Full project proposal applicant guide: Critical Minerals Research, Development and Demonstration Program — Wave 2 (Pilot and Demonstration)

1. Introduction
2. Overview
3. Eligibility
4. Funding terms
5. Submission details
6. Evaluation
7. Full project proposal form
8. Appendix A — Applicant financial report
9. Appendix B — Detailed project budget
10. Appendix C — Technology readiness levels
11. Appendix D — Letters of support
12. Appendix E — Other supporting documents

Under Budget 2022, Natural Resources Canada (NRCan) was allocated $144.4 million to support the development of Canadian critical minerals value chains. Critical minerals are essential inputs for renewable energy and clean technology applications — such as advanced batteries, permanent magnets, solar panels and wind turbines — as well as advanced manufacturing supply chains, including defence and security technologies, consumer electronics, and critical infrastructure.

The Critical Minerals Research Development and Demonstration Program — Wave 2 (CMRDD2) includes a budget of $40.0 million in contribution funding for pilot plants and demonstration projects that will help develop critical minerals value chains that could contribute to Canada’s goal of being a net-zero emitter of carbon by 2050. The CMRDD2 will focus on moving technologies along the technology readiness level (TRL) scale between TRL 6 and 8 (see Appendix C for TRL descriptions). At these TRLs, the program will help advance the development of products, processes and technologies to the pre commercialization phase — a critical gap in technology development for the overall critical minerals mining innovation system.

This applicant guide provides details on the CMRDD2, including an overview of program objectives, eligibility and evaluation process. The funding process will apply a full project proposal (FPP) approach to select projects that best align with the CMRDD2’s objectives.

Program objectives and scope

The CMRDD2 aims to advance the commercial readiness of emerging processing technologies that will support the development of critical minerals value chains in Canada. The program will provide raw material inputs for use in batteries and permanent magnets, advanced manufacturing supply chains, semiconductors, information and communication technologies, and critical infrastructure value chains for commercialization.

The production of associated raw materials can stem from primary sources (e.g., ore deposits) or secondary sources. Secondary sources include mine and processing waste (e.g., tailings) and recycling of post-consumer waste.

The CMRDD2 seeks to validate the feasibility, viability and reproducibility of processing technologies by conducting pilot demonstrations. The complete process flowsheet of a technology or a designated circuit or unit operation within the flow sheet can be considered as a potential project for pilot funding under this program. Most funded projects will likely focus on piloting key circuits rather than complete flow sheets, given the level of funding available.

Projects applying for funding must clearly identify the main objectives of the operation, such as validating efficiency and recoveries, and/or improving economic aspects, product purity, or environmental footprint. The proposed projects should be conducted at sufficient scale and duration, and be designed to fully address all key design parameters of the technologies, including temperature, recycle streams, and reagent addition. Issues such as material handling, health and safety, impurity build-up, and process control should be carefully considered in the design. This is necessary to ultimately provide fundamental process design and engineering information to demonstrate the feasibility, viability and reproducibility of the technologies toward commercial deployment.

All projects must be completed by March 31, 2027.

Expected outcomes

Projects funded by this program are expected to improve the feasibility, viability and reproducibility of transforming these critical minerals raw materials. They will accomplish this through novel technology(ies) and innovative process design(s), and will support the environmental and social (e.g., diversity and inclusion) aspects of their production over the baseline or conventional process routes. Examples include, but are not limited to:

• Building a strong and resilient value chain focusing on sustainable mining practices and innovation clusters
• Improved capital and/or operating costs of critical minerals production through innovative and improved technologies or new flow sheets that shorten conventional processing
• Effective production of critical minerals from an unconventional source, such as tailings, recycled waste, slag, dross or other secondary sources
• Reduced energy intensity, carbon intensity or other environmental performance indicators in critical minerals processing
• Improved resource optimization and waste reduction by adopting circular economy principles including recycling, reusing, and remanufacturing the consumption of raw materials and decreasing the amount of waste generated during production processes

Tracking outcomes

Following a successful FPP process, funded projects will be required to report on expected outcomes to ensure that targets and objectives are met. Since outcomes may be realized only after funding has ended, provisions have been made for ongoing data collection and assessment for three years following the project completion date.

Technology readiness level (TRL)

The program will only support projects that advance pre-commercial technologies between TRL 6 and 8 (see Appendix C for TRL descriptions). The application must clearly demonstrate that the technology falls within these TRLs at the time of the proposal submission.

Targeted critical mineral list

From the 31 minerals Canada has identified as "critical", the program will focus on the following critical minerals:

• antimony
• cesium
• cobalt
• copper
• gallium
• germanium
• graphite
• indium
• lithium
• magnesium
• manganese
• nickel
• niobium
• specific rare earth elements (dysprosium, gadolinium, neodymium, praseodymium, and terbium)
• scandium
• tellurium
• titanium
• vanadium
• zinc

With priority given to the six most significant minerals: lithium, graphite, nickel, cobalt, copper, and rare earth elements.

