Securities Law & Instruments

Headnote

Relief from the prospectus requirement in connection with the first trade of ordinary shares to be distributed to residents of Canada under a prospectus exemption -- the issuer of the ordinary shares is not a reporting issuer in any jurisdiction of Canada -- the conditions of the exemption in section 2.14 of National Instrument 45-102 Resale of Securities are not fully met as residents of Canada currently own more than 10% of the total number of ordinary shares -- the ordinary shares held by Canadian residents are concentrated -- relief granted subject to conditions, including: that the first trade must be made through an exchange or market outside of Canada or to a person or company outside of Canada; that residents of Canada do not, after the proposed offering, own directly or indirectly more than 10 percent of the outstanding ordinary shares, excluding the shares currently held by Canadian residents; and, that residents of Canada do not after the proposed offering represent in number more than 10 percent of the total number of owners directly or indirectly of ordinary shares -- relief limited to the first trade by the Canadian resident investors who purchase ordinary shares in the proposed offering and does not extend to subsequent exempt purchasers.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 53 and 74(1).

National Instrument 45-102 Resale of Securities.

March 2, 2007

IN THE MATTER OF

THE SECURITIES ACT (ONTARIO)

AND

IN THE MATTER OF

URANIUM EQUITIES LIMITED (the "Filer")

 

DECISION DOCUMENT

Background

The Ontario Securities Commission (the "Decision Maker") has received an application from the Filer for a decision under the Securities Act (Ontario) (the "Legislation") for an exemption from the prospectus requirement of the Legislation for first trades of the Canadian Offering Shares (as defined below) by the Canadian Investors (as defined below) that purchase such shares pursuant to the Offering (as defined below) (the "Requested Relief").

This decision document evidences the decision of the Decision Maker (the "Decision").

Interpretation

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

"ASX" means the Australian Stock Exchange.

"NI 45-106" means National Instrument 45-106 Prospectus and Registration Exemptions.

Representations

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

1. The Filer was incorporated under the laws of Australia. The Filer is a uranium exploration company which currently has 28 uranium projects in Australia.

2. The Filer's registered head office is located at Level 2, 1292 Hay Street, West Perth, Western Australia 6005 and has a second office at Level 6 West, 50 Grenfell Street, Adelaide, South Australia 5000. The principal management, assets and operations of the Filer are located in Australia.

3. Ordinary shares of the Filer ("Ordinary Shares") are listed and posted for trading on the ASX.

4. The authorized capital of the Filer consists of an unlimited number of Ordinary Shares. As of the close of business on February 2, 2007, the Filer's issued and outstanding share capital consisted of 133,310,801 Ordinary Shares.

5. At the close of business on February 2, 2007 the authorised capital of the Filer consisted of an unlimited number of Ordinary Shares, of which 133,310,801 Ordinary Shares are issued and outstanding. Of these shares, an aggregate of 20,002,000 Ordinary Shares (approximately 15.0% of the outstanding Ordinary Shares), are deemed to be held by residents of Canada (the "Existing Canadian Shares"). To the knowledge of the Filer, the holder of the vast majority of the Existing Canadian Shares (20,000,000) is Lagoon Creek Resource Pty Ltd. ("Lagoon Creek"), an Australian company which is a wholly-owned subsidiary of Laramide Resources Ltd. ("Laramide"), a Canadian public corporation whose head office is in Toronto, Ontario and shares are listed on the TSX Venture Exchange. Lagoon Creek did not access the Canadian public markets to obtain the Existing Canadian Shares as follows:

(a) on January 13, 2006 the Filer entered into a subscription agreement with Laramide in respect of the subscription by Laramide, or its nominee, for Ordinary Shares;

(b) in accordance with applicable laws in Australia, the subscription of Ordinary Shares by Laramide, or its nominee, was subject to approval by the shareholders of the Filer; and

(c) shareholder approval was obtained at a meeting on May 8, 2006 and the subscription by Lagoon Creek was completed shortly thereafter in a transaction that did not require the publication of a prospectus in accordance with the applicable laws of Australia.

