Net Proceeds of Minerals Tax Instructions — Operator — Statement of Gross Yield and Claimed Net Proceeds (NRS 362.110), Form LGS-F025

362. Each type of mineral sold, exchanged, Deductions for Employee Compensation related removed from the State in a form ready for use or to activities described in NRS 362.120(3)(a) and sale, or used should be listed separately. For further described in NAC 362.050(1)(g) may be example, if gold and silver products are included claimed on this line. Claimed costs may include in gross yield per statutes and regulations, gold actual costs incurred in 2024 for salaries, wages, may be listed on Line 1 and silver may be listed and performance related bonuses of persons on Line 2. Include by-products. working in, operating, or supervising the If additional space is needed, attach a schedule management IN NEVADA of the Nevada mine with substantially the same information, cross or by persons performing office, clerical or reference the schedule in Part A, and enter the engineering work IN NEVADA necessary for the appropriate total(s) from the attached schedule in operations per NRS 362.120(6)(a). Claimed Part A. deductions must be directly related to extracting the mineral IN NEVADA. Do not include in Line Line 4 is the total of lines 1 through 3 or total 5 the costs associated with paid leave or gross yield. If submitting electronically, the total retirement plans; such costs may be claimed in should automatically calculate. If submitting on Line 6 and 7, respectively for Extraction paper, total the gross yield and place the total in Functions and on Lines 25 and 26 or Lines 42 and the indicated section of Line 4. 43 for Transportation Functions and Reduction, Page 4 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) Refining, and Sale Functions. Do not include any clarification) General and Administrative costs on Line 5. Additional examples of nondeductible items are Employee compensation and certain benefits defined in NAC 362.050(2), and include: associated with Nevada Based Corporate Services may be claimed on Lines 18, 35, and52. • Costs associated with providing health clubs for employees If allocating compensation to the Cost of Extraction, allocation detail and basis should be • Costs incurred for pre-employment provided on Schedule O or other supporting activities, including, without limitation, documentation to substantiate claimed deduction reimbursement for expenses for moving and allocation basis. For example, if the operator and relocation (See NAC 362.035(2) for has a central warehouse that provides support interpretation by Nevada Tax services for Extraction Functions and other Commission) functions, the Employee Compensation for • Costs associated with providing day care employees performing warehouse functions must facilities for the children of employees first be allocated between Extraction Functions and other functions on a reasonable basis. The Effective January 1, 2017, the following items are costs allocated to Extraction Functions must then allowed deductions and should be reported on be analyzed to determine whether or not the costs Line 8 (see NRS 362.120(3)(g)): should be claimed in Part B of the Gross Yield, • Premiums for industrial insurance Deductions, Net Proceeds section. Attach (workers' compensation) See NRS 616A schedules and supporting documentation to show through 616D the allocation and the basis for the allocation. • Hospital expenses Where deductions for compensation are claimed • Medical attention on a basis other than actual cash costs incurred for • Accident benefits the taxable year, an explanation and all pertinent • Group insurance detail to include the alternative accounting basis Line 6: Paid Vacation Leave and Paid Sick Leave used should be provided on Schedule O or other supporting documentation to substantiate Deductions for Paid Vacation and Sick Leave alternative basis. related to activities described in NRS 362.120(3)(a) as further described in NAC Do not include costs of severing employees. See 362.050(1)(g) may be claimed on this line. NAC 362.035. Claimed deductions may include actual costs Some examples of nondeductible items are incurred in 2024 for Sick Leave and Vacation defined in NRS 362.120(7), and include: leave for employees working in, operating, or • The costs of employee housing supervising the management IN NEVADA of the • The costs of severing the employment of Nevada mine or by persons performing office, any employees clerical or engineering work IN NEVADA • The costs of mineral exploration necessary for the operations per NRS (employee compensation for exploration 362.120(6)(a). Claimed deductions must be activities must not be claimed- see NAC directly related to Extraction Functions which are 362.035 (3) and NAC 362.007 for further performed in the State of Nevada during 2024 not Page 5 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) include in Line 6 the costs associated with 401k employee compensation claimed on Line 5 or Deductions for Qualified Pension Plans, retirement plans claimed on Line 7. Similarly, do Retirement and 401k related to activities not include in Line 6 the costs associated with Transportation and Reduction, Refining and Sale described in NRS 362.120(3)(a) as further claimed elsewhere. Do not include any General described in NAC 362.050(1)(g) may be claimed and Administrative costs on Line 6. Employee on this line. Claimed deductions may include compensation and certain benefits associated contributions to, and administrative costs of, with Nevada Based Corporate Services may be qualified pension plans, retirement plans, 401k plans, and other similar deferred benefit plans on claimed on Lines 18, 35 or 52. behalf of employees working in, operating, or For employees severed from service during the supervising the management IN NEVADA of the taxable year, only sick leave and vacation leave Nevada mine or by persons performing office, accrued before the date of termination may be clerical or engineering work IN NEVADA claimed and only if not previously deducted. See necessary for the operations per NRS NAC 362.035(2) for the interpretation by the 362.120(6)(a). Claimed deductions must be Nevada Tax Commission regarding the costs of directly related to Extraction Functions. Do not severing employees. include in Line 7 the costs associated with If allocating Paid Leave to Extraction Functions, Employee Compensation claimed on Line 5 or allocation detail and basis should be provided on paid leave claimed on Line 6. Similarly, do not Schedule O or other supporting documentation to include any costs associated with Transportation substantiate claimed deduction and allocation Functions and Reduction, Refining, and Sale basis. For example, if the operator has a central Functions that may be claimed elsewhere. Do not laboratory that provides support services for include any General and Administrative costs on Extraction Functions and other functions, the Line 7. Employee Compensation and certain Paid Leave for employees performing laboratory benefits associated with Nevada Based Corporate functions must first be allocated between Services may be claimed on Line 18, 35, or 52. Extraction Functions and other functions on a If allocating qualifying retirement benefits to reasonable basis. Allocated costs must then be Extraction Functions, allocation detail and basis analyzed to determine whether or not the costs should be provided on Schedule O or other may be claimed in Part B of the Gross Yield, supporting documentation to substantiate claimed Deductions, Net Proceeds section. Attach deduction and allocation basis. Where deductions schedules and supporting documentation to show for retirement benefits are claimed on a basis the allocation and the basis for the allocation. other than actual cash costs incurred for the Where deductions for Paid Leave are claimed on taxable year, an explanation and all pertinent a basis other than actual cash costs incurred for detail to include the alternative accounting basis the taxable year, an explanation and all pertinent used should be provided on Schedule O or other detail to include the alternative accounting basis supporting documentation to substantiate used should be provided on Schedule O or other alternative basis. supporting documentation to substantiate For employees severed from service during the alternative basis. taxable year, only qualifying retirement benefits accrued before the date of termination may be Line 7: Qualified Pension Plans, Retirement, and Page 6 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) claimed and only if not previously deducted. See mining operations within the State of Nevada.” NAC 362.035(2) for the interpretation by the Money paid as the employer portion of Medicare Nevada Tax Commission regarding the costs of (Hospital Insurance) Contributions and money severing employees. paid as the employer portion of Social Security Line 8: Unemployment, Social Security, (Old-Age, Survivors, and Disability Insurance) Medicare, Premiums for Industrial Insurance, Contributions may be claimed per NAC Actual Cost of Hospital and Medical Attention, 362.050(1)(g) because both are included in the Accident Benefits and Group Insurance Social Security Act and primarily funded through the Federal Insurance Contributions Act (Internal Effective January 1, 2017, the following items Revenue Code Title 26 Chapter 21). ARE allowed deductions (see NRS 362.120(3)(g)): Per NAC 362.050(1)(g) the cost of state and federal unemployment compensation • Premiums for industrial insurance contributions may be claimed on Line 8 if the (workers' compensation) See NRS 616A costs are related to Extraction Functions. These through 616D costs are sometimes referred to as FUTA (Federal • Hospital expenses Unemployment Tax Act Internal Revenue Code • Medical attention title 26 Chapter 23) and SUTA (NRS chapter • Accident benefits 612) in the operator’s books and records. Deductions for Unemployment, Social Security, If allocating these costs to Extraction Functions, and Medicare described in NRS 362.120(3)(h) as allocation detail and basis should be provided on further described in NAC 362.050(1)(g) and Schedule O or other supporting documentation to deductions for Premiums for Industrial Insurance, substantiate claimed deduction and allocation Actual Cost of Hospital and Medical Attention, basis. Where deductions for these costs are made Accident Benefits and Group Insurance described on a basis other than actual cash costs incurred for in NRS 362.120(3)(h) and related to Mining the taxable year, an explanation and all pertinent Functions may be claimed on this line if detail to include the alternative accounting basis associated with the compensation claimed on line used should be provided on Schedule O or other

5. Claimed deduction may include actual costs for supporting documentation to substantiate “All money paid as contributions or payments alternative basis. under the unemployment compensation law of the Line 9: Maintenance and Repairs State of Nevada, as contained in chapter 612 of NRS, all money paid as contributions under the Deductions for actual cost in 2024 for Social Security Act of the Federal Government, maintenance and repair of assets used in and all money paid to either the State of Nevada Extraction Functions as described in NRS or the Federal Government under any 362.120(3)(e) may be claimed on this line. Per amendment to either or both of the statutes NRS 362.120(3)(e)(1): mentioned in this paragraph” and “all money “The actual cost of maintenance and repairs of: expended for premiums for industrial insurance, and the actual cost of hospital and medical (1) All machinery, equipment, apparatus attentions and accident benefits and group and facilities used in the mine.” insurance for employees actually engaged in Claimed costs must be incurred in the State of Page 7 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) Nevada during 2024 and must be in support of 16 for Development and Line 17 for Reclamation. Extraction Functions. The specific costs are Exploration, as defined in NAC 362.007, is not further described in NAC 362.050. For example, deductible from gross yield per NRS the cost of employee compensation paid to an 362.120(7)(f). Similarly, costs for Transportation employee to maintain and repair assets used for Functions per NRS 362.120(3)(b) and Reduction, Extraction Functions may be claimed on this line Refining, and Sale Functions per NRS per NAC 362.050(1)(g). 362.120(3)(c) should not be included on this line. Do not claim on this line costs which were Materials and supplies not directly related to capitalized or relate to items on Schedule E. Do Extraction Functions in the State of Nevada are not deduct maintenance or repairs which were not deductible on this line. Such non-deductible completed by contractors and would otherwise be costs include, for example, office party supplies, claimed on Lines 15, 34 or 51 and are therefore food or refreshments, and employee gifts or subject to provisions of NAC 362.050(4), which awards. are detailed in the instructions for that line. Do not Effective January 1, 2012, NRS 362.120(7)(g) duplicate any costs claimed on this line with costs specifically DISALLOWS deductions for any claimed elsewhere in the Statement. federal, state, or local taxes. Therefore, do not If allocating costs to Maintenance and Repairs, include in Line 10 any costs for such disallowed allocation detail and basis should be provided on taxes, which may include, for example, sales and Schedule O or other supporting documentation to use tax, vehicle registration general services tax, substantiate claimed deduction and allocation motor vehicle fuel tax and similar taxes. It may basis. be necessary to estimate and adjust for the taxes that may be included in various accounts in the Maintenance and repairs to administrative operator’s books and records. For example, if an buildings or similar costs associated with Nevada expense account includes the cost of acquiring Based Corporate Services should not be claimed materials, including the cost of taxes and freight, on Line 9. Any claimed costs associated with it may be necessary to adjust the account to reflect Nevada Based Corporate Services may be the appropriate Net Proceeds of Minerals Tax included on Line 18, 35 and 52. deduction claims. If so, attach a schedule and/or Line 10: Materials and Supplies supporting documentation. Schedule O may be Deductions for the cost of Materials and Supplies used. related to activities described in NRS Do not claim materials and supplies costs related 362.120(3)(a) may be claimed on this line. Only to Nevada Based Corporate Services on Line 10. actual costs incurred for materials and supplies Claim costs of materials and supplies related to used in the State of Nevada during 2024 which Nevada Based Corporate Services on Lines 18, are directly related to Extraction Functions may 35, and 52, if applicable. be claimed on Line 10. Line 11: Fuel Do not include fuel costs on this line; instead Deductions for the cost of Fuel related to claim these costs on Line 11 or other applicable activities described in NRS 362.120(3)(a) may be line. Materials and supplies used in exploration, claimed on this line. Only actual costs incurred reclamation, or development should not be for fuel used in the State of Nevada during 2024 included on this line, but may be claimed on Line Page 8 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) which are directly related to Extraction Functions be claimed on this line. Only actual costs incurred may be claimed on Line 11. Examples of the for electric power used in the State of Nevada types of fuel costs include, without limitation, during 2024 which are directly related to gasoline, diesel fuel, propane and natural gas Extraction Functions may be claimed on Line 12. used in Extraction Functions. If allocating costs to Electric Power, allocation If allocating fuel costs to Extraction Functions, detail and basis should be provided on Schedule allocation detail and basis should be provided on O or other supporting documentation to Schedule O or other supporting documentation to substantiate claimed deduction and allocation substantiate claimed deduction and allocation basis. basis. Special cost allocations may be needed to Do not include on Line 11 fuel specifically determine the cost of power acquired through associated with Employee Travel, Transportation other than an arms-length transaction and used in Services for employees per NAC 362.050(1)(e), Extraction Functions. Transportation Functions per NRS 362.120(3)(b), Reduction, Refining, and Sale Functions per NRS 362.120(3)(c), or Vehicle Allowances, which Line 13: Utilities-Except Electric Power may be claimed elsewhere on the Statement. Deductions for the costs of Utilities for activities Effective January 1, 2012, NRS 362.120(7)(g) described in NRS 362.120(3)(a) may be claimed specifically DISALLOWS deductions for any on this line. Only actual costs incurred for utilities federal, state, or local taxes. Therefore, do not used in the State of Nevada during 2024 which claim in Line 11 any costs for such disallowed are directly related to Extraction Functions may taxes, which may include, for example, sales and be claimed on Line 13. If claiming costs use tax, vehicle registration general services tax, associated with providing on-site utilities, such motor vehicle fuel tax and similar taxes. It may costs must be itemized on Schedule O, or other be necessary to estimate the taxes that may be reasonable means to substantiate claimed included in various accounts in the operator’s deduction. books and records. For example, if an expense Examples of Utilities that may be claimed on this account includes the cost of acquiring fuel, line include, without limitation, water, sewer, or including the cost of fuel taxes, it may be garbage directly associated with Extraction necessary to adjust the account to reflect the Functions. appropriate Net Proceeds of Minerals Tax deduction claim. If so, attach a schedule and/or Do not claim costs of utilities associated with supporting documentation. Schedule O may be Nevada Based Corporate Services on Line 13. used. Costs related to Nevada Based Corporate Services may be claimed on Lines 18, 35 and 52. Do not claim unrealized gains or losses from fuel hedging on Line 11 or elsewhere on the If allocating costs to Utilities, allocation detail Statement. and basis should be provided on Schedule O or other supporting documentation to substantiate Line 12: Electric Power claimed deduction and allocation basis. Deductions for the cost of Electric Power related Operators are encouraged but not required to to activities described in NRS 362.120(3)(a) may submit a schedule detailing the type and amount Page 9 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) of other utilities such as a schedule with general price must be commercially reasonable ledger account numbers, descriptions and account in the circumstances and the cost would balances claimed. Schedule O may also be used otherwise be deductible if the service or but is not required. activity contracted for was provided or performed directly by the operator of the Line 14: Renting Equipment mine, and Deductions for the cost of Renting Equipment used in activities described in NRS 362.120(3)(a) • Per NAC 362.050(4): “For the purposes may be claimed on this line. Only costs incurred of paragraph (b) of subsection 1, there is for renting equipment used in the State of Nevada a rebuttable presumption that not less during 2024 which are directly related to than 20 percent of the cost of contracting Extraction Functions may be claimed on Line 14 for all or part of a mine’s operations is if the amount paid is commercially reasonable in attributable to the cost of services and the circumstances, per NAC 362.050(1)(a). activities that would not be deductible if provided or performed directly by the Contracts for renting equipment may also be operator of the mine.” subject to limitations for otherwise non- deductible activities. For example, exploration costs are not deductible, even if provided by a contractor, because they The cost of renting equipment used in would not otherwise be deductible if performed exploration, reclamation, or development should by the operator of a mine. not be claimed on this line. Costs of exploration, as defined in NAC 362.007, are not allowed In addition, the contractor makes a profit in deductions from gross yield per NRS providing the service to the Operator. Therefore, 362.120(7)(f). Do not claim costs for renting the claimed deduction must be adjusted to equipment related to exploration activities account for the otherwise non- deductible item. anywhere on the Statement. Do not duplicate any Whether the Operator would incur more or less costs for renting equipment that have been costs if the Operator performed the activities is claimed elsewhere on the return such as for immaterial in the analysis or rebuttal of the Transportation Functions, Reduction, Refining, presumption in NAC 362.050(4). The rebuttable and Sale Functions, Reclamation Work, presumption relates to costs incurred by the Development Work or Nevada Based Corporate contractor that would not otherwise be deductible Services. including the contractor’s profit in providing the Line 15: Contracting for Mining Operations services. A letter from the contractor without supporting documentation is not sufficient. Deduction for the cost of Contracting for activities described in NRS 362.120(3)(a) may be If the operator elects to reduce the amounts paid by claimed on this line. Only costs incurred for 20% per NAC 362.050(4), the operator is not contracting for Extraction Functions performed required to submit documentation related to the in the State of Nevada during 2024 may be contractor costs. If the operator elects to rebut the claimed on Line 15 subject to the following presumption in NAC 362.050(4), the operator limitations: must provide detailed schedules and supporting documentation for the claimed amount. • Per NAC 362.050(1)(b), the contract Page 10 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) Line 16: Developmental Work without limitation, costs associated with the remediation of a mine site may be claimed. Deduction for costs incurred for Development work described in NRS 362.120(3)(k) and further Accrued reclamation expenses must not be described in NAC 362.006 may be claimed on claimed on Line 17. this line. Only costs incurred for developmental If claiming a deduction for reclamation costs, the work performed in the State of Nevada during costs must have been paid during the taxable year. 2024 may be claimed on Line 16. Per NAC 362.310: “A taxpayer may claim a Cost of development work usually would not be deduction pursuant to paragraph (l) of included in Transportation Functions or subsection 3 of NRS 362.120 for any money paid Reduction, Refining, and Sale Functions. during the reporting period for reclamation Development work usually relates to further performed by the taxpayer.” definition of established ore reserves as opposed Reclamation Work is defined in NAC 362.250 to exploring for reserves. Development work as (See Appendix B). defined in statutes and regulations may be claimed on this line. The costs of Development Carefully review definitions when claiming Work and Exploration Work are mutually deductions for costs related to Reclamation Work exclusive. Include ONLY costs that meet the as distinguished from Exploration and definition of Development Work on this line. Development Work. Exploration costs should not be claimed Operators are encouraged but not required to anywhere on the Statement. attach supporting documentation describing the Generally, Development Work is related to type, cost and location of the reclamation work defining and analyzing established mineral completed. Cross reference to the reclamation reserves and may be capitalized in an asset plan is encouraged but not required. account for book purposes. The capitalized costs Reconciliation of the reclamation recorded for may be referred to as Deferred Development book purposes to the reclamation allowed for Net Costs for book purposes. Operators are Proceeds of Minerals Tax purposes is encouraged encouraged but not required to submit supporting but not required. documentation describing the type of work, the Line 18: Nevada Based Corporate Services location of the work, the cost of the work, and the general ledger accounts used to account for the Deduction for costs incurred for Nevada Based Development Work for book purposes. This Corporate Services described in NRS information should be reconciled to the deduction 362.120(3)(j) and further described in NAC claimed for purposes of the Net Proceeds of 362.050(1)(c), may be claimed on this line. Minerals Tax. Usually, an allocation of Nevada Based Corporate Services is made to Extraction Line 17: Reclamation Work Functions and claimed on this line. Claimed Deductions for costs incurred for Reclamation deductions for costs for Nevada Based Corporate Work described in NRS 362.120(3)(l) and further Services must be incurred in the State of Nevada described in NAC 326.200 through 362.310 may during 2024 and must be related to Extraction be claimed on this line. Only the costs of Functions. Corporate services performed outside reclamation work performed in 2024, including, of the State of Nevada are not deductible, and Page 11 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) such costs incurred outside the State of Nevada on this line. should not be claimed either directly or as part of Line 21: Vehicle Allowances allocated costs. Operators may incur vehicle allowance costs Per NAC 362.050(1)(c) there are limitations on necessary to conduct extraction per NRS the costs that may be claimed as Nevada Based 362.120(3)(a). NAC 362.050(1)(e) contains Corporate Services. Carefully review this specific criteria that must be met to claim regulation when preparing the Statement. See deductions for vehicle allowances. Vehicle Appendix B. allowances are only applicable to Operator- NRS 362.120(8) defines Nevada-based corporate owned vehicles provided to employees or services. Carefully review this statute when independent contractors. preparing the Statement. See Appendix A. If the Operator has a policy which prohibits Line 19: Employee Travel personal use of the Operator-owned vehicle and the vehicle is, in fact, only used for business Deductions for costs described in NRS purposes, a deduction for costs related to the 362.120(3)(i), employee travel, may be claimed vehicle may be claimed. If the Operator has a on this line if the costs are related to Extraction policy which prohibits personal use of the Functions. The Employee Travel must occur Operator-owned vehicle and the vehicle is within the State of Nevada and must be directly actually used for non-business purposes, the related to Extraction Functions within the State of vehicle allowance may be claimed only to the Nevada. Both origin and destination must be extent the vehicle is actively engaged in the located in State of Nevada. business of the mine. For example, if the vehicle Carefully review this statute when preparing the is used in exploration, the portion related to Statement. See Appendix A. exploration may not be claimed. Line 20: Transportation Services to the Mine for If the Operator does not have a policy which the Employees prohibits personal use of the Operator-owned Costs related to transporting employees to and vehicle, no deduction may be claimed for the from “a point of extraction or reduction of the costs associated with the Operator-owned mine” may be claimed per NRS 362.120(3)(a) as vehicle, regardless of actual business use. further described in NAC 362.050(1)(f). Costs If the Operator reimburses employees or claimed as deductions from gross yield for independent contractors for business use of transportation services must follow the guidelines personally-owned vehicles that would otherwise established per NAC 362.050(1)(f). Carefully be deductible if an Operator-owned vehicle were review this regulation in Appendix B when used, the deduction may be claimed on this line. claiming costs in this section. Per NAC 362.050(1)(g) the definition of The costs of transporting ore to the point of compensation that may be claimed does not processing and transporting the mineral after include compensation in the form of either processing to a place of further reduction and personal use of an Operator-owned vehicle or refining are claimed in the Cost of Transportation reimbursement for personal expenses, including section of Part B of the Gross Yield, Deductions, commuting. These costs must not be claimed Net Proceeds section. Do not include these costs anywhere on the Statement. Page 12 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) Operators are encouraged but not required to COST OF TRANSPORTATION TO attach supporting documentation for the claimed PLACE(S) OF REDUCTION, REFINING, amount. AND SALE Line 22: Other Direct Costs of Mining Functions Line 24: Employee Compensation Operators may claim other direct costs per Deductions for Employee Compensation related statutes and regulation for Extraction Functions to activities described in NRS 362.120(3)(b) and in the State of Nevada during 2024, which were further described in NAC 362.050(1)(g) may be not claimed on Lines 5 through 21, on Line 22. All claimed on this line. Claimed costs may include costs claimed on Line 22 must be itemized on actual costs incurred in 2024 for salaries, wages, Schedule O or an equivalent schedule or and performance related bonuses of persons supporting documents in order to substantiate working in, operating, or supervising the claimed deduction, including citation of the management IN NEVADA of the Nevada mine statute and/or regulation under which the or by persons performing office, clerical or deduction is claimed. engineering work IN NEVADA necessary for the operations per NRS 362.120(6)(c). Claimed If allocating other direct costs, allocation detail deductions must be directly related to and basis should be provided on Schedule O, or transporting the mineral. Do not include in Line other reasonable means to substantiate claimed 24 the costs associated with paid leave or deduction and allocation basis. Where deductions retirement plans; such costs may be claimed in for other direct costs are claimed on a basis other Lines 25 and 26, respectively, for Transportation than actual cash costs, an explanation and all Functions and on Lines 6 and 7 or Lines 42 and pertinent detail to include the alternative 43 for Extraction Functions and Reduction, accounting basis used should be provided on Refining, and Sale Functions. Do not include any Schedule O, or other reasonable means to General and Administrative costs on Line 24. substantiate alternative basis. Employee compensation and certain benefits Failure to itemize and fully describe the claimed associated with Nevada Based Corporate deductions will result in disallowance of the Services may be claimed on Lines 18, 35, and 52. claimed deductions. Carefully read all statutes If allocating compensation to the Cost of and regulations and clearly submit supporting Transportation, allocation detail and basis should documentation for the claimed deductions be provided on Schedule O or other supporting included in Line 22. documentation to substantiate claimed deduction Line 23: Total Cost of Extraction and allocation basis. For example, if the operator The amount on Line 23 is a total of the amounts has a central warehouse that provides support on lines 5 through 22. If filing electronically, the services for Transportation Functions and other formula in the worksheet should calculate the functions, the Employee Compensation for total. Therefore, manual input on line 23 is employees performing warehouse functions must usually not needed. If filing on paper, total the first be allocated between Transportation amounts on lines 5 through 22 and enter the total Functions and other functions on a reasonable on Line 23. basis. The costs allocated to Transportation Functions must then be analyzed to determine whether or not the costs may be claimed in Part B Page 13 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) of the Gross Yield, Deductions, Net Proceeds (workers' compensation) See NRS 616A section. Attach schedules and supporting through 616D documentation to show the allocation and the • Hospital expenses basis for the allocation. • Medical attention Where deductions for compensation are claimed • Accident benefits on a basis other than actual cash costs incurred for • Group insurance the taxable year, an explanation and all pertinent Line 25: Paid Vacation Leave and Paid Sick detail to include the alternative accounting basis Leave used should be provided on Schedule O or other supporting documentation to substantiate Deductions for Paid Vacation and Sick Leave alternative basis. related to activities described in NRS 362.120(3)(b) as further described in NAC Do not include costs of severing employees. See 362.050(1)(g) may be claimed on this line. NAC 362.035. Claimed deductions may include actual costs Some examples of nondeductible items are incurred in 2024 for Sick Leave and Vacation defined in NRS 362.120(7), and include: leave for employees working in, operating, or supervising the management IN NEVADA of the • The costs of employee housing Nevada mine or by persons performing office, • The costs of severing the employment of clerical or engineering work IN NEVADA any employees necessary for the operations per NRS • The costs of mineral exploration 362.120(6)(c). Claimed deductions must be (employee compensation for exploration directly related to Transportation Functions activities must not be claimed- see NAC which are performed in the State of Nevada 362.035 (3) and NAC 362.007 for further during 2024. Do not include in Line 25 the costs clarification) associated with employee compensation claimed Additional examples of nondeductible items are on Line 24 or retirement plans claimed on Line defined in NAC 362.050(2), and include: 26. Similarly, do not include in Line 25 the costs associated with Extraction and Reduction, • Costs associated with providing health Refining, and Sale Functions claimed elsewhere. clubs for employees Do not include any General and Administrative • Costs incurred for pre-employment costs on Line 25. Employee compensation and activities, including, without limitation, certain benefits associated with Nevada Based reimbursement for expenses for moving Corporate Services may be claimed on Lines 18, and relocation (See NAC 362.035(2) for 35, or 52. interpretation by Nevada Tax For employees severed from service during the Commission) taxable year, only sick leave and vacation leave • Costs associated with providing daycare accrued before the date of termination may be facilities for the children of employees claimed and only if not previously deducted. See Effective January 1, 2017, the following items NAC 362.035(2) for the interpretation by the ARE allowed deductions and should be reported Nevada Tax Commission regarding the costs of on Line 27 (see NRS 362.120(3)(g)): severing employees. • Premiums for industrial insurance If allocating Paid Leave to Transportation Page 14 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) Functions, allocation detail and basis should be Employee Compensation claimed on Line 24 or provided on Schedule O or other supporting paid leave claimed on Line 25. Similarly, do not documentation to substantiate claimed deduction include any costs associated with Extraction and and allocation basis. For example, if the operator Reduction, Refining, and Sale Functions that may has a central warehouse that provides support be claimed elsewhere. Do not include any services for Transportation Functions and other General and Administrative costs on Line 26. functions, the Paid Leave for employees Employee Compensation and certain benefits performing laboratory functions must first be associated with Nevada Based Corporate allocated between Transportation Functions and Services may be claimed on Line 18, 35, or 52. other functions on a reasonable basis. The costs If allocating qualifying retirement benefits to allocated to Transportation Functions must then Transportation Functions, allocation detail and be analyzed to determine whether or not the costs basis should be provided on Schedule O or other should be claimed in Part B of the Gross Yield, supporting documentation to substantiate claimed Deductions, Net Proceeds section. Attach deduction and allocation basis. Where deductions schedules and supporting documentation to show for retirement benefits are claimed on a basis the allocation and the basis for the allocation. other than actual cash costs incurred for the Where deductions for Paid Leave are claimed on taxable year, an explanation and all pertinent a basis other than actual cash costs incurred for detail to include the alternative accounting basis the taxable year, an explanation and all pertinent used should be provided on Schedule O or other detail to include the alternative accounting basis supporting documentation to substantiate used should be provided on Schedule O or other alternative basis. supporting documentation to substantiate For employees severed from service during the alternative basis. taxable year, only qualifying retirement benefits Line 26: Qualified Pension Plans, Retirement, accrued before the date of termination may be and 401k claimed and only if not previously deducted. See NAC 362.035(2) for the interpretation by the Deductions for Qualified Pension Plans, Nevada Tax Commission regarding the costs of Retirement and 401k related to activities severing employees. described in NRS 362.120(3)(b) as further described in NAC 362.050(1)(g) may be claimed Line 27: Unemployment, Social Security, on this line. Claimed deductions may include Medicare, Premiums for Industrial Insurance, contributions to, and administrative costs of, Actual Cost of Hospital and Medical Attention, qualified pension plans, retirement plans, 401k Accident Benefits and Group Insurance plans, and other similar deferred benefit plans on Effective January 1, 2017, the following items behalf of employees working in, operating, or ARE allowed deductions (see NRS supervising the management IN NEVADA of the 362.120(3)(g)): Nevada mine or by persons performing office, clerical or engineering work IN NEVADA • Premiums for industrial insurance necessary for the operations per NRS (workers' compensation) See NRS 616A 362.120(6)(c). Claimed deductions must be through 616D directly related to Transportation Functions. Do • Hospital expenses not include in Line 26 the costs associated with • Medical attention Page 15 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) • Accident benefits (NRS chapter 612) in the operator’s books and records. Deductions for Unemployment, Social Security, and Medicare described in NRS 362.120(3)(h) as If allocating these costs to Transportation further described in NAC 362.050(1)(g) and Functions, allocation detail and basis should be deductions for Premiums for Industrial Insurance, provided on Schedule O or other supporting Actual Cost of Hospital and Medical Attention, documentation to substantiate claimed deduction Accident Benefits and Group Insurance described and allocation basis. Where deductions for these in NRS 362.120(3)(h) and related to Mining costs are made on a basis other than actual cash Functions may be claimed on this line if costs incurred for the taxable year, an explanation associated with the compensation claimed on line and all pertinent detail to include the alternative

