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Ayrex Resources Ltd. - Order and Decision
Headnote
Subsection 83.1(1) - Issuer deemed a reportingissuer in Ontario - Issuer has been a reporting issuer in BritishColumbia since November 1999 and in Alberta since January 1986- Issuer listed and posted for trading on the TSX Venture Exchange- Issuer not designated as a capital pool company by TSX Venture- Continuous disclosure requirements of British Columbia andAlberta substantially the same as those of Ontario - Directorgrants exemption from subsection 4.1(1) of NI 43-101 and certainfee relief.
Statutes Cited
Securities Act, R.S.O. 1990, c. S.5, as am.,ss. 83.1(1).
National Instruments Cited
National Instrument 43-101 - Standards of Disclosurefor Mineral Projects (2001), 24 OSCB 303, ss. 4.1(1), 9.1.
IN THE MATTER OF
THE SECURITIES ACT
R.S.O. 1990 CHAPTER S.5, ASAMENDED (the "Act")
AND
ONTARIO REGULATION 1015, R.R.O.1990,
AS AMENDED (the "Regulation")
AND
IN THE MATTER OF
NATIONAL INSTRUMENT 43-101
STANDARDS OF DISCLOSURE FORMINERAL PROJECTS ("NI 43-101")
AND
IN THE MATTER OF
AYREX RESOURCES LTD.
ORDER AND DECISION
(Subsection 83.1(1) of theAct, Subsection 9.1(1) of NI 43-101
& Subsection 59(2) ofSchedule I to the Regulation)
UPON the application of Ayrex ResourcesLtd. (the "Issuer") to the Ontario Securities Commission(the "Commission") for an order pursuant to subsection83.1(1) of the Act deeming the Issuer to be a reporting issuerfor the purposes of Ontario securities law;
AND UPON the application of the Issuerto the Director of the Commission for a decision that the Issuerbe exempt from the requirement contained in subsection 4.1(1)of NI 43-101 to file a technical report upon first becominga reporting issuer in Ontario and pursuant to subsection 59(2)of Schedule I to the Regulation for a decision that the Issuerbe exempt from the requirement contained in subsection 53(1)of Schedule I to the Regulation to pay a fee in connection withthis application;
AND UPON considering the applicationand the recommendation of the staff of the Commission;
AND UPON the Issuer representing to theCommission and the Director as follows:
1. The Issuer is a natural resource explorationcompany incorporated under the Company Act (Alberta)by articles of incorporation dated January 22, 1985.
2. The Issuer's registered and head officeare located at Suite 1750, 700 - 6th Avenue S.W., Calgary,Alberta T2P 0T8. The Issuer's branch office in Ontario islocated at 121 Richmond Street West, Suite 501, Toronto, OntarioM5H 2K1.
3. The authorized share capital of the Issuerconsists of an unlimited number of shares without par valuedesignated as Class A voting shares, Class B non-voting shares,Class C non-voting shares and Class D non-voting, non-cumulative,redeemable preferred shares, of which 13,346,999 Class A votingshares (the "Class A Shares") were issued and outstandingas at October 3, 2002.
4. The Issuer has been a reporting issuerunder the Securities Act (Alberta) (the "AlbertaAct") since January 14, 1986 following the receipt fora prospectus dated January 13, 1986, and a reporting issuerunder the Securities Act (British Columbia) (the "B.C.Act") since November 29, 1999, as a result of the mergerof the Alberta and Vancouver Stock Exchanges.
5. The Issuer's Class A Shares trade on Tier2 of the TSX Venture Exchange ("TSX Venture") underthe trading symbol AYR.A. The Issuer is not designated asa Capital Pool Company by TSX Venture.
6. TSX Venture requires all of its listedissuers, which are not otherwise reporting issuers in Ontario,to assess whether they have a "significant connectionto Ontario" as defined in Policy 1.1 of the TSX VentureCorporate Finance Manual.
7. TSX Venture requires that where an issuer,which is not otherwise a reporting issuer in Ontario, becomesaware that it has a significant connection to Ontario, theissuer promptly make a bona fide application to theCommission to be deemed a reporting issuer in Ontario.
8. The Issuer has a significant connectionto Ontario in that, a total of 261, or approximately 65%,of the Issuer's registered or beneficial holders of ClassA Shares are residents of Ontario, and such shareholders hold4,147,966, or approximately 31%, of the Issuer's issued andoutstanding Class A Shares. Of that amount, approximately1,445,400, or 10.8%, of the Issuer's issued and outstandingClass A Shares are owned by Stanley G. Hawkins, a directorof the Issuer. The following officers or directors are residentsof Ontario: Stanley G. Hawkins, Director; Michel J. Lafrance,Director and Secretary; and T. F. Vernon Le Page, Treasurerand C.F.O.
