Securities Law & Instruments


Securities exchange take-over bid made in Ontario - Bid made in accordance with the laws of Norway - De minimis exemption unavailable because Norway is not a jurisdiction recognized for the purposes of clause 93(1)(e) of the Securities Act (Ontario). Transaction is, in substance, a continuance of a foreign company into Canada. Bid exempted from the requirements of Part XX, subject to certain conditions. Relief from the seasoning period hold also granted. Absent such relief de minimis shareholders in Ontario will lose their liquidity.

Statutes Cited

Securities Act, R.S.O. 1990, c. S.5, as amended, ss. 53, 93(1)(e), 95-100 and 104(2)(c).

Recognition Orders Cited

In the Matter of the Recognition of Certain Jurisdictions Recognition Order (Clauses 93(1)(e) and 93(3((h) of Act) (1997), 20 OSCB 1035.

Multilateral Instruments Cited

Multilateral Instrument 45-102 Resale of Securities 24 OSCB 7029.



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






(Clause 104(2)(c) and subsection 74(1) of the Act)

UPON the application of Guinor Gold Corporation (the "Corporation") to the Ontario Securities Commission (the "Commission") for an order pursuant to clause 104(2)(c) of the Act exempting the Corporation from the requirements of sections 95 to 100 of the Act (the "Take-over Bid Requirements") in respect of the offer (the "Offer") by the Corporation to acquire all of the outstanding shares of Kenor ASA ("Kenor") and for a ruling pursuant to subsection 74(1) of the Act that the first trade in common shares of the Corporation (the "Guinor Shares") received by shareholders of Kenor resident in Ontario pursuant to the Offer shall not be subject to section 53 of the Act, subject to certain conditions;

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

AND UPON the Corporation having represented to the Commission as follows:

1. The Corporation was incorporated under the Business Corporations Act (Yukon) on February 12, 2004. The Corporation is not a reporting issuer in any province or territory of Canada.

2. As at the date hereof, the Corporation has 1 common share outstanding (held by Kenor) and no material assets.

3. The Corporation was created to carry out the re-domiciliation of Kenor to Canada by making a securities exchange take-over bid for all of the outstanding shares of Kenor, such that upon completion of the bid, Kenor will become a wholly-owned subsidiary of the Corporation.

4. The board of directors of the Corporation and of Kenor are identical. The officers of the Corporation and of Kenor consist of the same individuals, although certain titles have been modified.

5. Kenor is organized under the laws of Norway and was founded in 1983. Kenor is not a reporting issuer in any province or territory of Canada.

6. Kenor is a fully integrated mining company and independent gold producer. Kenor's main asset is its indirect 85% ownership interest in the Léro/Karta and Fayalala gold mines within the Dinguiraye Concession in the Republic of Guinea.

7. Since 1994, the common shares of Kenor (the "Kenor Shares") have been listed on the Oslo Stock Exchange (the "OSX"). As of March 15, 2004, Kenor had approximately 142,544,729 shares outstanding and market capitalization of approximately Cdn.$152.4 million (using the closing price of the Kenor Shares on the OSX on March 15, 2004 of NOK5.60 (Cdn.$1.07)).

8. As of March 15, 2004, approximately 42% of the Kenor Shares were held by residents of the United States and approximately 28% of the Kenor Shares were held by residents of Norway. The balance is held by residents of a variety of jurisdictions world-wide (including in Ontario).

9. In November, 2003, after consultation with its Norwegian legal and tax advisors, and its Canadian legal advisors, the board of directors of Kenor resolved to re-domicile the company to a North American jurisdiction so as to better position it to access the North American capital markets required for its continued growth.

10. Norwegian corporate law applicable to Kenor does not permit the continuance or "export" of a company governed thereby to any other jurisdiction. After a review of the legal alternatives and tax implications, it was determined by the board of directors of Kenor that the corporate domicile of Kenor would be changed through the completion of a securities exchange take-over bid of Kenor by a newly incorporated Canadian corporation.

11. The Offer has been made to all shareholders of Kenor (except where prohibited by law) pursuant to an offering document prepared in accordance with Norwegian law and the rules of the OSX (the "Offering Document"). The Offering Document also contains financial statements of Kenor prepared in accordance with International Financial Reporting Standards ("IFRS"), and disclosure with respect to Kenor's material mining properties similar to that required in a long-form prospectus under Commission Rule 41-501.

12. The consideration under the Offer is 1 Guinor Share for each 1 Kenor Share tendered to the Offer or, in the case of shareholders holding less than 2000 Kenor Shares, NOK 5.60 (CDN $1.07) per Kenor Share (as permitted under Norwegian law).

13. The Offer is open for 20 business days commencing on February 27, 2004 such that the Offer is open for acceptance until March 26, 2004 (unless extended).

14. The Offer is subject to two principal conditions: (1) that the Guinor Shares be conditionally approved for listing on the Toronto Stock Exchange (the "TSX") on completion of the Offer; and (2) that at least 90% of the outstanding Kenor Shares are tendered to the Offer (and not withdrawn).

15. On March 25, 2004, the TSX conditionally approved the Guinor Shares for listing.

16. Assuming the conditions to the Offer are satisfied, the Corporation will distribute Guinor Shares to former Kenor shareholders on or about April 1, 2004 (the "Take-up Date"). Upon successful completion of the Offer, the Corporation will, on the Take-up Date, own in excess of 90% of the Kenor Shares. Following the Take-up Date, the Corporation intends to exercise its rights under Norwegian corporate law to acquire the remaining Kenor Shares which were not tendered. This procedure is fundamentally the same as the compulsory acquisition provisions of the Business Corporations Act (Ontario), and provides fair value appraisal rights to shareholders.

17. The Corporation will become a reporting issuer in Ontario as a result of the listing of the Guinor Shares on the TSX.

18. At the time the Offer was commenced, the Corporation believed that there were no registered or beneficial shareholders of Kenor in Canada. Subsequently, it was determined by the Corporation that there were 6 beneficial shareholders of Kenor in Ontario holding, in the aggregate, 5,790,022 shares (or approximately 4.06% of the outstanding Kenor Shares). No beneficial shareholders are resident in any other province or territory of Canada.

19. The Offer does not comply with certain provisions of Part XX of the Act, including that the Offer be kept open for 35 days and, absent the requested relief, cannot be made to shareholders of Kenor resident in Ontario.

20. There is no exemption available to permit the Corporation to make the Offer in Ontario. In particular, the exemption set out in clause 93(1)(e) of the Act is not available because Norway is not a jurisdiction recognized by the Commission for purposes of the exemption.

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

IT IS ORDERED pursuant to clause 104(2)(c) of the Act that the Corporation is exempt from the Take-over Bid Requirements in connection with the Offer, provided that:

(a) the Corporation files copies of the Offering Document and any amendments thereto with the Commission,

(b) the Offer and any amendments thereto comply with the laws of Norway, and

(c) a public announcement of the Offer is made in a national Canadian newspaper, prior to the expiry of the Offer, that specifies how shareholders of Kenor may obtain a copy of the Offer Document and information relating to the Offer.

AND IT IS RULED pursuant to subsection 74(1) of the Act that section 53 of the Act shall not apply to the proposed distribution of Guinor Shares to beneficial shareholders of Kenor in Ontario pursuant to the Offer provided the first trades in such securities shall be deemed a distribution unless the conditions in subsection (3) of section 2.6 of MI 45-102, except item 1, are satisfied.

March 25, 2004.

"Paul M. Moore"
"Susan Wolburgh-Jenah"