5. Claimed deduction may include actual costs for accounting basis used should be provided on “All money paid as contributions or payments Schedule O or other supporting documentation to under the unemployment compensation law of the substantiate alternative basis. State of Nevada, as contained in chapter 612 of Line 28: Maintenance and Repairs NRS, all money paid as contributions under the Social Security Act of the Federal Government, Deductions for actual cost in 2024 for and all money paid to either the State of Nevada maintenance and repair of assets used in or the Federal Government under any Transportation Functions as described in NRS amendment to either or both of the statutes 362.120(3)(e) may be claimed on this line. Per mentioned in this paragraph” and “all money NRS 362.120(3)(e)(1): expended for premiums for industrial insurance, “The actual cost of maintenance and repairs of: and the actual cost of hospital and medical attentions and accident benefits and group (1) All machinery, equipment, apparatus and insurance for employees actually engaged in facilities used in the mine.” mining operations within the State of Nevada.” Claimed costs must be incurred in the State of Money paid as the employer portion of Medicare Nevada during 2024 and must be in support of (Hospital Insurance) Contributions and money Transportation Functions. The specific costs are paid as the employer portion of Social Security further described in NAC 362.050. For example, (Old-Age, Survivors, and Disability Insurance) the cost of employee compensation paid to an Contributions may be claimed per NAC employee to maintain and repair assets used for 362.050(1)(g) because both are included in the Transportation Functions may be claimed on this Social Security Act and primarily funded through line per NAC 362.050(1)(g). the Federal Insurance Contributions Act (Internal Do not claim on this line costs which were Revenue Code Title 26 Chapter 21). capitalized or relate to items on Schedule E. Do Per NAC 362.050(1)(g) the cost of state and not deduct maintenance or repairs which were federal unemployment compensation completed by contractors and would otherwise be contributions may be claimed on Line 27 if the claimed on Lines 15, 34 or 51 and are therefore costs are related to Transportation Functions. subject to provisions of NAC 362.050(4), which These costs are sometimes referred to as FUTA are detailed in the instructions for that line. Do not (Federal Unemployment Tax Act Internal duplicate any costs claimed on this line with costs Revenue Code title 26 Chapter 23) and SUTA claimed elsewhere in the Statement. Page 16 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) If allocating costs to Maintenance and Repairs, that may be included in various accounts in the allocation detail and basis should be provided on operator’s books and records. For example, if an Schedule O or other supporting documentation to expense account includes the cost of acquiring substantiate claimed deduction and allocation materials, including the cost of taxes and freight, basis. it may be necessary to adjust the account to reflect the appropriate Net Proceeds of Minerals Tax Maintenance and repairs to administrative deduction claims. If so, attach a schedule and/or buildings or similar costs associated with Nevada supporting documentation. Schedule O may be Based Corporate Services should not be claimed used. on Line 28. Any claimed costs associated with Nevada Based Corporate Services may be Do not claim materials and supplies costs related included on Line 18, 35 and 52. to Nevada Based Corporate Services on Line 10. Claim costs of materials and supplies related to Nevada Based Corporate Services on Lines 18, Line 29: Materials and Supplies 35, and 52, if applicable. Deductions for the cost of Materials and Supplies Line 30: Fuel related to activities described in NRS Deductions for the cost of Fuel related to 362.120(3)(b) may be claimed on this line. Only activities described in NRS 362.120(3)(b) may be actual costs incurred for materials and supplies claimed on this line. Only actual costs incurred used in the State of Nevada during 2024 which for fuel used in the State of Nevada during 2024 are directly related to Transportation Functions which are directly related to Transportation may be claimed on Line 29. Functions may be claimed on Line 30. Examples Do not include fuel costs on this line; instead of the types of fuel costs include, without claim these costs on Line 30 or other applicable limitation, gasoline, diesel fuel, propane and line. Materials and supplies used in exploration, natural gas used in Transportation Functions. reclamation, or development must not be claimed If allocating fuel costs to Transportation in the Transportation Section. Functions, allocation detail and basis should be Materials and supplies not directly related to provided on Schedule O or other supporting Transportation Functions in the State of Nevada documentation to substantiate claimed deduction are not deductible on this line. Such non- and allocation basis. deductible costs include, for example, office Do not include on Line 30 fuel specifically party supplies, food or refreshments, and associated with Employee Travel, Transportation employee gifts or awards. Services to the Mine, Extraction Functions per Effective January 1, 2012, NRS 362.120(7)(g) NRS 362.120(3)(a), Reduction, Refining, and specifically DISALLOWS deductions for any Sale Functions per NRS 362.120(3)(c), or federal, state, or local taxes. Therefore, do not Vehicle Allowances, which may be claimed include in Line 10 any costs for such disallowed elsewhere on the Statement. taxes, which may include, for example, sales and Effective January 1, 2012, NRS 362.120(7)(g) use tax, vehicle registration general services tax, specifically DISALLOWS deductions for any motor vehicle fuel tax and similar taxes. It may federal, state, or local taxes. Therefore, do not be necessary to estimate and adjust for the taxes claim in Line 30 any costs for such disallowed Page 17 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) taxes, which may include, for example, sales and may be claimed on Line 32. If claiming costs use tax, vehicle registration general services tax, associated with providing on-site utilities, such motor vehicle fuel tax and similar taxes. It may costs must be itemized on Schedule O, or other be necessary to estimate the taxes that may be reasonable means to substantiate claimed included in various accounts in the operator’s deduction. books and records. For example, if an expense Examples of Utilities that may be claimed on this account includes the cost of acquiring fuel, line include, without limitation, water, sewer, or including the cost of fuel taxes, it may be garbage directly associated with Transportation necessary to adjust the account to reflect the Functions. appropriate Net Proceeds of Minerals Tax deduction claim. If so, attach a schedule and/or Do not claim costs of utilities associated with supporting documentation. Schedule O may be Nevada Based Corporate Services on Line 32. used. Costs related to Nevada Based Corporate Services may be claimed on Lines 18, 35, and52. Do not claim unrealized gains or losses from fuel hedging on Line 30 or elsewhere on the If allocating costs to Utilities, allocation detail Statement. and basis should be provided on Schedule O or other supporting documentation to substantiate Line 31: Electric Power claimed deduction and allocation basis. Deductions for the cost of Electric Power related Operators are encouraged but not required to to activities described in NRS 362.120(3)(b) may submit a schedule detailing the type and amount be claimed on this line. Only actual costs incurred of other utilities such as a schedule with general for electric power used in the State of Nevada ledger account numbers, descriptions and account during 2024 which are directly related to balances claimed. Schedule O may also be used Transportation Functions may be claimed on Line but is not required. 31. Line 33: Renting Equipment If allocating costs to Electric Power, allocation detail and basis should be provided on Schedule Deductions for the cost of Renting Equipment O or other supporting documentation to used in activities described in NRS 362.120(3)(b) substantiate claimed deduction and allocation may be claimed on this line. Only costs incurred basis. for renting equipment used in the State of Nevada during 2024 which are directly related to Special cost allocations may be needed to Transportation Functions may be claimed on Line determine the cost of power acquired through 33 if the amount paid is commercially reasonable other than an arms-length transaction and used in in the circumstances, per NAC 362.050(1)(a). Transportation Functions. Contracts for renting equipment may also be Line 32: Utilities - Except Electric Power subject to limitations for otherwise non- deductible activities. Deductions for the costs of Utilities for activities described in NRS 362.120(3)(b) may be claimed The cost of renting equipment used in on this line. Only actual costs incurred for utilities exploration, reclamation, or development should used in the State of Nevada during 2024 which not be claimed on this line. Costs of exploration, are directly related to Transportation Functions as defined in NAC 362.007, are not an allowed Page 18 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) deduction from gross yield per NRS the claimed deduction must be adjusted to 362.120(7)(f). Do not claim costs for renting account for the otherwise non- deductible item. equipment related to exploration activities Whether the Operator would incur more or less anywhere on the Statement. Do not duplicate any costs if the Operator performed the activities is costs for renting equipment that have been immaterial in the analysis or rebuttal of the claimed elsewhere on the return such as for presumption in NAC 362.050(4). The rebuttable Extraction Functions, Reduction, Refining, and presumption relates to costs incurred by the Sale Functions, Reclamation Work, Development contractor that would not otherwise be deductible Work or Nevada Based Corporate Services. including the contractor’s profit in providing the Line 34: Contracting for Transportation to services. A letter from the contractor is not Place(s) of Reduction, Refining and Sale sufficient. Deduction for the cost of Contracting for If the operator elects to reduce the amounts paid by activities described in NRS 362.120(3)(b) may be 20% per NAC 362.050(4), the operator is not claimed on this line. Only costs incurred for required to submit documentation related to the contracting for Transportation Functions contractor costs. If the operator elects to rebut the performed in the State of Nevada during 2024 presumption in NAC 362.050(4), the operator may be claimed on Line 34 subject to the must provide detailed schedules and supporting following limitations: documentation for the claimed amount. • Per NAC 362.050(1)(b), the contract Line 35: Nevada Based Corporate Services price must be commercially reasonable Deduction for costs incurred for Nevada Based in the circumstances and the cost would Corporate Services described in NRS otherwise be deductible if the service or 362.120(3)(j) and further described in NAC activity contracted for was provided or 362.050(1)(c), may be claimed on this line. performed directly by the operator of the Usually, an allocation of Nevada Based mine, and Corporate Services is made to Transportation • Per NAC 362.050(4): “For the purposes Functions and claimed on this line. Claimed of paragraph (b) of subsection 1, there is deductions for costs for Nevada Based Corporate a rebuttable presumption that not less Services must be incurred in the State of Nevada than 20 percent of the cost of contracting during 2024 and must be related to for all or part of a mine’s operations is Transportation Functions. Corporate services attributable to the cost of services and performed outside of the State of Nevada are not activities that would not be deductible if deductible, and such costs incurred outside the provided or performed directly by the State of Nevada should not be claimed either operator of the mine.” directly or as part of allocated costs. For example, exploration costs are not deductible, Per NAC 362.050(1)(c) there are limitations on even if provided by a contractor, because they the costs that may be claimed as Nevada Based would not otherwise be deductible if performed Corporate Services. Carefully review this by the operator of a mine. regulation when preparing the Statement. See Appendix B. In addition, the contractor makes a profit in providing the service to the Operator. Therefore, NRS 362.120(8) defines Nevada-based corporate Page 19 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) services. Carefully review this statute when policy which prohibits personal use of the preparing the Statement. See Appendix A. Operator-owned vehicle and the vehicle is actually used for non-business purposes, the Line 36: Employee Travel vehicle allowance may be claimed only to the Deductions for costs described in NRS extent the vehicle is actively engaged in the 362.120(3)(i), employee travel, may be claimed business of the mine. For example, if the vehicle on this line if the costs are related to is used in exploration, the portion related to Transportation Functions. The Employee Travel exploration may not be claimed. must occur within the State of Nevada and must If the Operator does not have a policy which be directly related to Transportation Functions prohibits personal use of the Operator-owned within the State of Nevada. Both origin and vehicle, no deduction may be claimed for the destination must be located in State of Nevada. costs associated with the Operator-owned Carefully review this statute when preparing the vehicle, regardless of actual business use. Statement. See Appendix A. If the Operator reimburses employees or Line 37: Transportation Services for Employees independent contractors for business use of personally-owned vehicles that would otherwise Costs related to transporting employees to and be deductible if an Operator-owned vehicle were from “a point of extraction or reduction of the used, the deduction may be claimed on this line. mine” may be claimed per NRS 362.120(3)(b) as further described in NAC 362.050(1)(f). Costs Per NAC 362.050(1)(g) the definition of claimed as deductions from gross yield for compensation that may be claimed does not transportation services must follow the guidelines include compensation in the form of either established per NAC 362.050(1)(f). Carefully personal use of an Operator-owned vehicle or review this regulation in Appendix B when reimbursement for personal expenses, including commuting. These costs must not be claimed claiming costs in this section. anywhere on the Statement. Line 38: Vehicle Allowances Operators are encouraged but not required to Operators may incur vehicle allowance costs attach supporting documentation for the claimed necessary to conduct Transportation Functions amount. per NRS 362.120(3)(b) for costs associated with Operator-owned vehicles. NAC 362.050(1)(e) Line 39: Other Direct Costs of Mining Functions contains specific criteria that must be met to Operators may claim other direct costs per claim deductions for vehicle allowances. Vehicle statutes and regulation for Transportation allowances are only applicable to Operator- Functions in the State of Nevada during 2024, owned vehicles provided to employees or which were not claimed on Lines 24 through 38, independent contractors. on Line 39. All costs claimed on Line 39 must be If the Operator has a policy which prohibits itemized on Schedule O or an equivalent schedule personal use of the Operator-owned vehicle and or supporting documents in order to substantiate the vehicle is, in fact, only used for business claimed deduction, including citation of the purposes, a deduction for costs related to the statute and/or regulation under which the vehicle may be claimed. If the Operator has a deduction is claimed. Page 20 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) If allocating other direct costs, allocation detail Refining and Sale of the mineral IN NEVADA. and basis should be provided on Schedule O, or Do not include in Line 41 the costs associated other reasonable means to substantiate claimed with paid leave or retirement plans; such costs deduction and allocation basis. Where deductions may be claimed in Line 42 and 43, respectively, for other direct costs are claimed on a basis other for Reduction, Refining, and Sale Functions and than actual cash costs, an explanation and all on Lines 6 and 7 or Lines 25 and 26 for Extraction pertinent detail to include the alternative Functions or Transportation Functions. Do not accounting basis used should be provided on include any General and Administrative costs on Schedule O, or other reasonable means to Line 41. Employee compensation and certain substantiate alternative basis. benefits associated with Nevada Based Corporate Services may be claimed on Lines 18, 35 and 52. Failure to itemize and fully describe the claimed deductions will result in disallowance of the If allocating compensation to the Cost of claimed deductions. Carefully read all statutes Reduction, Refining, and Sale, allocation detail and regulations and clearly submit supporting and basis should be provided on Schedule O or documentation for the claimed deductions other supporting documentation to substantiate included in Line 41. claimed deduction and allocation basis. For example, if the operator has a central warehouse Line 40: Total Cost of Transportation to Place(s) that provides support services for Reduction, of Reduction, Refining, and Sale Refining, and Sale Functions and other functions, The amount on Line 40 is a total of the amounts the Employee Compensation for employees on lines 24 through 39. If filing electronically, the performing warehouse functions must first be formula in the worksheet should calculate the allocated between Reduction, Refining, and Sale total. Therefore, manual input on line 40 is Functions and other functions on a reasonable usually not needed. If filing on paper, total the basis. The costs allocated to Reduction, Refining, amounts on lines 24 through 39 and enter the total and Sale Functions must then be analyzed to on Line 40. determine whether or not the costs may be COST OF REDUCTION, REFINING, AND claimed in Part B of the Gross Yield, Deductions, SALE: Net Proceeds section. Attach schedules and supporting documentation to show the allocation Line 41: Employee Compensation and the basis for the allocation. Deductions for Employee Compensation related Where deductions for compensation are claimed to activities described in NRS 362.120(3)(c) and on a basis other than actual cash costs incurred for further described in NAC 362.050(1)(g) may be the taxable year, an explanation and all pertinent claimed on this line. Claimed costs may include detail to include the alternative accounting basis actual costs incurred in 2024 for salaries, wages, used should be provided on Schedule O or other and performance related bonuses of persons supporting documentation to substantiate working in, operating, or supervising the alternative basis. management IN NEVADA of the Nevada mine or by persons performing office, clerical or Do not include costs of severing employees. See engineering work IN NEVADA necessary for the NAC 362.035. operations per NRS 362.120(6)(c). Claimed Some examples of nondeductible items are deductions must be directly related to Reduction, defined in NRS 362.120(7), and include: Page 21 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) • The costs of employee housing supervising the management IN NEVADA of the • The costs of severing the employment of Nevada mine or by persons performing office, any employees clerical or engineering work IN NEVADA • The costs of mineral exploration necessary for the operations per NRS (employee compensation for exploration 362.120(6)(b). Claimed deductions must be activities must not be claimed- see NAC directly related to Reduction, Refining, and Sale 362.035 (3) and NAC 362.007 for further Functions which are performed in the State of clarification) Nevada during 202443. Do not include in Line 42 • Additional examples of nondeductible the costs associated with employee compensation items are defined in NAC 362.050(2), claimed on Line 41 or retirement plans claimed and include: on Line 43. Similarly, do not include in Line 42 • Costs associated with providing health the costs associated with Extraction Functions or clubs for employees Transportation Functions claimed elsewhere. Do • Costs incurred for pre-employment not include any General and Administrative costs activities, including, without limitation, on Line 42. Employee compensation and certain reimbursement for expenses for moving benefits associated with Nevada Based Corporate and relocation (See NAC 362.035(2) for Services may be claimed on Lines 18, 35, or 52. interpretation by Nevada Tax For employees severed from service during the Commission) taxable year, only sick leave and vacation leave • Costs associated with providing daycare accrued before the date of termination may be facilities for the children of employees claimed and only if not previously deducted. See NAC 362.035(2) for the interpretation by the Effective January 1, 2017, the following items Nevada Tax Commission regarding the costs of ARE allowed deductions and should be reported on Line 44 (see NRS 362.120(3)(g)): severing employees. If allocating Paid Leave to Reduction, Refining, • Premiums for industrial insurance and Sale Functions, allocation detail and basis (workers' compensation) See NRS 616A should be provided on Schedule O or other through 616D supporting documentation to substantiate claimed • Hospital expenses deduction and allocation basis. For example, if • Medical attention the operator has a central laboratory that provides • Accident benefits support services for Reduction, Refining, and • Group insurance Sale Functions and other functions, the Paid Line 42: Paid Vacation Leave and Paid Sick Leave for employees performing laboratory Leave functions must first be allocated between Reduction, Refining, and Sale Functions and Deductions for Paid Vacation and Sick Leave other functions on a reasonable basis. The costs related to activities described in NRS allocated to Reduction, Refining, and Sale 362.120(3)(c) as further described in NAC Functions should then be analyzed to determine 362.050(1)(g) may be claimed on this line. whether or not the costs should be claimed in Part Claimed deductions may include actual costs B of the Gross Yield, Deductions, Net Proceeds incurred in 2024 for Sick Leave and Vacation section. Attach schedules and supporting leave for employees working in, operating, or documentation to show the allocation and the Page 22 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) basis for the allocation. basis. Where deductions for retirement benefits are claimed on a basis other than actual cash costs Where deductions for Paid Leave are claimed on incurred for the taxable year, an explanation and a basis other than actual cash costs incurred for all pertinent detail to include the alternative the taxable year, an explanation and all pertinent accounting basis used should be provided on detail to include the alternative accounting basis Schedule O or other supporting documentation to used should be provided on Schedule O or other substantiate alternative basis. supporting documentation to substantiate alternative basis. For employees severed from service during the taxable year, only qualifying retirement benefits Line 43: Qualified Pension Plans, Retirement, accrued before the date of termination may be and 401k claimed and only if not previously deducted. See Deductions for Qualified Pension Plans, NAC 362.035(2) for the interpretation by the Retirement and 401k related to activities Nevada Tax Commission regarding the costs of described in NRS 362.120(3)(c) as further severing employees. described in NAC 362.050(1)(g) may be claimed Line 44: Unemployment, Social Security, on this line. Claimed deductions may include Medicare, Premiums for Industrial Insurance, contributions to, and administrative costs of, Actual Cost of Hospital and Medical Attention, qualified pension plans, retirement plans, 401k Accident Benefits and