Gastem Inc GTMIF

private placement

[foshizzle]

This is really how the private placement works...

Basically the company passes an exploration tax break they are recieving on to the buyer of the flow-through share. The reason the shares are priced higher than the current market price is because the buuyer is willing to pay more because they are getting a tax shelter (and free warrants).

In this case because the offering in only available to 'accredited investors' (millionaires) without getting into to much detail, the break even price for the buyers is about 75% of what they pay, once you factor in tax savings & capital gains upon selling. Long story short - these shares are basically 48 cent shares (75% of 65 cents) to the buyers plus they get the warrants for free. Coincidentally I see the price dropped to 48 cents today. Contrary to what I've seen posted here, the buyers are not paying over market price when you factor in the flow-through aspect.

The warrants do not trade. They are an incentive given to the buyers of the share offering often referred to as a 'sweetener'.

Here is a good explanation of flow through shares.
https://www.milliondollarjourney.com/how-flow-through-shares-work.htm