Ontario Exploration Corporation offers grants to prospectors
By Lisa Fattori
A funding program by the Ontario Exploration Corporation (OEC) is helping prospectors to offset some of the costs associated with working their claims. The three-phase program gives successful applicants up to $85,000 to help fund prospecting activities such as drilling and sampling. In return, the OEC keeps a royalty, up to 1.5 per cent net smelter return (NSR), a portion of which prospectors can buy back up to 11 years after receiving the funds.
“This program puts more prospects forward and the more we find, the more of an economic generator it is for the province,” says Garry Clark, president of the OEC and executive director of the Ontario Prospectors Association (OPA). “Some people are concerned about the royalty, but there is the option to buy back part of the NSR and three prospectors have done that.”
Owned by the OPA, the OEC is a for-profit corporation that was established to invest in mining lands that have high economic potential. Founded in 2002, the OEC’s grant program replaced the provincial government’s Ontario Prospectors Assistance Program (OPAP), which also awarded grants to prospectors, but had no royalty attached. Of the $3 million initial funding from the Northern Ontario Heritage Fund Corporation, approximately $1.8 million remains. Sustainability of the program is achieved through royalties on the mining lands.
The first phase of the funding program is $10,000, half of which is given up front. The other $5,000 is awarded after the prospector files an assessment report with the Ministry of Northern Development and Mines. The OEC takes a one per cent NSR on this initial $10,000. If a claim proves to have no economic potential, the prospector is under no obligation and doesn’t have to pay back the funds. For successful claims, however, prospectors can apply for phase two, $25,000, and another $50,000 for phase three of the program. For the second and third phases, the OEC takes another 0.25 per cent each, for a total of 1.5 per cent NSR.
“The first $10,000 may fund trenching and the sampling of soil and the next $25,000 could cover stripping with a backhoe,” Clark says. “With the third-phase $50,000, a prospector could drill a couple of holes and then, maybe, a junior company will jump on the project.”
While the OEC has awarded funds for approximately 170 claims, only one project has received phase-two funding. The program spurs greater exploration activity, however, and has led to a number of successful projects that have been optioned by junior mining companies.
“The OEC gives you money to work with and pays for the assays and their transportation,” says one OEC recipient who has received funding since the program’s inception. “If you get results, you can pass it on to a company that can further the work. We’ve passed on projects to juniors and also to a producing mining company.”
The application for the OEC fund is available on the OPA website. Applicants must also submit a prospecting proposal that outlines details of the project, such as location, accessibility, geology and a summary of all previous work done on the property. A third-party consultant reviews the applications for completion and economic potential, and then makes recommendations about funding to the board.
Approval for funding is not limited to precious metal exploration, but can include industrial minerals, such as lithium, as well as building stone. The OEC provides prospectors with another source of funding, and becomes all the more attractive in times of tighter financing. Eligible claims have the opportunity to become, if not the next Hemlo, then a viable project that catches the interest and deeper pockets of a junior mining company.
“The response to the funding is very positive; people are happy that there is a source of funding,” Clark says. “This money helps to fill the gap between what a prospector finds in the ground and getting a junior company interested in the claim.”