Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: Does lithium-bearing spodumene deposits in question meet the definition of mineral resource under subparagraph (d)(i)?
Position: Yes.
Reasons: Favourable opinion issued by NRCan.
XXXXXXXXXX 2022-095524
Boriana Christov
November 15 2023
XXXXXXXXXX
This is in response to your letter (received on October 31, 2022) in which you requested on behalf of XXXXXXXXXX (“XXXXXXXXXX” or the “Company”) a certification pursuant to subparagraph (d)(i) of the definition “mineral resource” in subsection 248(1) of the Income Tax Act (the “Act”) with respect to the XXXXXXXXXX deposits (the “Deposits”) of its XXXXXXXXXX Project (the “Project”) located in XXXXXXXXXX.
The XXXXXXXXXX Project
The Project is located in the XXXXXXXXXX. The Municipality of XXXXXXXXXX the Project. Mineral rights for the Project are secured through XXXXXXXXXX(for a list of the claims, see Appendix). The Company maintains a XXXXXXXXXX% interest in these tenures, with a select minority of claims subject to a net smelter return type royalty.
Definition of Mineral Resource
In order for subparagraph (d)(i) of the definition of “mineral resource” in subsection 248(1) of the Act to apply, three conditions must be met:
1. a principal mineral must be extracted,
2. that mineral is an industrial mineral; and
3. that mineral is contained in a non-bedded deposit.
We obtained an opinion from the Minister of Natural Resources (“NRCan”) regarding the Deposits located on the Property. NRCan has advised us that the principal mineral to be extracted from the Deposits, the XXXXXXXXXX, is an industrial mineral contained in non-bedded deposits (pegmatites). It is therefore our view that the Deposits on the Property will qualify as a “mineral resource” pursuant to subparagraph (d)(i) of the definition of this term in subsection 248(1) of the Act.
We note that nothing in this letter should be construed as implying that the CRA has confirmed, reviewed, made any determination, or accepted any method for the determination in respect of whether the proposed exploration expenses will be “Canadian exploration expenses,” “flow-through mining expenditures” or “flow-through critical mineral mining expenditures,” as those terms are defined in the Act.
Yours truly,
Kimberley Wharram
Manager
Resources Section
Reorganizations Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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