Group Insurance plans, and other similar deferred benefit plans on behalf of employees working in, operating, or Effective January 1, 2017, the following items supervising the management IN NEVADA of the ARE allowed deductions (see NRS Nevada mine or by persons performing office, 362.120(3)(g)): clerical or engineering work IN NEVADA necessary for the operations per NRS • Premiums for industrial insurance 362.120(6)(b). Claimed deductions must be (workers' compensation) See NRS 616A through 616D directly related to Reduction, Refining, and Sale Functions. Do not include in Line 43 the costs • Hospital expenses associated with Employee Compensation claimed • Medical attention on Line 41 or Paid Leave claimed on Line 42. • Accident benefits • Group insurance Similarly, do not include any costs associated with Extraction Functions or Transportation Functions Deductions for Unemployment, Social Security, that may be claimed elsewhere. Do not include and Medicare described in NRS 362.120(3)(h) as any General and Administrative costs on Line 43. further described in NAC 362.050(1)(g) and Employee Compensation and certain benefits deductions for Premiums for Industrial Insurance, associated with Nevada Based Corporate Actual Cost of Hospital and Medical Attention, Services may be claimed on Line 18, 35, or 52. Accident Benefits and Group Insurance described in NRS 362.120(3)(g) and related to Reduction, If allocating qualifying retirement benefits to Refining and Sale may be claimed on this line. Reduction, Refining, and Sale Functions, Claimed deduction may include actual costs for allocation detail and basis should be provided on “All money paid as contributions or payments Schedule O or other supporting documentation to under the unemployment compensation law of the substantiate claimed deduction and allocation State of Nevada, as contained in chapter 612 of Page 23 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) NRS, all money paid as contributions under the Deductions for actual cost in 2024 for Social Security Act of the Federal Government, maintenance and repair of assets used in and all money paid to either the State of Nevada Reduction, Refining, and Sale Functions as or the Federal Government under any described in NRS 362.120(3)(e) may be claimed amendment to either or both of the statutes on this line. Per NRS 362.120(3)(e)(2): mentioned in this paragraph” and “all money “The actual cost of maintenance and repairs of: expended for premiums for industrial insurance, and the actual cost of hospital and medical (1) All milling, refining, smelting and attentions and accident benefits and group reduction works, plants and facilities.” insurance for employees actually engaged in Claimed costs must be incurred in the State of mining operations within the State of Nevada.” Nevada during 2024 and must be in support of Money paid as the employer portion of Medicare Reduction, Refining, and Sale Functions. The (Hospital Insurance) Contributions and money specific costs are further described in NAC paid as the employer portion of Social Security 362.50 (Old-Age, Survivors, and Disability Insurance) For example, the cost of employee compensation Contributions may be claimed per NAC paid to an employee to maintain and repair assets 362.050(1)(g) because both are included in the used for Reduction, Refining, and Sale Functions Social Security Act and primarily funded through may be claimed on this line per NAC the Federal Insurance Contributions Act (Internal 362.050(1)(g). Revenue Code Title 26 Chapter 21). Do not claim on this line costs which were Per NAC 362.050(1)(g) the cost of state and capitalized or relate to items on Schedule. Do not federal unemployment compensation deduct maintenance or repairs which were contributions may be claimed on Line 44 if the completed by contractors and would otherwise be costs are related to Reduction, Refining, and Sale claimed on Lines 15, 34, or 51 and are therefore Functions. These costs are sometimes referred to subject to provisions of NAC 362.050(4), which as FUTA (Federal Unemployment Tax Act are detailed in the instructions for that line. Do not Internal Revenue Code title 26 Chapter 23) and duplicate any costs claimed on this line with costs SUTA (NRS chapter 612) in the operator’s books claimed elsewhere in the Statement. and records. If allocating costs to Maintenance and Repairs, If allocating these costs to Reduction, Refining, allocation detail and basis should be provided on and Sale Functions, allocation detail and basis Schedule O or other supporting documentation to should be provided on Schedule O or other substantiate claimed deduction and allocation supporting documentation to substantiate claimed basis. deduction and allocation basis. Where deductions for these costs are made on a basis other than Maintenance and repairs to administrative actual cash costs incurred for the taxable year, an buildings or similar costs associated with Nevada explanation and all pertinent detail to include the Based Corporate Services should not be claimed alternative accounting basis used should be on Line 45. Any claimed costs associated with provided on Schedule O or other supporting Nevada Based Corporate Services may be documentation to substantiate alternative basis. included on Line 18, 35, and 52. Line 45: Maintenance and Repairs Line 46: Materials and Supplies Page 24 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) Deductions for the cost of Materials and Supplies Claim costs of materials and supplies related to related to activities described in NRS Nevada Based Corporate Services on Lines 18, 362.120(3)(c) may be claimed on this line. Only 35, and 52, if applicable. actual costs incurred for materials and supplies Line 47: Fuel used in the State of Nevada during 2024 which are directly related to Reduction, Refining, and Deductions for the cost of Fuel related to Sale Functions may be claimed on Line 46. activities described in NRS 362.120(3)(c) may be claimed on this line. Only actual costs incurred Do not include fuel costs on this line; instead for fuel used in the State of Nevada during 2024 claim these costs on Line 47 or other applicable which are directly related to Reduction, Refining, line. Materials and supplies used in exploration, and Sale Functions may be claimed on Line 47. reclamation, or development should not be Examples of the types of fuel costs include, claimed in the Reduction, Refining and Sale without limitation, gasoline, diesel fuel, propane category. Similarly, costs for Extraction Functions and natural gas used in Reduction, Refining, and per NRS 362.120(3)(a) and Transportation Sale Functions. Functions per NRS 362.120(3)(b) should not be included on this line. If allocating fuel costs to Reduction, Refining, and Sale Functions, allocation detail and basis should Materials and supplies not directly related to be provided on Schedule O or other supporting Reduction, Refining, and Sale Functions in the documentation to substantiate claimed deduction State of Nevada are not deductible on this line. and allocation basis. Such non-deductible costs include, for example, office party supplies, food or refreshments, and Do not include on Line 47 fuel specifically employee gifts or awards. associated with Employee Travel, Transportation Services for Employees, Extraction Functions per Effective January 1, 2012, NRS 362.120(7)(g) NRS 362.120(3)(a), Transportation Functions per specifically DISALLOWS deductions for any NRS 362.120(3)(b), or Vehicle Allowances, federal, state, or local taxes. Therefore, do not which may be claimed elsewhere on the include in Line 46 any costs for such disallowed Statement. taxes, which may include, for example, sales and use tax, vehicle registration general services tax, Effective January 1, 2012, NRS 362.120(7)(g) motor vehicle fuel tax and similar taxes. It may specifically DISALLOWS deductions for any be necessary to estimate and adjust for the taxes federal, state, or local taxes. Therefore, do not that may be included in various accounts in the claim in Line 47 any costs for such disallowed operator’s books and records. For example, if an taxes, which may include, for example, sales and expense account includes the cost of acquiring use tax, vehicle registration general services tax, materials, including the cost of taxes and freight, motor vehicle fuel tax and similar taxes. It may it may be necessary to adjust the account to reflect be necessary to estimate the taxes that may be the appropriate Net Proceeds of Minerals Tax included in various accounts in the operator’s deduction claims. If so, attach a schedule and/or books and records. For example, if an expense supporting documentation. Schedule O may be account includes the cost of acquiring fuel, used. including the cost of fuel taxes, it may be necessary to adjust the account to reflect the Do not claim materials and supplies costs related appropriate Net Proceeds of Minerals Tax to Nevada Based Corporate Services on Line 46. Page 25 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) deduction claim. If so, attach a schedule and/or Do not claim costs of utilities associated with supporting documentation. Schedule O may be Nevada Based Corporate Services on Line 49. used. Costs related to Nevada Based Corporate Services may be claimed on Lines 18, 35, and52. Do not claim unrealized gains or losses from fuel hedging on Line 47 or elsewhere on the If allocating costs to Utilities, allocation detail Statement. and basis should be provided on Schedule O or other supporting documentation to substantiate Line 48: Electric Power claimed deduction and allocation basis. Deductions for the cost of Electric Power related Operators are encouraged but not required to to activities described in NRS 362.120(3)(c) may submit a schedule detailing the type and amount be claimed on this line. Only actual costs incurred of other utilities such as a schedule with general for electric power used in the State of Nevada ledger account numbers, descriptions and account during 2024 which are directly related to balances claimed. Schedule O may also be used Reduction, Refining, and Sale Functions may be but is not required. claimed on Line 48. Line 50: Renting Equipment If allocating costs to Electric Power, allocation detail and basis should be provided on Schedule Deductions for the cost of Renting Equipment O or other supporting documentation to used in activities described in NRS 362.120(3)(c) substantiate claimed deduction and allocation may be claimed on this line. Only costs incurred basis. for renting equipment used in the State of Nevada during 2024 which are directly related to Special cost allocations may be needed to Reduction, Refining, and Sale Functions may be determine the cost of power acquired through claimed on Line 50 if the amount paid is other than an arms-length transaction and used in commercially reasonable in the circumstances, Reduction, Refining, and Sale Functions. per NAC 362.050(1)(a). Contracts for renting Line 49: Utilities - Except Electric Power equipment may also be subject to limitations for Deductions for the costs of Utilities for activities otherwise non-deductible activities. described in NRS 362.120(3)(c) may be claimed The cost of renting equipment used in on this line. Only actual costs incurred for utilities exploration, reclamation, or development should used in the State of Nevada during 2024 which not be claimed in the Reduction, Refining and are directly related to Reduction, Refining, and Sale category. Do not duplicate any costs for Sale Functions may be claimed on Line 49. If renting equipment that have been claimed claiming costs associated with providing on-site elsewhere on the return such as for Extraction utilities, such costs must be itemized on Schedule Functions, Transportation Functions, or Nevada O, or other reasonable means to substantiate Based Corporate Services. claimed deduction. Line 51: Contracting for Reduction, Refining and Examples of Utilities that may be claimed on this Sale Operations line include, without limitation, water, sewer, or Deduction for the cost of Contracting for garbage directly associated with Reduction, activities described in NRS 362.120(3)(c) may be Refining, and Sale Functions. claimed on this line. Only costs incurred for Page 26 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) contracting for Reduction, Refining, and Sale documentation for the claimed amount. Functions performed in the State of Nevada Line 52: Nevada Based Corporate Services during 2024 may be claimed on Line 51 subject to the following limitations: Deduction for costs incurred for Nevada Based Corporate Services described in NRS • Per NAC 362.050(1)(b), the contract price must 362.120(3)(j) and further described in NAC be commercially reasonable in the circumstances 362.050(1)(c), may be claimed on this line. and the cost would otherwise be deductible if the Usually, an allocation of Nevada Based service or activity contracted for was provided or Corporate Services is made to Reduction, performed directly by the operator of the mine, Refining, and Sale Functions and claimed on this and line. Claimed deductions for costs for Nevada • Per NAC 362.050(4): “For the purposes of Based Corporate Services must be incurred in the paragraph (b) of subsection 1, there is a State of Nevada during 2024 and must be related rebuttable presumption that not less than 20 to Reduction, Refining, and Sale Functions. percent of the cost of contracting for all or part Corporate services performed outside of the State of a mine’s operations is attributable to the cost of Nevada are not deductible, and such costs of services and activities that would not be incurred outside the State of Nevada should not deductible if provided or performed directly by the operator of the mine.” be claimed either directly or as part of allocated costs. For example, exploration costs are not deductible, even if provided by a contractor, because they Per NAC 362.050(1)(c) there are limitations on would not otherwise be deductible if performed the costs that may be claimed as Nevada Based by the operator of a mine. Corporate Services. Carefully review this regulation when preparing the Statement. See In addition, the contractor makes a profit in Appendix B. providing the service to the Operator. Therefore, the claimed deduction must be adjusted to NRS 362.120(8) defines Nevada-based corporate account for the otherwise non- deductible item. services. Carefully review this statute when preparing the Statement. See Appendix A. Whether the Operator would incur more or less costs if the Operator performed the activities is Line 53: Employee Travel immaterial in the analysis or rebuttal of the Deductions for costs described in NRS presumption in NAC 362.050(4). The rebuttable 362.120(3)(i), employee travel, may be claimed presumption relates to costs incurred by the on this line if the costs are related to Reduction, contractor that would not otherwise be deductible Refining, and Sale Functions. The Employee including the contractor’s profit in providing the Travel must occur within the State of Nevada and services. A letter from the contractor without must be directly related to Reduction, Refining, supporting documentation is not sufficient. and Sale Functions within the State of Nevada. If the operator elects to reduce the amounts paid by Both origin and destination must be located in 20% per NAC 362.050(4), the operator is not State of Nevada. required to submit documentation related to the Carefully review this statute when preparing the contractor costs. If the operator elects to rebut the Statement. See Appendix A. presumption in NAC 362.050(4), the operator Line 54: Transportation Services Employees must provide detailed schedules and supporting Page 27 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) Costs related to transporting employees to and vehicle, no deduction may be claimed for the from “a point of extraction or reduction of the costs associated with the Operator-owned mine” may be claimed per NRS 362.120(3)(c) as vehicle, regardless of actual business use. further described in NAC 362.050(1)(f). Costs If the Operator reimburses employees or claimed as deductions from gross yield for independent contractors for business use of transportation services for employees must personally-owned vehicles that would otherwise follow the guidelines established per NAC be deductible if an Operator-owned vehicle were 362.050(1)(f). Carefully review this regulation in used, the deduction may be claimed on this line. Appendix B when claiming costs in this section. Per NAC 362.050(1)(g) the definition of The costs of transporting ore to the point of compensation that may be claimed does not processing and transporting the mineral after include compensation in the form of either processing are claimed in the Cost of personal use of an Operator-owned vehicle or Transportation section of Part B of the Gross reimbursement for personal expenses, including Yield, Deductions, Net Proceeds section. Do not commuting. These costs must not be claimed include these costs on this line. anywhere on the Statement. Line 55: Vehicle Allowances Operators are encouraged but not required to Operators may incur vehicle allowance costs attach supporting documentation for the claimed necessary to conduct Reduction, Refining, and amount. Sale per NRS 362.120(3)(c) for costs associated Line 56: Other Direct Costs of Mining Functions with Operator-owned vehicles. NAC 362.050(1)(e) contains specific criteria that must Operators may claim other direct costs per be met to claim deductions for vehicle statutes and regulation for Reduction, Refining, allowances. Vehicle allowances are only and Sale Functions in the State of Nevada during applicable to Operator-owned vehicles provided 2024, which were not claimed on Lines 41 to employees or independent contractors. through 55, on Line 56. All costs claimed on Line 56 must be itemized on Schedule O or an If the Operator has a policy which prohibits equivalent schedule or supporting documents to personal use of the Operator-owned vehicle and substantiate claimed deduction, including citation the vehicle is, in fact, only used for business of the statute and/or regulation under which the purposes, a deduction for costs related to the deduction is claimed. vehicle may be claimed. If the Operator has a policy which prohibits personal use of the If allocating other direct costs, allocation detail Operator-owned vehicle and the vehicle is and basis should be provided on Schedule O, or actually used for non-business purposes, the other reasonable means to substantiate claimed vehicle allowance may be claimed only to the deduction and allocation basis. Where deductions extent the vehicle is actively engaged in the for other direct costs are claimed on a basis other business of the mine. For example, if the vehicle than actual cash costs, an explanation and all is used in exploration, the portion related to pertinent detail to include the alternative exploration may not be claimed. accounting basis used should be provided on Schedule O, or other reasonable means to If the Operator does not have a policy which substantiate alternative basis. prohibits personal use of the Operator-owned Page 28 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) Failure to itemize and fully describe the claimed entries are not needed for Line 59. If submitting deductions will result in disallowance of the on paper, enter the figure from Schedule E, Line claimed deductions. Carefully read all statutes 4. and regulations and clearly submit supporting Schedule C Capital Asset Additions, schedule D documentation for the claimed deductions Capital Asset Deletions, Schedule C-1 Capital included in Line 56. Asset Transfers IN, and Schedule D-1 Capital Line 57: Total Cost of Reduction, Refining and Asset Transfers OUT all support Schedule E. Sale Only the total from Schedule E is carried forward to Line 59. See the specific instructions for these The amount on Line 57 is a total of the amounts schedules and attach appropriate supporting on lines 41 through 56. If filing electronically, the documentation for these schedules. formula in the worksheet should calculate the total. Therefore, manual input on line 57 is The amount claimed on Line 59 should match usually not needed. If filing on paper, total the Schedule E, Line 4 which is the total depreciation amounts on lines 41 through 56 and enter the total claimed. on Line 57. Line 60: Total of All Claimed Deductions from Line 58: Total Production Royalties Gross Yield The amount on Line 58 of Part B of the Gross The amount on Line 60 is the total of lines 23, 40, Yield, Deductions, Net Proceeds section is 57, 58, and 59. If submitting electronically, derived from information on Schedule B line 21 information on the lines from the excel worksheet which is the total production royalties paid by the should automatically total on Line 60. Therefore, operator. See the specific instructions for if submitting electronically, manual entries are Schedule B for more information. If submitting usually not needed for Line 60. If submitting on electronically, information input into the excel paper, enter the total of lines 23, 40, 57, 58, and worksheet for Schedule B should automatically 59 on Line 60. update Line 58. Therefore: if submitting Line 61: Net Proceeds or Loss electronically, manual entries are not usually needed for Line 58. If submitting on paper, enter The amount on Line 61 is the amount on Line 4 the figure from Schedule B, Line 21 on Line 58. (Gross Yield) less the amount on Line 60 (Claimed Deductions from Gross Yield). If Line 59: Total Claimed Depreciation of Capital submitting electronically, the difference between Assets the amount on line 4 and the amount on Line 60 The Operator may claim an allowed cost for should automatically calculate on Line 61. depreciation of capital assets per NRS Therefore, if submitting electronically, manual 362.120(3)(f) and NAC 362.040 on Line 59 of entry is usually not needed for Line 61. If Part B of the Gross Yield, Deductions, Net submitting on paper, enter the difference between Proceeds section. The amount on this line is Line 4 and Line 60 on Line 61. derived from information on Schedule E. If submitting electronically, information input into the excel worksheet for Schedule E should automatically update Line 59. Therefore: if submitting electronically, generally manual Page 29 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) SPECIFIC INSTRUCTIONS production-based royalty payments that are paid regardless of extraction, i.e. minimum advance LGS-F025 Schedule B (Production Royalties) royalties, lease payments, etc. Attach a copy of Per NRS 362.105, royalty payments are defined IRS Form 1099 for each royalty recipient, if as a portion of the proceeds from mineral applicable. extraction which is paid for the privilege of extracting the mineral. SPECIFIC INSTRUCTIONS LGS-F025 Schedule C (Capital Asset Royalty does not include the following: Additions) Rents or other compensatory payments which are Carefully read the general instructions for the fixed and certain in amount and payable Statement (LGS-F025, Schedules, and periodically over the duration of the lease Supporting Documentation) in addition to these regardless of the extent of extractions; or specific instructions for Schedule C, Capital Asset Minimum royalties covering periods when no Additions. mineral is extracted if the payments are fixed and Schedule C is used to report assets that were certain in amount and payable on a regular acquired during 2043. periodic basis. Per NAC 362.030(3), for Net Proceeds of Per NRS 362.010(2), mineral includes oil, gas, Minerals Tax, the costs of each asset added on and other hydrocarbons, but does not include Schedule C must be the complete cost to the sand, gravel or water, except hot water or steam taxpayer, and must include all delivery, taxes, in an operation extracting geothermal resources and installation charges. for profit. For purposes of the Net Proceeds of Mines Tax Lines 1 through 20: Royalties Paid assets acquired are categorized into four classes Complete Columns A, B, C, and D with the as follows: following information for the royalty recipients. Leasehold Improvements or Buildings 20-year Name Address straight-line method: Per NAC 362.040(1), City, State, Zip Phone Number leasehold improvements and buildings must be depreciated over a 20-year period using the Complete Column E with