Exemption Orders (Discretionary)
MINEGEM INC.
2001 BCSECCOM 846
Headnote
Mutual Reliance Review System for Exemptive Relief Applications – National Instrument 43-101 – Relief granted from the requirement to use the mineral resource and mineral reserve categories set out in NI 43-101 in connection with disclosure in an annual information form, press release and technical report provided the resources and reserves are prepared in accordance with the South African Code for Reporting of Mineral Resources and Reserves and a reconciliation to the mineral resource and reserve categories in NI 43-101 is also filed with the technical report.
Applicable British Columbia Provisions
National Instrument 43-101 Standards of Disclosure for Mineral Projects, ss. 2.2(a) and 9.1
IN THE MATTER OF THE SECURITIES LEGISLATION OF ALBERTA, BRITISH COLUMBIA AND ONTARIO
AND
IN THE MATTER OF THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF MINEGEM INC.
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatory authority or regulator (the “Decision Maker”) in each of Alberta, British Columbia and Ontario, (the “Jurisdictions”) has received an application (the “Application”) from MineGem Inc. (the “Filer”) for a decision under the securities legislation of the Jurisdictions (the “Legislation”) that the Filer be exempt from section 2.2 (a) of National Instrument 43-101 ("NI 43-101") in connection with certain disclosure to be contained in the Filer’s annual information form, technical report, and a press release in respect of a property material to the Filer;
AND WHEREAS under the Mutual Reliance Review System for Exemptive Relief (the “System”) the Ontario Securities Commission is the principal regulator for this Application;
AND WHEREAS the Filer has represented to the Decision Makers that;
1. The Filer was incorporated as Whisper Lake Resources Inc. under the laws of the Province of Ontario by Articles of Incorporation effective January 27, 1988. On December 19, 1996, the Filer was reorganized and its name was changed to Messina Diamond Corporation. Pursuant to Articles of Amendment dated July 10, 2000, the Filer changed its name to MineGem Inc.
2. The authorized capital of the Filer consists of an unlimited number of common shares of which 42,464,968 common shares (the “Common Shares”) were issued and outstanding as at May 18, 2001.
3. The Common Shares are listed on the Canadian Venture Exchange under the symbol “YGL”.
4. As of the date hereof, the Filer is a reporting issuer in each of Ontario, British Columbia and Alberta and is not on the list of defaulting issuers maintained by the securities regulatory authorities of such jurisdictions.
5. The Filer is engaged in the business of mineral exploration and development and is subject to NI 43-101.
6. The Filer is currently preparing for filing an annual information form in respect of the year ended December 31, 2000 (the “AIF”) in which it will disclose information respecting a mineral project of the Filer located in Lesotho, Southern Africa referred to as the Liqhobong Satellite Pipe Mine (the “Liqhobong Mine”). The Filer further intends to disseminate a press release disclosing a summary of such information following the filing of the AIF (the “Liqhobong Press Release”). The Filer is also currently preparing a technical report to be filed in support of information contained in the AIF and the Liqhobong Press Release (the "Technical Report").
7. The Liqhobong Mine is a mining project material to the Filer.
8. A feasibility study in respect of the Liqhobong Mine was completed by Bateman Engineering Limited (“Bateman”) and Steffen, Robinson & Kirsten Inc. ( “SRK”) (the “Feasibility Study”).
9. The Feasibility Study complies with the South African Code for Reporting of Mineral Resources and Mineral Reserves (the “SAMREC Code”). The SAMREC Code became effective March 2000, and was prepared by the South African Mineral Resource Committee (“SAMREC”) under the auspices of a South African Institute of Mining and Metallurgy.
10. The Filer engaged Velasquez Spring of Watts, Griffis, and McOuat Limited (“Spring”) to prepare a reconciliation of the Feasibility Study to the mineral resource and reserve categories set out in sections 1.3 and 1.4 of NI 43-101(the “Spring Reconciliation”).
11. Spring is a “qualified person” as such term is defined in NI 43-101.
12. The Spring Reconciliation includes an explanation of the definitions prescribed by the SAMREC Code and the opinion of Spring that the definitions for indicated resources, inferred resources, and probable reserves are identical in effect to the definitions in the CIM Standards on Mineral Resources and Reserves Definitions and Guidelines adopted by the CIM Council on August 20, 2000 (the “CIM Standards”).
13. The SAMREC Code further includes a “checklist of assessment and reporting criteria for diamonds” (See Appendix II to the SAMREC Code), which includes sections for the “reporting of diamond resources” and for “reporting of diamond reserves”. This checklist is very similar in content and scope to the guidelines which accompany the CIM Standards, but is specifically directed at the evaluation and reporting of diamond deposits.
14. The SAMREC Code specifically allows for the use of terms appropriate to the diamond industry including “diamond reserves” and “diamond resources” where the word “diamond” is used in place of the word “mineral”. In following the requirements of the SAMREC Code, Bateman/SRK were required to use terms such as “indicated diamond resource” and “inferred diamond resource”, rather than “indicated mineral resource” and “inferred mineral resource” as required by Section 1.3 of NI 43-101. Similar terms to the ones used by Bateman/SRK are used under the SAMREC Code for reserves, for example “probable diamond reserve” as a replacement for “probable mineral reserves”.
15. The SAMREC Code contains definitions and standards comparable to definitions and standards which are recognized by NI 43-101.
AND WHEREAS under the System this MRRS Decision Document evidences the decision of each Decision Maker (collectively, the "Decision");
AND WHEREAS each of the Decision Makers is satisfied that the test contained in the Legislation that provides the Decision Maker with the jurisdiction to make the Decision has been met;
THE DECISION of the Decision Makers under the Legislation is that section 2.2(a) of NI 43-101 shall not apply to the Filer in connection with the disclosure in the AIF, the Technical Report, and the Liqhobong Press Release of the resources and the reserves of the Liqhobong Mine prepared in accordance with SAMREC provided that:
(i) the disclosure of the resources and reserves of the Liqhobong Mine in the AIF and the Liqhobong Press Release includes a summary of the Spring Reconciliation, a cautionary statement to the effect that the resources and reserves have not been prepared in accordance with the definitions of mineral resources and mineral reserves in NI 43-101, and a reference to this Decision; and
(ii) the Spring Reconciliation is certified by Velasquez Spring and filed with the Technical Report.
DATED August 17, 2001.
Kathy Soden