Canada Gazette

In the Northwest Territories (N.W.T.) and Nunavut, the federal government, through Indian and Northern Affairs Canada (INAC), is responsible for the management of Crown lands, including minerals, through the Territorial Lands Act and its Regulations, which include the Canada Mining Regulations (CMR). The CMR require that each mine located on mineral leases granted under the Regulations pay to the Crown a royalty based on the "value of the output" of the mine less certain deductions and allowances specified in the Regulations.

Most of the current set of amendments deal with the clarification of the wording of definitions and other provisions of the Regulations. The amendments also include a number of changes to the mineral leasing and royalty provisions of the CMR to deal with:

1. The allocation of revenues and expenses where a mine is comprised of a combination of mineral leases under the CMR and Aboriginal-owned land pursuant to a comprehensive land claim settlement;

2. The ability of the Minister to hold and sell mineral claims and leases where the Minister has acquired these through insolvency proceedings or through the realization on security;

3. Ensuring that mine operators do not deduct the cost of inventories of fuel, spare parts and other consumables until they have been used in the production of the output of the mine;

4. Ensuring that mine operators use a consistent exchange rate from the Bank of Canada to value transactions carried out in a foreign currency and inventories valued in a foreign currency; and

5. Allowing mine operators to deduct the cost of assets used for sorting, marketing and selling of the output of a mine when these assets located outside the territories are purchased, rather than just leased, as is currently the case.

The royalty provisions of the CMR were last amended in 1999. The proposed amendments are intended to clarify the wording of some of the provisions of the existing Regulations, deal with issues that have arisen since the 1999 amendments relating to the operation of the Regulations, the implementation of comprehensive land claim settlements and changes to insolvency legislation.

In 2002, a comprehensive package of draft amendments to the mineral tenure and royalty provisions of the CMR was sent out to over 1 800 stakeholders for comments and input. Due to the differing levels of work required to deal with comments received from this process on various provisions of the Regulations, it was decided to divide the comprehensive package of amendments into two separate packages of amendments: one dealing with amendments to the royalty and some leasing provisions of the Regulations, and the other dealing with the balance of the amendments to the mineral tenure regime. A draft of this package of royalty and leasing amendments was circulated for further consultation with the mining industry, Aboriginal groups and other stakeholders in May 2005. Comments from Aboriginal groups and territorial governments have been carefully reviewed and considered and have been incorporated into the amendments where practicable. Most of the concerns raised by the mining industry were of a technical nature and have been addressed in the current draft of these amendments.

The mineral leasing provisions of the Regulations prevent the transfer of leases where royalty is due and unpaid, thus forcing mine operators to settle any outstanding royalty obligations to the Crown, before vending leases. In addition, the interest provisions in section 155.1 and the deduction and set off provisions of section 155 of the Financial Administration Act, as well as subsection 30(1) of the Territorial Lands Act, which makes any violation of the CMR an offence punishable on summary conviction, are used to enforce the royalty provisions of the CMR.

Robert Lauer, Chief, Financial Analysis and Royalty Administration, Mineral Resources, Department of Indian Affairs and Northern Development, Les Terrasses de la Chaudière, Gatineau, Quebec K1A 0H4, 819-994-6772 (telephone).

Notice is hereby given, pursuant to paragraph 24(b) of the Territorial Lands Act, that the Governor in Council, pursuant to sections 8 and 12 and paragraphs 23(j) and (l) of that Act, proposes to make the annexed Regulations Amending the Canada Mining Regulations.

Interested persons may make representations with respect to the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Robert Lauer, Chief, Financial Analysis and Royalties Administration, Mineral Resources Directorate, Natural Resources and Environment Branch, Department of Indian Affairs and Northern Development, 15/25 Eddy St., 10th Floor, Gatineau, QC; Postal address: Ottawa, Ontario K1A 0H4 (tel.: (819) 994-6772; fax: (819) 953-9066; e-mail: lauerr@ainc-inac.gc.ca).

1. The long title of the Canada Mining Regulations (see footnote 1) is replaced by the following:

3. The heading before section 2 of the French version of the Regulations is replaced by the following:

4. (1) The portion of subsection 2(1) in the French version of the Regulations before the definition "actif amortissable" is replaced by the following:

(2) The definitions "lessee" and "qualifying environmental trust" in subsection 2(1) of the Regulations are repealed.

(3) The definitions "concession" and "minéraux" in subsection 2(1) of the French version of the Regulations are repealed.

(4) The definitions "Chief", "depreciable assets", "mine", "mining property", "mining royalty valuer", "owner" and "processing" in subsection 2(1) of the Regulations are replaced by the following:

"Chief" means the Chief of Financial Analysis and Royalties Administration of the Mineral Resources Directorate of the Natural Resources and Environment Branch of the Department of Indian Affairs and Northern Development; (chef)

"depreciable assets" means buildings, plant, machinery and equipment; (actif amortissable)

"mine" means a work or undertaking that produces or has produced minerals or processed minerals from the lands referred to in section 3, and includes the depreciable assets that are located in the Territories, below or above ground and used in connection with the work or undertaking; (mine)

(a) a recorded claim, or a recorded claim that is subject to a lease, within the boundaries of which a mine or part of a mine is situated, or

(b) a group of contiguous recorded claims, whether or not subject to a lease, within the boundaries of which a mine or part of a mine is situated,

(i) that are the property of the same owner, or

(ii) if the mine is operated as a joint venture, that are owned exclusively by the members of the joint venture or parties related to the members of the joint venture, regardless of the degree of ownership of each claim or lease; (propriété minière)

"mining royalty valuer" means a person acting on the Minister's behalf for the purpose of ascertaining the value of minerals or processed minerals produced from a mine; (évaluateur des redevances minières)

"owner", in respect of a recorded claim, lease, mine or mining property, means any person with a legal or beneficial interest in the recorded claim, lease, mine or mining property; (propriétaire)

"processing" means crushing, grinding, floatation, beneficiation, concentrating, milling, roasting, smelting, leaching, recrystallization or refining performed on minerals, and if the output of a mine is precious stones, cleaning and sorting that output; (traitement)

