Letters to the Editor: Setting the flow-through record even more straight

I’m bemused by the recent Northern Miner Letter to the Editor from Ned Goodman (T.N.M. April 30-May 6, 2007) giving credit to various people for the creation of flow-through shares.

This form of financing existed well before anything suggested in your original article (“Flow Through Financing,” Prospectors and Developers Association of Canada 75th Anniversary Magazine) or in Mr. Goodman’s response.

In early 1979, I noted an article in the business press that reported much of PanArctic’s exploration spending was funded by a consortium of major Canadian companies using the flow-through method.

At the time, I headed a small TSE-listed exploration company called Precambrian Shield Resources, whose name was subsequently changed to Mark Resources and is now part of the EnerPlus Income Trust. I suggested to our accountants that it should be possible for us to use this method, and after some research they agreed.

In March of 1979, Precambrian issued 850,000 treasury shares at $2.85 per share for a total of roughly $2.42 million — to my knowledge, this is the first flow-through deal done by a junior resource company. A similar financing arrangement followed in 1980, whereby we issued about 1.19 million shares for a total of about $5 million. These transactions caused a flood of calls to our office inquiring how this method of financing worked, which would indicate that Precambrian was the first junior to issue flow-through shares.

The $7.5 million raised in 1979 and 1980 may seem like peanuts compared with present-day financings, but I would take issue with Mr. Goodman’s comment that flow-through shares were not of any importance to the junior exploration industry prior to the birth of CMP in 1983.

Earl E. Curry

Victoria, B.C.