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by Fernando Costa and Waseem Javed
September 25, 2020

Navigating Mineral Exploration in Times of COVID

As with all industries, the mining industry during COVID is not immune to the operational and financial impact of the ongoing coronavirus pandemic.

Mining companies have had to adapt to the new normal resulting from COVID-19, however, with the prices of precious metals reaching historical highs, the mining industry is in a unique position to lead Canada’s post COVID-19 economic recovery.

We have recently seen a significant number of financing transactions which have put junior mining companies in a position to continue with their exploration work amidst COVID-19. 

The federal, provincial, and territorial governments, as well as regulators, have recognized the challenges for the mining industry during COVID-19. Together, they and have implemented or proposed changes to allow mining companies to better manage their working capital.

Some of these measures are as follows:

Federal Government Changes

The federal government has proposed to extend the period to incur eligible flow-through share expenses under the general and the look-back rule by 12 months. In essence, if a Company receives flow-through funding during 2020, the 10% Part XII.6 tax will not apply until January 1, 2022. The 12-month extension will be applicable to all flow-through funds raised after March 1, 2018 and before 2021 under the general rule, or in 2019 or 2020 under the look-back rule.1

TSX Venture Exchange Changes

The TSX Venture Exchange (“TSX-V”) has provided temporary relief to enable companies and the mining industry during COVID to raise financing. In specific instances, primarily, where the market price of a company’s listed shares is not greater than $0.05, the minimum price at which further shares may be issued has been reduced from $0.05 to $0.01.2 The temporary relief was initially provided on April 8, 2020, and was extended on September 16, 2020 to December 31, 2020.

Provincial & Territorial Government Changes

Several provincial and territorial governments have also provided relief in one or more forms for the mining industry during COVID, including the following:

o    British Columbia3

  • The deadline to make cash payments in lieu of required exploration work or register work on mineral claims that have expiry dates before December 31, 2020 is extended to December 31, 2021.
  • The annual rental payment for mining and placer leases, which is normally due on the anniversary date, has been extended to December 31, 2021.

o    Saskatchewan4

  • Expenditure requirements for current term and the subsequent 12 months for mineral claims and leases which were active on March 18, 2020 have been waived.
  • Any qualifying expenditures which are incurred during the relief period noted above can be applied towards future expenditure requirements.
  • Claimholders are allowed to meet the requirements for refund of deficiency deposits after the relief period noted above has ended.

o    Ontario

  • Holders with claim anniversary dates on or before March 31, 2021 can apply for an exclusion order via email to extend the due date for assessment work for a period of up to 12 months.

o    Quebec

  • As of March 19, 2020, certain mining leases, concessions and permits that are due to expire will be kept active.
  • As of April 9, 2020, the validity period of all mining claims has been extended by 12 months.

o    Yukon

  • For certain claims and leases expiring between April 23, 2020 and April 22, 2021, the validity period will be automatically extended, and miners do not have to fulfill annual representation work requirements or make payments in lieu of work.

o    Nunavut8

  • The Government of Canada has extended the time limit to pay rent for mineral leases on crown lands in Nunavut by up to six months
  • The Government of Canada has also, upon lease holders requesting in writing, waived payment for annual rent on mineral leases due between March 13, 2020 and March 12, 2021, and any payment made for this period already will be applied to the next year’s rent payment

The above list as it applies to mining companies during COVID is not exhaustive, and the information provided should not be relied upon exclusively. For up to date details of relief measures, please enquire with or visit the appropriate department’s website in the applicable province or territory.

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Manning Elliott is here to help. To assist business owners and professional advisors, visit our blog to stay up to date on the most recent mining topics.

If you have any questions about the financial impacts of the mining industry during COVID, please contact our mining and exploration team.








The above content is believed to be accurate as of the date of posting. Canadian tax laws are complex and are subject to frequent changes. Professional tax advice should be sought before implementing any tax planning. Manning Elliott LLP cannot accept any liability for the tax consequences that may result from acting based on the information contained herein.