Tax Benefits of Flow-through Shares in Mining and Exploration

Flow-through shares are a type of common stock unique to Canada and typically associated with the Canadian resource sector. When a company issues a flow-through share, the tax credits it receives for expending capital on qualifying exploration and development projects will “flow through” to investors. Any funds spent investing in flow-through shares are treated as a tax deduction against the investor’s income — in exchange, these shares are issued at a premium.