Securities Law & Instruments

Headnote

National Policy 11-206 Process for Cease to be a Reporting Issuer Applications -- issuer deemed to be no longer a reporting issuer under securities legislation, issuer in default of securities legislation, issuer received an order staying all proceedings under the Bankruptcy and Insolvency Act.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., s. 1(10).

June 21, 2018

IN THE MATTER OF THE SECURITIES LEGISLATION OF QUÉBEC AND ONTARIO (the Jurisdictions) AND IN THE MATTER OF THE PROCESS FOR CEASE TO BE A REPORTING ISSUER APPLICATIONS AND IN THE MATTER OF QUEST RARE MINERALS LTD. (the Filer)

ORDER

Background

The securities regulatory authority or regulator in each of the Jurisdictions (Decision Maker) has received an application from the Filer for an order under the securities legislation of the Jurisdictions (the Legislation) that the Filer has ceased to be a reporting issuer in all jurisdictions of Canada in which it is a reporting issuer (the Order Sought).

Under the Process for Cease to be a Reporting Issuer Applications (for a dual application):

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

b) the Filer has provided notice that subsection 4C.5(1) of Regulation 11-102 respecting Passport System (Regulation 11-102) is intended to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, New Brunswick, New Scotia, Prince Edward Island and Newfoundland and Labrador and

c) this order is the order 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, Regulation 11-102 and, in Regulation 14-501Q on definitions have the same meaning if used in this order, unless otherwise defined.

Representations

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

1. the Filer's head office is located at 1100-1200, McGill College Avenue, Montréal, Québec H3B 4G7;

2. the common shares of the Filer were delisted from the Toronto Stock Exchange on August 11, 2017;

3. on January 3, 2018, the Filer filed a proposal (the Proposal) pursuant to Part III of the Bankruptcy and Insolvency Act (Canada) with the Office of the Superintendent of Bankruptcy, which Proposal was amended on January 12, 2018. The Proposal provided, among other things, for the reorganization of the Filer's share capital, whereby all issued and outstanding common shares of the Filer would be cancelled, the whole in accordance with Section 191 of the Canada Business Corporations Act (the CBCA). The Proposal also provided for the creation of a company to be incorporated or other commercial vehicle to be established (the Consortium), which would be funding certain monetary obligations of the Filer under the Proposal as well as the funding of the Filer's operations going forward (the Reorganization). As a result of the funding by the Consortium as described above and in accordance with an agreement between the Filer and the Consortium, the Consortium would be the sole shareholder of the Filer;

4. on March 23, 2018, the Superior Court of Québec rendered an order granting the Filer's motion to homologate the Proposal that was accepted by the statutory majority of the Filer's creditors at a duly-called meeting of the Filer's creditors held on January 24, 2018;

5. the closing of the Reorganization occurred on April 4, 2018, at which time the Filer filed the Articles of Reorganization reflecting the Reorganization with the Director named under the CBCA and all of the then issued and outstanding securities of the Filer were cancelled and new shares were issued to the Consortium, the whole in accordance with Section 191 of the CBCA;

6. the Filer is not an OTC reporting issuer under Regulation 51-105 respecting Issuers Quoted in the U.S. Over-the-Counter Markets;

7. the outstanding securities of the Filer, including debt securities, are beneficially owned, directly or indirectly, by fewer than 15 securityholders in each of the jurisdictions of Canada and fewer than 51 securityholders in total worldwide;

8. no securities of the Filer, including debt securities, are traded in Canada or another country on a marketplace as defined in Regulation 21-101 respecting Marketplace Operation or any other facility for bringing together buyers and sellers of securities where trading data is publicly reported;

9. the Filer has no securities issued and outstanding other than the common shares;

10. the Filer has no intention to proceed with a distribution of its securities in any jurisdiction of Canada;

11. the Filer is applying for an order that the Filer has ceased to be a reporting issuer in all of the jurisdictions of Canada in which it is a reporting issuer;

12. the Filer is not in default of its obligations as a reporting issuer pursuant to the legislation except for the failure to file its (i) audited financial statements, management's discussion and analysis (MD&A) and annual certificates for the year ended October 31, 2017 and its (ii) interim financial statements, MD&A and interim certificates for the period ended January 31, 2018; and

13. a cease trade order was not issued in respect of the Filer's defaults, and fees were not collected because of the stay of proceedings ordered by the Superior Court of Québec on March 23, 2018 in accordance with the Bankruptcy and Insolvency Act (Canada).

Order

Each of the Decision Makers is satisfied that the order meets the test set out in the Legislation for the Decision Maker to make the order.

The decision of the Decision Makers under the Legislation is that the Order Sought is granted.

"Martin Latulippe"
Director, Continuous Disclosure