Bonterra Shares Results from Canada Revenue Agency Audit
Bonterra Resources Inc. recently announced an ongoing tax audit by the Canada Revenue Agency (CRA). This audit focuses on the company’s renunciation of Canadian exploration expenses (CEE) related to private placements of flow-through shares conducted on December 13, 2019, and October 21, 2021. The proceeds from these financings amounted to approximately C$16.96 million.
Details of the CRA Audit
The CRA plans to reclassify about C$11.05 million in previously renounced CEEs. This decision stems from a misinterpretation, as the CRA mistakenly considers the Moroy Deposit an extension of the Bachelor Mine. Bonterra strongly disagrees with this conclusion and is poised to contest the proposed tax adjustments.
Impact of Proposed Tax Adjustments
Subscribers of the flow-through financing will be directly affected by the CRA’s reassessment of deductions linked to the renounced CEEs. Notifications regarding reassessments are expected, starting with the December 2019 financing.
- Financing Dates:
- December 13, 2019
- October 21, 2021
- Aggregate Proceeds: C$16.96 million
- Proposed Tax Adjustments: C$11.05 million
- Estimated Company Liability: C$9.5 million, including interest and penalties
Bonterra has committed to indemnifying its subscribers for any tax liabilities arising from disallowed CEEs under the flow-through financing agreements. Should reaccreditation occur, affected subscribers are advised to contact Bonterra for guidance on the indemnification process and potential next steps.
Next Steps for Subscribers
Subscribers who receive reassessment notifications will need to consider filing a notice of objection concerning their reassessment. The company anticipates that the initial liability from the CRA’s reassessment will likely be around C$3 million.
Bonterra is actively addressing the obligations resulting from the proposed tax adjustments, and they will continue to provide updates as more information becomes available.
For further information, Bonterra’s President & CEO, Marc-André Pelletier, can be reached at [email protected] or by phone at 819-825-8678.
