Securities Law & Instruments

Headnote

Section 144 -- application for variation of cease trade order -- issuer cease traded due to failure to file with the Commission annual financial statements -- issuer has applied for a variation of the cease trade order to permit the issuer to proceed with a private placement -- potential investors to be accredited investors and to receive copy of cease trade order and partial revocation order prior to making investment decision -- partial revocation granted subject to conditions.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 127, 144.

National Instrument 45-106 Prospectus and Registration Exemptions.

IN THE MATTER OF

THE SECURITIES ACT

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

(the "Act")

AND

IN THE MATTER OF

MARINE MINING CORP.

(the "Applicant")

ORDER

(Section 144)

WHEREAS the Applicant is subject to a cease trade order dated May 26, 2004 made pursuant to subsection 127(1) and subsection 127(5) of the Act ordering that trading in securities of the Applicant cease (the "Cease Trade Order");

AND WHEREAS the Applicant has made an application to the Ontario Securities Commission (the "Commission") pursuant to section 144 of the Act for a partial revocation of the Cease Trade Order;

AND WHEREAS Applicant has represented to the Commission that:

1. The Applicant was formed by certificate and articles of incorporation under the Business Corporations Act (Ontario) on May 27, 1993.

2. The Applicant's registered and head office is located at 856 Millwood Road, Toronto, Ontario, M4G 1W6.

3. The Applicant is a reporting issuer in Ontario and is not a reporting issuer or equivalent under the securities legislation of any other jurisdiction in Canada.

4. The Applicant's authorized capital consists of an unlimited number of common shares (the "Common Shares"), of which 28,583,272 Common Shares are issued and outstanding.

5. The Cease Trade Order was issued due to the failure of the Applicant to file audited financial statements for the period ended December 31, 2003 (the "Financial Statements"). No further financial statements have been filed since that time and no further continuous disclosure documents required by applicable securities legislation have been filed by the Applicant since that time.

6. The Applicant's principal assets consist of approximately $500,000 in cash and marketable securities received subsequent to the issuance of the Cease Trade Order, and interests in certain mineral property concessions in Ghana.

7. The Applicant suffered financial distress caused by difficult capital market conditions in the early 2000s. As a result, the Applicant has lacked the funds necessary to prepare, file, or deliver any subsequent financial statements or other continuous disclosure documents required by applicable securities legislation.

8. The Applicant is seeking to effect a financing transaction to enable the Applicant to bring itself into compliance with its continuous disclosure obligations and fund operations, one or more of which transactions, or the actions associated therewith, may constitute a contravention of the Cease Trade Order. More specifically, the Applicant proposes to complete a brokered or non-brokered private placement of its securities (the "Private Placement") with accredited investors (as such term is defined in National Instrument 45-106 -- Prospectus and Registration Exemptions) resident in the Province of Ontario (each a "Potential Investor") to raise gross proceeds of up to $750,000. The Applicant is proposing to sell units ("Units") comprised of one (1) Common Share and one half (1/2) of a common share purchase warrant (a "Warrant"), for a subscription price equal to $0.12 per Unit. Each whole Warrant shall entitle the investor to purchase one additional Common Share on or before the date that is one (1) year from the date the Common Shares are listed for trading on a stock exchange recognized by the Commission, at an exercise price of $0.20 per Common Share. The Warrants may contain a feature enabling the Applicant to accelerate the expiry date for the Warrants upon notice to the Warrant holders.

9. The proceeds from the Private Placement shall be used to prepare and file continuous disclosure documents with a view to obtaining a full revocation of the Cease Trade Order, to pay filing fees with respect thereto to the Commission, to pay outstanding fees to the Applicant's transfer agent, to fund the preparation of the application for the revocation of the Cease Trade Order, to advance the Applicant's current work program and to provide working capital. These expenses are more fully described in paragraph 10 below.

10. The Applicant proposes to use the proceeds of the private placement as follows:

(a)

Legal, accounting and audit fees

$100,000

 

(b)

Fees and penalties for late filing of materials

$20,500

 

(c)

Ghana Work Program:

 

 

 

(i)

Completion of dockage and staging grounds

 

 

 

at the Ankobra River;

$175,000

 

 

(ii)

Completion of a sidescan and bulk sampling program;

$329,500

 

 

(iii)

Consultant salaries, wages and compliance in Ghana.