the dollar amount of the straight-line method. This category of property is payment made to the royalty recipient for referred to as Class A property. production during 2024. Fixed Machinery and Equipment 20-year Complete Column F with the date the dollar straight-line method: Per NAC 362.040(2), fixed amount of the payment made to the royalty machinery and equipment must be depreciated recipient was actually paid during 2043. over a 20-year period using the straight-line Complete Line 21 with a total of all production method. This category of property is referred to royalties paid that were entered in Column E. as Class B property. Enter the total amount on Line 58 of the Gross Mobile Machinery and Equipment 10-year Yield, Deductions, Net Proceeds section. straight-line method: Per NAC 362.040(3), mobile machinery and equipment must be Do NOT include any amount(s) paid for non- Page 30 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) depreciated over a 10-year period using the 362.030(4)(b), the cost of the construction of an straight-line method. This category of property is asset is included when referred to as Class C property. construction is completed. Automobiles and Light Service Vehicles 5-year The total additions in all Classes in Column C of straight-line method: Per NAC 362.040(4), Schedule C are reported on Schedule E - automobiles and light service vehicles must be Statement of Depreciation Costs Column B. If depreciated over a 5-year period using the submitting electronically, the amounts entered on straight-line method. This category of property is Schedule C should automatically carry forward to referred to as Class D property. Schedule E. If filing on paper, carry the totals for each class of property on Schedule C to Schedule In addition, per NAC 362.040(5) an integrated E, Column B. processing assembly must be depreciated over a 20-year period using the straight-line method and SPECIFIC INSTRUCTIONS included in either Class A or Class B as LGS-F025 Schedule D (Capital Asset appropriate. Subsequent additions to the unit Deletions) must also be reported and depreciated over a 20- year period using the straight-line method. Carefully read the general instructions for the Statement (LGS-F025, Schedules, and For each property class complete the following Supporting Documentation) in addition to these columns with the appropriate information as specific instructions for Schedule D, Capital Asset requested or attach a schedule with substantially Deletions. the same information. If attaching a schedule Schedule D is used to report two types of enter the appropriate totals into Schedule C. deletions from the list of mine assets used to Column A: In the column for Description, input a calculate the depreciation deduction for Net brief description of the capital asset. Proceeds of Minerals Tax purposes: • Assets that were disposed of during 2024 • Assets that were fully depreciated in Column B: In the column for Date Originally prior years and therefore, are deleted for Acquired, per NAC 362.030(4)(b), “the date on purposes of calculating depreciation which the construction of the asset was deductions in 2024 completed, or the asset was acquired” should be Per NAC 362.040(6), used for this field. The field is formatted as a date in the excel worksheet. Input the information as a “If any property is disposed of before the end of the depreciation period, the remaining amount of date if filing electronically. If filing on paper, allowable depreciation, if the property had input the date so the asset can be identified. remained in use, may be reported in total as an Column C: In the column for the Original additional expense of depreciation for the Acquisition Cost/Cost Installed, per NAC reporting period. The amount of depreciation 362.030(3) enter the “complete cost to the must be reduced by the amount of any taxpayer, and … include all delivery, taxes and consideration received for the property from sale, installation charges.” In addition, per NAC insurance recovery, trade-in or any other reimbursement, but not below zero.” Page 31 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) Do not include any assets that have been depreciated over a 10-year period using the transferred to another mining facility controlled straight-line method. This category of property is by the operator. Those assets are reported on referred to as Class C property. Schedule D-1 Capital Asset Transfers OUT. Automobiles and Light Service Vehicles 5-year Similarly, do not include any sets that have been straight-line method: Per NAC 362.040(4), transferred in from another mining facility automobiles and light service vehicles must be controlled by the operator. Those assets are depreciated over a 5-year period using the reported on Schedule C-1 Capital Asset Transfers straight-line method. This category of property is IN. Transfers are not considered “Deletions” or referred to as Class D property. “Additions.” In addition, per NAC 362.040(5) an integrated Additional schedules or supporting processing assembly must be depreciated over a documentation may be submitted, such as 20-year period using the straight-line method and existing asset lists or listings from the operator’s included in either Class A or Class B as computer system that contain substantially the appropriate. Subsequent additions to the unit same information. Enter totals from other must also be reported and depreciated over a 20- schedules in the various columns of Schedule D year period using the straight-line method. for the totals to carry forward to the Schedule E and ultimately to the Gross Yield, Deductions, For each property class complete the following Net Proceeds section. If you need to refer to other columns with the appropriate information as schedules, put “See attached” in the description requested or attach a schedule with substantially column and transfer the appropriate totals to each the same information. If attaching a schedule class in Columns D, E, and F. enter the appropriate totals into Schedule D. For purposes of the Net Proceeds of Mines Tax Column A: In the column for Description, input a assets acquired are categorized into four classes brief description of the capital asset. The as follows: description should match the existing description on the asset lists. The purpose of the description Leasehold Improvements or Buildings 20-year is to identify the capital asset on existing straight-line method: Per NAC 362.040(1), schedules so the deletion can be recorded. leasehold improvements and buildings must be depreciated over a 20-year period using the Column B: In the column for Date Originally straight-line method. This category of property is Acquired enter the original acquisition date referred to as Class A property. previously reported. For example, if the acquisition date on existing schedules is “07-09- Fixed Machinery and Equipment 20-year 2009” input this date in Column B. The purpose straight-line method: Per NAC 362.040(2), fixed of the date is to identify the capital asset on machinery and equipment must be depreciated existing schedules so the deletion can be over a 20-year period using the straight-line recorded. The field is formatted as a date in the method. This category of property is referred to excel worksheet. Input the information as a date as Class B property. if filing electronically. If filing on paper, input the Mobile Machinery and Equipment 10-year date so the asset can be identified on existing straight-line method: Per NAC 362.040(3), schedules. In some cases, the prior identifying mobile machinery and equipment must be date is only a year. If so, input January 1 of the Page 32 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) indicated year. 20,2013, the depreciation taken in prior years should be $8,000. ($2,000 each year for four Column C: In the column for deletion date, the years in 2013, 2014, 2015, and 2016). entries distinguish between (1) assets that were actually disposed of during the year versus (2) In the case of assets included on Schedule D as assets that are deleted from the assets lists deletions because the asset was fully depreciated because they were fully depreciated in prior years in prior years, the amount of depreciation taken and therefore no longer eligible for depreciation in prior years should equal the original cost. When deductions. If the asset was actually disposed of, the totals are transferred to Schedule E, the end input the disposal date. If the asset was fully result will be that no depreciation is deducted in depreciated in prior years but still owned, leave 2024 for the asset. the deletion date blank. Column F: In the Column for Consideration for For example, if you have a Mobile Equipment Sale, Trade-in, Insurance, etc. enter all funds asset (Class C 10-year life) asset acquired on received during the year. Per NAC 362.040(6), September 12, 2008, and the asset was sold on include the amount of any consideration received July 22, 2021, include the asset on Schedule D for the property from sale, insurance recovery, with a deletion date of “07-22-19” to designate trade-in or any other reimbursement. In the same that the asset was no longer owned on December example above for Column E, when the Rock 31, 2024. Crusher was disposed, the company received $10,000 for the sale of the Rock Crusher. For this For example, if you have a light service vehicle line item, $10,000 should be input in Column F. (Class D, five-year life) acquired on July 7, 2011 and you still had the vehicle on December 31, If the asset is included on the Schedule D as a 2021, include the vehicle on Schedule D with a deletion due to the item being fully depreciated in blank in the deletion date field because the prior years, input a zero or leave Column F blank vehicle was fully depreciated in prior years (20% for that line item. Do not put any negative in 2013, 20% in 2014, 20% in 2015, 20% in 2016, amounts in Column F. and 20% in 2017). Column G: In the column for Remaining Value Column D: In the column for the Original calculate Column D less Column E less Column Acquisition Cost/Cost Installed put the amount F for each line item. The amount in Column G that was included on Schedule C - Statement of cannot be below zero. additions to Capitalized Property when acquired. The total deletions in all Classes in Column D of The amount should match the amount on existing Schedule D are reported on Schedule E - asset lists. The amount will also help to identify Statement of Depreciation Costs Column D. If the capital asset on existing schedules or lists so submitting electronically, the amounts entered on the deletion can be recorded. Schedule D should automatically carry forward to Column E: In the column for the Depreciation Schedule E. If filing on paper, carry the totals for taken in Prior Years put the amount of each class of property on Schedule D to Schedule deprecation taken on prior Net Proceeds of E, Column D. Minerals Tax Statements. For example, if you The Remaining Value in all Classes in Column G have a Rock Crusher, Class C (10 year) capital of Schedule D is reported on Schedule E - Line 3. asset that was acquired for $20,000 on July If submitting electronically, the amounts entered Page 33 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) in Column G should automatically carry forward Nevada mine name. If the asset was transferred in to Schedule E, Line 3. If filing on paper, carry the from outside Nevada, enter “From Out of State” total of all items in Column G to Schedule E, Line into this field. 3. Column B: Enter a complete description of the SPECIFIC INSTRUCTIONS capital asset transferred in during 2024. When transferred in from another Nevada mine, the LGS-F025 Schedule C-1 (Capital Asset description should match the existing description Transfers IN) on the asset lists. Be sure to place the asset in the Carefully read the general instructions for the proper Class on the schedule. Statement (LGS-F025, Schedules, and Column C: Enter the date the capital asset was Supporting Documentation) in addition to these originally acquired. When transferred in from specific instructions for Schedule C-1, Capital another Nevada mine, the date should match the Asset Transfers IN. Also carefully read the existing date on the asset lists. instructions for Schedules C and D for descriptions of asset classes. Column D: Enter the original acquisition cost/cost installed of the asset. When transferred This schedule is for reporting assets that have in from another Nevada mine, the cost should been transferred in from another mining facility match the existing cost on the asset lists. The for service during 2024. original cost does not change upon transfer. Do not include on Schedule C-1 any assets that The total Transfers In for all Classes in Column have been acquired during the year. Those assets D of Schedule C-1 is carried forward to Schedule are reported on Schedule C Capital Asset E Column C. Additions. The assets should be separately reported SPECIFIC INSTRUCTIONS according to the class of property. LGS-F025 Schedule D-1 (Capital Asset Transfers OUT) For each property class complete the following columns with the appropriate information as Carefully read the general instructions for the requested or attach a schedule with substantially Statement (LGS-F025, Schedules, and the same information. If attaching a schedule Supporting Documentation) in addition to these enter the appropriate totals into Schedule C-1. In specific instructions for Schedule D-1, Capital the excel workbook, the total amounts are Asset Transfers OUT. Also carefully read the automatically carried to Schedule E. Therefore, if instructions for Schedules C and D for submitting electronically, appropriate totals must descriptions of asset classes. be entered on Schedule C-1 to assure proper This schedule is for reporting assets that were amounts are included on Schedule E. If included on the prior year asset list for this submitting on paper, enter appropriate totals from property and were transferred out to another attached schedules on Schedule C-1. mining facility during 2024. Column A: Enter the name of the mine from Do not include on Schedule D-1 any assets that which the capital asset was transferred. If the were sold or disposed of during 2024 or assets asset was transferred from another mine in that were fully depreciated in prior years. Those Nevada controlled by the Operator, enter the Page 34 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) assets are reported on Schedule D - Capital Asset LGS-F025 Schedule E (Depreciation Mine Deletions. Assets Only) The assets should be separately reported This schedule is the summary of the capital asset according to the class of property. activity for the year and also documents the calculation of the depreciation per NRS For each property class complete the following 362.120(3)(f) and NAC 362.040. The form columns with the appropriate information as includes the following: requested or attach a schedule with substantially the same information. If attaching a schedule, Column on Information Source Schedule input the appropriate totals from the attached Schedule E schedule into the Schedule D-1. In the excel workbook, the total amounts on Schedule D-1 are Column A Assets from the From Prior Year automatically carried to Schedule E. Therefore, if prior year Schedule E submitting electronically, appropriate totals must be input or linked on Schedule D-1 to assure the Column B Additions Schedule C proper amounts are included on Schedule E. If submitting on paper, enter the appropriate totals Column C Transfers IN Schedule C-1 from attached schedules on Schedule D-1. Column A: Enter the name of the mine to which Column D Disposals Schedule D the capital asset was transferred. If the asset was transferred to another mine in Nevada controlled Column E Transfers OUT Schedule D-1 by the Operator, enter the Nevada Mine Name. If the asset was transferred out of Nevada, enter Column F: Amounts in this column represent the “Out of Nevada” in this field. Total Acquisition Cost of Mining Assets eligible for depreciation in 2024. The total includes assets Column B: Enter a complete description of the from the prior year, plus additions for the current capital asset transferred out during 2024. The year, plus transfers-in from other mines, less description should match the existing description disposals and less transfers out to other mines. on the asset lists. Be sure to place the asset in the The amounts in Column F represent the cost basis proper Class on the schedule. of assets eligible for depreciation in 2024 Column C: Enter the date the capital asset was pursuant to NRS 362.120(3)(f) as further originally acquired. The date should match the described in NAC 362.040. existing date on the asset lists. Column G: This column contains the Column D: Enter the original acquisition Depreciation percentages for the various cost/cost installed for the asset. NAC 362.030(3). categories of assets per NAC 360.040 used to The cost should match the existing cost on the calculate 2024 depreciation. asset lists. Column H: This column is used to calculate the The total Transfers Out for all Classes in Column claimed depreciation for the current year. The D of Schedule D-1 should be carried to Schedule calculation is the Total Acquisition Cost E Column E. multiplied by the depreciation percentage for the appropriate class. The total is the claimed SPECIFIC INSTRUCTIONS Page 35 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) depreciation, before additional depreciation from Taxpayer or Principal for tax matters. The Agent asset disposals, for 2024. Authorization Form is similar to a Power of Attorney. The Principal or Taxpayer may be Line 1: Total each column referred to in other ways, depending on the type of Line 2: The total of the claimed depreciation report of statement. For example, for Net (Column H), before additional depreciation from Proceeds of Minerals Tax reporting, the taxpayer asset disposals, is carried to this line. may be referred to as "Operator" or "Royalty Line 3: The total additional depreciated claimed Recipient" and for property tax declarations, the from 2024 asset disposals from Schedule D, taxpayer may be referred to as "Declarant." Column F is carried to this line. The Agent Authorization form may be submitted Line 4: This is the total 2024 claimed with various types of returns, declarations, or depreciation which is calculated by adding Line 2 reports, including but not limited to the and Line 3. Carry the amount on Line 4 forward following: to The Gross Yield, Deductions, Net Proceeds • Form LGS-F024 LGSCA - Geothermal Section Line 60. The totals from the above Operator Statement of Gross Yield and schedules are placed in the appropriate columns Claimed Net Proceeds on the Depreciation Summary section of the • Form LGS-F025 LGSCA - Operator Schedule E and totaled in column F. Statement of Gross Yield and Claimed SPECIFIC INSTRUCTIONS Net Proceeds • Form LGS-F026 LGSCA - Statement of LGS-F025 Schedule O (Other Deductions) Royalties Received Schedule O may be used to provide supporting • Form LGS-F027 LGSCA - Estimated documentation for an item on the Statement. Annual Gross Yield and Net Proceeds Schedule O is optional, and taxpayer prepared • Real and Personal Property Affidavit supporting documentation may be included in The Agent Authorization form may also be lieu of Schedule O. submitted separately from a particular form. If the Agent Authorization form is submitted Schedule O may be completed multiple times and separately, submit the form to the following relate to various line items. Enter the cross address: reference to the Statement in the Field “Detail for Nevada Department of Taxation Line # ” of each. Make additional Local Government Services Division copies (worksheets in excel) as needed. 3850 Arrowhead Dr., 2nd Floor Carson City, NV 89706 Call the Department if you have any issues with using Schedule O. The electronic version of the Agent Authorization form is formatted in Microsoft Excel 2010. The SPECIFIC INSTRUCTIONS electronic version is protected with certain cells LGS-F025 Schedule P (Agent Authorization) unlocked so that the form can be filled in electronically. Coordinate with the appropriate The Agent Authorization form is used to Department employee regarding electronic designate an Agent to act on behalf of the signature and submission, if possible. Page 36 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) Tax Category: List the type of tax for which authorization is provided. Common tax categories are "Net Proceeds of Minerals Tax" and "Real and Personal Property Tax." Period(s): List the years or other periods for which the authorization is provided. For example, if the Tax Category is "Net Proceeds of Minerals Tax" the associated period might be "Production Year 2021 = Tax Year 2021-21" or possibly multiple years such as "2016, 2017 and 2021." Property Identification Number: List the Property Identification Number (PIN), if applicable, assigned to the property by the Department. The PIN is listed on the billing or may be obtained from the Department. Property or Mine Name: List the name by which the property or mine is generally known. Examples are "Ajax Mine" or "ABC Toll Ore" or "XYZ Geothermal Operation." County: List the county where the mine or property is located. Other Identifier: List any other identifier that may be helpful to determine the exact tax cases to which the authorization applies. This field may be left blank if the identification is clear from the other information provided. Complete contact information. Page 37 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) Appendix A – Excerpts from Nevada Revised Statutes (NRS) Chapter 362 CHAPTER 362 - TAXES ON PATENTED MINES AND PROCEEDS OF MINERALS GENERAL PROVISIONS NRS 362.010 Definitions. ASSESSMENT OF PATENTED MINES AND MINING CLAIMS NRS 362.030 County assessor to assess surface of patented mines and mining claims; exceptions. NRS 362.040 Exclusion of assessment from roll. NRS 362.050 Affidavit of labor: Requirement for exemption of surface of patented mine or mining claim from taxation; form and contents. NRS 362.060 Who may make affidavit. NRS 362.070 Contiguous patented mines or mining claims: Performance of work on one mine. NRS 362.090 One affidavit may be recorded for labor on several patented mines or mining claims. NRS 362.095 Method of taxation of patented mine or mining claim used for purpose other than mining or agriculture. ASSESSMENT AND TAXATION OF NET PROCEEDS OF MINERALS NRS 362.100 Duties of Department. NRS 362.105 “Royalty” defined. NRS 362.110 Annual statement of gross yield and claimed net proceeds; annual list of lessees. NRS 362.115 Annual statement of estimated gross yield, net proceeds and royalties; use of statement. NRS 362.120 Computation of gross yield and net proceeds; required reports. NRS 362.130 Preparation and mailing of certificate of amount of net proceeds and tax due; due date of tax; overpayments. NRS 362.135 Appeal of certification to State Board of Equalization; payment of tax pending determination of appeal. NRS 362.140 Rate of tax upon net proceeds. NRS 362.150 Liens for taxes on proceeds of minerals. NRS 362.160 When tax becomes delinquent; collection of delinquency, penalty and interest; appeal of imposition of penalty and interest. NRS 362.170 Appropriation to county of amount of tax, penalties and interest attributable to extractive operations in county; apportionment by county treasurer; deposit of certain amount of tax, penalties and interest to credit of State Education Fund; Department to report amount received as tax upon net proceeds of geothermal resources. Page 38 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) NRS 362.171 Establishment and use of county fund for mitigation; certain school districts authorized to use money apportioned to school district to retire bonds or other obligations of school district. NRS 362.175 Procedure for removal of amount of tax and name from records of Department when tax impossible or impractical to collect. NRS 362.180 Burden of proof on taxpayer to show certification by Department to be unjust, improper or invalid. NRS 362.200 Powers of Department: Examination of records; hearings. NRS 362.230 Penalty for failure to file statements. NRS 362.240 Penalty for false statements. _________ GENERAL PROVISIONS NRS 362.010 Definitions. As used in this chapter, unless the context otherwise requires:

1. “Mine” means an excavation in the earth from which ores, coal or other mineral substances are extracted, or a subterranean natural deposit of minerals located and identified as such by the staking of a claim or other method recognized by law. The term includes a well drilled to extract minerals.

2. “Mineral” includes oil, gas and other hydrocarbons, but does not include sand, gravel or water, except hot water or steam in an operation extracting geothermal resources for profit.

3. “Patented mine or mining claim” means each separate, whole or fractional patented mining location, whether such whole or fractional mining location is covered by an independent patent or is included under a single patent with other mining locations. [1:206:1915; 1919 RL p. 3009; NCL § 6592]—(NRS A 1975, 317; 1989, 33; 2013, 3120) ASSESSMENT OF PATENTED MINES AND MINING CLAIMS NRS 362.030 County assessor to assess surface of patented mines and mining claims; exceptions. The county assessor shall assess the surface of each patented mine and mining claim in the county for which an affidavit was not filed pursuant to NRS 362.050, 362.070 and 362.090 and return the assessment as required by law. [3:206:1915; 1919 RL p. 3009; NCL § 6594]—(NRS A 1989, 33) NRS 362.040 Exclusion of assessment from roll. Upon receipt of an affidavit from the county recorder pursuant to NRS 362.050 stating that at least $100 in development work has been actually performed upon the patented mine or mining claim during the federal mining assessment work period ending within the year before the fiscal year for which the assessment has been levied, the assessor shall exclude from the roll the assessment against the patented mine or mining claim named in the affidavit. [4:206:1915; A 1933, 233; 1931 NCL § 6595]—(NRS A 1989, 33, 1831; 1991, 2105; 2003, 2772) NRS 362.050 Affidavit of labor: Requirement for exemption of surface of patented mine or mining claim from taxation; form and contents.

1. To obtain the exemption of the surface of a patented mine or mining claim from taxation ad valorem, pursuant to Section 5 of Article 10 of the Constitution of this state, the owner must record an Page 39 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) affidavit with the office of the county recorder for the county in which the mine is located on or before December 30 covering work done during the 12 months next preceding 12 a.m. on September 1 of that year. The exemption then applies to the taxes for the fiscal year beginning on July 1 following the filing of the affidavit. Upon receipt of such an affidavit, the county recorder shall transmit a copy of the affidavit, without charge, to the county assessor.

2. The affidavit of labor must describe particularly the work performed, upon what portion of the mine or claim, and when and by whom done, and may be substantially in the following form: State of Nevada } }ss. County of................................... } ................................, being first duly sworn, deposes and says: That development work worth at least $100 was performed upon the ............................... patented mine or mining claim, situated in the ........................................ Mining District, County of ..........................................., State of Nevada, during the federal mining assessment work period ending within the year ....... . The work was done at the expense of .............................., the owner (or one of the owners) of the patented mine or mining claim, for the purpose of relieving it from the tax assessment. It was performed by ................................, at about ................ feet in a ................ direction from the monument of location, and was done between the ........ day of the month of ........ of the year ......., and the .......... day of the month of .......... of the year ......., and consisted of the following work: ....................................................................................................................................................... ....................................................................................................................................................... ............................................................... (Signature) Subscribed and sworn to before me this ...... day of the month of ...... of the year ...... ............................................................................... Notary Public (or other person authorized to administer oaths) [7:206:1915; A 1933, 233; 1931 NCL § 6598]—(NRS A 1975, 317; 1985, 1221, 1503; 1989, 33; 1991, 2105; 2001, 52; 2003, 2773) NRS 362.060 Who may make affidavit. The affidavit may be made by the owner or agent of the owner, or the person performing the labor, or by any person familiar with the facts, on behalf of the owner. [8:206:1915; 1919 RL p. 3010; NCL § 6599] NRS 362.070 Contiguous patented mines or mining claims: Performance of work on one mine. The owner of two or more contiguous patented mines or mining claims may perform all the work required by Section 5 of Article 10 of the Constitution of this state upon one mine or claim only; but the aggregate amount of such work must be equal to $100 for each of the contiguous patented mines or claims. [9:206:1915; 1919 RL p. 3010; NCL § 6600]—(NRS A 1989, 34) Page 40 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) NRS 362.090 One affidavit may be recorded for labor on several patented mines or mining claims. A single affidavit may be recorded for the labor on several patented mines or mining claims belonging to the same person or held in common ownership, provided all are located in the same county. [11:206:1915; 1919 RL p. 3011; NCL § 6602]—(NRS A 1989, 34, 1832) NRS 362.095 Method of taxation of patented mine or mining claim used for purpose other than mining or agriculture.

1. Whenever any portion of a patented mine or mining claim is used by the patentee or a successor in interest for a purpose unrelated to mining or agriculture, the portion of such patented mine or mining claim so used shall cease to be a patented mine or mining claim or part thereof and shall be taxed as other real property is taxed.

2. For the purpose of this section, a dwelling placed upon a patented mine or mining claim to be occupied by the operator of such patented mine or mining claim or his or her agent is not a use unrelated to mining.

3. Whenever any patented mine or mining claim is taxed as real property, such taxation shall not affect the status of contiguous patented mines or mining claims. (Added to NRS by 1967, 839; A 1989, 34) ASSESSMENT AND TAXATION OF NET PROCEEDS OF MINERALS NRS 362.100 Duties of Department.

1. The Department shall: (a) Investigate and determine the net proceeds of all minerals extracted and certify them as provided in NRS 362.100 to 362.240, inclusive. (b) Appraise and assess all reduction, smelting and milling works, plants and facilities, whether or not associated with a mine, all drilling rigs, and all supplies, machinery, equipment, apparatus, facilities, buildings, structures and other improvements used in connection with any mining, drilling, reduction, smelting or milling operation as provided in chapter 361 of NRS. (c) Deposit all taxes, interest and penalties it receives pursuant to this chapter in the State Treasury for credit to the State General Fund. Each year after the distribution of all money due to the State of Nevada and each county pursuant to NRS 362.170, the State Controller shall transfer all taxes, interest and penalties collected pursuant to this chapter to the State Education Fund.

2. As used in this section, “net proceeds of all minerals extracted” includes the proceeds of all: (a) Operating mines; (b) Operating oil and gas wells; (c) Operations extracting geothermal resources for profit, except an operation which uses natural hot water to enhance the growth of animal or plant life; and (d) Operations extracting minerals from natural solutions. [Part 13:177:1917; 1919 RL p. 3202; NCL § 6554] + [1:77:1927; NCL § 6578]—(NRS A 1975, 1675; 1983, 2088; 1985, 1305; 1989, 34; 2013, 3121; 2021, 1282) NRS 362.105 “Royalty” defined. As used in NRS 362.100 to 362.240, inclusive, unless the context otherwise requires:

1. “Royalty” means a portion of the proceeds from extraction of a mineral which is paid for the privilege of extracting the mineral. Page 41 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025)

2. “Royalties” do not include: (a) Rents or other compensatory payments which are fixed and certain in amount and payable periodically over the duration of the lease regardless of the extent of extractions; or (b) Minimum royalties covering periods when no mineral is extracted if the payments are fixed and certain in amount and payable on a regular periodic basis. (Added to NRS by 1975, 135; A 1989, 35; 2013, 3143) NRS 362.110 Annual statement of gross yield and claimed net proceeds; annual list of lessees.

1. Every person extracting any mineral in this State or receiving any royalty: (a) Shall, on or before February 16 of each year, file with the Department a statement showing the gross yield and claimed net proceeds from each geographically separate operation where a mineral is extracted by that person during the calendar year immediately preceding the year in which the statement is filed. (b) May have up to 30 days after filing the statement required by paragraph (a) to file an amended statement.

2. The statement must: (a) Show the claimed deductions from the gross yield in the detail set forth in NRS 362.120. The deductions are limited to the costs incurred during the calendar year immediately preceding the year in which the statement is filed. (b) Be in the form prescribed by the Department. (c) Be verified by the manager, superintendent, secretary or treasurer of the corporation, or by the owner of the operation, or, if the owner is a natural person, by someone authorized in his or her behalf.

3. Each recipient of a royalty as described in subsection 1 shall annually file with the Department a list showing each of the lessees responsible for taxes due in connection with the operation or operations included in the statement filed pursuant to subsections 1 and 2. [2:77:1927; A 1929, 120; NCL § 6579]—(NRS A 1971, 562; 1973, 1293; 1975, 1675; 1979, 819; 1983, 878; 1989, 35; 1995, 40; 1999, 732; 2001, 661; 2005, 296; 2008, 25th Special Session, 15; 2011, 2896; 2013, 3122, 3425; 2015, 2953) NRS 362.115 Annual statement of estimated gross yield, net proceeds and royalties; use of statement.

1. In addition to the statement required by subsection 1 of NRS 362.110, each person extracting any mineral in this State shall, on or before March 1 of each year, file with the Department a statement showing the estimated gross yield and estimated net proceeds from each such operation for the entire current calendar year and an estimate of all royalties that will be paid during the current calendar year.

2. The Department shall: (a) Use the statement filed pursuant to subsection 1 only to prepare estimates for use by local governments in the preparation of their budgets; and (b) Submit those estimates to the local governments on or before March 15 of each year. (Added to NRS by 1987, 2141; A 1989, 36, 1536; 1993, 1360; 1995, 40; 1999, 733; 2005, 308; 2008, 25th Special Session, 15; 2011, 2896; 2013, 3123, 3425; 2015, 2953; 2020, 31st Special Session, 26) NRS 362.120 Computation of gross yield and net proceeds; required reports. Page 42 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025)

1. The Department shall, from the statement filed pursuant to NRS 362.110 and from all obtainable data, evidence and reports, compute in dollars and cents the gross yield and net proceeds of the calendar year immediately preceding the year in which the statement is filed.

2. The gross yield must include the value of any mineral extracted which was: (a) Sold; (b) Exchanged for any thing or service; (c) Removed from the State in a form ready for use or sale; or (d) Used in a manufacturing process or in providing a service, Ê during that period.

3. The net proceeds are ascertained and determined by subtracting from the gross yield the following deductions for costs incurred during that period, and none other: (a) The actual cost of extracting the mineral, which is limited to direct costs for activities performed in the State of Nevada. (b) The actual cost of transporting the mineral to the place or places of reduction, refining and sale. (c) The actual cost of reduction, refining and sale. (d) The actual cost of delivering the mineral. (e) The actual cost of maintenance and repairs of: (1) All machinery, equipment, apparatus and facilities used in the mine. (2) All milling, refining, smelting and reduction works, plants and facilities. (3) All facilities and equipment for transportation except those that are under the jurisdiction of the Public Utilities Commission of Nevada or the Nevada Transportation Authority. (f) Depreciation of the original capitalized cost of the machinery, equipment, apparatus, works, plants and facilities mentioned in paragraph (e). The annual depreciation charge consists of amortization of the original cost in a manner prescribed by regulation of the Nevada Tax Commission. The probable life of the property represented by the original cost must be considered in computing the depreciation charge. (g) All money expended for premiums for industrial insurance, and the actual cost of hospital and medical attention and accident benefits and group insurance for employees actually engaged in mining operations within the State of Nevada. (h) All money paid as contributions or payments under the unemployment compensation law of the State of Nevada, as contained in chapter 612 of NRS, all money paid as contributions under the Social Security Act of the Federal Government, and all money paid to either the State of Nevada or the Federal Government under any amendment to either or both of the statutes mentioned in this paragraph. (i) The costs of employee travel which occurs within the State of Nevada and which is directly related to mining operations within the State of Nevada. (j) The costs of Nevada-based corporate services relating to paragraphs (e) to (i), inclusive. (k) The actual cost of developmental work in or about the mine or upon a group of mines when operated as a unit, which is limited to work that is necessary to the operation of the mine or group of mines. (l) The costs of reclamation work in the years the reclamation work occurred, including, without limitation, costs associated with the remediation of a site. (m) All money paid as royalties by a lessee or sublessee of a mine or well, or by both, in determining the net proceeds of the lessee or sublessee, or both.

