Flow-Through Shares
Invest in Canadian mineral exploration and receive a 100% tax deduction on eligible exploration expenditures. Super flow-through shares for critical minerals offer an additional 30% tax credit.
How Flow-Through Shares Work
Company issues flow-through shares
A Canadian mining company raises capital by issuing shares at a premium to market price. The premium reflects the tax benefit passed to the investor.
Exploration expenses are "flowed through"
The company renounces its Canadian Exploration Expenses (CEE) or Canadian Development Expenses (CDE) to the investor, who receives a T5013 tax slip.
Investor claims the deduction
The investor deducts 100% of the CEE amount from their taxable income. At a 50% marginal rate, a $100,000 investment yields a $50,000 tax reduction.
Shares convert to common
After the hold period (typically 4 months + 1 day for exchange-listed issuers), flow-through shares convert to regular common shares that can be traded freely.
Tax Benefit Summary
Example based on a $100,000 flow-through investment at a 50% combined marginal tax rate.
Standard Flow-Through
Super Flow-Through
Critical minerals — additional 30% METC
Super Flow-Through Eligible Minerals
The Mineral Exploration Tax Credit (METC) provides an additional 30% non-refundable tax credit for exploration targeting the following critical minerals, as defined by Natural Resources Canada.
Who Can Invest
Flow-through shares are available to Canadian taxpayers. The tax deduction applies against Canadian income.
Active Flow-Through Offerings
Flow-through share offerings will be listed here as they become available.
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Important Disclaimers
Flow-through shares involve significant risk. Exploration-stage mining companies have a high rate of failure. The tax benefits described are subject to change based on federal and provincial legislation. The examples provided are for illustrative purposes only and do not account for provincial tax credits, alternative minimum tax (AMT) implications, or individual tax circumstances.
This page does not constitute tax advice. Investors should consult a qualified tax professional and financial advisor before investing in flow-through shares. The information presented is for informational purposes only and is not an offer or solicitation for the sale or purchase of securities.
Flow-through shares are subject to hold periods. Shares may not be freely tradable until the applicable hold period expires. The adjusted cost base of flow-through shares is deemed to be zero for capital gains purposes upon eventual disposition.