Priority value chains

Projects that will be considered for funding must be classified as upstream processing. For the purposes of this program, time limits of a project start immediately following primary crushing, continue through the processing cycle, and end at precursor material and element production.

For instance, in the case of battery minerals, this includes, but is not limited to, crushing and grinding, mineral and chemical processing to the production of nickel and cobalt sulfates, lithium hydroxide and coated spherical purified graphite. It does not include bulk ore feed sampling or mining, or the manufacturing of multi-metal oxide manufacturing, cell and battery pack. Another example, in the case of permanent magnets, it ranges from the crushing and grinding, and mineral and chemical processing, to the production of separated rare earth metals and alloys, but not the production of permanent magnets.

Eligible recipients

Eligible Canadian funding recipients may include:

1. Legal entities validly incorporated or registered in Canada, including:
   • For-profit and not-for-profit organizations such as, but not limited to, companies, industry associations, research associations
   • Community groups
   • Academic institutions
2. Provincial, territorial, regional and municipal governments and their departments and agencies
3. Indigenous groups:
   • Indigenous communities or governments
   • Tribal Councils or entities that fulfill a similar function (e.g., general council)
   • National and regional Indigenous councils and tribal organizations
     • Indigenous (majority-owned and majority-controlled by Indigenous peoples) for-profit and not-for-profit organizations
   • Members of Indigenous groups with community knowledge, Indigenous traditional knowledge or input relevant to the policy dialogue

For the purpose of this document, the term “Indigenous” is understood to include Inuit, Métis, First Nations, individuals registered as Status Indians and non-Status Indian individuals, or any combination thereof.

Eligible project location

Technology solutions can originate from anywhere on the globe, but must be developed, tested, piloted, demonstrated and deployed in Canada.

Eligible expenditures

Eligible expenditures for an approved project must be directly related to, and necessary for, the implementation and conduct of a project, and could include some or all the following items:

• Salaries and benefits for employees on the payroll of the recipient for the time employees work on the project
• Professional, scientific, technical and contracting services
• Training, workshops and facility costs for seminars, conference room rentals, etc.
• Travel expenditures, including meals and accommodations, based on National Joint Council rates
• Capital expenditures such as the purchase, installation, testing and commissioning of qualifying equipment, materials and products, including diagnostic testing tools and instruments and original equipment manufacturer equipment warranties (including extended warranties deemed appropriate to mitigate risk and lack of capacity)
• Other expenses, including:
  • Laboratory and field supplies and materials
  • Printing services and translation
  • Data collection services, including processing, analysis and management
  • Construction Insurance, license fees and permits
  • Accreditation
  • Scholarships
  • Field testing services
• When the recipient is an Indigenous organization, other expenses may include:
  • Costs associated with an Indigenous ceremony (excluding hospitality)
  • Honoraria for Elders

• Overhead expenditures, provided they are directly related to the conduct of the project and can be attributed to it. Overhead expenditures can be included in the total project costs to a maximum of 15 percent of eligible expenditures (based on the total approved CMRDD2 contribution).

  Overhead expenditures include:

  • Administrative and corporate support provided directly to the project by the recipient’s employees, valued on the same basis as professional staff time
  • Routine laboratory and field equipment maintenance, based on the actual expenditure to a recipient
  • Office operating expenses directly related to the conduct of the project (e.g., faxes, telephone, photocopies)
  • Costs associated with further distribution of funding
• A predetermined overhead percentage may be set and subsequently applied to each claim to avoid unnecessary administrative burden to funding recipients. The percentage will be based on evidence provided by the recipient of expected overhead expenditures at the time of negotiating a contribution agreement.
• GST, PST or HST net of any tax rebate to which the recipient is entitled

The total funding available under CMRDD2 is $40 million.

Pilot plants and demonstration projects

The CMRDD2 may pay up to 75 percent of total project costs for for-profit recipients and 100 percent for all other recipients for each pilot plant and demonstration project. It is expected that good quality projects will request between $500,000 and $3 million. However, the maximum funding that can be provided under this program per project is $5 million.

Although the CMRDD2 may pay up to 100 percent of total project costs for certain projects, recipients are expected to contribute an average of 50 percent.

The CMRDD2 will consider the total project costs to be eligible from the approval of the project up to March 31, 2027 or the project end date, whichever is earlier. Project related costs incurred or paid by the applicant, before the date a proposal is approved, may not be considered as the applicant contribution to the total project costs according to the terms and conditions of the contribution agreement.

Note: The CMRDD2 will provide non-repayable contributions for eligible research, development and demonstration projects.

Stacking provisions

The maximum level of total Canadian government funding (i.e., federal, provincial, territorial, and municipal) for a project will not exceed the percentages of eligible expenditures as defined above.

To ensure the stacking provisions are respected, recipients will be required to disclose all sources of project funding, including those from other federal, provincial/territorial and municipal programs (including implicit subsidies, rebates, forgivable loans, etc.).

• Stacking limit for for-profit organizations shall not exceed 75% of eligible costs per project;
• Stacking limit for all other organizations may be up to 100% of eligible costs per project.