(5) Paragraph (d) of the definition "related" in subsection 2(1) of the Regulations is replaced by the following:

(d) other than for the purpose of subsection 67.1(1), owners or operators of the same mine; (liées)

(6) Paragraph (c) of the definition "undeducted balance" in subsection 2(1) of the Regulations is replaced by the following:

(c) in respect of a mining reclamation trust contribution allowance, the total of all contributions made to the mining reclamation trust, less any deductions previously claimed; (fraction non amortie)

(7) The definition "détenteur des droits de surface" in subsection 2(1) of the French version of the Regulations is replaced by the following:

« détenteur des droits de surface » Le preneur à bail ou le détenteur officiel des droits de surface de la terre sur laquelle un claim est enregistré ou sur le point de l'être. (surface holder)

(8) The definition "mineral" in subsection 2(1) of the English version of the Regulations is replaced by the following:

"mineral" means any naturally occurring inorganic substance found on or under any surface of land, but does not include native sulphur, construction stone, carving stone, limestone, soapstone, marble, gypsum, shale, clay, sand, gravel, volcanic ash, diatomaceous earth, ochre, granite, slate, marl, loam, earth, flint, sodium chloride or soil; (minéral)

(9) The expression "(concession)" at the end of the definition "lease" in subsection 2(1) of the English version of the Regulations is replaced by the expression "(bail)".

(10) Subsection 2(1) of the Regulations is amended by adding the following in alphabetical order:

(a) is created for the purposes of subsection 17(1) of the Northwest Territories Waters Act or subsection 76(1) of the Nunavut Waters and Nunavut Surface Rights Tribunal Act, or

(i) a lease issued under the Territorial Lands Regulations,

(ii) a contract with the Minister relating to the reclamation or environmental management of a mining property, or

(iii) a permit issued under Part 3 or Part 4 of the Mackenzie Valley Resource Management Act or under the Territorial Land Use Regulations; (fiducie de restauration minière)

"precious stone" means a diamond, a sapphire, an emerald or a ruby; (pierre précieuse)

(11) Subsection 2(1) of the French version of the Regulations is amended by adding the following in alphabetical order:

« bail » Bail d'un claim enregistré accordé au détenteur de celui-ci en vertu de l'article 58. (lease)

« minéral » Toute substance inorganique existant dans la nature trouvée sur ou sous la surface de la terre. Ne sont pas visés par la présente définition le soufre natif, la pierre de construction, la pierre à tailler, le calcaire, la stéatite, le marbre, le gypse, le schiste argileux, l'argile, le sable, le gravier, les cendres volcaniques, la terre de diatomées, l'ocre, le granite, l'ardoise, la marne, le terreau, la terre, le silex, le chlorure de sodium et le sol. (mineral)

3. These Regulations apply in respect of territorial lands in the Northwest Territories and in Nunavut referred to in subsections 3(1) and (2) of the Act.

6. Paragraph 8(6)(e) of the French version of the Regulations is replaced by the following:

7. (1) The portion of subsection 11(1) of the Regulations before paragraph (a) is replaced by the following:

(2) Paragraph 11(1)(h) of the French version of the Regulations is replaced by the following:

h) dont la surface a été donnée à bail par Sa Majesté, à moins que le preneur à bail n'y consente ou qu'une ordonnance autorisant à y pénétrer n'ait été rendue en vertu du paragraphe 72(3).

8. (1) Subsections 27(1) and (2) of the Regulations are replaced by the following:

27. (1) No person other than the holder of a recorded claim or of a recorded claim that is subject to a lease may prospect on, remove minerals or processed minerals from or develop a mine on land within the boundaries of the recorded claim or recorded claim that is subject to a lease.

(2) No person shall remove minerals or processed minerals whose gross value exceeds $100,000 from a recorded claim, other than for the purposes of assay and testing to determine the existence, location, extent, quality or economic potential of a mineral deposit in the lands constituting the recorded claim, before the holder of the claim has been granted a lease for the claim.

(2) Subsection 27(3) of the French version of the Regulations is replaced by the following:

(3) Le détenteur d'un claim enregistré qui n'a pas obtenu de bail ou de concession pour la surface de la terre comprise dans le claim n'a pas le droit d'ériger un bâtiment devant servir d'habitation, une usine de broyage, un concentrateur ou tout autre bâtiment minier, ni de créer une zone de dépôt de résidus ou de stériles provenant du début de la production d'une mine sur ce claim.

9. Subsection 28(2) of the French version of the Regulations is replaced by the following:

(2) Lorsque le registraire minier en chef est convaincu que l'enregistrement d'un claim pour lequel un bail n'a pas été accordé a été obtenu grâce à une déclaration fausse ou trompeuse faite sciemment par le détenteur du claim, le registraire minier en chef peut, après avoir entendu le détenteur ou toute personne comparaissant en son nom, annuler le claim.

42. No representation work is required to be done on a recorded claim for the period beginning on the day on which an application for a lease of that claim is filed with the Mining Recorder and ending on the day on which a lease is granted, if the holder of the claim has met the requirements of section 58.

11. Paragraph 45(1)(d) of the French version of the Regulations is replaced by the following:

(a) enter on any recorded claim, recorded claim that is subject to a lease, or mining property, and inspect the claim, mining property or mine, and records or books of account kept there and take samples of minerals or processed minerals;

(2) Subsection 47(2) of the French version of the Regulations is replaced by the following:

(2) Les renseignements sur les résultats de l'exploitation qui n'ont pas été déposés à titre d'état des travaux obligatoires sont confidentiels jusqu'à ce que le détenteur du claim enregistré les rende publics ou jusqu'à ce que le claim ou le bail soit périmé ou annulé, selon la première de ces éventualités à se présenter.

(3) Subsections 47(3) and (4) of the Regulations are replaced by the following:

(3) Every authorized officer shall be furnished with a certificate of authorization and, on entering any claim, mining property or mine, shall, if requested, produce the certificate to the owner or persons in charge of that place.

(4) The owner or person in charge of any claim, mining property or mine and every person found in that place shall give the authorized officer all reasonable assistance in their power to enable that officer to carry out his duties and functions under these Regulations, and shall furnish that officer with any information with respect to the administration and enforcement of these Regulations as may reasonably be required.

