Words and Phrases - "mineral resource"

Expenses incurred by members of a joint venture, including the taxpayer, in connection with preliminary planning for an underground mine that was located in the same coal seam as an existing surface mine, and expenses incurred in developing the underground mine, qualified under subparagraphs (iii) and (iii.1). The underground operation was found to be a separate mine from the surface operation in light of such factors as the lack of physical interconnection between the two works, the different anticipated life span for the operations, the lack of interchangeability of the workforces, and the fundamentally different production techniques and safety considerations involved.

MacKay J. also noted that the question of what constituted a "mineral resource" for purposes of subparagraph (iii.1) should be interpreted in light of the industry practice of only committing development expenses when a reserve had been established that was considered to be likely to produce a satisfactory profit from production, and stated (p. 5333) that "resources which lie within the ambit of the reserve to be recoverable by a particular development project ... are the 'mineral resource' or coal deposit intended by s/p(iii.1)".