9. The Issuer has applied to the Commissionpursuant to subsection 83.1(1) of the Act for an order thatit be deemed a reporting issuer in Ontario.
10. Subsection 4.1(1) of NI 43-101 providesthat, upon first becoming a reporting issuer in a Canadianjurisdiction, an issuer shall file with the securities regulatoryauthority in that Canadian jurisdiction, a current technicalreport for each property material to the issuer.
11. The Issuer does not have a current technicalreport and would not otherwise be required to file a technicalreport pursuant to NI 43-101 at this time except for havingto become a reporting issuer in Ontario pursuant to the TSXVenture Corporate Finance Manual.
12. The Issuer is not a reporting issuer underthe securities legislation of any jurisdiction other thanthe Provinces of British Columbia and Alberta.
13. The Issuer is not in default of any requirementsof the B.C. Act, the Alberta Act, or any of the rules andregulations thereunder, and is not on the lists of defaultingreporting issuers maintained pursuant to the B.C. Act andthe Alberta Act. To the knowledge of management of the Issuer,the Issuer has not been the subject of any enforcement actionsby the British Columbia Securities Commission or the AlbertaSecurities Commission or by TSX Venture.
14. The continuous disclosure requirementsof the B.C. Act and the Alberta Act are substantially thesame as the requirements under the Act.
15. The materials filed by the Issuer as areporting issuer in the Provinces of British Columbia andAlberta since January 1, 1997 are available on the Systemfor Electronic Document Analysis and Retrieval. The Issuer'scontinuous disclosure record is up to date and includes adescription of the Issuer's material mineral projects.
16. There have been no penalties or sanctionsimposed against the Issuer by a court relating to Canadiansecurities legislation or by a Canadian securities regulatoryauthority, and the Issuer has not entered into any settlementagreement with any Canadian securities regulatory authority.
17. Neither the Issuer nor any of its directors,officers nor, to the knowledge of the Issuer, its directorsand officers, any of its controlling shareholders, has: (i)been the subject of any penalties or sanctions imposed bya court relating to Canadian securities legislation or bya Canadian securities regulatory authority; (ii) entered intoa settlement agreement with a Canadian securities regulatoryauthority; or (iii) been subject to any other penalties orsanctions imposed by a court or regulatory body that wouldbe likely to be considered important to a reasonable investormaking an investment decision.
18. Neither the Issuer nor any of its directors,officers nor, to the knowledge of the Issuer, its directorsand officers, any of its controlling shareholders, is or hasbeen subject to: (i) any known ongoing or concluded investigationsby: (a) a Canadian securities regulatory authority; or (b)a court or regulatory body, other than a Canadian securitiesregulatory authority, that would be likely to be consideredimportant to a reasonable investor making an investment decision;or (ii) any bankruptcy or insolvency proceedings, or otherproceedings, arrangements or compromises with creditors, orthe appointment of a receiver, receiver-manager or trustee,within the preceding 10 years.
19. None of the directors or officers of theIssuer nor, to the knowledge of the Issuer, its directorsand officers, any of its controlling shareholders, is or hasbeen at the time of such event a director or officer of anyother issuer which is or has been subject to: (i) any ceasetrade or similar orders, or orders that denied access to anyexemptions under Ontario securities law, for a period of morethan 30 consecutive days, within the preceding 10 years; or(ii) any bankruptcy or insolvency proceedings, or other proceedings,arrangements or compromises with creditors, or the appointmentof a receiver, receiver-manager or trustee, within the preceding10 years.
AND UPON The Commission and the Directorbeing satisfied that to do so would not be prejudicial to thepublic interest.
IT IS HEREBY ORDERED pursuant to subsection83.1(1) of the Act that the Issuer be deemed to be a reportingissuer for the purposes of Ontario securities law.
November 15, 2002.
"Iva Vranic"
AND IT IS DECIDED pursuant to subsection9.1(1) of NI 43-101 that the Issuer is exempt from subsection4.1(1) of NI 43-101 upon being deemed to be a reporting issuerin Ontario.
AND IT IS FURTHER DECIDED pursuant tosubsection 59(2) of Schedule I to the Regulation that the Issueris exempt from the requirement contained in subsection 53(1)of Schedule I to the Regulation to pay a fee in connection withthe making of the application under subsection 9.1(1) of NI43-101.
November 15, 2002.
"Iva Vranic"