Lisa Davis CEO PEARTREE SECURITIES
Can you outline the key achievements and challenges you faced in 2023?
Our overall deal flow reached unprecedented levels, with standout success in critical minerals. The introduction of the federal critical mineral exploration tax credit (CMETC) played a pivotal role, resulting in a substantial increase in financing for critical minerals projects. In about 18 months, we saw CMETC financings amounting to approximately C$500 million, marking a significant shift from industry’s predominantly gold-focused financings. We applaud the government's proactive approach in supporting the CMETC initiative.
Can you provide insights into the industry's advocacy efforts regarding the AMT?
The awareness within the mining community regarding the AMT has been slow to develop due to the intricate nature of the rules. Peartree Securities has actively taken on the role of educating both industry stakeholders and the government about the nuances of the AMT.
The challenges are further compounded by proposed changes that could significantly impact the capital available for critical minerals exploration.
The charitable community, facing similar concerns, has become more organized and vocal recently, and is now actively engaging on the issue. Decision-making around the purchase of flow-through shares has become more difficult for individuals within the mining community.
How does PearTree Securities plan to maintain its leading position?
We have expanded our reach within charitable communities, building relationships with donors and diversifying our distribution channels. This has positioned us as a dominant player in the securities dealing space, with a robust pipeline of demand for flow-through shares. Our ability to facilitate large financing deals, such as those in the C$50 million range, sets us apart. We plan to maintain this trajectory by staying committed to our core strategies, building on our reputation, and adapting to market dynamics. Our emphasis on donations and efficient deal execution positions us for continued success in 2024 and beyond.
Peter Nicholson Founder and President WEALTH GROUP (WCPD INC)
Can you introduce the Wealth Group (WCPD) to our audience?
Our core focus revolves around financial services, with a strong emphasis on tax reduction and philanthropic tax planning. In 2006, our firm integrated donation services into our business when Canadian charitable flow-through deals commenced.
Our structure is based on two long-standing tax policies. The first is the charitable tax receipt, created in 1918, designed to promote donations. The second is the flow-through share, introduced in 1954, to provide seed funding to junior mining companies.
Both tax policies offer 100% tax savings. When these tax policies are combined, and you include additional provincial and credit critical tax credits, something special happens.
Our firm alone has facilitated north of C$350 million in giving to Canadian charities while financing well over C$1 billion in junior mining projects.
Can you share insights into the challenges facing the industry and the evolution of liquidity providers and donors since 2006?
A decade ago, I foresaw challenges in maintaining a robust liquidity provider network for flow-through share transactions in Canada. Recognizing the complexity of the risk dimension, we cultivated relationships with a diverse range of liquidity providers, convincing them to explore assets like critical minerals or gold. Our role involves not only securing lead orders but also fortifying our risk component to address challenges anticipated a decade ago.
I think there will soon be an upswing in the market, and it will require new investors due to exhaustion among existing ones. Convincing investors who are wary of mining's volatility is a hurdle. We need to educate retail investors about mining, to redirect them away from crypto and cannabis and towards critical minerals.
Philanthropy tied to carbon reduction is gaining traction among high-net-worth individuals. Tax-efficient donations have seen a surge. However, the Canadian middle class is donating less and less, with a peak in donations in 2006.