Securities Law & Instruments


Section 147 - Exemption from provisions of article 10.15 OSC Policy 5.2 to permitissuance of compensation warrants to a dealer where less than 1% of the issuer'sshares held by Ontario residents.

Statutes Cited

Securities Act, R.S.O. 1990, c.S.5, as amended, ss. 6 and 147

Rules Cited

In the Matter of Certain Trades in Securities of Junior Natural Resource Issuers (1997)20 O.S.C.B. 1218 (March 1, 1997).

R.S.O. 1990, c.S.5, AS AMENDED, (the "Act")



(Section 147 of the Act)

WHEREAS Emerging Africa Gold (EAG) Inc. (the "Corporation") has applied to theOntario Securities Commission (the "Commission") pursuant to section 147 of the Act (the"Application") for an order of the Commission exempting the issuance by the Corporationof compensation warrants, as described herein, to Wellington West Capital Inc. (the"Agent") from article 10.15 of Commission Policy 5.2 - Junior Natural Resource Issuers("Policy 5.2"), also a rule entitled In the Matter of Certain Trades in Securities of JuniorResource Issuers (1997) 20 O.S.C.B. 1218 (March 1, 1997) (the "Rule");

AND UPON considering the Application and recommendation of the staff of theCommission;

AND UPON the Corporation having represented to the Commission that:

1. The Corporation proposes to issue rights to its shareholders (the "Rights Offering")which permit each shareholder to acquire, in exchange for one right and $0.0975,one and one half common shares of the Corporation ("Common Shares");

2. The Corporation intends to effect the Rights Offering by prospectus;

3. The registered and head office of the Corporation is located at 2855 ReneLevesque Blvd. West, Suite 2855, Montreal, Quebec, H3B 1S6;

4. The Corporation was incorporated on December 13, 1995 pursuant to Part 1A ofthe Companies Act (Quebec) under the name 9029-0834 Quebec Inc.;

5. The Corporation is authorized to issue an unlimited number of Common Shares, ofwhich 20,398,115 Common Shares are currently issued and outstanding;

6. The Corporation is a reporting issuer in Ontario and Quebec;

7. The Common Shares of the Corporation are traded on the Canadian DealingNetwork Inc. ("CDN");

8. The Corporation is not on the list of defaulting reporting issuers maintainedpursuant to section 72(9) of the Act;

9. Policy 5.2 provides at article 10.15 that a dealer may obtain a compensation optionin connection with an offering by an issuer subject to Policy 5.2 only where theoffering is underwritten or guaranteed, and further restricts the exercise period ofany such option granted;

10. Policy 5.2 provides at section 10.8 that a dealer may only receive cashcompensation or such other compensation as is permitted by Policy 5.2 inconnection with an offering by an issuer subject to Policy 5.2;

11. The Corporation wishes to issue 1,000,000 purchase warrants to the Agent inconnection with the Rights Offering that will enable the Agent to acquire up to1,000,000 Common Shares at a price of $0.065 per Common Share for a period oftwo years from the date of the Rights Offering (the "Compensation Warrants");

12. Registered shareholders of the Corporation (excluding CDS & Co. Ltd.) resident inOntario hold approximately 0.41% of the outstanding Common Shares of theCorporation;

13. The issuance of the Compensation Warrants will be effected in accordance withapplicable securities laws of Quebec and Manitoba, being the jurisdictions ofresidence of the Corporation and the Agent, respectively.

AND UPON the Director being satisfied that it would not be prejudicial to the publicinterest to do so;

IT IS ORDERED pursuant to section 147 of the Act that the Corporation is exemptfrom the requirements of article 10.15 of Policy 5.2 in connection with the issuance of theCompensation Warrants.

August 23rd, 2000.

"Margo Paul"