Québec Mining companies benefit the economy both locally and on a federal level. But do Québec businesses offer investors an advantage? Many seem to think so, and some may even call it unfair. Investors can benefit from the fact that Québec mining companies appear to have an advantage over other mining companies in Canada and around the world. The strong support provided by the Québec government as well as the Canadian Federal government to these mining enterprises enables them to thrive and benefit their local and provincial economies. This robust backing, combined with the high grade of minerals and resources, makes Québec one of the world’s most attractive sites for mining — and investors.
As a mining investor, there aren’t many areas in the world where you’ll find abundant resources in a politically stable country with a thriving sector supported by the government.
According to the Fraser Institute’s Annual Survey of Mining Companies, Québec is a constant top competitor in terms of investment attractiveness. Behind its stability as a premier mining jurisdiction is a formula of government incentives, skilled labour, social licence, and a financial environment that make it a surprisingly favourable mining jurisdiction.
It also possesses the legal transparency and a high-quality geological information database that allow businesses to confidently explore the province’s rich endowment of minerals and metals, many of which are critical to powering the transition to a green economy.
The Ministry of Energy and Natural Resources (Ministère de l’Énergie et des Ressources Naturelles) is dedicated to mineral development in Québec, offering vital resources to mining corporations to promote exploration and development. These resources are specialized research and development centres, an extensive database including over 150 years of geological data, and various geoscientific data banks. Furthermore, they give financial assistance in stock and debt packages to mining firms, serving as a cornerstone.
Such broad government backing is exceptionally beneficial to Québec mining and exploration enterprises. This may appear to provide an unfair advantage over other Canadian or global mining regions, but that is precisely the goal.
Québec is also serving as a global role model in sustainable and responsible mining practices and ESG. In April of 2021, the federal government invested $730,096 in a clean mining technology project in Québec City and Ottawa on behalf of the Honourable Seamus O’Regan Jr., Minister of Natural Resources. The Québec government has additionally contributed $10,000 to the Université Laval in support of this research. Corem and Université Laval have also contributed to the project, bringing the total investment to more than $1 million.
The innovative pilot-scale clean technology led by Université Laval that removes the need for toxic cyanide in the gold extraction process, reducing the environmental effect of gold mining. Once commercially available, the technique has the potential to provide opportunities for skilled operators, technicians, and engineers in gold refineries.
Natural Resources Canada’s Clean Growth Program provides funding for clean technology research, development, and demonstration projects in Canada’s energy, mining, and forest industries. The initiative is a $155 million investment fund that assists new clean technologies in reaching commercial readiness so that natural resource operations can minimize their environmental impacts, such as greenhouse gas emissions while increasing competitiveness and creating jobs.
In addition to clean mining initiatives, Québec has made significant investments in the region’s infrastructure. This investment includes roads, electricity infrastructure, and even airstrips in northern Québec to serve the province’s rich mineral landscape, including the Abitibi.
The province also offers a favourable investment climate for mining firms, with some of the finest tax breaks in Canada for mining corporations in early-stage exploratory projects. Other advantages include the Québec government’s Plan Nord economic development policy. A proposal that calls for the government to spend CAD 80 billion on energy promotion over the next 25 years.
The Québec government, like any other institutional investor, expects a return on their investment. It evaluates the project’s viability, the likelihood of success, and long-term repercussions before investing. This due diligence encompasses sociological and technological research as well as comprehensive environmental impact assessments.
Last Quarter, The Crux Investor interviewed three executives from the mining sector, one of whom being Jose Vizquierra, CEO of O3 Mining to weigh in their opinions. Jose Vizquerra might not agree that mining businesses in Québec have an unfair edge over companies in other regions. He appreciates the government’s recognition that by supporting mining they are contributing to the development of the nation and the strength of the Canadian economy.
“We are in one of the most stable jurisdictions in the world — and it is fair for the government to understand that by supporting mining companies, they are developing a nation.” Stated Mr. Vizquerra.
The Abitibi region of Québec is a prime jurisdiction for gold mining, producing more than 200 million ounces of gold. Despite the fact that the region has produced enormous resources, Vizquerra believes there is still gold to be found. As a result, numerous mining businesses will seek to locate here. He puts it like way:
“If you’re going to look for elephants, go to an elephant-rich country.”
As a result, it’s understandable that the Québec government will promote such businesses; by doing so, it secures growth for the benefit of Québec’s people. The support provided by the Québec government to junior mining businesses is critical. It enables juniors to develop assets, continue to de-risk them and get permits and resources before being acquired by a major mining firm.
O3 Mining has properties located in a prime area of the province and is working towards setting a new standard in gold production, as well as responsible and sustainable mining practices.
Now more than ever, investors are setting their sights on companies with actionable ESG initiatives. To learn how O3 Mining can deliver long-term value for its shareholders through sustainable practices, reach out to our investor relations team today!
Sources: https://www.canada.ca/en/natural-resources-canada/news/2021/04/canada-invests-in-clean-mining-technology.html
https://www.cruxinvestor.com/articles/investing-in-quebec-based-companies-what-investors-need-to-know
https://www.quebec.ca/en/government/policies-orientations/northern-territory-development/financial-support
https://www.fraserinstitute.org/studies/annual-survey-of-mining-companies-2020?utm_source=Media-Releases&utm_campaign=Annual-Survey-of-Mining-Companies-2020&utm_medium=Media&utm_content=Learn_More&utm_term=415
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