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ABQB decision
Precambrian Shield Resources Ltd. v. Alberta (Provincial Treasurer), [1990] 2 CTC 40
Prime + 3/4% X (i) $14,000,000, plus 12 (ii) the designated amount (at the previous month end), plus (iii) the precentage income amount (at the previous month end), minus (iv) net cash proceeds (at the start of the month) plus 2. ... The termination point meant the the earliest of: (i) 12:01 a.m. on the day immediately following the day, if ever, net proceeds first equalled or exceeded the termination amount; (ii) 12:01 a.m. on the day immediately preceding the day on which all the leases terminated; and (iii) 12:01 a.m. on May 1, 2005. ... Examples Month 7—ending May 31, 1985 Net Proceeds Net Cash Proceeds Proceeds $125,000 $0 Crown royalties ($ 30,000) ($30,000) ARTC $ 15,000 $15,000 Operating costs ($ 15,000) ($15,000) PGRT (net of credit) ($ 2,500) ($ 2,500) Net proceeds $92,500 ($32,500) Designated Amount = $71,000 (deemed amount) Percentage Income Amount Proceeds $125,000 Operating costs ($ 15,000) Resource allowance ($ 27,500) Designated amount expense ($ 71,000) $ 11,500 Percentage Income Amount = $11,500 x 15% = $1,725 Termination Amount Purchase price $14,000,000 Designated amount $0 Percentage income amount $0 Less option price ($ 75,000) Termination amount $13,925,000 Month 2—ending June 30,1985 Net Proceeds Net Cash Proceeds Proceeds $250,000 $0 Crown royalties ($ 60,000) ($60,000) ARTC $ 30,000 $30,000 Operating costs ($ 30,000) ($30,000) PGRT (Net of credits) ($ 5,000) ($ 5,000) $185,000 ($65,000) Previous net proceeds $ 92,500 Net proceeds $277,500 Designated Amount 1. 10.75 x $14,000,000 purchase price $ 71,000 designated amount (previous month end) $ 1,725 percentage income amount (previous month end) $ 32,500 (— 1 X negative net cash proceeds at start of month).896% x $14,105,225 $126,383 1. $126,383 plus 2. $ 71,000 Previous month end cumulative designated amount $197,383 Designated amount at June 31, 1985 $197,383 Percentage Income Amount Proceeds $ 25,000 Operating costs ($ 30,000) Resource allowance ($ 55,000) Designated amount expense ($126,383) $ 38,617 Percentage income amount (month) $38,617 x 15% = $5,793 Cumulative percentage income amount $ 5,793 4- $1,725 = $7,518 Termination Amount Purchase price $14,000,000 Designated amount (at previous month end) $ 71,000 Percentage income amount (at previous month end) $ 1,725 Less option price ($ 75,000) Termination amount = $13,997,725 ...