plant on Sulawesi island, announced Indonesia’s Investment Ministry. This plant, named “SOA HPAL,” aims to produce mixed hydroxide precipitate (MHP), essential for electric vehicle batteries, with an expected annual output of 60,000 metric tons of nickel in MHP. Vale Indonesia, which is in the final stage of exploration, plans to collaborate with automakers for this venture. The company already has two HPAL projects underway in Sulawesi, partnering with Zhejiang Huayou Cobalt, and has Ford’s involvement in the $4.5 billion Pomalaa project. Additionally, Indonesia’s state mining company MIND ID recently acquired a 14% stake in Vale Indonesia, bolstering its position as a top shareholder.

CATL earnings slip masks charged-up ambitions (March 18, 2024, Source) — Contemporary Amperex Technology (CATL), the world’s largest electric car battery manufacturer, experienced a slight 1.2% decline in quarterly earnings, marking its first downturn since early 2022. Despite reduced factory utilization and the broader industry’s cooling sales growth, CATL is ambitiously expanding, planning new facilities to increase its production potential significantly. The company dominates the global market, boasting a 36.8% share and leading innovation with a large R&D team focused on advanced battery chemistries. Although facing challenges in the United States, CATL is making strategic moves abroad, including constructing a factory in the European Union. Investors remain optimistic, reflected in a stock price increase, as CATL’s scale, innovation, and strategic expansion position it to potentially outpace competition and maintain market leadership, despite potential overcapacity risks.

Startup Offers EV Firms Greener Graphite in Alternative to China (March 18, 2024, Source) — Graphjet Technology, an alternative energy startup in Malaysia, is offering electric-vehicle (EV) manufacturers a sustainable source of graphite by converting agricultural waste into this critical battery component. Utilizing palm kernels, the company can produce graphite with an 83% lower carbon footprint and at 80% less cost than traditional methods. Starting in the second quarter, Graphjet aims for an annual production capacity of 3,000 tons from its facility in Malaysia, a leading palm oil producer. This move provides a significant alternative to China’s dominance in the synthetic graphite market, responsible for 90% of the global supply. The U.S. is keen on diversifying its EV battery supply chain away from Chinese control, especially in light of China’s recent export restrictions on graphite. Graphjet’s initiative is timely, as it plans expansions in Nevada, Korea, Japan, and Europe, aiming to address the growing global demand and the U.S.’s need for a reliable graphite source outside China.

TFI: Phosphate and Potash are Critical Minerals, Senate Bill to Solidify (March 14, 2024, Source) — The Fertilizer Institute (TFI) has commended the U.S. Senate’s bipartisan effort to classify phosphate and potash as critical minerals, highlighting the move as crucial for securing the nation’s agricultural future and food supply. The legislation, backed by Senators from both parties, aims to ensure a resilient and sustainable domestic fertilizer supply for American agriculture by addressing the vulnerabilities in the global supply chain and geopolitical instability. With the majority of the world’s phosphate and potash concentrated in a few countries, and the U.S. heavily reliant on imports for its potash needs, this initiative seeks to mitigate supply chain risks. Recognizing these minerals as critical could streamline the permitting process for expanding and opening new mines in the U.S., a necessary step given the extensive time and financial investment required.

Kazakhstan’s Potential to Overtake China in Production of Rare-Earth Metals (March 14, 2024, Source) — Kazakhstan is on the verge of becoming a significant contender in the global rare-earth elements (REEs) market, challenging China’s dominance. With China controlling 70% of the market and facing strained relations with the West, North American and European investors are turning to Kazakhstan’s rich reserves as a strategic alternative. This shift is driven by the need to diversify supply chains away from China, given REEs’ critical role in technology and manufacturing. The US and EU are prepared to invest in Kazakhstan, aiming to secure a stable, sustainable supply of these vital materials. However, Kazakhstan must modernize its mining practices and carefully select investors to fully leverage its potential as a global REE supplier.

