Exemption Orders (Discretionary)
MENTOR EXPLORATION AND DEVELOPMENT CO., LIMITED
2001 BCSECCOM 959
ORDER UNDER SECTIONS 48 AND 76 OF THE SECURITIES ACT, R.S.B.C. 1996, c. 418
MENTOR EXPLORATION AND DEVELOPMENT CO., LIMITED
AND SUDBURY CONTACT MINES LIMITED
[para 1]
Background
1. Mentor Exploration and Development Co., Limited applied for an exemption from the registration requirements of section 34(1)(a) of the Act and the requirement to file and obtain receipts for a preliminary prospectus and prospectus in section 61 of the Act, for trades of shares under an arrangement;
1.1 Sudbury Contact Mines Limited applied for an exemption from the requirement to file and obtain receipts for a preliminary prospectus and prospectus in section 61 of the Act, for trades of shares distributed under the arrangement;
[para 2]
Representations
2. Mentor and Sudbury represent that:
2.1. Mentor is incorporated under the laws of Ontario;
2.2. Mentor’s authorized capital is an unlimited number of common shares and as of September 13, 2001, it had 3,482,351 common shares outstanding;
2.3. Mentor is a reporting issuer under the Act and has its common shares listed on the Canadian Venture Exchange, Inc.;
2.4. Mentor is not in default of any requirement under the Act or the Securities Rules, B.C. Reg.194/97;
2.5. Sudbury is incorporated under the laws of Ontario;
2.6. Sudbury’s authorized capital is an unlimited number of common shares and as of June 30, 2001, it had 19,691,085 common shares outstanding;
2.7. Sudbury is not a reporting issuer under the Act, but has been a reporting issuer in Alberta and Ontario for more than 12 months;
2.8. Sudbury is not in default under the securities legislation of either Alberta or Ontario;
2.9. Sudbury’s common shares are listed on The Toronto Stock Exchange;
2.10. Mentor holds 4,441,148, or 22.6%, of Sudbury’s outstanding common shares;
2.11. Mentor and Agnico-Eagle Mines Ltd. have agreed that:
2.11.1 Agnico will acquire all of the outstanding common shares of Mentor by issuing 0.21 Agnico common shares to the shareholders of Mentor for every Mentor common share held by them, and
2.11.2 Mentor will distribute all of Sudbury’s common shares that it holds to its shareholders on the basis of 1.2753303 Sudbury common shares for each Mentor share held by its shareholders;
2.12. the arrangement is subject to both the approval of the Mentor shareholders at a meeting to be held on October 15, 2001 and to a final order from the Ontario Superior Court of Justice (Commercial List);
2.13. prior to the shareholders’ meeting, Mentor provided its shareholders with an information circular that included disclosure of the arrangement and the business and operations of each of Agnico and Sudbury;
2.14. once the arrangement is completed, the former shareholders of Mentor resident in British Columbia will hold a maximum of 2,551 common shares of Sudbury representing 0.013% of Sudbury’s outstanding shares;
2.15. the distribution of the Agnico shares to the Mentor shareholders is exempt from the registration and prospectus requirements of sections 34(1)(a) and 61 of the Act under sections 45(2)(9) and 74(2)(8) of the Act;
2.16. Mentor cannot rely on the exemptions in sections 45(2)(9) and 74(2)(8) of the Act to distribute its Sudbury common shares to its shareholders;
2.17. section 140 of the Rules provides that a trade in the Sudbury common shares acquired by the former Mentor shareholders in British Columbia is deemed to be a distribution unless, among other things, Sudbury is a reporting issuer and has been a reporting issuer for the 12 months preceding the trade;
[para 3]
Order
3. Because it is not prejudicial to the public interest, it is ordered that:
3.1. Mentor is exempt from the requirements of sections 34(1)(a) and 61 of the Act in connection with its distribution of the Sudbury common shares to its shareholders under the arrangement;
3.2. any trade by the former Mentor shareholders resident in British Columbia of Sudbury common shares acquired under the arrangement is a distribution, unless the trades are made through the TSE or any other Canadian stock exchange, or
3.2.1 Sudbury is a reporting issuer and has been a reporting issuer for the 12 months immediately preceding the trade,
3.2.2 if the seller is an insider of Sudbury, other than a director or senior officer of Sudbury, the seller has filed all records required to be filed under sections 87 and 90 of the Act,
3.2.3 if the seller is a director or senior officer of Sudbury, the seller has filed all records required to be filed under sections 87 and 90 of the Act and Sudbury has filed all records required to be filed under Part 12 of the Act and of the Rules,
3.2.4 the trade is not a distribution from the holdings of a control person of Sudbury,
3.2.5 no unusual effort is made to prepare the market or create a demand for the security, and
3.2.6 no extraordinary commission or other consideration is paid in respect of the trade.
[para 4]
DATED October 2, 2001.
Derek E. Patterson
Manager