Securities Law & Instruments


Headnote

Application by an issuer for a revocation of a cease trade order issued by the Commission -- cease trade order issued because the issuer had failed to file certain continuous disclosure materials required by Ontario securities law -- defaults subsequently remedied by bringing continuous disclosure filings up-to-date -- cease trade order revoked.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as amended, ss. 127 and 144.

IN THE MATTER OF THE SECURITIES ACT, R.S.O. 1990, C. S.5, AS AMENDED (the "Act") AND IN THE MATTER OF EUROPEAN METALS CORP.

ORDER (Section 144 of the Act)

WHEREAS the securities of European Metals Corp. (the "Applicant") are subject to a cease trade order dated May 5, 2016 issued by the Director of the Ontario Securities Commission (the "Commission") pursuant to paragraph 2 of subsection 127(1) and subsection 127(4.1) of the Act (the "Ontario Cease Trade Order") directing that trading in securities of the Applicant, whether direct or indirect, cease until the order is revoked by the Director;

AND WHEREAS the Ontario Cease Trade Order was made on the basis that the Applicant was in default of certain filing requirements under Ontario securities law as described in the Ontario Cease Trade Order;

AND WHEREAS the Applicant has applied to the Commission pursuant to section 144 of the Act to revoke the Ontario Cease Trade Order;

AND UPON the Applicant having represented to the Commission that:

1. The Applicant was incorporated under the federal laws of Canada on May 30, 1997.

2. The Applicant's registered office is located in Toronto, Ontario. The Applicant's principal regulator is the Commission.

3. The Applicant is a reporting issuer in the provinces of Ontario, British Columbia, and Alberta (the "Reporting Jurisdictions"). The Applicant is not a reporting issuer in any other jurisdiction in Canada.

4. The Applicant's authorized capital consists of an unlimited number of common shares (the "Common Shares"). As at the date hereof, there were 1,392,762,564 Common Shares issued and outstanding.

5. Other than (i) outstanding incentive stock options exercisable for an aggregate of 66,500,000 Common Shares; (ii) outstanding warrants to purchase an aggregate of 704,958,200 Common Shares; and (iii) 10,000,000 Common Shares pursuant to contractual arrangements, no Common Shares are reserved for issuance pursuant to outstanding convertible securities.

6. Other than the Common Shares, the Applicant has no securities (including debt securities) issued and outstanding.

7. The Applicant is a junior mining exploration company focused on precious and base metals.

8. The Ontario Cease Trade Order was issued as a result of the Applicant's failure to file its audited annual financial statements and related management's discussion & analysis (MD&A) for the year ended December 31, 2015 within the prescribed time frame as required under National Instrument 51-102 Continuous Disclosure Obligations and related certifications (the NI 52-109 Certificates) as required by National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings.

9. The Applicant is also subject to a cease trade order dated May 12, 2016 (the "BC Cease Trade Order") issued by the British Columbia Securities Commission (the "BCSC") and a reciprocal cease trade order issued by the Alberta Securities Commission (the "ASC") (together with the Ontario Cease Trade Order, the BC Cease Trade Order and the ASC reciprocal cease trade order, the "Cease Trade Orders"). The Applicant has concurrently applied to the BCSC for an order for revocation of the BC Cease Trade Order.

10. Subsequent to the issuance of the Ontario Cease Trade Order, the Applicant has filed the following continuous disclosure documents with the Reporting Jurisdictions (collectively, the Outstanding Filings):

(i) audited annual financial statements, MD&A and NI 52-109 Certificates for the year ended December 31, 2015;

(ii) unaudited interim financial statements, MD&A and NI 52-109 Certificates for the three month periods ended March 31, 2016, June 30, 2016 and September 30, 2016;

(iii) audited annual financial statements, MD&A and NI 52-109 Certificates for the year ended December 31, 2016; and

(iv) unaudited interim financial statements, MD&A and NI 52-109 Certificates for the three month period ended March 31, 2017, June 30, 2017 and September 30, 2017.

11. The Applicant (i) is up-to-date with all of its continuous disclosure obligations; (ii) is not in default of any of its obligations under the Ontario Cease Trade Order (other than as set out in paragraph 12, below); and (iii) is not in default of any requirements under applicable securities legislation or the rules and regulations made pursuant thereto in any of the Reporting Jurisdictions, except for the existence of the Cease Trade Orders.