4. Royalties deducted by a lessee or sublessee constitute part of the net proceeds of the minerals extracted, upon which a tax must be levied against the person to whom the royalty has been paid. Page 43 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025)

5. Every person acquiring property in the State of Nevada to engage in the extraction of minerals and who incurs any of the expenses mentioned in subsection 3 shall report those expenses and the recipient of any royalty to the Department on forms provided by the Department. The Department shall report annually to the Mining Oversight and Accountability Commission the expenses and deductions of each mining operation in the State of Nevada.

6. The several deductions mentioned in subsection 3 do not include any expenditures for salaries, or any portion of salaries, of any person not actually engaged in: (a) The working of the mine; (b) The operating of the mill, smelter or reduction works; (c) The operating of the facilities or equipment for transportation; (d) Superintending the management of any of those operations; (e) The State of Nevada, in office, clerical or engineering work necessary or proper in connection with any of those operations; or (f) Nevada-based corporate services.

7. The following expenses are specifically excluded from any deductions from the gross yield: (a) The costs of employee housing. (b) Except as otherwise provided in paragraph (i) of subsection 3, the costs of employee travel. (c) The costs of severing the employment of any employees. (d) Any dues paid to a third-party organization or trade association to promote or advertise a product. (e) Expenses relating to governmental relations or to compensate a natural person or entity to influence legislative decisions. (f) The costs of mineral exploration. (g) Any federal, state or local taxes.

8. As used in this section, “Nevada-based corporate services” means corporate services which are performed in the State of Nevada from an office located in this State and which directly support mining operations in this State, including, without limitation, accounting functions relating to mining operations at a mine site in this State such as payroll, accounts payable, production reporting, cost reporting, state and local tax reporting and recordkeeping concerning property. [3:77:1927; A 1937, 139; 1939, 256; 1931 NCL § 6580]—(NRS A 1971, 926; 1973, 1294; 1975, 1676; 1979, 820; 1983, 254; 1989, 36, 1533; 1991, 146; 1997, 1990; 2001, 661; 2011, 2694, 2696; 2013, 3126, 3426, 3819; 2015, 2954) NRS 362.130 Preparation and mailing of certificate of amount of net proceeds and tax due; due date of tax; overpayments.

1. When the Department determines from the annual statement filed pursuant to NRS 362.110 the net proceeds of any minerals extracted, it shall prepare its certificate of the amount of the net proceeds and the tax due and send a copy of the certificate to the owner of the mine, operator of the mine or recipient of the royalty, as the case may be.

2. The certificate must be prepared and mailed not later than: (a) April 20 immediately following the month of February during which the annual statement was filed; or (b) April 30 immediately thereafter if an amended statement is filed in a timely manner. Page 44 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025)

3. The tax due as indicated in the certificate must be paid on or before May 10 of the year in which the certificate is received.

4. If an overpayment was made, the overpayment must be credited toward the payment due on May 10 of the next calendar year. If the certificate shows a net loss for the year covered by the certificate or an amount of tax due for that year which is less than an overpayment made for the preceding year, the amount or remaining amount of the overpayment must, after being credited against any amount then due from the taxpayer in accordance with NRS 360.236, be refunded to the taxpayer within 30 days after the certification was sent to the taxpayer. [4:77:1927; NCL § 6581]—(NRS A 1969, 561; 1973, 1295; 1975, 1677; 1979, 822; 1981, 809; 1987, 168, 2141; 1989, 38, 1537; 1991, 653; 1993, 1361; 1995, 41; 1999, 733; 2001, 663; 2005, 297; 2008, 25th Special Session, 16; 2009, 65; 2011, 2896; 2013, 3128, 3425; 2015, 2953; 2020, 31st Special Session, 26) NRS 362.135 Appeal of certification to State Board of Equalization; payment of tax pending determination of appeal.

1. Any person dissatisfied by any certification of the Department may appeal from that determination to the State Board of Equalization. The appeal must be filed within 30 days after the certification is sent to the taxpayer.

2. Pending determination of the appeal, the person certified as owing the tax shall pay it on or before the date due, and the tax is considered to be paid under protest. (Added to NRS by 1977, 1052; A 1987, 169; 1989, 38; 2013, 3129) NRS 362.140 Rate of tax upon net proceeds.

1. Except as otherwise provided in this section, the rate of tax upon the net proceeds of each geographically separate extractive operation depends upon the ratio of the net proceeds to the gross proceeds of that operation as a whole, according to the following table: Net Proceeds as Percentage Rate of Tax as Percentage of Gross Proceeds of Net Proceeds Less than 10............................................................................................ 2.00 10 or more but less than 18.................................................................. 2.50 18 or more but less than 26.................................................................. 3.00 26 or more but less than 34.................................................................. 3.50 34 or more but less than 42.................................................................. 4.00 42 or more but less than 50.................................................................. 4.50 50 or more............................................................................................... 5.00

2. If the combined rate of tax ad valorem which would be assessed but for the provisions of Section 5 of Article 10 of the Constitution of this state, including any rate levied by the State of Nevada, upon property at the situs of the operation is more than 2 percent, the minimum rate of tax under this section equals that rate of tax ad valorem.

3. The rate of tax upon royalties is 5 percent.

4. The rate of tax upon the net proceeds of a geothermal operation taxable pursuant to NRS 362.100 is the combined rate of tax ad valorem applicable to the property at the situs of the operation. Page 45 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025)

5. The rate of tax upon an operation for which the net proceeds in a calendar year exceed $4,000,000 is 5 percent. [Part 75:99:1891; C § 1147; RL § 3687; NCL § 6481]—(NRS A 1989, 38, 1537; 2013, 3129) NRS 362.150 Liens for taxes on proceeds of minerals. Every tax levied under the authority or provisions of NRS 362.100 to 362.240, inclusive, on the proceeds of minerals extracted is hereby made a lien on the mines from which minerals are extracted for sale or reduction, and also on all machinery, fixtures, equipment and stockpiles of the taxpayer located at the mine site or elsewhere in the State. The lien attaches on the 1st day of January of each year, for the calendar year commencing on that day and may not be removed or satisfied until the taxes are all paid, or the title to those mines has vested absolutely in a purchaser under a sale for those taxes. [76:99:1891; C § 1148; RL § 3688; NCL § 6482]—(NRS A 1979, 822; 1989, 39; 2013, 3130) NRS 362.160 When tax becomes delinquent; collection of delinquency, penalty and interest; appeal of imposition of penalty and interest.

1. Except as otherwise provided in NRS 360.232 and 360.320, if the amount of any tax required by NRS 362.100 to 362.240, inclusive, is not paid within 10 days after it is due, it is delinquent and must be collected as other delinquent taxes are collected by law, together with a penalty of 10 percent of the amount of the tax which is owed, as determined by the Department, in addition to the tax, plus interest at the rate of 1 percent per month, or fraction of a month, from the date the tax was due until the date of payment.

2. Any person extracting any mineral or receiving a royalty may appeal from the imposition of the penalty and interest to the Nevada Tax Commission by filing a notice of appeal in accordance with the requirements set forth in NRS 360.245. [5:77:1927; NCL § 6582]—(NRS A 1975, 1678; 1987, 169; 1989, 39; 1995, 42; 1999, 2490; 2013, 3130) NRS 362.170 Appropriation to county of amount of tax, penalties and interest attributable to extractive operations in county; apportionment by county treasurer; deposit of certain amount of tax, penalties and interest to credit of State Education Fund; Department to report amount received as tax upon net proceeds of geothermal resources.

1. There is hereby appropriated to each county the total of the amounts obtained by multiplying, for each extractive operation situated within the county, the net proceeds of that operation and any royalties paid by that operation, by the combined rate of tax ad valorem, excluding any rate levied by the State of Nevada and any rate levied for a county school district for any purpose other than capital projects or debt service for the county school district, for property at that site, plus a pro rata share of any penalties and interest collected by the Department for the late payment of taxes distributed to the county. The Department shall report to the State Controller on or before May 25 of each year the amount appropriated to each county, as calculated for each operation from the final statement made in February of that year for the preceding calendar year. The State Controller shall distribute all money due to a county on or before May 30 of each year.

2. The county treasurer shall apportion to each local government or other local entity an amount calculated by: Page 46 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) (a) Determining the total of the amounts obtained by multiplying, for each extractive operation situated within its jurisdiction, the net proceeds of that operation and any royalty payments paid by that operation, by the rate levied on behalf of that local government or other local entity, excluding any rate levied for a county school district for any purpose other than capital projects or debt service for the county school district; (b) Adding to the amount determined pursuant to paragraph (a) a pro rata share of any penalties and interest collected by the Department for the late payment of taxes distributed to that local government or local entity; and (c) Subtracting from the amount determined pursuant to paragraph (b) a commission of 5 percent, of which 3 percent must be deposited in the county general fund and 2 percent must be accounted for separately in the account for the acquisition and improvement of technology in the office of the county assessor created pursuant to NRS 250.085.

3. The amounts apportioned pursuant to subsection 2, including, without limitation, the amount retained by the county and excluding the percentage commission, must be applied to the uses for which each levy was authorized in the same proportion as the rate of each levy bears to the total rate.

4. The Department shall deposit to the credit of the State Education Fund the total of the amounts obtained by multiplying, for each extractive operation situated within a county, the net proceeds of that operation and any royalties paid by that operation, by the combined rate of tax ad valorem levied in that county for the county school district for any purpose other than capital projects or debt service for the county school district, plus a pro rata share of any penalties and interest collected by the Department for the late payment of taxes deposited to the credit of the State Education Fund.

5. The Department shall report to the State Controller on or before May 25 of each year the amount received as tax upon the net proceeds of geothermal resources which equals the product of those net proceeds multiplied by the rate of tax levied ad valorem by the State of Nevada. [Part 1:57:1885; BH § 2386; C § 1241; RL § 1581; NCL § 2062]—(NRS A 1959, 761; 1989, 39, 1538; 1995, 42; 1999, 735; 2001, 663; 2005, 2667; 2007, 1899; 2008, 25th Special Session, 16, 17; 2009, 1232; 2011, 91, 2896, 3531; 2013, 299, 3131, 3425; 2015, 2953; 2019, 4242; 2023, 3) NRS 362.171 Establishment and use of county fund for mitigation; certain school districts authorized to use money apportioned to school district to retire bonds or other obligations of school district.

1. Each county to which money is appropriated by subsection 1 of NRS 362.170 may set aside a percentage of that appropriation to establish a county fund for mitigation. Money from the fund may be appropriated by the board of county commissioners only to mitigate adverse effects upon the county, or the school district located in the county, which result from: (a) A decline in the revenue received by the county from the tax on the net proceeds of minerals during the 2 fiscal years immediately preceding the current fiscal year; or (b) The opening or closing of an extractive operation from the net proceeds of which revenue has been or is reasonably expected to be derived pursuant to this chapter.

2. A school district in a county whose population is less than 4,500 may, as the board of trustees of the school district determines is necessary, use a portion of the money apportioned to the school district pursuant to subsection 2 of NRS 362.170 to retire bonds issued by the school district or any other Page 47 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) outstanding obligations of the school district. Before authorizing the expenditure of money pursuant to this subsection, the board of trustees shall hold at least one public hearing on the matter. (Added to NRS by 1993, 2289; A 1999, 736; 2009, 297; 2011, 1222; 2013, 3132; 2019, 4243) NRS 362.175 Procedure for removal of amount of tax and name from records of Department when tax impossible or impractical to collect.

1. If at any time, in the opinion of the Executive Director, it becomes impossible or impractical to collect any tax certified on the proceeds of minerals extracted, the Executive Director may apply to the Nevada Tax Commission to have the amount of the tax and the name of the person against whom the tax is certified removed from the tax records of the Department.

2. If the Nevada Tax Commission approves the application, the Department may remove the name and amount from its tax records. (Added to NRS by 1960, 84; A 1975, 1678; 1989, 40; 2013, 3133) NRS 362.180 Burden of proof on taxpayer to show certification by Department to be unjust, improper or invalid. In any suit arising concerning the certification and taxation of the net proceeds of minerals extracted, the burden of proof is upon the taxpayer to show if the taxpayer so alleges or contends that the certification by the Department is unjust, improper or otherwise invalid. [Part 13:177:1917; 1919 RL p. 3202; NCL § 6554] + [6:77:1927; NCL § 6583]—(NRS A 1975, 1678; 1977, 1052; 1989, 40; 2013, 3133) NRS 362.200 Powers of Department: Examination of records; hearings.

1. The Department may examine the records of any person operating or receiving royalties from any extractive operation in this state. The records are subject to examination at all times by the Department or its authorized agents and must remain available for examination for a period of 4 years from the date of any entry therein.

2. If any person whose gross yield from an extractive operation as reported to the Department for any annual reporting period during the 4 years immediately preceding the examination was $100,000 or more keeps his or her books and records pertaining to that operation or royalties outside this state, the person shall pay an amount per day equal to the amount set by law for out-of-state travel for each day or fraction thereof during which an examiner is actually engaged in examining the books, plus the actual expenses of that examiner during the time he or she is absent from Carson City, Nevada, for the purpose of making the examination, but the time must not exceed 1 day going to and 1 day coming from the place of examination. No more than one examination may be charged against a person in any 1 fiscal year.

3. The Department may hold hearings and summon and subpoena witnesses to appear and testify upon any subject material to the determination of the net proceeds of minerals extracted. The hearings may be held at any place the Department designates, after not less than 10 days’ notice of the time and place of the hearing given in writing to the owner or operator of the mine. The owner or operator is entitled, on request made to the Executive Director, to the issuance of the Department’s subpoena requiring witnesses in behalf of the owner or operator to appear and testify at such hearing.

4. The failure of a witness to obey the subpoena of the Department subjects the witness to the same penalties prescribed by law for failure to obey a subpoena of a district court. [9:77:1927; NCL § 6586]—(NRS A 1975, 318, 1679; 1977, 1052; 1985, 1438; 1989, 40; 2013, 3133) NRS 362.230 Penalty for failure to file statements. Page 48 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025)

1. Every person extracting any mineral in this state, or receiving a royalty in connection therewith, who fails to file with the Department the statements provided for in NRS 362.100 to 362.240, inclusive, during the time and in the manner provided for in NRS 362.100 to 362.240, inclusive, shall pay a penalty of not more than $5,000. If any such person fails to file the statement, the Department may ascertain and certify the net proceeds of the minerals extracted or the value of the royalty from all data and information obtainable, and the amount of the tax due must be computed on the basis of the amount due so ascertained and certified.

2. The Executive Director shall determine the amount of the penalty. This penalty becomes a debt due the State of Nevada and, upon collection, must be deposited in the State Treasury to the credit of the State General Fund.

3. Any person extracting any mineral or receiving a royalty may appeal from the imposition of the penalty to the Nevada Tax Commission by filing a notice of appeal in accordance with the requirements set forth in NRS 360.245. [7:77:1927; NCL § 6584]—(NRS A 1971, 563; 1973, 1296; 1975, 135, 1679; 1989, 41; 1995, 43; 1999, 2491; 2013, 3134) NRS 362.240 Penalty for false statements. Any person who verifies under oath to the truthfulness of a statement required by NRS 362.100 to 362.240, inclusive, that is false in any material respect shall be liable to a penalty of not more than 15 percent of the tax as determined by the Executive Director after reasonable notice and hearing. [8:77:1927; NCL § 6585]—(NRS A 1975, 1680; 2013, 3134) Page 49 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) Appendix B – Excerpts from Nevada Administrative Code (NAC) Chapter 362 [NAC-362 Revised Date: 6-14] CHAPTER 362 - TAXES ON PATENTED MINES AND PROCEEDS OF MINERALS GENERAL PROVISIONS 362.001 Definitions. 362.005 “Department” defined. PROCEEDS OF MINERALS General Provisions 362.010 Determination of gross value of mineral products. 362.020 Separate report of royalties. 362.030 Annual statement of gross yield and claimed net proceeds: Form and contents. 362.035 Deductions: Interpretation of certain statutory terms. [Effective through December 31, 2015.] 362.035 Deductions: Interpretation of certain statutory terms. [Effective January 1, 2016.] 362.040 Deductions: Depreciation of capitalized costs. 362.050 Deductions: Operating costs. [Effective through December 31, 2015.] 362.050 Deductions: Operating costs. [Effective January 1, 2016.] 362.060 Deductions: Electric power. 362.070 Deductions: Loading and transportation costs. 362.081 Date of receipt of material mailed to Commission. 362.083 Annual statement of gross yield and claimed net proceeds: Failure to include all applicable information, documentation, reports and statements. 362.085 Annual statement of gross yield and claimed net proceeds: Penalty for failure to file. 362.087 Annual statement of gross yield and claimed net proceeds: Documentation of proper filing and waiver of penalty for failure to file. 362.090 Report of amount of net proceeds of minerals taxes plus pro rata penalties and interest; distribution. Deductions for Reclamation Costs 362.200 Definitions. 362.210 “Closure of a mine” defined. 362.250 “Reclamation” defined. 362.270 “Reclamation plan” defined. 362.280 “Reporting period” defined. 362.290 “Taxpayer” defined. 362.310 Allowable deduction. [Effective through December 31, 2015.] 362.310 Allowable deduction. [Effective January 1, 2016.] Page 50 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) Geothermal Resources 362.350 Definitions. 362.352 “Field” defined. 362.354 “Mining function” defined. 362.356 “Plant” defined. 362.358 “Processing” defined. 362.360 “Processing allowance” defined. 362.362 “Repowering” defined. 362.364 “Transaction” defined. 362.366 “Transportation allowance” defined. 362.368 Determination of gross yield. 362.370 Calculation of net proceeds. PATENTED MINES 362.410 Assessment; removal from secured roll for miscellaneous property. REVISER’S NOTE. The regulation of the Nevada Tax Commission filed with the Secretary of State on December 30, 2011 (LCB File No. R058-11), which makes various changes to this chapter on January 1, 2012, and January 1, 2014, contains the following provisions not included in NAC: “Sec. 16. Sections 1 to 6, inclusive, 9, 11, 12 and 15 of this regulation [creating NAC 362.001, 362.006, 362.007, 362.008 and 362.035, amending NAC 362.050, 362.200 and 362.310, and repealing NAC 362.220, 362.230, 362.240, 362.260, 362.300, 362.320 and 362.330 on January 1, 2012]: 1. Do not apply to or affect any determination of gross yield or net proceeds required pursuant to NRS 362.100 to 362.240, inclusive, for the calendar year 2011.

2. Apply for the purposes of estimating and determining gross yield and net proceeds pursuant to NRS 362.100 to 362.240, inclusive, for the calendar year 2012 and each calendar year thereafter. Sec. 17. Sections 10, 13 and 14 of this regulation [amending NAC 362.035, 362.050 and 362.310 on January 1, 2014]: 1. Do not apply to or affect any determination of gross yield or net proceeds required pursuant to NRS 362.100 to 362.240, inclusive, for the calendar year 2013.

2. Apply for the purposes of estimating and determining gross yield and net proceeds pursuant to NRS 362.100 to 362.240, inclusive, for the calendar year 2014 and each calendar year thereafter.” GENERAL PROVISIONS NAC 362.001 Definitions. (NRS 360.090) As used in this chapter, unless the context otherwise requires, the words and terms defined in NAC 362.005 to 362.008, inclusive, have the meanings ascribed to them in those sections. (Added to NAC by Tax Comm’n by R058-11, 12-30-2011, eff. 1-1-2012) Page 51 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) NAC 362.005 “Department” defined. (NRS 360.090) “Department” means the Department of Taxation. (Added to NAC by Tax Comm’n by R048-01, eff. 11-1-2001; A by R058-11, 12-30-2011, eff. 1-1-2012) NAC 362.006 “Developmental work” defined. (NRS 360.090)

1. Except as otherwise provided in subsection 2, “developmental work” means any activities performed on the property of a mine which outline the location of the mineral reserves of the mine or prepare the mineral reserves of the mine for production, including, without limitation, drilling, rock work and the construction of support systems to increase the mineral reserves of the mine.

