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: Whether NRCan can certify that the principal mineral to be extracted from the lithium-bearing silicate spodumene deposits of the taxpayer will be a principal mineral extracted from a non-bedded deposit.
Position: Yes.
Reasons: Positive Opinion provided by NRCan.
XXXXXXXXXX 2023-096746
André Payette
May 16, 2023
Dear XXXXXXXXXX:
Re: XXXXXXXXXX Mineral Resource Certification
This is in response to your letter dated March 15, 2023, in which you requested on behalf of XXXXXXXXXX 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 lithium-bearing silicate spodumene deposits (the “Deposits”) of its XXXXXXXXXX Project (the “Project”) located in XXXXXXXXXX.
The XXXXXXXXXX Project
The Project is located within the XXXXXXXXXX. It surrounds the town of XXXXXXXXXX and is made up of XXXXXXXXXX claims (the “Property”), covering a total of XXXXXXXXXX hectares (XXXXXXXXXX). The Company owns most of the claims and has a XXXXXXXXXX% interest in the Property. XXXXXXXXXX.
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, lithium-bearing silicate spodumene, is an industrial mineral contained in non-bedded deposits. 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 have attached a copy of the certification provided by NRCan for your records.
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
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 2023
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 2023
Email this Content