Red Lake Madsen Mine Ltd LRTNF

RE:RE:news release

[snowshoedb]

flow through shares are issued so that the tax benefit (deduction for tax purposes) of exploration expenses are shifted from the  mining company and on to the financing company... that is why it is normally done above market. Essentially it means the finace company will pay a net lower cost then what was published. Assume the tax rate = 25%. Then the net cost of the shares to the company providing the financing would be as follows as long as the money was spent on qualifying exploration expenses:

Net Share cost = 1.52 x (1-tax rate) = 1.52 x (1-.25) = 1.52 x .75 = 1.14/share