Page 1

IN THIS ISSUE

The Feds Land Grab……….p.2

NMEC at Roundup………...p.3

Coalition at PDAC………...p.4

Update on Carson City District

RMP……………………… p.5

Tax Changes ……..……pp. 6-7

Note on Claim Fees………..p7

Upcoming Events ………... p.8

Newsletter of the Nevada Mineral Exploration Coalition February 2016 Vol. 3 Issue 1

QUARTERLY EXPLORER

UPCOMING EVENT

PDAC 2016

Toronto, CA March 6 - 9 This year the NMEC will be in a

display booth in the trade show at the

PDAC in Toronto from March 6th to

9th, 2016.

See page 4 for further information TAX CODE CHANGES FOR

NEVADA EXPLORATION

BUSINESSES

By Dave Shaddrick, President NMEC

Many of you likely have questions concerning tax rate

changes that occurred during the 2015 Nevada Legislative

Session and how the newly instituted Commerce Tax

may impact you and your exploration business. The tax

changes passed by the 2015 Legislature which went into

effect July 2015 are summarized on pages 6 and 7 .

THE FEDS GRAB LAND FOR GREATER SAGE GROUSE

For two years beginning September 24, 2015, you have

lost the right to start new exploration projects within an

area of Nevada larger than Eureka County... (full editorial

by Richard Knox on page 2)

UPDATE ON CARSON CITY RMP

Do you remember, nearly a year ago, preparing comments

to submit to the Carson City District BLM office about

their draft Resource Management Plan update? What’s

happening? Full article on page 5.

NMEC LOSES A FRIEND

On Sunday, February 21, State Senator Debbie Smith lost

her life to cancer, and the NMEC lost a tireless advocate

of Nevada’s exploration industry. Continued on page 8..

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Quarterly Explorer Newsletter of the Nevada Mineral Exploration Coalition

For two years beginning September

24, 2015, you have lost the right to

start new exploration projects

within an area (see red on map) of

Nevada larger than Eureka County.

Over a six-state region of the West

it adds up to 10 million acres. The

Department of Interior proposes to

lock you out forever in the name of

the greater sage grouse.

Letters to Interior from your

Coalition, companies and individuals

cite reasons the Sagebrush Focal

Areas (SFA) mineral withdrawal is

not warranted (and harmful) and

recommend novel and effective

strategies for better protecting the

bird from its real threats: fire and

invasive species l ike cheatgrass.

When Interior's withdrawal draft

Environmental Impact Statement

comes out, you will get another

chance to speak out.

Because the cancer of mineral

withdrawals is spreading fast, this is

no time for spectators. Your future

is at risk. Every explorer, miner,

supplier and service company is

called to oppose this and other land

grabs in Nevada and the West. Your

vo i ce i s needed . By s tand ing

together and remaining vigi lant,

perhaps we can avert exploration

and mining being penned into

shrinking enclaves by governmental

whim.

THE FEDS GRAB LAND FOR GREATER SAGE GROUSE by Richard Knox

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Quarterly Explorer Newsletter of the Nevada Mineral Exploration Coalition

For the second consecutive year, NMEC

hosted the Nevada Room for the four-

day AME BC Roundup meeting in

Vancouver, British Columbia. The

Nevada Room was again located next to

the long established Yukon and British

Columbia rooms, which provided the

Nevada Room and NMEC improved

visibility.

As in the past, display tables lined the

walls with maps and information on

Nevada, NMEC member vendor

services, and NMEC member company

property information. Several meeting

tables were available for all to use with

coffee and tea provided throughout each

day.

The room had more traffic this year and

the meeting tables were well utilized.

There was increased interest in Nevada

projects and companies, with several

visitors returning from last year’s

Nevada Room to discuss our State’s

projects in more detail.

Many thanks go to the generous

sponsors and supporters of the

Nevada Room:

Gold Sponsors:

Nevada Division of Minerals,

Enviroscientists, Inc. and Wilson &

Associates

Bronze Sponsors:

Hunsaker Inc., Drift Exploration and

Nevada Exploration Inc.

Copper Sponsors:

Almadex Minerals Limited, Carlin

Trend Mining Services, Eric and Debra

Struhsacker, Childs Geoscience Inc.

and Kinetic Gold Corp., Geotemps,

Inc./Geopros, Inc,.

Supporters:

Randy Henkle and Desert Ventures

Inc.

