Sprott Flow-Through Limited Partnerships

What are Flow-Through shares?

The Federal Government allows Canadian resource companies that invest in the oil and gas, mining and renewable energy sectors to fully deduct certain exploration expenses, known as Canadian Exploration Expenses (CEE). To raise capital for exploration, those companies often issue flow-through shares and pass along the rights to claim the CEE to the purchasers of those shares. The shareholders are then able to deduct the CEE against their own income.

What is a Flow-Through Limited Partnership? 

Flow-through limited partnerships are professionally managed diversified portfolios of flow-through shares. The amounts invested in CEE are generally 100% deductible against taxable income in the year the investment is made.

The illustration below shows how flow-through limited partnerships work:flow-through process



Tax benefits of flow-through limited partnerships 

Tax Savings
The cost of flow-through limited partnerships is 100% tax-deductible in the year the investment is made. In addition, the proceeds from the disposition of the partnership are treated as capital gains and taxable only at a rate 50% of regular income.  

Tax Efficiency
Investing in flow-through shares effectively converts income into capital gains, allowing investors to take advantage of any capital loss carry-forwards 

The following summary is of a general nature only and is not intended to be, nor should it be construed to be, legal or tax advice to any particular purchaser of units of Sprott Flow-Through Limited Partnership (the “Partnership”). Purchasers acquiring units with a view to obtaining tax advantages should obtain independent tax advice from a tax advisor who is knowledgeable in the area of income tax law and is able to determine optimal use of an investor’s federal and provincial deductions and/or credits, as well as impact, if any, on an investor’s liability for alternative minimum tax.  

This offering is only made by prospectus. The Partnership’s prospectus contains important detailed information about the securities being offered. Copies of the prospectus may be obtained from your IIROC registered financial advisor. Investors should read the prospectus before making an investment decision. 

This is a speculative offering. The purchase of units involves significant risks. There is no assurance of a return on a subscriber’s initial investment. Please refer to the prospectus for the complete list of risk factors associated with an investment in the units. 

More Information

 

 

The Sprott Flow-Through Advantage:

  • Breadth of manager with significant experience investing in the natural resource sector
  • Ability to leverage Sprott’s existing relationships with hundreds of Canadian resource companies
  • Sprott’s long history of investing in common shares of Canadian resource issuers

 

Download investor-friendly infographic on the tax advantages of flow-through investing:

sam_ft-infographic-238.gif

You are now leaving Sprott.com and entering a linked website. Sprott has partnered with ALPS in offering ETF products. For fact sheets, marketing materials, prospectuses, performance, expense information and other details about the ETFs, you will be directed to the ALPS/Sprott website at www.SprottETFs.com

An investor should consider investment objectives, risks, charges and expenses carefully before investing. The prospectuses contain this and other important information. For more information about the ETFs or to obtain a prospectus, call 1.855.215.1425. Read the prospectuses carefully before investing. The ETFs are distributed by ALPS Distributors, Inc. ALPS Advisors, Inc. is the investment adviser to the ETFs and Sprott Asset Management LP is the investment sub-adviser. Sprott is not affiliated with ALPS.

Continue to Sprott Exchange Traded Funds