BCSC

Settlements

PETER E. FOX [Sec. 144 & Settlement Agmt]

BCSECCOM #:	Document Type: Sec. 144 & Settlement Agmt
Published Date: 1997-01-17	Effective Date: 1997-01-14
Details:

IN THE MATTER OF THE SECURITIES ACT
S.B.C. 1985, c. 83

AND

IN THE MATTER OF PETER E. FOX

Order Under Section 144

WHEREAS an Agreed Statement of Facts and Undertaking was executed by Peter E. Fox (“Fox”) and the Executive Director, a copy of which is attached hereto as Schedule “A”;

NOW THEREFORE the Executive Director, considering that it would be in the public interest to do so, orders, BY CONSENT, that:

1. under section 144(1)(c) of the Act, the exemptions described in sections 30 - 32.1, 55, 58, 80 and 81, other than sections 32(a) and 32(b), do not apply to Fox for a period ending five years from the date of this Order except that:

(a) Fox may trade shares he beneficially owns at the date of the Order, subject to the following conditions:

(i) that before any trades take place, Fox must deliver a sworn declaration to the Executive Director listing all of the securities he beneficially owns at the date of the Agreement;

(ii) that any such trade must take place within 365 days of the date of the Order through a single registered dealer designated in writing by Fox;

(iii) that before any such trades take place, Fox must deliver to the registered dealer a copy of the Order and an irrevocable direction to pay to the Commission the net proceeds from the trades until such time as Fox's obligation to the Commission under paragraph 3, below, is satisfied;

(iv) that, within three days of any trade, Fox must file with the Executive Director a copy of the confirmation slips disclosing is trades; and

(b) Fox may trade in shares of Fox Geological Consultants Ltd., Fox Geological Services Inc. and Foxcorp Holdings Ltd.

2. Under section 144(1)(d) of the Act, that he is prohibited from becoming or acting as a director or officer of any reporting issuer or any issuer that provides management, consulting or administrative services to a reporting issuer for a period ending five years from the date of the Order, except as follows:

(a) preparing engineering reports;

(b) providing computer services to the mining industry;

(d) providing geological services.

DATED at Vancouver, British Columbia on January 14, 1997.

Paul C. Bourque
Acting Executive Director

Schedule “A”
IN THE MATTER OF THE SECURITIES ACT
S.B.C. 1985, c. 83

AND

IN THE MATTER OF PETER E. FOX

Agreed Statement of Facts and Undertaking

1. As a basis for the orders and undertakings referred to below, Peter E. Fox acknowledges the following facts to be true:

(a) Silverspar Minerals Inc. ("Silverspar") was incorporated under the Company Act, R.S.B.C. 1979, c.59 (the "Company Act") on July 18, 1979 and is a reporting issuer under the Securities Act S.B.C. 1985, c. 83 (the “Act”);

(b) At all times between June, 1993 and February, 1995, Peter E. Fox ("Fox") was a director, president and an employee of Silverspar. Fox resigned as the president of Silverspar on or about February 3, 1995 but continued as a director and employee of Silverspar;

(c) At all material times Fox was the sole director and owner of Fox Geological Consulting Ltd. ("Fox Consulting"). Pursuant to written agreements between Fox Consulting and Silverspar entered into in 1991 and amended from time to time, Fox Consulting provided certain geological and administrative services to Silverspar;

(d) Pursuant to a subscription agreement dated as of June 22, 1993 between Silverspar and a number of investors, Silverspar issued an aggregate of $5,672,150.00 principal amount of exchangeable subordinated promissory notes by way of private placement. Each note was convertible at the option of the note holder or Silverspar into units at any time after receipt of a final prospectus in connection with the offering. Each unit consisted of one common share and one share purchase warrant (the "Offering");

(e) On or about May 2, 1994, the Commission receipted a prospectus of Silverspar in connection with the Offering (the "Prospectus");

(f) Silverspar's business was the acquisition, exploration and development of industrial mineral properties focusing on the acquisition and development of fluorspar deposits. At the time the Prospectus was receipted, Silverspar had, among other assets, an option to acquire a property in Kentucky (the "West Kentucky Property"), interests in properties known as the Silver District Property and the Hidalgo Property and a leasehold interest in a property known as the Sweetwater Property;

(g) The Prospectus disclosed that the use of proceeds realized by Silverspar from the Offering would be as follows:

Fund Purchase of West Kentucky Property: $ 2,600,000.00

Further work on West Kentucky Property

including further exploration, drilling,

mining and processing, facility upgrading

and maintenance: $ 1,000,000.00

Further work on Silver District Property

including further exploration, drilling,

geological data analysis and designing of

mineral processing techniques: $ 300,000.00

Finalize the purchase of the Hidalgo Property,

and the lease of the Sweetwater Property

and conducting further exploration and

drilling on these properties: $ 150,000.00

Expenses related to the Offering: $ 500,000.00

General working capital, interest charges

and possible future industrial mineral

property acquisitions:

$ 1,122,150.00

TOTAL:

$ 5,672,150.00

(h) Fox certified that the Prospectus constituted full, true and plain disclosure of all material facts relating to the securities offered;

(i) The Prospectus failed to make full, true and plain disclosure of a number of material facts, including:

(i) that Silverspar had paid $71,000.00 to van der Weij, much of which was in connection with the Offering;

(ii) that at least $1,472,621.00 raised by the Offering had been spent as of the date the Prospectus was receipted;

(iii) that the option on the West Kentucky Property would not be exercised immediately but, rather, would only be exercised if the results of an exploration program to be carried out were satisfactory;

Fox states that he believed the prospectus made full, true and plain disclosure.