Investor.News Critical Minerals Media Coverage:

• March 20, 2024 – Anxiety Rises on the Future of Flow-Through Financings as METC Deadline Looms, Canadian Government Keeps Quiet https://bit.ly/3IKHmI7
• March 20, 2024 – Albemarle Lithium Auction offers a bold move forward in pricing transparency in the critical minerals market https://bit.ly/3vkpBwf
• March 20, 2024 – The Top 5 Reasons Why YouTube Will Transform Marketing for Public Companies https://bit.ly/3PvPnEC

Investor.News Critical Minerals Videos:

• March 20, 2024 – CBLT’S Peter Clausi on de-risking exploration projects with M&A https://bit.ly/3vfU6Uf
• March 20, 2024 – Chris Buncic on the “shocking” Chrysalis Copper timeline for production https://bit.ly/49ZGRGm
• March 19, 2024 – World Renowned Critical Minerals Expert Constantine Karayannopoulos is Bullish on Lithium https://bit.ly/43mOvbk
• March 19, 2024 – Peartree’s Ron Bernbaum on how Charitable Flow-Through Financings Connects Donors, Investors, and Mining Companies for Canada’s Exploration Capital https://bit.ly/4cj303V
• March 19, 2024 – Xcite Resources’ Jean-Francois Meilleur on the Athabasca Basin’s untapped potential for significant uranium discoveries https://bit.ly/49YQ9SK
• March 19, 2024 – Scandium Canada’s Guy Bourassa on One of the Largest Primary Scandium Projects in the World https://bit.ly/3TlHeUp
• March 18, 2024 – Rowena Smith Highlights ASM’s Operational Success at Korean Metals Plant in Rare Earth Metals Production https://bit.ly/3TH1jWS
• March 18, 2024 – Jack Lifton Sits Down with ‘Bobby’ Stewart, the Driving Force Behind Geophysx Jamaica’s Charge into the Global Arena with Critical Minerals https://bit.ly/3vhDtaG
• March 18, 2024 – WEALTH’s Peter Nicholson on the Added Benefits of Critical Mineral Flow Through Investment Deals in Quebec, Saskatchewan and Manitoba https://bit.ly/4a37xGk
• March 17, 2024 – John Passalacqua on First Phosphate’s groundbreaking achievements in the phosphate mining industry https://bit.ly/3VgRlwt
• March 17, 2024 – America Rare Earths’ Donald Swartz on the recent increase in in-situ resources at Halleck Creek by 64% to 2.34 billion tonnes https://bit.ly/3IGgvNv
• March 17, 2024 – Rowena Smith sits down with Jack Lifton on ASM’s ‘Mines to Metal’ Advantage in Supplying Rare Earths https://bit.ly/4cmIlMc

Critical Minerals IN8.Pro Member News Releases:

• March 21, 2024 – Hearty Bay Drilling Suggests Till Sampling May Lead to Source of Radioactive Boulders https://bit.ly/3ILHjvL
• March 21, 2024 – ASM receives US$600M (A$923 million) Letter of Interest from US EXIM for Dubbo Project, as US partnerships begin to play a significant role https://bit.ly/4ahxWQR
• March 20, 2024 – NEO Battery Materials Announces Change of Auditor to MNP LLP https://bit.ly/3VrGyQf
• March 20, 2024 – Power Nickel Continues to Expand its Near Surface High-Grade Cu-Pt-Pd-Au-Ag Zone 5km Northeast of its Main Nisk Deposit https://bit.ly/3IM5Cd5
• March 19, 2024 – First Phosphate Drills 9.44% P2O5 Over 89.10 m at Its Begin-Lamarche Project in Saguenay-Lac-St-Jean, Quebec, Canada https://bit.ly/43wi4qT
• March 19, 2024 – Defense Metals Appoints HCF International Advisers for Strategic Funding Review of Wicheeda REE Project https://bit.ly/3IGNMIo
• March 18, 2024 – American Rare Earths’ Scoping Study confirms low-cost, scalable world-class REE project https://bit.ly/3IJID2l

As the deadline looms for the expiration of the end of March, the Canadian mining industry faces a pivotal moment that could significantly impact its funding mechanisms and future exploration endeavors. The mineral exploration tax credit (METC), traditionally extended during the PDAC Convention, has not seen its renewal announced this year, stirring considerable anxiety within the sector. This program has been a cornerstone in supporting Flow-Through Share (FTS) pricing for exploration companies, enabling them to raise funds more effectively. Without the METC, these companies are looking at a potential increase in the cost of capital by 15% to 20%, a dilution that signifies not just an operational challenge but a strategic impediment to growth and exploration activities across Canada.

