Northwest Territories Mining Regulations — 70
ncement of production of the mine, or from another mining property that was incorporated into the mining property on which the mine is located after the date of the commencement of production, (A) if the claim or lease was purchased, the purchase price of the claim or lease or the amount referred to in clause (B), whichever is the lesser, or (B) in any other case, the costs referred to in subparagraphs (i) and (ii) that were incurred on the incorporated claim or lease and that have not been previously claimed as a deduction or allowance under these Regulations; (j) a mining reclamation trust contribution allowance, determined by the operator, not exceeding the undeducted balance at the end of the fiscal year of amounts contributed to the mining reclamation trust with respect to any environmental impact resulting from the mining of minerals from lands to which these Regulations apply; (k) if minerals or processed minerals are processed by the operator of the mine before their sale or transfer, an annual processing allowance equal to the lesser of (i) subject to subsection (2), 8% of the original cost of the processing assets used by the operator in the processing of the output of the mine during the fiscal year, and (ii) 65% of the value of the output of the mine, after deduction of the amounts referred to in paragraphs (a) to (j); and (l) if minerals or processed minerals from the mine are processed at another mine, or at any facilities located outside the Northwest Territories that are used for the processing of minerals or processed minerals produced from another mine that is owned by the operator or by a person related to the operator, the total of (i) the amount of the costs of the other mine that are not deductible under paragraph (8)(b), (ii) the amount by which the processing allowance for the other mine is reduced under paragraph (8)(c), and (iii) the amount by which the undeducted balance of the original cost of the other mine’s depreciable assets is adjusted under paragraph (8)(d). Production or fiscal year less than 12 months (2) When a mine is in production for less than 12 months in a fiscal year or a fiscal year of a mine is less than 12 months, (a) the deduction for processing allowance calculated under subparagraph (1)(k)(i) must be multiplied by one-twelfth times the number of months in the fiscal year that the mine was in production or the number of months in the shortened fiscal year, as the case may be; and (b) each dollar amount in column 1 of the table to subsection 69 (1) must be multiplied by one-twelfth times the number of months in the fiscal year that the mine was in production or the number of months in the shortened fiscal year, as the case may be. Deduction respecting related person (3) When the operator of a mine claims a deduction for costs incurred in a transaction with a related person, the costs allowed as a deduction under this section must be the amount of the actual costs incurred by the related person, exclusive of any profit, gain or commission to the related person or to any other related person. Depreciation allowance (4) A depreciation allowance may be claimed in respect of a depreciable asset in the fiscal year in which it is first used in the operations of the mine. Reduction in depreciation allowance (5) When an operator disposes of, or receives insurance proceeds in respect of, assets for which a depreciation allowance has been claimed, (a) the undeducted balance of depreciable assets must be reduced by the lesser of (i) the proceeds of disposition or insurance proceeds, as the case may be, and (ii) the original cost of the asset; and (b) when the lesser of the amounts referred to in subparagraphs (a)(i) and (ii) exceeds the undeducted balance of depreciable assets in the fiscal year in which the assets were disposed of, the excess must be included in the value of the output of the mine for that fiscal year. Depreciation allowance — proceeds of disposition (6) For the purposes of