IN THE MATTER OF
THE SECURITIES LEGISLATION IN ONTARIO
(the “Jurisdiction”)
AND
IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF
APPLICATION IN MULTIPLE JURISDICTIONS
AND
IN THE MATTER OF
WALLBRIDGE MINING COMPANY LIMITED
(the “Filer”)
DECISION
Background
The principal regulator in the Jurisdiction has received an application from the Filer (the “Application”) for a decision under the securities legislation of the Jurisdiction of the principal regulator (the “Legislation”) for relief pursuant to section 8.1 of National Instrument 44-101 Short Form Prospectus Distributions (“NI 44-101”) from the requirement to file a notice (a “Notice”) declaring its intention to be qualified to file a short form prospectus at least 10 business days prior to the filing of its first preliminary short form prospectus (the “Exemption Sought”).
Furthermore, the principal regulator in the Jurisdiction has received a request from the Filer for a decision that the application and this decision be kept confidential and not be made public under the earlier of: (a) the date on which the Filer publicly announces the filing of the Preliminary Prospectus (as defined below); (b) the date that the Filer files the Preliminary Prospectus; (c) the date on which the Filer advises the principal regulator that there is no longer any need for the application and the decision to remain confidential; and (d) the date that is 60 days after the date of this decision (the Confidentiality Sought).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application);
(a) The Ontario Securities Commission is the principal regulator for this application, and
(b) the Filer has provided notice that section 4.7 (1) of Multilateral Instrument 11-102 Passport System (“MI 11-102”) is intended to be relied upon in Ontario and British Columbia.
Interpretation
Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.
Representations
This decision is based on the following facts represented by the Filer.
The Filer was incorporated on June 3, 1996 under the laws of the Province of Ontario. The registered and head office of the Filer is located at 129 Fielding Road, Lively, Ontario P3Y 1L7.
The Filer has been a reporting issuer in Ontario and Quebec since August 6, 1998. The Filer is not a reporting issuer in any other jurisdictions in Canada.
The Filer is not on the list of defaulting reporting issuers maintained by the OSC.
The Filer’s authorized capital consists of unlimited number of common shares (the “Common Shares”). As at the date hereof, there are 181,917,013 Common Shares issued and outstanding.
The Filer’s common shares (the “Common Shares”) are traded on the Toronto Stock Exchange (the “TSX”) under the symbol “WM” and on the Frankfurt Stock Exchange under the symbol “WC7”.
On May 24, 2016, the Filer entered into a binding Letter of Intent (the “LOI”) dated May 24, 2016 to acquire 100% of the Fenelon gold property (the “Fenelon Mine Property”) from Balmoral Resources Ltd. (“Balmoral”) for a purchase price of $3,600,000. The Fenelon Mine Property is an advanced stage project with near-term production potential, as well as drill intersections suggesting potential for resource expansion. The project is located in West Central Quebec, within the same geological belt that hosts the Detour Gold mine in Quebec.
Pursuant to the LOI, the Filer issued to Balmoral 2,381,575 Common Shares (valued at $200,000) as a non-refundable deposit and agreed to sign a definitive purchase agreement within 60 days of the LOI, i.e. on or before July 25, 2016 (the “Purchase Agreement”).
The balance of the $3,400,000 purchase price is payable on or before July 25, 2016 provided that if the Filer is not in a position to make the required cash payment by July 25, 2016, the cash purchase price increases to $3,500,000 and the Filer may extend the deadline for payment to September 21, 2016 by paying to Balmoral two non-refundable cash payments of $500,000 each on July 25, 2016 and August 22, 2016 with both payments being credited towards the $3,500,000 final cash purchase price. If the purchase payments are not received by Balmoral under the terms outlined above, the LOI and the Purchase Agreement (if completed) shall automatically terminate.
The Filer is qualified to file a prospectus in the form of a short form prospectus pursuant to section 2.2 of NI 44-101 and filed the Notice with the OSC on July 4, 2016.
The Filer, for the reasons set out above, wishes to file a preliminary short form prospectus (a “Preliminary Prospectus”) as soon as possible in order to close its proposed short form prospectus offering of Units and FT Shares on or before July 21, 2016.
Pursuant to the qualification criteria set forth in section 2.2 of NI 44-101 the Filer will be qualified to file a short form prospectus on the basis that it will satisfy the requirements of section 2.2 of NI 44-101.
Notwithstanding section 2.2 of NI 44-101, section 2.8(1) of NI 44-101 provides that an issuer is not qualified to file a short form prospectus unless it has filed a notice declaring its intention to be qualified to file a short form prospectus at least 10 business days prior to the issuer filing its first preliminary short form prospectus.
In the absence of the Exemption Sought, the Filer will not be qualified to file a Preliminary Prospectus until July 18, 2016, which is 10 business days from the date upon which the Notice was filed.
The Filer has determined that a favourable market window for an offering or potential offering of Common Share units and flow-through shares currently exists. Due to the current levels of uncertainty existing with respect to global equity markets, the Filer cannot determine how long this favourable window will last in order to be able to raise the funds necessary in order to acquire the Fenelon Mine Property. As a result, the Filer wishes to be in the position to file a Preliminary Prospectus and commence the marketing of a public offering as soon as possible.
Decision
The principal regulator is satisfied that the decision meets the test set out in the legislation for the principal regulator to make the decision.
The decision of the principal regulator pursuant to the Legislation is that the Exemption Sought is granted.
Furthermore, the decision of the principal regulator is that the Confidentiality Sought is granted.
“Michael Tang”
Michael Tang
Acting Manager, Corporate Finance Branch
Ontario Securities Commission