Feasibility Study and Technical Report - Pretivm

Canadian Income Tax SystemFederal Income Tax Rate: 15%Provincial (BC) Income Tax Rate: 10%Machinery and Equipment:Prior to 2021, assets purchased prior tocommercial production are added to a Class 41(a)pool and are deducted at an accelerated rate, at upto 100% of the balance, to the extent of taxableincome from the mine.Recent proposed tax amendments in the 2013federal budget will phase out the accelerateddeduction over the 2017 to 2020 years. Onehundred percent of the accelerated rate will bepermitted in 2013 to 2016, 90% in 2017, 80% in2018, 60% in 2019, and 30% in 2020.Assets purchased after commencement ofproduction are added to a Class 41(b) pool and arededucted at up to 25% of the balance.Mine Acquisition Costs:Including costs of land, exploration and miningrights, licenses, permits and leases.Costs are added to a Canadian developmentexpense pool and can be deducted at up to 30% ofthe balance of a year.Pre-production Mine Expenditures:This includes both exploration and minedevelopment costs.Prior to 2015, exploration and mine developmentare added to a Canadian exploration expense pool.One hundred percent of the balance can bededucted in a year, but the deduction is also limitedto the income from the mine.Under recent proposed tax amendments in the2013 federal budget, pre-production minedevelopment costs incurred subsequent to 2017will be treated as a Canadian development expenseinstead of a Canadian exploration expense. Thetransition will be phased-in beginning in 2015, with20% of costs being allocated proportionately to aCanadian development expense and 80% to aCanadian exploration expense in 2015, 40% to aPretium Resources Inc. 22-8 1291990200-REP-R0012-02Feasibility Study and Technical Report on the BrucejackProject, Stewart, BC