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Nunavut Mining Regulations (SOR/2014-69)

Regulations are current to 2022-11-16 and last amended on 2021-01-30. Previous Versions

Royalties (continued)

Marginal note:Change of owner or operator has no effect

  •  (1) A change in the ownership or of the operator of a mine does not affect

    • (a) the undeducted balance of the depreciable assets eligible for a depreciation allowance;

    • (b) the undeducted balance of the costs eligible for a development allowance;

    • (c) the undeducted balance of contributions to a mining reclamation trust; or

    • (d) the original cost of the assets used for calculating a processing allowance.

  • Marginal note:Costs not eligible for development allowance

    (2) Subject to paragraph 70(1)(i), if the recording of a claim is cancelled, or a lease expires or is cancelled, any costs incurred in respect of that claim or lease that would otherwise be eligible for a development allowance are no longer eligible for a development allowance in respect of any mine.

  • Marginal note:Combining operations on two mining properties

    (3) If a mining property is acquired by the operator of another mine and the operations on the two mining properties are combined to become a single operation, the undeducted balance of the costs eligible for the development allowance, the undeducted balance of the cost of the depreciable assets eligible for the depreciation allowance, the undeducted balance of the contributions to a mining reclamation trust and the original cost of the processing assets eligible for the processing allowance for each mine must be combined.

  • Marginal note:Valuations when mining property purchased from Crown

    (4) For the purpose of subsection (3), if an operator purchases a mining property from the Crown, the value of the undeducted balance of the costs eligible for the development allowance, of the undeducted balance of the cost of the depreciable assets eligible for the depreciation allowance and of the original cost of the processing assets eligible for the processing allowance of the purchased mine is the lesser of the value established at the time the Crown acquired the mining property and the value established in the agreement of purchase and sale for that property.

Marginal note:Statement respecting minerals whose gross value exceeds $100,000

  •  (1) If, in a particular year, minerals or processed minerals that are from a leased claim and whose gross value exceeds $100,000 are processed at a mine, removed from a mine, sold or otherwise disposed of, the lessee must, within one month after the end of that year, deliver to the Chief a statement setting out

    • (a) the name and a description of the mine;

    • (b) the names and addresses of all owners, operators and other lessees of the mine;

    • (c) the name and address of a person to whom notices may be sent;

    • (d) the weight and value of minerals or processed minerals processed at the mine, removed from the mine, sold or otherwise disposed of during the year and during each month of that year; and

    • (e) the design capacity of any mill, concentrator or other processing plant at the mine.

  • Marginal note:Notice of changes

    (2) A lessee who has delivered a statement under subsection (1) must promptly notify the Chief of

    • (a) any change in the name and address of the person to whom notices may be sent; and

    • (b) any change in the ownership or of the operator of the mine.

Marginal note:Contents of royalty return

  •  (1) On or before the last day of the fourth month after the end of each fiscal year of a mine, including the fiscal year during which the mine commences production and all subsequent years for which there are any amounts that qualify for determining the values of A to H and J in subsection 69(4), the operator of the mine must deliver to the Chief a mining royalty return, in the prescribed form, setting out

    • (a) the name and a description of the mine;

    • (b) the name and address of the operator;

    • (c) the names of processing plants to which minerals or processed minerals have been shipped from the mine for processing;

    • (d) the weight of the minerals or processed minerals produced from the mine during the fiscal year;

    • (e) the weight and value of the minerals or processed minerals produced from the mine that were

      • (i) sold or transferred during the fiscal year of the mine to persons not related to the operator,

      • (ii) sold or transferred during the fiscal year of the mine to persons related to the operator,

      • (iii) in inventory at the beginning of the fiscal year of the mine, and

      • (iv) in inventory at the end of the fiscal year of the mine;

    • (f) any costs, deductions and allowances claimed under subsection 70(1);

    • (g) if exploration costs are claimed as a deduction under paragraph 70(1)(g), or if costs are included in the costs eligible for a development allowance under paragraph 70(1)(i), the recorded claims or leases on which those costs were incurred;

    • (h) in respect of depreciable assets,

      • (i) the undeducted balance of depreciable assets at the beginning of the fiscal year,

      • (ii) the cost of additions during the fiscal year to depreciable assets,

      • (iii) the proceeds from the disposition during the fiscal year of depreciable assets,

      • (iv) the undeducted balance of depreciable assets at the end of the fiscal year before deduction of a depreciation allowance,

      • (v) the undeducted balance of depreciable assets at the end of the fiscal year after deduction of a depreciation allowance, and

