It is always nice getting a government hand-out, so the Metal Detective, in principle, heartily welcomes the introduction of the $A100 million Exploration Development Incentive scheme that went live on July 1.

For juniors with land, but not much cash in the bank, it looms as a useful crutch in what Association of Mining and Exploration Companies CEO Simon Bennison has called one of the most difficult financial periods on record.

The EDI will act as a “catalyst” to turn around the confidence of the investment community, Bennison told delegates at the AMEC conference last week.

While the scale of the initiative has been “significantly capped”, it will still benefit the average Australian investor willing to support greenfields exploration, he said.

Given that AMEC has spent years researching and helping to devise a local variant of Canada’s “flow-through” scheme, it is only natural for Bennison to feel relief that it has finally arrived, however modest the pilot scheme.

But the Metal Detective believes it is unrealistic to expect too much charity from those Canberra boffins, who remain deeply suspicious of a plan aimed at diverting government money into the pockets of exploration stock punters.

Treasury’s recent history is one of trying to milk more money – not less – from the rocks sector: Witness the ludicrous mining tax proposal that cost Kevin Rudd his job as PM a few years ago.

There was no shortage of mumble and grumble about the EDI at the AMEC conference, mainly due to the lack of detail in Industry Minister Ian Macfarlane’s launch, the modest amount of tax refunds available, and a realisation that it won’t become law for several months – maybe not until early next year.

Over the trial period the Commonwealth will allocate $25 million this fiscal year ending June 30, 2015, then $35 million next year, and $40 million the last, to provide an opportunity for the scheme to be “run and assessed,” Macfarlane said.

“If it can be demonstrated that the scheme not only boosts exploration, but also gets optimised – if I was talking to farmers I would say ‘rorted’ – to the extent that the Tax Office becomes uncomfortable, and I’m confident that it won’t be, then the potential for this scheme is well and truly there,” he said.

Craig Yaxley, a corporate tax partner at KPMG, said that while $25 million doesn’t look huge in a national context, the number should generate $88 million of greenfields exploration expenditure.

However, one delegate wondered how many companies would apply for EDI relief when the legislation might not be enacted for another six months.

Yaxley responded that the measure doesn’t rely on new capital raised, so if Company X spends its last $1 million on exploration this fiscal year it will qualify to pass those tax credits through to shareholders.

“It will have some value this year, because exploration dollars spent as of yesterday (July 1) are potentially eligible,” he said.

But he conceded that no company will be able to raise capital and promise tax credits to new investors until the scheme becomes law.

Cassini Resources chairman Mike Young urged delegates to stop “belly-aching”, reminding them that the scheme has been a decade in the making, and needed to overcome substantial opposition from Treasurer Joe Hockey, among others.

“This is the thin edge of the wedge – it’s a start,” he said. “Trying to get money from government is like trying to get blood from a rock.”

As a Canadian, he’d seen the start of that country’s flow-through scheme, which had worked well.

“Yes, there are teething problems and there is a long way to go. But let’s be positive.”

It is somewhat ironic that Doray Minerals, which won AMEC’s Prospector of the Year award last week for uncovering its Andy Well gold deposit near Meekatharra, won’t be able to benefit from the new incentive.

That’s because it is now a producer, and the EDI can only be allocated to genuine explorers which are yet to start production.

MD’ advice to West Perth lifestyle rock-kickers looking to milk the government teat: find some mineralisation (it’s good for business) but don’t kill a good welfare cash-cow by building a mine on it.

Meanwhile, out among the conference exhibition stands, one senior geologist said that some ineligible producers may decide to package their exploration tenements into a separate IPO so new investors get the tax benefit.

Of course, that is predicated on investors coming to the party on exploration IPOs – a dry argument in recent times, with greenfields exploration at a 10-year low.