Securities Law & Instruments

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- issuer deemed to be no longer a reporting issuer under securities legislation -- issuer has outstanding warrants which may be held by more than 15 securityholders in one jurisdiction -- warrant holders no longer require public disclosure in respect of the issuer -- requested relief granted.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, s. 1(10)(a)(ii)

Citation: Re Gold Royalties Corporation, 2015 ABASC 767

June 3, 2015

IN THE MATTER OF THE SECURITIES LEGISLATION OF ALBERTA AND ONTARIO (the Jurisdictions) AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF GOLD ROYALTIES CORPORATION (the Filer)

DECISION

Background

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) to cease to be a reporting issuer (the Exemptive Relief Sought).

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

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

(b) this decision is the decision of the principal regulator and evidences the decision of each other Decision Maker.

Interpretation

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

Representations

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

1. The Filer is a corporation existing under the laws of the Province of Alberta and is a reporting issuer in each of the Jurisdictions. The head office of the Filer is located in Calgary, Alberta.

2. Sandstorm Gold Ltd. (Sandstorm), is a corporation existing under the laws of the Province of British Columbia. Sandstorm is a reporting issuer in each of the Jurisdictions, as well as in all other provinces and territories of Canada, and the common shares of Sandstorm (the Sandstorm Shares) are listed and traded on the Toronto Stock Exchange (TSX) under the symbol "SSL" and on the NYSE MKT LLC under the symbol "SAND".

3. Upon completion of the court approved plan of arrangement under Section 193 of the Business Corporations Act (Alberta) (the Arrangement), that was made effective at 12:01 a.m. (Calgary time) (the Effective Time) on April 28, 2015 (the Effective Date), pursuant to the arrangement agreement between Sandstorm and the Filer, Sandstorm acquired all of the issued and outstanding common shares of the Filer (the Filer Shares) not already held by Sandstorm in exchange for 0.045 of a common share of Sandstorm (each a Sandstorm Share) for each Filer Share.

4. Immediately prior to the Effective Time, the Filer had the following issued and outstanding securities: (a) 28,652,563 Filer Shares; (b) 1,055,000 stock options expiring between August 22, 2017 and March 30, 2022, each exercisable at prices ranging from $0.40 to $0.825 into one Filer Share (the Filer Options); and (c) 8,217,252 common share purchase warrants (which includes 38,625 additional warrants to be issued upon exercise of 38,625 broker common share purchase warrants) (the Filer Warrants) expiring between October 28, 2015 and May 1, 2016, each exercisable at a price of $0.40 or $0.50 into one Filer Share.

5. There are four beneficial holders of Filer Options and 30 beneficial holders of Filer Warrants. These are the only securities of the Filer that are not held by Sandstorm.

6. Pursuant to the terms of the Arrangement, each holder of a Filer Option outstanding immediately prior to the Effective Date, became entitled upon completion of the Arrangement, to receive, upon the exercise of such holder's option, in lieu of each Filer Share to which such holder was previously entitled, 0.045 of a Sandstorm Share.

7. Pursuant to the terms of the Arrangement, each holder of a Filer Warrant outstanding immediately prior to the Effective Date, became entitled upon completion of the Arrangement, to receive, upon the exercise of such holder's warrant, in lieu of each Filer Share to which such holder was previously entitled, 0.045 of a Sandstorm Share.

8. The Filer Shares were delisted from the TSX Venture Exchange at the close of business on May 5, 2015. As of April 28, 2015, the Filer's Shares are no longer traded on the OTCPink.

9. The Filer has applied for a decision that it is not a reporting issuer in all of the jurisdictions in which it is currently a reporting issuer.

10. The Filer filed a Notice of Voluntary Surrender of Reporting Issuer Status with the British Columbia Securities Commission (the BCSC) under BC Instrument 11-502 Voluntary Surrender of Reporting Issuer Status stating that it will cease to be a reporting issuer in British Columbia. The BCSC has confirmed that non-reporting status was effective on May 18, 2015.

11. The simplified procedure under the Canadian Securities Administrators' Staff Notice 12-307 Application for a Decision that an Issuer is not a Reporting Issuer is not available to the Filer, as it is unable to determine with certainty that it has less than 15 beneficial holders of Filer Warrants in any one jurisdiction.

12. Sandstorm, on behalf of the Filer, has made diligent enquiry (the Investigation) to determine the jurisdiction of the beneficial holders of the Filer Warrants. The Investigation included numerous enquiries made to the Filer's former transaction counsel, pursuant to which requests were made to obtain details of beneficial holders and to obtain copies of subscription agreements for the Filer Warrants, which details and documents were unavailable for review, and also included the review of reports of exempt distribution available online.

13. Based on the Investigation, to the Filer's knowledge: (a) five beneficial holders of Filer Warrants are resident in the United States; (b) one holder of Filer Warrants is resident outside of North America; and (c) of the remaining 24 holders of Filer Warrants, six beneficial holders are resident in Ontario, five beneficial holders are resident in Alberta and one beneficial holder is resident in Quebec. The Investigation was not able to identify the province of residence of the 12 remaining beneficial holders.

14. The Filer cannot rely on the exemption available in Section 13.3 of National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102) for issuers of exchangeable securities because the Filer Warrants and the Filer Options are not "designated exchangeable securities" as defined in NI 51-102. The Filer Options and the Filer Warrants do not provide their holders with voting rights in respect of Sandstorm.

15. The Filer has no intention to access the capital markets in the future by issuing any further securities to the public, and has no intention to issue any securities other than to Sandstorm or its affiliates.

16. None of the Filer's securities, including debt securities, are traded in Canada, or another country on a marketplace as defined in National Instrument 21-101 Marketplace Operation or any other facility for bringing together buyers and sellers of securities where trading data is publicly reported.

17. The Filer is not required to remain a reporting issuer in the Jurisdictions under any contractual arrangement between the Filer and the holders of the Filer Warrants or the Filer Options.

18. The Filer and, to the best of the Filer's knowledge, Sandstorm are not in default of any of their obligations under the Legislation as reporting issuers.

19. Upon granting of the Exemptive Relief Sought, the Filer will not be a reporting issuer in any jurisdiction of Canada.

Decision

Each of the Decision Makers is satisfied that the decision meets the test contained 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.

"Denise Weeres"
Manager, Legal
Corporate Finance