      • (vi) the original cost of depreciable assets disposed of during the fiscal year;

    • (i) in respect of development allowances,

      • (i) the undeducted balance at the beginning of the fiscal year of costs eligible for a development allowance,

      • (ii) if the mining royalty return is delivered for the first fiscal year of the mine, the amount of the costs determined under subparagraphs 70(1)(i)(i) and (ii),

      • (iii) the amounts of each of the costs identified in subparagraphs 70(1)(i)(iii) to (v) incurred during the fiscal year,

      • (iv) the undeducted balance of costs eligible for a development allowance at the end of the fiscal year before deduction of a development allowance, and

      • (v) the undeducted balance of costs eligible for a development allowance at the end of the fiscal year after deduction of a development allowance;

    • (j) in respect of any mining reclamation trust established for lands to which these Regulations apply,

      • (i) the total of all amounts contributed to the mining reclamation trust,

      • (ii) the undeducted balance of contributions to the mining reclamation trust at the beginning of the fiscal year,

      • (iii) the amounts contributed to the mining reclamation trust during the fiscal year,

      • (iv) the undeducted balance of contributions to the mining reclamation trust at the end of the fiscal year before any deduction of a mining reclamation trust contribution allowance,

      • (v) the undeducted balance of contributions to the mining reclamation trust at the end of the fiscal year after deduction of a mining reclamation trust contribution allowance, and

      • (vi) the total of all amounts withdrawn from the mining reclamation trust during the fiscal year and in previous fiscal years;

    • (k) in respect of processing assets,

      • (i) the original cost of the processing assets at the beginning of the fiscal year,

      • (ii) the original cost of any new processing assets added to the mine during the fiscal year,

      • (iii) the original cost of any processing assets that were substituted for other processing assets of the mine during the fiscal year,

      • (iv) the original cost of any processing assets for which other processing assets were substituted during the fiscal year,

      • (v) the original cost of any processing assets not used, sold, discarded or otherwise disposed of during the fiscal year, and

      • (vi) the original cost of the processing assets at the end of the fiscal year;

    • (l) any payment received during the fiscal year that is related to a cost that has been claimed as a deduction or allowance; and

    • (m) any amount by which the proceeds of disposition of assets for which a depreciation allowance has been claimed exceed the undeducted balance of depreciable assets at the end of the fiscal year in which the assets were disposed of.

  • Marginal note:Documents to accompany royalty return

    (2) Every mining royalty return must be

    • (a) accompanied by the financial statements for the mine or, if the mine has no financial statements, the financial statements of the operator of the mine, and a reconciliation of those financial statements to the mining royalty return; and

    • (b) signed by the operator of the mine and include a statement under oath or solemn affirmation by the operator or, if the operator is a corporation, by an officer of the corporation, that the financial statements are to that person’s knowledge and belief complete and correct.

  • Marginal note:Royalty return — election under subsection 69(7)

    (3) If a mine’s operator makes an election under subsection 69(7),

    • (a) the operator must deliver the initial mining royalty return for the fiscal year using the market value of the inventories of minerals or processed minerals and then deliver an amended mining royalty return once those inventories have been sold; and

    • (b) the operator must deliver a mining royalty return for the mine’s subsequent fiscal years if there are any amounts that qualify for determining the values of D to H in subsection 69(4), or if the mine recommences production.

Marginal note:Royalty returns for certain joint ventures

  •  (1) If a mine is operated as a joint venture and each member of the joint venture takes its share of the output of the mine in kind and sells that share separately and independently from other members of the joint venture to purchasers who are not related to any of the members of the joint venture,

    • (a) each member may deliver to the Chief a separate mining royalty return for the royalty payable under subsection 69(1) on the value of its share of the output of the mine, in lieu of including that information in a mining royalty return delivered under subsection 73(1); and

    • (b) each member, and any person related to that member, is liable to pay only those royalties attributable to that member’s share of the output of the mine.