Contribution agreement

Successful applicants will have three months after receiving the notice of funding approval to enter into a contribution agreement (“Contribution Agreement”) with NRCan, after which time funding may be reallocated to other projects. The Contribution Agreement will address the following elements, without limitation:

• project scope
• project benefits
• work plan
• milestones
• deliverables
• performance targets
• budget per fiscal year
• payment schedule
• reporting requirements
• terms of funding

Submission process

NRCan is committed to a consistent, fair and transparent project selection process to identify, select and approve the allocation of funding to projects that best fit the CMRDD2’s objectives.

This applicant guide provides the necessary information to start preparing the FPP. The CMRDD2 will be open for FPP submissions as of July 2023.

An applicant may withdraw their FPP at any stage of the evaluation process by notifying NRCan in writing via email at criticalmineralsprograms-programmesminerauxcritiques@nrcan-rncan.gc.ca.

Each FPP will be assessed based on the evaluation criteria provided in Section 6 and only the most innovative projects that best align with CMRDD2’s objectives will be selected. The applicant must provide all mandatory information to be considered for funding. The program may request supplementary information at various points in the review process.

All FPP documents must be submitted through our secure funding portal.

Successful applicants will be invited to provide additional financial information as part of the due diligence process.

Note: Submission of an FPP does not represent a funding commitment from the CMRDD2.

Submission deadline

The deadline for submission of the FPP is Friday, September 29, 2023, at 4:00 p.m. (Eastern daylight time). Late submissions will be rejected. NRCan will only accept complete submissions received through our secure funding portal.

Process timeline

The following timelines are anticipated for the FPP approach of this call for proposals. Note that, at its sole discretion, NRCan reserves the right to modify these currently anticipated timelines:

• FPP submission deadline: September 29, 2023 at 4:00 p.m. (Eastern daylight time)
• Carry out due diligence: By end of December 2023
• Notify FPP results: By early 2024
• Initiate contribution agreements: March 2024

Submission content

The following documents should be part of the FPP:

• Full project proposal form — see Section 7
• Financial report — see Appendix A
• Detailed project budget — see Appendix B
• Detailed statement of work
• Risk analysis
• Process diagram
• Technology readiness levels — see Appendix C
• Letters of support — see Appendix D
• Other supporting documents

Further guidance on each document is provided in Section 6 (evaluation) and in each accompanying appendix.

The FPP seeks to obtain information about these specific areas:

• Detailed information on how the pilot plant or demonstration project will be carried out, including supporting documentation for bench-scale studies to clearly justify a TRL of 6–8
• Implications of the success or failure of the pilot plant or demonstration project to advancing critical minerals production in the next three years and expected next steps
• Project risks
• Detailed financial review

Methodology

Each FPP will be evaluated based on its alignment with the Canadian Critical Minerals Strategy and its ability to address gaps in driving innovation and commercialization in critical minerals value chains, and to clearly demonstrate the link to identified priorities indicated below and their potential to achieve overarching goals for environmental, economic and social impact.

The proposed projects should focus on critical minerals processing, critical minerals inputs to manufacturing, and/or recycling. They also need to fall within one of the three priority focus areas:

• Clean technologies (focus on zero-emission vehicles (ZEV) batteries)
• Information and communication technologies (focus on semi-conductors)
• Advanced manufacturing inputs and materials (focus on permanent magnets)

Each FPP will be assessed using the evaluation criteria below to determine how well it aligns with a set of overarching objectives.

Evaluation criteria

The evaluation criteria for the FPP are listed below, along with considerations when scoring each criterion.

Note on proposal quality

The FPP evaluation process is highly competitive and only the highest quality projects will be considered for funding. In this regard, “quality” means the merits of the proposal in terms of the potential for positive impacts based on the assessment criteria; how well the proposal clearly addresses these criteria, including completeness and clarity; and how well the project aligns with the identified priority areas of focus.

It is incumbent on each applicant to communicate the merits of the proposed project through the responses provided in the FPP application form and required supporting documentation.

Intellectual property

The agreement between NRCan and each successful applicant will be specific to the circumstances of each project. However, the following general principles apply:

• All intellectual property (IP) that arises during a project shall be vested in, or licensed to, the proponent
• The proponent will grant to Canada a non-exclusive, irrevocable, worldwide, royalty-free licence in perpetuity to use the data and information contained in reports and modify such reports and documents for non-commercial governmental purposes
• Any background IP required for the project must be vested with the proponent or the proponent must hold sufficient background IP rights to allow their project activities to be carried out. Additionally, they must hold sufficient rights to permit them to exploit the IP resulting from their project activities.

