PDAC President highlights exploration financing gap in CIM Magazine
Restrictions on how flow-through funds can be spent are creating a financing obstacle as mineral projects move towards feasibility, PDAC President Karen Rees told CIM Magazine.
“Too many projects are reaching an impasse, where incentive dollars may be available in the marketplace or already on their balance sheets but are untouchable because of the way the tax code restricts flow-through spending,” Rees said. “At this point in the development cycle, hard dollars are extremely scarce, and viable projects are failing to reach feasibility simply because capital is unavailable.”
Rees described the period between early exploration and a construction decision as a financing “valley of death,” when projects need extensive engineering and technical work but struggle to attract risk capital or debt. PDAC is calling for expanded Canadian Exploration Expense (CEE) eligibility to help companies fund this work and advance discoveries towards development.