Securities Law & Instruments

Headnote

National Instrument 43-101 - Applicant granted relief from the requirements of NI 43-101 in respect of disclosure made in and in connection with an offering memorandum for a private placement - Relief subject to conditions that offering memorandum contains specified opinions of experts, offering is de minimis,and all Canadian investors are "accredited investors".

Rules Cited

National Instrument 43-101 Standards of Disclosure for Mineral Projects.

IN THE MATTER OF

THE SECURITIES ACT,

R.S.O. 1990, c. S.5, AS AMENDED

AND

IN THE MATTER OF

NATIONAL INSTRUMENT 43-101

STANDARDS OF DISCLOSURE FOR MINERAL PROJECTS

AND

IN THE MATTER OF

CUNICO RESOURCES N.V.

 

ORDER

WHEREAS the Ontario Securities Commission (the "Commission") has received an application from Cunico Resources N.V. (the "Applicant") for an order pursuant to section 9.1 of National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101") exempting the Applicant from the requirements of NI 43-101 in respect of the disclosure made in and in connection with an offering memorandum (the "Ontario Offering Memorandum") prepared by the Applicant in connection with the offering (the "Ontario Offering") by the Applicant of ordinary shares (the "Ordinary Shares") on a private placement basis to accredited investors in Ontario (the "Requested Relief");

AND WHEREAS, the Applicant has represented to the Commission that:

1. The Applicant is a public limited liability company incorporated pursuant to the laws of The Netherlands with its head office in Amsterdam, The Netherlands.

2. The Applicant is the holding company of an international mining group currently engaged in the development of mining deposits in the Former Yugoslav Republic of Macedonia, the Republic of Albania, Kosovo and the Republic of Zambia. The Applicant, together with its subsidiaries, focuses on the exploration for, and the mining, processing, marketing and sale of nickel, copper and cobalt.

3. The Applicant is not a reporting issuer in Ontario or any other Canadian jurisdiction, nor are any of its securities listed or posted for trading on any stock exchange in Canada. The Applicant has no present intention of becoming a reporting issuer in Ontario or any other Canadian jurisdiction or of becoming listed in Canada.

4. The authorized share capital of the Applicant consists of 200,000,000,000 Ordinary Shares. No securities of the Applicant are currently listed on any stock exchange, although admission to listing of the Ordinary Shares on the official list of the Financial Services Authority (the "FSA") of the United Kingdom (the "UK") and unconditional dealings in the Ordinary Shares are currently expected to commence on the London Stock Exchange in August 2007 concurrently with the closing of the Offering (as defined below).

5. The Applicant intends to offer new Ordinary Shares and outstanding Ordinary Shares held by certain current shareholders of the Applicant in an underwritten offering to institutional investors in the UK and certain other members states of the European Economic Area pursuant to a prospectus (the "Prospectus"), and on a private placement basis to purchasers in certain other jurisdictions including the United States, Australia, South Africa and Ontario (together, the "Offering").

6. The Prospectus (i) will be prepared in accordance with Commission Regulation no. 809/2004 of the European Community (the "Prospectus Regulation"), the Dutch Act on Financial Supervision and related regulations which implement European Community Directive 2003/71/EC (the "Prospectus Directive") in Dutch law and is required to be approved by the Dutch Authority for the Financial Markets, and (ii) will also comply with the listings requirements of the FSA and the London Stock Exchange plc.

7. The Ontario Offering will be made to accredited investors in Ontario only.

8. A competent persons' report (the "CPR") regarding the mineral assets (including mineral resources and ore reserves) of the Applicant in Macedonia, Albania, Kosovo and Zambia has been prepared and will be included in its entirety in the Prospectus.

9. The CPR was prepared jointly under the supervision of Roger Dixon of SRK Consulting Engineers and Scientists (Pty) Ltd. ("SRK") and Mike Lawlor of Snowden Mining Industry Consultants Pty Ltd. ("Snowden"), each of whom is a "qualified person" and is independent of the Applicant for the purposes NI 43-101.

10. The CPR was prepared in accordance with the requirements set out in paragraphs 131-133 of the Recommendations of the Committee of European Securities Regulators for the consistent implementation of the Prospectus Regulation, the Prospectus Directive as implemented in The Netherlands and the Prospectus Rules published by the FSA. Snowden and SRK have prepared the CPR (including the estimates of mineral resources and ore reserves set out therein) in accordance with, among other things, the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (2004 Edition) published by the Joint Ore Reserves Committee ("JORC") of the Australasian Institute of Mining & Metallurgy, Australian Institute of Geoscientists, and Minerals Council of Australia.

11. In connection with the Ontario Offering, the Applicant intends to distribute to accredited investors in Ontario the Ontario Offering Memorandum containing the Prospectus and any additional disclosure required pursuant to the laws of Ontario, including disclosure relating to resale restrictions, statutory rights of action and exchange rate information.

12. Immediately after the Offering, less than 10% of the Ordinary Shares will be held by residents of Canada.

IT IS ORDERED pursuant to section 9.1 of NI 43-101 that the Requested Relief be and is hereby granted, provided that:

(i) Snowden and SRK will each provide opinions, to be set out in the Ontario Offering Memorandum, that (i) the definitions and standards of JORC are substantively similar to the definitions and standards of the Canadian Institute of Mining, Metallurgy and Petroleum (the CIM Standards) which are recognized by NI 43-101; and (ii) a reconciliation of the Applicant's mineral Resources and ore reserves as stated in compliance with JORC would not result in materially different mineral resources and mineral reserves as prepared in compliance with the CIM Standards;

(ii) less than 10% of the Ordinary Shares will be held by residents of Canada after the Offering; and

(iii) all purchasers under the Ontario Offering will be "accredited investors" as defined in National Instrument 45-106 Prospectus and Registration Exemptions.

DATED July 27, 2007.

"Erez Blumberger"
Manager, Corporate Finance
Ontario Securities Commission