Junior explorer Archer Exploration is one of the first to be approved for the Australian government’s new exploration tax credit scheme.

The Junior Minerals Exploration Incentive (JMEI) will allow explorers with no mining income to renounce and pass on future tax deductions to Australian resident investors.

“The ATO has confirmed that Archer has been successful in its application under JMEI and that 100 per cent of the exploration credits applied for by the company of $270,000 will be available,” Archer told investors today.

However, only investors who buy Archer shares or exercise options between April 23 and before June 30 will be eligible to receive JMEI credits for the 2018 financial year.

Archer – which has graphite, manganese and cobalt projects – estimates shareholders will receive back somewhere between 1.75c and 2.25c per share.

The news was not well received, with shares dipping 12.5 per cent to 14c at midday.

AXE shares over the past year.
AXE shares over the past year.

The JMEI was finally passed in March and the Australian Tax Office (ATO) opened applications for the new scheme on April 16.

The Tax Credit is a modified version of the previously failed Exploration Development Incentive, which the government binned in May last year following a review that showed a 36 per cent drop in registered participants from the first year to the second year.

The new $100 million four-year commitment was supposed to be introduced at the start of the 2018 financial year.

Archer directors Alice McCleary and Greg English plan to exercise their share purchase plan options before June 30 to qualify for the JMEI credit.