2. The term does not include any mineral exploration. (Added to NAC by Tax Comm’n by R058-11, 12-30-2011, eff. 1-1-2012) NAC 362.007 “Mineral exploration” defined. (NRS 360.090) “Mineral exploration” means any activities relating to the search for mineral reserves which do not occur during the development or production stages of a mine, including drilling, sampling, assaying, metallurgical testing, engineering studies, studies of economic feasibility and procedures to obtain appropriate permits. (Added to NAC by Tax Comm’n by R058-11, 12-30-2011, eff. 1-1-2012) NAC 362.008 “Mineral reserves” defined. (NRS 360.090) “Mineral reserves” means the portion of a measured or indicated mineral resource that has been analytically determined to justify mining, taking into account, at the time of that determination, any mining, metallurgical, marketing, legal, environmental, social, economic and other conditions which apply to that determination. (Added to NAC by Tax Comm’n by R058-11, 12-30-2011, eff. 1-1-2012) PROCEEDS OF MINERALS General Provisions NAC 362.010 Determination of gross value of mineral products. (NRS 360.090, 362.120)

1. For the purposes of assessment and taxation of the net proceeds of minerals pursuant to chapter 362 of NRS, the gross value of mineral products must be determined in accordance with the provisions of this section.

2. In those cases where a mineral product is sold by the producer in an arms-length transaction in free market competition, the gross value of the product is an amount equal to the proceeds of the sale of the product. This subsection applies to sales realized on all minerals produced from mining, including, without limitation, reduction, beneficiation or any treatment used by the producer within or outside this State to obtain a mineral product which is commercially marketable.

3. In those cases where a product is exchanged for any thing or service or removed from the State in a form ready for use or sale, but not used or sold during the period covered by the statement required by NRS 362.110 to be filed, the gross value of the product is: (a) For sales of minerals that do not involve derivative financial transactions, the price stated in the contract or other document of sale if one is in existence; or Page 52 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) (b) If minerals are transferred in kind or used to support derivative financial transactions, the closing spot price on the date of the taxable event. The spot price for precious metals will be determined by the Department by using a recognized national or international publication of prices such as the London PM fix. If no organized commodity exchange exists for a particular mineral product, the price will be the realized sales price of the mineral product.

4. In those cases where the mineral product is used by the producer or disposed of by the producer in any kind of transaction which is not at arms-length, including, without limitation, such transactions with associated or affiliated companies, the gross value of the mineral product so used or disposed of will be determined by the Department by utilizing information supplied by the producer under this subsection and from such other appropriate sources as the Department deems necessary. The mineral producer shall supply the Department with the following information for each reporting period: (a) The producer’s profit and loss statements; (b) The proportionate profit reports and the calculations used to prepare them; (c) The allocation of income by states; (d) The amount used to calculate the percentage of depletion allowances; or (e) The monthly average price of the product for the months in which it was used in a manufacturing process or to provide a service.

5. Any information submitted pursuant to paragraphs (a) to (d), inclusive, of subsection 4 must be the same as submitted to the Internal Revenue Service.

6. The producer has the burden of proof in any determination under this section of the gross value of mineral products used or disposed of by the producer.

7. As used in this section: (a) “Derivative financial transaction” means a financial transaction which uses: (1) A financial instrument that has no intrinsic value, but which derives its value from a contract to deliver minerals in the future at a specific price; or (2) An option that gives a party to the transaction the opportunity to buy minerals from or sell minerals to the other party to the transaction at a prearranged price. (b) “Spot price” means the price established for physical delivery of a mineral by an organized commodity exchange on the date of the taxable event. (c) “Transferred in kind” means a transaction in which a mineral product is delivered instead of cash to complete the transaction. [Tax Comm’n, Mine Proceeds Reg. No. 26, eff. 1-24-78; renumbered as Reg. No. 1, 1-22-79]—(NAC A 5-3-84; R048-01, 11-1-2001) NAC 362.020 Separate report of royalties. (NRS 360.090, 362.110) All royalties received by a lessor must be reported separately from other receipts. [Tax Comm’n, Mine Proceeds Reg. No. 21, eff. 6-28-65; A and renumbered as Reg. No. 6, 1-22-79] NAC 362.030 Annual statement of gross yield and claimed net proceeds: Form and contents. (NRS 360.090, 362.110)

1. All information in the statement which is required by NRS 362.110 to be filed must be submitted on forms supplied by the Department or in a manner which is acceptable to the Department.

2. The following property must be reported: Page 53 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) (a) Leasehold improvements and buildings; (b) Fixed machinery and equipment; (c) Mobile machinery and equipment; and (d) Automobiles and light service vehicles such as pickups and panel trucks.

3. Each cost submitted for depreciation must be the complete cost to the taxpayer, and must include all delivery, taxes and installation charges.

4. Each asset must be listed on a table which sets forth: (a) A clear identification of the asset; (b) The cost of the construction or acquisition of the asset and the date on which the construction of the asset was completed or the asset was acquired; (c) The depreciation class, such as buildings, fixed equipment, mobile machinery and equipment, or automobile and light service vehicles; (d) The total amount of depreciation granted; and (e) The amount claimed for the present tax period. Ê An integrated processing assembly which consists of components of individual manufacture, and which is installed as a unit, may be reported as a unit. The report must describe the function of the unit and list its principal components in detail. [Tax Comm’n, Mine Proceeds Reg. No. 3 § 1, eff. 8-6-80]—(NAC A by R048-01, 11-1-2001; R058- 11, 12-30-2011, eff. 7-1-2012) NAC 362.035 Deductions: Interpretation of certain statutory terms. [Effective through December 31, 2015.] (NRS 360.090, 362.120) For the purposes of:

1. Paragraph (j) of subsection 3 of NRS 362.120, the Nevada Tax Commission will interpret the term “developmental work” to have the meaning ascribed to it in NAC 362.006.

2. Paragraph (c) of subsection 7 of NRS 362.120, the Nevada Tax Commission will interpret the term “costs of severing the employment of any employees” to: (a) Exclude, without limitation, the costs of: (1) Any wages, salary or production bonuses earned by an employee before the date of termination of his or her employment; and (2) Any pension benefits, vacation leave and sick leave accrued by an employee before the date of termination of his or her employment; and (b) Except as otherwise provided in paragraph (a), include, without limitation, the costs of any: (1) Additional payments based on length of service; (2) Cash bonuses; (3) Stock options; (4) Medical insurance, dental insurance and life insurance; (5) Payments made in lieu of a required period of notice; (6) Negotiated financial sums paid pursuant to an agreement absolving the employer from any further liability to an employee; (7) Voluntary redundancy packages offered by an employer to attract volunteers to leave the employment of the employer; and (8) Assistance in searching for new positions of employment. Page 54 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025)

3. Paragraph (f) of subsection 7 of NRS 362.120, the Nevada Tax Commission will interpret the term “mineral exploration” to have the meaning ascribed to it in NAC 362.007. (Added to NAC by Tax Comm’n by R058-11, 12-30-2011, eff. 1-1-2012; A by R058-11, 12-30-2011, eff. 1-1-2014) NAC 362.035 Deductions: Interpretation of certain statutory terms. [Effective January 1, 2016.] (NRS 360.090, 362.120) For the purposes of:

1. Paragraph (k) of subsection 3 of NRS 362.120, the Nevada Tax Commission will interpret the term “developmental work” to have the meaning ascribed to it in NAC 362.006.

2. Paragraph (c) of subsection 7 of NRS 362.120, the Nevada Tax Commission will interpret the term “costs of severing the employment of any employees” to: (a) Exclude, without limitation, the costs of: (1) Any wages, salary or production bonuses earned by an employee before the date of termination of his or her employment; and (2) Any pension benefits, vacation leave and sick leave accrued by an employee before the date of termination of his or her employment; and (b) Except as otherwise provided in paragraph (a), include, without limitation, the costs of any: (1) Additional payments based on length of service; (2) Cash bonuses; (3) Stock options; (4) Medical insurance, dental insurance and life insurance; (5) Payments made in lieu of a required period of notice; (6) Negotiated financial sums paid pursuant to an agreement absolving the employer from any further liability to an employee; (7) Voluntary redundancy packages offered by an employer to attract volunteers to leave the employment of the employer; and (8) Assistance in searching for new positions of employment.

3. Paragraph (f) of subsection 7 of NRS 362.120, the Nevada Tax Commission will interpret the term “mineral exploration” to have the meaning ascribed to it in NAC 362.007. (Added to NAC by Tax Comm’n by R058-11, 12-30-2011, eff. 1-1-2012; A by R058-11, 12-30-2011, eff. 1-1-2014) NAC 362.040 Deductions: Depreciation of capitalized costs. (NRS 360.090, 362.120)

1. Leasehold improvements and buildings must be depreciated over a 20-year period using the straight- line method.

2. Fixed machinery and equipment must be depreciated over a 20-year period using the straight-line method.

3. Mobile machinery and equipment must be depreciated over a 10-year period using the straight-line method.

4. Automobiles and light service vehicles must be depreciated over a 5-year period using the straight- line method. Page 55 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025)

5. An integrated processing assembly must be depreciated over a 20-year period using the straight-line method. Subsequent additions to the unit must also be reported and be depreciated over a 20-year period using the straight-line method.

6. If any property is disposed of before the end of the depreciation period, the remaining amount of allowable depreciation, if the property had remained in use, may be reported in total as an additional expense of depreciation for the reporting period. The amount of depreciation must be reduced by the amount of any consideration received for the property from sale, insurance recovery, trade-in or any other reimbursement, but not below zero.

7. A mining operator may petition the Nevada Tax Commission for reconsideration of the allowable depreciation of property. The Commission may adjust the allowable depreciation if the petitioner presents satisfactory evidence that the expected life of the property is longer than that which is provided for in this section. [Tax Comm’n, Mine Proceeds Reg. No. 3 § 2, eff. 8-6-80]—(NAC A 9-13-91; R161-05, 2-23-2006; R172-12, 12-23-2013) REVISER’S NOTE. The regulation of the Nevada Tax Commission filed with the Secretary of State on December 23, 2013 (LCB File No. R172-12), which amended this section, contains the following provision not included in NAC: “Sec. 4. Sections 1, 2 and 3 of this regulation [NAC 362.040 and 362.368] do not apply to or affect: 1. Any depreciation of assets approved by the Nevada Tax Commission before December 23, 2013; or

2. Any powers or duties of the Department of Taxation or any mining operator relating to any depreciation of assets approved by the Nevada Tax Commission before December 23, 2013.” NAC 362.050 Deductions: Operating costs. [Effective through December 31, 2015.] (NRS 360.090, 362.120)

1. In computing the costs enumerated in subsection 3 of NRS 362.120, the following specific items are deductible except as limited by subsection 2 of this section and subsection 6 of NRS 362.120: (a) The cost of renting equipment, if the amount paid as rental is commercially reasonable in the circumstances; (b) The cost of contracting for all or part of the mine’s operations, if the contract price is commercially reasonable in the circumstances and the cost would otherwise be deductible if the service or activity contracted for was provided or performed directly by the operator of the mine; (c) The cost of Nevada-based corporate services, as defined in subsection 8 of NRS 362.120, which a Nevada mine receives under contract from its corporate office or the office of a related corporation, if: (1) The cost is commercially reasonable in the circumstances; and (2) The cost is separately stated in a manner consistent with good accounting practices; (d) The reasonable cost of management provided to a joint venture by a member, if the fees relate directly to the operation of the mine; (e) If the taxpayer has a policy which prohibits the personal use of a vehicle by an employee, the cost of vehicle allowances to the extent that the vehicle is actively engaged in the business of the mine; Page 56 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) (f) The cost of transportation services between points of origin and destination within this State provided by a third party or the owner of the mine for employees to get to and from a point of extraction or reduction of the mine, excluding any cost for the repair, maintenance and depreciation of any facilities or equipment under the jurisdiction of the Public Utilities Commission of Nevada or the Nevada Transportation Authority; and (g) The cost of compensation for employees. As used in this paragraph, “compensation” means wages, salaries, paid vacation leave, paid sick leave, performance-related bonuses, contributions to and administrative costs of qualified pension and retirement plans, 401k and similar deferred benefit plans, Medicare contributions, social security payments, state and federal unemployment compensation contributions or payments, and postemployment training expenses for training conducted in compliance with the Mine Safety and Health Administration and the Division of Industrial Relations of the Department of Business and Industry or their successor organizations.

2. In computing the costs enumerated in subsection 3 of NRS 362.120, the following specific items are not deductible: (a) Cost or expenses which are capitalized; (b) Gifts, grants and donations; (c) Costs of public relations and influencing or seeking to influence governmental activities; (d) Costs of developmental work related to ore bodies outside the geographic area described in the plan for the mine filed with the Division of Minerals of the Commission on Mineral Resources pursuant to NRS 519A.210; (e) Any tax that an operator of a mine is required to pay to the Federal Government, this State or any other state, or a political subdivision thereof; (f) Costs associated with providing health clubs for employees; (g) Costs incurred for preemployment activities, including, without limitation, reimbursement for expenses for moving and relocation; (h) Except as otherwise provided in paragraph (g) of subsection 1 of this section and paragraph (g) of subsection 3 of NRS 362.120, costs associated with union trust funds; (i) Costs associated with providing day care facilities for the children of employees; (j) General liability insurance; (k) Excess policies of general liability insurance; (l) Fire insurance on any machinery, equipment, apparatus, works, plants or facilities; and (m) Expenses described in subsection 7 of NRS 362.120.

3. The taxes described in paragraph (e) of subsection 2 of this section and paragraph (g) of subsection 7 of NRS 362.120 do not include any contributions or payments described in paragraph (g) of subsection 3 of NRS 362.120.

4. If a cost is partially deductible and partially nondeductible, the deductible portion must be allowed. In determining the portion of such costs which is allowable as a deduction, a reasonable allocation must be made based upon available information. For the purposes of paragraph (b) of subsection 1, there is a rebuttable presumption that not less than 20 percent of the cost of contracting for all or part of a mine’s operations is attributable to the cost of services and activities that would not be deductible if provided or performed directly by the operator of the mine. Page 57 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) [Tax Comm’n, Mine Proceeds Reg. Nos. 1-7, 9-14, 19, 20 & 25, eff. 6-28-65; A and renumbered as Reg. No. 2, 1-22-79]—(NAC A 5-3-84; R048-01, 11-1-2001; R161-05, 2-23-2006; R058-11, 12-30-2011, eff. 1-1-2012; R058-11, 12-30-2011, eff. 1-1-2014) REVISER’S NOTES. The regulation of the Nevada Tax Commission filed with the Secretary of State on December 30, 2011 (LCB File No. R058-11), which makes various changes to this chapter on January 1, 2012, and January 1, 2014, contains the following provisions not included in NAC: “Sec. 16. Sections 1 to 6, inclusive, 9, 11, 12 and 15 of this regulation [creating NAC 362.001, 362.006, 362.007, 362.008 and 362.035, amending NAC 362.050, 362.200 and 362.310, and repealing NAC 362.220, 362.230, 362.240, 362.260, 362.300, 362.320 and 362.330 on January 1, 2012]: 1. Do not apply to or affect any determination of gross yield or net proceeds required pursuant to NRS 362.100 to 362.240, inclusive, for the calendar year 2011.

2. Apply for the purposes of estimating and determining gross yield and net proceeds pursuant to NRS 362.100 to 362.240, inclusive, for the calendar year 2012 and each calendar year thereafter. Sec. 17. Sections 10, 13 and 14 of this regulation [amending NAC 362.035, 362.050 and 362.310 on January 1, 2014]: 1. Do not apply to or affect any determination of gross yield or net proceeds required pursuant to NRS 362.100 to 362.240, inclusive, for the calendar year 2013.

2. Apply for the purposes of estimating and determining gross yield and net proceeds pursuant to NRS 362.100 to 362.240, inclusive, for the calendar year 2014 and each calendar year thereafter.” The reference to paragraph (g) of subsection 3 of NRS 362.120 in subsection 3 of this section was temporarily removed from that subsection by Senate Bill No. 493 of the 2011 Nevada Legislature, which was further amended by Assembly Bill No. 499 of the 2013 Nevada Legislature (see chapter 449, Stats. 2011, at p. 2695, and chapter 553, Stats. 2013, at p. 3795, respectively). The language contained in that paragraph will be restored effective January 1, 2016. NAC 362.050 Deductions: Operating costs. [Effective January 1, 2016.] (NRS 360.090, 362.120)

1. In computing the costs enumerated in subsection 3 of NRS 362.120, the following specific items are deductible except as limited by subsection 2 of this section and subsection 6 of NRS 362.120: (a) The cost of renting equipment, if the amount paid as rental is commercially reasonable in the circumstances; (b) The cost of contracting for all or part of the mine’s operations, if the contract price is commercially reasonable in the circumstances and the cost would otherwise be deductible if the service or activity contracted for was provided or performed directly by the operator of the mine; (c) The cost of Nevada-based corporate services, as defined in subsection 8 of NRS 362.120, which a Nevada mine receives under contract from its corporate office or the office of a related corporation, if: (1) The cost is commercially reasonable in the circumstances; and (2) The cost is separately stated in a manner consistent with good accounting practices; (d) The reasonable cost of management provided to a joint venture by a member, if the fees relate directly to the operation of the mine; Page 58 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) (e) If the taxpayer has a policy which prohibits the personal use of a vehicle by an employee, the cost of vehicle allowances to the extent that the vehicle is actively engaged in the business of the mine; (f) The cost of transportation services between points of origin and destination within this State provided by a third party or the owner of the mine for employees to get to and from a point of extraction or reduction of the mine, excluding any cost for the repair, maintenance and depreciation of any facilities or equipment under the jurisdiction of the Public Utilities Commission of Nevada or the Nevada Transportation Authority; and (g) The cost of compensation for employees. As used in this paragraph, “compensation” means wages, salaries, paid vacation leave, paid sick leave, performance-related bonuses, contributions to and administrative costs of qualified pension and retirement plans, 401k and similar deferred benefit plans, Medicare contributions, social security payments, state and federal unemployment compensation contributions or payments, and postemployment training expenses for training conducted in compliance with the Mine Safety and Health Administration and the Division of Industrial Relations of the Department of Business and Industry or their successor organizations.

2. In computing the costs enumerated in subsection 3 of NRS 362.120, the following specific items are not deductible: (a) Cost or expenses which are capitalized; (b) Gifts, grants and donations; (c) Costs of public relations and influencing or seeking to influence governmental activities; (d) Costs of developmental work related to ore bodies outside the geographic area described in the plan for the mine filed with the Division of Minerals of the Commission on Mineral Resources pursuant to NRS 519A.210; (e) Any tax that an operator of a mine is required to pay to the Federal Government, this State or any other state, or a political subdivision thereof; (f) Costs associated with providing health clubs for employees; (g) Costs incurred for preemployment activities, including, without limitation, reimbursement for expenses for moving and relocation; (h) Except as otherwise provided in paragraph (g) of subsection 1 of this section and paragraph (g) of subsection 3 of NRS 362.120, costs associated with union trust funds; (i) Costs associated with providing day care facilities for the children of employees; (j) General liability insurance; (k) Excess policies of general liability insurance; (l) Fire insurance on any machinery, equipment, apparatus, works, plants or facilities; and (m) Expenses described in subsection 7 of NRS 362.120.

3. The taxes described in paragraph (e) of subsection 2 of this section and paragraph (g) of subsection 7 of NRS 362.120 do not include any contributions or payments described in paragraph (h) of subsection 3 of NRS 362.120.

4. If a cost is partially deductible and partially nondeductible, the deductible portion must be allowed. In determining the portion of such costs which is allowable as a deduction, a reasonable allocation must be made based upon available information. For the purposes of paragraph (b) of subsection 1, there is a rebuttable presumption that not less than 20 percent of the cost of contracting for all or part of a mine’s operations is attributable to the cost of services and activities that would not be deductible if provided or performed directly by the operator of the mine. Page 59 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) [Tax Comm’n, Mine Proceeds Reg. Nos. 1-7, 9-14, 19, 20 & 25, eff. 6-28-65; A and renumbered as Reg. No. 2, 1-22-79]—(NAC A 5-3-84; R048-01, 11-1-2001; R161-05, 2-23-2006; R058-11, 12-30-2011, eff. 1-1-2012; R058-11, 12-30-2011, eff. 1-1-2014) NAC 362.060 Deductions: Electric power. (NRS 360.090, 362.120)

1. The installation of power and light lines is a capital charge, while the upkeep and purchase costs of electric power are operating costs.