(j) In breach of section 67 of the Act, Fox failed to cause Silverspar to make timely disclosure of the nature and substance of material changes in Silverspar's affairs, particulars of which include the following:

(i) Silverspar failed to make timely disclosure that:

. it was incurring increased administrative expenses at a time when it had insufficient capital to purchase the West Kentucky property at the option price;

. as a result of negative results from the exploration program, it was considering an alternative business plan and an alternative use for the West Kentucky Property other than exploration and development;

. by October 31, 1994 Silverspar no longer had sufficient funds in its possession to exercise the option on the West Kentucky Property;

(ii) Silverspar represented in various press releases that it owned the West Kentucky Property and a mill and concentration in West Kentucky, as follows:

August 5, 1993 Press Release

"...The net proceeds...will be used by the Company principally to fund additional purchase and development costs at its properties in Salem, Kentucky, which were acquired from U.S.X. Corporation."

March 9, 1994 Press Release

"...Work is progressing well at the Company's fluorspar properties at Salem..."

February 20, 1995 Press Release

"The company plans to ship the stockpile to its mill and concentrator located at Salem in Western Kentucky where gravelspar and acidspar products will be produced. The mill facility is expected to be in production within three to six months...

Material from the Memphis stockpile will provide a supply of feed for the Salem mill facility for approximately one to two years during which time the Company plans to expand its production through further acquisitions and possible developments of reserves located within its holdings in Kentucky."

when in fact Silverspar did not own the West Kentucky Property or any mill and concentrator in West Kentucky and, by February 21, 1995, did not have the financial resources to acquire the West Kentucky Property.

Fox states that he was not consulted about the February 20, 1995 press release and did not see it prior to its issuance.

(k) The notes to the interim consolidated financial statements for Silverspar for October 31, 1994 which were filed by Silverspar as part of its quarterly report stated that:

"while the U.S.X. properties [the West Kentucky Properties] are close to becoming a producing mine and generating a cash flow, additional capital is required to be able to commence production...The recoverability of the company's investment in mineral properties, claims and deferred exploration expenditures is dependent upon...the ability of the company to obtain additional financing to commence production on its U.S.X. properties."

These statements were false and misleading in light of the fact that Silverspar no longer had sufficient funds to exercise the option on the U.S.X. property and the fact that the results obtained on the exploration program had led the directors to pursue alternate business plans.

2. Fox consents to an order by the Executive Director (the "Order") that:

(a) under section 144(1)(c) of the Act, the exemptions described in sections 30 - 32.1, 55, 58, 80 and 81, other than sections 32(a) and 32(b), do not apply to Fox for a period ending five years from the date of this Order except that:

(i) Fox may trade shares he beneficially owns at the date of the Order, subject to the following conditions:

. that before any trades take place, Fox must deliver a sworn declaration to the Executive Director listing all of the securities he beneficially owns at the date of the Agreement;

. that any such trade must take place within 365 days of the date of the Order through a single registered dealer designated in writing by Fox;

. that before any such trades take place, Fox must deliver to the registered dealer a copy of the Order and an irrevocable direction to pay to the Commission the net proceeds from the trades until such time as Fox's obligation to the Commission under paragraph 3, below, is satisfied;

. that, within three days of any trade, Fox must file with the Executive Director a copy of the confirmation slips disclosing his trades, and

(ii) Fox may trade in shares of Fox Geological Consultants Ltd., Fox Geological Services Inc. and Foxcorp Holdings Ltd.

(b) under section 144(1)(d) of the Act, that he is prohibited from becoming or acting as a director or officer of any reporting issuer or any issuer that provides management, consulting or administrative services to a reporting issuer for a period ending five years from the date of the Order, except as follows:

(i) preparing engineering reports;

(ii) providing computer services to the mining industry;

(iii) providing exploration services;

(iv) providing geological services;

3. Fox undertakes to pay the British Columbia Securities Commission the sum of $6,000 on or before June 1, 1997 and to execute a demand promissory note to that effect which note will bear interest after default.

4. Fox undertakes that, prior to accepting a position as a director or officer of a reporting issuer or any issuer that provides management, consulting or administrative services to a reporting issuer, except an issuer that:

(a) prepares engineering reports;

(b) provides computer services to the mining industry;

(c) provides exploration services;

(d) provides geological services

he will successfully complete the securities program offered by Simon Fraser University or a comparable course acceptable to the Executive Director and will provide evidence of his successful completion of the course to the Executive Director;

5. Fox waives any right he may have, under the Act or otherwise to a hearing, hearing in review, judicial review or appeal related to, in connection with or incidental to this agreement or the related Order.

DATED at Vancouver, British Columbia, this 13th day of January, 1997.

Michael Carroll )
Witness Name (Please Print) )
2800 Park Place, 666 Burrard ) ________________________
Address ) Peter E. Fox
Lawyer )
Occupation

DATED at Vancouver, British Columbia, this 13th day of January, 1997.

Paul C Bourque
Acting Executive Director