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Thursday, January 7, 2021 - 1:35:34 PM
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Mining News Pro - Teck Resources is entitled to claim 100% of its exploration expenses on the Galore Creek mine development project and apply it to another one of its mines for tax purposes, the British Columbia Supreme Court has ruled.
The dispute over how much of its exploration expenses Teck could claim arose when the BC Ministry of Finance determined Teck was eligible to claim only 50% of its exploration expenses on Galore Creek because it was not the sole owner.
During the period in question – 2010 and 2011 — Teck was in a partnership with NovaGold Resources (TSX:NG) on the Galore Creek project in northwest B.C. Newmont Corp. (TSX:NGT) is now Teck’s new partner in the Galore Creek Mining Corp.
While NovaGold contributed mineral claims and all related infrastructure as part of its contribution to the partnership on the project, it was Teck that incurred the exploration expenses – about C$9.9 million over two years.
Under the Mineral Tax Act (MTA), a company that owns more than one mine is permitted to claim exploration expenses for one mine and apply it, for tax purposes, to another mine.
In Teck’s case, the company claimed 100% of the expenses for Galore Creek but claimed the expenses for its Highland Valley copper mine, which it owns outright.
But the Ministry of Finance denied the claim, saying Teck could only claim 50% of its exploration expenses for Galore Creek, since it was not the sole owner, but a partner. However, as the court pointed out, NovaGold, did not claim any exploration expenses for Galore Creek for the period in dispute.
“The evidence is that NovaGold has not claimed any of the costs funded by the petitioner,” the court ruling states.
“For the years under review, the petitioner (Teck) elected to allocate its proportionate share of the Galore Creek Mine exploration costs from 2010 and 2011 to the HV Mine for its 2011 and 2012 fiscal years,” Justice Laura Gerow’s decision reads.
In her ruling, Gerow concluded that Teck was responsible for 100% of the exploration expenses on Galore Creek for the years in question and was therefore entitled to claim 100% on its taxes. She ordered the matter be referred back to commissioner of mineral tax for an adjustment.
Short Link:
https://www.miningnews.ir/En/News/609966
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