3 March 2026 External T.I. 2026-1089071E5 - Mineral Resource Certification

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 a deposit qualifies as a mineral resource as that term is defined in subsection 248(1) of the Act where the principal mineral to be extracted is XXXXXXXXXX.

Position: Yes, provided that the project does not result in a quarrying operation.

Reasons: Favourable opinion from NRCan.

XXXXXXXXXX 2026-108907
Marie-Audrey Kirouac

March 3, 2026

Dear XXXXXXXXXX:

Re: XXXXXXXXXX – Mineral Resource Certification

This is in response to your inquiry dated January 26, 2026, in which you asked, on behalf of XXXXXXXXXX (the “Company”), for a mineral resource certification under subparagraph (d)(i) of the definition “mineral resource” in subsection 248(1) of the Income Tax Act (the “Act”) in respect of XXXXXXXXXX to be extracted from a XXXXXXXXXX deposit (the “Project”).

The Project

The Project will be conducted on the XXXXXXXXXX (the “Property”). The center of the Property is situated at XXXXXXXXXX.

The Property is made up of XXXXXXXXXX claims, covering a total of XXXXXXXXXX hectares. All the claims are registered in the name of the Company which owns a 100% interest in the Property (for a list of the claims, see Appendix I).

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 deposit located on the Property. NRCan has advised us that the principal mineral to be extracted from the deposit, XXXXXXXXXX, is an industrial mineral contained in a non-bedded deposit. It is therefore our view that the deposit contained within the Project will qualify as a “mineral resource” pursuant to subparagraph (d)(i) of the definition of this term in subsection 248(1) of the Act.

However, if the Project proves unsuccessful and the focus shifts to a quarrying operation—where the XXXXXXXXXX will be used directly as a construction material and no principal mineral is extracted— the Property would not meet the conditions set out in subparagraph (d)(i) of the definition of “mineral resource” in subsection 248(1) of the Act and the above conclusion would no longer apply. As a result, please advise us as soon as possible if there is any material change in the Project.

We note that nothing in this letter should be construed as implying that the Canada Revenue Agency has confirmed, reviewed, made any determination, or accepted any method for the determination in respect of whether the proposed exploration expenses will be “Canadian exploration expenses”, “flow-through mining expenditures” or “flow-through critical mineral mining expenditures”, as those terms are defined in the Act.

Yours truly,

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

Appendix I
XXXXXXXXXX