Northwest Territories Mining Regulations (SOR/2014-68)

Regulations are current to 2017-09-27 and last amended on 2017-06-19. Previous Versions

Royalties

Marginal note:Commencement of production of mine
  •  (1) For the purposes of these Regulations, the date on which a mine commences production is

    • (a) if the mine includes a mill or concentrator, the first day of the first 90-day period during which the mill or concentrator operates at an average of at least 60% of its rated capacity; or

    • (b) otherwise, the day the mine begins to produce minerals in reasonable commercial quantities.

  • Marginal note:Presumptions respecting mineral or processed mineral

    (2) For the purposes of these Regulations, a mineral or processed mineral is considered to

    • (a) be produced and be part of the output of a mine if the mineral or processed mineral is in a saleable form or has been removed from the mine; and

    • (b) form part of the output of the mine if it is produced from the reprocessing of tailings from a mine.

  • Marginal note:Presumptions respecting related persons

    (3) For the purposes of these Regulations,

    • (a) if minerals or processed minerals that have been sold by an operator to a person not related to the operator are later sold to a person related to the operator, those minerals or processed minerals are considered to have been sold by the operator to a related person; and

    • (b) if minerals or processed minerals that have been sold by an operator to a person related to the operator are later sold to a person not related to the operator and proof of that sale is provided, those minerals or processed minerals are considered to have been sold by the operator to a person not related to the operator.

Marginal note:Royalties on value of output of mine
  •  (1) Each fiscal year, the owner or operator of a mine must pay to the Crown royalties on the value of the mine’s output during that fiscal year in an amount equal to the lesser of

    • (a) 13% of the value of the output of the mine, and

    • (b) the sum of the royalties payable set out in Column 2 of the table to this paragraph for the dollar value of the output set out in Column 1.

      TABLE

      ItemColumn 1Column 2
      Dollar value of the output of the mineRoyalty payable on that portion of the value (%)
      110,000 or less0
      2greater than 10,000 but not greater than 5 million5%
      3greater than 5 million but not greater than 10 million6%
      4greater than 10 million but not greater than 15 million7%
      5greater than 15 million but not greater than 20 million8%
      6greater than 20 million but not greater than 25 million9%
      7greater than 25 million but not greater than 30 million10%
      8greater than 30 million but not greater than 35 million11%
      9greater than 35 million but not greater than 40 million12%
      10greater than 40 million but not greater than 45 million13%
      11greater than 45 million14%
  • Marginal note:Royalties payable to Receiver General

    (2) The royalties payable to the Receiver General of Canada under subsection (1) in respect of a mine accrue during a fiscal year as the output of a mine is produced and must be remitted to the Chief not later than the last day of the fourth month after the end of that fiscal year.

  • Marginal note:Joint and several liability

    (3) Subject to paragraph 74(1)(b), any person who was an owner or operator of a mine during the fiscal year in respect of which the royalties were payable is jointly and severally liable for the entire amount of the royalties payable in respect of the period during which that person was an owner or operator.

  • Marginal note:Calculation of value of output

    (4) For the purposes of this section, the value of the output of a mine for a fiscal year must be calculated in accordance with the formula

    A + B – C + D + E + F + G + H – I + J

    where

    A
    is the total of
    • (a) the proceeds from sales, during the fiscal year, of minerals or processed minerals produced from the mine to persons not related to the operator, if proof of those sales is provided,

    • (b) the market value of any minerals or processed minerals produced from the mine that were sold or transferred to a person related to the operator, or to any other person if the proof of that disposition is not provided, and

    • (c) if the minerals or processed minerals produced from the mine are precious stones that have been cut or polished before their sale or transfer, the market value of those precious stones before they were cut or polished;

    B
    is the market value of any inventories of minerals and processed minerals produced from the mine, as at the end of the fiscal year, determined under subsection (9);
    C
    is the market value of any inventories of minerals and processed minerals produced from the mine, as at the beginning of the fiscal year, determined under subsection (9);
    D
    is the lesser of
    • (a) the amount of any payment received during the fiscal year that is related to a cost that has been claimed as a deduction or allowance under this section, and

    • (b) that cost;

