ONTARIO COURT OF JUSTICE

CITATION: Ontario Securities Commission v. Katmarian, 2024 ONCJ 151

DATE: 2024 03 20

COURT FILE No.: Toronto

999-21-12000891

B E T W E E N :

ONTARIO SECURITIES COMMISSION

— AND —

STEPHAN KATMARIAN

Before Justice Beverly A. Brown

Heard on June 7, 8, 9, 13, 14, 15, 16, 19, 20, 22, 23, 27, 29, August 2, September 7

and December 1 of 2023

Reasons for Judgment released on March 20, 2024

Mr. Niall Gilks and Mr. Sean McCormack Counsel for the Ontario Securities Commission

Mr. Brian Greenspan and Mr. Bryan Friedman Counsel for the defendant Stephan Katmarian

BROWN, J.:

Table of Contents

Page

A. INTRODUCTION........................................................................................................... 3

B. OUTLINE OF ISSUES.................................................................................................. 5

C. BACKGROUND............................................................................................................. 8

D. CREDIBILITY, RELIABILITY AND

CONSIDERATION OF EVIDENCE.......................................................................... 33

(1) Stephan Katmarian................................................................................... 34

(2) Norman Brewster....................................................................................... 40

(3) Suganthan Krisnarajah (Kris)................................................................... 43

(4) Kevin Wright............................................................................................... 46

(5) Erin Taylor................................................................................................... 47

(6) Albert Ciorma.............................................................................................. 49

(7) Gary Sugar.................................................................................................. 50

E. OWNERSHIP AND INTEREST IN THIERRY MINE.............................................. 51

F. OFFENCES

(1) Count 1 – Fraud Allegations – Securities Act s. 126.1(1)(b)........................... 60

(a) First Prong - Deceit or Falsehood....................................... 60

Materials containing representations Witnesses regarding investments :

(i) Daniel West.................................................................. 69

(ii) Chris Balsingh.............................................................. 73

(iii) Bridget Flynn................................................................ 77

(iv) Vasanthaseelan Ratnaananthan.............................. 80

(v) Erin Taylor.................................................................... 82

(vi) Walter Heidary............................................................. 84

(b) Second Prong – Other Fraudulent Means................................. 93

(2) Count 2 – Making misleading or untrue statement to OSC, s. 122(1)(a)... 100

(3) Count 3 – Trading in securities without being registered s. 25(1)................ 105

(4) Count 4 – Distributing securities without filing a prospectus s. 53(1) …….111

(a) The Offence................................................................................. 112

(b) Were there distributions by Stephan Katmarian?.................. 113

(c) Any applicable exemptions........................................................ 120

(i) Private issuer exemption.................................... 121

Accredited investor....................................... 124

Friends Family and Business Associates 125

Executive Officer.......................................... 130

(ii) Non private issuer exemption........................... 133

G. CONCLUSION......................................................................................................... 137

JUDGMENT

A. INTRODUCTION :

[1] Mr. Stephan Katmarian is charged with contravening four offences under the Securities Act, R.S.O. 1990, c. S-5. This is a prosecution by the Ontario Securities Commission, which will later be referred to as the Commission, or the OSC, as being one and the same entity. The charges relate to the period between January 1, 2018 and August 8, 2019. All of the statutory references in this case relate to provisions under the Securities Act unless otherwise stated in the reasons. The charges are as follows:

(1) Engaging in an act, practice or course of conduct related to securities that he knew or reasonably ought to have known perpetrated a fraud on Ontario investors, contrary to s. 126.1(1)(b) of the Securities Act, thereby committing an offence contrary to s. 122(1)(c) of the Securities Act;

(2) Making a statement in material, evidence or information submitted to the Commission that in a material respect is misleading or untrue, contrary to s. 122(1)(a) of the Securities Act;

(3) Engaging in or holding himself out as engaging in, the business of trading in securities, without being registered to trade in securities as required by s. 25(1), of the Securities Act, contrary to s. 122(1)(c ) of the Securities Act; and

(4) Trading in securities, where such trading was a distribution of securities, without having filed a preliminary prospectus, and prospectus, and obtaining receipts for them from the Director, as required by s. 53(1) of the Securities Act, and thereby committed an offence contrary to s. 122(1)(c ) of the Securities Act

[2] Prior to the start of the trial, there was a privilege motion in the Superior Court of Justice before Justice Akhtar. Mr. Katmarian was not a party to that proceeding. It involved a corporate entity that asserted privilege, and different counsel than those who represented Mr. Katmarian in this proceeding. It concluded prior to the start of this trial. Counsel alerted the court to the fact that the various rulings made by Justice Akhtar in this proceeding might affect this case.

[3] Counsel agreed that some of the witnesses in the trial could give their evidence through the zoom platform, given that various witnesses were located some distance from the court and the court permitted this request of counsel. The court made an order excluding witnesses, with no exceptions.

[4] Commission counsel called eleven witnesses in total. Those witnesses were Chris Balsingh, Bridget Flynn, Daniel West, Norman Brewster, Kevin Wright, Albert Ciorma, Erin Taylor, Suganthan Krisnarajah, Walter Heidary, Gary Sugar and Vasanthaseelan Ratnaananthan. The witnesses included investors in Northern Fox and/or Peblik Inc., directors, business associates, the lawyer for Northern Fox Resources Inc. (hereinafter will be referred to as Northern Fox) and Peblik Inc. and an accountant for the Commission. Commission counsel did an opening statement, that outlined its position regarding the evidence it proposed to call in the trial, related to the four counts before the court. The contents of that opening are considered below under the court’s discussion of the four counts. The defence did an opening statement as well. The defence called one witness, Stephan Katmarian, who was on the stand for two days for examination in chief, and a further four days in cross-examination.

[5] The defence took the position that Stephan Katmarian did not commit any of the four offences for which he is charged in this trial. The defence alleged that he exercised due diligence and took reasonable care to ensure that he and Peblik inc., of which he was just one of five directors, were at all times compliant with the provisions of the Securities Act. The defence made the point that only Stephan Katmarian has been charged with the subject offences, he stands charged alone notwithstanding that there were other directors of Peblik Inc.

[6] The defence submitted in its opening that Peblik Inc. was an Ontario startup, founded, operated and controlled by a team of sophisticated entrepreneurs, only one of whom was Stephan Katmarian. The defence outlined that this group of business people, technologists, geologists, marketers, compliance experts and legal advisors, wanted cooperatively to develop a platform that combined a new technology, which was blockchain crypto currency, with the age old business of natural resources.

[7] The defence further submitted in its opening that in pursuit of their collective vision, the Peblik Inc. team expended significant time, energy and brain power to develop this vision, with the hope of bringing the Peblik Token, which was a decentralized digital asset, to the public market. The defence outlined that seed money for this project was obtained from some early stage investors to help Peblik develop its new technology platform and support its fledgling operations. The defence also argued that Stephan Katmarian took reasonable care to ensure that the way in which these funds were raised was in full compliance with the private placement exemptions and other provisions of the Securities Act. The defence position is that the uncontradicted evidence is that the Peblik company

business was not a success. There were various reasons put forward by the defence for causing that outcome. The defence submitted that Kevin Wright, who was a director and chief executive officer of Peblik, failed to develop the technology as intended. The defence further submitted that the actions of Kevin Wright caused significant tension and irreconcilable conflict within the company from which it could not recover. The regulatory environment for the distribution of crypto currencies was uncertain and rapidly changing. The defence submitted that Mr. Katmarian is not guilty of the charges before the court.

[8] The defence called Mr. Stephan Katmarian as a witness.

[9] There were voluminous exhibits that were filed in evidence by both the Commission and the defence, including business records, web captures, statements of Stephan Katmarian to the commission admitted to be voluntary and as an exception to the hearsay rule, email messages and communications and other material.

[10] The trial commenced on June 7, 2023, and continued over the course of June 7, 8, 9, 13, 14, 15, 16, 19, 20, 22, 23, 27, 29, August 2, and Sept. 7, in 2023. Written

submissions were filed by both parties on Nov. 17, 2023, and final oral submissions were made by counsel in court on Dec. 1, 2023. The case was then put over for consideration and judgment.

[11] The court will briefly outline the issues. The court will set out the Background, which includes a chronology of events and the context necessary for a better understanding of the relevant issues in this case. Given the complexity, the Background will be lengthy. The court will consider the evidence as it relates to various witnesses and the credibility and reliability of the evidence from those witnesses. A pivotal issue for the fraud count relates to the ownership and interest in the Thierry Mine, which the court will consider as a separate issue. Following that determination, the court will consider the evidence and facts related to each of the four counts, whether the Commission has proven those charges, and any applicable defences or exemptions.

B. OUTLINE OF ISSUES :

[12] Given the nature of the events, and the allegations, it will be necessary to compartmentalize the issues somewhat in considering the evidence relevant to the counts. The court relies upon the Commission’s submissions as to its view of the allegations and how the evidence proves those allegations, as the consideration of the somewhat amorphous evidence and parties would be otherwise unwieldy. This is critical to the court’s assessment of the case, as the charges are fairly general and without particulars. The court needs to consider the allegations in the context of how the case was presented by the Commission, and accordingly how it was defended by counsel for Mr. Katmarian.

[13] The bulk of the evidence, and time in the trial, relates to the consideration of the first count, the fraud charge. The first prong, as set out below, requires a consideration of whether there was a deceit or falsehood, relevant to the investments in Peblik Inc., and as well Northern Fox, by each of the various investors. The court will consider whether any representations by Stephan Katmarian constitute a deceit or a falsehood. The only oral representations made by Mr. Katmarian were to the investor Walter Heidary. Largely,

the Commission relies upon written representations relating to Peblik Inc. Those representations were potentially on the website, a document referred to as the White Paper (for Peblik Inc.), a Fast Facts (which is considered an executive summary of the White Paper), Investor Decks, any subscription agreement, or any other representation that the court finds in this case. If the court finds that a misrepresentation was made, which is a deceit or a falsehood, it will be important for the court to make a finding as to whether Stephan Katmarian made the subject misrepresentation which constitutes deceit or a falsehood. But that is not the end of the issue. The court must consider the situation with each of the witnesses who have provided evidence regarding investments. Each investment, by each of the investors who are the subject of evidence and this count, need to be considered separately given that they made their investment by unique means. The court must make individual and unique findings of fact relative to each investor. A key consideration in that regard will be whether each investor was given or received any misrepresentation that was deceitful or a falsehood, and reviewed that prior to or at the time of making the investment. A representation which was not given to the investor, or which was made after the investment, is not relevant to this fraud count.

[14] The second prong for count 1 relating to the fraud offence, relates to “other fraudulent means”. In this regard, the Commission essentially submits that Stephan Katmarian placed himself in a conflict of interest, as between his fiduciary duties owed to Peblik Inc. and to Northern Fox. The Commission submits that Stephan Katmarian used his position at Peblik Inc. to obtain a benefit for his other company, Northern Fox, without the approval of the board of directors of Peblik Inc. As noted below, this will include consideration of whether Stephan Katmarian gave a benefit to Northern Fox of receiving Peblik tokens for investment in Northern Fox, in what has been referred to as a “2 for 1” deal for Peblik tokens. In the narrative, the Commission essentially submits that this action in part caused the problem of there being too many Peblik tokens, and the actions of Stephan Katmarian in trying to engage an initiative of “rolling back” the tokens that had been previously promised to Peblik Inc. stakeholders.

[15] The second count relates to making a misleading statement to the Commission in responding to the Commission’s letter dated March 19, 2018. The response of Peblik Inc. to that letter was drafted by counsel for Peblik Inc. (Gary Sugar), based upon the information he obtained from Stephan Katmarian and others. Essentially, Peblik Inc. was asked, in 2(b), to provide the total amounts of the proceeds raised from the sale of Peblik tokens. Peblik Inc. answered “as of the date hereof, NIL proceeds have been raised from the sale of Peblik tokens”, based on the position of Peblik Inc. that no tokens of Peblik Inc. were sold. The second question related to an enquiry as to the amount of “the proceeds” raised from residents of Ontario, to which the Peblik Inc. response was “NIL, see 2(b) above”. This answer was based upon it being a follow-up to the previous question, reflecting that there had been no proceeds from the sale of Peblik Inc. tokens to residents of Ontario.

[16] The third count relates to an allegation that Stephan Katmarian was involved in trading in securities without being registered, as required by s. 25(1) of the Securities Act. In that regard, the court is required to consider whether Stephan Katmarian engaged in the sale of a security. The second issue is whether any “trading” occurred. The court will consider whether Stephan Katmarian engaged in or held himself out as engaging in

the business of trading in securities. The court will consider whether the Peblik Inc. convertible note was a “security”, whether Stephan Katmarian engaged in “trading”, and if so whether the trading was done for a “business purpose”.

[17] The fourth count relates to distributing securities without filing a prospectus, contrary to s. 53(1) of the Securities Act. The court will need to consider issues previously necessary to its consideration on the third count, including whether the investment was a “security” and whether Stephan Katmarian “traded” the security. The additional criteria required for this count is whether the trade amounted to a “distribution”. The court will need to examine the relevant subscription agreements. It is clear that Peblik Inc. did not file a prospectus with the OSC, given the evidence in this trial. The court will examine each of the distributions to determine whether Mr. Katmarian is someone who traded in the securities, relevant to each of the investments. That analysis will include a consideration of any role of Mr. Katmarian relating to the directions given to the people who did the distributions and whether they were acting on behalf of Stephan Katmarian.

[18] In the consideration of this fourth count, a key issue is whether the s. 25 trading and s. 53 distributions were done pursuant to any exemptions. The defence bears the onus of proving any exemption on a balance of probabilities, pursuant to s. 47(3) of the Provincial Offences Act. The position of the defence is essentially that the distributions were pursuant to the private issuer exemption. In this case, the relevant categories for consideration are those for accredited investors, family, friends and business associates, executives and where the number of distributions does not exceed 50 in number. If any of the distributions fall outside the private issuer exemption, reliance can be placed on the non private issuer exemption category, which includes accredited investors, friends, family and business associates and executives. There is no maximum number of distributions for this category of exemption, however there is a requirement that specific records be created and submitted to the OSC for such distributions. It is notable in this case that there is no evidence that any such records for distributions were sent to the OSC.

[19] In the background, the court is mindful of the issue of solicitor client privilege. Counsel advised the court that this issue had been litigated in Superior Court, and that it might impact on the issues in this case. The solicitor Gary Sugar, acted on behalf of Northern Fox, and also provided legal opinions to Peblik Inc. and Stephan Katmarian. It would seem that some of that advice was the subject of evidence in this trial, arising from what seems to be waiver of that privilege. Counsel were careful as this trial unfolded, to ensure that they did not tread on that prohibited privilege. Gary Sugar also testified for the OSC, and was cross-examined by the defence. It seemed to the court that only certain areas were covered in those questions. The court makes no inference arising from what may be the absence of evidence that would have otherwise emanated from advice by Gary Sugar to Mr. Katmarian, to Peblik Inc., and other relevant parties. Although there was also reference to Isaias Medina, as a lawyer in the United States, there is no evidence sufficient to this court’s satisfaction, that he actually is or was a lawyer. Nonetheless he did not testify in this case, despite being asked to testify, and offered the opportunity to testify on zoom to save him the inconvenience of coming to Canada for the trial.

C. BACKGROUND:

[20] This section of the judgment provides the context of developments over time, the relationships between the companies and the people mentioned in evidence. There is a need to understand the narrative of events and overview in this section, in order to be able to properly consider the evidence, context and relevant issues for the charges before this court.

[21] The subject of various investments in this case related to the Thierry Mine, a copper mine in Northwestern Ontario, near Pickle Lake. This was a mineral mine that previously produced copper. It had been operated by a company, Umex Canada from 1976 to 1981. The mine went into “care and maintenance” in 1981, and it was effectively shut down. Umex sold the property in 1990. Richview Resources acquired the Thierry Mine. It is interesting this court would note as set out below, that Stephan Katmarian was a founder of Richview Resources, but he testified that it raised “lots of money” after that time. Stephan Katmarian was affiliated with Richview Resources from March of 2005 to February of 2006. During that time, Richview launched a multi-phase drill program, and had an NI 43-101 commissioned for the Thierry Mine. (The court will refer to these reports later as 43-101 reports, a short form used consistently by the witnesses in this trial.) Richview Resources owned the Thierry Mine from 2004 to 2010.

[22] Mr. Katmarian agreed that three companies that he founded, Richview Resources, Northern Fox and Peblik Inc. were all connected to the Thierry Mine.

[23] Subsequently, in January of 2010, Cadillac Ventures Inc. (hereinafter referred to as Cadillac Ventures) acquired Richview Resources, and thereby acquired the Thierry Mine.

[24] Cadillac Ventures is a publicly traded Ontario exploration company, that has been exploring Canada since 2006. Norman Brewster was the CEO of Cadillac Ventures, and he was a director of the company. Norman Brewster is a mining executive. He has a B.Sc. in geology and he has a graduate education in geology. Between 2010 and 2014, Cadillac Ventures spent money on the exploration of the Thierry Mine. Mr. Brewster testified that between 2014 and 2016, the financing market for exploration projects was very difficult. Cadillac Ventures had its attention directed to another project at the time. As a result Cadillac Ventures was looking to sell the Thierry Mine, or have a joint venture with another party.

[25] At this point, in 2016, Stephan Katmarian had been thinking about an idea to invest in copper.

[26] When he testified, Stephan Katmarian was 57 years of age. He grew up in Toronto. He received a Bachelor of Arts in Political Science and History in 1988. At the time of his testimony in the trial, in 2023, he was self employed. In 2023, he worked in real estate development with a couple of partners. He is married and he lives with his wife and four children.

[27] Previously, starting in 1998 to 1999, Stephan Katmarian worked for an investment firm, C.M. Oliver, a firm that was “mostly doing mining, financing”. He was involved in

funding both small and large mining companies, from exploration to mine development. It was a time when mining was fairly active in Canada and there were some major discoveries. He was exposed to all aspects of the business from a finance perspective. He would visit mining sites and deal with geologists, as companies wanted his firm to raise money for them. He described himself as an educated layman in that regard. He testified as to his knowledge of the 43-101 reports, which he understood were to bring clarity to the description of mining properties. A 43-101 report is required if you are raising money or using a mining property as the key asset to list a company on a Canadian exchange.

[28] Mr. Katmarian was an entrepreneur, and no neophyte in the world of founding companies and securities, given his background.

[29] As noted above, around 2016, Stephan Katmarian testified that he was thinking that it might be a good time to find something that was an exposure to a rising copper price. Stephan Katmarian thought about leveraging an interest in a copper mine by acquiring an earn-in interest option in a copper-producing mine. Stephan Katmarian had a previous interest in Richview Resources, which had previously owned the copper- producing Thierry Mine. The Thierry Mine had been around for over one hundred years, and until sixty years previous had been a producing mine. It was one of Canada’s largest copper mines. There are only two dozen copper mines in the entire world. The cycle of copper and copper production as a commodity has been very cyclical.

[30] Stephan Katmarian described the idea of an earn-in interest option in a mine as a leveraged way to invest in copper. Stephan Katmarian testified that Canadian mining stocks were cheap, and you could pick these things up for relatively attractive earn-in agreements.

[31] Mr. Katmarian approached Norm Brewster, a person known to him, who was at the time the CEO and President of Cadillac Ventures. This approach by Stephan Katmarian was with a view to acquiring an interest in the Thierry Mine. Stephan Katmarian was aware that Cadillac Ventures was not doing anything with the Thierry Mine, it was short on money and it was concentrating on another project. Stephan Katmarian asked Norman Brewster if he set up a group, could they option the mine from him, and Norman Brewster said yes. Cadillac Ventures was amenable to a project to develop the Thierry Mine through an earn-in option agreement with Stephan Katmarian’s company.

