Angus Mining (Namibia) Inc. -- s. 104(2)(c)

Headnote

Multilateral Instrument 11-102 Passport System and National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Takeover Bids and Issuer Bids -- Exemption from the issuer bid requirements of the Securities Act (Ontario) -- Exemption from the valuation requirement applicable to issuer bids in MI 61-101 -- issuer requires an exemption from issuer bid requirements to acquire its own shares and warrants in connection with a negotiated settlement -- issuer will acquire securities in connection with termination of option agreement -- acquisition is not an independent transaction in which the issuer is repurchasing its own securities from one security holder in preference to other shareholders -- settlement was negotiated at arm's length between the issuer and the transferring security holder's legal representatives -- value of the consideration being paid to the transferring security holder does not exceed the market value of the securities being acquired by the issuer

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 93 to 99.1, 104(2)(c).

Multilateral Instrument 11-102 Passport System.

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions.

Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions.

January 31, 2012

IN THE MATTER OF

THE SECURITIES ACT (ONTARIO)

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

(the "Act")

AND

IN THE MATTER OF

ANGUS MINING (NAMIBIA) INC.

ORDER

(Clause 104(2)(c))

UPON the application (the "Application") of Angus Mining (Namibia) Inc. (the "Applicant") to the Ontario Securities Commission (the "Commission") for an order pursuant to clause 104(2)(c) of the Act exempting the Applicant from the requirements set forth in sections 93-99.1 of the Act (the "Formal Issuer Bid Requirements") and the regulations made thereunder and from the requirements in Part 3 of Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions (the "61-101 Issuer Bid Requirements" and, together with the Formal Bid Requirements, the "Issuer Bid Requirements").

AND UPON the Commission considering the Application and the recommendation of the staff of the Commission.

AND UPON the Applicant having represented to the Commission that:

1. The Applicant was incorporated under the Business Corporations Act (Alberta) on February 12, 2007. The Applicant changed its name to "Angus Mining (Namibia) Inc." on September 23, 2010 and continued to Ontario.

2. On September 24, 2010, the Applicant completed a qualifying transaction whereby it acquired all the common shares of Angus Mining (Namibia) Ltd. ("Angus Subco").

3. The Applicant is a reporting issuer in Ontario, British Columbia and Alberta (the "Jurisdictions") and is not in default of applicable securities legislation in any of the Jurisdictions.

4. The authorized capital of the Applicant consists of an unlimited number of common shares. As of January 20, 2012, the Applicant had 41,315,098 issued and outstanding common shares (the "Common Shares") and 28,141,667 warrants (the "Warrants"), each Warrant being exercisable for one Common Share at a price of $0.50 per share.

5. The Common Shares are listed on the TSX Venture Exchange ("TSX-V") under the symbol "ANA". The closing price of the Common Shares on the TSX-V on January 20, 2012 was $0.15. The Warrants are not listed on any stock exchange.

6. The Applicant is a junior exploration company focused on building precious metal resources.

7. The Applicant's principal office is located at 83 Yonge Street, Suite 200, Toronto, Ontario M5C 1S8.

8. Forsys Metals Corp. ("Forsys") was incorporated on May 13, 1985 under the Business Corporations Act (Ontario) and its shares are listed on the Toronto Stock Exchange under the trading symbol "FSY".

9. Forsys is an exploration stage company engaged in the acquisition, exploration and development of mineral properties.

10. Forsys currently owns 4,600,000 Common Shares and 3,000,000 warrants of Angus, which comprises approximately 11% of the issued and outstanding shares of Angus (on a non-diluted basis) or approximately 17% (on a semi-diluted basis).

11. The Applicant, through Angus Subco, and Forsys and their respective subsidiaries are parties to an option agreement dated as of July 30, 2010 (the "Option Agreement"), as amended, pursuant to which Forsys granted to Angus Subco the option to earn up to a 75% undivided beneficial interest in the equity of the Omatjete Mining Applicant (Namibia)(Pty) Ltd. ("Omatjete"), a corporation incorporated under the laws of Namibia and wholly owned indirectly by Forsys. In addition to its interest in the Option Agreement, the Applicant has an interest in certain exploration properties located in Nevada (the "Nevada Assets").

12. Omatjete owns rights in Exclusive Prospecting License 3195 on the Ondundu Gold Property in west central Namibia (the "Ondundu Gold Project").

13. In accordance with the Option Agreement, Angus, as the operator, has conducted exploration activities on the Ondundu Gold Property and has earned the right to a 42.6% interest in Omatjete by spending $5 million in exploration expenditures. Angus has the right to earn an additional 24.9% interest by spending an additional $6 million in exploration expenditures prior to January 30, 2013.

