2017-0682401E5 Certification of Mineral Resource

Principal Issues: (1) Whether the graphite deposit on the property meets the definition of a "mineral resource" under subparagraph (d)(i) of that term in subsection 248(1), (2) whether the marble deposit on the property meets the definition of a "mineral resource" under subparagraph (d)(i) of that term in subsection 248(1)?

Position: (1) Yes, (2) No.

Author: Wharram, Kimberley
Section: Subparagraph (d)(i) of definition of mineral resource in subsection 248(1)

XXXXXXXXXX                                                                                    2017-068240
                                                                                                            Kim Wharram
October 3, 2017

Dear XXXXXXXXXX:

Re: XXXXXXXXXX Mineral Resource Certification

This is in response to your requests dated January 10, 2017 and January 31, 2017, in which you requested on behalf of XXXXXXXXXX (the “Company”) 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 graphite deposit located on XXXXXXXXXX (the “Property”) and the marble deposit located on the Property.

The Property is located in XXXXXXXXXX.

XXXXXXXXXX is composed of XXXXXXXXXX contiguous claims located on XXXXXXXXXX. Discovered resources are graphite and architectural marble stone. XXXXXXXXXX is separated in XXXXXXXXXX blocks, XXXXXXXXXX, where XXXXXXXXXX is located.

The Minister of Natural Resources has advised that the principal mineral, graphite, to be extracted from the mineral deposit located on the Property is an industrial mineral contained in a non-bedded deposit. It is therefore our view that the graphite deposit 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.

Conversely, with respect to the marble deposit, the Minister of Natural Resources has advised that there is no principal mineral to be extracted from the deposit and, moreover, the end product will be used directly as a building material. It is therefore our view that the marble deposit on the Property does not qualify as a mineral resource pursuant to subparagraph (d)(i) of the definition of this term in subsection 248(1) of the Act.

Yours truly,

Kimberley Wharram
Acting Manager, Resources Section
Reorganizations Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch

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