Peter Clausi, a Director for the Critical Minerals Institute (CMI) and a prominent voice in the mining community, articulates the immediate concern and confusion within the sector. According to Clausi, the silence from the federal government in response to lobbying efforts for clarity on the METC’s future is disconcerting. This uncertainty complicates planning and investment for junior mining issuers, who might see their cost of capital rise significantly without the federal credit component of flow-through financing. Clausi’s observations underscore the critical nature of this moment, as the industry seeks guidance amidst this uncertainty.

The broader ramifications of the METC’s expiration extend beyond federal boundaries, affecting provincial METCs in Ontario and Saskatchewan, which are set to expire concurrently. Although Manitoba and British Columbia have made their tax credits permanent, and Quebec’s provincial incentives would remain effective, the overall impact on the industry’s financing landscape is profound.

If the METC does expire at the end of March, the Critical Mineral Exploration Tax Credit (CMETC) would continue until 2027.

Clausi emphasizes the significance of the upcoming federal budget announcement on April 16, which the sector hopes could reinstate the METC or provide a viable alternative.

Ron Bernbaum of Peartree Capital further amplifies this concern, highlighting the vital role of flow-through financing in supporting over 90% of exploration investment in Canada. Bernbaum points out that recent tax changes, especially those related to the Alternative Minimum Tax (AMT), threaten to reduce exploration capital significantly. The double whammy of an expanded AMT regime and no METC would have a severe negative impact on mining exploration in Canada.

Both Clausi and Bernbaum’s insights into the current state of flow-through financing and the METC bring to light the intricate balance between government policy, tax incentives, and the financial health of the mining sector. As the deadline approaches, the industry awaits some kind of federal action that could either bolster its prospects or challenge its resilience in navigating the complexities of mineral exploration and development in Canada.

In an insightful interview at PDAC 2024, Critical Minerals Institute (CMI) Director Peter Clausi and PearTree Financial‘s CEO Ron Bernbaum discussed the pivotal role and challenges of flow-through financing in Canada’s mining sector. Bernbaum highlighted that flow-through financing is instrumental for junior mining companies, facilitating over 90% of exploration investment. This model supports critical exploration activities such as drilling and First Nations engagement, with PearTree playing a significant role by facilitating over $500 million annually in Flow-Through Share Financings across more than 600 transactions.

Bernbaum expressed concern over recent tax changes, particularly the modifications in the Alternative Minimum Tax (AMT) rules, which could potentially reduce exploration capital by approximately one-third. Despite these challenges, the introduction of the Critical Mineral Exploration Tax Credit in 2022, which led to $350 million of investment, demonstrates the federal government’s recognition of the sector’s importance. However, Bernbaum underscored the need for sustainability in these incentives amidst tax policy changes.

Amidst regulatory challenges, Bernbaum remains hopeful for positive amendments to tax regulations and lauds provinces like Quebec for their additional support through tax incentives. He stressed the complexity and the essential nature of flow-through financing in leveraging government policies and tax incentives to support mining exploration. This system has facilitated significant investments in the mining sector, demonstrating the interplay between government initiatives and the industry’s funding mechanisms. PearTree’s unique position, offering Charity Flow-Through Financings, connects donors, investors, and mining companies, maximizing benefits for all parties involved and ensuring the continued flow of essential exploration capital in Canada’s mining industry.

To access the complete interview, click here

Don’t miss other InvestorNews interviews. Subscribe to the InvestorNews YouTube channel by clicking

The recent Critical Minerals Institute (CMI) Masterclass, hosted by Tracy Weslosky, featured an in-depth discussion on the intricacies and opportunities of flow-through financing, particularly in the context of critical minerals. The panel included Peter Nicholson from Wealth Group (WCPD Inc.), Jean-Philippe (J.P.) Côté from Fasken, and Peter Clausi from Silver Bullet Mines Corp. (TSXV: SBMI | OTCQB: SBMCF) and CBLT Inc. (TSXV: CBLT), who provided valuable insights into this complex financing model.

Peter Nicholson elaborated on the evolution of the charitable flow-through model in financing, a model that has grown significantly since 2006. He emphasized its benefits in mitigating risks and offering tax advantages, particularly for high net worth individuals. He emphasized how the charitable flow-through model has grown to dominate the market, explaining its resilience during financial downturns and its importance in the current market.