7.1. Applicant information

About the organization

• Legal name
• Head office address
• Type of organization (privately held or publicly traded)
• Parent company
• Province/territory of incorporation/legislation
• Date of incorporation
• Number of employees in the organization at time of application
• Organizational description (200-word maximum)
  • Include a description of what the applicant does (e.g., industry, products, service offering)
  • Indicate whether the applicant is a wholly owned subsidiary and provide information on the parent company (e.g., name, industry, location)
  • If the applicant is not a wholly owned subsidiary, indicate whom the majority shareholders are (include a capitalization table as an attachment, if applicable)

Key contacts

• Primary contact
• Alternative contact
• Financial contact

Initial project information

• Project title
• Project location
• Type of critical minerals
• Key value chain
• Uptake potential (300-word maximum)
  • Should the project be successfully completed, are there clear opportunities for future uptake and replication within Canada?
  • Who are the anticipated recipients of the products in Canada and abroad of the products?
  • What is the replicability or uptake potential of the project?
  • Is this something that solves a broad problem across the sector?
• Start date
• End date

Financial information

• Total cost of the project
• Total funding requested from NRCan
• Other sources of funding
• Applicant’s cash funding

7.2. Project summary

Proposed process diagram

Provide a visual representation of the proposed pilot or demonstration project by completing the Process diagram tab of the template available through the online application portal for the FPP.

Project objective (150-word maximum)

Provide the objective of the project in a few sentences, including targeted critical minerals, technical advancement and how it benefits the priority value chains.

Project description (700-word maximum)

Provide a description of how the proposed objectives will be accomplished and what metrics will be used to assess the success of the pilot project.

Clearly state specific details, such as the source and quantity of feed materials, the scale (capacity), the duration of the pilot, the proposed work phases and the key tasks to be completed.

Project evolution (250-word maximum)

Describe past work that the proposed project builds upon. Refer to the results and conclusions used in developing this project proposal, and the description of the IP status of the proposed technology, including who owns the IP.

TRL (500-word maximum)

Clearly demonstrate and justify in the application how the technology will advance pre-commercial technologies between TRL 6 and 8, for the assigned or current project TRL, by providing:

• the necessary information to evaluate the level of maturity of the technology (i.e., information on bench test results and clear process flow diagrams)
• reports or other types of documentation from internal sources or third parties that demonstrate results and support the TRL claim

(See Appendix C for TRL descriptions.)

Alignment with scope (100-word maximum)

Provide a clear statement of how the project addresses the scope and priorities of the program.

Detailed statement of work (700-word maximum)

Provide a description of the planned work for the project to a maximum of five tasks. This description should clearly indicate the project objectives, how they will be accomplished and the metrics (key performance indicators) used to assess the project’s success. Also, complete the Detailed statement of work tab of the template available through the online application portal for the FPP.

7.3. Project relevance

Addressing a gap (400-word maximum)

Provide a clear statement of the knowledge gap(s) for the technology that the project will address and explain how it (they) will be resolved by this project for the critical minerals value chains.

Innovation (250-word maximum)

Describe how the proposed project is considered innovative or novel. Provide sufficient details on similar projects already being undertaken in Canada and elsewhere and describe how this project is different.

Benefits to Canadians, stakeholders, provinces and territories (400-word maximum)

Describe any environmental, societal and economic benefits this project may generate for Canada, Canadians and stakeholders; and any benefits directly related to provincial or territorial priorities.

7.4. Project impacts

Environmental impacts (400-word maximum)

Identify the environmental impacts of the pilot plant or demonstration project (e.g., on air quality, water use, land use, greenhouse gas emission or any other) that could be expected and provide a strategy for how the project will/could help alleviate these potentially negative impacts.

Economic and social impacts (400-word maximum)

Identify the positive economic and social impacts that the project could have (e.g., the highly qualified personnel trained for the project, the employment generated during the project and the inclusion of Indigenous groups in the development of the project and the project itself) and justify these impacts.

Economical feasibility (400-word maximum)

Describe the economic feasibility of the product and/or technology. Also describe the major components of the return on investment or payback calculations.

Priority focus areas (400-word maximum)

Identify the steps to be taken over the next five years to ensure the product or technology is integrated into the critical minerals value chains of one of the three following priority focus areas:

• clean technologies
• information and communications technologies (e.g., semi-conductors)
• advanced manufacturing

Discuss the implications for the overall resource development potential. As a minimum, the response should address the following:

• the outputs of the pilot project, both in terms of material outputs (critical minerals produced) and process development
• how those outputs will advance the overall project towards production in the next three to five years
• specific technical and/or market opportunities or hurdles still to be addressed
• contingency plans if the pilot or demonstration project (or portions of the project) fails to meet expectations
• other considerations deemed important for proposal reviewers to understand

Uptake capacity and market opportunities (350-word maximum)

Identify the target audience of this R&D project and the uptake potential at project completion, while identifying any potential recipients or collaborators for when the project is complete.

Sustainability impact and circular economy (350-words maximum)

Identify key elements of contributions to resource optimization, waste reduction and circular economy principles, including recycling, reusing and remanufacturing consumed raw materials.

7.5. Budget and partners

Complete the Detailed project budget tab of the template available through the online application portal for the FPP, and provide the information below. Ensure that the detailed budget in the template is aligned with the information provided in this section.