[32] At the same time Stephan Katmarian assembled a few investors and created the new company, Northern Fox Resources Inc., to enter this earn-in option agreement. The court will refer to this company in the reasons as Northern Fox. Northern Fox was a private Ontario corporation. Stephan Katmarian was the original founder and there were a few other people involved. This company was set up for the purpose of acquiring and developing the Thierry Mine as an investment, exposed to copper.

[33] Northern Fox included Mr. Katmarian and Michael Paul. It is not clear if there was an additional person who was part of Northern Fox, the record is unclear in that regard. A 43-101 was prepared for the Thierry Mine on behalf of Northern Fox with a view to taking Northern Fox public in the future.

[34] Stephan Katmarian’s motivation in acquiring this interest in the Thierry mine, through the newly-formed Northern Fox, was based upon his belief that with the green movement, there would be a need for lots of copper, for electric car batteries, solar panels, and almost anything required for the green movement. He believed that this would put upward pressure on copper prices. There were not that many copper mines in the world. Stephan Katmarian had been constantly looking at 43-101’s for various mines as investment opportunities.

[35] From the perspective of the owner of Thierry Mine, Norman Brewster as the CEO of Cadillac Ventures, understood that Stephan Katmarian was the directing mind of Northern Fox. According to Norm Brewster, the Northern Fox company was set up by Mr. Katmarian, it was looking to get involved in mineral exploration and in particular copper exploration. Norman Brewster testified that his understanding was that once Northern Fox secured a project or access to a project, it would raise funds to prosecute that project.

[36] After this meeting of minds, an earn-in option proposal from Stephan Katmarian on behalf of Northern Fox was made to Norman Brewster of Cadillac Ventures and put forward on June 12, 2016. In this proposal, there was reference to Northern Fox having the ability to raise capital for the project.

[37] Stephan Katmarian gave evidence as to his understanding of the earn-in option agreements within the mining industry. The Commission objected to this type of evidence on numerous occasions, submitting that it was being put forward as expert evidence. The defence submitted it was being put before the court as to the understanding of Stephan Katmarian of the industry, not expert evidence. There is no doubt, this court would find, and it is relevant to issues of credibility and reliability, that Stephan Katmarian had an extensive and deep understanding of mines, financing for mines, earn-in options for mines, and development of mines. The proper title for what is often referred to as an “earn-in option”, is an “earn-in option interest assignment agreement”. Both terms relate to the same type of agreement, and are referred to by the witnesses interchangeably. Stephan Katmarian testified that an earn-in option assignment agreement is very common in the industry, and it would involve an arrangement with the owner of the property to spend an amount of money, for example on drilling to see if there is anything there. The owner then finds out if there is value in the mine, and the optionee for much less money than would be paid to purchase the entire deposit, gets to find out more about the deposit and have an ownership interest in the deposit, and at the same time advance the deposit. There is another benefit for the optionee, who is the party that acquires an interest in an earn-in option assignment agreement. That benefit is that during the earn-in period, the optionee is not exposed to what might be very significant potential liability. Mr. Katmarian gave the example that the Ministry of Natural Resources might step in and order a mine closure which would result in a liability of $20 Million. Stephan Katmarian testified that prior to the subject earn-in option agreement between Cadillac Ventures and Northern Fox, Stephan Katmarian had been involved in 50 or 60 earn-in option agreements for investment opportunities or investments in the mining industry. This is very important to the context of the nature of an earn-in option interest assignment agreement and Stephan Katmarian’s understanding of the terms of such an agreement, as he was very experienced in dealing with these agreements. In addition, Stephan Katmarian had been

involved in approximately 10 or 20 direct ownership of mines by investors for mining investments, where there was no earn-in option. Again, as the court notes, Stephan Katmarian had a tremendous amount of personal work experience in dealing with these issues, he was by no means a neophyte in the field of mining development, ownership of mines, and earn-in option interest assignment agreements for the development of mines.

[38] Following the agreement in principle to enter this agreement, the original earn-in option assignment agreement between Cadillac Ventures and Northern Fox was dated and signed on July 19, 2016. It is in evidence as Tab 2 of Exhibit 13. It was signed by Norm Brewster, as president on behalf of Cadillac Holdings, which continued to hold title for the Thierry Mine for Cadillac Ventures, and by Stephan Katmarian, for Northern Fox. This agreement reflected that the optionor, Cadillac Ventures, is the owner of a 100% interest in leased and staked mining claims comprising the Thierry Mine property. The optionee, Northern Fox was desirous of acquiring a 70% interest in the optionor’s right, title and interest in the mine.

[39] On July 25, 2016 a press release was issued by Cadillac Ventures setting out the pertinent elements of the agreement. This proposal involved an earn-in option, whereby Northern Fox could earn an interest in the property by a sequenced expenditure of cash and shares and by expending funds on exploration development on the property, such that when the process was completed, it would allow Northern Fox to earn an interest in the property. The Northern Fox interest in the property was not to be earned until the expenditures were completed. It was contemplated that Northern Fox would spend approximately USD $13.9 Million in total expenditures on the project. (The court is aware that references to the spending was agreed to be in USD, even though that was not stated at all times in the earn-in option agreements. It is essentially an agreed fact that the currency denomination for that figure was to be in USD.) Northern Fox would have the right to make the expenditures and do the work to earn the interest over the period of the agreement. The agreement provided that Northern Fox would be able to earn up to a 70 percent interest in the Thierry Mine. At the end of that process, Cadillac Ventures would retain a 30% interest in the mine. Cadillac Ventures would retain control of the Thierry Mine until the process of Northern Fox expending the huge amount of funds pursuant to the earn-in option agreement was complete. The goal was to bring the copper mine to production.

[40] In a news release on October 5, 2016, Cadillac Ventures announced that it had received a $100,000 payment as part of the July 25, 2016 earn-in option agreement.

[41] In January of 2017, Cadillac Ventures received 6 million shares of Northern Fox valued at 10 cents per share, for a value of $600,000, pursuant to the earn-in option agreement. A note for $8 Million to Cadillac Ventures had been issued by Northern Fox, as a first charge against Northern Fox’s option interest in the property. The note would retire at three points during the work program. As a result, Northern Fox complied with provisions 1.1 to 1.3 inclusive of the original earn-in option interest assignment agreement it had with Cadillac Ventures. (This was well before the August, 2017 assignment of this interest from Northern Fox to Peblik Inc., as noted below.)

[42] It is clear that this agreement contemplated the expenditure of USD $13.9 Million on the development of the Thierry Mine, to be spent by Northern Fox. In the earlier

Thierry proposal, which Stephan Katmarian testified was a document informal in nature, it was to Norman Brewster of Cadillac Ventures, and it stated that “Northern Fox Resources Inc. is a company that has an ability to raise capital for this project.” This was in Exhibit 13, Tab 1, pg. 2

[43] Stephan Katmarian testified that Schedule B of the earn-in option agreement set out the general nature of how monies would be spent on the project. The parties agreed that there would be an operating committee, with one member from each company. The earn-in option agreement did not mention the operating committee for expenditure on funds. Although Stephan Katmarian testified that typically the party spending money would decide how to spend the money, in this situation since Cadillac Ventures had much more expertise than Northern Fox, it was agreed that Cadillac Ventures, Norm Brewster, would decide how to spend the money provided by Northern Fox pursuant to the earn-in option obligations, as he saw fit to increase the value of the deposit. There was an operating committee, which included Mr. Brewster, and it decided how to move forward. They agreed that Minroc was the company that would actually do the work, together with outside contractors. Stephan Katmarian explained that following the July 2016 earn-in option agreement, they first wanted to do the 43-101 report. Stephan Katmarian testified he paid for the original 43-101 for the Thierry Mine, being approximately $55,000. Minroc did the 43-101 report regarding the mine. Reference was made to the 43-101 report for the Thierry property, in Exh. 15. Tab A. The court would note that the completion of the 43-101 report was delayed. Stephan Katmarian explained that it was likely delayed due to waiting for winter to end as a property visit was required. The 43-101 report was not completed until April 12, 2017.

[44] Given the newly acquired obligations taken on by Northern Fox, in signing the earn-in option interest assignment agreement with Cadillac Ventures, Stephan Katmarian needed a plan to raise the USD $13.9 Million to develop the Thierry Mine. Initially the plan was to find an investment dealer for this Thierry Mine project. That did not appear to be successful, this court would note.

[45] As time passed, there were investments in Northern Fox. In evidence, the court would note that Walter Heidary invested $200,000. of his money in Northern Fox, together with a group of other investors associated with Walter Heidary. These investments by Walter Heidary are set out in further detail below, under the consideration of Count 1, the first prong of the fraud allegations.

[46] However, Northern Fox did not have a lot of money from its newly formed company, even with the subsequent investments, to develop the Thierry Mine relative to its need to comply with the investment requirements of USD $13.9 Million pursuant to the earn-in option interest assignment agreement with Cadillac Ventures.

[47] The alternative idea of Stephan Katmarian was to take the Northern Fox company public and raise the money to exercise the option agreement. At one point Stephan Katmarian engaged Dominick Capital Corporation to do an offering memorandum / prospectus for Northern Fox. That company started to prepare materials, including a Confidential Offering Memorandum, put in evidence as Exhibit. 12, Tab 1. This appeared to be prepared by Dominick Capital, and it was dated December 6, 2017. This outlined that Northern Fox was planning to do an IPO at an initial offering of 15 cents per unit, and

that for pre-funding prior to the IPO, the investment was coming in at an investment of 5 cents per unit. Stephan Katmarian testified that unfortunately Dominick could not get any subscribers. The relationship between Northern Fox and Dominick came to an end, and the plan to take Northern Fox public also came to an end, at least at that point in time.

[48] If the expenditures and work agreed upon in the earn-in option agreement between Cadillac Ventures and Northern Fox were not completed as set out, the agreement would become null and void. Under the terms of this original earn-in option agreement, and according to the testimony of Norman Brewster of Cadillac Ventures, Northern Fox would only acquire control of the 70% interest in the Thierry Mine when all of the conditions were met, which included the expenditure of USD $13.9 Million pursuant to the agreement. Northern Fox did not have access to that amount of funding to comply with the agreement, either at the date it signed the earn-in option, nor at any time following that date. There is no doubt that Northern Fox required access to this amount of funds in order to comply with the agreement, and to be able to acquire the resulting 70% interest in the mine. Facing the potential of not complying with the terms of the earn-in option agreement with Cadillac Ventures, and thereby potentially not acquiring any interest in the Thierry mine, Stephan Katmarian worked on a plan to develop a token investment for investors, to raise money, backing token investments or a blockchain platform. The idea was to provide the coins with the backing of an asset, as the future value of the Thierry Mine.

[49] As of that point, Stephan Katmarian had been following bitcoin and blockchain, since approximately 2013. Stephan Katmarian was thinking about using that type of procedure for this investment.

[50] During this general period of time, Stephan Katmarian was working on a mobile phone company project for Fonia, with Chris Pay. During that process, in August, 2017, Stephan Katmarian met Kevin Wright who was involved in doing work for Fonia.

[51] Kevin Wright’s background was as a professional engineer, having received a degree in Geological Engineering from Queen’s University, and working for two and a half years with a geophysical exploration consulting company and engineering consulting company. He did two years in training, dealing with guestimates of reserves and resources of various properties, drill targeting to define resources and reserves, to bring those properties into production to be mined. Following that he began a career in marketing, doing a website with marketing material for the company. He subsequently developed his first web marketing company and left his employer to pursue a career in marketing and advertising. He started an agency with a partner, and two additional marketing and advertising agencies. He had many clients who were not in the mining field.

[52] Kevin Wright started to look for projects where he could participate as an owner and operator, or investor, to bring his skills in marketing and advertising, with geological engineering. His career had gone full circle, to working for a mining company. He started the firm JAAM Capital in 2007, where he invested in different startup companies. He is the sole director of that company. He started the agency Participator with Peter Holmes in 2017, doing marketing and advertising services, where he is one of the two managing partners with Peter Holmes. They had full-time employees working for them at Participator, who worked as graphic designers, web programmers and copywriters.

[53] In 2017, as noted above, Kevin Wright was introduced to Stephan Katmarian and Chris Pay through a common business colleague. His company Participator developed the logo, website and marketing material for Fonia, the mobile phone company involving Stephan Katmarian and Chris Pay.

[54] Through Fonia, Kevin Wright was invited to look at some of the other business opportunities they were working on, which included Northern Fox. In 2017, Kevin Wright learned that Northern Fox was a junior mining and exploration company. In addition to discussing a mine, at this time Northern Fox was attempting to go public. In terms of the mine opportunity, at that time, Kevin Wright was aware that Northern Fox had an earn-in or joint venture partnership agreement to help Cadillac Ventures, which was publicly traded, to develop the Thierry Mine in Northern Ontario. In October of 2017, Stephan Katmarian and Chris Pay introduced Kevin Wright to their investment in Northern Fox, and they advised Kevin Wright that they were seeking to raise money to reactivate the Thierry Mine.

[55] Kevin Wright learned that both Stephan Katmarian and Norman Brewster had identified that copper was coming back into favour as a commodity that was in short supply and that the price of copper was predicted to increase. The thought was that Tesla and other electric vehicles required 100 times the amount of copper in their production, as compared to traditional vehicles. Kevin Wright was aware of the fact that the Thierry Mine was owned by Cadillac Ventures in 2017. The contract between Cadillac Ventures and Northern Fox was to help create a work program to make the Thierry Mine current, and possibly receive investments from institutions or banks to bring it back into production.

[56] Stephan Katmarian had been working on a project, called the Gemeto blockchain proposal which he introduced to Kevin Wright. At the same time, Kevin Wright brought a new work product “to the table” for a blockchain project. Kevin Wright wrote the first draft for a patent of this blockchain, and the patent was then co authored with Stephan Katmarian, Isaias Medina and Matthew Rice. The patent application was filed by the Fasken law firm.

[57] At this point, Mr. Wright had already registered the name “Peblik”, and he was the administrator for that domain through his GoDaddy account.

[58] Kevin Wright worked closely with Stephan Katmarian and Norman Brewster to bring information as to the opportunity in the Thierry Mine in lay language, to develop two presentations, one that was very technical and specific to the Thierry mine, and the other was an investor or business presentation that dealt with the commodity industry around copper, the opportunity, a bit about the Thierry Mine and some predictive valuations of what the value of the mine would be over time. Kevin West’s company, Participator, put together material for Northern Fox, to develop the brand, the website, investor presentation material specific to the mine and the opportunity. It also created stationery, letterhead, business cards, and other materials. Kevin Wright testified that he started to work for Northern Fox in 2017.

[59] From the time of the original earn-in option agreement between Cadillac Ventures and Northern Fox, Stephan Katmarian testified that there had been through Northern Fox

a few hundred thousand dollars raised in financing, $200,000. to $300,000. Stephan Katmarian testified that much of it was being funded by Stephan Katmarian and possibly Michael Paul at the time. Stephan Katmarian testified that the expenses incurred from the time of the original earn-in option agreement included the cost of the 43-101 (set out above, paid by Mr. Katmarian), the initial payment to Cadillac Ventures of $100,000., and the monthly property maintenance payments, which ranged between $10,000. to

$60,000. per month.

[60] As noted above, a numbered Ontario corporation was started before it changed to the name Peblik Inc. The “Peblik” name was chosen as one that Kevin Wright and Peter Holmes had developed as a brand, for the phonetic spelling of the word “public”. Mr. Michael Paul was originally the director, from November 2, 2015. Stephan Katmarian was a director from August 1, 2016. Michael Paul ended his position as a director on August 3, 2017. Kevin Wright became a director on August 2, 2017. Christopher Pay was a director from September 5, 2017. Stephan Katmarian testified that Peblik Inc. was formed around the end of 2017. The founders of Peblik Inc. were Stephan Katmarian, Kevin Wright and Christopher Pay. Peblik Inc.’s business was to develop a blockchain oriented protocol. Suman and Kris were added as directors of Peblik Inc. on December 18, 2017.

[61] Following the completion of the 43-101 report in April 2017 noted above, and the failure of Northern Fox to raise significant funds to comply with the USD $13.9 Million obligations for the earn-in option assignment agreement with Cadillac Ventures, there was a significant event. While this original agreement was in place, on August 1, 2017, and without the participation of Cadillac Ventures to the agreement, there was an earn-in option interest assignment agreement between Northern Fox and Peblik Inc., as set out in Exhibit 8, Tab 1B. (There are two additional versions of this earn-in option agreement, which are noted below in the reasons in Section E, related to the ownership and interest in the Thierry Mine.) This agreement was signed by Michael Paul for Northern Fox Ventures Inc. and Stephan Katmarian for Peblik Inc. Essentially Northern Fox assigned its interest in the Thierry Mine to Peblik Inc. This agreement was signed “as of” August 1, 2017 and in it Northern Fox assigned its interest in the earn-in option agreement it had with Cadillac Ventures, to Peblik Inc. Northern Fox and Peblik Inc. were the only two parties to this agreement. Cadillac Ventures was not a party. Stephan Katmarian explained in his evidence that the objective of this agreement was to allow Peblik Inc. to raise the required funds to execute the earn-in option agreement between Northern Fox and Cadillac Ventures. In the period of time following the original earn-in option agreement with Cadillac Ventures, Stephan Katmarian and other people came up with the “notion of funding the project by a token offering and we felt that to bring clarity to the situation, we didn’t want to do a token offering in a company that was ostensibly going to be a reporting issuer in Ontario, being Northern Fox, which was undergoing its activity with Dominick Securities around this time”. At the time, Northern Fox was either under contract with Dominick to do a prospectus offering, or it was being contemplated at the time. A decision was made to not use Northern Fox for this purpose as it had legacy business and stakeholders. The concepts that Peblik Inc. endeavored to pursue were unique, and did not involve the core business of Northern Fox nor the interest of their existing group. Stephan Katmarian testified that the other reason it was done was because Ontario did not have clear legislative guidance on crypto offerings. Stephan

Katmarian explained in his testimony that they felt it would make sense to isolate the uncertainties and complications that would cause, in a separate vehicle (Peblik Inc.) that was purpose built to do a token offering.

[62] Interestingly, this assignment agreement to Peblik Inc. had attached to it a copy of the full original earn-in option agreement between Cadillac Ventures and Northern Fox Resources dated July 19, 2016, together with the schedule of the description of the Thierry Mine, and the original project spending budget of USD $13.9 Million. The assignment agreement also had attached a project spending budget which revised the original agreement budget, totaling (USD, presumably, although that is unclear) $14 Million. Peblik would take over the obligations of Northern Fox Resources in the original earn-in option agreement with Cadillac Ventures. Peblik Inc. would exercise the option the optionee Northern Fox had to make the cash and share payments in the original earn-in option agreement. Peblik was to conduct the drilling and the work program for the mine. Pursuant to this agreement, the optionee (Peblik) would acquire a 51% interest in the right, title and interest in the Thierry Mine, Northern Fox Resources would have a 19% interest in the Thierry mine, and Cadillac Ventures would retain a 30% interest in the Thierry Mine (consistent with the 30% share Cadillac Ventures would have had from the original earn-in option agreement with Northern Fox). Norman Brewster, of Cadillac Ventures, testified that he was not aware of this assignment to Peblik Inc., nor that ownership of the mine was being apportioned in those amounts. Pursuant to this agreement, Peblik Inc. was to issue 120 million tokens of its cryptocurrency under development by Peblik Inc., free and clear. This was to be done as soon as was technically possible. In addition, Peblik Inc. was to pay Northern Fox, on a monthly basis, all operating, management, property, joint venture, earn-in and overhead expenses incurred by Northern Fox, including paying for a proposed listing transaction for Northern Fox securities on a Canadian or other exchange for Northern Fox. The court would note that there was clearly a renewed interest to take Northern Fox public at that time, as demonstrated by that term.

[63] It is significant to note that there is a very contentious issue in relation to the assignment of the earn-in option agreement from Northern Fox to Peblik Inc. That is dealt with as a separate issue below in section E of the reasons dealing with the ownership and interest in the Thierry Mine.

