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: Whether NRCan can certify that the principal mineral to be extracted from the spodumene lithium deposits of the taxpayer will be an industrial mineral extracted from a non-bedded deposit.
Position: Yes.
Reasons: Positive Opinion provided by NRCan.
XXXXXXXXXX 2022-093526
André Payette
August 10, 2022
Dear XXXXXXXXXX:
Re: XXXXXXXXXX Mineral Resource Certification
This is in response to your letter dated March 16, 2022, in which you requested on behalf of XXXXXXXXXX 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 the spodumene deposits located in the municipalities of XXXXXXXXXX and XXXXXXXXXX (the “Deposits”). The Deposits are part of the XXXXXXXXXX Project (the “Project”) located in XXXXXXXXXX. XXXXXXXXXX, a partnership formed under the laws of XXXXXXXXXX, acquired a royalty related to mineral products extracted from the Project.
The XXXXXXXXXX Project
The Project is located in XXXXXXXXXX, in the municipalities of XXXXXXXXXX and XXXXXXXXXX, approximately XXXXXXXXXX. The Project is divided into four property groupings (XXXXXXXXXX) (the “Properties”) comprising 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
3. that mineral is contained in a non-bedded deposit.
We obtained an opinion from the Minister of Natural Resources (“NRCan”) regarding the spodumene deposits located on the Properties. NRCan has advised us that the principal mineral to be extracted from each of the Properties, spodumene, is an industrial mineral contained in non-bedded deposits (pegmatite). It is therefore our view that the spodumene deposits on the Properties 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 certifications 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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