Securities Law & Instruments

Headnote

Consent given to an offering corporation under the Business Corporations Act (Ontario) to continue under the Canada Business Corporations Act.

Statutes Cited

Business Corporations Act, R.S.O. 1990, c. B.16, as am., s. 181.

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

Regulations Cited

Regulation made under the Business Corporations Act, Ont. Reg. 289/00, as am., s. 4(b).

IN THE MATTER OF

R.R.O. 1990, REGULATION 289/00,

AS AMENDED

(the "Regulation")

MADE UNDER THE

BUSINESS CORPORATIONS ACT (ONTARIO),

R.S.O. 1990 c. B.16, AS AMENDED

(the "OBCA")

AND

IN THE MATTER OF

CRESO EXPLORATION INC

CONSENT

(Subsection 4(b) of the Regulation)

UPON the application of Creso Exploration Inc. ( the "Applicant") to the Ontario Securities Commission (the "Commission") requesting the consent from the Commission for the Applicant to continue in another jurisdiction as required by subsection 4(b) of the Regulation;

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

AND UPON the Applicant having represented to the Commission that:

1. The Applicant was incorporated pursuant to the OBCA on August 25, 2004 under the name of Willowstar Capital Inc. On June 1, 2010, the Applicant changed its name to Creso Exploration Inc./Exploration Creso Inc.

2. The Applicant's registered office is located at Heenan Blaikie LLP, 333 Bay Street, Bay-Adelaide Centre, Suite 2900, Toronto, Ontario M5H 2T4.

3. The Applicant's authorized capital consists of an unlimited number of common shares (the "Common Shares") of which approximately 72,861,063 Common Shares are issued and outstanding as at the date hereof.

4. The Applicant is an offering corporation under the provisions of the OBCA and a reporting issuer under the Securities Act (Ontario) (the "Act"). The Applicant is also a reporting issuer or its equivalent under the securities legislation of the province of British Columbia and Alberta. The Applicant is not a reporting issuer in any other jurisdiction in Canada. The Common Shares of The Applicant are listed for trading on the TSX Venture Exchange (the "Exchange") under the symbol "CXT".

5. The Applicant intends to apply (the "Application for Continuance") to the Director under the OBCA for authorization to continue as a corporation under the Canada Business Corporations Act (the "CBCA") pursuant to section 181 of the OBCA (the "Continuance").

6. Pursuant to clause 4(b) of the Regulation, where a corporation is an offering corporation under the OBCA, the Application for Continuance must be accompanied by a consent from the Commission.

7. The Applicant is not in default under any provision of the Act or the regulations or rules made under the Act and is not in default under the securities legislation of any other jurisdiction where it is a reporting issuer or equivalent.

8. The Applicant is not in default of any of the rules, regulations or policies of the Exchange.

9. The Applicant is not a party to any proceeding nor, to the best of its knowledge, information and belief, any pending proceeding under the Act.

10. The Application for Continuance is being made in connection with a proposed transaction involving the amalgamation (the "Amalgamation") of the Applicant with Creso Resources Inc., a non-distributing corporation incorporated pursuant to the CBCA. As part of the Amalgamation, the amalgamated entity ("Amalco") will carry on business under the name Creso Exploration Inc./Exploration Creso Inc. Upon completion of the Amalgamation, Amalco will be governed by the CBCA.

11. Amalco intends to remain a reporting issuer in Ontario and in the other jurisdiction where it is a reporting issuer and will file the required application to become a reporting issuer in the province of Quebec given that its registered office will be in Quebec.

12. The Application for Continuance is proposed to be made because the Applicant believes it to be in the best interest to conduct its affairs in accordance with the CBCA in order to effect the Amalgamation.

13. The holders of Common Shares of the Applicant (the "Shareholders") authorized the Continuance of the Applicant at an annual and special meeting of shareholders held on September 22, 2010 (the "Meeting"). The special resolution authorizing the continuance was approved at the Meeting by 99% of the votes cast. 6,961,093 Common Shares representing 9.77% of the outstanding Common Shares were voted at the Meeting. The Applicant's quorum requirement for a shareholders' meeting is 2%.

14. The management information circular dated August 27, 2010 of the Applicant describing the Continuance provided to the Shareholders in connection with the Meeting, included full disclosure of the reasons for and the implication of the proposed Continuance and a summary of the material differences between the OBCA and the CBCA and advised the shareholders of their dissent rights in connection with the Continuance pursuant to section 185 of the OBCA.

15. The material rights, duties and obligations of a corporation governed by the CBCA are substantially similar to those of a corporation governed by the OBCA.

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

THE COMMISSION HEREBY CONSENTS to the Continuance of the Applicant as a corporation under the CBCA.

DATED at Toronto on this 28th day of September, 2010.

"Wesley Scott"
Commissioner
Ontario Securities Commission
 
"James Carnwath"
Commissioner
Ontario Securities Commission