[64] The defence has emphasized at various points in this trial that Mr. Brewster, as the representative of Cadillac Ventures, as having worked with the Peblik Inc. team, must have known that Northern Fox had assigned the earn-in option to Peblik Inc. The court would note two significant points. Firstly, Norman Brewster was concerned with the ability of Northern Fox to comply with its earn-in option obligations with Cadillac Ventures, and he was of the view that if the Peblik token or coin offering raised funds to allow Northern Fox to comply with those obligations, that was a good thing. Secondly, knowledge is not equivalent to a consent of Cadillac Ventures to an assignment of that earn-in option. Cadillac Ventures was at all material times a publicly traded company, and the issue of any consent to an assignment of the Northern Fox earn-in option in the Thierry Mine would need to be considered by the Cadillac Ventures corporation. This is discussed in greater detail below in the reasons in section E below.

[65] After the assignment agreement to Peblik Inc. was put in place, Kevin Wright testified that the responsibilities under the earn-in joint venture agreement were transferred to Peblik Inc. (Kevin Wright often referred to the earn-in option agreement as a joint venture agreement.) Stephan Katmarian had a previously incorporated Ontario company that had not been used, so the assets, including the intellectual property, and pursuit of the business was in the new company changed from a numbered company to the name Peblik Inc.

[66] Peblik Inc. was the first phase of Peblik, in 2017, and it was the conglomerate. Initially the only director of Peblik Inc. was Michael Paul, but after he resigned, the appointed directors of Peblik Inc. in late 2017 or early 2018, were Stephan Katmarian, Christopher Pay and Kevin Wright. Kevin Wright was the founder in terms of the business plan, but became a director and an officer. Mr. Wright became the appointed CEO of the company for some time. Stephan Katmarian was a director of the company and the managing director or partner, and participated in the operations of the company. Stephan Katmarian was also described as the executive director (from January 2017 to August of 2022) and chair of Peblik Inc. The evidence regarding Mr. Paul and his affiliation was somewhat unclear, at one point he was described as a shareholder, but no more, yet in the corporate filings, it reflected that he was President and officer, until March 15, 2018. Stephan Katmarian testified that Michael Paul was generally responsible for administrative and clerical matters for Peblik Inc.. Kevin Wright testified that he attended 80%, 90% of the board meetings for Peblik Inc. They had many committees, many meetings referred to as town halls, and at one point dozens of people across half a dozen different companies were lending their expertise to help Peblik Inc. develop as a company. Stephan Katmarian assisted on the work products of the company, and on the mining committee. He also assisted on the compliance as he had been studying blockchain prior to working with Kevin Wright and Participator. Stephan Katmarian also assisted in marketing.

[67] It is to be noted that pursuant to clause 9.7 of the original earn-in option agreement between Cadillac Ventures and the optionee (Northern Fox), Northern Fox may sell, assign, transfer or otherwise dispose of the whole or any part of its interest in this agreement, upon the consent of the optionor (Cadillac Ventures). This clause also provided that any party assigned the rights of Northern Fox of this agreement would be required to comply with the original terms, in effect. The clause also provided that this transfer was to be done by written agreement with and for the benefit of the optionor (Cadillac Ventures). In his testimony, Norman Brewster confirmed that this term required any transfer of the interest of Northern Fox in this agreement to another party, was to be done with the consent of Cadillac Ventures, and to be in writing with Cadillac Ventures. In his testimony, he specifically stated that Cadillac Ventures never consented to the transfer of the interest of Northern Fox Resources in this agreement to any other party, nor was there any written agreement with Cadillac Ventures to transfer this interest in the agreement. In his evidence, Norman Brewster also specified that there was no consent by Cadillac Ventures to the selling, assignment, transfer or otherwise disposal of Northern Fox’s interest in this earn-in option agreement. This is very significant in the court’s consideration of whether Peblik Inc. ever had a valid interest in the Thierry Mine, on dates relevant to the issues in this trial. This is discussed further in Section E, below, in the reasons.

[68] At time went on, there were investments made in Northern Fox, but nothing in the range of the USD $13.9 Million required to comply with the original earn-in option interest obligations of Northern Fox with Cadillac Ventures. Walter Heidary invested $200,000, and other people he knew also invested in Northern Fox. During the period of late 2017 to November of 2018, Kevin Wright testified that Stephan Katmarian was raising funds for Northern Fox. Kevin Wright was involved with Stephan Katmarian in a number of the presentations, one or more of which was attended by Walter Heidary. At the time, according to Kevin Wright, Michael Paul was the Director and President, or CEO of Northern Fox and Stephan Katmarian was the managing partner at Northern Fox.

[69] Meanwhile, the blockchain proposal was being developed. At that point Peblik Inc. had been created, and it had become the optionee in the assignment of Northern Fox’s earn-in option interest in the Thierry Mine. This was identified as an opportunity to not only raise funds for Peblik Inc., to assist in the financial obligations of the earn-in option assignment agreement, but also to launch the blockchain idea.

[70] This blockchain idea was the subject of testimony by both Kevin Wright and Stephan Katmarian. Kevin Wright testified that the idea was to create an open registry of natural resource commodities like the Thierry Mine. The concept was to have a blockchain. He testified that bitcoins and block chain are quite different. Bitcoin is a currency. Blockchain is an open registry, like a library system, where the information is publicly stored at numerous public computers around the world. People could see what was in the registry. The concept with Peblik Inc. was to take ownership of properties like the Thierry Mine and publish them on the internet. There had been no global registry of mineral properties or standardization between countries as to who owns which property, each country does it their individual way. Peblik Inc. would create a best practice to prove the ownership of the mineral resources and publish that internationally so that there could be no dispute. Kevin Wright testified that this idea originated from the author Benjamin Graham, who wrote a book called World Economics after World War II. He suggested that countries’ currencies should be based on a monopoly of their natural resources. In Canada, the currency could be backed by forestry, gold, hydroelectricity, water, and to move off a gold based currency. For instance, the blockchain could prove the ownership of the mine, and it would be a peaceful way to internationally create a standardized record. There was a currency element to that as well, out of the open registry concept. Kevin Wright and his partner Peter Holmes had previously worked with Lennox Professional Institute, the world’s largest open source certification body. In addition to the blockchain concept, there was an opportunity with Northern Fox, that had a proven resource and reserve in the Thierry Mine. Stephan Katmarian had also been working on the blockchain industry. The idea was to have the Thierry Mine underpin the first resource that Peblik would need to create a portfolio. The idea was that the initial backing of the Peblik Inc. future token was the Thierry Mine.

[71] Stephan Katmarian testified that blockchain is a system that allows one to trade a distributed network of information. The recorded information is immutable for all parties in that network. All parties agree that the information is accurate and cannot be changed. For each transaction, it is recorded on notes, on millions of computers around the world, with each computer continuously talking to each other and agreeing with each other. This

is unlike the current system of banking where systems are subject to being altered, corrupted, changed and lost.

[72] Stephan Katmarian testified that crypto currency are tokens as a use of blockchain. The most easily identifiable is bitcoin. Bitcoin are elements of currency.

[73] Kevin Wright testified that the idea for the Peblik open source registry was to focus on natural resources such as gold, copper, iron, and not forestry and hydro. The portfolio would become the basis of the currency, and the challenge was how to tokenize it or turn it into currency. The idea for tokenizing, in terms of the Thierry Mine, was that if there were 100 units of the Thierry Mine, you take 1/110 [sic, the court assumes the witness meant 1/100] of a unit and establish a value to that unit. The value would be published in the blockchain, which is the open registry where everyone would know who owned that unit. A value would be established for that unit. The value would be on a digital token, which is an alpha numeric key that is very unique, and it could then be used as a currency, like bitcoin, where you could use it to purchase goods or services. During the time with Peblik Inc., many people were trying to figure out how to launch the token and this involved legal consultants and compliance consultants.

[74] In establishing the value of the token, Kevin Wright testified that it would be based, in this case, on the 43-101 report, which sets out the amount of commodity sitting in the mine. It would cost money to access that commodity down in the ground. For instance, if the in-ground resource value of the copper in the Thierry Mine was $5 Billion, and if it would require a considerable amount of work, manpower and money to extract it, the industry would give 5 cents on the dollar for the value of that resource, for example only

$250 million given the high cost of extracting the copper and getting it above ground. The tokenization of that was based on a formula, drawing upon best practice and engineering standards. That was programmed into a Smart Contract, which is written in a technical program, taking all the information data points, which is a contract verifying that all of that was taken into account, and the output would be the token. No one in the Peblik project could agree if the token was to be associated with a currency, or whether it was a closed circuit that could only be used among a small group. Tokenizing, and turning it into a currency, was at the time, under the legal scrutiny and definition by the Canadian government, the Ontario Securities Commission and the American government. Peblik Inc. was an Ontario corporation. Peblik Limited was incorporated in Barbados, because that government was leading and defining blockchain and currency, and it had a relationship with the Canadian government. The plan for the Peblik token was not to launch it in Canada because the law in Canada was not sufficiently defined, whereas Barbados had already tokenized and currencied other blockchain and bitcoin style currencies.

[75] Kevin Wright testified that the initial backing of the Peblik future token was the Thierry Mine.

[76] During the period from the end of 2017 and early 2018, Erin Taylor was looking for help raising capital for her project Musiconomi, and she met Stephan Katmarian and another man to see if they could assist her in raising $4 to $5 Million. Erin Taylor testified that there was an understanding that Stephan Katmarian and Mr. Shanahan would help

her with her project, and she testified that she would work with them on their project at Peblik Inc.

[77] Kevin Wright testified that over sixteen months, the idea was to have a security, an NSTO, secure token offering. To do that, there were many legal requirements and security law requirements. It was described as a very complex subject matter. Peblik had consulting agreements and engagement agreements internally with people who came on board as Peblik employees, or consultants, and externally with third parties. Kevin Wright testified that everyone was trying to solve and create a cost effective way to launch the token, the Peblik token. They were not successful in launching the token.

[78] Stephan Katmarian testified that his view was that the token issuance platform, their Peblik Inc. blockchain, was in the nature of a security. He testified that if a person wanted to subscribe to the Peblik tokens, they would send in bitcoin. As a result there needed to be a repository wallet that accepted bitcoin. It was never contemplated that they would take cash or cheques or credit cards. As a result the investments would be by people who were pretty sophisticated in the blockchain space. There also had to be protocols. The people working on this at Peblik Inc. were Stephan Katmarian, Kevin Wright, Erin Taylor, Matthew Rice and Pigeon Forge. They were developing the code. The business of Peblik Inc. was to develop a blockchain oriented protocol to bring large resource assets onto a distributed network by a block chain.

[79] Kevin Wright testified that for Peblik, the first phase of fundraising was to flush out the concepts that needed to be done. They were seeking to raise a couple of million dollars to pay for the listing fees, legal fees, marketing fees, and staff required for technology, operating and a legal perspective. In the first phase Peblik did not approach the public for fundraising. Documentation was put together to present to prospective investors. This included a White Paper, which was published on the Peblik Inc. website. It also included a modified subscription agreement, that was drafted by Gary Sugar.

[80] Interestingly, Stephan Katmarian had reached out and done a presentation to Suman Pushparajah (referred to throughout the trial as “Suman”) and Suganthan Krisnarajah (referred to throughout the evidence as “Kris”) in what seems to have been late 2017. Kris testified as to the meetings he and Suman had with Stephan Katmarian. Stephan Katmarian showed them colour maps and electromagnetic readings, and Kris described that it was very exciting for them to see the mining and colour codings on the map and deposits. It was the first time they were exposed to the mining business. Stephan Katmarian told them about the copper mine that had been inactive but had millions, billions, of copper deposit. The mine had been flooded but with enough money invested it could get back up and running. As far as ownership of the mine, Stephan Katmarian said he was fully or partially the owner, the impression was that he was “part of that”. He also discussed the Peblik Inc. concept, a digital coin backed by assets, and that they would get the Peblik token going and with the funds, get the mine operating. Kris described that day and that he would have believed anything he was told. He said they were blinded, they were so excited. They had the opportunity to invest in it.

[81] After Stephan Katmarian got to know Kris and Suman better, he learned that Kris and Suman were affiliated with a corporation with five other partners, known as the Firm Group. This group had a tech company, a marketing company and various other

ventures. The Firm Group, significantly, also had experience in blockchain. They had technology expertise in writing Smart Contracts, and marketing expertise similar to Participator. And they had an existing clientele of other blockchain-like companies, together with expertise in financing. At that point, Stephan Katmarian invited Suman and Kris on as partners to take care of the digital side and benefit from it. Suman and Kris joined the board of Peblik Inc. as directors in December of 2017. The corporation profile reports for Peblik Inc. did not list Kris and Suman as directors, but Stephan Katmarian testified that this could have been done by Christopher Pay, or anyone, and that was not contradicted. It was not, this court would find, an obligation on Stephan Katmarian personally to file the change to note their addition as directors, but rather one on the company, Peblik Inc.

[82] On January 13, 2018, Kevin Wright sent an email to Mr. Katmarian, Suman and Kris advising that the website would be launching this week, and referring to a White Paper for Peblik Inc., which Kevin Wright testified would have been version 7.1 or 7.2. Kevin Wright testified that the website would not have had a White Paper as part of it until several months later. They were also developing marketing programs. It would seem by January, 2018, Kris and Suman were involved in this work with Peblik Inc.

[83] On January 20, 2018, a photograph was taken of Kris and Suman, who had recently joined Peblik Inc. as directors. On January 25, 2018, Kevin Wright sent an email to the other directors Chris Pay, Stephan Katmarian, Suman and Kris, advising that the video for Peblik Inc. was on the website and stating that an updated Peblik Inc. White Paper and subscription agreement was attached to the agreement.

[84] Suman headed the Firm Group business “Pigeon Forge”, which did the Peblik Inc. website, anything digital, blockchain and coding for the token. Kris did not get involved in that as Suman looked after it. Pigeon Forge put together the Peblik Inc. website based on information received from Stephan Katmarian and Kevin Wright.

[85] Kris indicated that the members of the Firm Group were telling everybody about the Peblik Inc. coin and to get on early because as it goes, the price will increase, so there’s money to be made and that is what they told people. At the time, Kris testified that Stephan Katmarian was pushing Kris and Suman to get funds, because they were responsible to get investments, to get funds in. It is important to refer to the court’s assessment of the credibility and reliability of the evidence of Kris, considered below in the reasons. The court finds that there was no pressure by Stephan Katmarian to sell the investments, but rather it was pressure to hand in the investment monies they had collected for Peblik Inc., together with the subscription agreements, to comply with the Securities Act.

[86] The offence dates for all of the charges before this court, run between January 1, 2018 and August 8, 2019.

[87] The top level of management according to Stephan Katmarian were Stephan Katmarian, Kevin Wright and Erin Taylor. Matthew Rice and Pigeon Forge were collectively working on the code for the blockchain protocol. The everyday decision makers, according to the evidence of Mr. Katmarian, were Stephan Katmarian, Kevin Wright, Erin Taylor, and Isaias Medina.

[88] Kevin Wright testified that in early 2018, there was a lot of momentum, it was very positive, consultants and industry people joined for promise of their time and future opportunities. They had a very tight budget. Kris and Suman and others were aligned. Kris and Suman brought in a number of consultants and companies that accelerated Peblik Inc. in terms of operations and marketing and they were enthusiastic collaborators. The sentiment was very positive, as far as bitcoin and blockchain.

[89] Stephan Katmarian testified that Peblik Limited, Peblik LLC and Peblik Inc., were all affiliated companies. At the time one question was where the token offering should take place, and whether it should be out of Canada, for example in Switzerland, Barbados or the United States. (In the end there were no tokens issued out of any jurisdiction.) Peblik Limited was set up in Barbados, and had similar if not the same board as Peblik Inc. Peblik Inc. was formed, according to the testimony of Stephan Katmarian, around the end of 2017. It included Stephan Katmarian, Kevin Wright and Christopher Pay. Kevin Wright testified that as they had more information and potentially might choose Barbados for the token launch and minting, it was decided that Peblik should have a company in Barbados, which became Peblik Limited. This was done in late 2017 or early 2018. For Peblik Limited, Kevin Wright testified that he was the only director, and he was also the managing director, CEO and secretary. They had intended to make the directors Chris Pay, Stephan Katmarian and Kevin Wright as the directors of Peblik Limited, being the same directors, although that did not actually happen.

[90] Kevin Wright had control over the domain name peblik.com. The board of directors of Peblik Inc. controlled the company.

[91] On March 26, 2018, as shown in Exh 17, tab 5, there was a Confidential Offering Memorandum from Northern Fox. It was marked for internal use only. It did not say “draft” on it, Stephan Katmarian testified it could be the final form.

[92] Kevin Wright testified that the subsequent version of the Confidential Offering Memorandum, at Tab 6 of Exh. 17, dated November 7, 2018, was prepared by Participator for Northern Fox. Kevin Wright testified that internally, there would have been dozens of versions of this document prepared as iterations. It would involve Mr. Katmarian, and Michael Paul. It would have been updated once a month or once a quarter. There were different versions of investor presentations. When it was marked “externally” it would mean that they had signed off as an approval and there would be no more comments and edits on that version, it would turn into a PDF that was an external facing document. At that point it would be signed, locked down. Kevin Wright testified as to Investor Deck Q1-2023 and Q2-2023 presentations, as updated on the websites, although there was no reference as to what those materials were in this trial. Kevin Wright testified he assumed that the documents were given to potential investors as iterations. He also testified that other information, like business summaries, would also be on the company’s website, although Kevin Wright did not identify in evidence the particular version of the website.

[93] Stephan Katmarian testified that funds were raised by Peblik Inc. largely for development of the token platform. He testified that approximately $380,000 was raised by Peblik Inc. It was never an active money raise program. Stephan Katmarian testified that the Kris and Suman, of the Firm Group made a proposal to make an investment, and

to be on the board. Stephan Katmarian testified that the Firm Group was to make the investment, but as time went on, it was apparent that there were multiple cheques coming in for investments. Stephan Katmarian said they were not going to accept the investment funds unless it fell within some exemption, private issuer exemption, accredited investor or friends and family. Stephan Katmarian did not want to go above the 50 shareholder limit and then lose the exemption. Stephan Katmarian asked Suman and Kris if the investors were in the Friends and Family category. Stephan Katmarian looked at the names and spoke to one or two of those people, and they were friends and family, business associates of the Firm Group. Stephan Katmarian testified he was concerned because monies had come in, and there were no subscription agreements with those investments. He surmised this arose from problems between Kris and Kevin Wright. Stephan Katmarian finally recovered the subscription agreements after Kevin Wright left Peblik Inc. Stephan Katmarian testified that the private placement of Peblik Inc.’s convertible notes relied upon exemptions. Stephan Katmarian testified that he cut it off as it seemed that Kris, Suman and the Firm Group were not putting in their own money, as they had offered, but rather were soliciting the funds from elsewhere. This is discussed below in relation to Count 4. The Firm Group would also do marketing for Peblik Inc. The Firm Group continued to do the tech work for Peblik Inc. Stephan Katmarian testified that the focus overall was to get to an ICO quickly, rather than to raise funds.

[94] Kevin Wright was asked about Stephan Katmarian raising funds for both Northern Fox and Peblik Inc. at the same time. He testified that at the time, optimistically “all roads led to Rome”, that everyone’s goal was to develop and further the Thierry Mine and the asset base, and the companies were intertwined. However, his optimistic view changed as investment dollars were harder to come by for Peblik Inc. Previously Suman and Kris had covenanted that they would raise $1 Million, but they raised substantially less than

$250,000. Stephan Katmarian anticipated more interest in their project. The company was running out of operating funds. The group was unable to “tokenize”, to “mint” the initial public offering of coins in the US markets, and they were looking to hire a legal firm for that purpose. They did not have funds to hire and pay for the US lawyer. Investors were calling Kevin Wright and were upset, including Walter Heidary. Kevin Wright told Walter Heidary that Peblik Inc. was out of funds. Walter Heidary advised Kevin Wright that he had been continuing to fund, but Kevin Wright knew that his funds had not reached Peblik Inc. Kevin Wright assumed that the additional funds from Walter Heidary went to Northern Fox rather than Peblik Inc. Kevin Wright was of the view that Walter Heidary had invested in Peblik Inc. Kevin Wright was wrong, Walter Heidary did not invest funds in Peblik Inc, as this court will later find in relation to Count 1.

