Overview

As an exempt market dealer, the role of PearTree Securities is to work with Canadian Resource Exploration Companies to arrange and close flow through donation financing placements, a valuable new source of capital for many firms.

In the current market reality – a time when resource capital is harder than ever to access for junior resource exploration companies – PearTree’s flow through donation financing program is a highly beneficial tool to expand the universe of capital sources.

Some PearTree highlights:

  • Since 2007, PearTree has facilitated more than $800 million in structured flow through share subscriptions.
  • In 2013 – 2014, we raised more than $185 million in structured financings for junior mineral exploration firms across Canada.
  • With an annual growth rate of over 25% over the last three years, PearTree
    is a significant contributor to the junior exploration market in Canada.

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PearTree has been working diligently over the past year to lobby the Ontario Government to increase the Ontario flow through Investment Tax Credit from the current 5% to 20%.
 

Benefits of PearTree’s flow through share donation financing

Through PearTree Securities, PearTree Financial provides Canadian Resource Exploration Companies direct access to institutional domestic, strategic and off-shore capital not typically available in standard flow through offerings.

One of the key benefits of arranging flow through financing through PearTree is that our unique structured financing process commands a higher share issue price than standard flow through offerings – minimizing dilution to existing shareholders – while still offering an attractive discount-to-market to qualified investors.

A further advantage is that flow through share issuers gain the ability to ensure their shares are only placed in the hands of trusted institutional and accredited investors whose strategic investment interests are aligned with the resource company’s vision.

How flow through share donation financing works

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PearTree Financial’s flow through donation financing structure is designed to help major gift charitable donors in Canada significantly reduce their after-tax cost of giving and to ensure that the donor’s full pledge amount is gifted to the recipient charity.

The process begins with the donor subscribing for flow through shares, thereby accessing the associated Canadian Exploration Expense (CEE) and/ or Canadian Development Expense (CDE), and investment tax credit benefits. The next step is for the donor to gift the shares to their chosen charity. The charity then sells the shares to an institutional investor, arranged through PearTree, to receive their funds for which a tax receipt is issued to the original donor.

PearTree’s highly efficient flow through financing process includes working with:

Because the PearTree process essentially transforms standard flow through share offerings into risk-mitigated financings that hold strong appeal to institutional and offshore investors, Canadian resource exploration firms can gain access to new, large and motivated capital pools.

Our process enables this to happen by, first, capturing the requisite tax benefits for the initial flow through subscriber and then converting the newly issued underlying shares into common securities that can be sold at an attractive discount to a global, strategic or institutional investor that has been pre-arranged by PearTree and an intermediary bank or investment broker.