NMEC AGAIN HOSTS NEVADA ROOM AT ROUNDUP IN VANCOUVER by Steve Green

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Quarterly Explorer Newsletter of the Nevada Mineral Exploration Coalition

THE COALITION AT PROSPECTORS AND DEVELOPER’S ASSOCIATION OF CANADA (PDAC)

Toronto, CA March 6 - 9, 2016

This year the NMEC will be in a display booth in the

trade show at the PDAC in Toronto from March 6th

to 9th, 2016. We will be in the North Building,

Booth #6502 and we hope to become a focal point

for all things Nevada. If you are in Toronto for any

reason, come by the booth and catch up on what

we’re doing.

Our goal with this effort is to raise awareness of the

importance of Nevada in the world of mineral

exploration and to encourage both participation and

investment in Nevada’s exploration industry. The

Geological Society of Nevada, The Nevada Division

of Minerals, the Nevada Mining Association and the

Governor’s Office of Economic Development will be

part of this effort (See letter at right from

GOED). Additionally, of course, we will be helping

with membership sign-up and information.

We hope to be a place for networking and linking up

with friends, colleagues, clients and prospects. We

will make “Meet me at Nevada” a common and

well understood networking tool.

For sponsorship information, please visit the NMEC

website.

PROMOTIONAL OPPORTUNITY FROM GOVERNOR’S OFFICE OF ECONOMIC DEVELOPMENT

Good Day Nevada Explorer,

We may have already met but let me introduce

myself. I’m Sheldon Mudd, Mining Industry

Specialist with the Governor’s Office of Economic

Development (GOED).

Currently I’m in the process of putting together an

investment portfolio that highlights Nevada

Exploration companies. My intention is to use this

portfolio as a tool that can be presented to

possible investors during GOED’s various foreign

and domestic trade missions.

Ultimately I see the portfolio as a collection of

“one pagers”, each representing a single company/

project and highlighting what makes that specific

entity worth investing in (experience, track record,

unique technology, diverse mineral focus, etc.).

What it boils down to is free marketing! If you’d

like to see your company included please contact

me as soon as possible with any details that are

relevant to this project. If you have any questions

my information is below, I look forward to hearing

from you.

Regards,

Sheldon Mudd

Mining Industry Specialist

Governor's Office of Economic Development

1500 College Parkway, McMullen Hall, #103 Elko,

NV 89801

Office: (775) 738-6075

Mobile: (775) 600-3548

Fax: (775) 738-7978

www.diversifynevada.com

smudd@diversifynevada.com

NMEC at PDAC during 2015 Conference

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Quarterly Explorer Newsletter of the Nevada Mineral Exploration Coalition

UPDATE ON CARSON CITY DISTRICT RESOURCE MANAGEMENT PLAN

by Elizabeth Zbinden

For further detailed information about the draft RMP, including letters and maps submitted in response by NMEC members,

please visit this page on the NMEC website.

Do you remember, nearly a year ago, preparing comments

to submit to the Carson City District BLM office about

their draft Resource Management Plan update? What’s

happening?

The BLM is still in its long ‘rewrite’ phase, to come up with

one proposed final Resource Management Plan. I spoke

with Colleen Sievers, the Project Manager for this job (and I

don’t envy her job!). She told me the team has taken the

30,000+ comments we and our buddies submitted, and

sorted them into the various issues to be addressed.

Responses to those issues are being used to “adjust the

document”.

They also need to incorporate the issues from the Bi-State

Population Sage Grouse rulings. They have pretty much

come up with their proposed plan and now must “develop

the analysis”, after which the plan undergoes layers of

review: district, state, federal. Her best guess at this point

is that the proposed Resource Management Plan will be

released May or June of this year.

Recall that after this document is released, there will 30

days for the public to protest and 60 days for the two

governors (Sandoval and Brown) to review it. BLM will

need to respond to those protests. The Summer 2016

timeline for final Record Of Decision seems optimistic to

me.

Rumors (not from Ms. Sievers) suggest that there have

been substantial changes from the original five alternatives.

Thank you to everyone who submitted comments. I have

hope that our combined effort has had the desired effect

and that the changes will be good news for us.

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Quarterly Explorer Newsletter of the Nevada Mineral Exploration Coalition

State Business License

The current $200 State annual business

license fee is increased to $500 for domestic

and foreign corporations. All other Nevada

businesses stay at an annual fee of $200,

however, filings of initial and annual lists with

the Secretary of State’s office are all increased

by $25.

The Modified Business Tax

(MBT) or Payroll Tax

The health care deduction is continued,

however, the rate for the MBT general

business is increased to 1.475 % and the wage

threshold for purposes of determining tax

liability is reduced to the amount of quarterly

wages paid over $50,000.

If you do not meet the $50,000 threshold, you

cannot carry over any unused portion of the

$50,000. Finally, businesses receive a credit of

50 % of the Commerce tax against the MBT

(see below).

The Commerce Tax

There are 26 industry/business classifications

and one catchall classification and one tax rate

per classification. The tax is paid annually and

the first $4 million of annual gross revenue is

exempt from this tax.

