Northwest Territories Mining Regulations (SOR/2014-68)

Marginal note:Cancellation of recorded claim or lease

• 67 (1) The recording of a claim is cancelled, or a lease and the recording of the claims covered by the lease are cancelled, on the day that any of the following events occur:

  • (a) the Minister has realized on a charge or security over the real property of the claim holder or the lessee for the costs of remedying any environmental condition or environmental damage under subsection 11.8(8) of the Companies’ Creditors Arrangement Act or subsection 14.06(7) of the Bankruptcy and Insolvency Act;

  • (b) the interests in territorial lands represented by the claim or lease have reverted to the Crown as a result of a court order made under the Companies’ Creditors Arrangement Act or the Bankruptcy and Insolvency Act;

  • (c) the Minister has accepted the claim or lease as a security in respect of a debt or other obligation owed to the Crown and the Minister has realized on the security under section 156 of the Financial Administration Act.

• Marginal note:Delay in opening lands

  (2) The lands that were covered by a claim or a lease the recording of which has been cancelled under subsection (1), are not open for prospecting and staking until the Minister opens them.

• Marginal note:Disposition of interests in lands

  (3) Subject to subsection (7), at any time after the recording of a claim (the original claim) was cancelled under subsection (1), the Minister may, with respect to the lands that were covered by the original claim, instruct the Mining Recorder to record, in the name of a specified person, a new claim that covers those lands.

• Marginal note:New claim considered as transfer

  (4) When a new claim is recorded under subsection (3),

  • (a) the new claim need not be staked;

  • (b) the recording date for the new claim is considered to be the recording date of the original claim;

  • (c) the information recorded by the Mining Recorder, including the requests and the documents filed with respect to the original claim, are considered to have been recorded or presented with respect to the new claim;

  • (d) despite subsection 33(5), the duration of the new claim extends for a period beginning on the day on which the Minister instructs that the new claim be recorded (the start day) to the next anniversary date of the recording of the original claim that is at least “x” days after the start day, where “x” is equal to the number of days that were left in the duration of the original claim immediately before it was cancelled; and

  • (e) the requirements of paragraphs 39(1)(b) and 43(1)(b) apply with respect to the new claim.

• Marginal note:Minister may issue new lease

  (5) Subject to subsection (7), at any time after a lease is cancelled under subsection (1), the Minister may issue a new lease that covers the same lands as were covered by the cancelled lease.

• Marginal note:New lease considered as transfer

  (6) A new lease issued under subsection (5) is considered to be a transfer of the previous lease on the same lands, with the same duration as was left on the previous lease at the time it was cancelled.

• Marginal note:Conditions

  (7) The Minister may only act under subsection (3) or (5) if

  • (a) the lands covered by the new claim or lease have not been opened for prospecting and staking; and

  • (b) it is in the financial interest of the Crown or will aid in remedying environmental damage on territorial lands.

Royalties

Marginal note:Commencement of production of mine

• 68 (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

• 69 (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.

    	Column 1	Column 2
    Item	Dollar value of the output of the mine	Royalty payable on that portion of the value (%)
    1	10,000 or less	0
    2	greater than 10,000 but not greater than 5 million	5%
    3	greater than 5 million but not greater than 10 million	6%
    4	greater than 10 million but not greater than 15 million	7%
    5	greater than 15 million but not greater than 20 million	8%
    6	greater than 20 million but not greater than 25 million	9%
    7	greater than 25 million but not greater than 30 million	10%
    8	greater than 30 million but not greater than 35 million	11%
    9	greater than 35 million but not greater than 40 million	12%
    10	greater than 40 million but not greater than 45 million	13%
    11	greater than 45 million	14%

• 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.