Northern Precious Metals 2010 Limited Partnership and Northern Precious Metals Management Inc.

Decision

Headnote

Policy Statement 11-203 Respecting Process for Exemptive Relief Applications in Multiple Jurisdictions -- Exemptions granted to flow-through limited partnership from the requirement in Regulation 81-106 Investment Fund Continuous Disclosure to file an annual information form. Flow-through limited partnership has a short lifespan and does not have a readily available secondary market.

Applicable Legislative Provisions

Regulation 81-106 Investment Fund Continuous Disclosure, s. 9.2.

[Translation]

March 29, 2012

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

QUÉBEC AND ONTARIO

(the Jurisdictions)

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

NORTHERN PRECIOUS METALS

2010 LIMITED PARTNERSHIP

(the Partnership)

AND

NORTHERN PRECIOUS METALS MANAGEMENT INC.

(the Manager, together with the Partnership, the Filers)

DECISION

Background

The securities regulatory authority or regulator in each of the Jurisdictions (each a Decision Maker) has received an application from the Filers for a decision under the securities legislation of the Jurisdictions (the Legislation) for an exemption relieving the Partnership from the requirement to file an annual information form (the AIF) pursuant to section 9.2 of Regulation 81-106 respecting Investment Fund Continuous Disclosure (the Regulation 81-106) in respect of its financial year ended December 31, 2011 (the Exemption Sought).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):

(a) the Autorité des marchés financiers is the principal regulator for this application;

(b) the Filers have provided notice that section 4.7(1) of Regulation 11-102 respecting Passport System (Regulation 11-102) is intended to be relied upon in the following jurisdictions: Ontario, British Columbia, Alberta, Saskatchewan and Manitoba; and

(c) the decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.

Interpretation

Terms defined in Regulation 14-101 respecting Definitions and Regulation 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 Filers:

1. The Partnership is a non-redeemable investment fund established as a limited partnership in accordance with the Civil Code of Québec on July 8, 2010.

2. Northern Precious Metals 2010 Inc. is the general partner of the Partnership (the General Partner). The General Partner was incorporated under the Canada Business Corporations Act.

3. The Manager is the duly registered investment fund manager of the Partnership. The Manager was incorporated under the Canada Business Corporations Act.

4. The head office of the Manager, the Partnership and the General Partner is located in Montréal, Québec.

5. The Partnership became a reporting issuer in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Québec by filing a final prospectus relating to its initial public offering in such jurisdictions on October 25, 2010, as amended by Amendment No.1 dated November 4, 2010.

6. Neither the Manager nor the Partnership are in default of securities legislation in any jurisdiction.

7. The Partnership has been created for the primary investment purpose of acquiring flow-through shares and other securities of mining companies in order to obtain for the limited partners of the Partnership (the Limited Partners) the significant tax benefits that accrue when mining companies renounce qualifying mineral resource exploration expenditures to the Partnership through flow-through shares. The achievement of capital appreciation is a secondary benefit of the Partnership's primary investment purpose.

8. The Partnership invests in flow-through shares (the Flow-Through Shares) of mining companies focused primarily on gold exploration or development (the Mining Companies) pursuant to agreements (the Flow-Through Agreements) between the Partnership and the Mining Companies. Under the terms of each Flow-Through Agreement, the Partnership will subscribe for Flow-Through Shares of the Mining Companies and the Mining Companies will agree to incur and renounce to the Partnership, in amounts equal to the subscription price of the Flow-Through Shares, expenditures in respect of resource exploration and development that qualify as Canadian exploration expenses or as Canadian development expenses and that may be renounced as Canadian exploration expenses to the Partnership.

9. Following the initial public offering of the limited partnership units of the Partnership (the Units) on October 25, 2010, the Partnership has issued no other Units and no further Units will be issued. The Units are not redeemable nor are they listed or quoted for trading on any stock exchange or market. Generally, Units are not transferred by the Limited Partners, since each Limited Partner must be the holder of the Units on the last day of each fiscal year of the Partnership in order to obtain the desired tax deduction.

10. According to the limited partnership agreement (the Partnership Agreement), the Partnership should have been dissolved by no later than February 29, 2012 (theDissolution Date).Prior to its dissolution, all assets of the Partnership would have been disposed of, all liabilities of the Partnership would have been discharged and all net proceeds of dispositions would have been distributed. On February 29, 2012, by extraordinary resolution, the Limited Partners approved the amendment to the Partnership Agreement for the purpose of extending the term of the Partnership from the Dissolution Date to July 31, 2012.

11. According to the terms of the Partnership Agreement, the Manager has the authority to manage, control, administer and operate the business and affairs of the Partnership, including the authority to take all measures necessary or appropriate for the business, or ancillary thereto, and to ensure that the Partnership complies with all necessary reporting and administrative requirements.

12. Each Limited Partner has, by subscribing for Units, agreed to the irrevocable power of attorney contained in the Partnership Agreement and has thereby, in effect, consented to the making of this application.

13. Since its formation, the Partnership's activities have been limited to: (i) completing the issue of the Units under its prospectus, (ii) investing its available funds in accordance with its investment objective, and (iii) incurring expenses as described in its prospectus.

14. All material information concerning the business and activities of the Partnership is contained in the publicly available documents filed on the System for Electronic Document Analysis and Retrieval (SEDAR). The AIF is intended to assist current and prospective investors to evaluate investment funds so that they may make an informed investment decision. In the case of the Partnership, no prospective investor may purchase its units and current investors have access to the continuous disclosure documents of the Partnership, such as its annual and interim financial statements and management reports of fund performance, in order to get information on their investments.

15. Given the limited range of business activities to be conducted by the Partnership, the short lifespan and the nature of the investment of the Limited Partners, the preparation and distribution of an AIF by the Partnership would not provide additional benefit to the Limited Partners. Furthermore, the fees associated with the filing of an AIF represent a significant expense for the Partnership, considering its net asset value.

16. Upon the occurrence of any material change to the Partnership, Limited Partners would receive all relevant information from the material change reports the Partnership is required to file with each of the jurisdictions where the Partnership is a reporting issuer. If the Manager does not consider a change in the organization and management of the Partnership, the custodian of the Partnership, the investment strategy of the Partnership or the investment restrictions of the Partnership, to be a material change, the Manager undertakes to promptly issue and file a release on SEDAR.

17. The Filers are of the view that the Exemption Sought is not against the public interest, and represents the business judgment of responsible persons uninfluenced by considerations other than the best interest of the Partnership and its Limited Partners.

Decision

Each of the Decision Makers 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 Makers under the Legislation is that the Exemption Sought is granted.

"Josée Deslauriers"
Director, Investment Funds and Continuous Disclosure
Autorité des marchés financiers