[95] The Commission takes the position that the actions of Stephan Katmarian in being a director both for Northern Fox and Peblik Inc. at the same time, and given the nature of the investments and the terms for monies contributed to Northern Fox, that he was in a conflict of interest. This is the basis for the allegations of fraud in Count 1, prong 2 of the charges.

[96] The business plan for Peblik Inc. became documented in a White Paper, which was a living Word document. Various people including Stephan Katmarian were involved in the marketing material and the White Paper.

[97] The White Paper versions and marketing material were added to the Peblik Inc. website. Kevin Wright testified that there were more than ten versions of the White Paper. The website changed over time as new marketing material was developed, as new members to the team were added, and as the business model progressed and new developments took place. As a result, the website was updated frequently.

[98] Mr. Wright testified that as it related to fundraising for Peblik Inc., after discussions with Gary Sugar, the securities counsel with Northern Fox, a modified subscription agreement was prepared. Peblik Inc. was a single purpose company, that would have costs for legal fees for filing with the government, the marketing, the technology for the Smart Contracts that needed to be programmed and the legal contracts. Proceeds were required for Peblik Inc. through money to be invested or raised to pursue the business. Stephan Katmarian had been raising money for Northern Fox, so he went back to some of those investors to raise funds for Peblik Inc. Kris and Suman had also raised money successfully for other blockchain ventures so they were involved in fundraising. The idea was to raise funds from friends and family.

[99] According to the testimony of Mr. Wright, the second phase of Peblik Inc. would have required a substantially larger amount of money, which would include going to a much broader audience and getting a consumer base for the tokens. The Peblik project did not make it to the second phase.

[100] On March 19, 2018, the OSC sent a letter regarding the White Paper. This letter was immediately forwarded by Stephan Katmarian and Kevin Wright to their counsel, Gary Sugar, who began to compile answers to the letter. The response was dated April 3, 2018, from Gary Sugar to the OSC. Everyone at Peblik Inc. was involved in the response letter. That is why it did not need to be taken to the Peblik Inc. board of directors. This letter from the Commission, and the response from Gary Sugar, are the subject of Count 2 in the Information and dealt with below in the reasons.

[101] On July 7, 2018, Kevin Wright testified that he sent out an email to various parties including Stephan Katmarian, Isaias Medina and Christopher Pay, regarding Peblik State of the Union, set out in Exhibit. 20, Tab 2. It was an internal document. Things were not going well for Peblik Inc. The information in this memo was gathered from many people to share with the team, regarding next steps and what needed to be done. Under financing and administration they were still seeking funds from friends and family of people at Peblik Inc. It was the summer, which is when summer work programs happen in northern Ontario. Stephan Katmarian did not know if they were starting to de-water the mine or if there was technical work being done on the development of the mine. He was looking out for monies that needed to be put towards technical work on the Thierry Mine. In terms of compliance, they had come to realize that if they were going to mint the tokens, the company doing that had to be the owner of the mine. Tab 4 of Exhibit. 20 set out the action steps they required to take for compliance. They were considering going to the United States to list on the Exchange and marry the token to a common share as a secure token offering. They were trying to get the token minted as quickly as possible.

[102] On July 18, 2018, Erin Taylor, the compliance advisor for Peblik Inc., was invited to present on behalf of Peblik Inc. at the Toronto Cryptocurrency Conference. She presented the Investor Deck Q3 of 2018, which related to the Peblik token offering, tied

to the interest in the Thierry Mine. The invitation was not based on her work at Peblik Inc., but rather her prior experience in the area.

[103] As of July 29, 2018, Exhibit. 17, Tab 4, there was an email sent to Stephan Katmarian and other people at Peblik Inc. There was an idea that the directors of Peblik Inc. wanted to go public and they were looking for exchanges to list the security token. They asked Erin Taylor to look for exchanges for them. As of that time, Peblik Inc. had been a private placement, which was understood to be under an exemption.

[104] Erin Taylor is a witness the court found below in Section D to have questionable credibility and not reliable. She testified that from mid to the end of 2018 there was very little progress being made on the project. She indicated that there were problems with communication, she was not clear what was happening. She stated that they were trying to get the token out to market without looking at whether it needed to be registered as a security or not. She testified that she talked to Stephan Katmarian about how much money had been raised, where the money was going, that there had been little to no progress. She testified that Stephan Katmarian told her that Peblik Inc. was being provided capital by Northern Fox, that there was a promissory note of $2 or $4 Million. fronting the money. She testified that Stephan Katmarian told her that it was embarrassing that Kevin Wright had not raised any capital, that a total of $500,000 had been raised but that Peblik Inc. was still in debt to Northern Fox.

[105] Erin Taylor testified that from July to December 2018, things were “not going super well”. She had asked and recommended they not go forward selling any Peblik token. She testified she wanted the proper assessments from securities counsel, she wanted an anti money laundering review, they needed a technology service provider to do a KYC (know your client) review. Ms. Taylor testified that the directors of Peblik Inc. wanted to understand the process for listing Peblik Inc. in the United States, that was the goal, and to sell Peblik tokens in the US and Canada. On November 26, 2018, at Exhibit. 20, tab 12, Erin Taylor sent an email on the progress to date to Stephan Katmarian and other members of the Peblik Inc. team, requesting progress to date.

[106] During this period, Stephan Katmarian testified that there was a strain that had developed between Stephan Katmarian and Kevin Wright. Stephan Katmarian was advocating for the minting of the Peblik token, and Erin Taylor and Isaias Medina together with Kevin Wright, were of the view that they did not have a clear line of sight on compliance. Stephan Katmarian believed that his idea for minting the token was compliant.

[107] The following day, Nov. 27, 2018, Stephan Katmarian responded in an email that

$500,000. had been raised, that about $400,00 had been advanced by Northern Fox.

[108] The testimony of Mr. Wright was that in the latter half of 2018, things were going in a way that “cash flow kills companies”. They were not able to launch the token offering, it had been delayed multiple times. There was no consensus among the internal parties. Kevin Wright testified that Erin Taylor, Isaias Medina and Kevin Wright were of a different position in terms of the launch than Stephan Katmarian and Mr. Pay. And by that point, Kevin Wright testified that the relationship with Suman and Kris had begun to deteriorate. They disappeared at one point. Kevin Wright testified that as of October, November or

December of 2018 Kris and Suman had disappeared. By early 2019, Kris and Suman stopped attending at Peblik Inc. offices and meetings. For practical purposes Stephan Katmarian testified that the directors of Peblik Inc. at that time were the original three, Stephan Katmarian, Kevin Wright and Christopher Pay. The Peblik Inc. team did not understand how to navigate the compliance issue. Peblik Inc. had no funds to hire a law firm in the United States to advise them, for a secure token offering.

[109] On November 26, 2018, Erin Taylor, whom Kevin Wright testified was the head of compliance for Peblik Inc. (although she gave contrary evidence as to her position), wrote an email to Isaias medina, Stephan Katmarian, Kevin Wright and Chris Pay regarding next steps. This was regarding issuance of the tokens. Stephan Katmarian responded to her email. In part he indicated there is no PPM filed as we are operating under various exemptions. Kevin Wright testified that he referred to the friends, family and business associates exemption, but he did not know what other exemption was referenced by Stephan Katmarian.

[110] Throughout the latter part of 2018, Mr. Wright testified that he and Stephan Katmarian were not getting along well. Stephan Katmarian testified that in November of 2018, Kevin Wright was relieved of his active engagement as CEO for operations for Peblik Inc. After mid-December of 2018, the differences between Stephan Katmarian and Kevin Wright had become irreconcilable, and Mr. Wright failed to show up in the Peblik Inc. offices.

[111] In December of 2018, at a Christmas party for Peblik Inc., Erin Taylor sat beside Walter Heidary and found out for the first time that Stephan Katmarian had offered Walter Heidary a “2 for 1” deal for Peblik tokens, that he was getting shares or tokens for his Northern Fox investment. Walter Heidary invested no money in Peblik Inc., but she understood he was going to get Peblik tokens. This upset Erin Taylor as she testified she knew this was wrong. Erin Taylor spoke with Mr. Medina, a lawyer working with Peblik Inc., to express her concern about this “2 for 1” deal that she had just learned about from Walter Heidary She never spoke to Stephan Katmarian about this “2 for 1” deal for Northern Fox investors in Peblik tokens.

[112] Mr. Wright testified that around the end of 2018, Peblik Inc. ran out of financing. During the project, Peblik Inc. had 24 to 30 consultants, employees or stakeholders working on various teams, including a mining committee team, a marketing team, a technical paper team. Prior to the end of 2018, the budgets for compliance and governance to mint the token were poorly projected, they had used a number of outside consultants and the legal bills became quite high. Mr. Wright testified that Peblik Inc. did not receive any of the investment funds raised by Stephan Katmarian into Northern Fox. The court does note however the evidence that Northern Fox made direct payments to Cadillac Ventures and to others to comply somewhat with the earn-in option agreement (1st and 2nd) between Cadillac Ventures and Northern Fox.

[113] By early 2019, Mr. Wright described working at Peblik Inc. as difficult, and he felt agitated, he felt that the progress of Peblik Inc. was stalled. Kris and Suman were no longer active. There were January and February 2019 board meetings. Stephan Katmarian was proposing a token rollback, that the original published tables covenanted to all of the stakeholders as to what they would receive as tokens, was being proposed

to be only a fraction of that amount. On February 11, 2019, there was a Peblik Inc. board meeting. Erin Taylor attended as a guest. The three directors of Peblik Inc. including Stephan Katmarian worked through the next step for the business to move forward. It was a time of significant duress among the three of them. Stephan Katmarian wanted Mr. Wright to leave Peblik Inc. by resignation. Mr. Wright did not want to move forward with Stephan Katmarian on the board of Peblik Inc. At this board meeting, Stephan Katmarian made a proposal that there be a rollback of tokens. This arose from the development of the understanding that the token was a digital security, as a representation of a share of a company. Stephan Katmarian indicated that everyone would have to accept that there would be a rollback of tokens previously promised, and if not, those persons would no longer be part of the company. The token structure for stakeholders that had existed, and was being proposed, was set out in Exhibit. 20 Tab 5. The rollback proposed by Stephan Katmarian was captured in this chart.

[114] At this board meeting, a majority of the board (Stephan Katmarian and Christopher Pay) voted in favour of the rollback, and Kevin Wright voted against it. The board also considered a name change from Peblik Inc. to Global Asset. This seems to have been driven by the control by Kevin Wright of the Peblik Inc. name. Also Stephan Katmarian wanted to move ahead with the minting of the token and Kevin Wright did not want to do so as he was not sure that they were 100% compliant in order to do so. Stephan Katmarian wanted control of the website that had been in the control of Kevin Wright.

[115] On February 19, 2019, following the contentious February 11 board meeting where Kevin Wright voted against the token rollback, and Stephan Katmarian and Chris Pay voted in favour of the rollback, Kevin Wright wrote an email to the other Peblik Inc. directors, Stephan Katmarian and Chris Pay, copying it to many other members of the Peblik Inc. team. This was in Exhibit. 20, at Tab 9. In that email, Kevin Wright listed grievances he had over the previous eight months. Kevin Wright requested an independent audit of all the transactions, offers, promises, finances, correspondence and documentation in relation to Peblik Inc., Global Asset (which was the new company name proposed by Mr. Katmarian) and Northern Fox. He asked for this within two days, otherwise he advised he would be seeking the OSC to assist with an official audit. Kevin Wright also wished to slow down the coin launch or prevent it at the time. He was not confident that protocols were being properly followed.

[116] At this point, Kevin Wright described the differences he had with Stephan Katmarian as irreconcilable.

[117] In response to the February 19 email, the lawyer for Peblik Inc., Gary Sugar, responded to the email with a letter, three days later, dated February 22, 2019, which was Exhibit. 20, Tab 10. Mr. Sugar responded based on what he had been advised. In this letter, there was mention of the creation of the technology platform, which is synonymous with the smart contract and the blockchain token mining. Stephan Katmarian was pushing to mint the tokens, although he wanted to use a different system that existed in the marketplace, which was different than the system that had been in the process of being developed by the Peblik Inc. team. This letter described the conduct of Kevin Wright as conduct unbecoming. In the final point of that letter, it was mentioned that a meeting of

shareholders of Peblik Inc. had been held, and that Kevin Wright had been removed as a director of the Peblik Inc. corporation, and he was no longer an officer of the corporation.

[118] Following that February 11, 2019 board meeting, Erin Taylor wrote the minutes of a meeting March 26, 2019. This is at Exhibit. 17, Tab 8. There is an outline of how many tokens each person would receive in light of the token rollback.

[119] In communication with Stephan Katmarian on March 21, 2019, (in Exhibit 24, Tab 7), Erin Taylor noted the need for a discussion about repayment for the investors into Peblik Inc. Then she added “specifically my group to avoid major blow ups with them. Can we do this”. There is no doubt that she had a particular focus on getting reimbursement for the investments she had made for her group. She then suggested that both companies be broken down and move on to the next chapters.

[120] After this meeting, Stephan Katmarian did not meet with Erin Taylor as she requested. Stephan Katmarian asked Erin Taylor to deal with Gary Sugar, the lawyer for Peblik Inc. In emails exchanged in April of 2019, at exhibit. 17, Tab 7, on April 26, Erin Taylor referred in a communication to Mr. Katmarian, about having waited patiently. She referred to the “next steps are getting the regulatory bodies involved and removing myself from the equation. Then everything will be frozen.” She stated that she would send Stephan Katmarian a list of the monies collected from her investors and the monies owed to her and wait for his response. After the exchanges went on for some time, Stephan Katmarian suggested she speak with Gary Sugar, the lawyer.

[121] It was apparent that Erin Taylor felt that there was a misrepresentation in terms of Peblik Inc. owning the Thierry Mine. She also felt that investment monies should have been held in escrow. She seemed to request that investors be given an option of investing in a new token offering or a return of their investment. As the communications with Stephan Katmarian were exchanged, Erin Taylor seemed to request that the subscribers get a return of their investment, among other issues discussed.

[122] Ms. Taylor did not get a return of the funds for investments that she and her investors had made in Peblik Inc. At some point, Erin Taylor received $11,500 from Peblik Inc., which she understood was for placing Greg Marland, the tech guy who built the Argo token, around August or September which would be in 2019.

[123] The Commission called Albert Ciorma, the senior forensic accountant at the OSC, to give evidence. He was not qualified as an expert witness, but he gave evidence in the form of an accounting report, relying upon evidence in the relevant bank accounts. The court found that the evidence of Mr. Ciorma was somewhat questionable in terms of credibility and reliability, as set out in the credibility assessments in Section D below. The court looks for confirming evidence on some issues before accepting at face value his evidence. There were however some aspects of his evidence which were not challenged and can be accepted by the court.

[124] The court would note that as it related to the written evidence of Mr. Ciorma, the Commission should not have presented his evidence in the fashion it did, by filing an exhibit with twelve tabs (Exhibit 26), and then minutes later, filing an amended version as

Exhibit 27, referencing four tabs that were to replace the earlier tabs filed in Exhibit 26. This presentation of evidence by the OSC was not helpful to the court.

[125] The evidence with respect to the Peblik Inc. bank accounts related to the TD accounts from January 8, 2018 to March 29, 2018, one for Canadian funds and one for US funds. The TD accounts had Stephan Katmarian, Michael A. Paul and Kevin Wright as authorized signatories for those accounts, and Suganthan Krisnarajah (Kris) was an authorized cardholder and signing officer. Following the March 29, 2018 closure of the TD bank accounts, Peblik Inc. opened BMO bank accounts, one for Canadian funds and one for US funds, which were open until November 6, 2018. The authorized signatories for these BMO accounts were Stephan Katmarian and Kevin Wright. (Michael Paul was no longer a signatory, nor was Kris an authorized cardholder and signing officer for these accounts).

[126] In the TD Canadian funds account, there was $239,700. deposited from various investors. The TD US funds account received $44,500. from four investors. Northern Fox paid $10,200 US in that account. In the BMO Canadian funds account, there were deposits from five investors, totaling $102,936, according to the evidence of Mr. Ciorma. In the BMO US funds account, there were investments for a total of $65,000 US. The court is not sure if all deposits into the Peblik Inc. bank account were “investments”, although it seems that Mr. Ciorma has made that inference. Defence counsel did not challenge that inference to any notable degree.

[127] Mr. Ciorma listed the names of investors to these bank accounts, which was interesting information. It disclosed that some names of people that witnesses thought had invested money in Peblik Inc. had not actually done so. Significantly, it was very apparent that there were many more investors in Peblik Inc., than were called as witnesses by the Commission in this trial. The court will only deal with the evidence before it as it relates to proper evidence regarding the witnesses who testified in this trial. For example, the OSC sought to rely at one point on an investment by James McLean, but he was not called to testify (as he had passed away), and there was no proper evidence before the court as to the nature and context of his investment.

[128] In summary, Mr. Ciorma noted that the total of investments were received in the Peblik Inc. bank accounts, was CDN $342,636. And a total of US $109,500. Accounting for the currency exchange, the total investments were CDN $484,515.50. Northern Fox contributed $83,216.14. In addition, there was a contribution noted to be from miscellaneous sources of $175,700.50. The total received in all of the Peblik Inc. bank accounts was $763,614.59.

[129] The interesting aspect of the evidence of the accountant is that it shows a pattern where there was never very much money in the Peblik Inc. bank accounts before it appeared that cheques were drawn, for what may have been expenses for Peblik Inc. For example, Mr. Ciorma was not able to indicate if the payments were for expenses of Mr. Katmarian, rather than compensation in nature. He did not know if any of the parties, including Chris Pay, Michael Paul and Isaias Medina were paid for their work as opposed to reimbursement for expenses.

[130] Kevin Wright testified that Peblik Inc. had paid out monies to Minroc management, for map products, required for Cadillac Ventures obligations with the government and suppliers to keep the Thierry Mine properties in good standing.

[131] There was a Capital token mentioned in this trial. Kevin Wright was obviously concerned about it, and he testified that it was to replace the Peblik token. It was set out in exhibit. 20 at tab 13. It was on the internet. Kevin Wright testified it is a business summary of the Peblik Inc. business. Mr. Wright testified that it was the renaming of Peblik Inc. by Stephan Katmarian. Page 17 of this document for Capital token describes Kevin Wright as Executive Director and CEO. Kevin Wright never worked for Capital, and on page 20, as a contact person for Capital, it gives the name of Kevin Wright, with a phone number and email at capitalcoin.io. Kevin Wright was never a contact for Capital, and he did not recognize the email address. When he saw that, Mr. Wright got them to take that down from the document. In cross-examination Kevin Wright admitted that he does not know who put his name and information on the Capital documents.

[132] Stephan Katmarian testified that a common fraud in the “crypto space” is to copy a website, create an alternate wallet and try to get people to subscribe to a phony website. He believed that someone in Panama had done this, and they caught it, reported it to the domain and took it down. Mr. Katmarian testified that the “Capital Coin” had nothing to do with Stephan Katmarian or Peblik Inc. The court accepts his testimony, and finds that it was a fake website for a fake company.

[133] After Kevin Wright, Erin Taylor and Isaias Medina left Peblik Inc., Mr. Katmarian indicated that there were still approximately thirty people still working at Peblik Inc. They were not paid salaries, only reimbursement for expenses.