  • Marginal note:Joint venture respecting single mine

    (2) When, under subsection (1), more than one member of a joint venture delivers a mining royalty return to the Chief for a single mine,

    • (a) each member of the joint venture is considered to be a separate operator for the purposes of these Regulations;

    • (b) each member must indicate on the mining royalty return the percentage of the output of the mine represented by that mining royalty return;

    • (c) the value of the output on the mining royalty return for each member must be calculated in accordance with section 69 using

      • (i) in respect of costs eligible for deductions under paragraphs 70(1)(a) to (f),

        • (A) a percentage of costs that have been jointly incurred, equal to the percentage of the output of the mine received by that member, and

        • (B) the costs that have been incurred by that member alone,

      • (ii) in determining a deduction for exploration costs under paragraph 70(1)(g), the exploration costs incurred by that member alone,

      • (iii) a depreciation allowance based on

        • (A) a percentage of the depreciable assets of the mine that are jointly held, equal to the percentage of the output of the mine received by that member, and

        • (B) the depreciable assets of the mine that are held by the member alone,

      • (iv) a development allowance based on

        • (A) a percentage of the costs referred to in subparagraphs 70(1)(i)(i) to (v) that have been jointly incurred, equal to the percentage of the output of the mine received by that member, and

        • (B) the costs referred to in subparagraphs 70(1)(i)(i) to (v) that have been incurred by that member alone,

      • (v) a mining reclamation trust contribution allowance equal to the amount contributed to a mining reclamation trust in respect of lands to which these Regulations apply by that member, and

      • (vi) a processing allowance based on

        • (A) a percentage of the processing assets of the mine that are jointly held equal to the percentage of the output of the mine received by that member, and

        • (B) the processing assets of the mine that are held by that member alone;

    • (d) the amounts in column 1 of the table to subsection 69(1) must be adjusted by multiplying each amount by a percentage equal to the percentage of the output of the mine received by that member; and

    • (e) each mining royalty return must be based on the same fiscal year.

Marginal note:Notice of assessment of royalties

  •  (1) Within six years after the end of a particular fiscal year of a mine, the Chief must send to the operator of the mine a notice of assessment for the amount of the royalty payable for that fiscal year.

  • Marginal note:Notice of reassessment

    (2) If, during or after the period referred to in subsection (1), there are reasonable grounds to believe that the operator of a mine or any other person who delivers a mining royalty return has made a fraudulent or negligent misrepresentation in completing the mining royalty return or in supplying any other information under section 73 or 74, the Chief may send a notice of reassessment for the amount of the royalty payable for a fiscal year in respect of the mine.

  • Marginal note:When royalties are considered payable

    (3) If the Chief sends an operator a notice of assessment or reassessment for the amount of royalty payable for a fiscal year, the amount of royalty assessed or reassessed for the fiscal year is considered to be payable on the last day of the fourth month after the end of that fiscal year.

  • Marginal note:Royalty returns when ownership of mine changes

    (4) If the ownership of a mine changes, the operator may file a separate mining royalty return for the portion of the fiscal year before the change of ownership and the portion of the fiscal year after the change of ownership, and each such portion is considered to be a fiscal year of less than 12 months for the purposes of subsection 70(2).

Marginal note:Record keeping

  •  (1) Every operator of a mine must keep at an office in Canada and make available to the Chief, to substantiate information required on mining royalty returns,

    • (a) records, books of account and other documents evidencing

      • (i) the weight of all minerals extracted from the mine and of all minerals or processed minerals processed at the mine, whether or not they are produced from the mine,

      • (ii) the weight and value of all minerals or processed minerals produced from the mine, sold, transferred or removed from the mine by the mine’s operator,

      • (iii) any amounts received from a processing plant and any other amounts received from the sale of minerals or processed minerals, and

      • (iv) the costs, payments, allowances and other deductions referred to in section 70;

    • (b) the financial statements of the mine and the operator;

    • (c) a reconciliation between the documents referred to in paragraphs (a) and (b) and the mining royalty return;

    • (d) if the financial statements of an owner or the operator of the mine are audited by an external auditor,

      • (i) the audited financial statements and the accompanying signed audit opinion of the external auditor, and

      • (ii) any working papers and documentation prepared by the external auditor that are in the possession of an owner or the operator;

    • (e) any documents filed by an owner or the operator with a stock exchange or securities commission;

    • (f) any documents related to any internal audits of a company that is an owner or the operator; and

    • (g) any other documents that contain information necessary for ascertaining the amount of royalty payable under section 69.

  • Marginal note:Non-disclosure of confidential information

    (2) It is prohibited to disclose information of a confidential nature acquired for the purposes of sections 69 to 77, except

    • (a) to the extent necessary to determine the amount of royalties payable under section 69;

    • (b) when required under a land claims agreement referred to in section 35 of the Constitution Act, 1982; or

    • (c) under an agreement entered into by the Minister for the purpose of the administration of section 69 with the government of a country, province or state, or with an Aboriginal organization owning mineral rights, under which the officers of that government or Aboriginal organization are provided with the information and the Chief is provided with information from the government or Aboriginal organization.

 
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