    E
    is any excess amount referred to in paragraph 70(5)(b);
    F
    is any amount withdrawn, during the fiscal year, from a mining reclamation trust established in respect of lands to which these Regulations apply, up to the maximum of the total of the amounts contributed to the trust;
    G
    is the amount of any proceeds received, during the fiscal year, from insurance on minerals or processed minerals produced from the mine;
    H
    is the amount of any grants in respect of the mine that were made to the operator, or of any loans to the operator in respect of the mine that were forgiven, by the federal government during the fiscal year;
    I
    is the total of the deductions and allowances claimed under subsection 70(1); and
    J
    is the total of
    • (a) the amount by which the sum of the amounts referred to in paragraphs 70(8)(d) and (9)(e) exceeds the undeducted balance of the depreciable assets eligible for a depreciation allowance at the end of the fiscal year, and

    • (b) the amount by which the sum of the amounts referred to in paragraphs 70(9)(c) and (d) exceeds the undeducted balance of the development allowance at the end of the fiscal year.

  • Marginal note:Joint venture — determination of value of A

    (5) For the purpose of determining the value of A in subsection (4), if a mine is operated as a joint venture whose members deliver separate mining royalty returns under subsection 74(1),

    • (a) a diversion of any or all of the production of the mine from one member of the joint venture to another does not constitute a sale or transfer for the purposes of subsection 77(2), even if consideration is paid for the diversion; and

    • (b) any consideration paid to the member from whom the production was diverted must be included by that member as proceeds of sale of minerals or processed minerals produced from the mine.

  • Marginal note:Certain costs and values excluded

    (6) Costs related to the production of or value for minerals or processed minerals from lands other than lands to which these Regulations apply must not be taken into account for the purposes of determining the values of A to D, G and I in subsection (4).

  • Marginal note:Last year of production — option for calculation

    (7) In the case of a mining royalty return for the last fiscal year of production of a mine, the operator may, for the purpose of determining the value of B in subsection (4), elect to use the actual proceeds from the sale to a party not related to the operator of minerals or processed minerals in inventory at the end of the fiscal year, if proof of that sale is provided, rather than the market value of the inventory of minerals or processed minerals at the end of that fiscal year as required under subsection (4).

  • Marginal note:Election is irrevocable

    (8) An election made under subsection (7) is irrevocable.

  • Marginal note:Market value of precious stones

    (9) If the minerals or processed minerals referred to in paragraphs (b) and (c) of the description of A, and in the descriptions of B and C, in subsection (4) are precious stones, the market value of the precious stones is as follows:

    • (a) if the mining royalty valuer and the operator agree on a value for the stones, that value; or

    • (b) if the mining royalty valuer and the operator cannot agree on a value for the stones, the maximum amount that could be realized from the sale of the stones on the open market after they are sorted into market assortments.

  • Marginal note:Timing of market value of precious stones

    (10) For the purpose of subsection (9), the market value must be determined

    • (a) when the value is calculated for inventory purposes, at the beginning or end of the fiscal year; and

    • (b) when the value is calculated for any other purpose, as of the last time the precious stones were valued by the mining royalty valuer.

  • Marginal note:Market value of other minerals

    (11) If the minerals or processed minerals referred to in paragraphs (b) and (c) of the description of A, and in the descriptions of B and C, in subsection (4) are not precious stones, their market value is the price that could be obtained from their sale to a person who is not related to the operator.

  • Marginal note:Timing of market value of other minerals

    (12) For the purpose of subsection (11), the market value must be determined

    • (a) when the value is calculated for inventory purposes, at the beginning or end of the fiscal year; and

    • (b) when the value is calculated for any other purpose, at the time the minerals or processed minerals are shipped from the mine.

  • Marginal note:Exclusion respecting hedging transactions

    (13) Gains and losses from hedging transactions must not be included in calculating the value of the mine’s output.

  • Marginal note:Exchange rate

    (14) For the purpose of these Regulations, the Bank of Canada’s noon exchange rate must be used to convert foreign currencies into Canadian dollars

    • (a) as of the date of that transaction if a transaction is carried out in a foreign currency; and

    • (b) as of the last day of the fiscal year if inventories have been valued in a foreign currency.

  • Marginal note:Operating costs for operations outside Canada

    (15) When operating costs are incurred for operations outside of Canada, the operator may convert foreign currency transactions for those costs into Canadian dollars using the Bank of Canada’s average noon exchange rate for the month in which those costs were incurred.

 
Date modified: