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Gold/Mining/Energy : Kensington Resources Ltd. (V.KRT) * Diamond in the rough! -- Ignore unavailable to you. Want to Upgrade?

To: Maher Sid-Ahmed who wrote (2009)	6/15/1998 1:23:00 PM
From: Mike Smillie	Read Replies (2) \| Respond to of 5206

I am catching up on posts for the last week as I have been away. I don't think anyone answered your question on flow through shares. The shares are actually ordinary shares, identical to the ones you now hold. When they are issued, however, there is a provision that the company can renounce exploration expenses back to the shareholder. This lets the shareholder deduct those expenses against other income. If you bought $1,000 worth of shares you could deduct $1,000 from income and reduce your tax liability. If you were in a 50% tax bracket this would reduce your exposure considerably. The other side of the coin is that this also reduces your cost base of the shares to zero and you pay a much higher capital gains tax when you sell the shares. Since it is a Canadian tax provision it only works for Canadian taxpayers. Good luck, Mike