Throughout last summer and fall, I have been

in touch with the Nevada Department of

Taxation seeking guidance from them as to

how the Commerce Tax applies to venture

capital investments from out of state and

which NAICS (North American Industrial

Categorization System) category mineral

exploration is in to determine the industry’s

Commerce Tax rate if your business exceeds

$4 million annually in gross revenue.

The Nevada Department of Taxation offers

the following general guidance to our industry:

Does the definition of

“revenue” include venture

capital investment in

Research and development

activities?

Answer:

Section 8(3) of SB 483 provides for the

exclusions from the definition of the revenue

for the purposes of the Commerce Tax.

Namely, the section 8(3)(d) of SB 483 states:

“the term [revenue] does not include… the

amounts realized from a transaction subject

to, described in, or equivalent to section

118… 721… of the Internal Revenue Code,

26 U.S.C…”

The aforementioned IRC sections refer to the

contributions to the capital of a corporation

and the contributions to a partnership

respectfully, and, generally, provide for no gain

TAX CODE CHANGES (continued…)

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Quarterly Explorer Newsletter of the Nevada Mineral Exploration Coalition

or loss recognition treatment for such

contributions. Therefore, the amounts

contributed, for instance, to a corporation’s

capital [except for the contributions in aid of

construction] will be excluded from the

definition of “revenue” for the Commerce Tax.

Please note, the section 8(3)(g) may also be

pertinent in the decision whether the amounts

obtained as a venture capital represent the

revenue for the Commerce Tax purposes.

Which NAICS code should be

used for research and

development corporations

and/or for mineral

exploration?

Answer:

The NAICS code for the research and

development corporations is 541712 (code 54

for the Commerce Tax purposes): http://

www.na ics .com/na ics -code-descr ipt ion/ ?

code=541712

The NAICS code for mineral exploration

depends on the types of minerals being explored,

but generally starts with 21**** (code 21 for

Commerce Tax purposes).

The easiest way to find a NAICS code is to use

the NAICS Keyword Search feature at http://

www.census.gov/eos/www/naics and then select

the corresponding category (first 2 or 3 digits of

NAICS code) in the Commerce Tax table at

http :/ / tax.nv.gov/uploadedFi les/taxnvgov/

Content/FAQs/Commerce_Tax_FAQs.pdf to

determine the tax rate.

** Please note, if a business entity is engaged

in more than one business activity, the NAICS

code is determined by the business activity in

which the highest percentage of the Nevada

gross revenue is generated. (Section 15 of SB

483).

In case you missed it in the last GSN

newsletter, the Nevada Division of Minerals has

been holding workshops in Carson City and

Elko to discuss and take comment on changes

to regulations pertaining to the Abandoned

Mine Lands Program. These changes include an

increase of $1.50 per claim in the mining claim

filing fee you pay in the counties each year.

Further Information is available at

http://minerals.nv.gov/.

We are continuing to monitor these

developments and will notify you when further

details are available.

UPDATE ON NEVADA

DIVISION OF

MINERALS CLAIM

FEE INCREASE

Upcoming Events:

March 6 - 9, 2016 Prospectors and Developer’s Association of Canada

(PDAC) Toronto, Canada

Fall 2016 (Dates TBA) Annual Great Basin Rendezvous - September 16 - 18

Lamoille, NV

General Meeting - October

About the NMEC

The Nevada Mineral

Exploration Coalition

(NMEC) is a not-for-profit,

nonpartisan coalition of

small businesses and

individuals engaged in, or

in support of, mineral

exploration and

development activities in

the State.

Contact Us

To join as a member, to re-

new your membership, or to

learn more about the NMEC,

please visit us on the web at

www.nvmec.org

NMEC

P.O. Box 1734

Elko, NV 89803

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Quarterly Explorer Newsletter of the Nevada Mineral Exploration Coalition

NEVADA LOSES A STATESWOMAN AND NMEC

LOSES A FRIEND

On Sunday, February 21, State Senator Debbie Smith lost her life to cancer. Most of us

know Debbie from her long and prestigious service in the state legislature, first as an

assemblywoman and then as a leader in the state senate. As a fellow claim holder, she

understood the value of Nevada’s mineral exploration industry and was a tireless

advocate on our behalf.

She was a dear friend to many of us and will be greatly missed. Please keep her family

in your thoughts and prayers during this difficult time.

Left to Right: Senator Debbie Smith, David Shaddrick, Jonathan

Price and Dennis Bryan pause for a photo during the 2013 Nevada

Legislative Session with the official state proclamation recognizing

the contributions made by Nevada’s mineral exploration industry to

the state and its local communities.