Peter Clausi clarified the terminology and functioning of flow-through shares. These shares are designed as a tax benefit, enabling losses from mining exploration to be passed to investors. He underscored that these are a creation of the Income Tax Act, not affecting corporate or stock exchange structures.

J.P. Côté discussed the tax benefits associated with investing in companies exploring critical minerals, such as uranium. He highlighted the changes in tax credits, especially for critical minerals, and the implications of these incentives for exploration companies.

The panel also delved into the role of liquidity providers in the flow-through model, discussing the current market trends. They explored the challenges and opportunities for both investors and companies, especially considering recent markets and the growing focus on critical minerals.

There was a discussion on the increasing global interest in critical minerals, emphasizing the potential for institutional investors to play a more active role in this sector. The panelists also discussed the necessity for better understanding and utilization of flow-through financing among these investors.

From a legal and regulatory standpoint, J.P. Côté and Peter Clausi offered insights into the complexities of flow-through financing. They discussed the nuances of qualifying for critical minerals and the potential for future legislative adjustments in this area.

For investors looking to leverage flow-through financing in critical minerals, the session provided strategic advice. This included guidance on how to approach brokers and identify promising investment opportunities in this sector.

The discussion concluded with thoughts on the future of flow-through financing. The panelists pondered its trajectory, especially considering political and economic changes, and the possibility of including sectors like renewable energy in this financing model.

To access the complete video, click here

For more information on the Critical Minerals Institute or becoming a CMI Member, click here

Toronto, November 15, 2023 – The Critical Minerals Institute (CMI), an international organization dedicated to advancing the critical minerals sector, is pleased to announce an upcoming Masterclass titled Navigating the Critical Minerals and Flow-Through Landscape. This virtual event, focusing on the exploration of critical minerals and the innovative charitable flow-through model, promises to be an enlightening experience for professionals and enthusiasts alike.

Date: Monday, November 20th
Time: 7-8 PM EST
Format: Virtual Event, Click Here to Register

Guided by CMI Director Tracy Weslosky, this masterclass will bring together notable figures like Peter Nicholson from WEALTH, Jean-Philippe Côté from Fasken, and Peter Clausi, also a CMI Director. They will explore the latest trends, opportunities, and challenges in the critical minerals landscape.

Highlights of the session include:

• An in-depth explanation of the charity flow-through model, detailing its structure and benefits under Canada’s Income Tax Act.
• Discussion on the Critical Mineral Exploration Tax Credit (CMETC), a crucial development in Canada’s 2022 budget that enhances capital raising capabilities in the mining sector.
• Insights into the role of critical minerals in modern technology and clean energy solutions.

This masterclass is an excellent opportunity to expand your knowledge, network with industry experts, and gain insights into the critical minerals sector and investment strategies.

About the Critical Minerals Institute, the CMI:

The Critical Mineral Institute (CMI) is an international organization for companies and professionals focused on battery materials, technology metals, defense metals, ESG technologies and practices, the general EV market, and the use of critical minerals for energy and alternative energy production. Offering an online site that features job opportunities that range from consulting roles to Advisory Board positions, the CMI offers a wide range of B2B service solutions. Also offering online and in-person events, the CMI is designed for education, collaboration, and to provide professional opportunities to meet the critical minerals supply chain challenges. 

Offering access to critical mineral experts, B2B resources, an industry newsletter and both online and in-person events. 

Click here to become a CMI Member

Registration:
For event registration, click here

Contact:
For further details, please contact Tracy Weslosky, Managing Director for the CMI, at [email protected] or +1 416 792 8228

In the InvestorNews interview, the Critical Minerals Institute (CMI) President Brandon Colwell spoke with Peter Nicholson, Founder and President of Wealth Group (WCPD Inc.), about flow-through shares and the benefits of being a critical mineral company. Peter explained that flow-through shares have been part of Canada’s tax code since 1954 and are encouraged by the government as they support exploration and mining, crucial for transitioning to zero carbon. These shares allow investors to claim 100% tax deductions on their investments, supporting small exploration companies with high risk.

Nicholson distinguished four types of flow-through shares: CEE, CDE, super flow-through, and those related to critical minerals. CEE (Canadian Exploration Expenses) and CDE (Canadian Development Expenses) are ideal for corporations, providing tax deductions and credits. Super flow-through shares, introduced in 2001, offer a 15% federal credit and 100% tax deduction, exclusively for individuals. Critical mineral flow-through shares, focusing on minerals like copper, nickel, lithium, cobalt, and uranium, provide an additional 15% federal credit to foster investment in these crucial resources.

