2017-0682401E5 Certification of Mineral Resource

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: (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

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 the prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5.

© Her Majesty the Queen in Right of Canada, 2017

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 redistribuer de l'information, sous quelque forme ou par quelque moyen que ce soit, de façon électronique, mécanique, 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, 2017


Video Tax News is a proud commercial publisher of Canada Revenue Agency's Technical Interpretations. To support you, our valued clients and your network of entrepreneurial, small businesses, we choose to offer this valuable resource to Canadian tax professionals free of charge.

For additional commentary on Technical Interpretations, court cases, government releases, and conference materials in a single practical document specifically geared toward owner-managed businesses see the Video Tax News Monthly Tax Update newsletter. This effective summary and flagging tool is the most efficient way to ensure that you, your firm, and your clients are fully supported and armed for whatever challenges are thrown your way. Packages start at $400/year.