[134] Stephan Katmarian testified that after Mr. Wright left, the idea of the Argo company came from Stephan Katmarian and Chris Pay. They changed the focus to creating a software platform that was functional. As a result, Stephan Katmarian testified that he hired another coder who was able to fix the coding errors in the first software platform. That coder was funded by Mr. Katmarian, and he was of the view that all of the errors in the functionality had been addressed. Stephan Katmarian testified that the next problem related to Mr. Wright not turning over the ownership of the domain to the Peblik Inc. corporation. As a result, they changed the entire project to the name of “Argo”. Mr. Katmarian testified that they put the Argo Wallets into the Google Play Store and the Apple Store. Then they placed restricted Argo Tokens into the wallets of the various people that were owed the restricted tokens based on investments they had made. He testified that to his knowledge all the investors received an email and a wallet, as per the Know Your Client Anti Money Laundering. They had to download the wallet, and go through a procedure to prove identification, after which they would be able to download their wallet and tokens. By the time that happened, Stephan Katmarian testified that they were aware that the OSC was doing a full-scale investigation.

[135] Ms. Erin Taylor’s association with Peblik Inc. clearly ended when, through the whistleblowing portal, she went to the Ontario Securities Commission. This followed numerous unsuccessful efforts she made to get a return of the funds she invested in Peblik Inc. on behalf of herself and her friends and family members. On October 10, 2019 she attended a voluntary interview, with her lawyer, at the Ontario Securities Commission.

It is obvious to this court that a number of aspects of the charges before this court relate to compliance issues. She was the compliance advisor at Peblik Inc. She went to the Ontario Securities Commission after she was unable to get a return of her investment, that she sought from Stephan Katmarian and Gary Sugar, counsel for Peblik Inc.

[136] Unfortunately the terms and conditions of the (original) 2016 earn-in option agreement between Cadillac Fox and Northern Fox were not met. That first earn-in option agreement became null and void. As a result, Norman Brewster and Stephan Katmarian had further discussions and replaced that earn-in option with a renegotiated earn-in agreement, with different terms. In the second agreement, it made reference to the first earn-in option agreement being in default. This second earn-in option agreement between Cadillac Ventures and Northern Fox was dated December 5, 2019, and announced on December 9, 2019. In this agreement, Norman Brewster signed on behalf of Cadillac Ventures, and Michael Paul signed on behalf of Northern Fox Inc. (as he had become the President of Northern Fox). Those were the only two parties, similar to the original earn-in option agreement. There were different conditions. Within 90 days, by March 9, 2020, Northern Fox was to pay a previously agreed upon $300,000. to Cadillac Ventures, ($140,000. of which had been advanced) and following financing of Northern Fox, Northern Fox was to have the right to earn a 51% interest in the property. The amount of work to be done pursuant to this agreement was reduced from USD $13.9 Million (in the first earn-in agreement) to a lower number, so the earn-in interest percentage was also reduced. The note would be retired based on different conditions. On completion of this second earn-in option agreement, Northern Fox would have a 51% interest, but would have the option to earn a further 10% interest (to 61% total) by spending a further $2 Million over 2 years. After a 61% interest was earned by Northern Fox, a formal joint venture agreement would be drawn up between Cadillac Ventures and Northern Fox.

[137] This court has observed, significantly, there was no mention of the intervening assignment of the original earn-in option interest assignment agreement by Northern Fox to Peblik Inc. in the second earn-in option agreement between Cadillac Ventures and Northern Fox. As noted in the reasons below, Peblik Inc. was operating with a representation that it had the earn-in option interest assignment agreement for the Thierry Mine. This assignment to Peblik Inc. was in 2017, and it was never terminated, wound up, nor declared to be null and void.

[138] Notably, similar to the original earn-in option agreement, there was in clause 9.7 for this December 5, 2019 Cadillac Ventures Northern Fox agreement, the provision for the sale, assignment, transfer or otherwise disposal of the whole or any part of any interest of the optionee (Northern Fox) to another party. The clause specified that this could only be done with the consent of the optionor (Cadillac Ventures), and that this was to happen by means of written agreement. The term was very similar to the term in the original agreement.

[139] On December 9, 2019, there was a press release from Cadillac Ventures stating that it had signed this new earn-in option interest agreement with Northern Fox for the Thierry Mine.

[140] On September 28, 2020, a wind-up of the second earn-in option interest agreement between Cadillac Ventures and Northern Fox was entered, and signed by Norman Brewster for Cadillac Ventures, and Michael Paul for Northern Fox. This terminated the second earn-in option agreement between the parties, arising from the failure to meet all of the conditions of that agreement within the appropriate time periods. Pursuant to this agreement, various advances that had been made by Northern Fox during the earn-in option agreements were to be reflected and converted into shares in Cadillac Ventures for Northern Fox. On September 30, 2020, Cadillac Ventures issued a press release announcing that the earn-in option agreement between Cadillac Ventures and Northern Fox, referred to in the Dec. 9, 2019 press release, was terminated. At that point, Northern Fox retained no interest in the Thierry property.

[141] As noted above, the investors who were witnesses in this trial did not receive from Peblik Inc. or any corporation a return of their investment funds, any interest payments or any Peblik tokens. Some however did acknowledge the receipt of email communication offering them an opportunity to get Argo tokens, which they did not proceed with for various reasons.

[142] On November 27, 2020, Trevor Parkes, Senior Investigator, Enforcement at the Ontario Securities Commission, sent a letter requesting a great deal of information, documentation and supporting documents regarding a “quasi-criminal investigation into Peblik Inc., Stephan Katmarian and Christopher Pay, for alleged breaches of the Ontario Securities Act”. Stephan Katmarian was cross-examined at length about an exchange of correspondence between Mr. Parkes and Mr. Katmarian, which continued until February 2, 2021. A great deal of documentation and information was turned over to the OSC through this process. In cross-examination, Stephan Katmarian indicated that although they were not aware of the nature of the specific allegations which initiated this investigation, that Erin Taylor had been threatening Stephan Katmarian and Peblik Inc. for some time about going to cause them problems with the OSC if she didn’t get what she wanted in the way she wanted it. As a result, Mr. Katmarian testified that none of this came as a surprise. However, Mr. Katmarian was trying to have a meeting with the OSC, his approach was “guys, well, before we waste a lot of time for a lot of people and destroy the company, come and talk to me”.

[143] Mr. Katmarian sent a response on December 9, 2020, stating they would be happy to provide the information requested and that they were in the process of getting the information together. There was some impatience from the investigator as he sent other follow-ups requesting the information. There was a delay in Stephan Katmarian’s ability to gather and submit all of the information. On January 19, 2021, Stephan Katmarian sent an email, at Exh. 8 Tab 2Q, responding to the questions in Mr. Parkes’ original letter, referring to “we” had to put together hundreds of pages of documents and emails. In cross-examination he explained that “we” was in reference to the board of Peblik Inc., and likely at that point Gary Sugar, their lawyer was involved. Mr. Pay participated in this response. They sent more material than the OSC requested. There was a problem with the uploading procedure. There was a problem in that some of the materials were potentially subject to privilege. There were many questions about Mr. Katmarian’s knowledge of solicitor client privilege, and waiver, that the court finds are not relevant to the issues in this trial. Mr. Katmarian was asked about his earlier evidence that the OSC

had threatened him, and he explained that it related to the fact that the OSC was not going to allow him to submit the material because of their technical problems with the upload. Secondly, he was referring to the occasion when Mr. Parkes and someone else from the OSC served Mr. Katmarian’s wife with some papers and told her that if he didn’t respond to them he would be going to jail. He viewed that as a threat and intimidation.

[144] On December 23, 2020 Cadillac Ventures sold its 100% interest in the Thierry Mine to Braveheart Resources for shares and cash.

D. CREDIBILITY, RELIABILITY AND CONSIDERATION OF EVIDENCE :

[145] Mr. Stephan Katmarian is presumed to be innocent, the Commission must prove his guilt beyond a reasonable doubt. Stephan Katmarian has no burden to prove anything, to explain anything or to persuade the court of anything.

[146] The principle of reasonable doubt also applies to the issue of credibility. The assessment of credibility is not a matter of choosing between competing versions or determining which is more credible or to be preferred. Where Mr. Katmarian has testified, or there is exculpatory evidence elicited from other witnesses or exhibits in the trial, that evidence is entitled to the benefit of the application of reasonable doubt in the assessment of its credibility and the fact finding that follows. If that evidence is believed, and it affords a defence, Mr. Katmarian is entitled to an acquittal.

[147] Even if that evidence is not believed in the sense of believing it to be true, if it nonetheless raises a reasonable doubt, Stephan Katmarian is entitled to that doubt, and an acquittal will follow. Even if that evidence is rejected, the Commission must still prove guilt, beyond a reasonable doubt, based on all of the evidence in the trial.

[148] A determination of guilt or innocence must not turn into a mere credibility contest between two witnesses, or a bipolar choice between competing evidence called by the Commission and by the defence. This approach would erode the presumption of innocence, and the burden on the Commission of proving guilt beyond a reasonable doubt.

[149] The court applies the law as set out by the Supreme Court of Canada in R. v. W.(D.) (1991), 1991 93 (SCC), 63 C.C.C. (3d) 397 (S.C.C.) , and other appellate case law dealing with credibility and the consideration of evidence. The court also considers the case referred to by the defence, of R. v. Gostick (1999), 1999 3125 (ON CA), 137 C.C.C. (3d) 53 (OCA) paras 14 to 18. In that case, the court noted that a trial judge cannot find witnesses to be credible based solely on demeanour. The court needs to consider internal contradictions, matters raised in cross examination, and defence evidence including alibi. There is a need to test the evidence of crown witnesses in light of all other evid presented (including defence evidence) and improbabilities that something could have happened that way. Trial judges assess evidence in light concerns raised. The trial judge had found the complainants to be credible, then sought to discredit those who contradicted her (thereby shifting onus to defence).

[150] In this case, there is a great deal of evidence which is not challenged particularly where there are exhibits and testimony which is essentially not challenged. However, there are aspects of this trial where it will be necessary for the court to consider credibility and reliability of the evidence of various witnesses. The court will consider the credibility and reliability of a number of witnesses in this section, including Stephan Katmarian, Norm Brewster, Suganthan Krisnarajah (Kris), Kevin Wright, Erin Taylor, Albert Ciorma and Gary Sugar. There will be some witnesses whose credibility is dealt with below under the relevant sections dealing with their evidence, including Daniel West, Chris Balsingh, Bridget Flynn, Vasanthaseelan Ratnaananthan, and Walter Heidary.

(1) Stephan Katmarian :

[151] Before getting into the details of the court’s consideration of the testimony of Stephan Katmarian, the court makes some preliminary comments. Firstly, Mr. Katmarian testified over a period of many days, spread apart with breaks. For instance, he gave his examination in chief on June 22 and 23. His cross-examination began four days later, on June 27, and was continued June 29, August 2 and September 7. It is always a challenge for a witness to remember and recall evidence previously given in the context of giving evidence with breaks and delays. Secondly, the court considers the context of the OSC letter from the Senior Investigator in Enforcement of the OSC dated November 27, 2020. It set out a list of questions to Mr. Katmarian, with a c.c. to Mr. Pay. The letter indicated that the OSC was currently conducting a quasi-criminal investigation into Peblik Inc., to Stephan Katmarian and to Mr. Pay for alleged breaches of the Ontario Securities Act. The letter requested information, and Mr. Katmarian provided that information. He provided more information than was required or sought by the OSC. Stephan Katmarian believed that a complaint originated from Erin Taylor and was made to the OSC, to initiate this investigation. She had threatened to go to the OSC, after she did not get the return of her investment monies in Peblik Inc. It was the view of Mr. Katmarian that Ms. Taylor felt that millions of dollars had been misdirected, and essentially that was the fraud the OSC was investigating at the time. He felt that once he provided the information, the Commission would realize that this was not the case. Unfortunately the Commission did not drop its investigation after Mr. Katmarian provided the material, consisting of many documents provided by Stephan Katmarian. In the end, although the potential investigation was related to Peblik Inc., Chris Pay and Stephan Katmarian, only Stephan Katmarian was charged. It was very apparent that Stephan Katmarian was very upset at the time of his testimony, that the focus of the Commission was to select him personally for investigation and later solely for prosecution, and not other directors and the corporation. He was the only party charged with offences arising from this investigation. The reason for doing this is not apparent to the court. In addition, Stephan Katmarian was also seeking at the outset, to the extent that he potentially gave up his rights, to provide information to the Commission in response to enquiries. He provided more information than was requested and the Commission complained about the delay, including the period over the Christmas holidays. The materials were provided. Mr. Katmarian testified he was convinced that once the OSC had the relevant material, it would realize that nothing wrong had happened regarding what it had potentially been told by others. In addition, Stephan Katmarian was ready willing and available to attend

any interview with a member of the Commission to answer questions and explain anything. He communicated this several times both orally and in writing to the investigator Trevor Parkes. Yet, the Commission chose to charge him without offering him the “benefit” of an interview. The court understands Mr. Katmarian’s frustration with all of the aspects of these articulated points.

[152] As Mr. Katmarian sat in the stand, responding to suggestions by Commission counsel, the frustration, resentment, and potential anger came out in many of his answers. He was at many times defensive and argumentative with counsel. The court notes that from the beginning of the cross-examination, Commission counsel was somewhat confrontational in stating that he had changed his evidence, when the court would observe he had not changed his evidence. Mr. Katmarian was chippy at times. His manner of response to suggestions conveyed more than content, but an emotional and angry tone at times. Then on other days, including August 2, Stephan Katmarian responded carefully to numerous suggestions where there were mis-statements of his evidence by Commission counsel, and did so in an entirely reasonable, patient and polite manner. Yet, the court is fully aware of the context of this case, and that he has been solely targeted for this prosecution, he was the only party pursued by the Commission. The court cannot fairly consider his testimony in the absence of this context.

[153] The court set out in detail in the Background section above the personal background of Stephan Katmarian. As it relates to his credibility and reliability regarding relevant issues in this trial, the court finds his background and experience particularly significant. He has had a tremendous amount of experience, and knowledge gained through working in funding mining companies, exploration and mine development. As he stated, Stephan Katmarian was exposed to all aspects of the business from a finance perspective. He visited mining sites and deal with geologists, as companies wanted his firm to raise money for them. He described himself as an educated layman in that regard. He described his knowledge of the 43-101 reports, which bring clarity to the description of mining properties. A 43-101 report is required if you are raising money or using a mining property as the key asset to list a company on a Canadian exchange. Around 2016, he was thinking of investing in a copper mine. He had previous experience with the Thierry Mine when it was owned by Richview, and he had an interest in pursuing an earn-in option interest assignment agreement with Cadillac Ventures, a company that had ownership of it but was not developing it at the time. Stephan Katmarian gave evidence as to his understanding of the earn-in option agreements within the mining industry. The Commission objected to this type of evidence on numerous occasions, submitting that it was being put forward as expert evidence. The defence submitted it was being put before the court as to the understanding of Stephan Katmarian of the industry, not expert evidence. There is no doubt, this court would find, and it is relevant to issues of credibility and reliability, that Stephan Katmarian had an extensive and thorough understanding of mines, financing for mines, earn-in option interest assignment agreements for mines, and development of mines. Stephan Katmarian testified that prior to the subject earn-in option agreement between Cadillac Ventures and Northern Fox, Stephan Katmarian had been involved in 50 or 60 earn-in option agreements for investment opportunities or investments in the mining industry. This background of Stephan Katmarian is very important to the context of the nature of an earn-in option interest assignment agreement and Stephan Katmarian’s understanding of the terms of such an agreement, as he was

very experienced in dealing with these agreements. In addition, Stephan Katmarian had been involved in approximately 10 or 20 direct ownerships of mines by investors for mining investments, where there was no earn-in option. Again, as the court notes, Stephan Katmarian had a tremendous amount of personal work experience in dealing with these issues, he was by no means a neophyte in the field of mining development, ownership of mines, and earn-in option interest assignment agreements for the development of mines. That background plays significantly in the court’s assessment of his testimony and the ultimate findings of fact in this case.

[154] The court considers next the content of his evidence.

[155] Mr. Katmarian was the executive director and chair of Peblik Inc. He was also the managing director or partner of Peblik Inc. He made an admission, potentially against interest in his testimony, that he made it his business to make sure the description of the Thierry Mine and the company’s relationship to that mine be accurately reflected in the marketing materials. He also admitted that he was involved in the original white paper, and as a co-author in the ongoing development of that White Paper. He agreed that Gary Sugar had sent an email regarding a version of the White Paper, inviting Peblik Inc. to make sure the representations in the white paper conformed to the 43-101 report, although the focus seemed to be in relation to the value of the in-ground mineral deposit. Gary Sugar also advised that the White Paper should refer to the 43-101 report, and that it should be made available on the Peblik Inc. website. All of those admissions were potentially against interest for Stephan Katmarian. He did not resile from that admission, or contradict himself, even as the OSC sought to clearly fix him with liability for the first prong of the fraud counts based upon that admission. That leads the court to accept that this evidence is credible and reliable.

[156] Mr. Katmarian was consistent and steadfast, notwithstanding a protracted and penetrating cross-examination that become confrontational at times. The OSC suggested that Stephan Katmarian wanted to obfuscate or mislead readers of the website, to believe that Peblik Inc. owned the Thierry Mine. He maintained, every time he was asked over the six days he was on the stand, that the disclosure on the mine, (the 43-101 report) by Northern Fox, the relationship between Northern Fox and Peblik Inc., and between Northern Fox and Cadillac Ventures was exhaustively explained in the material.

[157] As it relates to investments by Walter Heidary in Northern Fox, the court considers the evidence of Walter Heidary and Stephan Katmarian. Stephan Katmarian testified that he advised Walter Heidary of the earn-in option agreement between Cadillac Ventures and Northern Fox. This is consistent with the testimony of Walter Heidary. When asked if he provided Walter Heidary with the Confidential Offering Memorandum for Northern Fox dated December 6, 2017, Stephan Katmarian testified he could not remember. In cross-examination Stephan Katmarian testified that he did not give this to Walter Heidary. Then he indicated he did not agree with the evidence of Walter Heidary. Then Stephan Katmarian indicated “I don’t think I gave him this one”. There was potentially an inconsistency with the evidence of Stephan Katmarian and Walter Heidary although Walter Heidary was firm that Stephan Katmarian gave it to him. Stephan Katmarian was not sure. Then on this point, when Stephan Katmarian continued his testimony in August, he changed his version and went back to maintaining he never gave the document to

Walter Heidary The court accepts the evidence of Walter Heidary on this point and not the evidence of Stephan Katmarian, and finds that Stephan Katmarian did give Walter Heidary this document in December 2017.

[158] To his credit, he changed his evidence regarding whether Norman Brewster or Cadillac Ventures had provided a consent to the assignment of the earn-in option interest assignment agreement from Northern Fox to Peblik Inc. Initially he testified that there was a written consent by Cadillac Ventures, but that he had been unable to locate the document. Then as time went by and he returned to continue his cross-examination, it became clear that he admitted that there might not have ever been a written consent.

