2018-0755191E5 Mineral Resource Certification

Principal Issues: Whether the limestone deposits described below meet the definition of "mineral resource" in subparagraph 248(1)(d)(i) (Minister of Natural Resources Certification is required).

Position: The limestone deposits described below do not meet the requirements of the definition of "mineral resource" in subparagraph 248(1)(d)(i), such that no certification from the Minister of Natural Resources has been provided.

Reasons: The taxpayer is extracting rock, rather than a mineral, from the deposits.

Author: Verlinden, Nicole
Section: 248(1)(d)(i) of the definition of "mineral resource"

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                                                                                                                                      2018-075519
                                                                                                                                      Nicki Verlinden

August 13, 2018

Dear XXXXXXXXXX:

Re:        XXXXXXXXXX (“Taxpayer”)
              Request for Mineral Resource Certification

This is in response to your letter dated April 9, 2018, in which you requested certification pursuant to subparagraph (d)(i) of the definition “mineral resource” in subsection 248(1) of the Income Tax Act (the “Act”) on behalf of the Taxpayer regarding the XXXXXXXXXX located in XXXXXXXXXX (the “Property”).

More specifically, the Property consists of XXXXXXXXXX mineral claims, totaling XXXXXXXXXX, all of which are located in the Province of XXXXXXXXXX, near the XXXXXXXXXX.

In order for subparagraph (d)(i) of the definition of “mineral resource” in subsection 248(1) of the Act to apply, two conditions must be met:

1.    a principal mineral must be extracted, and

2.    that mineral is an industrial mineral contained in a non-bedded deposit.

We obtained an opinion from the Minister of Natural Resources regarding the limestone deposits on the Property.  The Minister of Natural Resources has advised us that no principal mineral, such as calcium carbonate (calcite), will be extracted from the limestone deposits. Rather, the material being extracted from the deposits is the limestone rock, consisting of a number of different minerals.  Therefore, the limestone deposits on the Property do 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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