Securities Law & Instruments

Headnote

Subsection83.1(1) - issuer deemed to be a reporting issuer in Ontario -issuer has been a reporting issuer in British Columbia since 1990and Alberta since 1987 - issuer listed and posted for tradingon the Canadian Venture Exchange - continuous disclosure requirementsof British Columbia and Alberta substantially identical to thoseof Ontario.

NI43-101 - issuer exempt from filing technical report in subsection4.1(1) of NI 43-101 and from related fee set out in subsection53(1) of Schedule 1 to Reg.

StatutesCited

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

RegulationsCited

Regulation1015, R.R.R. 1990, as am., Schedule 1- ss. 53(1), 59(2).

NationalInstruments Cited

NationalInstrument 43-101 - Standards of Disclosure for Mineral Projects(2001), 24 OSCB 303, ss. 4.1(1), 9.1(1).

INTHE MATTER OF

THESECURITIES ACT,

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

ONTARIO REGULATION 1015, R.R.O 1990, AS AMENDED (The "Regulation"),

AND

NATIONALINSTRUMENT 43-101 STANDARDS OF DISCLOSURE

FORMINERAL PROJECTS ('NI 43-101")


AND


INTHE MATTER OF

CANABRAVADIAMOND CORPORATION


ORDERAND DECISION

(Subsection83.1(1) of the Act,

Subsection 9.1(1) of NI 43-101 &

Subsection 59(2) of Schedule 1 to the Regulation)

UPONthe application (the "Application") of Canabrava Diamond Corporation(the "Issuer") for an order pursuant to subsection 83.1(1) ofthe Act deeming the Issuer to be a reporting issuer for thepurposes of Ontario securities law.

ANDUPON the application of the Issuer to the Directorof the Commission for a decision that the Issuer be exempt fromthe requirement contained in subsection 4.1(1) of NI 43-101to file a technical report upon first becoming a reporting issuerin Ontario and pursuant to subsection 59(2) of Schedule 1 tothe Regulation for a decision that the Applicant be exempt fromthe requirement contained in subsection 53(1) of Schedule 1to the Regulation to pay a fee in connection with this application;

ANDUPON considering the Application and the recommendationof the staff of the Commission.

ANDUPON the Issuer representing to the Commission andthe Director that:

1.The Issuer is a corporation amalgamated under the laws of BritishColumbia on November 1, 1994.

2.The Issuer's head office is located in Vancouver, British Columbia.

3.The authorized share capital of the Issuer consists of 300,000,000shares divided into: (a) 100,000,000 common shares without parvalue of which there are currently 43,883,506 common sharesissued and outstanding; (b) 100,000,000 Class "A" Preferenceshares with a par value of $10.00 each none of which are currentlyissued or outstanding; and (c) 100,000,000 Class "B" Preferenceshares with a par value of $50.00 each none of which are currentlyissued or outstanding.

4.The Issuer has been a reporting issuer under the SecuritiesAct (British Columbia) since October 15, 1990 and a reportingissuer under the Securities Act (Alberta) since October8, 1987.

5.The Issuer is not a reporting issuer in Ontario or any jurisdictionother than British Columbia and Alberta.

6.The Issuer is up to date in the filing of its financial statementsand other continuous disclosure documents.

7.The common shares of the Issuer are listed on the Canadian VentureExchange ("CDNX") and the Issuer is in compliance with all requirementsof the CDNX.

8.The CDNX requires all of its listed issuers, which are not otherwisereporting issuers in Ontario, to assess whether they have a"significant connection to Ontario" as defined in Policy 1.1of the CDNX Corporate Finance Manual.

9.The CDNX requires that where an issuer, which is not otherwisea reporting issuer in Ontario, becomes aware that it has a significantconnection to Ontario, the issuer promptly make a bona fideapplication to the Commission to be deemed a reporting issuerin Ontario.

10.The Issuer has applied to the Commission pursuant to subsection83.1(1) of the Act for an order that it be deemed a reportingissuer in Ontario.

11.Subsection 4.1(1) of NI 43-101 provides that, upon first becominga reporting issuer in a Canadian jurisdiction, an issuer shallfile with the securities regulatory authority in that Canadianjurisdiction, a current technical report for each property materialto the issuer.

12.The Issuer does not have a current technical report and wouldnot otherwise be required to file a technical report pursuantto NI 43-101 at this time except for having to become a reportingissuer in Ontario pursuant to the CDNX Corporate Finance Manual.

13.The Issuer has a significant connection to Ontario because, basedon an independent assessment, beneficial shareholders residentin Ontario hold about 30% of the Issuer's outstanding shares.

14.The continuous disclosure requirements of the Securities Act(British Columbia) and the Securities Act (Alberta)are substantially the same as the requirements under the Act.

15.The continuous disclosure materials filed by the Issuer underthe Securities Act (British Columbia) and the SecuritiesAct (Alberta) are available on the System for ElectronicDocument Analysis and Retrieval.

16.Neither the Issuer nor any of its officers, directors or controllingshareholders has (i) been the subject of any penalties or sanctionsimposed by a court relating to Canadian securities legislationor by a Canadian securities regulatory authority (ii) enteredinto a settlement agreement with a Canadian securities regulatoryauthority, or (iii) been subject to any other penalties or sanctionsimposed by a court or regulatory body that would be likely tobe considered important to a reasonable investor making an investmentdecision.

17.Neither the Issuer nor any of its directors, officers nor, tothe knowledge of the Issuer, its directors and officers, any ofits controlling shareholders, is or has been subject to: (i) anyknown ongoing or concluded investigations by: (a) a Canadian securitiesregulatory authority, or (b) a court or regulatory body, otherthan a Canadian securities regulatory authority, that would belikely to be considered important to a reasonable investor makingan investment decision; or (ii) any bankruptcy or insolvency proceedings,or other proceedings, arrangements or compromises with creditors,or the appointment of a receiver, receiver-manager of trustee,within the preceding 10 years.

18.None of the directors or officers of the Issuer, nor to the knowledgeof the Issuer, its directors and officers, any of its controllingshareholders, is or has been at the time of such event a directoror officer of any other issuer which is or has been subject to:(i) any cease trade or similar orders, or orders that denied accessto any exemptions under Ontario securities law, for a period ofmore than 30 consecutive days, within the preceding 10 years.

ANDUPON the Commission being satisfied that to do so wouldnot be prejudicial to the public interest;

ITIS HEREBY ORDERED pursuant to subsection 83.1(1) of theAct that the Issuer is deemed to be a reporting issuer for thepurposes of Ontario securities law.

February18, 2002.

"IvaVranic"

ANDIT IS DECIDED pursuant to subsection 9.1(1) of NI 43-101that the Issuer is exempt from subsection 4.1(1) of NI 43-101upon being deemed to be a reporting issuer in Ontario;

ANDIT IS FURTHER DECIDED pursuant to subsection 59(2) ofSchedule I to the Regulation that the Issuer is exempt from therequirement contained in subsection 53(1) of Schedule I to theRegulation to pay a fee in connection with the making of thisapplication.

February18, 2002.

"IvaVranic"