Provincial credits vary, with Quebec offering the most attractive incentives. Nicholson emphasized the increasing popularity and significance of critical mineral flow-through shares, highlighting their role in supporting environmental sustainability and a potential 20-year bull market in critical minerals.

To access the complete interview, click here

Don’t miss other InvestorNews interviews. Subscribe to the InvestorNews YouTube channel by clicking here

About WCPD Inc.

Wealth Creation Preservation & Donation Inc.‘s (WCPD Inc) financial planning strategies help increase your personal wealth by tailoring financial solutions that fit the client’s personal circumstances. Their highly personalized boutique services offer unique financial solutions while working in tandem with larger financial institutions and industry partners. They do not sell products and advice based on sales targets and product launches.

In addition to Insurance Services, WCPD also offers access to some of Canada’s most exciting opportunities in the resources sector, including financings for this essential sector in our economy. In particular, WCPD is a proud supporter of critical minerals, which are crucial to green technologies of the future.

To learn more about WCPD Inc., click here.

Disclaimer: WCPD Inc. is an advertorial member of InvestorNews Inc.

This interview, which was produced by InvestorNews Inc. (“InvestorNews”), does not contain, nor does it purport to contain, a summary of all material information concerning the Company, including important disclosure and risk factors associated with the Company, its business and an investment in its securities. InvestorNews offers no representations or warranties that any of the information contained in this interview is accurate or complete.

This interview and any transcriptions or reproductions thereof (collectively, this “presentation”) does not constitute, or form part of, any offer or invitation to sell or issue, or any solicitation of any offer to subscribe for or purchase any securities in the Company. The information in this presentation is provided for informational purposes only and may be subject to updating, completion or revision, and except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any information herein. This presentation may contain “forward-looking statements” within the meaning of applicable Canadian securities legislation. Forward-looking statements are based on the opinions and assumptions of the management of the Company as of the date made. They are inherently susceptible to uncertainty and other factors that could cause actual events/results to differ materially from these forward-looking statements. Additional risks and uncertainties, including those that the Company does not know about now or that it currently deems immaterial, may also adversely affect the Company’s business or any investment therein.

Any projections given are principally intended for use as objectives and are not intended, and should not be taken, as assurances that the projected results will be obtained by the Company. The assumptions used may not prove to be accurate and a potential decline in the Company’s financial condition or results of operations may negatively impact the value of its securities. This presentation should not be considered as the giving of investment advice by the Company or any of its directors, officers, agents, employees or advisors. Each person to whom this presentation is made available must make its own independent assessment of the Company after making such investigations and taking such advice as may be deemed necessary. Prospective investors are urged to review the Company’s profile on SedarPlus.ca and to carry out independent investigations in order to determine their interest in investing in the Company.

In a world filled with opinions, controversies, and disagreements, one issue most Canadians can agree on is the push for a greener future.

Reducing greenhouse emissions. Preserving our natural environment. And transitioning to a low-carbon economy.

These are all goals worth pursuing.

Who would have thought that mining would play an essential role? 

In April 7^th of last year, Canada opened the eyes of many Canadians when it announced its first ever Critical Minerals Strategy – a new set of laws, regulations and tax incentives to help boost the supply of critical minerals, or the building blocks of technology and green energy solutions. 

“The world economy is going green,” Chrystia Freeland, Deputy Prime Minister and Minister of Finance, said at the last Federal Budget. “Canada can be in the vanguard, or we can be left behind.”

Think cobalt for electric car batteries and wind turbines. Think titanium for solar panels and aerospace technology, or copper for circuit boards and electronics.

The fact is, the average Canadian understands these technologies are important, but has no clue what it takes to actually produce them. Mention mining, and it sometimes conjures images of our grandparents’ generation – destructive, archaic, invasive and damaging to the natural world.

I should know.

For almost 10 years, I have spoken to Canadians about the merits of charity flow-through shares with an immediate liquidity provider to reduce their taxes, and if they wish to, give more to charities of their choice.  You may have heard about flow-through shares before, which makes sense, considering they have been around since 1954 (three years older than your RRSP).

In essence, flow-through shares are a financial instrument used by the government to raise capital for junior mining companies, through a tax deduction equal to the amount invested.

