15‑5 When an entity has a mining project15‑5 When an entity has a mining project interest

15‑5 When an entity has a mining project interest

Mining project interest arising from a mining venture (1) An *entity has a mining project interest to the extent that the entity is entitled to share in the output of a *mining venture in which the entity participates (whether actively or otherwise, and whether alone or with one or more other entities).

Note 1: There may be more than one mining venture to extract taxable resources from an area covered by a production right.

Note 2: Changing or renewing a mining venture does not necessarily cause the termination day of a mining project interest: see section 135‑15.

(2) If the *mining venture relates to one or more *production rights, the *entity has a separate mining project interest in relation to each production right.

Note: Example: Scouting Resources participates in a mining venture relating to the extraction of taxable resources from an area covered by 3 production rights. Scouting Resources has 3 mining project interests, one in relation to each production right.

Meaning of mining venture (3) An undertaking is a mining venture if the purpose, or a purpose, of the undertaking is: (a) to extract some or all of the *taxable resources from the area covered by one or more *production rights; and (b) to produce an output that is a taxable resource extracted under the authority of the production right or rights, or something produced using such a taxable resource.

Note: Example: CheckCo and BelCo enter into a contractual arrangement under which they agree to jointly extract and process iron ore from the whole area covered by a mining lease, and each take an equal share of the ore once it has been pelletised.

Note: Participation in this undertaking gives rise to a mining project interest for each of CheckCo and BelCo, comprising their respective entitlements to share in the pellets produced from the mining venture.

Residual mining project interest (4) An *entity has a mining project interest to the extent that: (a) the entity is entitled to extract *taxable resources from the area covered by a *production right; and (b) there is no *mining venture, relating to the extraction of those taxable resources, that gives rise to a mining project interest for one or more entities under subsection (1).

Note 1: The start of a mining venture relating to the extraction of those taxable resources is treated as a mining project transfer (if the venture relates to all of the resources), or otherwise, a mining project split: see section 120‑25 (for transfers) or 125‑35 (for splits).