[159] This is dealt with below in relation to the court’s consideration of the issue relating to the ownership and interest in the Thierry Mine at relevant times. In particular, the court notes the evidence of Mr. Katmarian. The evidence in that regard was as follows. On one of the dates of cross-examination, Mr. Katmarian testified he believed that there was a written consent (between Cadillac Ventures and Northern Fox), to Northern Fox being able to assign the interest to Peblik Inc. Stephan Katmarian testified he believed there was such a written agreement, but he could not find it. Then, on the final day of his cross- examination, the court would find that the OSC mis-stated the earlier testimony, by stating “on the last occasion you said that a written assignment agreement did exist between Peblik and Cadillac Ventures, but you couldn’t find it”, and Mr. Katmarian said “correct”. That is not what Stephan Katmarian said on the prior day of evidence. He referenced a written consent between Cadillac Ventures and Northern Fox as the two parties to an agreement. This is notable, as the primary focus of the questioning by the OSC was on the absence of a written consent by Cadillac Ventures in an agreement with Northern Fox. Then many questions were put regarding potentially an oral consent by Cadillac Ventures, or Norm Brewster. Questions were put as to the existence of any written consent. (At that point, Mr. Katmarian had not given evidence regarding the existence or non-existence of any agreement between Cadillac Ventures and Peblik Inc. as the parties, to the transfer of the earn-in option agreement.) He could not find the agreement, he testified. When asked why he had not sent it to the investigator Mr. Parkes in the January 2021 response, Mr. Katmarian accurately stated that it was not requested. At that time, Stephan Katmarian repeated his earlier evidence that he, “all of us” went over and beyond the call of duty to make sure Norm understood what was happening with the assignment and the crypto currency, he well understood that. He testified that he did not think that “anyone” asked Gary Sugar if he was aware of such a written agreement. Then Mr. Katmarian varied his testimony, referring to his view that the one agreement he could not find, is the one between Cadillac Ventures and Peblik Inc. He stated if such an agreement exists, he was not able to find it. He went on to state his view that it was not required by the original agreement. (Earlier he testified that one is required by the agreement.) Mr. Katmarian indicated that he “believed” that the agreement exists. He later said he “suspects” that it exists. He cannot find it. Then he stated it is possible that the agreement does not exist, he does not remember. The court considers that evidence, that ultimately it is possible that there was no written agreement with Cadillac Ventures consenting to the transfer of the earn-in option interest assignment agreement to Peblik Inc., together with the evidence of Norman Brewster that he was very clear that Cadillac Ventures had not entered a written agreement to this effect. The evidence, this court finds, of Mr. Katmarian in this regard is not reliable, as he does not remember. The court

accepts the evidence of Norm Brewster, as noted below, as being credible and reliable. While he knew about Peblik tokens (as stated below) as a means of raising funds for Northern Fox to comply with the earn-in option interest assignment agreement obligations with Cadillac Ventures for the Thierry Mine, that is not a “written agreement” by Cadillac Ventures to that assignment. Even if Norman Brewster knew that Peblik Inc. either received a transfer of the earn-in option agreement, or represented that it had, (and the court specifically has found below that there was no such knowledge as to this special aspect of the transfer of the earn-in option interest assignment agreement to Peblik Inc.), it is not the same as a written consent by the corporation Cadillac Ventures, a publicly traded Ontario corporation. In that regard, the court rejects the testimony of Stephan Katmarian that there might have been a written consent, which nonetheless is not in evidence in this trial.

[160] A key admission made by Stephan Katmarian in cross-examination, which was another admission against interest that enhances his credibility, related to his understanding of the clauses in this agreement. Specifically, he agreed that with his experience in founding companies and business and finance, he understood each of the clauses in the earn-in option interest assignment agreement between Cadillac Ventures and Northern Fox in 2016, at Exh. 13, Tab 2. This would mean that he would have known that a written agreement was required to assign the interest to Peblik Inc.

[161] As it relates to his dealings with Erin Taylor, the court has found in the reasons that Ms. Taylor was a witness of questionable credibility and reliability. The court found the testimony of Stephan Katmarian to be logical and consistent, as it related to her investment in Peblik Inc. The court accepted his testimony in this regard, as will be set out in the portion of the reasons dealing with her investment in Peblik Inc.

[162] As it relates to raising money for Peblik Inc., Stephan Katmarian was consistent throughout as far as his knowledge that only Kris and Suman through the Firm Group, and Erin Taylor raised money for Peblik Inc. Stephan Katmarian did not raise money for Peblik Inc. Kevin Wright did not raise money. This evidence was consistent with other evidence in this trial. The court accepts this evidence as credible and reliable.

[163] Mr. Katmarian testified that his position was that Kris, Suman and the other directors of the board for the Firm Group were founders of Peblik Inc. That is consistent with the evidence at trial from the witnesses who were affiliated with the Firm Group, as to their positions with Peblik Inc.. The evidence was consistent with the other evidence in this trial and not contradicted.

[164] Mr. Katmarian’s evidence about the nature of the three Peblik companies was consistent and not contradicted by any other witnesses or evidence. The evidence was that Peblik Inc. was the main company, and that Peblik Limited and Peblik LLC were only created in the event that the Peblik tokens were going to be launched in the Barbados or United States, respectively, and the tokens were never launched.

[165] As far as the payments of monies from the Peblik Inc. bank accounts to Mr. Katmarian, the evidence of Stephan Katmarian as to the nature of the payments was uncontradicted. He indicated that the payments to him of $79,084.67, were for reimbursement of expenses he paid, and that is uncontradicted. The evidence of Stephan

Katmarian is that the payments to the Kevin Wright corporations of over $177,000 were for fees for Participator (for work done for Peblik Inc.), for a bunch of their employees and their production of material. Mr. Katmarian indicated that the payments to Pigeon Forge and the Firm Group for $128,000 was also what this court would find to be valid, for programming or coding expense, some creative and marketing online. The payments to 12 Sparks Limited for $69,000 was for consulting and some coding. Isaias Medina was paid for his contract for legal and other advice. The payment to Michael Paul was suspected to be misallocated for expenses for rent and utilities but put under his name. Northern Fox provided $83,216.14 to Peblik Inc.. Stephan Katmarian gave evidence as to other payments, but the court chooses not to repeat this evidence in detail in the reasons. There was no allegation of fraud regarding these payments in this trial. The court found that the testimony of Stephan Katmarian was forthright and credible in this regard.

[166] The court considers the testimony of Stephan Katmarian as it related to the position of Erin Taylor at Peblik Inc. There is no doubt that he was of the view that she held herself out to be the chief compliance officer, just as strongly as Erin Taylor maintained in her testimony that she was not the chief compliance officer. The court will note below that it found Ms. Taylor to be lacking in credibility and reliability. However, the court does not accept the version of Mr. Katmarian that she was the chief compliance officer, arising from the evidence of the refusal to sign a final version contract with that title. Nonetheless, the court finds as a fact that she was a compliance advisor, in light of the evidence of other witnesses who dealt with her, and the exhibits where she sent communications which provided her title as a compliance advisor. The court does not consider the evidence on this point to detract from the overall credibility or reliability of Stephan Katmarian generally.

[167] Stephan Katmarian gave evidence relating to events after Kevin Wright, Erin Taylor and Isaias Medina left Peblik Inc.. He gave evidence which was consistent with the other evidence in the trial, that Chris Pay and Stephan Katmarian focused on making the software for the blockchain protocol functional. They had to change the project name as Kevin Wright did not agree to give the Peblik domain to Peblik Inc. They picked the name Argo. Mr. Katmarian was consistent, and elaborated in cross-examination that the process of creating the Argo token was akin to cloning the Peblik token. Kevin Wright did not contradict that evidence, and it is consistent with other evidence in this trial. The court also accepts the evidence of Stephan Katmarian with respect to the Capital Coin, which was consistent with an email from the chief coder at Peblik Inc., dated September 24, 2019, in Exhibit 37.

[168] Mr. Katmarian was asked about his role in being one of four people working on the response to the OSC questions, which form the basis of Count 2 in this trial. This process took place over ten or twelve meetings with the four people, to create the response. He testified that the goal was to answer the questions transparently. This evidence is consistent with the evidence of Kevin Wright and Gary Sugar. It is uncontradicted. Although this offence does not require a mens rea element per se, it is an important finding of fact which the court makes in considering the evidence. Stephan Katmarian testified that the answers provided to the OSC were responsive, truthful and completely accurate. He explained the reference to Peblik Limited instead of Peblik Inc., as being

there for some reason, although he indicated that those two corporations, together with Peblik LLC, were for all practical purposes the same entity for the purpose of this enquiry and response.

[169] Overall, the court rejected the evidence of Stephan Katmarian regarding the consent of Cadillac Ventures, and the existence of any written transfer agreement between Cadillac Ventures and Peblik Inc. regarding the original earn-in option agreement. As noted above, Mr. Katmarian contradicted himself, and was unreliable in this area. The court found the evidence of Norman Brewster on this issue very credible and reliable and accepts it as fact below.

[170] As it relates to his testimony regarding dealings with Walter Heidary and information provided to Walter Heidary the court finds, as noted below, the evidence of Walter Heidary to be very credible and reliable. Where the testimony of Stephan Katmarian differs from Walter Heidary the court accepts the testimony of Walter Heidary as being more credible and reliable. It is clear that Mr. Katmarian’s memory regarding what he told Walter Heidary and what he gave Walter Heidary is not that good when it comes to some details, which affects the reliability of that evidence.

[171] Where Mr. Katmarian’s evidence differs from Kris, such as it relates to instructions for making distributions and obtaining investment funds, Mr. Katmarian was very motivated to ensure that this was done properly, given the need to remain within the parameters of the private issuer exemption. The court accepts the evidence of Stephan Katmarian as very credible and reliable in that area, and as noted below, rejects the evidence of Kris. The court has outlined the concerns with the testimony of Kris noted below.

[172] As it relates to other areas of testimony of Mr. Katmarian, the court found the balance of his testimony to be largely credible except where the court specifically notes concerns, in dealing with specific issues. The reliability of his evidence depends on his memory and his attention to detail.

(2) Norman Brewster :

[173] Mr. Brewster gave his evidence in a forthright manner, and his testimony was internally consistent and consistent with the documents filed as exhibits in this trial. He did not contradict himself.

[174] The court has considered his evidence below under the Section E dealing with Ownership and Interest in the Thierry Mine.

[175] Mr. Brewster was adamant and steadfast in his evidence, that Cadillac Ventures never consented to nor was even approached by anyone to consent to the assignment of the earn-in option that Cadillac Ventures had given to Northern Fox. He had no knowledge that Northern Fox on its own had assigned its option to Peblik Inc. . Although he knew about the fundraising efforts in relation to tokens for Peblik Inc. he assumed it was a project of Northern Fox in an effort to raise funds to comply with the Cadillac

Ventures and Northern Fox earn-in option obligations. He was not shaken in cross- examination. He admitted matters against interest, including his knowledge about the general concept of Peblik Inc. doing a token offering to raise money. He was copied on an email from Mr. Katmarian, advising that the initial use of proceeds of the Peblik token offering would fund the monies required to be spent on Thierry Mine for resources expansion. Although there was an attachment of the Peblik Inc. White Paper, which referred to currently having a significant reserve asset of up to USD $4.8 billion, Mr. Norman Brewster explained in his evidence that he did not understand crypto currency. He had no memory of receiving this White Paper nor the Peblik Fast Facts. Mr. Brewster testified that he understood that the funds were going into Northern Fox, and Northern Fox would expend those resources on the Thierry Mine to fulfil its obligations. In cross examination, Mr. Brewster confirmed that he would not be concerned where Northern Fox obtained funds, as long as it made its obligations to Cadillac Ventures. Further, if it was funded by Peblik Inc., Mr. Brewster testified that would not be a concern to him as long as it was done in a format that complied with the agreement Cadillac Ventures had with Northern Fox. At one point in cross examination, Mr. Brewster testified that he thought the idea of Peblik issuing tokens to raise money, relying upon Northern Fox’s earn-in option with Cadillac Ventures for the Thierry Mine to base their offering to the public was a brilliant strategy. Mr. Brewster admitted that he did not object to this procedure. When asked about that, Mr. Brewster understood they were doing that, but he testified that “they did not have an agreement”. The court understood his evidence to relate to the absence of an agreement between Cadillac Ventures and Northern Fox, nor between Cadillac Ventures and Peblik Inc. to assign the Northern Fox earn-in option with Cadillac Ventures, to Peblik Inc. When asked in cross-examination about the Investor’s Deck for Peblik Inc., as far as the token offering, he indicated that the concept was brilliant, and that if it was going to advance the possibilities of Northern Resources to fulfil its commitment to Cadillac, that was fine with him.

[176] It was evident through the testimony of Mr. Brewster that he did not really understand the role of Peblik Inc., other than being marketed in order to raise funds for payments to comply with the terms of the earn-in option agreement, which had been entered into by Cadillac Ventures and Northern Fox Resources. Mr. Brewster was an advisor on the Peblik project, but in his evidence he saw his role as to advising on the expenditures on the Thierry Mine to comply with the earn-in option agreement. He readily admitted that he did not understand the block chain or the Peblik token system that was attempted to be launched.

[177] On August 9, 2018, Stephan Katmarian sent an email to Norman Brewster and representatives of Minroc, attaching a Peblik Investor Deck. Mr. Brewster understood that they were trying to use tokens to secure them with commodities, but he did not understand how a blockchain nor crypto currency works. In this Investor’s Deck, it made reference to the Thierry Mine, a USD $4.8 Billion mineral reserve having Canada’s largest underdeveloped copper deposit. He testified that he would have looked at this material. In cross examination, Mr. Brewster was asked about numerous members of the Peblik leadership team advisors and management, most of whom he did not know. Mr. Brewster was listed as part of the advisory group (although as set out elsewhere, this was he testified in reference to his role in advising regarding expenditures for the Thierry Mine, which was pursuant to the original earn-in option agreement). He had met Mr. Sugar, the

lawyer for Peblik Inc.. He was not familiar with Erin Taylor. He knew Mr. Katmarian, he had met Kevin Wright, and he testified he might have met Christopher Pay.

[178] Mr. Brewster was shown the 43-101 Technical Report, from Exh. 15, Tab A, being the requirement for a regulatory body, pertaining to the Thierry Mine. It was prepared by Minroc Management, for Northern Fox Resources, effective April 12, 2017.

[179] In cross examination, Mr. Brewster agreed that under the earn-in option agreement, one of the parties (Cadillac Ventures or Northern Fox Resources) could not unilaterally encumber the property with a mortgage or security interest, nor lease the property, nor carry out work programs without the other party. Under the agreement, Cadillac Ventures would be the operator and execute the exploration programs until the optionee (Northern Fox) earned their interest. If an off-take agreement was negotiated or became available during the option, until the interest was earned by Northern Fox, Cadillac Ventures would negotiate on behalf of both parties.

[180] He readily admitted matters against interest, such as his knowledge that Stephan Katmarian was attempting to raise funds through Peblik Inc. to pay for the obligations of the earn-in option with Cadillac Ventures for the Thierry Mine. He was clearly someone who knew Stephan Katmarian for a very long time, and he had done business with him, not only in connection with the facts in this case, but in other situations as well. He was not contradicted, and withstood a pointed and penetrating cross-examination. He was questioned about his knowledge, and potentially consent by Cadillac Ventures, to the assignment by Northern Fox of the earn-in option interest assignment agreement to Peblik Inc. He was steadfast in maintaining his evidence that Cadillac Ventures at no time agreed to this assignment from Northern Fox to Peblik Inc., nor did Peblik Inc. have any agreement with Cadillac Ventures to take over this earn-in option interest assignment agreement. He also admitted that he had received the Investor’s Deck for Peblik Inc., which indicated that Peblik Inc. currently has direct control via an earn-in option of our first asset, an advanced stage USD $4.8 Billion mineral deposit in Canada. He acknowledged that he understood that Peblik Inc. was talking about the Thierry Mine, but he was not sure “how they get there”. He admitted that he did not object to this procedure, that the concept was brilliant and that if it was going to advance the possibility of Northern Fox to fulfil its commitment to Cadillac, that was fine to him. It is notable that through his testimony, his position was that he was working in the offices and had some knowledge as to there being Peblik tokens to be issued to raise funds for the Thierry Mine. Clearly, this court would find, he was of the view, given his evidence, that Northern Fox and Peblik Inc. were somehow aligned. He understood that Peblik Inc. was essentially raising funds for Northern Fox, and that this would assist Northern Fox and as a result would assist Cadillac Ventures, in being able to comply with the obligations of the original earn-in option agreement. He was not challenged to any notable degree in terms of credibility and reliability.

[181] The court finds the evidence of Mr. Brewster to be very credible and reliable, and relies upon it in making findings of fact. The court accepts the evidence of Mr. Brewster and rejects the evidence of Stephan Katmarian where the two versions diverge, such as the existence of any consent by Cadillac Ventures to Northern Fox transferring its earn- in option interest assignment agreement to Peblik Inc. and whether there was a written

agreement between Cadillac Ventures and Peblik Inc. for the transfer of the earn-in option interest assignment agreement.

(3) Suganthan Krisnarajah (Kris) :

[182] Suganthan Krisnarajah was referred to by all of the witnesses in the trial as “Kris”. The court understands that this is how he wished to be referred to during the time of the allegations. He was, at the time of the trial, the president of a printer company. He had an elementary school education from Sri Lanka, and he was “self taught” to use his words. He considered himself to be an entrepreneur. He was the President of a group of business people, that became a corporation, which is the Firm Group, for a relevant period of time. This group included Suman Pushparajah (Suman, who joined the Peblik Inc. board with Kris), and five other friends and associates. His involvement with the Firm Group ended badly when he walked out of the organization, but the date of that event is not clear. It seems that it was around the time that Kris also lost interest in Peblik Inc. and stopped participating in that company.

[183] While Kris admitted that he “had some paperwork with Northern Fox” he stated that he was involved with the crypto at Peblik Inc. Significantly, Kris did not invest any of his money in either Northern Fox or Peblik Inc. . (It is important to note, however, that he was involved in investments in this case, by approaching his neighbour, Daniel West. This culminated in investments by Daniel West in both Northern Fox, and later in Peblik Inc.) Daniel West was, on the evidence in this trial, the only investor involved with Kris in this trial.

[184] In cross-examination, Kris admitted that he has a “criminal record”. He was convicted in 2009 for credit card fraud, break and entry and possession of fraudulent documents, although counsel did not lead in evidence the sentence that had been imposed for those findings of guilt. As a result, the court does not know if he had “convictions”, and a “criminal record”.

[185] Kris did not appear as forthright as the court would hope to see in a witness. He seemed somewhat disinterested, at the trial, in remembering much of any relevance regarding events during the relevant points in time. While he and Suman were obviously quite excited and interested at the early stage of involvement with Mr. Katmarian, Mr. Wright and Peblik Inc., it appeared that the interest waned over time. The evidence is clear that there were disagreements between Kevin Wright and Kris. Kris admitted that he and Suman had been given instructions for doing the investments by Stephan Katmarian, but in his testimony he indicated he does not know what is meant by the family, friends and business associates exemption, nor the accredited investor exemption. Kris admitted that there was a discussion about friends and family. He seemed reluctant to admit that Mr. Katmarian, Mr. Wright and occasionally Chris Pay, had explained the types of people who could be approached for these investments, as they had been instructed. He just wanted to focus on the pressure that he felt to bring in investments. He appeared disinterested during the trial as it related to categories of appropriate investors, and various questions posed by counsel.

[186] Kris seemed confused about the nature of the investment. At one point he testified that the investments were only in Peblik Inc. However, he obtained investments from his close friend and neighbour Daniel West, that were firstly in Northern Fox, and then later in Peblik Inc. He did not seem to distinguish between the two companies at some points in his evidence.

[187] Kris acknowledged that Stephan Katmarian told them that everything “was in the White Paper”, to give that to investors and it would explain it. He was shown the four page colour White Paper for Peblik Inc. which is in Exh. 18, Tab 1. This is also referred to in the trial as the Fast Facts for Peblik Inc. It is a shorter version of the Peblik Inc. White Paper. It was also described as the executive summary of the White Paper. Kris responded that he recognizes this because he believes that this was one of the first versions of the website as well. (There is no evidence in this trial that the first version of the Peblik Inc. website looked like that.) Then Kris said that the White Paper was bigger, with more substance. Kris testified that he understood that the mining resource was the Northern Fox mine, which had the copper reserve. Kris’ evidence was somewhat unclear as to whether he shared this White Paper with the other members of the Firm Group to share with investors. At one point he said “yes, might have”, then later said there were a lot of documents, “I for sure shared it with the group, Firm Group”.

