Stock sales to benefit First Nations high school residence
KWG Resources Inc. is looking to help raise funds for the founding of student residences at Dennis Franklin Cromarty (DFC) First Nations High School in Thunder Bay.
The company, involved in a drilling program at Cliffs Natural Resources Ring of Fire chromite deposit, plans to have investors donate flow-through shares to the United Way of Thunder Bay, for use by DFC students.
“The purchasers of the flow-through shares will donate the shares to the United Way of Thunder Bay,” said Theresa Okimaw-Hall, executive director of KWG’s transportation subsidiary Canada Chrome Corporation and former chief of Attawapiskat. “The funds derived from their sale will then be made available for the acquisition, furnishing and maintenance of residences for students attending the Dennis Franklin Cromarty High School.”
Frank Smeenk, president and CEO of KWG, developed the funding strategy after discussing the DFC residence issue with Tom Kamenawatamin, president and CEO of Wasaya Group Inc., who told him about some of the business plans DFC students had developed.
“Some of their ideas are really neat,” Smeenk said. “They want to have a residence of their own with two students in each room.”
Smeenk also noted that his company’s business with Webequie slowed down last year while the search for Jordan Wabasse was going on, as many of the community’s leaders were helping in the search. Wabasse went missing in February 2011 and was found in the Kaministiquia River in May.
“I came to understand this wasn’t the first time, in fact, it goes on on an almost annual basis,” Smeenk said. “It kind of struck a chord. I was going to buy some more flow-through shares and I thought that perhaps Cliffs (Natural Resources) would want to participate in this with me.”
Smeenk has already started the process by donating flow-through shares in KWG he had already purchased to the United Way of Thunder Bay in late December 2011 before he purchased more flow-through shares.
Now Smeenk is looking for other people or companies to make additional flow-though share donations to the residences through the United Way of Thunder Bay. He noted that it works as a charity deduction for tax purposes.
“If you buy flow-through shares, you get to deduct the value of the investment from your taxable income,” Smeenk said. “But when you sell flow-through shares, you realize a taxable capital gain. The exception to that is if you give away flow-through shares you bought before, you don’t have to include the value of that gift in your income, but you also get to deduct it from your income.”
Smeenk and M.J. (Moe) Lavigne, vice president exploration and development with KWG, are together guaranteeing the first 10 per cent of the donations.
“What I’ve really done is given about a quarter of a million dollars to a charity that would have otherwise gone to Ottawa.”
