Section 144 - revocation of cease trade order upon default being remedied andfinancial statements being mailed to shareholders.
Securities Act, R.S.O. 1990, c.S.5, as am., ss. 6, 127(1), 127(5), 144.
R.S.O. 1990, CHAPTER S. 5, AS AMENDED (the "Act")
IN THE MATTER OF
BRO-X MINERALS LTD.
WHEREAS by an Assignment made pursuant to section 6 of the Act and datedMarch 10, 1995, as amended November 9, 1995 (the "Assignment"), the Ontario SecuritiesCommission (the "Commission") assigned to each Director (as defined in the Act) certainpowers and duties of the Commission under section 127 of the Act;
AND WHEREAS, pursuant to the Assignment, the Director made a temporary orderunder paragraph 2 of subsection 127(1) and subsection 127(5) on May 22, 1997, andextended the temporary order on June 2, 1997 (as extended, the "Cease Trade Order"),as a result of which the securities of Bro-X Minerals Ltd. ("Bro-X") were cease traded untilthe Cease Trade Order is revoked;
AND WHEREAS the Cease Trade Order was made on the basis that Bro-X hadfailed to file audited financial statements for the period ended December 31, 1996;
AND WHEREAS Bro-X has made an application pursuant to section 144 of the Actfor revocation of the Cease Trade Order;
AND UPON considering the application and the recommendation of the staff of theCommission;
AND UPON Bro-X having represented to the Commission as follows:
1. Bro-X is a reporting issuer under the Act and has been a reporting issuer sinceAugust of 1996.
2. The authorized capital of Bro-X consists of an unlimited number of common sharesand an unlimited number of preferred shares issuable in series, of which there are22,000,000 common shares ("Common Shares") and 2,000,000 preferred shares,series 2 ("Preferred Shares") outstanding.
3. The Cease Trade Order was issued due to the failure of Bro-X to file with theCommission audited financial statements for the year ended December 31, 1996.
4. The financial statements of Bro-X were not filed as a result of the neglect of theboard of directors and as a result of business occurrences involving relatedcorporations, namely Bre-X Minerals Ltd. and Bresea Resources Ltd. ("Bresea").
5. The directors of Bro-X as at the time of the issuance of the Cease Trade Orderhave resigned as directors, and a new board of directors has been elected by theshareholders.
6. On February 10, 1999, Bro-X filed audited financial statements for the years endingDecember 31, 1996, December 31, 1997 and December 31, 1998. The audit reportaccompanying the financial statements for the years ended December 31, 1996 andDecember 31, 1997 contained a qualification; namely, a limitation in scoperegarding the cost of certain Indonesian properties acquired in a related partytransaction. A clean audit report was issued for the December 31, 1998 financialstatements.
7. Bro-X has not been actively engaged in business since May of 1997.
8. Except for the Cease Trade Order, the failure to file interim financial statements forthe period May 9, 1996 to December 31, 1998 and the qualification in the auditorsreports referred to above, Bro-X is not in default of any of the requirements of theAct or the regulations made under the Act.
9. Bro-X has delivered to its shareholders audited financial statements for the yearended December 31, 1998.
10. The only asset of Bro-X is approximately $700,000 in cash.
11. Bresea is the holder of Bro-X's 2,000,000 Preferred Shares, which are redeemableat $1.00 per share, convertible into common shares on a one for one basis andretractable at $1.00 per share.
12. The interim receiver of Bresea has issued a retraction notice for 860,000 of thePreferred Shares worth $860,000. However, a conditional agreement has beenreached whereby the interim receiver has agreed to redeem only 750,000 PreferredShares for $750,000 and convert the balance of the Preferred Shares held onbehalf of Bresea to common shares of Bro-X. The agreement is conditional uponBro-X being successful in raising the $750,000 required to complete thetransaction.
13. The shareholders of Bro-X have approved a rights offering pursuant to which atleast $750,000 is intended to be raised for the purpose of redeeming 750,000 ofBresea's Preferred Shares.
14. Bro-X is attempting to locate a potentially profitable business opportunity. Bro-Xis not presently considering, nor is it involved in any discussions relating to, areverse take-over or similar transaction.
15. There is no prejudice to the public in Bro-X not filing its interim financial statementsfor the period up from May 9, 1996 to December 31, 1998.
AND WHEREAS the Commission is of the opinion that to grant this Order would notbe prejudicial to the public interest and is satisfied in the circumstances of this particularcase that there is adequate justification for so doing;
IT IS HEREBY ORDERED pursuant to Section 144 of the Act that the Cease TradeOrder is hereby revoked.
January 26th, 2000.
"Howard I. Wetston" "J. A. Geller"