Contribution funding requested from the program

Enter the amount of funds requested from the CMRDD2.

Anticipated in-kind financial partners

Include all partner contributions to the project, including proponent contributions.

Anticipated cash financial partners

Include all partner contributions to the project, including applicant contributions.

Anticipated non-financial partners (200-word maximum)

Indicate all key partners that are not providing financial contributions to the project, but are providing services for a fee (subcontracted).

Funding requested from other government departments and agencies (200-word maximum)

State whether this proposal has been submitted to any other funding programs and, if so, provide a list of these programs and government departments and/or agencies.

Financial justification (400-word maximum)

NRCan will prioritize the funding for essential steps of the pilot or demonstration projects, such as piloting of a mineral processing plant or a “hydromet” plant. Considering this, elaborate on the following financial aspects of the project:

• Why NRCan funding is required and, if applicable, how NRCan funding would help to secure other funding for the project (e.g., by de-risking the project for investors, by satisfying funding requirements from other granting agencies)
• How the project would be affected if NRCan could only provide a portion of the requested amount. Would the project still be able to proceed? How would the project scope change if NRCan were to fund at a reduced amount?
• Actions needed to obtain confirmation from unconfirmed sources and when confirmation is expected
• Evidence that senior management within the applicant organization has approved committing financial resources to the project (e.g., a letter signed by the applicant’s Chief Financial Officer). Alternatively, briefly describe the overall stage-gating process for full approval of the project, explain any internal steps that need to be taken for final confirmation (e.g., executive approval, board approval) and indicate when these steps will be completed.
• Any alternate financing plans if one or more of the financial contributions listed above is not successfully secured or is significantly delayed
• How potential cost overruns, cost underruns, and/or currency exchange fluctuations will be managed

7.6. Key project team, collaborators and partners

Highlight the roles, experience, capability and capacity of the core team and any key collaborators or partners that will undertake the work over the duration of the project:

• Primary project manager (1 entry)
• Team members (5-entry maximum)
• Collaborators and partners (5-entry maximum)

7.7. Project risk assessment

Demonstrate that the applicant understands the risks at various stages of the project development and that they have a well thought-out plan to execute the project in such a manner that risk is mitigated to a reasonable degree.

Complete the Risk analysis tab of the template available through the online application portal for the FPP.

7.8. Regulatory requirements

Canadian Environmental Assessment Act, 2012 (200-word maximum)

If the proposed project is considered a designated project under the Canadian Environmental Assessment Act, 2012 and the Regulations Designating Physical Activities, describe the activities undertaken to complete the environmental assessment, the remaining steps and the anticipated completion date.

Also consider activities relevant to a federal environmental assessment in the Risk analysis tab of the template available through the online application portal for the FPP.

Federal lands (200-word maximum)

Will the project be carried out on federal lands?

Under Sections 67 and 68 of the Canadian Environmental Assessment Act, 2012, NRCan is required to assess whether a project it intends to fund and that is to be carried out on federal lands is likely to cause significant adverse environmental effects. If so, an environmental assessment may be required.

Identify the portions of the project (if any) that will be carried out on federal lands and the specific activities (including, but not limited to, site preparation, construction, installation, modification, operation, decommissioning, abandonment) that will occur at those sites.

Identify any other federal government involvement in the project, such as funding from other federal departments or agencies, and federal permits or licences, as appropriate.

Identify any provincial or territorial environmental assessment requirements, permits, certificates of authorization, etc., as appropriate.

Indigenous consultation (250-word maximum)

NRCan has a duty to consult with Indigenous groups when a contemplated Crown conduct, such as the provision of funding or the issuance of permits, may have adverse impact on existing or potential Aboriginal or treaty rights. To assess consultation requirements, use the Aboriginal and Treaty Rights Information System to identify the Indigenous groups that may be impacted by the project.

Also, identify Indigenous groups with whom you have interacted on the project and describe the type and frequency of interactions. If no interaction has taken place with any Indigenous groups, explain why.

Diversity and inclusion (250-word maximum)

NRCan recognizes the contributions of a diverse and inclusive workforce to the resilience and competitiveness of Canada’s natural resources sector. Applicants are now required to provide a diversity and inclusion plan (DIP) as part of the FPP. The DIP will be considered in the project evaluation process.

The DIP should describe the applicant’s approach to improving gender balance and increasing diversity within Canadian corporate structures and supply chains. Examples include efforts to increase the proportion of designated groups as defined in the Employment Equity Act (e.g., women, Indigenous Peoples, persons with disabilities, racialized communities) in the construction and operation phases of the project or to select suppliers that have DIPs.

The DIP may include, but is not limited to:

• Internal policies related to discrimination or harassment
• Existing or planned training to educate the organization’s workforce on diversity and inclusion
• Statistics on the proportion of designated groups employed at all levels of their firm in Canada
• Approaches for factoring gender and diversity into its supplier selection methods in Canada
• Funding advocacy groups or promotional activities that promote workforce diversity
• Conducting research or studies to better understand barriers and identify solutions to supporting workplace diversity and inclusion
• Strategies to increase workforce diversity in the composition of the board of directors and board subcommittees, and at the senior management level

Applicants are free to submit a DIP in the format of their choice.

