For most Canadians, especially those in urban centres, the mining exploration sector can feel removed from everyday life, conjuring up images of old-time prospectors panning for gold rather than the modern, high-tech operations that define the industry today.
In reality, mining exploration is the cornerstone of Canada’s resource sector, driving the discovery of critical resources for advancing clean energy solutions and renewable infrastructure.
A common, tax-efficient way for companies to raise capital and incentivize investment in exploration projects, is through the issuance of flow-through shares; a Canadian innovation introduced in the 1970s that has become an essential way to invest in mining exploration in Canada. By providing tax benefits to investors, these shares enable junior mining companies to secure critical funding for exploration, stimulate economic activity in resource-rich regions and ensure a strong pipeline of mineral resources for future development.
Additionally, flow-through shares allow mineral exploration companies to transfer their expenses to investors as tax deductions, reducing financial risk for investors. They are also a powerful tool for generous Canadians seeking to maximize tax efficiency and charitable impact. PearTree Canada, the originator and leading provider of the flow-through share donation platform, has spent almost 20 years increasing donations to charities, while significantly increasing the funding of jobs in rural and remote communities across Canada under the flow-through share tax regime.
For a primer on mining exploration in Canada, we’ve tapped geologist Kendra Johnston, managing director at PearTree Canada, who has 20 years of experience in the mineral exploration industry.
Exploration is different from extraction
Arguably, the first and most salient aspect of exploration is that it is a lengthy process conducted over many years before extraction.
Exploration involves initial geological surveys, core sampling and environmental studies to determine if mining is viable. Extraction is the actual removal of resources from the ground, processing them into usable materials and managing construction and waste handling.
In short, while extraction focuses on resource recovery and production, exploration is about discovery and evaluation.
“In the earliest stages, exploration is literally hiking and picking up rocks,” explains Johnston. “It’s two or three individuals with backpacks walking along a path, collecting rocks, soil, sometimes moss or bits of trees—anything that might contain trace amounts of minerals and metals.”

Once the data is collected and analyzed, says Johnston, sites showing potential are revisited. Yet, in almost all cases, actual extraction is still years away. “At the end of the day, one in every 10,000 mineral showings becomes a mine,” Johnston says. “One in every thousand advanced exploration projects becomes a mine.”
Those odds mean exploration is inherently riskier than mining because it involves searching for economically viable deposits without a guaranteed return. Flow-through shares help fund these grassroots explorations.
Exploration is done with a minimal environmental footprint
Early-stage exploration projects rigorously monitor conditions in prospective project areas, including establishing a baseline understanding of the area’s natural state. This is done, in part, so that during any subsequent operations, environmental data is compared to the baseline to detect and address any deviations caused by mining activities.
Funds raised through flow-through shares often cover environmental studies and baseline data collection, ensuring exploration activities are sustainable and comply with industry regulations.
Exploration typically involves smaller-scale operations, such as core sampling and testing, rather than the more expansive land use required for mining operations. Once an area of interest is identified, small drill holes are dug for further exploration.
“A project is built over several years, and it might involve drilling up to 10 holes a year,” explains Johnston. “Each hole is typically about two-and-a-half inches in diameter and about 150 metres deep. Afterward, you’re typically left with a 10-by-10-metre clearing, but that’s the only disturbance. A year later, the brush has grown back. There are no chemicals, and there’s nothing left from that drill hole.”
Exploration teams collaborate with municipalities and Indigenous groups
Modern mining exploration actively involves partnerships with local communities.
“Typically, explorers will approach the community—be it a municipality or an Indigenous nation—and have really open and transparent conversations,” says Johnston. “Often, explorers will introduce themselves when they’re simply walking around, taking rocks. It’s an important step to stay in contact and build relationships and proper friendships with the people in nearby communities.”
Johnston says by taking the time to understand the Indigenous view of the land, exploration teams establish a foundation of mutual respect. “Land is a living, breathing thing. It has a spirit and has sacred places,” she says. “And understanding that, for example, the top of a particular hill—which is perhaps part of an exploration claim—is sacred because it’s an ancestor who’s passed away and has been reformed in the land and created as a mountain, is really important.”
Mining helps drive economic activity in resource-rich regions
Exploration can strengthen regional economies by offering training, employment, and revenue-sharing opportunities.
If a mine comes to fruition, Johnston says, it will rely on the nearby community for local products, workforce, and knowledge, while the community benefits from the mine through economic growth, improved infrastructure, and support in remote regions.
“For example, mining health and safety personnel or helicopter pilots have responded to medical emergencies in nearby communities,” says Johnston. “Similarly, employees from local mines have assisted with firefighting efforts and flood preparedness in these areas. And most companies will support celebratory dinners, local soccer teams and food programs for schools.”
In many ways it’s a win-win across the country. Flow-through shares can lead to a triple benefit—for local communities through jobs and economic activity, for donors through tax efficiency and for charitable organizations through increased donations.
Disclaimer:
This story was created by Canadian Family Offices’ commercial content division on behalf of PearTree Canada, which is a member and content provider of this publication.