As you may be aware, the Junior Minerals Exploration Incentive (“JMEI”) is available for expenditure incurred in the 2018 to 2021 income years, with total credits limited to $100 million.


A company’s participation in the JMEI is voluntary, however, it should be noted that the JMEI is allocated between eligible companies on a “first come, first served” basis.

An eligible company intending to participate and create exploration credits is required to lodge the JMEI Participation Form electronically by the deadline. For the 2019 income year, the form is required to be lodged only between 1 June 2018 and 30 June 2018.

Penalties may apply for false or misleading statements.


An eligible exploration company can participate in the JMEI if:

  • The company is a greenfields minerals explorer; and
  • During the income year, it is a constitutional corporation that is a disclosing entity under Section 111AC of the Corporations Act 2001; and
  • During the income year and the immediately preceding income year, neither the company or any entity connected or affiliated with it, carried on any mining operations for the extraction of minerals from their natural site for the purposes of producing assessable income.


The amount of exploration credits created for an income year cannot exceed the lesser of an exploration company’s:

  • Tax loss; or
  • Greenfields minerals expenditure;
  • Multiplied by the corporate tax rate.

Broadly, the rules ensure that exploration credits are proportionally provided to the investors that actually funded the relevant expenditure.


The definition attributed to such expenditure is consistent with that applying to the former exploration development incentive (“EDI”). However, the amendments specifically provide that such expenditure extends to transferees under farm-in farm-out arrangements thereby ensuring these entities can also benefit from the JMEI.

The amount of greenfields minerals exploration expenditure for an income year is the sum of the amounts that can be deducted for:

  • Minerals exploration and prospecting; and
  • The decline in value of a depreciating asset that is immediately deductible on the basis it was first used for exploration or prospecting.

Minerals exploration or prospecting must be carried in an area:

  • That is land within Australia;
  • Over which the company holds a mining, quarrying or prospecting right or interest, or is the transferee under a farm-in farm-out arrangement; and
  • That has not been identified as containing a mineral resource that is at least inferred in a JORC Code report or other prescribed document.


Australian resident investors in small minerals exploration companies undertaking greenfields minerals exploration are entitled to a refundable tax offset (or a franking credit in some cases) if issued with an exploration credit. In effect, an exploration credit represents the conversion of a tax loss from exploration and prospecting into an immediately distributed tax benefit.

There are also capital gains tax (“CGT”) upon the sale of a share by an investor that has received the JMEI.

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