Details of the DIP will not be disseminated unless otherwise specified by the applicant.

7.9. Attachments

Other supporting documents: applicants are asked to attach any other supporting documents relevant to their project (e.g., photos, pictures, presentations, permits, licences, assessments, proof of IP ownership).

Documents to support TRL: applicants are asked to attach documents or third-party reports that support their assessed TRL. (See Appendix C for information on TRLs.)

Letters of funding support: this should include all letters of support for funding or in-kind contributions from partners, provinces, territories, etc. (See Appendix D for guidance on letters of support.)

Proof of incorporation/legislation or any creation document of the organization that identifies how the proponent’s organization is registered or incorporated, if applicable.

Downloadable documents

The following templates will be provided through our online application portal, when the applicant submits their request for funding under the FPP:

• statement of work
• budget
• risk analysis

The applicant and any major financial contributors to the project (excluding governments and academia) must include the information listed below in a financial report and submit it online with their application as part of due diligence. For further guidance, email NRCan at criticalmineralsprograms-programmesminerauxcritiques@nrcan-rncan.gc.ca.

1. Organizational description, including, but not limited to:
   • a description of what the applicant does (e.g., industry, products, service offering)
   • whether the applicant is a wholly owned subsidiary and information on the parent company (e.g., name, industry, location)
   • if the applicant is not a wholly owned subsidiary, who are the majority shareholders (include a capitalization table)
2. Financial statements (including balance sheet, income statement, cash flow, notes to the financial statements and, if available, management discussion and analysis) for the preceding two fiscal years. If available, include the most recent interim internal financial statements and cash flow projections. If financial statements are publicly available online, provide the web page address where they can be found.
3. Letter of credit or bank reference letter from the relevant financial institution or parent company showing guarantees relating to the applicant’s or any project partner’s credit (if no public credit ratings are available).
4. Organizational description, including, but not limited to:
   • any current or potential litigation
   • any significant commitments and contingencies outside the normal course of business
   • description of any other significant projects under consideration or currently being undertaken by the applicant

All applicants must complete a detailed project budget using the template named “Template – CMRDD2_Process diagram-SOW-Budget-Risk Analysis”. This template is available for download through the online application portal for the FPP.

NOTE: The CMRDD2 will consider total project costs to be eligible from September 29, 2023 up to March 31, 2027 or earlier if the project is scheduled to end earlier.

Costing memorandum

This costing memorandum provides more details on the categories of expenditures permitted by the program. Applicants should closely review these terms as they complement the terms of funding in Section 4 to determine whether budgeted costs are compliant with these instructions. Applicants are responsible to indicate any costs that fall outside the admissible requirements. Additionally, any in-kind (non-cash) contributions should be identified separately.

Eligible expenditures

Salaries

Salaries include wages for all personnel with direct involvement in the project such as engineers, scientists, technologists, draftsmen, researchers, and laboratory, experimental and shop labourers. All eligible personnel must be employees on the proponent’s payroll. Payment of shares, stock, stock options and the like are not eligible. The amount invoiced shall be actual gross pay for the work performed and shall not include any markup for profit, selling, administration or financing.

The eligible payroll cost is the gross pay of the employee (normal periodic remuneration before deductions). Normal periodic remuneration rates are the regular pay rates for the period excluding premiums paid for overtime or shift work. The payroll rate does not include any reimbursement or benefit conferred in lieu of salaries or wages. When hourly rates are being charged for salaried personnel, the hourly rates shall be the periodic remuneration (annual, monthly, weekly, etc.), divided by the total paid hours in the period including holidays, vacation, paid sickness time.

Labour claims must be supported by suitable records, such as time sheets and records, and be held for verification at time of audit. Management personnel are required to maintain appropriate records of time devoted to the project.

Benefits

Benefits are defined as a reasonable prorated share of expenses associated with the direct labour cost (e.g., the employer’s portion of the Canada Pension Plan, Québec Pension Plan and Employment Insurance), employee benefits (e.g., health plan and insurance, workers’ compensation, sick leave and vacation plus any other employer paid payroll-related expenses). Items such as salary bonuses and other salary incentives, stock options or vehicle use, which have no relationship to the project or which have been charged on an indirect basis, are not permitted. The determination of the fringe benefits amount shall be in accordance with generally accepted cost accounting principles. In general, fringe benefits rate provided in the project estimate shall be computed once during the life of the project and agreed on prior to the signing of the Contribution Agreement. If retroactive adjustments are made, these must be indicated on claims for progress payments for NRCan’s approval.

Professional, technical, and scientific contracting services

The nature of goods or services to be acquired from sub-contractors and consultants shall be set out in the proposal estimate. The amount eligible from a sub-contractor or a consultant shall be the actual contract amount.

