Securities Law & Instruments

Headnote

Subsection 83.1(1) - Issuer resulting from Arrangement,listed on TSXV, reporting issuer in B.C. and Alberta deemedto be a reporting issuer in Ontario.

Statutes Cited

Securities Act, R.S.O. 1990, c. S.5, as am.,ss. 83.1(1).

IN THE MATTER OF

THE SECURITIES ACT R.S.O.1990

CHAPTER S.5, AS AMENDED (the"Act")

AND

IN THE MATTER OF

BETA MINERALS INC.

 

ORDER

(Subsection 83.1(1))

UPON the application of Beta MineralsInc. (the "Applicant" or "Beta") for anorder pursuant to subsection 83.1(1) of the Act deeming theApplicant to be a reporting issuer for the purposes of the Actand the regulations made thereunder (the Act and the regulationscollectively, "Ontario Securities Law");

AND UPON considering the applicationand the recommendation of the staff of the Commission;

AND UPON the Applicant representing tothe Commission as follows:

1. Beta is a corporation incorporated underthe OBCA on September 27, 2002;

2. the head office of Beta is located in Vancouver,British Columbia;

3. the authorized capital of Beta includesan unlimited number of common shares ("Beta Common Shares");

4. effective November 29, 2002, Beta completedan arrangement under section 182 of the OBCA (the "Arrangement")with Highwood Resources Ltd. ("Highwood"), DynatecCorporation ("Dynatec") and 2016964 Ontario Limited("Dynatec Newco");

5. the Arrangement is described in the managementinformation circular (the "Highwood Circular") ofHighwood dated October 25, 2002,

6. Beta has filed a notice on SEDAR advisingthat it has filed the Highwood Circular as an alternativeform of annual information form under Multilateral Instrument45-201 and identifying the SEDAR project number under whichthe Circular was filed;

7. Beta is a "reporting issuer"in the provinces of British Columbia and Alberta;

8. the material properties of Beta are thefollowing:

(a) a direct 100% interest in the Thor Lakeproperty (the "Thor Lake Property"), which islocated in the Northwest Territories;

(b) an indirect 59.88% interest in the MikwamProperty (the "Mikwam Property"), which is locatedin the Province of Ontario; and

(c) any direct 39% interest in the YellowGiant Property (the "Yellow Giant Property"),which is located in the Province of Ontario;

9. the purpose of the Arrangement was to transferHighwood's interests in the Thor Lake Property, the MikwamProperty and the Yellow Giant Property (the "TransferredProperties") to Beta, the shareholders of which are certainof the former minority holders (the "Minority Shareholders")of Highwood Common Shares other than Dynatec and Dynatec,and to transfer ownership of Highwood to Dynatec;

10. the transactions completed either immediatelybefore or as part of the Arrangement involved a number ofsteps, including the following:

(a) Dynatec advanced $1,750,000 to DynatecNewco by way of a loan evidenced by a Promissory Note fromDynatec Newco to Dynatec;

(b) Dynatec Newco used the proceeds of theDynatec loan to subscribe for 12,068,965 Beta Shares at$0.145 per share for total subscription proceeds of $1,750,000;

(c) Dynatec exchanged all of its HighwoodCommon Shares with Dynatec Newco for one Dynatec Newco CommonShare;

(d) All options, warrants and all existingrights to acquire Highwood Common Shares were cancelled;

(e) Highwood transferred to Beta the TransferredProperties in return for 11,820,469 Beta Common Shares;

(f) Dynatec Newco and Highwood amalgamatedto continue as a single corporation ("Amalco")on the basis that:

(i) each outstanding DynatecNewco CommonShare was exchanged for one common share ("AmalcoCommon Share") in the capital of Amalco;

(ii) Highwood Common Shares (other thanthose held by Dynatec Newco, Dynatec or Dissenting Shareholders)were exchanged at such person's election, but subjectto certain proration adjustments described in the HighwoodCircular (as hereinafter defined) for:

(1) one class A preferred share ("AmalcoClass A Preferred Share") of Amalco for each onHighwood Common Shares (the "Share Election");or

(2) one class B preferred share ("AmalcoClass B Preferred Share") of Amalco for each oneHighwood Common Share (the "Cash Election");or

(3) a fraction of one Amalco Class APreferred Share and a fraction one of Amalco Class BPreferred Share for each one Highwood Common Shares(the "Cash and Share Election");

(iii) Highwood Common Shares held by DynatecNewco were cancelled without repayment of capital.

11. each Class A Preferred Share was immediatelyredeemed upon issuance for one Beta Common Share and eachClass B Preferred Share was immediately redeemed upon issuancefor cash equal to $0.145;

12. the sum of the fraction of an Amalco ClassA Preferred Share and an Amalco Class B Preferred Share electedunder the Cash and Share Election was not permitted to exceedone, and the amount of cash a Shareholder making the CashElection or the Cash and Share Election received subject toproration;

13. as at December 2, 2002 and after completingthe Arrangement, Dynatec was the registered and beneficialowner of a total of 5,972,345 Beta Common Shares, representingapproximately 25% of the 23,885,965 issued and outstandingBeta Common Shares;

14. Dynatec is listed for trading on the TorontoStock Exchange;

15. the head office of Dynatec is locatedin Richmond Hill, Ontario;

16. Beta has a significant connection to theProvince as a result of over 20% of the Beta Common Sharesbeing registered in the name of and being beneficially heldby persons resident in the Province of Ontario;

17. the TSX Venture Exchange has acceptedthe listing of the Beta Common Shares for trading;

18. trading on the TSX Venture Exchange inthe Beta Common Shares commenced on December 13, 2002;

19. Beta is an electronic filer under NationalInstrument 13-101;

AND UPON the Commission being satisfiedthat to do so would not be prejudicial to the public interest;

IT IS HEREBY ORDERED pursuant to subsection83.1(1) of the Act that the Applicant is deemed to be a reportingissuer for the purposes of the Act.

December 17, 2002.

"Iva Vranic"