CRA considered that exploring a placer jade deposit did not qualify as CEE

Para. (f) of the Canadian exploration expense definition refers to exploring a Canadian “mineral resource,” which is defined to include a “base or precious metal deposit” and “a mineral deposit in respect of which the Minister of Natural Resources has certified that the principal mineral extracted is an industrial mineral contained in a non-bedded deposit.”

The Minister of Natural Resources advised CRA that nephrite (a type of jade) to be extracted from the in-situ deposits on the subject property was an industrial mineral contained in non-bedded deposits – but excluding placer nephrite deposits, which were considered to fail the quoted test. Apparently, this means that CRA considers that claims containing minerals other than bedded (i.e., stratified) deposits are not necessarily non-bedded deposits.

CRA itself considered that the placer nephrite deposit also did not qualify as a “base or precious metal deposit.”

CRA also noted that the exploration expenses in question might be incurred near existing mines, in which case they could be denied CEE treatment on that basis as well

Neal Armstrong. Summaries of 16 June 2017 External T.I. 2016-0674541E5 under s. 248(1) – mineral resource and s. 66.1(6) - Canadian exploration expense – para. (f).