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 a deposit qualifies as a mineral resource as that term is defined in subsection 248(1) of the Act where the principal mineral to be extracted is XXXXXXXXXX.
Position: Yes, provided that the project does not result in a quarrying operation.
Reasons: Favourable opinion from NRCan.
XXXXXXXXXX 2026-108809
Marie-Audrey Kirouac
April 28, 2026
Dear XXXXXXXXXX:
Re: Mineral Resource Certification – XXXXXXXXXX Deposit
This is in response to your inquiry dated January 20, 2026, in which you asked, on behalf of XXXXXXXXXX. (the “Company”), for a mineral resource certification under subparagraph (d)(i) of the definition “mineral resource” in subsection 248(1) of the Income Tax Act (the “Act”) in respect of the XXXXXXXXXX deposit that is part of the XXXXXXXXXX project (the “Project”).
The Project
The Project is located XXXXXXXXXX (the “Property”).
The Property comprises XXXXXXXXXX. All the claims are registered in the name of the Company which owns a XXXXXXXXXX% interest in the Property (for the XXXXXXXXXX, see Appendix I).
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 deposit located on the Property. NRCan has advised us that the principal mineral to be extracted from the deposit, XXXXXXXXXX, is an industrial mineral contained in a non-bedded deposit. It is therefore our view that the deposit contained within the Project will qualify as a “mineral resource” pursuant to subparagraph (d)(i) of the definition of this term in subsection 248(1) of the Act.
However, if the Project proves unsuccessful and the focus shifts to a quarrying operation—where the XXXXXXXXXX will be used directly as a construction material and no principal mineral is extracted— the Property would not meet the conditions set out in subparagraph (d)(i) of the definition of “mineral resource” in subsection 248(1) of the Act and the above conclusion would no longer apply. As a result, please advise us as soon as possible if there is any material change in the Project.
We note that nothing in this letter should be construed as implying that the Canada Revenue Agency 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
Appendix I
XXXXXXXXXX
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
© His Majesty the King in Right of Canada, 2026
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 le Roi du Chef du Canada, 2026
Email this Content