CRA rules that drilling on an existing, currently uneconomic, mine site would qualify as CEE
A mine ceased production quite some time ago as a result of the grade of the production being too low to justify continued production. The underground workings were allowed to flood and other historic shafts were sealed. The existing tracks would be unusable without significant work.
The new owner will conduct an exploration program, much of it focused on the existing mine site, in order to expand the “mineralization” (with any reserve identification being much further down the road). CRA ruled, subject to its detailed provisoes, that the expenses of this work would qualify as exploration (under s. 66.1(6) – Canadian exploration expense - para. (f).)
Neal Armstrong. Summary of 2017 Ruling 2016-0635341R3 under s. 66.1(6) – CEE - para. (f).