13. The heading before section 58 of the French version of the Regulations is replaced by the following:

14. (1) The portion of subsection 58(1) of the French version of the Regulations before paragraph (a) is replaced by the following:

58. (1) Le détenteur d'un claim enregistré peut faire une demande de bail pour ce claim :

(2) The portion of subsection 58(2) of the French version of the Regulations before paragraph (a.1) is replaced by the following:

(2) Le détenteur d'un claim enregistré obtient du ministre un bail pour ce claim :

(3) Paragraph 58(2)(e) of the French version of the Regulations is replaced by the following:

e) si la demande de bail rédigée selon la formule 15 de l'annexe III a été déposée auprès du registraire minier.

(4) The portion of subsection 58(4) of the French version of the Regulations before paragraph (a) is replaced by the following:

(4) Sur réception de la demande de bail, le registraire minier l'envoie au chef, qui peut :

(5) Subsection 58(9) of the French version of the Regulations is replaced by the following:

(9) Si le chef accorde un bail pour un claim enregistré ou s'il cède ce bail ou tout intérêt qui s'y rapporte, il en avise le registraire minier.

15. (1) Subsections 59(1) to (3) of the French version of the Regulations are replaced by the following:

59. (1) La durée de validité du bail est de vingt et un ans à compter de la date d'entrée en vigueur qui y est indiquée.

(2) À l'expiration du bail, y compris le bail renouvelé, le preneur à bail peut demander au ministre de le renouveler pour une période de vingt et un ans et, sur paiement du droit applicable prévu à l'annexe I et sous réserve des dispositions du présent règlement, le ministre renouvelle le bail.

(3) Si le preneur à bail ne présente pas de demande de renouvellement conformément au paragraphe (2), le ministre peut lui envoyer, par courrier recommandé, un avis d'expiration et, s'il ne présente pas de demande de renouvellement dans les soixante jours suivant la date de mise à la poste de l'avis, son droit au renouvellement est aussitôt annulé, sans qu'il y ait déclaration d'annulation ou de déchéance.

(2) The portion of subsection 59(4) of the French version of the Regulations before paragraph (a) is replaced by the following:

(4) Au moment du renouvellement prévu par le présent règlement, une partie du terrain visé par un bail peut être abandonnée si :

(3) Paragraph 59(4)(b) of the French version of the Regulations is replaced by the following:

b) la surface du terrain visé par le bail est réduite conformément à l'article 43, lorsque la partie à abandonner est un claim minier enregistré après l'entrée en vigueur du présent règlement ou une partie de ce claim, et

16. (1) Subsection 60(1) of the French version of the Regulations is replaced by the following:

60. (1) Sous réserve du paragraphe (2), le loyer d'un claim enregistré pour lequel un bail a été accordé est indiqué à l'annexe I.

(2) The portion of subsection 60(2) of the French version of the Regulations before paragraph (a) is replaced by the following:

(2) Si des travaux d'un type énuméré à l'alinéa 38(1)a) ont été exécutés sur un claim enregistré pour lequel un bail a été accordé, il faut déduire du loyer de l'année d'exécution des travaux, pour ce claim ainsi que pour au plus cinq claims enregistrés adjacents détenus par le même preneur à bail et faisant l'objet d'un bail, une somme égale :

(3) Paragraph 60(2)(b) of the French version of the Regulations is replaced by the following:

(4) Subsections 60(3) to (5) of the French version of the Regulations are replaced by the following:

(3) Le loyer annuel dû en vertu d'un bail est payé au chef à la date de la signature du bail et, par la suite, à chaque anniversaire de la date d'entrée en vigueur.

(4) Trente jours après la date d'échéance du loyer, le chef envoie à chaque preneur à bail qui n'a pas payé son loyer pour l'année un avis rédigé selon la formule 16 de l'annexe III indiquant le montant du loyer impayé.

(5) Si le loyer n'est pas payé dans les soixante jours suivant la date apparaissant sur l'avis visé au paragraphe (4), le ministre peut annuler le bail.

61. (1) A lessee may, by giving a notice in writing to the Mining Recorder, surrender the lease.

(2) A surrender of a lease is effective on the day on which it is recorded by the Mining Recorder.

61.1 If a lease expires or is cancelled or surrendered, the lease area shall be open for staking under these Regulations at noon on the day after the first business day after the day on which the lease expired or was cancelled or surrendered, as the case may be.

62. (1) Subject to subsections (2) to (5) and section 62.1, a holder of a recorded claim or lease or, if the holder has died or become insolvent, an executor, an administrator or a trustee may transfer the claim or lease at any time to a licensee.

(2) All transfers of a recorded claim or lease shall be in a form prescribed by the Minister under section 28 of the Act and shall be signed by the holder of the claim or lessee and the assignee and filed with the Mining Recorder, accompanied by

(3) No transfer of a recorded claim or lease is effective until the Mining Recorder has recorded it.

(4) Subject to subsection 62.1(1), the Mining Recorder shall not record the transfer of the lease if rent owing under the lease is unpaid.

(5) Subject to subsection 62.1(1), the Mining Recorder shall not record the transfer of a recorded claim or lease of a mining property in respect of which mining royalties are due and unpaid, unless security in the amount of the unpaid royalties has been deposited with the Minister.

62.1 (1) At the written request of the Minister, the Mining Recorder shall record a transfer of a recorded claim or lease to the Minister if

(a) Her Majesty has realized on a first charge over the real property of the holder of the claim or the lessee for the costs of remedying the 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 claim or lease has been transferred to the Minister by a court order made under the Companies' Creditors Arrangement Act or the Bankruptcy and Insolvency Act; or

(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.

(a) the requirements for the payment of fees in respect of the claim are suspended for the period during which the claim is held by the Minister; and

(b) the period set out in subsection 58(1) is extended by the period during which the claim is held by the Minister.

(3) In the case of a lease transferred to the Minister, no rent is payable on the lease for the period during which the lease is held by the Minister.