$125,000

11. The portion of the Private Placement proceeds proposed to be allocated to the Applicant's work programs and working capital requirements will allow it to preserve its property interests until such time as it is capable of applying for a full revocation of the Cease Trade Order.

12. As the Private Placement will involve trades in securities of the Applicant (including, for greater certainty, acts in furtherance of trades in securities of the Applicant), it cannot be completed without a variation of the Cease Trade Order.

13. The Private Placement trades will take place in Ontario.

14. The Private Placement will be completed in accordance with applicable securities legislation.

15. The Applicant believes that the proceeds of the Private Placement will be sufficient to bring its continuous disclosure obligations up to date and pay all related outstanding fees.

16. Prior to completion of the Private Placement each Potential Investor will:

(a) receive a copy of the Cease Trade Order;

(b) receive a copy of this Order; and

(c) receive written notice from the Applicant and acknowledge that all of the Applicant's securities, including the securities issued in connection with the Private Placement, will remain subject to the Cease Trade Order until it is revoked, and that the granting of this Order does not guarantee the issuance of a full revocation order in the future.

17. The Applicant is not in default of any requirements of the Cease Trade Order or the Act or the rules and regulations made pursuant thereto, subject to the deficiencies outlined in paragraph 5 above.

18. Upon the issuance of this Order, the Applicant will:

(a) issue a press release and file a material change report announcing, among other things, the Private Placement and this Order;

(b) market the Private Placement and provide information relating to the Applicant to the Potential Investors in accordance with the provisions of this Order and in accordance with the Act and the rules and regulations made pursuant thereto; and

(c) issue securities in connection with the Private Placement.

19. To bring its continuous disclosure record up to date, the Applicant intends, within a reasonable time following the completion of the Private Placement, to file the following documents on SEDAR once completed:

(a) the Financial Statements;

(b) its interim financial statements for the interim periods ending on or around the date of the completion of the Private Placement, and the related management discussion and analysis;

(c) all certifications by the Chief Executive Officer and the Chief Financial Officer of the Applicant with respect to the Applicant's annual and interim filings required by National Instrument 52-109 -- Certification of Disclosure in Issuers' Annual and Interim Filings; and

(d) all other continuous disclosure documents required by applicable securities legislation to be filed by the Applicant.

20. The purpose of the Private Placement is to enable the Applicant to raise sufficient funds to reactivate its business to bring its continuous disclosure up to date and to apply for a full revocation of the Cease Trade Order.

21. The Applicant intends, within a reasonable time following the completion of the Private Placement, to apply to the Commission for a full revocation of the Cease Trade Order.

22. The Applicant is not considering, nor is it involved in any discussion relating to a reverse take-over, merger, amalgamation or other form of combination or transaction similar to any of the foregoing.

23. The Applicant undertakes to hold its annual meeting of shareholders within three (3) months of the date that the Cease Trader Order is revoked in full.

AND WHEREAS considering the Application and the recommendation of the staff of the Commission;

AND WHEREAS the Director being satisfied that to do so would not be prejudicial to the public interest;

IT IS ORDERED, pursuant to section 144 of the Act, that the Cease Trade Order be and is hereby partially revoked solely to permit trades in securities of the Applicant (including, for greater certainty, acts in furtherance of trades in securities of the Applicant) that are necessary for and are in connection with the Private Placement provided that:

(a) prior to completion of the Private Placement each Potential Investor will:

(i) receive a copy of the Cease Trade Order;

(ii) receive a copy of this Order; and

(iii) receive written notice from the Applicant, and acknowledge that all of the Applicant's securities, including the securities issued in connection with the Private Placement will remain subject to the Cease Trade Order until it is revoked, and that the granting of this Order does not guarantee the issuance of a full revocation order in the future; and

(b) this Order will terminate on the earlier of:

(i) completion of the Private Placement; and

(ii) 120 days from the date hereof.

DATED this 8th day of April, 2010.

"Jo-Anne Matear"
Assistant Manager, Corporate Finance
Ontario Securities Commission