Taranis Resources Receives Reversal of Tax Ruling on Bulk Sample Permitting Expenses

Taranis Resources Inc. announced that the Canada Revenue Agency (CRA) has reversed its 2021 ruling regarding the disallowance of Canadian Exploration Expenses (CEE) treatment for certain expenses related to the permitting of the 10,000 tonne exploration Bulk Sample. The ruling was reversed after Taranis filed a ‘Request for Loss Determination’ for taxation years 2017 and 2018. This decision is considered a significant step towards completing an economic assessment of the Mineral Resource at Thor, which is 100% owned by Taranis.

The Bulk Sample Permitting process at Thor began in October 2018 with the submission of a Joint Environmental and Mines Act (JEMA) Permit application to the government of British Columbia. After a thorough review and various studies conducted by Taranis, the Mines Act Permit was finally issued on June 17, 2021. However, the CRA conducted an audit on 2017-2018 CEE expenditures and initially disallowed the use of CEE treatment due to perceived excessive costs for the exploration Bulk Sample.

Taranis successfully argued that the costs were mandated by the government under the JEMA and that the Bulk Sample drew from broken ore stockpiles, which do constitute part of Mineral Resources. Despite initial challenges, the CRA’s Appeals Division completed its review and confirmed that the permitting costs for the exploration Bulk Sample were indeed eligible for CEE treatment.

With the tax ruling reversal, Taranis can now proceed with its plans for the Thor project. The company has submitted an engineering report, prepared by Knight Piésold, to the Ministry of Energy, Mines and Low Carbon Innovation in British Columbia as part of the documentation required prior to the construction of the bulk sample processing facility.

John Gardiner, President and CEO of Taranis Resources, expressed satisfaction with the resolution, highlighting the company’s commitment to ensuring the proper treatment of the Bulk Sample as an exploration activity. Gardiner also emphasized the importance of safe and environmentally sound exploration and called for improvements in permitting processes in British Columbia to support the mining sector. Taranis had engaged in discussions with industry representative groups, such as the Prospectors and Developers Association of Canada, to address the CEE eligibility issue and advocate for the rights of exploration companies.