Atacama Pacific Gold Corporation

Decision

Headnote

National Policy 11-203 Process For Exemptive Relief Applications in Multiple Jurisdictions -Exemption granted from the requirement to prepare financial statements in accordance with Canadian GAAP - Issuer recently became a reporting issuer - Issuer has not previously prepared financial statements in accordance with Canadian GAAP - Issuer has assessed the readiness of its staff, board and audit committee - Relief granted subject to conditions.

Applicable Legislative Provisions

National Instrument 52-107 Acceptable Accounting Principles, Auditing Standards and Reporting Currency - ss. 9.1, 3.1.

December 30, 2010

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO (the "JURISDICTION")

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

ATACAMA PACIFIC GOLD CORPORATION

(the "FILER")

DECISION

Background

The principal regulator in the Jurisdiction (the "Decision Maker") has received an application from the Filer for a decision under the securities legislation of the Jurisdiction (the "Legislation") exempting the Filer from the requirement in section 3.1 of National Instrument 52-107 Acceptable Accounting Principles, Auditing Standards and Reporting Currency ("NI 52-107") that financial statements be prepared in accordance with Canadian GAAP (the "Exemption Sought"), in order that the Filer may prepare financial statements for periods ending on or after July 1, 2010 in accordance with Part I of the CICA Handbook, that is International Financial Reporting Standards as issued by the International Accounting Standards Board ("IFRS").

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions:

(a) the Ontario Securities Commission is the principal regulator for this application; and

(b) the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System ("MI 11-102") is intended to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, Nova Scotia, New Brunswick, Newfoundland and Labrador and Prince Edward Island (the "Passport Jurisdictions").

Interpretation

Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.

Representations

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

1. The Filer was incorporated in Ontario in June 2008. Its registered and head office is at 5300 -- 199 Bay Street, Commerce Court West, Toronto, Ontario, M5L 1B9.

2. In anticipation of completing an initial public offering of its common shares under National Instrument 41-101 General Prospectus Requirements (the "Offering"), the Filer retained KPMG LLP to audit its financial statements for the financial years ended March 31, 2009 and 2010, as well as review financial statements for the three-month period ended June 30, 2010 (collectively, the "Historical Statements") for inclusion in the Prospectus (as defined below). The Historical Statements were prepared in accordance with IFRS.

3. On September 15, 2010, the Filer made a pre-filing application with the Decision Maker seeking exemptive relief from the requirement set out in Section 3.1 of NI 52-107 that its Historical Statements to be included in the Prospectus be prepared in accordance with Canadian GAAP as applicable to public enterprises, and instead permitting the Filer to prepare such Historical Statements in accordance with IFRS (the "Pre-Filing Application").

4. In connection with the Offering, the Filer filed a preliminary prospectus dated September 28, 2010 and a (final) prospectus dated October 29, 2010 (collectively, the "Prospectus") and was issued receipts by the Decision Maker for such filings on September 30, 2010 and November 3, 2010 respectively.

5. The receipt for the Prospectus dated November 3, 2010 constituted evidence of the relief referred to in paragraph (3) above.

6. The Filer completed the Offering on November 10, 2010.

7. The Filer is a reporting issuer in the Jurisdiction and the Passport Jurisdictions. The Filer is not in default of securities legislation in the Jurisdiction or any of the Passport Jurisdictions, except that the Filer has filed interim financial statements in accordance with IFRS for the period ended September 30, 2010 rather than Canadian GAAP interim financial statements as required by NI 52-107.

8. The Filer's common shares are listed on the TSX Venture Exchange.

9. The Filer is a precious metals exploration and development company focused on Chilean gold opportunities.

10. The Filer does not have any operating revenue as it is still in the exploration phase.

11. The Canadian Accounting Standards Board has confirmed that publicly accountable enterprises will be required to prepare their financial statements in accordance with IFRS for interim and annual financial statements relating to fiscal years beginning on or after January 1, 2011.

12. NI 52-107 sets out acceptable accounting principles for financial reporting under the Legislation by domestic issuers, foreign issuers, registrants and other market participants; under NI 52-107, a domestic issuer must use Canadian GAAP; under NI 52-107, only foreign issuers may use IFRS.

13. In CSA Staff Notice 52-321 Early Adoption of International Financial Reporting Standards, Use of US GAAP and Reference to IFRS-IASB, staff of the Canadian Securities Administrators recognized that some issuers may wish to prepare their financial statements in accordance with IFRS for periods beginning prior to January 1, 2011 and indicated that staff were prepared to recommend exemptive relief on a case by case basis to permit a domestic issuer to do so, despite section 3.1 of NI 52-107.

14. Subject to obtaining the Exemption Sought, the Filer intends to prepare and file its financial statements to be filed for interim and annual periods ending after July 1, 2010 in accordance with IFRS.

15. The Filer's financial year-end is March 31.

16. The Filer has expended considerable resources in connection with the preparation and audit of the Historical Statements in accordance with IFRS and the establishment of the necessary internal controls and procedures. Having already expended these resources and established these controls and procedures, the Filer believes that requiring it to prepare financial statements for periods commencing on or after July 1, 2010 in accordance with Canadian GAAP only to then convert these financial statements a few months later back to IFRS for the financial year commencing April 1, 2011 would be costly and time-consuming and would create significant inefficiencies with respect to the Filer's financial statement preparation process, as well as the establishment and maintenance of its internal controls and procedures.

17. The Filer believes that the immediate adoption of IFRS for the remainder of its 2011 financial year will benefit the Filer and investors by offering continuity in form, presentation and public disclosure of its financial information consistent with the form, presentation and public disclosure of the Historical Statements in the Prospectus.

18. The Filer evaluated its overall readiness to transition to IFRS and concluded that it was adequately prepared for adoption of IFRS.

19. Early adoption of IFRS eliminates the need to plan and perform a conversion from Canadian GAAP to IFRS.

20. Early adoption of IFRS also eliminates the requirement to provide reconciliations of financial statements prepared under both Canadian GAAP and IFRS.

21. Early adoption of IFRS provides users of the Filer's financial statements with significantly more disclosure, which enhances their understanding of its results from operations and its financial position, and eliminates complexity and costs from the financial statement preparation process.

22. For the Filer, because it is in a start-up position, the main areas of accounting focus are exploration, issuance of share capital, stock based compensation and cash accounting, all of which have very few or no significant differences under the two accounting standards.

23. The Filer carefully assessed the readiness of its staff, board of directors, auditors, investors and other market participants for the immediate adoption by the Filer of IFRS for the presentation of the Historical Statements in the Prospectus and for all subsequent financial periods following the Offering, and concluded that all parties are adequately prepared for the Filer's immediate adoption of IFRS.

Decision

The Decision Maker is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.

The decision of the Decision Maker under the Legislation is that the Exemption Sought is granted provided that the Filer prepares its financial statements for financial interim and annual periods ending after July 1, 2010 in accordance with IFRS.

 
"Naizam Kanji"
Deputy Director
Corporate Finance Branch
Ontario Securities Commission