The Government of Quebec Marks Dark Chapter in Mining Industry

ROUYN-NORANDA, QUEBEC--(Marketwire - Dec. 5, 2011) - The AEMQ (Quebec Mining Exploration Association) is appalled by measures proposed by the Quebec government through Bill 14, which endorses the abandonment of the government's fiduciary responsibility of managing mineral resources.

"By giving municipalities the option to reject exploration activities, the government of Quebec is setting up an environment of unprecedented instability within Quebec's mineral business sector. In spite of a favourable global environment and high metal prices, once adopted, Bill 14 will instil doubt on the stability and predictability of our mining system", said Jean-Marc Lulin, President of the Quebec Mining Exploration Association.

As of May 2011, the Minister of Natural Resources, Mines and Energy, and parliamentary representative for Dubuc, Mr Serge Simard has yet to come up with the expected amendments to Bill 14, most importantly the conciliation and arbitration measures for conflicting uses proposed by the AEMQ.

Instead of making it fair for all stakeholders, and establishing an economic and social vision, the government will transfer management of the collective resource to 1200 local entities. The administration of Québec's minerals will become messy and incoherent.

"The reputation of quality Quebec's mining rights enjoy will be permanently affected and irreversible in areas subjected to unpredictable municipal arbitration. There should be no illusions vis-à-vis investors as this loss of confidence in mining titles will extend to the rest of Quebec, including the Plan Nord territory. This will become a major concern for any economic player and investor in the sector", added Mr Lulin.

Once this bill passes, the government will argue that acquired rights will be respected and all damages compensated. The AEMQ rejects this position. In fact, amendments introduced only provide a minimum compensation from state funds for sums spent on mining activities. Furthermore, they will not consider costs for project acquisition, financial and legal provisions between partners or loss of value created by such mining activities, including the identification of resources and reserves. This unprecedented situation creates considerable hurdles for economic stakeholders.

"The state, municipalities, exploration and mining companies could come into permanent conflict. The perception that will prevail on the Canadian and international scene is that the Quebec government has abandoned its primary responsibility of managing natural resources in the territory of Quebec in an integrated and uniformed manner. This responsibility will now be the burden of municipalities instead of the state. There is a huge risk of seeing mineral rights become a judicial issue. This will considerably weaken Quebec's attractiveness and competitiveness", said Valérie Fillion, Executive Director of Quebec Mining Exploration Association.

When Bill 14, a statute promoting the development of mineral resources in accordance with sustainability, was put forward on May 12th, 2011, the AEMQ vigorously rejected the bills' provisions as they threaten many SME's vested interests by retroactively applying exemption provisions.

The AEMQ notes that Quebec's mining industry accounts for more than 54 000 of some of the highest paying jobs in our society. The median salary in the sector is 40% higher than the industry average. The mineral industry annually contributes over $7 billion to Quebec's Gross Domestic Product (GDP) and exports $8 billion in mining resources to other countries, contributing positively to our balance of trade. The industry injects more than $900 million into local and regional communities to accomplish activities.

The mining sector has over 3800 suppliers and manufacturers, including 1800 small and medium businesses in the Montreal area, and 250 in the Quebec region. There are about 250 exploration companies in Québec representing approximately
$5 billion in market capital, and piloting some 300 exploration projects.

The AEMQ points out that besides being a major player in many of our resource regions (Abitibi, Northern Quebec, and North Shore), our mining companies pay almost 30% of payroll for citizens living in the dozens of local and regional municipalities where mining activities take place.

"No Quebec minister associated with Quebec's natural resources sector has shown such misunderstanding toward our SMEs and resource regions. The negative impact of Bill 14 is already considerable, and will hinder the emerging dynamics of the Plan Nord. These new provisions not only weaken our economic development, but also jeopardize Quebec's sustainable development," concluded Ms. Fillion.

About the Québec Mineral Exploration Association (AEMQ)

The Québec Mineral Exploration Association (AEMQ) is a non-profit professional and industry association incorporated under Part III of the Companies Act. The AEMQ represents the key stakeholders involved in the field of mineral exploration in Québec. The AEMQ was founded in 1975 to reflect the will of mineral explorationists in Québec (prospectors, geologists, geophysicists, contractors, developers, exploration managers) to stimulate exploration and foster the development of mining entrepreneurship in Québec. The AEMQ brings together more than 1,600 individual members (prospectors, geologists, geophysicists, brokers, tax experts, lawyers, etc.) and over 213 corporate members (junior and major mining exploration companies, engineering firms specializing in geology and geophysics, drilling companies, services companies, equipment manufacturers, etc.). It is headed by a board of twenty directors, each representing a different segment of the mineral exploration industry.

The Association's President is Jean-Marc Lulin (Exploration Azimut), who is supported by Marc Boisvert (MDN inc), François Bouchard (Corporation minière Osisko), Tony Brisson (Focus Metals), Philippe Cloutier (Ressources Cartier), Martin Demers (Mines Aurizon), Pierre-Philippe Dupont (Royal Nickel Corporation), Sylvain Durocher (Investissement Québec), Marco Gagnon (Adventure Gold), Robert Gagnon (Explolab), Jean Girard (Corporation minière Alexis), Guy Gosselin (Mines Agnico-Eagle), Marcel H. Jolicoeur (Genivar), Robert Kitchen (Cree Nation Nemaska), Marc L'Heureux (Société d'exploration minière Vior), Frank Mariage (Miller Thomson Pouliot SENCRL /LLP), Jean-François Ouellette (Services techniques Géonordic), Ghislain Poirier (Les diamants Stornoway inc), Gino Roger (Exploration Midland) and Mathieu Savard (Mines Virginia). The AEMQ's head office is located at 132 Lac Avenue, Suite 203, Rouyn-Noranda, Québec, J9X 4N5 For more information, visit the AEMQ website at http://www.aemq.org/english/index.asp