Proceedings

IN THE MATTER OF THE SECURITIES ACT,
R.S.O. 1990, CHAPTER S.5, AS AMENDED (the "Act")

AND

IN THE MATTER OF MACDONALD OIL EXPLORATION LTD.,
MACDONALD MINES EXPLORATION LTD.,
MARIO MIRANDA AND FRANK SMEENK

NOTICE OF HEARING
(Sections 127 and 127.1)

TAKE NOTICE that the Ontario Securities Commission (the "Commission") will hold a hearing pursuant to sections 127 and 127.1 of the Act at the Commission’s offices on the 17th floor, 20 Queen Street West, Toronto, Ontario, commencing on Friday, January 12, 2001 at 1:30 p.m., or as soon thereafter as the hearing can be held (the "Hearing"), to consider whether it is in the public interest to make an order:

(a)pursuant to clause 2 of subsection 127(1) of the Act, that trading in any securities by Mario Miranda ("Miranda") and Frank Smeenk ("Smeenk") cease permanently or for such period as may be specified in the order;

(b)pursuant to clause 4 of subsection 127(1) of the Act, that MacDonald Oil Exploration Ltd. ("MacDonald Oil") submit to a review of its practices and procedures and institute such changes as may be ordered by the Commission;

(c)pursuant to clause 6 of subsection 127(1) of the Act, that MacDonald Oil, MacDonald Mines Exploration Ltd. ("MacDonald Mines"), Miranda and Smeenk be reprimanded;

(d)pursuant to clauses 7 and 8 of subsection 127(1) of the Act, that Miranda and Smeenk be prohibited from acting as an officer or director of any issuer and that Miranda and Smeenk resign any such office they currently hold;

(e)pursuant to subsections 127.1(1) and (2) of the Act, that MacDonald Oil, MacDonald Mines, Miranda and Smeenk pay amounts as a contribution in respect of the costs of the investigation that has been conducted by staff of the Commission ("Staff") into the affairs of the respondents and in respect of the costs of the Hearing; and

(f)such further and other order as the Commission may deem appropriate;

AND TAKE NOTICE that the purpose of the hearing will be for the Commission to consider whether to approve a settlement of the proceeding between Staff and the respondents, which approval will be sought by Staff and by the respondents;

AND TAKE NOTICE that, in the alternative, if the Commission does not approve the settlement, the Commission will consider an application by Staff for an order pursuant to subsection 127(5) of the Act, that trading by MacDonald Oil in common shares (the "Bresea Shares") of Bresea Resources Ltd. ("Bresea") and in the common shares (the "MacDonald Oil Common Shares") and warrants to purchase MacDonald Oil Common Shares to be issued as consideration pursuant to the take-over bid (the "Offer") by MacDonald Oil for all of the Bresea Shares cease;

BY REASON of the allegations set out in the Statement of Allegations of Staff and such additional allegations as counsel may advise and the Commission may permit;

AND FURTHER TAKE NOTICE that any party to the proceeding may be represented by counsel if that party attends or submits evidence at the Hearing;

AND FURTHER TAKE NOTICE that upon failure of any party to attend at the time and place of the Hearing, the Hearing may proceed in the absence of that party and such party is not entitled to any further notice of the proceeding.

January 9th, 2001


Secretary to the Commission