Aflease Gold and Uranium Resources Limited and Southern Cross Resources Inc. - MRRS Decision

MRRS Decision

Headnote

Mutual Reliance Review System for Exemptive Relief Applications -- Relief granted to permit issuer to make disclosure in accordance with South African code for Reporting of Mineral Resources and Mineral Reserves - Relief subject to condition that the disclosure include a statement that the mineral resources and mineral reserves would be identical if issued in accordance with the mineral resource and mineral reserve standards mandated by National Instrument 43-101 -- Standards of Disclosure for Mineral Projects.

Applicable Rules

National Instrument 43-101 -- Standards of Disclosure for Mineral Projects, ss. 1.3, 1.4, 2.2(a).

October 26, 2005

IN THE MATTER OF

THE SECURITIES LEGISLATION

OF ONTARIO AND NEW BRUNSWICK

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEW SYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

AFLEASE GOLD AND URANIUM RESOURCES LIMITED AND

SOUTHERN CROSS RESOURCES INC.

(THE "FILER")

 

MRRS DECISION DOCUMENT

Background

The local securities regulatory authority or regulator (the Decision Maker) in each of Ontario and New Brunswick (the Jurisdictions) has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the Legislation) for an exemption from the requirements of Section 2.2(a) of National Instrument NI 43-101 to permit disclosure of mineral resources and mineral reserves in two independent technical reports being prepared by SRK Consulting on the material properties of Aflease Gold and Uranium Resources Limited (Aflease) utilizing the mineral resource and mineral reserve categories of the South African Code for Reporting of Mineral Resources and Mineral Reserves (the SAMREC Code) (the Requested Relief).

Under the Mutual Reliance Review System for Exemptive Relief Applications, (a) Ontario is the principal regulator for this application and (b) the MRRS decision document evidences the decision of each Decision Maker.

Interpretation

Defined terms contained in National Instrument 14-101 Definitions have the same meaning in this decision unless they are defined in this decision.

Representations

This decision is based on the following facts represented by the Filer:

1. Aflease was incorporated under the South African Companies Act in 1921, with its head office in Johannesburg at 55 Empire Road, Parktown, South Africa.

2. The authorized capital of Aflease consists of 500 million ordinary shares of 2 cents par value each, of which 400,965,558 ordinary shares are issued and outstanding.

3. The ordinary shares of Aflease trade on the JSE Limited (formerly the Johannesburg Securities Exchange) under the symbol "AFL" and over the counter on the "pink sheets" market in the United States under the symbol "AFLUY".

4. Aflease is not a reporting issuer in any Canadian jurisdiction.

5. Southern Cross Resources Inc. ("Southern Cross") is a corporation continued under the Canada Business Corporations Act, with its head office in Toronto at 26 Wellington Street East, Suite 820, Toronto, Ontario, M5E 1S2.

6. The common shares of Southern Cross are listed and posted for trading on The Toronto Stock Exchange. Southern Cross is a reporting issuer under the securities legislation of Ontario and New Brunswick.

7. Pursuant to a definitive acquisition agreement dated September 14, 2005 between Southern Cross and Aflease and subject to shareholder and regulatory approvals and to the satisfaction of other conditions set out therein, Southern Cross will acquire all of the issued and outstanding ordinary shares of the Company on the basis of 0.18 of a Southern Cross common share for each Aflease ordinary share pursuant to a scheme of arrangement under Section 311 of the South African Companies Act (the "Arrangement"). The Arrangement will constitute a reverse take-over of Southern Cross.

8. In connection with the Arrangement, Aflease has engaged SRK Consulting to prepare two independent technical reports on its material properties in accordance with the requirements of NI 43-101 and Form 43-101F1 (the "Technical Reports") and the authors of the Technical Reports are "qualified persons" as defined in NI 43-101 (the "Qualified Persons").

9. The Technical Reports will filed by Southern Cross with the securities regulatory authorities in Ontario and New Brunswick to support disclosure made in the information circular to be sent to holders of Southern Cross common shares in connection with the Arrangement (the "Southern Cross Information Circular").

10. The Technical Reports disclose Aflease's mineral resources and mineral reserves utilizing the mineral resource and mineral reserve categories of the SAMREC Code. The Technical Reports contain a statement by the Qualified Persons of SRK Consulting that the mineral resources and mineral reserves disclosed therein would be identical if issued in accordance with the mineral resource and mineral reserve standards mandated by Sections 1.3 and 1.4 of NI 43-101.

Decision

The Decision Makers being satisfied that the test contained in the Legislation that provides the Decision Maker with the jurisdiction to make the decision has been met.

The decision of the Decision Makers under the Legislation is that the Requested Relief is granted provided that the disclosure in the Technical Reports includes a statement that the mineral resources and mineral reserves would be identical if issued in accordance with the mineral resource and mineral reserve standards mandated by Sections 1.3 and 1.4 of National Instrument 43-101.

"Charlie MacCready"
Assistant Manager
Ontario Securities Commission