PACE Killed Off by SA Govt (Liberals)

So much for the business friendly Liberals (South Australian Government).

The Liberals just shot HAV shareholders and a lot of other South Australian mining companies, who are currently looking at developing new mines in the state, in the hip pocket.

In the 2018-2019 South Australian State Budget, the Liberals not only removed the royalty concession for new mines but it also PACE killed off PACE (co-funded drilling with exploration mining companies in South Australia).

Breathtaking stupidity, IMLTHO!



South Australian State Budget drops off the PACE

5 September 2018

In the 2018-19 State Budget, the South Australian Budget has discontinued the Plan for Accelerating Exploration (PACE) co-funded drilling and cut the royalty concession.

The PACE program was a ground-breaking South Australian innovation that supported increased greenfield mineral exploration and developed greater precompetitive data.  It was the first of its kind in Australia and underpinned the discovery of the Carrapateena.

An independent evaluation of the South Australian PACE initiative (Plan for Accelerating Exploration) between 2004 and 2013 showed that an investment in precompetitive geoscientific data and collaborative drilling programmes provided returns on investment of over 20:1.

An independent evaluation of the similar Western Australian program found a return on investment of over 19:1.

In addition, the removal of the royalty concession on new mines from 1 July 2020 will make it harder to develop mines in South Australia. Currently, under the Mining Act 1971, a discount is applied to the standard royalty for the first five years of sales from new mine operations.  This foregone revenue supports the establishment of the mine.

Any new mine approved prior to 1 July 2020 will continue to be eligible for the concession up to five years after 1 July 2020 or 30 June 2026, whichever comes first.

“It is disappointing that the Government has cut the highly successful PACE program that has supported discovery in South Australia,” said Warren Pearce, Chief Executive Officer, Association of Mining and Exploration Companies (AMEC).

“The PACE helped cash strapped mineral exploration companies undertake greenfield drilling.  Each new drill hole could lead to the discovery that results in a new mine.  Each new mine creates jobs, royalties and a wide range of economic and community benefits.”

“As well, the loss of the royalty concession from 2020 will rework the economics of a number of potential mines. It is a ‘sleeper’ budget cut that will not impact existing miners but hits every single future mine.”

“This single concession cut has blunted a key competitive advantage that South Australia had in the mining sector, a royalty structure that encouraged the establishment of long term mines.”

“Combined, these cuts will have a significant impact on the future of the mining industry in South Australia, and at a time when it is struggling to breathe new life into new projects,” said Mr Pearce.

https://www.amec.org.au/Public/Medi...stralian_State_Budget_drops_off_the_PACE.aspx

Cheers

These are only my random (I don't normally get involved in politics, but today I will make an exception) thoughts and it does not constitute investment advice. Before acting on any information you read and before making any financial or investment decisions, you should always consult your advisor(s) or other relevant professional experts.

HAV fanboy: still drinking the Kool-Aid