Securities Law & Instruments

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- National Instrument 51-102, s. 13.1 Continuous Disclosure Obligations -- Material contract -- An issuer requires relief from the requirement to file a material contract -- The issuer entered into an agreement to fund litigation related to the loss of its only material property; the funding agreement contains commercially sensitive and confidential information, and may be subject to privilege in connection with the litigation; the issuer determined that disclosure of the funding agreement, even in a redacted form, would be seriously prejudicial to the issuer; the issuer has filed a material change report that contains sufficient alternative information about the material contract.

Applicable Legislative Provisions

National Instrument 51-102 Continuous Disclosure Obligations, ss. 12.2, 13.1.

March 5, 2015

IN THE MATTER OF THE SECURITIES LEGISLATION OF BRITISH COLUMBIA AND ONTARIO (the Jurisdictions) AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF RUSORO MINING LTD. (the Filer)

DECISION

Background

1 The securities regulatory authority or regulator in each of the Jurisdictions (the Decision Maker) has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the Legislation) that the Filer be exempt from the requirement to file a litigation funding agreement as a material contract (the Exemptive Relief Sought).

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

a) the British Columbia Securities Commission is the principal regulator for this application;

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 Alberta and Quebec; 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

2 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

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

1. the Filer's head office is located at Suite 3123 -- 595 Burrard Street, Vancouver, British Columbia;

2. the Filer is a reporting issuer in British Columbia, Alberta, Ontario and Quebec; the Filer's common shares are listed on the TSX Venture Exchange under the symbol "RML";

3. the Filer's principal business activities were the acquisition, exploration, development and operation of gold mineral properties; until March 14, 2012, the Filer held interests in certain mines in Venezuela, which the Filer operated jointly with the Venezuelan government;

4. in September 2011, the Venezuelan government enacted a decree mandating the return of all gold reserves under foreign control, including the Filer's gold mining assets; the Filer and the Venezuelan government never reached agreement on the terms for migration of the Filer's mining assets to the Venezuelan government; in March 2012, the Filer's mining concessions officially expired and all of the Filer's mining assets and operations reverted to the Venezuelan government;

5. the Filer's Venezuelan mining assets were its only material assets; the Filer has no other mineral properties or projects and currently has no active cash-flow generating business;

6. the Filer's sole recourse to seek compensation from the Venezuelan government following nationalization is international arbitration before the World Bank's International Centre for Settlement of Investment Disputes, in accordance with the provisions of the Canada-Venezuela Bilateral Investment Treaty;

7. on June 15, 2012, the Filer entered into a litigation funding agreement (the Litigation Funding Agreement) with Frentorn Limited (the Funder) to finance the Filer's costs in connection with the international arbitration on a non-recourse basis; the Funder is a subsidiary of a fund advised by Calunius Capital LLP, which is based in London, England and specializes in funding commercial litigation and international arbitration claims;

8. under section 12.2 of National Instrument 51-102 Continuous Disclosure Obligations, the Filer is required to file the Litigation Funding Agreement as a material contract;

9. the entering into of the Litigation Funding Agreement was publically disclosed in a news release filed on June 15, 2012; the Filer's periodic financial disclosure also discloses expenses that qualify for recovery under the Litigation Funding Agreement;

10. on November 6, 2014, the Filer issued and filed a material change report (the Material Change Report) disclosing the Filer's entry into the Litigation Funding Agreement, providing background on the Funder, and describing the key terms of the Litigation Funding Agreement that are not commercially sensitive;

11. the Litigation Funding Agreement may be subject to privilege in connection with the Filer's ongoing litigation involving the Venezuelan government, and any public disclosure of its substantive terms (beyond that contained in the Material Change Report), even in a redacted form, would run the risk of waiving the privilege in the course of its ongoing litigation, which would be seriously prejudicial to the Filer's interests;

12. disclosure of the Litigation Funding Agreement would also place the Filer in violation of confidentiality provisions in the Litigation Funding Agreement and would compromise the Filer's ongoing relationship with the Funder;

13. the Material Change Report discloses the key terms of the Litigation Funding Agreement; disclosure of the Litigation Funding Agreement in a redacted form would not provide additional information that would be material to an investor for purposes of making an investment decision; and

14. the Filer is not in default of any requirement of securities legislation in any jurisdiction of Canada, except that it has not filed the Litigation Funding Agreement as a material contract.

Decision

4 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 Exemptive Relief Sought is granted.

"Brenda M. Leong"
Chair
British Columbia Securities Commission