Items included in para. (f) of Canadian exploration expense include:
- Planning the exploration program and reviewing previous exploration results
- Community consultations and environmental studies required to obtain exploration permits
- Airborne (or satellite) surveys and prospecting (to identify targets or showings)
- Soil or rock sampling (other than of tailings)
- Geophysical and geochemical surveys along with interpretation, geological mapping and modeling
- Exploration drilling and laboratory testing of drilling cores, and mineralogical analysis and assays
- Trenching (i.e., to expose steeply-dipping mineralization) and digging test pits (for shallow mineralization)
- Definition or infill drilling,
- Resource estimation and deposit delineation, deposit modelling and updating resource estimates
- Testing of rock stability, of mineral resource dilution (re waste rock) and of metallurgy (re difficulty of separating pay material) including grinding tests
- Metallurgical separation testing on core or bulk samples (to determine recoverable percentage of minerals) – but not if for determining an optimal method of separation
- Bulk sampling (in reasonable sizes) for determining the effective grade (after dilution), performing grinding tests and whether any separation process (e.g. flotation or solvent extraction) allows minimum quality specifications - provided it is not for determining the optimal processing method
Note: various of the above items do not qualify as CEE if they are performed for camp, infrastructure or mine design purposes.
Also note: para. (f) potentially may include activities engaged in after the feasibility study preparation “to increase the level of geological knowledge and confidence in the mineral resource.”
Pre-feasibility and feasibility studies generally give rise to deductions under s. 9.
The following are deductible under s. 9 if incurred before making a decision to bring the mine into production (otherwise generally Class 41 or 41.2 assets or other depreciable property, or Class 14.1 if the property is not acquired – or CDE under para. (c.2) re the 1st or 5th item if to bring a new mine into production):
- Mine design or development studies
- Evaluation of transportation from the mine to the processing plant
- Evaluation of different technically feasible options for processing
- Process engineering studies
- Estimates of capital and operating costs
Costs of mineral claims and exploration permits (both of which are Canadian resource properties) are CDE under para. (e)