(a) every judgment or order relating to the ownership of a recorded claim or a lease made by a judge of a court of competent jurisdiction, the Minister, the Supervising Mining Recorder or a Mining Recorder;

(2) The portion of paragraph 63(1)(b) of the French version of the Regulations before subparagraph (i) is replaced by the following:

b) un avis à l'égard des claims enregistrés et des claims enregistrés faisant l'objet de baux qui constituent une propriété minière ou des intérêts y afférents, portant sur des redevances minières exigibles et impayées dans les trente jours suivant :

(3) Paragraph 63(1)(c) of the French version of the Regulations is replaced by the following:

c) sous réserve du paragraphe (2), sur paiement du droit applicable prévu à l'annexe I, tout autre document déposé relativement à un claim ou à un bail.

(2) No notice of an express or a constructive trust shall be recorded against a recorded claim or lease other than those trusts administered by the persons referred to in subsection 62(1).

(5) Subsection 63(4) of the French version of the Regulations is replaced by the following:

(4) La cession d'un claim enregistré ou d'un bail, ou de tout intérêt y afférent, est assujettie à tout jugement, ordonnance, privilège ou grèvement enregistré à l'égard du claim ou du bail, ou de l'intérêt y afférent, à la date de l'enregistrement de l'acte de cession.

(b) if the mine does not include a mill or concentrator, the day the mine begins to produce minerals in reasonable commercial quantities.

(2) Subsections 64(2) and (3) of the Regulations are replaced by the following:

(2) For the purposes of these Regulations, a mineral or processed mineral is considered to be produced and to 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.

(3) For the purposes of these Regulations, a mineral or processed mineral produced from the reprocessing of tailings from a mine is considered to form part of the output of the mine.

(3) Paragraphs 64(4)(a) and (b) of the Regulations are replaced by the following:

(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 evidence 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.

21. (1) The portion of subsection 65(1) of the Regulations before paragraph (a) is replaced by the following:

65. (1) Each fiscal year, the owner or operator of a mine shall pay to Her Majesty royalties on the value of the mine's output during that fiscal year in an amount equal to the lesser of

(2) Paragraphs 65(1)(a) and (b) of the French version of the Regulations are replaced by the following:

(3) Subsections 65(2) and (3) of the Regulations are replaced by the following:

(2) The royalties are payable to the Receiver General and shall be received by the Chief not later than the last day of the fourth month after the end of that fiscal year.

(3) Subject to paragraph 67.1(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.

(4) The formula in subsection 65(4) of the Regulations is replaced by the following:

(5) The descriptions of A to C in subsection 65(4) of the Regulations are replaced by the following:

(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 evidence of the proceeds 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 evidence of the proceeds of 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 (5),

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 (5),

(6) The descriptions of F and G in subsection 65(4) of the Regulations are replaced by the following:

F is any amount withdrawn, during the fiscal year, from a mining reclamation trust established in respect of lands referred to in section 3, 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,

(7) The description of H in subsection 65(4) of the French version of the Regulations is replaced by the following:

H toute subvention ou tout prêt — pour lequel l'exploitant a été dispensé de remboursement — accordé à l'exploitant par le gouvernement fédéral relativement à la mine pendant l'exercice;

(8) Subsection 65(4) of the Regulations is amended by striking out the word "and" at the end of the description of H, by adding the word "and" at the end of the description of I and by adding the following after the description of I:

(a) the amount by which the sum of the amounts referred to in paragraphs 65.1(8)(d) and (8.1)(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 65.1(8.1)(c) and (d) exceeds the undeducted balance of the development allowance at the end of the fiscal year.

(9) Subsections 65(5) to (7) of the Regulations are replaced by the following:

(4.1) 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 67.1(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 69(2), even if consideration is paid for the diversion; and

(b) any consideration paid to the member from whom the production was diverted shall be included by that member as proceeds of sale of minerals or processed minerals produced from the mine.

(4.2) No costs related to the production of or value for minerals or processed minerals from the lands other than those referred to in section 3 shall be taken into account for the purposes of determining the values of A to D and G and I in subsection (4).

(4.3) In the case of a mining royalty return for the last 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 sales of inventories of minerals or processed minerals at the end of that fiscal year, 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).

(5) 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.

(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 at the last time the precious stones were valued by the mining royalty valuer.

(7) If the minerals and 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.

(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.

(9) Gains and losses from hedging transactions shall not be included in calculating the value of the mine's output.

(10) For the purpose of these Regulations, the Bank of Canada's noon exchange rate shall be used to convert foreign currencies into Canadian dollars:

(a) as at the date of that transaction if a transaction is carried out in a foreign currency; and

(b) as at the last day of the fiscal year if inventories have been valued in a foreign currency.

22. (1) Paragraphs 65.1(1)(a) to (d) of the Regulations are replaced by the following:

(a) the costs, incurred during the fiscal year, of sorting, valuing, marketing and selling the minerals or processed minerals produced from the mine;

(b) the costs, incurred during the fiscal year, of insurance, storage, handling and transportation to the processing plant or market, in respect of the minerals or processed minerals produced from the mine;

(d) the costs, incurred during the fiscal year, of repair, maintenance or reclamation at the mine;

(d.1) the consideration paid by a member of a joint venture for minerals or processed minerals diverted from another member of the joint venture, when each member is delivering a separate mining royalty return in accordance with section 67.1;

(2) Subparagraph 65.1(1)(f)(ii) of the Regulations is replaced by the following:

(g) subject to subsection (5), paragraphs (8)(d) and (8.1)(e) and subsection (9), a depreciation allowance for the depreciable assets of the mine, and for the depreciable assets of any facilities located outside the Territories that are used for the processing of minerals or processed minerals produced from the mine in an amount not exceeding the undeducted balance of the cost of those depreciable assets at the end of the fiscal year of the mine;

(4) Subparagraph 65.1(1)(h)(ii) of the Regulations is replaced by the following:

(A) the value of any minerals or processed minerals produced from the mining property that were sold or transferred before the date of commencement of production, calculated in accordance with section 65, and

(B) the market value of any minerals or processed minerals produced from the mining property that are in inventory on the date of commencement of production, calculated in accordance with section 65,

(5) The portion of subparagraph 65.1(1)(h)(v) of the Regulations before clause (A) is replaced by the following:

(v) if minerals or processed minerals are being produced in commercial quantities from a recorded claim or recorded claim that is subject to a lease that was incorporated into the mining property after the date of the commencement of production of the mine, or from another mining property that was incorporated into the mine after the date of the commencement of production,

(6) Clauses 65.1(1)(h)(v)(A) and (B) of the French version of the Regulations are replaced by the following:

(A) dans le cas où le claim ou le bail a été acheté, le prix d'achat ou, s'ils sont moins élevés, les frais visés à la division (B),

(B) dans les autres cas, les frais visés aux sous-alinéas (i) et (ii) engagés à l'égard du claim ou du bail ainsi incorporé et pour lesquels une déduction n'a pas déjà été réclamée en vertu du présent règlement;

(7) Paragraphs 65.1(1)(i) and (j) of the Regulations are replaced by the following:

(i) 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 the lands referred to in section 3;

(j) 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 (i); and

(k) if minerals or processed minerals from the mine are processed at another mine, or at any facilities located outside the 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 operating 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).

(8) Paragraphs 65.1(2)(a) and (b) of the Regulations are replaced by the following:

(a) the deduction for processing allowance calculated under subparagraph (1)(j)(i) shall 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 I of the table to subsection 65(1) shall 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.

(9) Subsections 65.1(8) and (9) of the Regulations are replaced by the following:

(8) If, in a particular fiscal year, a mine's operator uses the mine's depreciable assets, or any facilities located outside the Territories that are used for the processing of minerals or processed minerals produced from the mine, to process minerals or processed minerals other than those produced from the mine,

(a) the revenue earned from the sale or processing of those minerals or processed minerals shall not be included in the value of the output of the mine;

(b) the deduction for the costs incurred during the fiscal year under paragraphs (1)(a) to (e) shall be reduced by any costs incurred for the processing of minerals or processed minerals not produced from the mine;

(c) the original cost of the processing assets used to calculate the processing allowance amount under subparagraph (1)(j)(i) shall be reduced by an amount equal to the original cost of the processing assets multiplied by the ratio of the costs incurred during the fiscal year under paragraphs (1)(a) to (e) of processing minerals or processed minerals not produced from the mine to the total costs incurred during the fiscal year under those paragraphs of processing all minerals or processed minerals at the mine; and

(d) the undeducted balance of the original cost of the mine's depreciable assets at the end of the fiscal year shall be adjusted to exclude an amount equal to the original cost of the depreciable assets used to process minerals or processed minerals not produced from the mine multiplied by the ratio of the costs incurred under paragraphs (1)(a) to (e) during that fiscal year and all prior fiscal years for the processing through those assets of minerals or processed minerals not produced from the mine to the total costs incurred under those paragraphs during that fiscal year and all prior fiscal years for the processing through those assets of all minerals and processed minerals at the mine.

(8.1) If a mine produces minerals or processed minerals from the lands referred to in section 3 and any other lands,

(a) the deduction for the costs incurred during the fiscal year under paragraphs (1)(a) to (e) shall be reduced by any costs incurred for the production of minerals or processed minerals from lands other than those referred to in section 3;

(b) the original cost of the processing assets used to calculate the processing allowance under subparagraph (1)(j)(i) shall be reduced by an amount equal to the original cost of the processing assets multiplied by the ratio of the costs incurred during the fiscal year under paragraphs (1)(a) to (e) for the processing of minerals or processed minerals produced from lands other than those referred to in section 3 to the total costs incurred during the fiscal year, under those paragraphs, for the processing of all minerals or processed minerals at the mine;

(c) the undeducted balance of costs eligible for the mine's development allowance at the end of the fiscal year shall be adjusted to exclude an amount equal to the costs referred to in subparagraph (1)(h)(ii) multiplied by the ratio of the costs incurred under paragraphs (1)(a) to (e) during that fiscal year and all prior fiscal years for the production of minerals or processed minerals from lands other than those referred to in section 3 to the total costs incurred under those paragraphs during that fiscal year and all prior fiscal years for the production of all minerals or processed minerals at the mine;

(d) the undeducted balance of costs eligible for the mine's development allowance at the end of the fiscal year shall be adjusted to exclude an amount equal to the costs of the workings referred to in subparagraph (1)(h)(iv) used in the production of minerals or processed minerals from lands other than those referred to in section 3 multiplied by the ratio of the costs incurred under paragraphs (1)(c) to (e) during that fiscal year and all prior fiscal years for the use of those workings in the production of minerals or processed minerals from lands other than those referred to in section 3 to the total costs incurred under those paragraphs during that fiscal year and all prior fiscal years for the use of those workings in the production of all minerals or processed minerals at the mine; and

(e) the undeducted balance of the original cost of the mine's depreciable assets at the end of the fiscal year shall be adjusted to exclude an amount equal to the original cost of the depreciable assets used in the production or processing of minerals or processed minerals produced from lands other than those referred to in section 3 multiplied by the ratio of the costs incurred under paragraphs (1)(a) to (e) during that fiscal year and all prior fiscal years for the use of those assets for the production or processing of minerals or processed minerals produced from lands other than those referred to in section 3 to the total costs incurred under those paragraphs during that fiscal year and all prior fiscal years for the use of those assets for the production or processing of all minerals or processed minerals produced at the mine.

(9) The adjustments referred to in paragraphs (8)(d) and (8.1)(c) to (e) shall each be calculated at the end of each fiscal year of the mine with the difference between the amount calculated for that fiscal year and the amount calculated for the previous fiscal year being added to or subtracted from the undeducted balance of the depreciable assets or the undeducted balance of the costs eligible for the development allowance, as the case may be.

