Mineral exploration expenditures could hit $60 million to $75 million this year, says Energy, Mines and Resources Minister Archie Lang.

Lang said from Vancouver Tuesday morning there is a buzz afoot in the exploration industry, with some 6,000 people attending the annual Mineral Exploration Roundup, compared to 1,600 or 2,000 just a couple of years ago.

And while the minister is predicting record exploration expenditures, he also announced in Vancouver the Yukon will be capping at $300,000 the maximum rebate under its Yukon Mineral Exploration Tax Credit program.

Revisions to the Yukon's previously uncapped policy aimed at providing incentives for exploration in the territory will have an impact on some but not others, say two company presidents.

Robert Rodger of Tagish Lake Gold explained that under the policy as it exists until March 31, if his company were to spend $4 million on exploration work, which it plans to do this year, it would be eligible for a 25-per-cent or $1-million tax rebate.

Under the policy to come in April 1 for the 2006-2007 tax year, if Tagish Lake did spend $4 million, its rebate would then be capped at $300,000, and not the $1 million, Rodger explained.

'In my view, any money we don't get through the Mineral Exploration Tax Credit, we have to raise some place else,' he said.

Rodger, however, said it seems to be easier these days amidst a hot mineral market to attract investment. Tagish Lake Gold expects it will raise the money needed to complete the work it has scheduled for this year, beginning early next month.

But the fact remains, with the new cap, it essentially has to raise an additional $700,000, he said.

On the other hand, noted Rodger, he met with Lang yesterday and was told by the mining minister the government is contemplating assistance for companies that are moving to the production stage.

There could be assistance with larger capital expenditures like road upgrades, and Tagish Lake Gold is most interested in getting on the hydro grid, he said.

Rodger said the extent of new support for infrastructure development could cushion the impact from the new cap on the tax credit.

Harlan Meade of Yukon Zinc Corp. said the impact would be minimal for Yukon Zinc and two others in their group of companies, StrataGold Corp. and Pacifica Resources.

The three companies together probably spent an estimated $25 million in the Yukon last year, he said.

Most of the expenditures were made using super flow-through share investments. They in themselves amount to a federal tax incentive that prevents the companies from claiming further tax advantages under the Yukon policy, he said.

'So it is probably going to have a very minimal impact on our companies.'

Meade, however, said the greater threat looms in the near future with what the federal government plans to do with its flow-through share incentive policy, which is set to expire March 31.

The mines minister said the new cap on the Yukon's incentive policy will affect about 10 per cent of the exploration companies doing work in the Yukon, with 90 per cent not impacted.

When the policy was introduced by the former NDP government in 1999, the intent was always to review the policy if the market conditions picked up and exploration expenditures again exceeded the $30-million mark, Lang explained.

Figures provided by the Yukon's Department of Finance show there are typically 40 or 50 companies that apply under the incentive program, and scores of individuals:

• 1999 $1.4 million returned under the Yukon Mineral Exploration Tax Credit, but no returns in excess of $300,000;

• 2000 $1.8 million returned, with one return in excess of $300,000;

• 2001 $1.9 million returned, with one in excess of $300,000;

• 2002 $1.7 million returned, with no returns in excess of $300,000;

• 2003 $3.1 million returned, with three returns in excess of $300,000; and,

• 2004 approximately $4 million in returns, with two in excess of $300,000.

Figures were not available for this tax year, as it doesn't end until March 31.

Clarke LaPrairie of the Finance department said he is not at liberty to discuss how large the individual returns were that exceeded the $300,000-mark, as it may convey private tax information since there weren't that many.

Lang said Tuesday, given the number of advanced projects like Yukon Zinc's Wolverine deposit, and the brisk upswing in general exploration, the territory could see expenditures of $60 million to $75 million, optimistically.

'So all of these things, at the end of the day, show you that the mineral industry is back in the Yukon, they are committed and they are moving forward,' the minister said.

The exploration industry peaked in the mid-1990s during the Finlayson staking rush, with about $56 million spent in 1996.

But expenditures declined steadily since '96, and hit rock-bottom at approximately $6 million four years ago.

With the turnaround in the price of metal, interest has grown consistently since 2002 and expenditures hit a recent high of an estimated $50 million-plus last year.