14. Exploration results to date with respect to the Ondundu Gold Project have not met Angus' goals for the project, and have resulted in the suspension of further exploration activities on that project. Angus has therefore entered into discussions with Forsys with respect to the future of the Ondundu Gold Project, which, subject to regulatory approvals, are anticipated to result in the entering into of a proposed option termination and settlement agreement (the "Settlement Agreement") with the effect of terminating the Option Agreement and releasing each other of all claims, damages and liabilities with respect to the Ondundu Gold Project.

15. Pursuant to the proposed Settlement Agreement the Applicant will relinquish its right to a 42.6% interest in the share capital and debt structure of Omatjete, its right to operatorship and its right to earn a further 24.9% interest in Omatjete as contemplated in the Option Agreement and in return Forsys will:

a) return to the Applicant for cancellation 3,000,000 Common Shares (the "Subject Shares"),

b) return to the Applicant for cancellation 3,000,000 warrants of Angus (the "Subject Warrants" and, together with the Subject Warrants, the "Settlement Securities"), and

c) assume certain payables currently owing in respect of the Ondundu Gold Project

(the "Proposed Transaction").

16. Under the Settlement Agreement, the Applicant will retain a 20% carried interest in the common shares of Omatjete. The retained carrying interest is a passive investment interest and will not require the Applicant to make any ongoing contributions related to operatorship or finance future development.

17. The board of directors of the Applicant (the "Board") has determined that entering into the Settlement Agreement is in the best interest of the Applicant and its securityholders. In particular, the Board is of the view that, although the Ondundu Gold Project could in the future develop into an economically viable ore body, the risk and required expenditures associated with further exploration efforts and development are not activities that the Applicant is reasonably capable of undertaking at the current time. The Board is of the view that Forsys is more likely to unlock the potential and realize value in the project because it already has the infrastructure in place in the region and also has greater financial resources. The Settlement Agreement will also allow the Applicant to focus its time and resources on its Nevada Assets, while preserving a 20% carried interest in the Ondundu Gold Project, an interest that will not require the Applicant to deploy its financial and other resources in order to maintain it.

18. The terms of the Settlement Agreement were negotiated at arm's length through legal counsel and finalized after extensive negotiations between Angus and Forsys.

19. The acquisition of the Settlement Securities by the Applicant is an integral part of the Proposed Transaction. It is not being proposed for the purpose or with the intention of providing preferential treatment to one securityholder and the Settlement Securities will be cancelled immediately after such shares are acquired by the Applicant, which will improve the equity position of the other Applicant's securityholders.

20. The terms of the Proposed Transaction have been reviewed by the independent members of the Board (the "Independent Board Members"). The Independent Board Members determined that the entering into and completion of the Settlement, including the acquisition of the Settlement Securities by the Applicant, is in the best interests of the Applicant and its securityholders and that the acquisition of the Settlement Securities by the Applicant will not adversely affect the financial position of the Applicant or the securityholders to whom the issuer bid is not extended.

21. In reaching its conclusion, the Independent Board Members received a fairness opinion from Haywood Securities Inc., which affirmed that the Proposed Transaction was fair from a financial point of view to the securityholders of Angus (other than Forsys).

22. The net value of the consideration paid for the Settlement Securities will not be greater in any material respect to the market price of the Common Shares on the TSX-V, as determined in accordance with section 1.3 of OSC Rule 62-504 -- Take-Over Bids and Issuer Bids, and the value of the Warrants.

23. The Proposed Transaction does not provide greater value to Forsys for the Settlement Securities than the value Forsys paid to acquire the Settlement Securities. The acquisition of the Settlement Securities by the Applicant pursuant to the Settlement Agreement is an "issuer bid" as defined in subsection 89(1) of the Act and is not exempt from the Issuer Bid Requirements.

24. The Proposed Transaction also constitutes a "related party transaction" in accordance with paragraphs (a) and (c) of the definition of such term in Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions ("MI 61-101"). Sections 5.5(a) and 5.7(a) of MI 61-101 exempt related party transactions from the formal valuation and minority approval requirements contained therein, if the fair market value of the transaction is not more than 25% of the issuer's market capitalization (the "Related Party Transaction Exemptions"). The Proposed Transaction qualifies for the Related Party Transaction Exemptions.

25. But for the exemptive relief requested herein from the Issuer Bid Requirements, the Proposed Transaction will comply with all other applicable securities laws, including the requirements contained in section 5.2 of MI 61-10.

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

IT IS ORDERED pursuant to clause 104(2)(c) of the Act that the Applicant is exempt from the Formal Issuer Bid Requirements in connection with the Proposed Transaction.

IT IS FURTHER ORDERED pursuant to subsection 9.1(2) of MI 61-101 that the Applicant is exempt from the 61-101 Issuer Bid Requirements in connection with the Proposed Transaction.