Travel, meal and accommodations costs

Unless stated otherwise in the Contribution Agreement between NRCan and the proponent, National Joint Council rates that are in effect at the time of expenditure incurrence shall be used in reimbursing the following expenses:

• travel, food and lodging costs to meet with NRCan officials
• travel, food and lodging costs necessary for other project activities (e.g., field trials and demonstrations at locations away from the proponent's usual location); project planning and review meetings between the principal proponent and its partner(s)

Materials

Materials include those consumed in carrying out the project, including those utilized in the production and operation of models, prototypes and pilot plants. Only utilities consumed to operate equipment or processes are eligible and may be metered and reported separately from the total utility cost. Utilities used for buildings are not eligible.

Materials purchased solely for the project and issued from the proponent’s inventory are eligible. All materials shall be charged to the project at the net price (excluding GST) after deducting all trade discounts and similar credits. Surplus materials shall be credited to the project at the original purchase price.

Equipment

Consists of equipment acquired or constructed exclusively for the project. To be eligible, such equipment must be identified in the project cost estimate and approved by the Minister. All such equipment shall be charged to the project at the net price (excluding GST) after deducting all trade discounts and similar charges.

Where such equipment is obtained from another division of the proponent or from a related company, the eligible expenditures shall not exceed fair market value and shall not include any markup for profit, administration, selling or financing expense.

Testing services

Eligible testing services are those conducted by testing organizations or accredited laboratories, such as the Canadian Standards Association and Underwriters Laboratories, and must be essential to the success of the project. Testing services shall be charged at actual cost. Regulatory costs, where required, may be eligible, such as testing to comply with environmental standards. All such costs should be identified in the original proposal cost estimates.

Overhead expenses

Overhead expenses may include:

• administrative support provided directly to the project by the proponent’s employee(s), valued on the same basis as professional staff time
• routine laboratory and field equipment maintenance, based on the actual cost to the proponent that is directly related to the project
• heat, hydro, and office operating costs (e.g., faxes, telephone), provided that they are directly related to the project

Overhead costs will be negotiated and agreed to on an individual basis with project proponents before signing a contribution agreement. They will not exceed 15% of eligible expenditures based on the total CMRDD2 contribution.

In-kind support

The program accepts in-kind contributions (defined below) as part of the total project costs, subject to the definitions and limitations described in this section. In-kind support is ineligible for reimbursement.

Important note: Proposed in-kind contributions that are deemed acceptable by NRCan officials must be supported by a formal commitment from the project proponent to provide them to the proposed project being made, prior to any commitment on program funding.

The purpose of this section is to identify the kinds of non-cash contributions (“in-kind support”) that are acceptable as part of the overall funding for the project from the project proponent, and to provide guidance on how to put a value on those contributions.

Definitions

• In-kind support: A cash-equivalent contribution in the form of an asset for which no cash is exchanged but is essential to the project and would have to be purchased by the project proponent on the open market, or through negotiation with the provider, if it were not provided by the project proponent.
• Fair market value: The average dollar value the project proponent could get for a contributed asset in an open and unrestricted market, between a willing buyer and a willing seller (the proponent) who are acting independently of each other. As a guide, it should approximately represent the original cost minus the depreciation.
• Most favoured customer: A customer given the highest discount from the normal selling price for a good or service sold by the project proponent.

Eligibility of in-kind contributions

To be eligible as an in-kind contribution:

• The contributed asset must be from one of the categories identified below under “Categories of eligible in-kind support”
• It must be essential to a project's success and would otherwise have to be purchased by the project proponent
• Its value must be determinable and verifiable
• Its valuation must be confirmed by NRCan officials or its auditors, and agreed upon by the project applicant and NRCan

Assessing the value of in-kind contributions

Two different approaches to the valuation of in kind support are possible:

1. Using the fair market value, as described above
2. Using the incremental cost (i.e., the cost to the project applicant or its partners and collaborators) of providing the contributed asset over and above normal operating costs

Categories of eligible in-kind support

Salaries and benefits

This category addresses the provision of the project partner’s employees’ time to undertake work (e.g., research, technology development and assessment), and expert analysis that is wholly and directly in support of the project

• The value of services of an employee of the project’s partner provided to the proponent should be at fair market value for the type of services provided and that these services are consistent with the duty for which the employee is normally paid

Professional, scientific and contracting services

This category addresses the provision of analytical and technical services. Analytical and technical services include routine laboratory and field technical services such as data collection, laboratory analyses and measurements, and field measurements, exclusive of equipment maintenance. These services may be provided by a component of the project proponent’s overall organization or provided to the project proponent by a third party.

The value of analytical and technical services provided by or to the proponent should be the lesser of the project proponent’s internal rate for the service if that service is provided internally (i.e., within the project proponent's organization), or the incremental cost to the project proponent if it is provided by a third party.

Provision of equipment and laboratory and field supplies and materials

This category includes equipment, laboratory supplies and field supplies that are provided by or to the project proponent, and the provision of access to, and use of, proprietary software and databases owned by or provided to the project proponent.

