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For those who like to delve deeper into an issue, this page is dedicated to more detailed information and/or links to additional references. Each blog will have a link to this page and is organized by reference or Blog heading for ease of access.

SEDAR – is the official site that provides access to most public securities documents and information filed by issuers with the thirteen provincial and territorial securities regulatory authorities (“Canadian Securities Administrators” or “CSA”) in the SEDAR filing system. Search this database by Company name e.g. Atlantic Gold. Atlantic NS Mining Corp., the mine operator and environmental approval applicant is not found in the database.

ESTMA – Extractive Sector Transparency Measures Act – Extractive entities active in Canada are required to publicly disclose, on an annual basis, specific payments made to all governments in Canada and abroad. Link to reports submitted to ESTMA. Click on year on the pull down menu and search for Atlantic Gold.

Royalties Blog

Mineral Resources Act Section 107 governs royalties and:

(a) “allowance for processing” means the lesser of


(i) the sum of

(A) an allowance by way of return on capital employed in the secondary crushing, grinding, concentrating, chemical extraction, smelting, refining or packaging of output in the Province equal to 8% of actual cost borne by the operator of the processing assets, and

(B) a further allowance by way of return on capital employed by the operator in respect of assets that were necessary to the servicing and management of the processing activities equal to 25% of that amount allowed by way of return on capital for processing assets,

(ii) an amount that does not exceed 65% of net income before deducting the sum described in subclause (i);

(b) “depreciable asset” means an asset in use in the Province by the operator resulting from

(i) the expenses incurred and substantiated by the operator in the exploration for an ore body to the date a mineral lease is acquired if such expense is incurred in relation to assessment work as prescribed and has not been used as a deduction in the calculation of royalties payable with respect to any mine in the Province, unless the operator has operated a mine during a fiscal year in respect of which exploration expenses have been incurred,

(ii) the expenses incurred by the operator in the development of a mine from the date the mineral lease is acquired to the date production of the mine begins, if such expense is essential to the production of output from a mine, is approved by the Mine Assessor and has not been used as a deduction in the calculation of royalties payable with respect to any mine in the Province, or

(iii) the expenditures for the purchase and installation of mining, milling, power, plant and equipment essential to the production of the output of a mine and all other expenditures that are, in the opinion of the Mine Assessor, essential for the purpose mentioned in this subclause and are not deducted from net income or specifically prohibited under this Act, and includes equipment leased at its fair market value less any amount of buyout at the effective date of the lease;

Calculation of gross income

83      An operator’s gross income must be calculated during a fiscal year using the following:

                   (a)      when output is sold, the consistent use in any fiscal year of the market price of the output at 1 of the following times:

                              (i)      the time of sale,

                              (ii)     the time of shipment;

                   (b)     when output is transferred from or consumed at a mining operation, the market price of the output at the time of the transfer or consumption.

Calculation of net revenue

84      An operator’s net revenue for a fiscal year is the gross income calculated under Section 83 less all of the following:

                   (a)      marketing costs;

                   (b)     shipping costs;

                   (c)      smelting costs;

                   (d)     refining costs;

                   (e)      packaging costs;

                   (f)      associated and related costs, if paid or borne by an operator.

Calculation of net income

85      (1)    An operator’s net income is the net revenue calculated under Section 84 less the reasonable operating expenses of a mining operation when paid for or borne by the operator.

          (2)    Reasonable operating expenses of a mining operation in subsection (1) may include any of the following:

                   (a)      allowance for depreciation;

                   (b)     allowance for processing;

(c)      actual costs of restoration, reclamation or rehabilitation of the mine incurred during the year, and for this purpose costs of reclamation completed after a mining operation has ceased may be considered as prior years[’] operating expenses and applied in reverse order to prior fiscal years’ royalty returns to reduce royalties payable to not less than 2% of net revenue for each fiscal year applied; What: The cost of reclamation can come off the royalty.

                   (d)     primary crushing and processing costs;

                   (e)      actual working expenses of the mine both underground and above ground, including salaries and wages of all necessary employees employed at the mine and the salaries and office expenses for necessary office work done at the mine;

                   (f)      head office costs that relate directly to a mining operation;

                   (g)     cost of insuring the equipment, buildings and the stock in storage;

                   (h)     municipal taxes paid by the operator or payments made to essential municipal or public services in lieu of municipal taxes;

                   (i)      prescribed expenditures on assessment work conducted in the Province incurred during the fiscal year, if the expenditure is paid or incurred by the operator;

                   (j)      cost of workers’ compensation and other contributions to the health and welfare of employees working at the mine;

                   (k)     cost of utilities;

                   (l)      cost of food or provisions for employees;

                   (m)    cost of fuel and explosives and other supplies used in a mining operation;

                   (n)     cost of safeguarding and protecting the mine;

                   (o)     cost of repair and maintenance with respect to movable and immovable property used at the mine;

                   (p)     cost of shafts, excavation, drifts, trenches, borings or other means of development in the area under lease, including the mine;

                   (q)     donations made in the Province for educational or charitable purposes that have been approved by the Mine Assessor.

Prohibited reductions to gross income​

86      A reduction of gross income must not be made in respect of any of the following:

                   (a)      operating expenses and allowances attributable to output held in inventory;

                   (b)     cost of plant, machinery, equipment or buildings;

                   (c)      capital invested;

                   (d)     interest on dividends upon being paid;

                   (e)      reduction in the value of any asset, including a mineral right, because the minerals are exhausted;

                   (f)      payments made with respect to acquiring surface rights or acquiring a mineral right;

                   (g)     costs of incorporation, or organization or reorganization of the corporation;

                   (h)     expenses related to manufacturing and industrial enterprises;

                   (i)      royalties payable under the Act and these regulations;

                   (j)      taxes on profit or capital;

                   (k)     reserves and provisions, other than as specifically permitted under the Act;

                   (l)      the portion of expenses or assets recovered by the operator;

                   (m)    deductions allowed in computing a previous year’s profit;

                   (n)     lease payments;

                   (o)     direct costs incurred by the operator in secondary crushing, grinding, concentrating, smelting, refining, packaging or otherwise processing any output other than output derived from a mining operation in the Province controlled by the operator;

                   (p)     any other sum expended, except to the extent that it is expended by the operator for the purpose of realizing or producing a profit from mining.

Mining Association of Nova Scotia’s MANS) view on the provincial tax regime.

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