In October 2025, the Canadian mineral exploration company PTX Metals raised $2.25 million by way of a special workaround: “charity flow-through” shares.
Mining companies are increasingly drawing on this unique type of investment to finance exploration – tapping into the gold mine, so to speak, of donor capital.
Here’s how it works: an exploration company sells shares to finance exploration. The shares are sold at a slight premium to reflect the market value of tax relief that the company agrees to pass on to investors – hence the term “flow-through.” A donor buys the shares and immediately donates them in-kind to a charity, which in turn immediately sells them to a pre-arranged end buyer at a discount. The donor makes use of the tax relief to significantly reduce the cost of their donation, the charity gets cash, and the so-called end buyer – often a company insider or institutional investor – acquires the shares at a discounted price. Instead of paying tax on the income used to purchase the shares, donors pay tax on capital gains equivalent to the cash value of the shares sold by the charity. Donors are also eligible for a series of specialized and sizable tax credits to further reduce the cost of their donation.
Philanthropists who purchased PTX’s shares saved up to an estimated $2.22 million in taxes by converting income into capital gains, and by deducting up to 80% of the share purchase price from their taxes owing, thanks to the Critical Mineral Exploration Tax Credit and Charitable Donation Tax Credit. Participating charities received a $1.5 million cash donation, and PTX raised three quarters of a million dollars more than would otherwise have been possible, to finance exploration of its properties.
The association of philanthropy with exploration finance has helped cast mineral exploration in a progressive light. Not only does it amplify the impact of charitable giving by dramatically reducing its cost, but according to the architects of charity flow-through, financings like the one PTX executed are also considered acts of “reconciliation.” They say that by enabling the flow of exploration capital, this type of financing supports Indigenous engagement and brings jobs and investment to remote Indigenous communities.
The conflation of flow-through financing with reconciliation obscures the mechanism’s deeply colonial dynamics. Much of the mineral exploration that these tax credits subsidize takes place on Indigenous land for which free, prior and informed consent has not been secured. Often it proceeds in spite of the clearly articulated opposition of Indigenous communities that are affected. Charity flow-through capitalizes exploration that would otherwise be too risky to proceed. In reality, it helps companies circumvent Indigenous resistance and ignore assertions of Indigenous jurisdiction.
In the absence of Indigenous consent, the philanthropists, charities and end buyers that make these transactions possible are complicit in undermining Indigenous rights.
Placement undermines Indigenous rights
PTX’s recent financing is a case in point. Documents filed with the Canadian Securities Administrators suggest that the funds raised by PTX will be used to advance exploratory drilling for critical minerals at the company’s flagship W2 property in the Ring of Fire region of northern Ontario. PTX received exploration permits from the Ontario government, most recently in December 2024. Nearby First Nations, including Neskantaga and Nibinamik, have objected to this exploration and have written to Ontario’s provincial government indicating that PTX does not have their authority to proceed. Fully funded, thanks to “charity flow-through,” PTX is proceeding nonetheless.
Neskantaga has advised the company on multiple occasions that it does not have its consent to be on the property or to conduct exploration, has made clear that any unauthorized exploration is a violation of its Indigenous and Treaty Rights, and has appealed to the Crown to intervene.
In December 2025, the Chief and some members of council from Neskantaga travelled by snowmobile to hand-deliver a cease-and-desist letter to the company at the drilling site. The letter orders PTX to halt exploration and makes clear that the First Nation is prepared to defend its homelands. Neskantaga is one of several First Nations calling for a moratorium on exploration, permitting and industrial development in the Ring of Fire, and has publicly vowed to block unilateral development on its territory.
A history of disregarding Indigenous rights
This isn’t the first time PTX has proceeded with projects despite Indigenous opposition. Rebranded as PTX Metals in 2024 to better reflect a transition from gold to critical mineral exploration, the company has a history of acting unilaterally on Indigenous territory and weaponizing the justice system against those who resist. Formerly known as Platinex, the company is notorious for its role in the 2008 incarceration of six leaders from Kitchenuhmaykoosib Inninuwug (KI) First Nation.