Values assessed for equipment and laboratory and field supplies and materials provided to the project must meet the following criteria:

• The value of supplies and materials shall not exceed the selling price to the provider’s most favoured customer at the time of provision
• The value of equipment shall not exceed the fair market value of equipment of the same age and condition at the time of provision
• If the equipment is for a special purpose, one of a kind, its value shall not exceed the cost to the provider of its design, testing and manufacture
• The value of access to, and use of, proprietary software and databases should be the incremental costs to the project proponent of providing that access and use, such as staff time involved, including providing any required instruction on their use. Costs associated with developing the software or databases are ineligible as an in kind contribution.

Travel, meals and accommodations costs

Unless stated otherwise in the Contribution Agreement between NRCan and the proponent, National Joint Council rates that are in effect at the time of expenditure incurrence shall be used in assigning a value to the following expenses:

• Travel, food and lodging costs to meet with NRCan officials
• Travel, food and lodging costs necessary for other project activities (field trials and demonstrations at locations away from the proponent's usual location), project planning and review meetings between the principal proponent and its partner(s)

Overhead expenses

Overhead expenses may include:

• Administrative support provided directly to the project by the proponent’s employee(s), valued on the same basis as professional staff time (as described under the “salaries and benefits” category above)
• Routine laboratory and field equipment maintenance, based on the actual cost to the proponent that is directly related to the project
• Heat, hydro and office operating costs (e.g., faxes, telephone) provided they are directly related to the project

Overhead costs will be negotiated on an individual basis with project proponents. Total overhead expenses (eligible and ineligible) will not exceed 15% of total projects costs, based on the total CMRDD2 contribution.

Technology readiness level (TRL) is a measure used to assess the maturity of evolving technologies (e.g., devices, materials, components, software, work processes) during their development and, in some cases, during early operations. Generally, when a new technology is first invented or conceptualized, it is not suitable for immediate application. Instead, new technologies are usually subjected to experimentation, refinement and increasingly realistic testing. Once the technology is sufficiently proven, it can be incorporated into a system or subsystem.

The lowest level (TRL 1) indicates that information already learned from basic scientific research is taking its first step from an idea to a practical application of a lesson learned. For example, after learning that hydrogen and oxygen can be combined to generate electricity, some would suggest an idea for building a machine to do just that.

A technology that has achieved TRL 9 is one that has been incorporated fully into a larger system. It has been proven to work smoothly and is considered operational. An example of an operational TRL 9 technology is the fuel cells that combine hydrogen and oxygen to generate electricity for NASA's space shuttle.

TRL descriptions

Level 0

R&D not specifically intended for technology development (but could be in support of technology adoption). Examples are knowledge generation to support codes, regulations and standards needed to support domestic adoption and to support Canada’s position in opposing non-tariff export barriers. Also includes basic research conducted prior to applied research.

Level 1

Early-stage scientific research begins the translation to applied R&D (lowest TRL: Basic scientific research begins to be translated into preparatory applied R&D. Examples include paper studies of a technology’s basic properties, algorithms and mathematical formulations.

Level 2

Technology development begins: Once basic principles are observed, development of practical and specific applications can be initiated. Applications are speculative and there may be no proof or detailed analysis to support the assumptions. Examples are limited to analytic studies, including concept development.

Level 3

Active R&D is initiated: Active R&D is initiated to establish proof of concept, including analytical and laboratory studies to physically validate analytical predictions of separate elements of the technology (i.e., individual components that are not yet integrated into the technology).

Level 4

Basic technological components are integrated to establish that the pieces will work together: Initial operational characterization of technology is applied and standalone component prototypes are implemented and tested.

Level 5

System or sub-system prototypes are improved significantly: The basic technological components and/or prototypes are integrated within a reasonably realistic supporting environment so that the technology concept can be tested in a simulated environment (e.g., bench-scale laboratory integration of components and observation of operating characteristics).

Level 9

System proven through successful demonstration: Actual application of technology is in its final form – commercialization-ready technology proven through successful operations.

Applicants are encouraged to provide signed letters of support from project partners, including financing entities, potential end-users, industry partners, federal/provincial/territorial support, other funding sources, site hosts, etc. Signed letters should be converted to PDF and combined into a single document and include the following information:

• Name of partner
• Summary of participation in the proposed project
• Details of funding commitments and any timelines or conditions associated with the confirmation of these, or other restrictions placed on the funding provided by the partner
• Original signature from an officer of the company able to legally commit funds from the company or organization

The following supporting documents may be included in the application (combine all documents into one single PDF document for review):

• Evidence of access rights to the required land for the project. This includes copies of lease agreements, licence agreements and/or easement agreements. If land access is still in negotiation, provide most recent correspondence or filings regarding the access rights.
• A list of permits of approvals required for the construction and operation of the project, including (if applicable) any federal environmental/impact assessments
• Planned or completed engagement with local and/or Indigenous communities regarding the proposed project and letters of support, if available
• Organizational chart showing the corporate structure and ownership situation