McEwen Mining Inc (MUX)

[JD400]

Explaining the complex structure of Flow_Through_Financing
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FinanceKid

A flow-through share (FTS) is a common share issued by an eligible Canadian mining corporation to a Canadian taxpayer pursuant to an agreement under which the issuing corporation agrees to incur qualifying exploration and development expenses which are renounced so that the expenses are considered for tax purposes to be expenses of the taxpayer. This is an effective way for junior mining companies to increase the attractiveness of their equity raise which directly impacts the amount of money raised.

The FTS allows, in present value terms, to take advantage of unused tax deductions while, in return for this added benefit to subscribers, most of the time the company expects to issue shares at a premium to the market price which helps the organization raise more financing.

In this video, I answer some common question about flow-through shares;
- How can you invest in flow-through shares?
- Numerical example of flow-through shares product
- What is a super flow-through share?
- What are the benefits and risks of flow-through shares?
- What are qualifying expenditures?
- What is the look-back rule?
- What are some common mistakes investors make when investing in flow-through shares?

To learn more about the flow-through shares, consider reading this short publication released by PWC;

https://www.pwc.com/ca/en/industries/...