6. By virtue of Section 1.1(5) of the Legislation, Laramide is deemed to beneficially own the Existing Canadian Shares.

7. The Filer intends to conduct a private placement offering (the "Offering") in certain jurisdictions, including in Ontario (the "Jurisdiction").

8. The number of Ordinary Shares to be issued pursuant to the Offering will be 46,000,000 Ordinary Shares of which the Filer anticipates 6,000,000 Ordinary Shares will be subscribed for by Lagoon Creek.

9. Part of the Offering will be a private placement of Ordinary Shares (the "Canadian Offering Shares") to investors other than Lagoon Creek, Laramide or any of their respective affiliates in the Jurisdiction (the "Canadian Investors") in reliance on registration and prospectus exemptions contained in NI 45-106.

10. The Canadian Investors are all resident in the Jurisdiction.

11. The Filer expects that on completion of the Offering, Lagoon Creek and the Canadian Investors will together own more than 10% of the outstanding Ordinary Shares.

12. Residents of Canada do not and will not, after giving effect to the Offering, own directly or indirectly more than 10 percent of the outstanding Ordinary Shares, excluding the Existing Canadian Shares.

13. Residents of Canada do not and will not, after giving effect to the Offering, represent in number more than 10 percent of the total number of owners directly or indirectly of Ordinary Shares.

14. The Filer is not a reporting issuer in any province or territory of Canada and will not become a reporting issuer as a result of the Offering.

15. The Filer has no current intention of becoming a reporting issuer in Canada.

16. The Ordinary Shares are not currently listed on any exchange or quotation system in Canada and the Filer has no plans to apply for a listing in Canada.

17. As the Filer is under no obligation to file a prospectus, the Ordinary Shares held by Canadian residents are subject to resale restrictions that may never expire.

18. In the absence of an order granting relief, the first trade in the Canadian Offering Shares by any of the Canadian Investors will be deemed to be a distribution pursuant to section 2.6 of National Instrument 45-102 Resale of Securities ("NI 45-102") unless, among other things, the Filer has been a reporting issuer for four months immediately preceding the trade in one of the jurisdictions set forth in Appendix B to NI 45-102.

19. The exemption provided for by section 2.14 of NI 45-102 will not be available to the Canadian Investors with respect to a first trade of Canadian Offering Shares as the criteria set out in subsection 2.14(b) of NI 45-102 is not met in that it is expected that, at the distribution date of the Canadian Offering Shares, residents of Canada will be deemed to own directly or indirectly more than 10% of the outstanding Ordinary Shares.

20. No market for the Ordinary Shares exists in Canada and none is expected to develop. It is intended that any resale of the Canadian Offering Shares by Canadian residents be effected through the facilities of the ASX or another exchange or market outside of Canada on which the Ordinary Shares may be quoted or listed at the time the trade occurs or to a person or company outside of Canada, in accordance with the rules and regulations of such foreign market.

21. The Filer will be subject to reporting obligations under the rules of the ASX. Holders of Canadian Offering Shares will receive copies of all shareholder materials provided to all other holders of Ordinary Shares, as required by the rules of the ASX.

Decision

The Decision Maker is 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 Maker is that the Requested Relief is granted provided that:

1. the Filer is not a reporting issuer in any jurisdiction of Canada at the date of the trade;

2. residents of Canada do not, after giving effect to the Offering, own directly or indirectly more than 10 percent of the outstanding Ordinary Shares, excluding the Existing Canadian Shares;

3. residents of Canada do not, after giving effect to the Offering, represent in number more than 10 percent of the total number of owners directly or indirectly of Ordinary Shares;

4. the trade is made through an exchange or market outside of Canada or to a person or company outside of Canada.

"Suresh Thakrar"
Commissioner
 
"Margot C. Howard"
Commissioner