2. When electric power is generated and distributed to various departments, the upkeep of the power plant must be written off, and the distribution of the power is an operating cost. New engines, boilers and similar equipment are chargeable to a capital account. [Tax Comm’n, Mine Proceeds Reg. No. 8, eff. 6-8-65; A and renumbered as Reg. No. 4, 1-22-79]— (NAC A by R048-01, 11-1-2001) NAC 362.070 Deductions: Loading and transportation costs. (NRS 360.090, 362.120) The actual cost of transporting the product of the mine to the place of reduction, refining and sale, is affected directly by both demurrage charged and dispatch earned credits. These charges and credits become a part of the cost of loading and unloading ore. Additional assessments for demurrage penalties incurred for any cause increases the cost of loading and transportation; dispatch earned credit paid for efficiency in loading or unloading vessels or other transport equipment directly reduces the cost of transportation. The actual cost of loading is the gross cost less any dispatch earned credits plus any demurrage. [Tax Comm’n, Mine Proceeds Reg. No. 26, eff. 4-24-69; renumbered as Reg. No. 15, 11-9-78; A and renumbered as Reg. No. 5, 1-22-79] NAC 362.081 Date of receipt of material mailed to Commission. (NRS 360.090, 362.110)

1. An annual statement which is required to be filed pursuant to NRS 362.110 and which is transmitted through the United States mail shall be deemed to have been received on the date shown by the post office cancellation mark stamped on the envelope containing it, or on the date it was mailed if proof satisfactory to the Commission establishes that the document or remittance was timely deposited in the United States mail, postage prepaid, and properly addressed to the Commission.

2. A receipt for material sent by certified or registered mail, if different than the post office cancellation mark, will prevail if the date on the receipt is earlier than the cancellation date.

3. A record authenticated by the post office that the cancellation date on certain batches of mail was erroneous is proof satisfactory to the Commission that the mailing was made on a date other than the post office cancellation date.

4. If it is known that the postal service was inoperative at a certain time due to strikes, riots, warfare, acts of God or other reasons, the Commission will consider the circumstances and, if there is other evidence of timely mailing, will accept the evidence and deem the return or payment timely.

5. Under no circumstances will: (a) The cancellation date affixed by a postage meter in the possession of the taxpayer or other person; or (b) Statements by the taxpayer or the taxpayer’s employees, Ê be considered sufficient to refute the post office cancellation date as the date of mailing. (Added to NAC by Tax Comm’n by R161-05, eff. 2-23-2006) Page 60 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) NAC 362.083 Annual statement of gross yield and claimed net proceeds: Failure to include all applicable information, documentation, reports and statements. (NRS 360.090, 362.110) If a taxpayer submits an annual statement which is required to be filed pursuant to NRS 362.110 and which does not include all applicable information, documentation, reports and statements, the Department may require the taxpayer to resubmit the annual statement with all applicable information, documentation, reports and statements within 10 days after receiving notice from the Department. If all applicable information, documentation, reports and statements are not included with the statement upon the resubmission of the statement, the Department may consider the taxpayer to have failed to file the statement. (Added to NAC by Tax Comm’n by R161-05, eff. 2-23-2006) NAC 362.085 Annual statement of gross yield and claimed net proceeds: Penalty for failure to file. (NRS 360.090, 362.230) If a taxpayer fails to file the statement required by NRS 362.110, the Department shall impose a penalty pursuant to NRS 362.230 in the following amounts:

1. For net proceeds or royalties not exceeding $5,000, the penalty is 10 percent of the net proceeds or royalties or $100, whichever is less.

2. For net proceeds or royalties greater than $5,000 but not exceeding $10,000, the penalty is $500.

3. For net proceeds or royalties greater than $10,000 but not exceeding $50,000, the penalty is $1,000.

4. For net proceeds or royalties greater than $50,000 but not exceeding $100,000, the penalty is $2,500.

5. For net proceeds or royalties of more than $100,000, the penalty is $5,000. (Added to NAC by Tax Comm’n, eff. 9-6-96; A by R161-05, 2-23-2006) NAC 362.087 Annual statement of gross yield and claimed net proceeds: Documentation of proper filing and waiver of penalty for failure to file. (NRS 360.090, 362.110, 362.230) If the Department does not receive an annual statement which is required to be filed pursuant to NRS 362.110 and alleges that the taxpayer has not filed the statement, the taxpayer may submit documentation which establishes that the statement was properly filed. If the Department subsequently determines the annual statement was filed properly, the Department shall waive the penalty for the failure to file a statement which is imposed pursuant to NAC 362.085. (Added to NAC by Tax Comm’n by R161-05, eff. 2-23-2006) NAC 362.090 Report of amount of net proceeds of minerals taxes plus pro rata penalties and interest; distribution. (NRS 360.090, 362.170)

1. The Department shall report to the State Controller pursuant to NRS 362.170 on or before May 25 the amount of any net proceeds of minerals taxes plus pro rata penalties and interest collected for distribution to each county.

2. The Department shall distribute penalties and interest pursuant to NRS 362.170 in the same manner and percentage as computed for the net proceeds of minerals tax for each county. (Added to NAC by Tax Comm’n, eff. 9-6-96; A by R048-01, 11-1-2001) Page 61 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) Deductions for Reclamation Costs REVISER’S NOTE. The regulation of the Nevada Tax Commission filed with the Secretary of State on December 30, 2011 (LCB File No. R058-11), which makes various changes to this chapter on January 1, 2012, and January 1, 2014, contains the following provisions not included in NAC: “Sec. 16. Sections 1 to 6, inclusive, 9, 11, 12 and 15 of this regulation [creating NAC 362.001, 362.006, 362.007, 362.008 and 362.035, amending NAC 362.050, 362.200 and 362.310, and repealing NAC 362.220, 362.230, 362.240, 362.260, 362.300, 362.320 and 362.330 on January 1, 2012]: 1. Do not apply to or affect any determination of gross yield or net proceeds required pursuant to NRS 362.100 to 362.240, inclusive, for the calendar year 2011.

2. Apply for the purposes of estimating and determining gross yield and net proceeds pursuant to NRS 362.100 to 362.240, inclusive, for the calendar year 2012 and each calendar year thereafter. Sec. 17. Sections 10, 13 and 14 of this regulation [amending NAC 362.035, 362.050 and 362.310 on January 1, 2014]:

1. Do not apply to or affect any determination of gross yield or net proceeds required pursuant to NRS 362.100 to 362.240, inclusive, for the calendar year 2013.

2. Apply for the purposes of estimating and determining gross yield and net proceeds pursuant to NRS 362.100 to 362.240, inclusive, for the calendar year 2014 and each calendar year thereafter.” NAC 362.200 Definitions. (NRS 360.090, 362.120) As used in NAC 362.200 to 362.310, inclusive, unless the context otherwise requires, the words and terms defined in NAC 362.210 to 362.290, inclusive, have the meanings ascribed to them in those sections. (Added to NAC by Tax Comm’n by R161-05, eff. 2-23-2006; A by R058-11, 12-30-2011, eff. 1-1-2012) NAC 362.210 “Closure of a mine” defined. (NRS 360.090, 362.120) “Closure of a mine” means the time at which:

1. The revegetation, treatment and rehabilitation of the site of the mine have been completed;

2. Any excess chemical solutions have been eliminated from the site of the mine, to the extent practicable;

3. The maximum degree of passive management has been implemented at the site of the mine in which a method of treatment is applied through the use of any naturally occurring chemical or biological processes to remove any metals or acidity from any waters of the mine which have been contaminated to cleanse the waters from such contamination; and

4. A monitoring program has been implemented to monitor the site of the mine after the production of the mine has been completed. (Added to NAC by Tax Comm’n by R161-05, eff. 2-23-2006) NAC 362.250 “Reclamation” defined. (NRS 360.090, 362.120) “Reclamation” means actions performed during or after a mining operation or developmental work which are consistent with the provisions of NRS concerning mines and minerals, and any regulations adopted pursuant thereto, and which are identified in a reclamation plan to shape, stabilize, revegetate or otherwise treat the land in order to return it to a safe, stable condition consistent with the establishment of a productive postmining use of the Page 62 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) land and the abandonment of a facility in a manner which ensures the public safety, as well as the encouragement of techniques which minimize the adverse visual effects. The term does not include any action performed after the closure of a mine. (Added to NAC by Tax Comm’n by R161-05, eff. 2-23-2006) NAC 362.270 “Reclamation plan” defined. (NRS 360.090, 362.120) “Reclamation plan” means a plan for reclamation, and any amendments or modifications thereto, which is approved by:

1. The Division of Environmental Protection of the State Department of Conservation and Natural Resources pursuant to chapter 519A of NRS for a mining operation or developmental work which is conducted on land administered by this State;

2. The Bureau of Land Management of the Department of the Interior pursuant to 43 C.F.R. Part 3800 for a mining operation or developmental work which is conducted on land administered by a federal agency; or

3. Any other state or federal agency pursuant to any state or federal law which: (a) Imposes a duty to reclaim the land disturbed by a mining operation or developmental work; or (b) Requires a permit to engage in a mining operation or developmental work which is substantially similar to the requirements for a permit set forth in chapter 519A of NRS and any regulations adopted pursuant thereto. (Added to NAC by Tax Comm’n by R161-05, eff. 2-23-2006) NAC 362.280 “Reporting period” defined. (NRS 360.090, 362.120) “Reporting period” means the calendar year for which the statement required by NRS 362.110 is filed. (Added to NAC by Tax Comm’n by R161-05, eff. 2-23-2006) NAC 362.290 “Taxpayer” defined. (NRS 360.090, 362.120) “Taxpayer” means a person who is required by the Department to pay a tax on the net proceeds of any mineral extracted in this State pursuant to chapter 362 of NRS. (Added to NAC by Tax Comm’n by R161-05, eff. 2-23-2006) NAC 362.310 Allowable deduction. [Effective through December 31, 2015.] (NRS 360.090, 362.120) A taxpayer may claim a deduction pursuant to paragraph (k) of subsection 3 of NRS 362.120 for any money paid during the reporting period for reclamation performed by the taxpayer. (Added to NAC by Tax Comm’n by R161-05, eff. 2-23-2006; A by R058-11, 12-30-2011, eff. 1-1-2012; R058-11, 12-30-2011, eff. 1-1-2014) NAC 362.310 Allowable deduction. [Effective January 1, 2016.] (NRS 360.090, 362.120) A taxpayer may claim a deduction pursuant to paragraph (l) of subsection 3 of NRS 362.120 for any money paid during the reporting period for reclamation performed by the taxpayer. (Added to NAC by Tax Comm’n by R161-05, eff. 2-23-2006; A by R058-11, 12-30-2011, eff. 1-1-2012; R058-11, 12-30-2011, eff. 1-1-2014) Page 63 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) Geothermal Resources NAC 362.350 Definitions. (NRS 360.090, 362.120) As used in NAC 362.350 to 362.370, inclusive, unless the context otherwise requires, the words and terms defined in NAC 362.352 to 362.366, inclusive, have the meanings ascribed to them in those sections. (Added to NAC by Tax Comm’n by R012-07, eff. 10-31-2007) NAC 362.352 “Field” defined. (NRS 360.090, 362.120) “Field” means the area of operations from which a geothermal resource is extracted and transported before any further beneficiation of the geothermal resource occurs. (Added to NAC by Tax Comm’n by R012-07, eff. 10-31-2007) NAC 362.354 “Mining function” defined. (NRS 360.090, 362.120) “Mining function” means any activity relating to the extraction of a geothermal resource, including, but not limited to, any drilling, pumping, reinjection, roadwork or transportation of the geothermal resource, if the activity occurs before any further processing of the geothermal resource by a system for gathering the geothermal resource. (Added to NAC by Tax Comm’n by R012-07, eff. 10-31-2007) NAC 362.356 “Plant” defined. (NRS 360.090, 362.120) “Plant” means any facility at which the processing of a geothermal resource occurs, including, without limitation, a plant for generating power. (Added to NAC by Tax Comm’n by R012-07, eff. 10-31-2007) NAC 362.358 “Processing” defined. (NRS 360.090, 362.120) “Processing” means any activity that occurs beyond the inlet of a plant that:

1. Changes the physical or chemical characteristics of the production stream of a geothermal resource; or

2. Enhances the marketability of the production stream or the value of any separate component of the production stream. Ê The term includes, without limitation, any beneficiation, compression, flashing, separation or stabilization that occurs within the plant, other than any reinjection, regulation of wellhead pressure, changing of pressures or temperatures in a reservoir or any other compression that occurs during the production of the geothermal resource. (Added to NAC by Tax Comm’n by R012-07, eff. 10-31-2007) NAC 362.360 “Processing allowance” defined. (NRS 360.090, 362.120) “Processing allowance” means any cost associated with converting a geothermal resource into any electricity, heat or other by- product. The term includes, without limitation, any cost associated with an activity occurring after the completion of all mining functions but before the processed product is transported to a market for the product. (Added to NAC by Tax Comm’n by R012-07, eff. 10-31-2007) NAC 362.362 “Repowering” defined. (NRS 360.090, 362.120) “Repowering” means to: Page 64 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025)

1. Remove any inefficient, obsolete or aging equipment that is used in the production stream of a geothermal resource; and

2. Replace that equipment with any new technology or equipment that increases or may increase the efficiency of the processing of the geothermal resource. (Added to NAC by Tax Comm’n by R012-07, eff. 10-31-2007) NAC 362.364 “Transaction” defined. (NRS 360.090, 362.120) “Transaction” means a bona fide transaction conducted at arms length involving a geothermal resource at the wellhead. (Added to NAC by Tax Comm’n by R012-07, eff. 10-31-2007) NAC 362.366 “Transportation allowance” defined. (NRS 360.090, 362.120) “Transportation allowance” means any cost incurred for the movement of a geothermal resource that is converted to any electricity, heat or other by-product, if the movement of the geothermal resource is performed by the operator and occurs after the geothermal resource is processed. (Added to NAC by Tax Comm’n by R012-07, eff. 10-31-2007) NAC 362.368 Determination of gross yield. (NRS 360.090, 362.120)

1. To assess and tax the net proceeds of an operating facility which extracts geothermal resources, the gross yield of the geothermal resources must be determined pursuant to this section.

2. If the transaction involves the direct, arms-length sale of the geothermal resource, the gross yield of the geothermal resource equals the proceeds of the sale of the geothermal resource.

3. If the transaction involves the indirect sale of the geothermal resource, the gross yield of the geothermal resource is the total revenue received from the sale of any electricity, heat or other by-product of the geothermal resource that is agreed upon by the parties to the sale, less any processing allowance or transportation allowance. If the selling price includes any costs for processing or transportation, the person extracting the geothermal resource shall report those costs on a form prescribed by the Department. The Department shall consider those costs in determining the gross yield of the geothermal resource.

4. In the case of an indirect sale of a geothermal resource that is used to produce electricity, all energy, capacity and other payments received, if any, must be included in the gross yield of the geothermal resource.

5. If the costs associated with the processing allowance or transportation allowance are included in a bona fide arms-length contract, the costs shall be deemed to be an appropriate deduction from the selling price. Such costs may include the negotiated costs for the operation, maintenance and replacement of the plant which are paid by the operator of the field, reduced by any negotiated costs for the operation, maintenance and replacement of the field which are paid by the operator of the plant. The negotiated costs must be set forth in a written contract or other document specified by the Department and may include, but are not limited to: (a) A negotiated sharing by percentage of the operating and maintenance costs of the field and the plant; or (b) A negotiated agreement that the operator of the field will pay for necessary improvement to the plant.

6. If the costs associated with the processing allowance or transportation allowance are not included in a bona fide arms-length contract, the Department must consider the following: Page 65 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) (a) The annual total cost of operating and maintaining the plant, transmission line and any other facility or equipment used to transport the geothermal product after all mining functions and processing are complete, including, but not limited to, any reasonable and prudent costs incurred for direct wages, benefits, workers’ compensation, supplies, materials and charges for overhead, general liability insurance incurred because of the plant and transmission line and costs for obtaining and maintaining any permit for a site, permit relating to air quality or any other permit or license required to operate the plant or transmission line. The transportation allowance for a transmission line is allowed only in direct proportion to the relationship of the field operator’s investment to the total cost of the transmission line. (b) The depreciation of the capital investment in the plant and transmission line using the straight-line method over the useful life of the asset established in accordance with the Personal Property Manual. (c) Any charges for wheeling electricity or for loss of power in the transmission line. (d) Amortization of each long-term contract to purchase power using the straight-line method over the stated life of the contract. Any amount amortized pursuant to this paragraph must not exceed 60 percent of the original book value of the plant and transmission line. (e) An allowance for return on the investment in the plant and transmission line, calculated by multiplying the cost of acquiring the plant and transmission line, as recorded in the books and records of the operator, by the overall rate of return on capital. The overall rate of return on capital must be based on the appropriate electric industry cost of capital study conducted by the Department pursuant to NAC 361.408 and 361.425.

7. For the purpose of paragraph (e) of subsection 6: (a) If an agreement for the purchase of power is in effect, the Department may grant an allowance for a return on the investment for a period that is equal to the remaining term of the agreement or 15 years, whichever is less. If such an agreement is not in effect, the Department may grant the allowance for a period that is equal to the remaining useful life of the plant and transmission line or 15 years, whichever is less. (b) If the plant or transmission line is repowered or a reinvestment in the plant or transmission line occurs, the taxpayer may apply to the Department for an extension of the allowance specified in paragraph (a). The Department may grant an extension pursuant to this paragraph for a period that is equal to the remaining life of the assets purchased for the repowering or reinvestment or 15 years, whichever is less. The remaining life of those assets must reasonably reflect the useful life of those assets established in accordance with the Personal Property Manual. (c) To calculate the allowance specified in paragraph (a), the Department may require the taxpayer to submit any additional information specified by the Department, including, without limitation: (1) A statement setting forth the amount of any recapitalization or repowering of the plant or transmission line; (2) A statement setting forth the established life of the assets purchased; or (3) An audit of the books and records of the taxpayer. (d) If the Department grants an extension pursuant to paragraph (b), the amount of the return on the investment must not exceed the amount of the recapitalization or repowering of the plant or transmission line.

8. As used in this section, “Personal Property Manual” has the meaning ascribed to it in NAC 361.1361. (Added to NAC by Tax Comm’n, eff. 10-9-87; A 9-13-91; R012-07, 10-31-2007; R172-12, 12-23- 2013)—(Substituted in revision for NAC 362.015) Page 66 of 67 LGS-F025 V2025.1 <!-- page break --> Nevada Department of Taxation Local Government Services Division Form LGS-F025 NET PROCEEDS OF MINERALS TAX INSTRUCTIONS OPERATOR - STATEMENT OF GROSS YIELD AND CLAIMED NET PROCEEDS (NRS 362.110) For Production January 1 through December 31, 2024 (Tax Year 2024-2025) REVISER’S NOTE. The regulation of the Nevada Tax Commission filed with the Secretary of State on December 23, 2013 (LCB File No. R172-12), which amended this section, contains the following provision not included in NAC: “Sec. 4. Sections 1, 2 and 3 of this regulation [NAC 362.040 and 362.368] do not apply to or affect:

1. Any depreciation of assets approved by the Nevada Tax Commission before December 23, 2013; or

2. Any powers or duties of the Department of Taxation or any mining operator relating to any depreciation of assets approved by the Nevada Tax Commission before December 23, 2013.” NAC 362.370 Calculation of net proceeds. (NRS 360.090, 362.120) The net proceeds of a geothermal resource must be calculated using the gross yield of the geothermal resource, as determined pursuant to NRS 362.120 and NAC 362.368, less the amount of any deduction that is available pursuant to NRS 362.120 and this chapter. (Added to NAC by Tax Comm’n by R012-07, eff. 10-31-2007) PATENTED MINES NAC 362.410 Assessment; removal from secured roll for miscellaneous property. (NRS 360.090, 362.030, 362.095)

1. A patented mine which is used for a purpose related to mining or agriculture must be assessed: (a) At 35 percent of the taxable value of a site of comparable size and similar terrain and location which is used for purposes other than mining; or (b) At $500, Ê whichever is greater.

2. Any portion of a patented mine which is used for a purpose unrelated to mining or agriculture and taxed as other property is taxed must be removed from the secured roll of miscellaneous property and added to the secured roll of real property. (Added to NAC by Tax Comm’n, eff. 1-8-86; A 6-23-86) Page 67 of 67 LGS-F025 V2025.1 <!-- page break -->