Operators that carry out processing activities can deduct the processing allowance in calculating both their annual earnings from a mine and the mine-mouth output value for the mine for a fiscal year.

The processing allowance is equal to the portion of the cost of the processing assets that corresponds to the ratio of their use in processing ore from the mine compared to their overall use. multiplied by:

• 10%, if the operator does not carry out any activities involving the smelting, refining or hydrometallurgy of the ore
• 10%, if the operator carries out only activities involving the concentration, smelting, refining or hydrometallurgy of ore from a gold or silver mine
• 13%, if the operator carries out, exclusively outside Québec, activities involving the smelting, refining or hydrometallurgy of ore that is not ore from a gold or silver mine (the rate is reduced by 3% where the property is used for concentrating ore)
• 20%, if the operator carries out, in Québec, activities involving the smelting, refining or hydrometallurgy of ore that is not ore from a gold or silver mine (the rate may be reduced by 7% where the property is used in processing ore that is not smelted or refined in Québec, and by 10% where the property is used for concentrating ore)

The maximum amount that an operator can deduct as a processing allowance for a fiscal year is the greater of the following amounts:

• 75% of the annual earnings from the mine for the fiscal year before deduction of the processing allowance, the additional depreciation allowance and the additional allowance for a mine situated in Northern Québec
• 30% of the mine-mouth output value for the year before deduction of the processing allowance