BCSC

Exemption Orders (Discretionary)

MRF 2001 LIMITED PARTNERSHIP

2001 BCSECCOM 964

Headnote

Mutual Reliance Review System for Exemptive Relief Applications – issuer, a limited partnership, exempted from interim financial reporting requirements for the first and third quarter of each financial year – exemption terminates upon the occurrence of a material change in the business affairs of the partnership, unless the Decision Makers are satisfied that the exemption should continue.

Applicable British Columbia Provisions

Securities Act, R.S.B.C. 1996, c. 418, s. 91

IN THE MATTER OF THE SECURITIES LEGISLATION OF BRITISH COLUMBIA, ALBERTA, SASKATCHEWAN, ONTARIO, NOVA SCOTIA AND NEWFOUNDLAND

AND

IN THE MATTER OF THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF MRF 2001 LIMITED PARTNERSHIP

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatory authority or regulator (the "Decision Maker") in each of British Columbia, Alberta, Saskatchewan, Ontario, Nova Scotia and Newfoundland (collectively, the "Jurisdictions") has received an application from MRF 2001 Limited Partnership (the "Partnership") for a decision pursuant to the securities legislation of the Jurisdictions (the "Legislation") that the Partnership be exempt from the requirements contained in the Legislation to file with the Decision Makers and send to its securityholders (the "Limited Partners") interim financial statements for each of the first and third quarters of each of the Partnership's fiscal years;

AND WHEREAS pursuant to the Mutual Reliance Review System for Exemptive Relief Application (the "System), the Ontario Securities Commission is the principal regulator for this application.

AND WHEREAS the Partnership has represented to the Decision Makers that:

1. the Partnership is a limited partnership formed pursuant to the Limited Partnerships Act (Ontario) on January 18, 2001;

2. the Partnership was formed to invest in certain common shares ("Flow-Through Shares") of companies involved primarily in oil and gas, mining or renewable energy exploration and development ("Resource Companies");

3. the Partnership will enter into agreements ("Resource Agreements") with Resource Companies and under the terms of each Resource Agreement, the Partnership will subscribe for Flow-Through Shares of the Resource Company and the Resource Company will incur and renounce to the Partnership, in amounts equal to the subscription price of the Flow-Through Shares, expenditures in respect of resource exploration and development which qualify as Canadian exploration expense or an Canadian development expense which may be renounced as Canadian exploration expense to the Partnership;

4. on April 25, 2001, the Decision Makers, together with the securities regulatory authority or regulator for Manitoba and Yukon (in which jurisdictions no legislative requirement exists to file first and third interim financial statements), issued a receipt under the System for the prospectus of the Partnership dated April 25, 2001 (the "Prospectus") relating to an offering of up to 1,400,000 units of the Partnership (the "Partnership Units");

5. the Prospectus contained disclosure that the Partnership intends to apply for an order from the Decision Makers exempting it from the requirements to file and distribute financial statements of the Partnership in respect of the first and third quarters of each fiscal year of the Partnership;

6. the Partnership Units will not be listed or quoted for trading on any stock exchange or market;

7. at the time of purchase or transfer of Partnership Units, each purchaser or transferee consents to the application by the Partnership for an order from the Decision Makers exempting the Partnership from the requirements to file and distribute financial statements of the Partnership in respect of the first and third quarters of each fiscal year of the Partnership;

8. on or about June 30, 2003, the Partnership will be liquidated and the Limited Partners will receive their pro rata share of the net assets of the Partnership; and it is the current intention of the general partner of the Partnership to propose prior to the dissolution that the Partnership enter into an agreement with Middlefield Mutual Funds Limited (the "Mutual Fund"), an open end mutual fund, whereby assets of the Partnership would be exchanged for shares of the Growth Class of the Mutual Fund; and upon dissolution, Limited Partners would then receive their pro rata share of the shares of the Growth Class of the Mutual Fund;

9. unless a material change takes place in the business and affairs of the Partnership, the Limited Partners will obtain adequate financial information concerning the Partnership from the semi-annual financial statements and the annual report containing audited financial statements of the Partnership together with the auditors' report thereon distributed to the Limited Partners;

10. given the limited range of business activities to be conducted by the Partnership and the nature of the investment of the Limited Partners in the Partnership, the provision by the Partnership of interim financial statements in respect of the first and third quarters of each fiscal year of the Partnership will not be of significant benefit to the Limited Partners and may impose a material financial burden on the Partnership;

11. it is disclosed in the Prospectus that the General Partner will apply on behalf of the Partnership for relief from the requirements to send to Limited Partners the interim financial statements for each of the first and third quarters of each of the Partnership's fiscal years;

12. each of the Limited Partners has, by subscribing for the units offered by the Partnership in accordance with the Prospectus, agreed to the irrevocable power of attorney contained in Article XIX of the Amended and Restated Limited Partnership Agreement scheduled to the Prospectus and has thereby consented to the making of this application for the exemption requested herein;

AND WHEREAS under the System, this MRRS Decision Document evidences the decision of each Decision Maker (collectively, the “Decision”);

AND WHEREAS each Decision Maker is of the opinion 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:

1. the Partnership be and is hereby exempted from the requirement to file with the Decision Makers interim financial statements for the first and third quarters of each financial year of the Partnership; and

2. the Partnership be and is hereby exempted from the requirement to send to the Limited Partners interim financial statements for the first and third quarters of each financial year of the Partnership,

provided that these exemptions shall terminate upon the occurrence of a material change in the affairs of the Partnership unless the Partnership satisfies the Decision Makers that the exemptions should continue, which satisfaction shall be evidenced in writing.

DATED this 25th day of September, 2001.

J. A. Geller, Q.C. R. Stephen Paddon, Q.C.