(10) Paragraphs 65.1(10)(a) and (b) of the Regulations are replaced by the following:

(a) the capital cost of the depreciable assets, other than those subject to the depreciation allowance under paragraph (1)(g);

(b) depletion in the value of the mine or mining property by reason of exhaustion of the minerals;

(11) Subparagraphs 65.1(10)(c)(iii) and (iv) of the Regulations are replaced by the following:

(iii) shareholders' meetings or the preparation of shareholders' reports, and

(iv) legal, accounting and other costs incurred in connection with incorporations, reorganizations, financing or security or stock issues;

(12) Paragraphs 65.1(10)(e) to (g) of the Regulations are replaced by the following:

(e) remuneration of executive officers, administrative and consulting costs and costs in respect of offices not located at the mine site, unless that remuneration or those costs are directly related to operations of the mine or to the marketing and selling of minerals or processed minerals produced from the mine;

(f) the taxes on profits, property or capital, or payments in lieu of those taxes, paid to any level of government and the cost of preparing returns in respect of those taxes, except for customs duties, sales and excise taxes not otherwise refundable to the operator and any taxes related to the employment of employees, and the cost of preparing a return in respect of those taxes;

(g) the royalties paid for the use of mining property or royalties calculated on revenue, production or profits of the mine, and the cost of calculating those royalties;

(k) increases in reserves or provisions for contingencies, other than in respect of a mining reclamation trust;

(m) insurance premiums other than those paid for insuring minerals or processed minerals produced from the mine;

(15) Paragraph 65.1(10)(n) of the French version of the Regulations is replaced by the following:

n) les frais engagés pendant l'exercice pour générer des revenus qui n'entrent pas dans le calcul de la valeur de la production de la mine;

(16) Paragraph 65.1(10)(o) of the French version of the Regulations is replaced by the following:

o) sous réserve du sous-alinéa 65.1(1)h)(v), le prix d'achat d'un claim enregistré, d'un claim enregistré faisant l'objet d'un bail ou d'une mine;

(17) Subsection 65.1(10) of the Regulations is amended by striking out the word "or" at the end of paragraph (r) and by adding the following after paragraph (s):

(t) the cost of inventories of fuel, other consumables and spare parts that have not been consumed in the operation of the mine;

(u) the costs of staking or recording a claim, or the cost of surveying the claim for the purpose of taking it to lease;

(x) any cost incurred after any precious stones have been last valued by the mining royalty valuer, if those stones were sold or transferred to a related party, or to any other person if evidence of the proceeds of disposition is not provided, or if the stones were cut and polished before their sale or transfer; or

23. (1) Paragraph 65.2(1)(c) of the Regulations is replaced by the following:

(2) Subsection 65.2(2) of the French version of the Regulations is replaced by the following:

(2) Sous réserve de l'alinéa 65.1(1)h), si un claim enregistré ou un bail devient périmé ou est annulé ou abandonné, tous les frais engagés relativement au claim ou au bail qui seraient autrement admissibles à une déduction relative à l'aménagement deviennent périmés et cessent d'être admissibles à une telle déduction à l'égard de toute mine.

(3) Section 65.2 of the Regulations is amended by adding the following after subsection (2):

(3) If a mine is acquired by the operator of another mine and the operations of the two mines are combined to become a single mine, the undeducted balance of the costs eligible for the development allowance, the undeducted balance of the cost of the depreciable assets eligible for the depreciation allowance, the undeducted balance of the contributions to a mining reclamation trust and the original cost of the processing assets eligible for the processing allowance for each mine shall be combined.

(4) For the purpose of subsection (3), if an operator purchases a mine from the Minister, the value of the undeducted balance of the costs eligible for the development allowance, of the undeducted balance of the cost of the depreciable assets eligible for the depreciation allowance and of the original cost of the processing assets eligible for the processing allowance of the purchased mine shall be the lesser of the value established at the time the Minister acquired the mine, and the value established in the agreement of purchase and sale for the mine.

24. (1) The portion of subsection 66(1) of the Regulations before paragraph (a) is replaced by the following:

66. (1) If, in a particular year, minerals or processed minerals from a recorded claim under a lease whose gross value exceeds $100,000 are treated at a mine, removed from a mine, sold or otherwise disposed of, the lessee shall, within one month after the end of that year, deliver to the Chief a statement setting out

(2) Paragraph 66(1)(b) of the French version of the Regulations is replaced by the following:

b) les nom et adresse de tous les propriétaires, exploitants et preneurs à bail de la mine;

(d) the weight and value of minerals or processed minerals treated at the mine, removed from the mine, sold or otherwise disposed of during the year and during each month of that year; and

(4) The portion of subsection 66(2) of the French version of the Regulations before paragraph (a) is replaced by the following:

(2) Le preneur à bail qui a produit la déclaration avise sans délai le chef :

25. (1) The portion of subsection 67(1) of the Regulations before paragraph (a) is replaced by the following:

67. (1) On or before the last day of the fourth month after the end of each fiscal year of a mine, including the fiscal year during which the mine commences production and all subsequent years for which there are any amounts that qualify for determining the values of A to H and J in subsection 65(4), the operator of the mine shall deliver to the Chief a mining royalty return, on a form prescribed by the Minister under section 28 of the Act, setting out

(2) Paragraphs 67(1)(c) and (d) of the Regulations are replaced by the following:

(c) the names of processing plants to which minerals or processed minerals have been shipped from the mine for treatment;

(d) the weight of the minerals or processed minerals produced from the mine during the fiscal year;

(3) The portion of paragraph 67(1)(e) of the Regulations before subparagraph (i) is replaced by the following:

(e) the weight and value of the minerals or processed minerals produced from the mine that were

(4) Paragraph 67(1)(g) of the French version of the Regulations is replaced by the following:

g) dans le cas d'une déduction réclamée au titre des frais d'exploration en vertu de l'alinéa 65.1(1)f), ou lorsque des frais sont inclus dans les frais admissibles au titre de la déduction relative à l'aménagement en vertu de l'alinéa 65.1(1)h), les claims enregistrés ou les baux pour lesquels ces frais ont été engagés;

(5) Subparagraph 67(1)(i)(ii) of the Regulations is replaced by the following:

(ii) if the mining royalty return is delivered for the first fiscal year of the mine, the amount of the costs determined under subparagraphs 65.1(1)(h)(i) and (ii),

(6) The portion of paragraph 67(1)(j) of the Regulations before subparagraph (i) is replaced by the following:

(j) in respect of any mining reclamation trust established for lands referred to in section 3,

(7) Subparagraphs 67(1)(j)(i) to (vi) of the English version of the Regulations are replaced by the following:

(i) the total of all amounts contributed to the mining reclamation trust,

(ii) the undeducted balance of contributions of the mining reclamation trust at the beginning of the fiscal year,

(iii) the amounts contributed to the mining reclamation trust during the fiscal year,

(iv) the undeducted balance of contributions to the mining reclamation trust at the end of the fiscal year before any deduction of a mining reclamation trust contribution allowance,

(v) the undeducted balance of contributions to the mining reclamation trust at the end of the fiscal year after the deduction of a mining reclamation trust contribution allowance, and

(vi) the total of all amounts withdrawn from the mining reclamation trust during the fiscal year and in previous fiscal years;

(8) Section 67 of the Regulations is amended by adding the following after subsection (2):

(a) the operator shall deliver the initial mining royalty return for the fiscal year using the market value of the inventories of minerals or processed minerals and then deliver an amended mining royalty return once those inventories have been sold or otherwise transferred; and

(b) the operator shall deliver a mining royalty return for the mine's subsequent fiscal years if there are any amounts that qualify for determining the values of D to H in subsection 65(4), or if the mine recommences production.

26. (1) The portion of subsection 67.1(1) of the Regulations before paragraph (b) is replaced by the following:

67.1 (1) If a mine is operated as a joint venture and each member of the joint venture takes its share of the output of the mine in kind and sells that share separately and independently from other members of the joint venture to purchasers who are not related to any of the members of the joint venture,

(a) each member may deliver to the Chief a separate mining royalty return for the royalty payable under subsection 65(1) on the value of its share of the output of the mine, in lieu of including that information in a mining royalty return delivered under subsection 67(1); and

(2) Subparagraph 67.1(2)(c)(v) of the Regulations is replaced by the following:

(v) a mining reclamation trust contribution allowance equal to the amount contributed to a mining reclamation trust in respect of the lands referred to in section 3 by that member, and

68. (1) Every operator of a mine shall keep at an office in Canada and make available to the Chief, to substantiate information required on mining royalty returns,

(i) the weight of all minerals extracted from the mine and of all minerals or processed minerals processed at the mine, whether or not they are produced from the mine,

(ii) the weight and value of all minerals or processed minerals produced from the mine, sold, transferred or removed from the mine by the mine's operator,

(iii) any amounts received from a processing plant and any other amounts received from the sale of minerals or processed minerals, and

(iv) the costs, payments, allowances and other deductions referred to in section 65.1;

(d) if the financial statements of an owner or operator of the mine are audited by an external auditor,

(i) the audited financial statements and the accompanying signed audit opinion of the external auditor, and

(ii) any working papers and documentation prepared by the external auditor that are in the possession of the operator or owner;

(e) any documents filed by an owner or operator with a stock exchange or securities commission;

(f) any documents related to any internal audits of a company that is an owner or operator; and

(g) any other documents that contain information necessary for ascertaining the amount of royalty payable under section 65.

69. (1) Subject to subsection (2), no minerals or processed minerals produced from a mine shall be removed from the mine, other than for the purposes of assay and testing to determine the existence, location, extent, quality or economic potential of a mineral deposit in the lands constituting the mining property, until the weight and any other information necessary to establish the value of those minerals or processed minerals has been ascertained and entered in the books of account referred to in subsection 68(1).

(2) No precious stones shall be removed from a mine, other than in a bulk sample or in a concentrate for the purposes of establishing the grade and the value of the stones in a mineral deposit, or cut, polished, sold or otherwise transferred, until they have been valued by a mining royalty valuer.

(3) The operator of a mine shall provide in the Territories any facilities and equipment, other than computer equipment, necessary for a mining royalty valuer to value any precious stones produced from the mine.

(4) For the purposes of these Regulations, facilities referred to in subsection (3) are considered to be part of the mine and any transfer of the precious stones from one part of the mine to another does not constitute removal from the mine.

(5) No precious stones shall be presented to the mining royalty valuer until the operator of the mine has cleaned the stones so as to remove all substances from the stones that are not part of them.

(6) As soon as any precious stones have been processed into a saleable form, they shall be presented to a mining royalty valuer for valuation.

(7) An operator who produces precious stones and transfers or sells them to persons who are not related to the operator shall present to a mining royalty valuer

(a) all stones that are to be transferred or sold to a person related to the operator, for separate valuation before their transfer or sale; and

(b) all stones that are to be cut or polished by the operator or any related party, for separate valuation before their being cut or polished.

(8) For the purposes of subsections (6) and (7), unless otherwise agreed on by the operator and the mining royalty valuer, an operator shall present to the mining royalty valuer

(a) diamonds with a weight of 10.8 carats or more, individually, together with the weight of each diamond;

(b) diamonds with a weight from 2.8 carats to 10.79 carats, in lots separated according to weight in carats, together with the number of diamonds per lot;

(c) diamonds with a weight from 3 grainers to 10 grainers, in lots separated according to weight in grainers, from which randomly selected samples, accurately representing the composition of each lot, have been separated; and

(d) diamonds with a weight of less than 3 grainers, in lots separated according to industry standard DTC sieve size, from which randomly selected samples, accurately representing the composition of each lot, have been separated.

(9) If diamonds are presented to the mining royalty valuer under subsection (8), the operator shall provide an estimate of the market value of each diamond or lot, as the case may be, to the Chief.

30. Subsection 80(1) of the French version of the Regulations is replaced by the following:

80. (1) Si le détenteur ou le co-détenteur d'un claim enregistré n'ayant pas fait l'objet d'un bail meurt ou est déclaré incapable d'administrer ses affaires par un tribunal compétent et qu'un avis à cet effet est déposé auprès du registraire minier dans les quatre-vingt-dix jours suivant la date du décès ou de la déclaration, à la satisfaction du registraire minier, le calcul du délai exigé pour que le détenteur ou le co-détenteur accomplisse toute action requise en vertu du présent règlement à l'égard du claim est suspendu pendant la période commençant le jour du décès ou de la déclaration et se terminant le jour du troisième anniversaire de cette date ou le trentième jour suivant la date où le claim, ou tout intérêt à l'égard du claim, est cédé à la personne administrant la succession du détenteur ou du co-détenteur, selon la première de ces éventualités à se présenter.