Starting in 2001, shortly after PTX staked its claims, KI declared a moratorium suspending all mining and mineral exploration on its territory. The First Nation made clear it was not opposed to development, but that – as restated in subsequent court proceedings – for development to eventually be accepted, it would need to respect “KI’s special connection to the land and its duty under its own law, to protect the land.”
Discussions with the company ceased when PTX failed to comply with the First Nation’s consultation protocol. The protocol required broad community engagement and a final community-wide referendum on whether to accept the project. Court documents also establish that KI subsequently (and on multiple occasions) informed PTX that the company did not have the Nation’s consent to undertake exploration, and that it was prepared to undertake peaceful land-based actions to prevent it. Events came to a head in early 2006 when, undeterred by community opposition and unwilling to take no for an answer, PTX decided – in the words of a judge – “to steamroll over the KI community by moving in a drilling crew without notice.”
With court-ordered consultation stalled and prevented by the community from accessing the property, PTX returned to court to obtain an order to compel compliance with court-ordered drilling. Six KI leaders were found in civil contempt of court for violating the order and sentenced to six months in jail. This sentence was overturned on appeal after the KI-6 (as they came to be known) had spent 68 days in jail.
PTX attempted once again to resume exploration in August 2009. This time, the company’s float plane was prevented from landing. PTX attempted to recover $70 million in alleged losses from the province – Ontario agreed to pay $5 million – and surrendered its claims. Ontario withdrew the majority of the KI homeland – 23,184 square kilometres – from further staking and mineral exploration.
Ability to indemnify shareholders uncertain
Donors unmoved by PTX’s blatant disregard for Indigenous rights might be concerned with the company’s ability to pay back its investments. Charity – and regular – flow-through shares renounce tax relief to investors. In the case of PTX’s two October charity flow-through placements, donors were able to claim up to $2.22 million worth of tax relief, reducing the cost of the $2.25-million share purchase to less than $30 thousand. Exploration companies are required to spend flow-through dollars on qualifying exploration expenses within a year (in the case of PTX by December 31, 2026) and can be held liable for tax relief renounced to investors when they do not.
Neskantaga’s assertion of its inherent jurisdiction under Anishinaabe law and promise to “defend their homeland” by engaging in “direct land defense” – as spelled out in the December 2025 cease-and-desist letter – calls into question PTX’s ability to use the funds it raised through charity flow-through. Whether the company is then able to compensate shareholders for resulting losses is an open question.
This is not the first time PTX has faced this problem. The judge who presided over the company’s legal proceedings against KI found that its pending insolvency was entirely “self-created.” Knowing that KI was strongly opposed to the project and having been advised that any further exploration would be resisted, PTX nonetheless elected to raise more than $1-million worth of flow-through shares to finance drilling – a decision that was, in the words of the judge, “based on an unreasonable belief that KI would not defend its interests when push came to shove.”
Unable to conduct the promised exploration, the company’s unspent exploration commitments pushed PTX further into debt. Financial statements filed with the Canadian Securities Administrators show that the company was forced to carry a $633,071 liability for shareholder indemnification, compounding the economic distress precipitated by KI’s capacity to deny access to its territory. Had the Canada Revenue Agency not reversed the liability in 2015 (following multiple successive appeals by the company), it is unclear whether it would have been able to find the money to compensate investors.
Flow-through financing, then, is not just a tax tool for stretching philanthropic dollars or incentivizing investment in mineral exploration. It is a fiscal policy of land alienation and public subsidy for conflict that emboldens exploration companies to operate as though Indigenous jurisdiction does not exist. Charity flow-through enables speculative, otherwise un-investable mineral exploration to advance deep into Indigenous territories – regardless of whether consent has been secured, and often in spite of opposition and resistance. All the while donors collect benefits, charities take their cut, and governments look away.
That should end. No charity should touch these deals without Indigenous consent, and no government should subsidize exploration that bypasses it.
Anna Stanley is an adjunct professor in the Department of Geography, Environment and Geomatics at the University of Guelph and a research fellow at the Broadbent Institute.
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