Exemption Orders (Discretionary)
STEALTH MINERALS LIMITED
2001 BCSECCOM 715
IN THE MATTER OF THE SECURITIES ACT
R.S.B.C. 1996, c. 418
AND
IN THE MATTER OF STEALTH MINERALS LIMITED
Exemption Order Under Section 76
[para 1]
WHEREAS Stealth Minerals Limited has applied to the Executive Director under section 76 of the Securities Act, R.S.B.C. 1996, c. 418 that certain intended trades of securities of Stealth under a Short Form Offering Document (“SFOD”) are exempt from the requirements of section 61 of the Act;
[para 2]
AND WHEREAS Stealth has represented to the Executive Director that:
1. Stealth was incorporated under the Business Corporations Act (Alberta), is a reporting issuer under the Act, and is not in default of any requirement of the Act or the Securities Rules, B.C. Reg. 194/97;
2. the authorized capital of Stealth consists of an unlimited number of common shares without par value (“common shares”) and an unlimited number of preferred shares, of which 21,176,218 common shares and no preferred shares are issued and outstanding;
3. the common shares are listed for trading on the Canadian Venture Exchange (the “CDNX”);
4. Stealth is a qualifying issuer as defined in BC Instrument 45-506 In the Matter of the System for Shorter Hold Periods with an Annual Information Form (“BCI 45-506”);
5. on April 24, 2001 Stealth filed an Annual Information Form dated April 15, 2001 in accordance with section 5.3 of Local Policy Statement 3-27 and the Executive Director has not advised Stealth that it is no longer entitled to offer purchasers the shorter hold period provided by BCI 45-506;
6. by an agreement dated June 1, 2001, as amended on June 20, 2001, (the “Agency Agreement”), Stealth agreed with Georgia Pacific Securities Corporation as agent (the “agent”) to offer up to 10,000,000 units by an SFOD dated June 1, 2001 (the “offering”); each unit will be comprised of one common share and one-half non-transferrable share purchase warrant (a “warrant”), each whole warrant will entitle the holder to purchase one additional common share for $0.10 (a “warrant share”);
7. the Agency Agreement provides, and the warrant certificates will provide, that only a portion of the warrants will be exercisable during the first year of the warrants’ two year term to ensure that the gross proceeds received by Stealth under the offering will not exceed $1,000,000 within twelve months after the closing date of the offering (the “closing date”);
8. any warrants that cannot be exercised in the first 12 months following the closing date (“restricted warrants”) will be distributed proportionately to the purchasers of the units under the offering;
9. Stealth will not be able to rely on BC Instrument 45-509 Short Form Offerings of Listed Securities and Units by Qualifying Issuers (“BCI 45-509”) to issue the units because the gross proceeds to Stealth under the offering may exceed $1,000,000; in all other respects, Stealth has complied and will comply with the requirements of CDNX in respect of the offering; and
10. the CDNX has accepted the SFOD in respect of the offering, including the terms of the restricted warrants;
[para 3]
AND WHEREAS the Executive Director considers that to do so would not be prejudicial to the public interest;
[para 4]
IT IS ORDERED under section 76 of the Act that:
(a) section 61 of the Act does not apply to the intended trades by Stealth of the units provided that:
(i) Stealth complies with all of the conditions of BCI 45-509 in respect of the offering other than the condition relating to the maximum gross proceeds that may be raised under the SFOD;
(ii) Stealth files a report in the form required under section 139 of the Rules on or before the tenth day after the distribution of the units;
(iii) the gross proceeds to Stealth from the offering, including the maximum proceeds that may be received from the exercise of the warrants in the 12 months following the closing date, will be considered “Gross Proceeds from Offerings” for the purposes of BCI 45-509;
(iv) if Stealth intends to rely on BCI 45-509 for any offering by way of SFOD during the second year of the term of the warrants, the maximum gross proceeds payable to Stealth on the exercise of the restricted warrants will be considered to be “Gross Proceeds from Offerings completed during the twelve month period immediately preceding the date of the Short Form Offering Document” for the purposes of BCI 45-509; and
(v) the common shares forming part of the units and the warrant shares will be considered “Listed Shares Issued and Issuable of the same class as a result of Offerings” for the purposes of BCI 45-509; and
(b) any intended trade in common shares forming part of the units or in warrant shares
(i) where the seller was, at the time the seller acquired the units, a Designated Hold Purchaser, or
(ii) in excess of the Threshold Amount by a Designated Threshold Purchaser
(as such terms are defined in BCI 45-509) is deemed to be a distribution unless:
(iii) a period of four months has elapsed from the date of distribution of the units by Stealth,
(iv) Stealth is a reporting issuer and has been a reporting issuer for the 12 months immediately preceding the trade,
(v) if the seller is an insider of Stealth, other than a director or senior officer of Stealth, the seller has filed all records required to be filed under sections 87 and 90 of the Act,
(vi) if the seller is a director or senior officer of Stealth, the seller has filed all records required to be filed under sections 87 and 90 of the Act and Stealth has filed all records required to be filed under Part 12 of the Act and of the Rules,
(vii) the trade is not a distribution from the holdings of a control person,
(viii) no unusual effort is made to prepare the market or create a demand for the security, and
(ix) no extraordinary commission or other consideration is paid in respect of the trade.
[para 5]
DATED June 29, 2001.
Brenda Leong
Director