First Canadian Securities® comparison to other flow-through funds

First Canadian Securities® (Offering Memorandum) vs. Other Flow-Through Funds

First Canadian Securities® flow-through securities (available by Offering Memorandum) are a cut above similar, competing products.  Here are some significant differences among flow-through investment products:

 

Other Flow-Throughs

First Canadian Securities


Tax Credit

Minimum 15 %, and as high as 32 %, resulting in an equivalent tax deduction in 2019 of  117 % to 164 %;  all First Canadian Securities® super flow-through funds are 100 % invested in mining exploration

Sometimes NIL, and in any event, no more than 15 %, because typically oil/gas (which allows no tax credit) is mixed in with mining; equivalent tax deduction is typically 100 % to 115 %


Others get, every year, a percentage of Partnership’s net assets, even if they decline, just like mutual funds, which cuts into returns to investors, and provides less motivation for the fund to choose the best possible investments

Ongoing Fees to  General Partner

NIL. General Partner only gets fee at back-end, and only after investors are paid back 100 % of their investment, providing maximum motivation to deliver investment returns


Targeted for 2020

Partnership Dissolution

Targeted up to 2021 -- more than 1 year later!


Senior Technical Analyst

Legendary senior technical analyst Horst Mueller of Mueller Behavioural Analytics advises First Canadian Securities® to augment the fundamental analysis performed on each investment by Senior Portfolio Manager Andrew Cook of Palette Investment Management Inc.; Mr. Mueller is exclusive to First Canadian Securities®

Other funds don't have their own experienced senior technical analyst to provide technical analysis on both the buy and sell sides, and just focus on fundamental analysis


Stock Exchange Listing & Investment Liquidity

100 % of First Canadian Securities® investments must be in companies listed on stock exchanges

Only 0 % - 90 % of others’ investments must be in companies listed on stock exchanges; up to 100 % can be invested in less liquid private companies


Hold Periods & Investment Liquidity

100 % of First Canadian Securities® investments must be in companies with no more than a 4 month hold period

No maximum hold period restrictions; this means that some investments could have a 1 year hold or longer, especially private companies


Investor Disclosure

First Canadian Securities® has a very detailed Offering Memorandum

Some others offer no Offering Memorandum at all, just a Subscription Agreement


Eligibility Across Canada

Investors from all 10 provinces and 3 territories are eligible to invest in First Canadian Securities®

Many others are restricted to Ontario, B.C. & Alberta


Front-End Costs

The front-end expenses (e.g., commissions and  costs of issue) are capped at 10 % with First Canadian Securities®, which means that 90 % goes into the ground (i.e., is invested in mining company shares)

The front-end expenses are often 15 % or more, which means only 85 % (or even less) goes into the ground.


Participation of Watts, Griffis and McOuat*

Yes

WGM is able to help access extraordinary opportunities for First Canadian Securities®

No

WGM is exclusive to First Canadian Securities®

*Watts, Griffis and McQuat are blue-chip geological and engineering consultants for over 40 years, and highly respected in the mining industry


Premiums

First Canadian Securities® commits in writing to try to not pay premiums of more than 10 %

Others are deliberately vague about the premiums they pay, often because they pay huge premiums of 35 % or more, especially in oil & gas flow-throughs


What is a Super Flow-Through Limited Partnership ?

To promote mining in Canada, the federal government has made available certain tax deductions for investments in this sector. To encourage the exploration and development of Canadian natural resources, the government allows Canadian natural resource companies to issue common shares that entitle the holder to certain tax benefits. These shares are called flow-through shares. 

Canadian natural resource companies have certain expenses, known as Canadian Exploration Expenses (CEE), which can be deducted 100 % for tax purposes by the purchasers of flow-through shares.  In addition to benefiting a taxpayer in the current taxation year, these tax deductions can be carried back 3 years and carried forward 7 years.

In addition, there is also a 15 % tax credit available to investors anywhere in Canada for  grass roots mining exploration expenses incurred in Canada -- this applies only to mining of metals and minerals, and not for extraction of oil and gas.  For investors in every province and territory of Canada, the tax credit is at least 15 % as long as the grass roots mining exploration occurs somewhere in Canada.  In addition, some (but not all) of the provinces and territories have added their own tax credit, ranging from 5 % in Ontario to 32 % in Manitoba, with 20 % in British Columbia and 10 % in Saskatchewan.  Quebec has some additional tax deductions for mining exploration in addition to the federal 100 % CEE tax deduction.  The provincial tax credit only applies if the investor is resident in the province, and the exploration occurs in the same province.  In addition to benefiting a taxpayer in the current taxation year, these tax credits can be carried back 3 years and carried forward 10 years.

The mining tax deduction and tax credits are unique to Canada, and have helped propel Canada to be the number one mining country in the world.