[188] Kris had the subscription agreement he could give to investors, but he never read it. He admitted that he never bothered to read the Peblik Inc. White Paper. He did not read the Peblik Inc. private investor summary, nor the subscription agreement that had been sent to him by Kevin Wright, to he and all of the other Peblik directors. He did not read the Peblik Inc. website. He did not seem to remember numerous emails in evidence that were sent to him and other directors of Peblik Inc. Kris admitted that he stopped reading things and attending meetings for Peblik Inc. He stopped reading emails.

[189] At times, Kris admitted that he was a director of Peblik Inc. At other times, he denied that he had been a director. This is a fundamental aspect of his evidence, and the clear contradiction in his testimony raises serious concerns about his credibility.

[190] Prior to a March 21, 2018 meeting with Mr. Wright, Mr. Katmarian, Kris and Suman, Kris and Suman had collected investor funds. They kept them for awhile, without turning the funds over to Peblik Inc. Kris testified that at this point, they were pressured to bring in these funds. Kris also admitted that he had withheld subscription agreements signed by investors. At one point, May 1, 2018, Mr. Medina, on behalf of Peblik Inc., requested the return of twenty subscription agreements held by Kris, in order to comply with Ontario Security regulations. Kris said he never saw that email. Kris did not hand in the subscription agreements requested by Mr. Medina.

[191] There was animus evident in his evidence, as between Kris and Kevin Wright and Stephan Katmarian. He testified that they did not disclose everything that was happening. He testified that sometimes Kevin Wright spoke and Stephan Katmarian sat there and said nothing, which led Kris to infer something nefarious about Mr. Katmarian. Kris was clearly upset that a promised token allotment was rolled back.

[192] Over time, Kris had disagreements with his partners at the Firm Group, and he left that group. When his friend Daniel West lost money from the investments he made that

had been recommended by Kris, Kris reimbursed him for those losses with his personal money.

[193] After being an active director with Suman in Peblik Inc., Kris appeared to lose interest and he stopped attending the board meetings and other meetings. He indicated that he was frustrated by the failure of Peblik Inc. to return subscription agreements initially signed by investors, which would have been signed by Peblik Inc. He appeared frustrated with Stephan Katmarian, and what he perceived to be undue pressure Stephan Katmarian put on Kris and Suman to bring in investment funds for Peblik Inc. As it related to that pressure, Kris seemed prone to potentially exaggerate the nature and amount of pressure. The court finds that this was pressure to submit investor funds that had been gathered, but not turned over, as opposed to pressure to go out and find a lot of new investors.

[194] Overall, the court was not impressed with the testimony of Kris. He seemed somewhat disengaged, being of the view that this was an investment, and a series of events in his life that he had put behind him. Perhaps that was motivated by the parallel breakdown in his role as President in leading the Firm Group, which took place at around the same time there were investments in Peblik Inc., and problems at Peblik Inc. It seemed to the court that he was not motivated to remember details, and that he was somewhat loose and careless with the way in which he recalled and related what had taken place. In particular, the court found that his testimony regarding Stephan Katmarian, Kevin Wright and others at Peblik Inc. making various comments about getting investments to be somewhat dramatic and exaggerated. There is no doubt that there was an initial arrangement for Kris and Suman, and the Firm Group to join Peblik Inc. as founders. The agreement involved a sharing of knowledge, experience and resources, and an offer that the Firm Group would bring in investment money. While the Firm Group, and Pigeon Forge, did work for Peblik Inc., they rendered invoices and were compensated for the work when there was money available. For whatever reason, it is clear that the Firm Group either was not able, or not willing, to make investments as a single investment from the corporation Firm Group as they had undertaken to do in early stage discussions with Stephan Katmarian and Kevin Wright . Instead, the directors were individually trying to deliver this commitment for investment, but they did it in a piecemeal manner. Kris, as can be seen from his conduct in dealing with his close friend Daniel West, was simply not engaged at this time. Kris did not read the material, or do research one would expect in the recommendation of an investment to a close friend. Then, at a certain point in time, Kris just walked away from everything, the Firm Group, and his involvement at Peblik Inc. even though he remained a director. He simply stopped participating in the business.

[195] The court has considered concerns with aspects of his testimony stated above in the reasons. In all of the circumstances, the court found his testimony to be lacking in credibility and reliability, and the court looks to other credible and reliable evidence regarding findings of fact related to Kris. Where other credible and reliable evidence contradicts the evidence of Kris, the court accepts the other evidence.

(4) Kevin Wright :

[196] In stark contrast to what appeared initially to be a very good working relationship, Kevin Wright and Stephan Katmarian were at odds with each other in the final months that they worked together at Peblik Inc. as directors. One (Stephan Katmarian) wanted the coin to be minted, and the other (Kevin Wright) felt that the concerns regarding compliance issues dictated that the coin should not be minted. This was the fundamental issue for the Peblik Inc. company at the end of 2018, and into 2019. It also happened when the company appeared to be short on funds to pay for any US lawyer to assist in launching the Peblik Inc. coin in the United States. Kevin Wright stopped coming to work. Stephan Katmarian was instrumental in having Kevin Wright removed as CEO. Later it seems that Stephan Katmarian and Kevin Wright voted on opposite sides of a proposed token rollback proposal. The ultimate sign of the breakdown in their relationship was when Kevin Wright was removed as a director of Peblik Inc.

[197] There does not seem to be a challenge to the credibility or reliability to the evidence of Kevin Wright in this case. It is ironic, this court would note, that both Commission and defence counsel seek to rely on various aspects of the testimony of Kevin Wright in the positions they advance before this court. Nonetheless, the court needs to consider whether his testimony is credible and reliable, or not.

[198] Having made that observation, the court notes the following. From time to time, Kevin Wright seemed to be somewhat careless in details in giving his evidence. For instance, when questioned about the role of Norman Brewster and Cadillac Ventures, both in terms of the work done by Kevin Wright and his partner, he seemed to throw Norman Brewster and Cadillac Ventures in the categories of work being done for Northern Fox and Peblik Inc. They were very distinct, the court would note, on the evidence. Kevin Wright was retained to do work for Northern Fox, and he was involved in doing work for Peblik Inc. He was not retained nor was he doing work for Norman Brewster or Cadillac Ventures, and at a later point he modified and clarified this evidence. The reference for this includes his testimony regarding the Confidential Offering Memorandum for Northern Fox dated March 26, 2018, shown in Tab 5 of Exhibit 17. Secondly, he seemed to generalize knowledge that by virtue of Norman Brewster working in the Peblik Inc. offices, he would have known about the assignment of the earn-in option from Northern Fox to Peblik Inc. There was no evidence which Kevin Wright identified as the source of that generalization. While Norman Brewster was aware of the Peblik token idea to raise funds, and while he seemed to be of the view that Northern Fox and Peblik Inc. were associated, with Peblik Inc. raising funds for Northern Fox for the Thierry Mine, there is no evidence from Mr. Wright to substantiate that Norman Brewster nor Cadillac Ventures knew or consented to the transfer of the earn-in option interest from Northern Fox to Peblik Inc. Thirdly, Kevin Wright testified that Norman Brewster was active in the Peblik Inc. business. He seemed to extrapolate that inference based on the role of Norman Brewster in the office to ensure that the technical requirements of various work products that were due, and obligations that Cadillac Ventures had to fulfil for exploration and permits. These were obligations pursuant to the original earn-in option interest assignment agreement between Cadillac Ventures and Northern Fox, and were not the obligations of Peblik Inc. as overseen by Norm Brewster. The court would note that the role of Norman Brewster in the offices was as described by Stephan Katmarian, as being on the

committee to decide where funds paid for compliance for this agreement should be spent, he was the person making those decisions for the Thierry Mine. This in no way properly supports an inference by Kevin Wright that Norman Brewster was involved in the business of Peblik Inc., and this lack of attention to detail in the evidence of Kevin Wright is shown in this regard. Overall, the court found that Kevin Wright was careless in relating the involvement of Norman Brewster in the office, and finds that the testimony of Kevin Wright to be unreliable as it relates to Norman Brewster.

[199] In addition, Kevin Wright was reluctant to admit his role and actions regarding the Peblik Inc. domain. There is no doubt that he had the “Peblik” name that was used for the Ontario corporation previously created by Stephan Katmarian. He agreed that this name would be used for the Ontario corporation that became Peblik Inc. As time went on, Kevin Wright maintained that domain account in his GoDaddy account. Yet, Kevin Wright was reluctant to admit, in the final stages of his time with Peblik Inc. in early 2019, that he refused to turn over the domain to the Peblik Inc. company. He maintained that the control of the website was with others at Peblik Inc. Yet, at the end of the day, the court finds that it was clear that he thwarted efforts by Stephan Katmarian and others that remained at Peblik Inc., to regain control over the website. As a result, Stephan Katmarian testified he had to take steps to create an alternate company to advance what had been the idea for the Peblik tokens, although through a different company and a different coin name. The court finds that Mr. Wright was not credible at all with respect to his role regarding the Peblik Inc. domain, the website, and control of the Peblik Inc. name. This cast a dark shadow over his credibility and reliability as a witness in this trial.

[200] There is also evidence throughout this trial that Kevin Wright was known to have consumed a lot of alcohol at work. He admitted that he had issues where he said things he should not have said, such as to Kris the former director of Peblik Inc. Stephan Katmarian testified that Kevin Wright did things he should not have done, and said things he should not have said, that seemed related to Kevin Wright’s consumption of alcohol. This would have a notable impact on the reliability of the recollection of Kevin Wright with respect to relevant events at Peblik Inc. during key points in time. While the court does not reject the evidence of Kevin Wright, the court considers it with caution, given the court’s concern about his lack of attention to detail in terms of memory and giving testimony, and his potential lack of reliability arising from regular consumption of alcohol in the workplace.

[201] As a result, the court has concerns about the testimony of Kevin Wright. While the court does not totally reject his evidence, the court considers it very carefully in terms of credibility and reliability, and seeks to compare it to other credible and reliable evidence on various issues before making any findings of fact relative to its content.

(5) Erin Taylor :

[202] It is important for this to consider the credibility and reliability of Ms. Erin Taylor. Her credibility was vigorously challenged by the defence. The court found Ms. Taylor to be difficult as a witness at times, and argumentative. She was particularly difficult as she was questioned about her role at Peblik Inc. as it related to compliance. She at times, in

the evidence and exhibits, referred to her role in compliance, and legal. She is not a lawyer. She stated numerous times that she is not licensed or qualified to act as a chief compliance officer. Yet she promoted herself in the exhibits, and the witnesses in this trial, as someone who did compliance work for Peblik Inc. Although she admitted at times that she was a compliance advisor, she also testified that she did not have a licence or insurance to give compliance advice. At one time she admitted she was a compliance advisor at Peblik Inc., yet at times resiled from that admission. At one point she admitted that it was her responsibility to make sure that the right things are done in the right time line, to assist the group at Peblik Inc. to make sure they can move the project along correctly, and giving access to the best professionals. While she denied that her focus at Peblik Inc. was on compliance, she at times admitted that she used that title in work emails. She also described herself as a project manager, although there is no evidence as to anyone at Peblik Inc. ever giving her that title. Her overall position was that she would hire people to do the compliance, anti money laundering and crypto work at Peblik Inc. At one point, in a particularly condescending aspect of her evidence, she testified that she was a “guidance counselor” working between the directors that were constantly in dispute, referring to Stephan Katmarian and Kevin Wright.

[203] When she was asked about writing the content of various emails that suggested her greater role in Peblik Inc., she virtually on each occasion denied she had written them and testified that someone else had written it, she had just sent it along. That seemed to be a constant rebuttal to questions when her emails suggested her greater role that she wished to minimize in Peblik Inc. The theme was that she was just sending things along, not suggesting the ideas. At other times she admitted that her emails were her thoughts and ideas. For instance, when asked about Exh. 25, p. 83 and an email where her position regarding the Peblik Inc. lawyer Gary Sugar repeating her idea, that an LLC was preferable, referencing shell companies and tax advantages to incorporating Peblik Inc. and a holdco in Guernsey, or the Channel Islands instead of Barbados, she denied that she was giving advice to Peblik Inc. (which Gary Sugar was repeating and crediting as having come from Erin Taylor). Rather, she stated that it was common knowledge about digital assets at the time.

[204] She was asked numerous questions, particularly in cross-examination about the nature of her position at Peblik Inc. as shown in a contract. There was a draft contract, which she at times said she never signed. Then she testified that she signed it but it was meant to be changed, from her point, with submitted comments to modify the contract. She seemed to suggest that counsel who questioned her did not have the latest version of her contract with changes. Throughout a lengthy period of time when she kept saying that counsel had the wrong contract, she made no mention of the fact she was holding in front of her, while testifying on zoom, the current and latest form of the contract. It was not apparent that she was reading and answering questions from something not possessed by counsel.

[205] She contradicted herself about whether she only went to one Peblik Inc. board meeting, February 11 of 2019, or if she had attended multiple board meetings.

[206] She contradicted herself as to when problems began at Peblik Inc., with the disputes, which she referred to as between Stephan Katmarian and Kevin Wright. At

times she said it was the beginning or middle of 2019. At another point she testified it began in July of 2018. She failed to admit facts that she should have known. For instance, she stated that she did not know the directors for Peblik Inc. Yet she read the White Paper which set out the names of the directors, although all were called executive directors.

[207] Although she sought a contract for payment for her work at Peblik Inc., she testified she was a volunteer advisor. She also said she was an intern that had no function or decision making role at Peblik Inc.

[208] She contradicted herself in terms of reading materials and knowing what was in the materials she had read, including materials she presented on behalf of Peblik Inc. at a public conference. Her evidence was also very odd in relation to the whole project, as she constantly referred to the magnesium mine, when it was referenced in all of the materials as primarily a copper mine, with the significant value in the copper.

[209] She seemed to ask for payment in tokens for her work at Peblik Inc., yet refused to admit that in emails she was asking for same, which was evident in the plain wording in the emails she wrote.

[210] Ms. Taylor seemed to engage in revisionist history, in the sequence of events she related to the court. For instance, she related that she had suggested there should have been an escrow treatment of investment funds, which was raised as an idea long after the funds were received. Obviously if the funds were to have been held in escrow that should have been raised as an idea prior to or at the time of receipt of funds.

[211] Overall, the court found Ms. Taylor to be lacking in credibility and reliability. The court found her to be an untrustworthy witness, and would not accept her evidence unless it is confirmed by other credible and reliable testimony, or exhibits.

(6) Albert Ciorma :

[212] The OSC called its accountant, Albert Ciorma, to give evidence. He was not qualified as an expert. His evidence was confusing, and the court is somewhat troubled by the credibility and reliability of his evidence.

[213] The confusion arose from his error in misallocating two particular investments. This resulted in various changes and substitutions of material at various tabs. The commission filed supplementary material to replace what it had filed minutes earlier, for the actual report, material at Tab 5, Tab 6, Tab 9 and Tab 10A. It is obvious that this is not a proper or useful way for the Commission to present evidence in this court, and it has caused undue confusion in trying to sort out the proper evidence. The commission should have simply asked Mr. Ciorma to re-do the materials. Then the Commission could have presented the evidence in a proper fashion, rather than this confusing method that was employed in what is already a complicated case. He clearly mixed up some of the relevant entries for the Peblik Inc. bank accounts and then he had to prepare new tabs of

various sections of his report. Then the Commission put both versions before the court, for some reason.

[214] The court has a much greater concern with his evidence. He was confronted in cross examination with an additional mistake he made in reciting what he knew were the facts. He had stated that members of the public were approached and sold investments, either directly or indirectly, in the Peblik Inc. initial coin offering. This was wrong. There was no evidence of that scenario in this trial. It is not entirely clear where he obtained that information. It is apparent that he does not know the difference between a coin offering and a convertible note, as described in a subscription agreement. This is knowledge the court would expect from an accountant employed at the Ontario Securities Commission. He admitted the mistake in cross-examination. However, he refused to amend his report to remove a clear misstatement which is on a significant issue. This is not the type of conduct the court expects from a witness called as an accountant in a case of this nature.

[215] There were also limitations to his evidence. For instance, Mr. Ciorma did not do any audits and he did not look into whether the payments to JAAM Capital (Kevin Wright’s company) were for Peblik Inc. expenses. He did not look into whether the payments to Stephan Katmarian in his personal capacity or to any of his companies, were for any expenses for the startup of Peblik Inc.

[216] The court has no other financial or banking evidence before the court. As a result, while the court needs to rely upon this evidence, the court is somewhat guarded in its reliance on what may not be totally reliable evidence.

(7) Gary Sugar :

[217] Mr. Sugar was the lawyer for Northern Fox, and later for Peblik Inc. on various issues. At the time of trial, he testified he was pretty much retired. Formerly, he was a practicing corporate securities lawyer. He has a B.Sc., LL.B. and M.B.A. At the time of the events in this trial, he had established GMS Law Professional Corporation. Prior to that he was a founding partner of a nine lawyer Bay Street securities law boutique firm. Prior to that he had six years experience as general counsel for a mid-market investment dealer and for an industrial conglomerate, with businesses in marketing, media, software development and investment funds. Overall he was a corporate securities lawyer with over 30 years experience counselling clients through private and public fundraising, regulatory compliance matters, corporate commercial transactions and investment fund development. Brendan Purdy was also a lawyer who was experienced in securities and was hired by Peblik Inc. for certain issues.

[218] Mr. Sugar was a witness who did not remember various details regarding a number of questions that were put to him in the trial. Perhaps that is not surprising given that he is currently retired, and the events were approximately five years ago. Given the solicitor client privilege issue in the background of this trial, there was not what this court would characterize as a free-ranging examination in chief (by OSC counsel) nor by defence counsel. He was called primarily with respect to his role in drafting the response letter to

the OSC, relevant to Count 2 in this trial. Despite the way his evidence was characterized by OSC counsel in submissions, his evidence was clear that the answer to 2(c) related to proceeds from the sale of tokens.

[219] Overall, neither party challenged his credibility or reliability. The court finds that he admitted when he did not recall matters, and he did his best to assist the court with accurate answers, with the greatest amount of detail he could recall at the time of his testimony. The court found his evidence to be credible and generally reliable and accepts his evidence.

E. OWNERSHIP AND INTEREST IN THE THIERRY MINE :

[220] Cadillac Ventures is the party at all relevant times in this case, that had the leases for the Thierry Mine, which is akin to ownership of the Thierry Mine for the purposes of this case. The court is fully cognizant of all of the qualifications around ownership of the leases for the mine, as distinct potentially from ownership of the land on top of which the mines are located.

[221] Norm Brewster, as a director, and the CEO of Cadillac Ventures, testified that Northern Fox never owned a percentage of Thierry Mine at any time, it only had a right to acquire, pursuant to the earn-in option interest assignment agreement discussed below. Similarly, Peblik Inc. never owned a percentage of the Thierry Mine, only possibly a right to acquire an interest, should it have acquired a subsequent valid earn-in option interest assignment agreement. Ownership would not pass from Cadillac Ventures to any party with a valid earn-in option interest assignment agreement unless and until all of the commitments under the relevant earn-in option agreement were completed. That never happened, at any time, during the period of the offence.

[222] In this case, there was a proposal between Cadillac Ventures and Northern Fox, referred to in the Background, which included a clause which represented that Northern Fox “is a company that has an ability to raise capital for this project”. Following that proposal, Cadillac Ventures entered into an earn-in option interest assignment agreement with Northern Fox for this mine, on July 19, 2016. This was the original earn-in option interest assignment agreement for the Thierry Mine. As noted throughout the reasons, there was an important requirement that Northern Fox comply with a budget to spend a great deal of money, USD $13.9 Million. The key term for this court to consider in this agreement is clause 9.7. In this agreement, Cadillac Ventures was the optionor (sometimes spelled incorrectly as optioner), and Northern Fox was the optionee (which was the party acquiring the interest.) This clause provided :

“9.7 Optionee may sell, assign, transfer or otherwise dispose of the whole or any part of its interest hereunder at any time upon consent of the Optioner [sic, spelling] which consent shall not be unreasonably withheld, provided that any such sale, assignment, transfer or other disposition after the payments in sections

1.1 to 1.3 have been made shall carry the rights, and shall delegate and make the interest subject to, all the liabilities and obligations of the Optionee under this Agreement. Each transferee of such interest shall, by written agreement with

and for the benefit of the Optionor, assume and agree to pay and perform such liabilities and obligations. Such assumption shall not serve to release or discharge the Optionee from any of the said liabilities and obligations thereto accrued with respect to the interest or portion thereof being transferred, but shall release and discharge Optionee from all of the said liabilities and obligations thereafter accruing with respect to the interest or portion thereof being transferred.”

