Securities Law & Instruments

Headnote

Section 144 -- Application by an issuer for a partial 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 -- relief requested for a private placement -- issuer to bring its continuous disclosure up to date and file for a full revocation order.

Statutes Cited

Securities Act, R.S.O., c. S.5, as am., s. 144.

IN THE MATTER OF
THE SECURITIES ACT,
R.S.O. 1990, c. S.5, AS AMENDED
(the Act)

AND

IN THE MATTER OF
SNIPER RESOURCES LTD.

ORDER
(Section 144)

WHEREAS the securities of Sniper Resources Ltd. (the Applicant) are subject to a cease trade order made by the Director dated February 11, 2016, pursuant to paragraph 2 of subsection 127(1) and subsection 127(4.1) of the Act (the Cease Trade Order), directing that all trading in the securities of the Applicant cease until the Cease Trade Order is revoked by the Director;

AND WHEREAS the Applicant has applied to the Ontario Securities Commission (the Commission) for a partial revocation of the Cease Trade Order pursuant to section 144 of the Act;

AND UPON the Applicant having represented to the Commission that:

1. The Applicant was incorporated in the province of British Columbia under theBusiness Corporations Act (British Columbia) on July 6, 2006.

2. The Applicant's registered office and principal place of business is located at 3374 West 19th Avenue, Vancouver, British Columbia, V6S 1C2.

3. The Applicant is a reporting issuer under the securities legislation of the provinces of Ontario, British Columbia, and Alberta. The Applicant is not a reporting issuer in any other jurisdiction in Canada.

4. The Applicant's authorized share capital consists of an unlimited number of common shares (Common Shares). The Applicant currently has 65,658,218 Common Shares issued and outstanding. Other than the issued and outstanding Common Shares, the Applicant has no securities outstanding.

5. The Applicant's securities are not listed on any stock exchange or quotation system.

6. In addition to the Cease Trade Order, the Applicant's securities are also subject to a cease trade order dated February 5, 2016 issued by the Executive Director of the British Columbia Securities Commission (the BCSC), pursuant to subsection 164(1) of the Securities Act (British Columbia), directing that all trading in the securities of the Applicant cease until the order is revoked by the Executive Director (the BC Cease Trade Order).

7. The BC Cease Trade Order and the Cease Trade Order are reciprocated in Alberta pursuant to section 198.1 of the Securities Act (Alberta), Alberta's statutory reciprocal order provision.

8. The Cease Trade Order was issued as a result of the Applicant's failure to file the following continuous disclosure materials as required by Ontario securities law:

(a) audited financial statements for the year ended September 30, 2015;

(b) management's discussion and analysis (MD&A) relating to the audited annual financial statements for the year ended September 30, 2015; and

(c) the certification of the foregoing filings as required by National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings (NI 52-109)

(collectively, the Unfiled Documents).

9. The Unfiled Documents were not filed as a result of financial difficulties.

10. Subsequent to the failure to file the Unfiled Documents, the Applicant also failed to file the following documents:

(a) annual audited financial statements for the years ended September 30, 2016, September 30, 2017, and September 30, 2018;

(b) unaudited interim financial statements for all the interim periods ended between December 31, 2015 to June 30, 2018;

(c) MD&A relating to the financial statements referred to in subparagraphs (a) and (b) above; and

(d) certificates required to be filed in respect of the financial statements referred to in subparagraphs (a) and (b) above under NI 52-109

(together with the Unfiled Documents, the Unfiled Continuous Disclosure).

11. The Applicant is seeking a partial revocation of the Cease Trade Order to be able to complete a private placement in the province of Ontario and other provinces (the Private Placement) of up to 145,000,000 Common Shares at a price of $0.001 per Common Share, to raise an estimated aggregate gross proceeds of $145,000.

12. The Applicant is also seeking a partial revocation of the BC Cease Trade Order, and has filed an application with the BCSC, dated January 3, 2019, for a partial revocation of the BC Cease Trade Order.