31. (1) Subsection 81(1) of the French version of the Regulations is replaced by the following:

81. (1) Malgré les autres dispositions du présent règlement, le preneur à bail, le titulaire de permis ou le détenteur de claim minier qui est dans l'impossibilité de satisfaire à une exigence du présent règlement en raison de circonstances indépendantes de sa volonté peut s'adresser au chef pour obtenir une ordonnance d'exemption justifiée par les circonstances afin que le bail, le permis ou le claim demeure en règle pendant la période en cause.

(2) Subsection 81(3) of the French version of the Regulations is replaced by the following:

(3) Malgré toute exemption accordée par le chef en vertu du paragraphe (2), celui-ci peut ordonner au preneur à bail, au titulaire de permis ou au détenteur de claim minier de commencer et de continuer avec diligence à satisfaire l'exigence visée au paragraphe (1) qui est nécessaire pour garder en règle le bail, le permis ou le claim, s'il juge que les circonstances justifiant l'incapacité de remplir cette exigence n'existent plus, et tout délai accordé en vertu du paragraphe (1), tel qu'il a été écourté par une ordonnance rendue en vertu du présent paragraphe, est ajouté à la durée du bail, du permis ou du claim lorsqu'il s'agit d'établir si les exigences du présent règlement ont été respectées.

32. (1) The portion of subsection 86(1) of the French version of the Regulations before paragraph (a) is replaced by the following:

86. (1) Dans le présent article, « bail antérieur » s'entend d'une concession accordée avant le 15 novembre 1977, en vertu :

(2) Subsections 86(2) to (6) of the French version of the Regulations are replaced by the following:

(2) Le présent règlement n'a pas pour effet de porter préjudice aux droits des détenteurs de claims antérieurs et de baux antérieurs.

(4) Malgré les autres dispositions du présent règlement, mais sous réserve des paragraphes (5) et (6), à l'expiration de la durée d'un bail antérieur, le preneur à bail peut demander au ministre de le lui renouveler pour une durée de vingt et un ans; le ministre peut, si le preneur s'est conformé aux modalités du bail, lui accorder le renouvellement du bail.

(5) Lors du renouvellement d'un bail antérieur en vertu du paragraphe (4), le bail renouvelé est assujetti au présent règlement, à l'exception du paragraphe 60(2), comme s'il avait été renouvelé en vertu du paragraphe 59(2).

(6) Si le preneur à bail d'un bail antérieur n'en demande pas le renouvellement, le ministre peut lui envoyer, par courrier recommandé, un avis d'expiration; si le preneur n'a toujours pas présenté de demande de renouvellement dans les soixante jours qui suivent la date de l'envoi de l'avis, ses droits sur le bail antérieur prennent fin sans qu'il y ait de déclaration d'annulation ou de déchéance.

33. Subsection 87(1) of the French version of the Regulations is replaced by the following:

87. (1) Sous réserve des articles 85 et 86, les permis, claims miniers et concessions délivrés ou accordés avant le 15 novembre 1977 et en règle le 15 novembre 1977 sont réputés avoir été accordés ou délivrés en vertu du présent règlement.

34. The portion of items 12 and 13 of Schedule I to the French version of the Regulations in column I is replaced by the following:

35. The portion of item 18 of Schedule I to the French version of the Regulations in column I before paragraph (a) is replaced by the following:

36. Forms 15 and 16 of Schedule III to the Regulations are replaced by the forms set out in the schedule to these Regulations.

37. The Regulations are amended by replacing the expression "Canada Mining Regulations" with the expression "Northwest Territories and Nunavut Mining Regulations", wherever it occurs in the following forms in Schedule III:

38. (1) Despite subsection 67(1) of the Canada Mining Regulations, as amended by section 25 of these Regulations, the operator of a mine for a fiscal year that has not ended on the day on which these Regulations come into force shall deliver to the Chief, for that year,

(i) a mining royalty return for the portion of the fiscal year occurring before the coming into force of these Regulations, on a form prescribed by the Minister under section 28 of the Territorial Lands Act, with the royalties payable calculated in accordance with sections 65 and 65.1 of the Canada Mining Regulations as they read immediately before the coming into force of these Regulations, and

(ii) a mining royalty return for the portion of the fiscal year occurring after the coming into force of these Regulations, on a form prescribed by the Minister under section 28 of the Territorial Lands Act, with the royalties payable calculated in accordance with sections 65 and 65.1 of the Canada Mining Regulations, as amended by sections 21 and 22 of these Regulations; or

(b) a mining royalty return for the entire fiscal year, on a form prescribed by the Minister under section 28 of the Territorial Lands Act, with the royalties payable calculated in accordance with sections 65 and 65.1 of the Canada Mining Regulations, as amended by sections 21 and 22 of these Regulations.

(2) For the purposes of calculating the royalty payable for a period referred to in subparagraph (1)(a)(i),

(a) the processing allowance shall be a percentage equal to 8% multiplied by one-twelfth times the number of complete and partial months in that portion of the fiscal year before the day on which these Regulations come into force; and

(b) the dollar amounts set out in column I of the table to subsection 65(1) of the Canada Mining Regulations shall be multiplied by one-twelfth times the number of complete and partial months in that portion of the fiscal year before the day on which these Regulations come into force.

(3) For the purposes of calculating the royalty payable for a period referred to in subparagraph (1)(a)(ii),

(a) the processing allowance shall be a percentage equal to 8% multiplied by one-twelfth times the number of complete months remaining in the fiscal year after the day on which these Regulations come into force; and

(b) the dollar amounts set out in column I of the table to subsection 65(1) of the Canada Mining Regulations shall be multiplied by one-twelfth times the number of complete months remaining in the fiscal year after the day on which these Regulations come into force.

(4) For the purposes of paragraph 65.1(1)(g) of the Canada Mining Regulations, as amended by subsection 22(3) of these Regulations, the original cost of the depreciable assets of any facilities located outside the Territories that are used for the processing of minerals or processed minerals produced from the mine during the fiscal year in which these Regulations come into force shall be added to the undeducted balance of depreciable assets eligible for a depreciation allowance.

39. These Regulations come into force on the day on which they are registered.