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: Does the spodumene (lithium) deposit qualify as a "mineral resource" pursuant to subparagraph (d) of the definition of that term in subsection 248(1)?
Position: Yes.
Reasons: Based on an opinion from Natural Resources Canada.
XXXXXXXXXX 2022-093239
Kim Wharram
June 14, 2022
Dear XXXXXXXXXX:
Re: XXXXXXXXXX (“Taxpayer”)
Mineral Resource Certification
This letter is in response to your letter, dated March 15, 2022, in which you requested certification pursuant to subparagraph (d)(i) of the definition of “mineral resource” in subsection 248(1) of the Income Tax Act (the “Act”) on behalf of the Taxpayer regarding a spodumene (lithium) project located in the XXXXXXXXXX.
The XXXXXXXXXX
The XXXXXXXXXX is located 100 kilometers XXXXXXXXXX. The project consists of XXXXXXXXXX mineral claims spanning XXXXXXXXXX hectares (the XXXXXXXXXX Property”), that were originally ground-staked but that have since been converted to map-designated claims. Access to the XXXXXXXXXX site is provided by the XXXXXXXXXX.
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
4. that mineral is contained in a non-bedded deposit.
We obtained an opinion from the Minister of Natural Resources (“NRCan”) regarding the spodumene deposit located on the XXXXXXXXXX Property. NRCan has advised us that the principal mineral to be extracted from the XXXXXXXXXX Property, spodumene, is an industrial mineral contained in a non-bedded deposit (pegmatite). It is therefore our view that the spodumene deposit on the XXXXXXXXXX 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.
We have attached a copy of the certification provided by NRCan for your records.
Yours truly,
Kimberley Wharram
Manager
Resources Section
Reorganizations Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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