For nearly 70 years, our government has understood how important it is to provide seed funding to junior companies so they can create jobs, stimulate the economy, and hopefully, find that next big deposit of minerals.

This financial structure has not only generated billions in financings for these junior mining companies, but more than a $1 billion in giving to registered Canadian charities.

Allow me to explain.

When a junior mining company plans to drill, our clients purchase these flow-through shares for the 100% tax deduction and donate them to charities of their choice. The shares are then sold to a pre-arranged liquidity provider at a discount a moment later, eliminating any stock market risk.

The charity receives the cash proceeds, but issues a donation tax receipt to the donor, generating a second 100% tax deduction.

In addition, some clients choose to keep the cash proceeds from the liquidity provider for themselves, generating at least a 25% rate of return via tax savings with no stock market risk.

It’s a tried and true model – the GIC of tax deduction, I like to say – with 9 advanced tax rulings and over 6,000 WCPD client tax filings, with no CRA filing issues.

However, of the thousands of clients I’ve met over the years, how many do you think cared about mining? The answer is almost none, except for mining executives, who are high-taxed clients and buy flow-throughs.

Not only did they not care about mining, but as I said earlier, they often had objections. Isn’t mining bad for the environment? For some clients, that was enough for them to walk away.

Suddenly, with the rise of critical minerals, mining isn’t quite so scary anymore.

In my discussions with Canadians, they now understand that there is no path to a low-carbon future without them.

In total, Canada has identified 31 minerals that are deemed “critical” to this future economy, not to mention our national security.

Now we just have to discover them.

As part of their Critical Minerals Strategy, the government has pledged $3.5 billion to boost infrastructure and improve the supply chain. In addition, it has introduced an enhanced tax credit. Explorations involving critical minerals, such as copper, nickel, lithium and cobalt, will now kick out a 30% tax credit (equal to a 60% tax deduction), on top of our 100% tax deductions from the flow-through structure.

Already, our firm has done several of these deals involving critical minerals.

For the technology and green energy sector, the stakes are high. In September 2021, at a mining conference, Tesla CEO Elon Musk famously quipped: “Please mine more nickel. Telsa will give you a giant contract for a long period of time if you can mine nickel efficiently and in an environmentally sensitive way.”

Put simply, this is an opportunity for Canadian mining to shine.

From the production of green energy solutions, to the decision to buy flow-through shares, Canadian mining is something we can all feel invested in.

Part 1: Avalon Advanced Materials Inc.

Since the start of the very unnecessary war in Ukraine both federal and provincial governments in Canada have made numerous announcements with respect to critical materials, supply chain, EV battery manufacturing, and a whole host of other related subjects. The province of Ontario made a big splash in March, first announcing its strategy for ‘critical minerals’ worth C$3.5 billion to Ontario’s economy followed shortly by a C$4.9 billion electric vehicle battery plant in Windsor, Ontario. Then in April, the Federal Government got in on the action with Budget 2022, proposing up to C$3.8 billion in support over eight years to implement Canada’s first Critical Minerals Strategy.

All these initiatives could have material impacts on several companies in the mining sector in Canada. Against this backdrop, we will begin a series of articles looking at the companies that could benefit from this government support to help position Canada to lead the way in supplying materials for clean technology, healthcare, aerospace, and computing, that will continue to be in high demand for years to come.

We’ll start the series by looking at an Ontario based mining company providing investors with exposure to lithium, rare earths, cesium, tantalum, feldspars, tin and indium. Avalon Advanced Materials Inc. (TSX: AVL | OTCQB: AVLNF) is a Canadian mineral development company specializing in sustainably produced materials for clean technology. Avalon is currently focusing on developing its Separation Rapids Lithium Project near Kenora, Ontario while continuing to advance other projects, including its 100%-owned Lilypad Cesium-Tantalum Lithium Project located near Fort Hope, Ontario. Additionally, Avalon is evaluating opportunities to apply an innovative, new extraction technology to recover rare earths and other metals from acid mine drainage at closed mine sites and remediate the environmental liability.

Unlike typical articles about companies where we focus on what a company is up to and where the next catalyst may come from, this series is going to look at how a company may be able to tap into some of the cash governments are pledging to the industry or benefits that may accrue due to policy changes. Accordingly, let’s review a few of the highlights from the various announcements.

