"They changed the exploration tax incentive. It's now treated as development and claimed at 30%"

Web:

I understand that. For the tax man, the exploration expense can be written off; but for an exploration company like CUU, there is no point writing this off because there is no income and no tax payable to off set these expense deductions.

From an accounting standpoint, the exploration expense can be recorded as an asset on the balance sheet, if these expenses meet certain criteria, such that the expenses can be recovered through commercial mining operation. You can see that CUU has not been writing off these drilling expenses on their financial statements: they have spent some $85 M to-date on SC and the deficit is only $18 M. If they have been writing the exploration expense off and accumulating them in deficit, the deficit should be well over $100 M; instead, the deficit to-date is about $18 M; most of the $85 M spent on SC is sitting on the balance sheet as "investments in exploration" and not written off as expense. Like I said, it's a numbers game.

From a tax stanpoint, these exploration expenses can be written off later against income when the company is generating income; but the time hasn't come, and hopefully it will be passed on to Teck. Their accountants will figure out how that can be done! JMO