12. On January 5, 2016, the Applicant issued a news release announcing that it signed a non-binding letter of intent which sets out the proposed terms and conditions of a transaction, whereby the Applicant will acquire approximately 78% of the issued and outstanding shares of EuroGas AG (EuroGas), a private Swiss company in the business of mining and oil and gas exploration and development, from ZB Capital AG (ZBC), a private Swiss company and the majority shareholder of EuroGas. The transaction was to take the form of a contractual share exchange pursuant to which the Applicant will acquire 100% of the EuroGas shares held by ZBC in exchange for the issuance to ZBC of units of the Applicant. The Applicant's MD&A for the year ended December 31, 2016 noted that the transaction was not completed and the negotiations were terminated. Staff of the Commission have advised that this may have been an act in furtherance of a trade in contravention of the Ontario Cease Trade Order. Except for the announcement of the non-binding letter of intent, there have been no material changes in the business, operations or affairs of the Applicant since the issuance of the Ontario Cease Trade Order.

13. The Applicant's Common Shares were listed for trading on the Canadian Securities Exchange under the symbol "ECU" on February 25, 2014 but trading in such securities was halted on May 5, 2016 because of the Ontario Cease Trade Order. The Applicant's securities are not listed or quoted on any other exchange or market in Canada or elsewhere, other than on the OTC Pink Market under the symbol "MNTCF" and on the Frankfurt Exchange under the symbol "4MM".

14. As of the date hereof, the Applicant has paid all outstanding activity, participation and late filing fees that are required to be paid to the Commission and has filed all forms associated with such payments.

15. Since the issuance of the Cease Trade Orders, there have been no material changes in the business, operations or affairs of the Applicant which have not been disclosed by news release and/or material change report and filed on SEDAR.

16. The Applicant has filed all outstanding continuous disclosure documents that are required to be filed in the Reporting Jurisdictions.

17. Other than the Cease Trade Orders, the Applicant has not previously been subject to a cease trade order issued by any securities regulatory authority.

18. The Applicant is not considering, nor is it involved in any discussions relating to a reverse take-over, merger, amalgamation or other form of combination or transaction similar to any of the foregoing.

19. The Applicant intends to hold an annual meeting of shareholders within three months of the revocation of the Ontario Cease Trade Order and will prepare a management information circular which will be mailed to shareholders and filed on SEDAR in accordance with Form 51-102F5.

20. The Applicant's SEDAR issuer profile and SEDI issuer profile supplement are current and accurate.

21. The Applicant has given the Commission a written undertaking that:

(a) The Applicant will hold an annual meeting of shareholders within three months after the date on which the Ontario Cease Trade Order is revoked; and

(b) The Applicant will not complete:

i. A restructuring transaction involving, directly or indirectly, an existing or proposed, material underlying business which is not located in Canada,

ii. A reverse takeover with a reverse takeover acquirer that has a direct or indirect, existing or proposed, material underlying business which is not located in Canada, or

iii. A significant acquisition involving, directly or indirectly, an existing or proposed, material underlying business which is not located in Canada,

unless

A. The Applicant files a preliminary prospectus and a final prospectus with the Commission and obtains receipts for the preliminary and final prospectus from the Director under the Act,

B. The Applicant files or delivers with the preliminary prospectus and the final prospectus the documents required by Part 9 of National Instrument 41-101 General Prospectus Requirements (NI 41-101) including a completed personal information form and authorization in the form set out in Appendix A of NI 41-101 for each current and incoming director, executive officer and promoter of the Applicant, and

C. The preliminary prospectus and final prospectus contain the information required by applicable securities legislation, including the information required for a probable restructuring transaction, reverse takeover or significant acquisition (as applicable).

22. Upon the revocation of the Ontario Cease Trade Order, the Applicant will issue a news release and concurrently file a material change report on SEDAR announcing the revocation of the Ontario Cease Trade Order, the Outstanding Filings and outlining the Applicant's future plans.

AND UPON considering the application and the recommendation of the staff of the Commission; and

AND UPON the Director being satisfied that it would not be prejudicial to the public interest to revoke the Ontario Cease Trade Order;

IT IS ORDERED pursuant to section 144 of the Act that the Ontario Cease Trade Order is revoked.

DATED at Toronto on this 29th day of March, 2018.

"Jo-Anne Matear"
Manager, Corporate Finance
Ontario Securities Commission