13. The Private Placement will be conducted on a prospectus exempt basis with subscribers in Ontario and other provinces who satisfy the requirements of section 2.5 Family, friends and business associates of National Instrument 45-106 Prospectus Exemptions (NI 45-106) or who are accredited investors (as defined in section 73.3 of the Act and NI 45-106).

14. The Applicant intends to prepare and file the Unfiled Continuous Disclosure and pay all outstanding fees within a reasonable period of time following the completion of the Private Placement. The Applicant also intends to apply to the applicable securities regulators to have the Cease Trade Order and the BC Cease Trade Order fully revoked.

15. Other than the failure to file the Unfiled Continuous Disclosure, the Applicant is not in default of any of the requirements of the Act or the rules and regulations made pursuant thereto. The Applicant's SEDAR and SEDI profiles are up to date.

16. The Applicant intends to allocate the proceeds from the Private Placement as follows:

Description

Cost

Accounting, audit and legal fees associated with the preparation and filing of the relevant continuous disclosure documents, as well as the preparation of the materials for the annual meeting, the Private Placement, and the applications for the partial revocation order and the full revocation order;

$55,000

Filing fees associated with obtaining the partial revocation order and the full revocation order, including fees payable to the applicable regulators, including the Commission;

$40,000

Legacy accounts payable, including accounting and legal fees, consulting fees and outstanding transfer agent fees; and

$25,000

Working capital and general and administrative expenses.

$25,000

Total:

$145,000

17. The Applicant reasonably believes that the Private Placement will be sufficient to bring its continuous disclosure obligations up to date and pay all related outstanding fees and provide it with sufficient working capital to continue its business.

18. As the Private Placement would involve a trade of securities and acts in furtherance of trades, the Private Placement cannot be completed without a partial revocation of the Cease Trade Order.

19. The Private Placement will be completed in accordance with all applicable laws.

20. Prior to completion of the Private Placement, the Applicant will:

(a) provide any subscriber to the Private Placement with:

(i) a copy of the Cease Trade Order;

(ii) a copy of this order; and

(b) obtain from each subscriber a signed and dated acknowledgment which clearly states that all of the Applicant's securities, including the securities issued in connection with the Private Placement, will remain subject to the Cease Trade Order and the BC Cease Trade Order, and that the issuance of a partial revocation order does not guarantee the issuance of a full revocation order in the future.

21. Upon issuance of this order, the Applicant will issue a press release announcing the order and the intention to complete the Private Placement. Upon completion of the Private Placement, the Applicant will issue a press release and file a material change report. As other material events transpire, the Applicant will issue appropriate press releases and file material change reports as applicable.

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

AND UPON the Director being satisfied that to do so would not be prejudicial to the public interest;

IT IS ORDERED, pursuant to Section 144 of the Act, that the Cease Trade Order is partially revoked solely to permit the trades in securities of the Applicant (including for greater certainty, acts in furtherance of trades in securities of the Applicant) that are necessary for and are in connection with the Private Placement, provided that:

(a) prior to completion of the Private Placement, the Applicant will:

(i) provide to each subscriber under the Private Placement a copy of the Cease Trade Order;

(ii) provide to each subscriber under the Private Placement a copy of this order; and

(iii) obtain from each subscriber under the Private Placement a signed and dated acknowledgment, which clearly states that all of the Applicant's securities, including the securities issued in connection with the Private Placement, will remain subject to the Cease Trade Order, and the BC Cease Trade Order, and that the issuance of a partial revocation order does not guarantee the issuance of a full revocation order in the future.

(b) The Applicant will make available a copy of the written acknowledgements referred to in paragraph (a)(iii) to staff of the Commission on request; and

(c) This order will terminate on the earlier of the closing of the Private Placement and 60 days from the date hereof.

DATED this 28th day of January, 2019.

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