Both Ontario and the Federal Budget announcements included funding to improve the regulatory framework, which has the potential to backfire in my opinion, but if successful this should be a benefit to any and all mining companies in Canada. However, the Ontario announcement goes one step further to include the development of a regulatory framework for recovery of minerals from mine tailings and waste with an amendment to the Mining Act. Avalon has been looking at several such opportunities including East Kemptville Tin-Indium and the Cargill past-producing phosphate mine site in Ontario with concentrations of rare earths, scandium and zirconium in the tailings. Unfortunately, East Kemptville is in Nova Scotia so it falls outside of Ontario’s jurisdiction, but if Avalon can advance their process, I’m sure there is ample opportunities to apply the technology to many of Ontario’s past producing mines.

Another pillar in the Ontario strategy was the encouragement of domestic processing and creating resilient local supply chains. The announcement of the Stellantis and LG Energy Solution JV marking Canada’s first lithium-ion electric vehicle (EV) battery manufacturing plant went a long way toward supporting this initiative. And what goes into lithium-ion batteries? Lithium of course, and Avalon is well positioned with two lithium projects located in Ontario. That strikes me as being in the right place at the right time with the right commodity. We’ll see how this plays out over the next few years as the plant is scheduled to begin production in early 2025.

Another catch-all for all junior miners in Canada was the Federal Budget announcement of the introduction of a new 30% Critical Mineral Exploration Tax Credit for specified mineral exploration expenses incurred in Canada and renounced to flow-through share investors. The tax credit would apply to eligible materials including nickel, lithium, cobalt, graphite, copper, rare earth elements, vanadium, tellurium, gallium, scandium, titanium, magnesium, zinc, platinum group metals, and uranium. This should help any explorer in the sector looking to fund upcoming drilling programs by providing another avenue of raising capital.

As long as governments don’t get in the way of their good intentions, we could be on the verge of a golden era for critical mineral explorers, miners and processors in Canada. Correspondingly, over the next several weeks we’ll continue to look at companies like Avalon that find themselves well-positioned to take advantage of this renewed focus by the Canadian Government on the security of supply, to exploit Canada’s abundance of valuable critical minerals.

In this InvestorIntel interview with host Tracy Weslosky, CBLT Inc.’s (TSXV: CBLT) President, CEO and Director Peter Clausi discusses the four major mining industry takeaways from Canada’s 2022 Federal Budget.

In the interview, which can also be viewed in full on the InvestorIntel YouTube channel (click here), Peter Clausi talks about four major items in the budget that affect the mining industry, including $1.5 billion to support the domestic critical minerals industry with new infrastructure and “access to federal data”, and the proposed flow-through increase to 30% of the new Critical Mineral Exploration Tax Credit. He also discusses the $70 million earmarked to research and develop small modular reactors as a major policy shift towards reconsidering nuclear power, and the importance of partnering with First Nations.

To watch the full interview, click here

About CBLT Inc.

CBLT Inc. is a Canadian mineral exploration company with a proven leadership team, targeting lithium, cobalt and gold in reliable mining jurisdictions. CBLT is well-poised to deliver real value to its shareholders.

To learn more about CBLT Inc., click here

Disclaimer: CBLT Inc. is an advertorial member of InvestorIntel Corp.

This interview, which was produced by InvestorIntel Corp., (IIC), does not contain, nor does it purport to contain, a summary of all the material information concerning the “Company” being interviewed. IIC offers no representations or warranties that any of the information contained in this interview is accurate or complete.

This presentation may contain “forward-looking statements” within the meaning of applicable Canadian securities legislation. Forward-looking statements are based on the opinions and assumptions of the management of the Company as of the date made. They are inherently susceptible to uncertainty and other factors that could cause actual events/results to differ materially from these forward-looking statements. Additional risks and uncertainties, including those that the Company does not know about now or that it currently deems immaterial, may also adversely affect the Company’s business or any investment therein.

Any projections given are principally intended for use as objectives and are not intended, and should not be taken, as assurances that the projected results will be obtained by the Company. The assumptions used may not prove to be accurate and a potential decline in the Company’s financial condition or results of operations may negatively impact the value of its securities. Prospective investors are urged to review the Company’s profile on Sedar.com and to carry out independent investigations in order to determine their interest in investing in the Company.

If you have any questions about the content of this interview, please contact us at +1 416 792 8228 and/or email us direct at [email protected].