Securities Law & Instruments

Headnote

MutualReliance Review System for Exemptive Relief Applications - issuerdeemed to no longer

bea reporting issuer under the Act;


ApplicableAlberta Statutory Provisions

SecuritiesAct, R.S.A., 2000, c.S-4, section 153


INTHE MATTER OF

THESECURITIES LEGISLATION

OFALBERTA AND ONTARIO

AND

INTHE MATTER OF

THEMUTUAL RELIANCE REVIEW SYSTEM

FOREXEMPTIVE RELIEF APPLICATIONS

AND

INTHE MATTER OF

CANBAIKALRESOURCES INC.

MRRSDECISION DOCUMENT

1.WHEREAS the local securities authority or regulator (the"Decision Maker") in Alberta and Ontario (the "Jurisdictions")has received an application from CanBaikal Resources Inc. ("CanBaikal")for a decision under the securities legislation of the Jurisdictions(the "Legislation") that CanBaikal be deemed to have ceased tobe a reporting issuer under the Legislation;

2.AND WHEREAS pursuant to the Mutual Reliance ReviewSystem for Exemptive Relief Applications (the "System") the AlbertaSecurities Commission is the principal regulator for this application;

3.AND WHEREAS CanBaikal has represented to theDecision Makers that:

3.1CanBaikal is incorporated under the laws of the Province of Alberta;

3.2CanBaikal's head office is located in Calgary, Alberta;

3.3CanBaikal is a reporting issuer in the Jurisdictions;

3.4CanBaikal is not in default of any of the requirements of theLegislation;

3.5under an offer to purchase dated December 21, 2002, C.B. AcquisitionLtd., an indirect wholly-owned subsidiary of Novation TradingLimited ("NTL"), made an offer to purchase all of the outstandingsecurities of CanBaikal for cash consideration of Cdn $.038 pershare (the "Offer"), which was followed by a compulsory acquisition(the "Compulsory Acquisition") under the provisions of the ABCA;

3.6the Compulsory Acquisition was completed on January 28, 2002;

3.7as a result of the Offer and the Compulsory Acquisition, CanBaikal'ssole shareholder is C.B. Acquisition Ltd. which is itself an indirectwholly-owned subsidiary of Novation Trading Limited;

3.8the authorized capital of CanBaikal both prior to the Offer andfollowing the completion of the compulsory acquisition consistsof an unlimited number of common shares ("Common Shares") andan unlimited number of Preferred Shares;

3.9prior to the Offer, there were 27,351,116 common shares on anundiluted basis only of CanBaikal issued and outstanding. No PreferredShares were issued or outstanding. In addition to the undilutedfigure, directors, officers and employees of CanBaikal held outstandingoptions to purchase an aggregate of 1,830,000 pursuant to thestock option plan maintained by CanBaikal. In addition, holdersof convertible debentures had rights to convert the outstandingamounts thereunder into 562,000 common shares. Following completionof the Compulsory Acquisition, there are 27,018,888 shares ofCanBaikal issued and outstanding, all of which are owned by C.BAcquisition Ltd.;

3.10other than the Common Shares, CanBaikal has no securities, includingdebt securities, outstanding;

3.11CanBaikal does not have any securities listed or traded on anyexchange or market in Canada; and

3.12CanBaikal does not intend to seek public financing by way of anoffering of its securities;

4.AND WHEREAS under the System, this MRRS DecisionDocument evidences the decision of each Decision Maker (collectively,the "Decision");

5.AND WHEREAS each of the Decision Makers is satisfiedthat the test contained in the Legislation that provides the DecisionMaker with the jurisdiction to make the Decision has been met;

6.AND WHEREAS the Decision of the Decision Makers,under the Legislation, is that CanBaikal is deemed to have ceasedto be a reporting issuer under the Legislation.

March22, 2002.

"PatriciaM. Johnston"