Sale of mining operationsbasic tax considerations

Higher metal prices have resulted not only in increased exploration and production, but also increased activity in the purchase of mining properties and mines. This article discusses some of the basic income tax considerations to be taken into account on the disposal of an interest in a mining claim or an active mining operation. It notes the importance ofan appropriate allocation of the purchase price amongst the various categories of assets, and discusses the tax implications to both vendor and purchaser of the transfer of the comm on types ofassets involved in mining operations. In the space available, the article can only outline the basic tax considerations, and point to areas where both vendor and purchaser need to be o