Securities Law & Instruments


Subsection 74(1) - issuance of warrant to acquire common shares of issuer tosophisticated purchaser in consideration of arrangement of credit facility exempt fromsections 25 and 53; transfer of warrant by sophisticated purchaser to wholly ownedsubsidiary exempt from section 25; first trades of shares on exercise of warrant subjectto s. 6.4 of Rule 45-501 as if option acquired under a 72(4) trade.

Statutes Cited

Securities Act, R.S.O. 1990, c.S.5, as am., ss. 25, 35(1)12.iii, 53, 72(1)(f)(iii), 72(4),74(1).

Rule Cited

Rule 45-501 Exempt Distributions.

R.S.O. 1990, CHAPTER S.5, AS AMENDED (The "Act")




(Section 74(1))

UPON the application of Yamana Resources Inc. ("Yamana") and Trilon FinancialCorporation ("Trilon") to the Ontario Securities Commission (the "Commission") for a rulingpursuant to subsection 74(1) of the Act that the grant of a warrant to acquire commonshares of Yamana and certain subsequent trades are not subject to sections 25 or 53 ofthe Act, subject to certain terms and conditions;

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

AND UPON Yamana having represented to the Commission that:

1. Yamana is a corporation continued under the Canada Business Corporations Act.The authorized capital of Yamana consists of an unlimited number of preferenceshares ("Preference Shares") without par value and an unlimited number ofcommon shares ("Common Shares") of which, as of December 10, 1999, noPreference Shares and 40,523,414 Common Shares are issued and outstanding.

2. Yamana is a reporting issuer under the Act and is not in default of any of therequirements of the Act or the regulation thereunder ("Regulation"). Yamana is alsoa reporting issuer or has comparable status in each of the other provinces ofCanada.

3. The Common Shares are listed and posted for trading on the facilities of TheToronto Stock Exchange ("TSE").

4. Trilon is a corporation continued under the Business Corporations Act (Ontario) anda reporting issuer within the meaning of the Act, and has comparable status in eachof the other provinces of Canada. Trilon's outstanding Class A Shares, Class IPreferred Shares Series A, Class II Series Two Shares and Class II Series ThreeShares are listed and posted for trading on the TSE.

5. Trilon is a Canadian financial and management services company which directly,and through its subsidiaries, provides institutional and corporate clients and highnet worth individuals with a broad range of financial, advisory and managementservices.

6. As at December 31, 1999, the approximate value of the total assets of Trilon andits subsidiaries was $3.3 billion.

7. Trilon Securities Corporation, a wholly-owned subsidiary of Trilon is registeredunder the Act as a dealer in the categories of broker and investment dealer.

8. Trilon is an arm's length party to Yamana. In December 1999, Trilon arranged fora credit facility in the principal amount of U.S. $4,000,000 (the "Credit Facility") tobe established by Northgate Exploration (BVI) Limited (35% indirectly held byTrilon) for Polimet (BVI) Ltd. (an indirect subsidiary of Yamana).

9. In consideration of the arrangment of the Credit Facility by Trilon, on December 22,1999 Yamana entered into an arrangement fee agreement (the "Agreement") withTrilon whereby Yamana has agreed to grant to Trilon a warrant ("Warrant") toacquire up to 2,000,000 Common Shares (the "Warrant Shares"). The Warrantmay only be transferred to wholly owned subsidiaries of Trilon.

10. Assuming the full exercise of the Warrant and the issuance of all of the WarrantShares, the issuance of the Warrant Shares would represent approximately 4.9%of the issued and outstanding capital of Yamana calculated on an undiluted basis.The issuance of such shares will not materially affect control of Yamana.

11. Trilon does not currently own any Common Shares.

12. Yamana will not be providing any financial assistance or other incentive to Trilonin connection with the exercise of the Warrant and no voting trust or similaragreement has or will be entered into by Yamana or any of its affiliates with Trilon.

13. Yamana considers Trilon to be a sophisticated purchaser with substantial financialknowledge and experience because of Trilon's business activities and because ofits lending relationship with Yamana.

14. The TSE has conditionally approved the grant of the Warrant, subject to the filingof customary documentation.

15. The issuance of the Warrant Shares to Trilon or a wholly owned subsidiary of Trilonwill be made in reliance on the exemptions from registration and prospectusrequirements contained in paragraph 35(1)12.iii and subclause 72(1)(f)(iii) of theAct (collectively, the "Exercise Exemptions").

AND UPON the Commission being satisfied that to do so would not be prejudicialto the public interest;

IT IS RULED pursuant to subsection 74(1) of the Act that the grant of the Warrantby Yamana to Trilon shall not be subject to section 25 or 53 of the Act and that the tradeof the Warrant by Trilon to a wholly owned subsidiary of Trilon shall not be subject tosection 25 of the Act provided that the first trades in the Warrant Shares acquired by Trilonor a wholly owned subsidiary of Trilon pursuant to the Exercise Exemptions shall be madein accordance with the provisions of section 6.4 of Rule 45-501 "Exempt Distributions" asif the Warrant had been acquired by Trilon or a wholly owned subsidiary of Trilon undera 72(4) trade (as defined in Rule 45-501).

August 25th, 2000.

"Howard I. Wetston"      "Theresa McLeod"