[emphasis added]

[223] As noted above, in the midst of the term of the original earn-in option agreement, which included clause 9.7, on August 1, 2017, and without the participation of Cadillac Ventures to the agreement, there was an earn-in option interest assignment agreement between Northern Fox and Peblik Inc., as set out in Exhibit 8, Tab 1B. This agreement was signed by Michael Paul for Northern Fox Ventures Inc. and Stephan Katmarian for Peblik Inc. The court is fully aware that there were three versions of this earn-in option interest assignment agreement between Northern Fox and Peblik Inc., all of which were signed, and all of which were dated as of August 1, 2017. One version was given to Kevin Wright, and put in evidence. The other two versions were submitted by Stephan Katmarian to the Commission. There is no evidence as to which of the three versions is the correct or valid version. There were notable differences between the three versions, but none of those differences are relevant to the court’s consideration of this issue.1

[224] There is also from the understanding of the court, no difference in how it relates to the offences before the court. It is odd that the parties appear to have executed three versions of an agreement without distinguishing the valid version from the non-valid

1 Mr. Katmarian agreed that all three versions of the earn-in option interest assignment agreement between Northern Fox and Peblik Inc. are dated as of August 1, 2017. The document versions do not reflect the actual date that the documents were signed. One version was at Exh. 20, Tab 11. The other two versions were those that Stephan Katmarian provided to the OSC, and they are set out in Exh. 8 at Tabs 1A and 1B. Stephan Katmarian agreed that his signature, and his initials were on all of the pages of the document. Stephan Katmarian was asked how it was possible to have three different versions signed by Stephan Katmarian and Michael Paul as of the same date. He stated that the agreements were materially the same and that the differences were some relatively minor clauses. He then went on to say “this is a pure speculation”, that maybe they decided to add a clause and resigned it. He said it is a mystery to him. Stephan Katmarian did not know which of the three versions is the valid version. All three versions provided in clause 1.2 that 120 million Peblik tokens would be provided to Northern Fox at the appropriate time. One version, which Mr. Wright testified Stephan Katmarian had given him, had in clause 1.2 that if Peblik Inc. defaulted on the USD $14 million work program, that Peblik Inc. shall issue Northern Fox a USD $4 million first charge promissory note bearing 9% interest. The version of this agreement at Exh. 8 Tab 1A provided that in that event there would be a USD $2 million first charge promissory note, with the same interest. The version in Exh. 8 Tab 1A made no provision for a promissory note to be issued.

The version in Exh. 20, Tab 11, had a unique clause, 1.4, not in the other two versions, that provided that Peblik Inc. upon completing its USD $14 Million work program, might elect to convert its earn-in option interest assignment agreement into shares of Northern Fox at a rate of USD $0.50 or at market at its option. Stephan Katmarian maintained that this clause worked to the benefit of Peblik Inc., because it was at its election, in the event that the Northern Fox company did better than the Peblik Inc. company.

There was also a clause 3.3 in versions Exh. 8 Tab 1A, that provided for the “length of the agreement”, as compared to the longer term in Exh. 20, Tab 11 “for an additional 20 years”, that Northern Fox would have at least 20% representation on the Peblik Inc. board of directors.

versions. At one point in the cross examination, Stephan Katmarian denied the suggestion of the OSC that the agreement was changed, ostensibly retroactively, in light of the changing circumstances at Peblik Inc. There is no evidence to support this suggestion.

[225] Upon being questioned as to the meaning of the reference that Peblik Inc. currently had a significant reserve asset, Stephan Katmarian testified and maintained that is not saying it owned the mine, that if it wanted to say it owned the mine it would have said so. Stephan Katmarian said the “asset” was the earn-in agreement.

[226] Interestingly, this agreement had attached to it the full original earn-in option agreement between Cadillac Ventures and Northern Fox dated July 19, 2016, together with the schedule of the description of the Thierry Mine, and the original project spending budget of USD $13.9 Million. The assignment agreement also had attached a project spending budget which revised the original agreement budget, totaling $14 Million. Peblik would take over the obligations of Northern Fox in the original earn-in option agreement with Cadillac Ventures. Peblik was to conduct the drilling and work program for the mine. Pursuant to this agreement, the optionee (Peblik) would acquire a 51% interest in the right, title and interest in the Thierry Mine, Northern Fox would have a 19% interest in the Thierry mine, and Cadillac Ventures would retain a 30% interest in the Thierry Mine (consistent with the 30% share Cadillac Ventures would have had from the original earn-in option agreement with Northern Fox Resources Inc). Norman Brewster, of Cadillac Ventures, testified that he was not aware that ownership of the mine was being apportioned in those amounts. Pursuant to this agreement, Peblik was to issue to Northern Fox 120 million tokens of its cryptocurrency under development by Peblik, free and clear. This was to be done as soon as was technically possible. In addition, Peblik was to pay Northern Fox, on a monthly basis, all operating, management, property, joint venture, earn-in and overhead expenses incurred by Northern Fox, including paying for a proposed listing transaction for Northern Fox securities on a Canadian or other exchange for Northern Fox. This reflected an intention of Northern Fox to take the company public at that time.

[227] But was this a valid transfer of the assignment of the earn-in option interest assignment agreement to Peblik Inc.? There is no doubt that Northern Fox had the right to assign or transfer its earn-in option interest assignment agreement in the Thierry Mine to another party, but only if certain conditions were met. The conditions are listed in clause 9.7 above, and are as follows :

(i) Timing. The interest cannot be assigned until the payments required in clauses 1.1 to 1.3 have been made. As set out in the Background above, those payments were made months before Northern Fox entered into its assignment, so that condition was met;

(ii) Any assignment must carry the rights and delegate and make the interest subject to all the liabilities and obligations of the optionee (Northern Fox) under the original agreement. This is no issue that essentially the terms of the Northern Fox assignment to Peblik Inc. complied with that requirement.

The court would note that it is worthy of consideration that this term provided that an assignment or transfer does not release Northern Fox from its liabilities and obligations that accrued up to the time of the assignment or transfer. However, on the clear wording of the clause, the transferee of such interest (in this case Peblik Inc.) was liable for (and Northern Fox was released from) any liability accruing after the date of the assignment or transfer. This is important as it would mean that Northern Fox was not liable for obligations accruing after the assignment to Peblik Inc.. Yet, as shown in the evidence in this trial, Northern Fox and Stephan Katmarian acted as if Northern Fox continued to be liable and continued to fund payments for the original agreement after the assignment or transfer to Peblik Inc.;

(iii) The optioner [sic optionor] Cadillac Ventures, must consent to the assignment or transfer, and that consent must not be unreasonably withheld. This clause does not state that the consent must be in writing. The court must make a finding as to whether Cadillac Ventures ever gave that required consent, and ;

(iv) The transferee (Peblik Inc.), is required to enter a written agreement with the optionor (Cadillac Ventures), for the benefit of Cadillac Ventures, to assume and agree to pay and perform such liabilities and obligations.

This would provide the right to Cadillac Ventures to enforce the agreement after any assignment, as against Peblik Inc. It makes sense, as the court considers the wording and intention of the parties, that the optionor Cadillac Ventures would have this degree of control over any assignment, which would relieve the original optionee Northern Fox after the assignment, who had originally contracted to do the work and make the payments. This agreement ties up the Thierry Mine, preventing Cadillac Ventures from dealing with it in other ways, including the ability to sell the mine. If a party came along and wanted to purchase the Thierry Mine from Cadillac Ventures, Cadillac Ventures would be unable to do so during the currency of a valid earn-in option agreement. Concurrently, prior to entering a written agreement with the transferee (Pebik Inc.) the owner or optionor would be able to potentially satisfy itself that the transferee had the ability to comply with the liabilities and obligations, including making the USD $13.9 Million payments for the development of the mine. In the original proposal, as noted above, between Cadillac Ventures and Northern Fox, there was a statement that Northern Fox “is a company that has an ability to raise capital for this project”. There was no evidence in terms of a communicated ability of the start-up company, Peblik Inc. to be able to make this representation. Instead, as noted in the evidence in this trial, there was the hope and expectation that it could launch a blockchain, and be able to raise funds through selling what is akin to tokens or coins for funding. As noted below, Peblik Inc. never succeeded in that goal.

The court must make a finding as to whether there was any written agreement for the transfer of this earn-in option interest assignment agreement between Cadillac Ventures and Peblik Inc., related to this requirement. There is in evidence no such agreement, although the potential existence of such an agreement was the topic of testimony in this trial.

[228] Essentially, the court must determine whether Cadillac Ventures consented to Northern Fox’s transfer to Peblik Inc. of an earn-in option interest assignment agreement in its Thierry Mine. Although it was the topic of dispute between the parties, the court interprets this consent provision, separately, as not requiring that the “consent” be in writing. If the “consent” was required to be in writing, clause 9.7 should have stated that requirement. The court agrees with that interpretation as submitted by the defence in this trial. The court finds that the consent by Cadillac Ventures to Northern Fox could have been given orally, although it was required to be a consent of Cadillac Ventures and not a consent by a person such as Norman Brewster. As noted below, the court finds that consent is separate and apart from knowledge, in law.

[229] Secondly, the court must determine whether there was a written agreement between Cadillac Ventures and Peblik Inc., wherein Peblik Inc. assumed and agreed to pay the liabilities and obligations of the original earn-in option interest assignment agreement between Cadillac Ventures and Northern Fox. This is based on the clear wording of the term. The court also notes that Stephan Katmarian agreed in his testimony that such an agreement is required and must be in writing. The court has considered, and rejected the defence submission that a written agreement was not required, for this provision.

[230] The court considers the evidence regarding these two issues, prior to making any finding on these important issues.

[231] In his testimony, Norm Brewster confirmed that this term required any transfer of the interest of Northern Fox in this agreement to another party, was to be done with the consent of Cadillac Ventures, and to be in writing with Cadillac Ventures. He specifically stated that Cadillac Ventures never consented to the transfer of the interest of Northern Fox in this agreement to any other party, nor was there any written agreement with Cadillac Ventures to transfer this interest in the agreement. In his evidence, Norman Brewster also specified that there was no consent by Cadillac Ventures to the selling, assignment, transfer or otherwise disposal of Northern Fox’s interest in this earn-in option agreement. This is very significant in the court’s consideration of whether Peblik Inc. ever had a valid interest in the Thierry Mine, on dates relevant to the issues in this trial. Mr. Brewster testified he was never asked if Cadillac Ventures consented to this assignment of the Northern Fox interest in the earn-in option agreement. This is very significant in the court’s consideration of whether Peblik Inc. ever had a valid interest in the Thierry Mine, on dates relevant to the issues in this trial.

[232] Mr. Brewster was adamant in his evidence, that Cadillac Ventures never consented to nor was even approached by anyone to consent to the assignment of the earn-in option that Cadillac Ventures had given to Northern Fox. He had no knowledge that Northern Fox on its own had assigned its option to Peblik Inc. Although he knew

about the fundraising efforts in relation to tokens for Peblik Inc. he assumed it was a project of Northern Fox in an effort to raise funds to comply with the Cadillac Ventures and Northern Fox earn-in option obligations.

[233] The court would note that when Mr. Brewster was asked about his understanding of the proceeds of the Peblik token offering of $14 Million into Thierry for resource expansions, he testified that he expected that the funding from Peblik Inc. would have flowed through Northern Fox into the prosecution of the work program as part of the earn- in agreement. He agreed that this would have been valuable for Cadillac Ventures, if the funds were placed in Northern Fox and they completed their obligations in the earn-in option agreement.

[234] In an email from Kevin Wright, JAAM Capital, to Norman Brewster and Stephan Katmarian on November 17, 2017, Mr. Wright made mention of a meeting that happened the day before the email. At some point, Norman Brewster believed he knew that Kevin Wright was chief executive officer of Peblik Inc. Mr. Brewster recalled meeting a few times, regarding Thierry Mine and Northern Fox’s relationship with Thierry and how it was going. He was aware that the companies (Peblik and Northern Fox and others) shared office space at one location. On Dec. 4, 2017, Mr. Brewster’s son-in-law Mr. Newton sent an email to Norman Brewster asking a question from Kevin Wright. Essentially he was asking about the price of copper and if it dropped below a certain value whether it would make the Thierry Mine uneconomic. Mr. Norman Brewster was on the advisory team of Peblik Inc. and he seemed to be aware that he was part of the marketing plan for Peblik Inc. He was the person most familiar with the Thierry Mine.

[235] Mr. Brewster testified that he was aware of Peblik, and that it was an affiliate, subsidiary or a parallel entity to Northern Fox. He knew that Stephan Katmarian was affiliated with Peblik. Mr. Brewster was considered an advisor, because of his role for Cadillac Ventures in controlling the expenditure program of the original earn-in option agreement. Mr. Brewster never invested in Northern Fox nor in Peblik Inc., nor was he ever an employee in Peblik Inc.

[236] Reference should be made to the portion of reasons dealing with the credibility of Norman Brewster for more detail regarding additional evidence regarding these issues. In that section, the court explains why it has at the end of the consideration of the evidence in this trial, found the evidence of Norman Brewster to be credible and reliable.

[237] It is important to consider the testimony of Stephan Katmarian regarding these issues. Some of this evidence is also repeated in the court’s assessment of his credibility, above. A key admission he made in cross-examination, which was another admission against interest that enhanced his credibility as noted in the credibility assessment above, related to his understanding of the clauses in this agreement. Specifically, he agreed that with his experience in founding companies and business and finance, he understood each of the clauses in the earn-in option interest assignment agreement between Cadillac Ventures and Northern Fox in 2016. This evidence from Stephan Katmarian is accepted by the court as credible and reliable, and it is significant in the analysis. This is the pivotal agreement which the court considers in relation to the issue relating to the validity of a subsequent transfer of the Northern Fox interest to Peblik Inc.. The court also considers the background of Stephan Katmarian, set out in the Background, which relates to his

extensive experience in dealing with the mining industry and earn-in option interest assignment agreements. He was previously involved in 50 or 60 earn-in option interest assignment agreements in mining. He had a comprehensive and very deep understanding of these agreements and the terms in them, as he acknowledged when asked about the subject earn-in option agreement.

[238] Significantly, in cross-examination Stephan Katmarian testified that he understood that there was no right to assign, or transfer, sell or otherwise dispose of Northern Fox’s earn-in interest without Cadillac’s permission in the form of a written agreement. That evidence as to Mr. Katmarian’s knowledge is uncontradicted.

[239] Juxtaposed with that evidence, is the following. Stephan Katmarian testified that the assignment was discussed at length between Norm and Stephan Katmarian at great length. Stephan Katmarian testified he wanted to ensure that Norman Brewster understood what was happening. Stephan Katmarian testified that there was a written agreement to that effect, but Stephan Katmarian cannot find it. He testified that there was consent from Cadillac Ventures to Northern Fox to assign the agreement, to access the fairly active crypto markets. The court would note that any consent, as required in clause 9.7, was not required to be in writing. However, it required the consent of Cadillac Ventures, not the knowledge of a person (Norm Brewster), nor the consent of a person (Norm Brewster), subject to a legal analysis of essentially piercing the corporate veil of Cadillac Ventures which was not sought to be done in this case.

[240] Stephan Katmarian testified that the recollection of Norman Brewster that there was no written agreement was incorrect, and that Norm Brewster’s recollection was incorrect. However, the court notes that Mr. Katmarian changed his evidence on this point.

[241] On one of the dates of cross-examination, Mr. Katmarian testified he believed that there was a written consent between Cadillac Ventures and Northern Fox, to Northern Fox being able to assign the interest to Peblik Inc. Stephan Katmarian testified he believed there was such a written agreement, but he could not find it. Questions were put to Stephan Katmarian regarding potentially an oral consent by Cadillac Ventures, or Norm Brewster. Mr. Katmarian had not given evidence regarding any agreement between Cadillac Ventures and Peblik Inc. as the parties, to the transfer of the earn-in option agreement. (Previously the focus had been on whether Cadillac Ventures gave a consent to Northern Fox for the transfer, which is an issue considered above, orally or in writing.) He could not find the agreement, he testified. When asked why he had not sent it to the investigator Mr. Parkes in the January 2021 response, Mr. Katmarian properly stated that it was not requested. At that time, Stephan Katmarian repeated his earlier evidence that “all of us” went over and beyond the call of duty to make sure Norm understood what was happening with the assignment and the crypto currency, he well understood that. He testified that he did not think that “anyone” asked Gary Sugar if he was aware of such a written agreement. Then Mr. Katmarian varied his testimony, referring to his view that the one agreement he could not find, is the one between Cadillac Ventures and Peblik Inc.. He stated if such an agreement exists, he was not able to find it. He went on to state his view that it was not required by the original agreement. This was clearly contrary, and inconsistent on a material point, with Mr. Katmarian’s evidence

that a written agreement was required as set out above. Mr. Katmarian indicated that he “believed” that the agreement exists. He later said he “suspects” that it exists. He cannot find it. Then he stated it is possible that the agreement does not exist, he does not remember.

[242] There are other pieces of evidence which are significant. Firstly despite the wording of the two earn-in option interest assignment agreements, firstly between Cadillac Ventures and Northern Fox, and secondly between Northern Fox and Peblik Inc., it was clear that in the second agreement Peblik Inc. was taking over the obligations of Northern Fox. Yet, Stephan Katmarian testified in cross-examination that both earn-in option agreements were valid at the same time. Obviously that does not flow from the wording of the two agreements, where only Peblik Inc. was liable from the date it received the assignment from Northern Fox. It also raises the question, at least in the mind of Mr. Katmarian, that the second agreement was potentially not valid as far as transferring the obligations to Peblik Inc., this court would find.

[243] The uncontradicted evidence in this trial is that Norman Brewster was working in the offices of Northern Fox and Peblik Inc. to fulfil his role on the committee to decide the priorities in spending for the development of the Thierry Mine, pursuant to the original earn-in option agreement. He had no personal role with Northern Fox, nor in Peblik Inc.

[244] Counsel for Stephan Katmarian relied upon the evidence of knowledge on the part of the person, Norm Brewster, as to the Peblik token system, which he understood to be a fundraising procedure he deemed brilliant. Counsel implicitly submitted that this knowledge extended to much more involved knowledge of the separate company (Peblik Inc. ) being created to take on all of the obligations of Northern Fox in the earn-in option for the Thierry Mine. Mr. Brewster was very clear in his evidence that he, and Cadillac Ventures, did not give such a consent to the assignment of the earn-in option of the interest in the Thierry Mine. Counsel for Mr. Katmarian submits, extrapolating from the personal knowledge of Norman Brewster as to the Peblik token fundraising idea, to knowledge as to the assignment of the earn-in option interest assignment agreement by Northern Fox to Peblik Inc. This is in the face of clear testimony of Norman Brewster that he was not aware of the transfer of the earn-in option interest assignment agreement by Northern Fox to Peblik Inc. Secondly, counsel submits that effectively this knowledge is one and the same as consent to the assignment. The court has accepted the evidence from Norm Brewster, where he was very clear that he and Cadillac Ventures were not even approached for such a consent. Further the defence implicitly suggests that this consent should be imputed as consent by the corporation, Cadillac Ventures. The court has already expressed its concerns regarding imputing corporate knowledge in the absence of sufficient evidence, or a legal basis