Bonterra Announces Results of Canada Revenue Agency Audit
Bonterra Announces Results of Canada
Revenue Agency Audit
Val-d'Or, Quebec--(Newsfile Corp. - January 16, 2026) -
Bonterra Resources Inc. (TSXV: BTR)
(OTCQX: BONXF) (FSE: 9BR2)
("
Bonterra
" or the "
Company
") announces that the Canada Revenue
Agency ("
CRA
") is completing a tax audit (the "
Audit
") of the Company's renunciation of Canadian
exploration expenses ("
CEE
") in favour of subscribers of the private placements of flow-through shares
which closed in December 13, 2019 and October 21, 2021 (the "
Flow-Through Financings
") for
aggregate gross proceeds of approximately C$16.96 million. Renunciations made pursuant to other
flow-through offerings by the Company are not affected by the Audit.
CRA has notified the Company of CRA's intention to reclassify approximately C$11.05 million of
previously renounced CEE on the basis that they did not meet the definition of CEEs, as defined for
income tax purposes (the "
Proposed Tax Adjustments
"). CRA's notification relies on the incorrect
assumption that the Moroy Deposit constitutes an extension of the Bachelor Mine, a finding that Bonterra
strongly disagrees with. Bonterra has voiced its disagreement with the Proposed Tax Adjustments and
the audit process followed by the CRA, and intends to continue to vigorously defend its position by
objecting to any forthcoming notice of reassessment.
CRA will contact directly the subscribers of the Flow-Through Financings regarding a reassessment of
deductions claimed in connection with the related CEEs. It is to be expected that the CRA will begin by
providing notice of reassessments to subscribers in the December 2019 flow through financing
(TIN#48427 and TIN#48428), with the other reassessment following later this year (TIN#49934). The
Company anticipates that the reductions in renounced CEE will be made on a pro rata basis among all
subscribers of the same financing.
The Company agreed to indemnify subscribers for tax attributable to disallowed renunciations of CEE
pursuant to the terms of the subscription and renunciation agreements entered into by the Company and
the subscribers in connection with the Flow-Through Financings. The Company invites subscribers of the
Flow-Through Financings who receive a notice of reassessment from CRA in connection with the
Proposed Tax Adjustments to contact the Company as soon as possible in connection with this right of
indemnification for more information about next steps. To support the Company's appeal, subscribers
may need to file a notice of objection in respect of their reassessment.
The maximum aggregate amount of the Company's exposure with respect to the indemnification
obligation from the Flow-Through Financings, together with interest and penalties payable to CRA, and
anticipated Part XII.6 tax payable under section 211.91 of the Income Tax Act, is presently estimated to
be approximately C$9.5 million, although the initial liability anticipated in respect of the initial
reassessment's that will be issued by CRA will be closer to C$3 million.
The Company expects to
account for this liability in its financial statements for the year ending December 31, 2025.
This provision
does not include any provision for the effect, if any, of the reclassification on provincial tax credits
received by the Company.
The Company is actively working to address the obligations resulting from the Proposed Tax
Adjustments and will provide additional information when available.
FOR ADDITIONAL INFORMATION
Marc-André Pelletier, President & CEO
2872 Sullivan Road, Suite 2, Val d'Or, Quebec J9P 0B9
819-825-8678 | Website:
www.btrgold.com
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in
the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy
of this release.
Forward-Looking Information
This news release contains forward-looking statements and forward-looking information within the
meaning of applicable securities laws. All statements other than statements of historical fact may be
forward-looking statements or information. Forward-looking statements are frequently identified by
such words as "may", "will", "plan", "expect", "anticipate", "estimate", "intend" and similar words
referring to future events and results. The forward-looking statements and information are based on
certain key expectations and assumptions made by management of the Company. Forward-looking
statements made in this news release include statements regarding the estimated liability resulting to
the Company, the allocation of the reductions amongst subscribers, the timing of delivery of
reassessments to subscribers of the Flow Through Financings, and the Company's defense of its
position.
In making these statements, management has relied on a number of assumptions, including
the anticipated impact of the reassessments on tax payable by past subscribers, how the
reassessments will be allocated, that there will be no changes to CRA's position on the Proposed Tax
Adjustments or other CEE renounced by the Company, and that the reclassification will not affect the
Company's provincial tax credits and renunciations. Although management of the Company believes
that the expectations and assumptions on which such forward-looking statements and information are
based are reasonable, undue reliance should not be placed on the forward-looking statements and
information since no assurance can be given that they will prove to be correct.
Forward-looking statements and information are provided for the purpose of providing information
about the current expectations and plans of management of the Company relating to the future.
Readers are cautioned that reliance on such statements and information may not be appropriate for
other purposes, such as making investment decisions. Actual results could differ materially from
those currently anticipated due to a number of factors and risks, that may cause actual results to differ
materially from those expressed or implied. Accordingly, readers should not place undue reliance on
the forward-looking statements and information contained in this news release. Readers are cautioned
that the foregoing list of factors is not exhaustive. The forward-looking statements and information
contained in this news release are made as of the date hereof and no undertaking is given to update
publicly or revise any forward-looking statements or information, whether as a result of new
information, future events or otherwise, unless so required by applicable securities laws. The forward-
looking statements or information contained in this news release are expressly qualified by this
cautionary statement.
To view the source version of this press release, please visit
https://www.newsfilecorp.com/release/280670