Thank you, Mr. Speaker. This is a return to an oral question asked by Mr. Henry on the 6th of October. It is in regard to calculation of gold royalties.

Royalties on all minerals produced from the Northwest Territories are based on sales revenues less allowable deductions. In the case of gold, a company is required to provide monthly production reports to the Department of Indian Affairs and Northern Development. These reports form the basis for a check on sales.

The company will sell gold in the form of dore, a very pure gold brick. A sample, called a button, is taken by the company and independently checked for purity. The gold brick is almost always shipped to the Canadian Mint. Although the Mint may be a purchaser, they are often just a storage facility for the gold. While at the Mint, the gold may be bought and sold several times without physically moving.

A company will sell gold at either the spot price (market price that day) or an agreed upon fixed price to a particular purchaser (forward selling). These revenues, less allowable deductions, are reported to DIAND and used to calculate royalties. DIAND may audit the sales reports, review production reports, market prices and forward sales contracts to ensure royalties are recovered. Thank you.