July 26, 2018
In the Matter of the Securities Legislation of Ontario (the Jurisdiction)
and
In the Matter of the Process for Exemptive Relief Applications in Multiple Jurisdictions
and
In the Matter of Anglo Pacific Group plc (the Filer)
DECISION
Background
The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) pursuant to subsection 9.1(1) of National Instrument 43-101 – Standards of Disclosure for Mineral Projects (NI 43-101) that the Filer be exempt from the requirements of section 2.2 of NI 43-101 that the Filer must not disclose any information about a mineral resource or mineral reserve unless it uses only the applicable mineral resource and mineral reserve categories ascribed to those terms by the Canadian Institute of Mining, Metallurgy and Petroleum (the CIM Standards), which exemption only applies with respect to the Filer’s use of mineral resource or mineral reserve categories ascribed under the JORC Code, the PERC Code, the SAMREC Code, SEC Industry Guide 7 or the Certification Code, as applicable (each as defined in NI 43-101, collectively the Foreign Codes) in “disclosure” (as defined in NI 43-101) made by the Filer relating to properties underlying the Royalty Portfolio (as defined below) and the Royalty Options (as defined below) (collectively, the Foreign Code Disclosure) (the Exemption Sought).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(a) the Ontario Securities Commission is the principal regulator (the Principal Regulator) for this application; and
(b) the Filer has provided notice that subsection 4.7(1) of Multilateral Instrument 11-102 – Passport System (MI 11-102) is intended to be relied upon in each of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Northwest Territories, Yukon and Nunavut.
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.
1The Filer is a public limited company, which was incorporated and registered in England and Wales on February 7, 1967 under the UK Companies Act, 1948 under the name "Diversified Bank Shares Limited". The Company subsequently underwent a number of name changes and on November 11, 1997 the Company changed its name to "Anglo Pacific Group plc". The Filer's head and registered office is located in London, England, United Kingdom.
2The issued share capital of the Filer consists of 181,418,939 Ordinary Shares with nominal par value per Ordinary Share of £0.02 issued and outstanding as at June 26, 2018.
3The Filer is a London, United Kingdom based global natural resources royalties company. The Filer's business consists of:
(a) passive (non-operating) royalty interests in mining projects and operations, including coal, iron ore, gold, chromite and uranium projects (Royalty Portfolio);
(b) options to acquire royalties and other associated assets (Royalty Options);
(c) direct ownership in one private coal property (the Coal Property); and
(d) direct equity investments in both listed and unlisted mineral exploration and development companies (the Equity Interests).
4The Filer considers the Royalty Portfolio and the Royalty Options, as a whole, to be material to the Filer's business, as the Royalty Portfolio and the Royalty Options comprise the core part of the Filer's business strategy and objective to continually build a diverse portfolio of royalties to generate growing, long-term returns for its investors. Currently, the Filer considers (i) its private royalty ground on the Kestrel Mine located in the Bowen Basin, Queensland, Australia and (ii) its private royalty ground on the Narrabri Mine located in the Gunnedah Basin, New South Wales, which royalty was acquired in February 2015, subsequent to the Initial Order (as defined below) to be a mineral project on a property material to the Filer.
5The Ordinary Shares are listed and quoted for trading on the London Stock Exchange (LSE), which is the principal trading market of the Ordinary Shares. The Filer is in compliance with the reporting requirements of the LSE.
6The Filer is subject to the listing rules and regulations of the UK Financial Services Authority in its capacity as the competent authority for the purposes of Part VI of the UK Financial Services and Markets Act 2000 (as amended from time to time) and the applicable laws of England and Wales (in each case as amended from time to time).
7The Filer does not have a head office in any jurisdiction in Canada. However, the Filer is a "reporting issuer" (as defined under the Securities Act (Ontario)) in the Jurisdiction as a consequence of its Ordinary Shares becoming listed and posted for trading on the Toronto Stock Exchange on July 9, 2010.
8The Filer qualifies as a "designated foreign issuer" (as defined in National Instrument 71-102 -- Continuous Disclosure and Other Exemptions Relating to Foreign Issuers).
9As a royalty and/or option holder, the Filer often has limited, if any, access to non-public scientific and technical information in respect of the properties underlying the Royalty Portfolio and the Royalty Options, or such information is subject to confidentiality provisions. The Filer often has certain rights to require an audit of payments under its royalties but generally does not have access to technical and other information regarding the properties underlying the Royalty Portfolio and the Royalty Options, other than as publicly disclosed by the owners and operators of such properties. As such, in making technical disclosure in respect of the properties underlying the Royalty Portfolio and the Royalty Options, the Filer is required to rely on the public disclosures of the owners and operators of the properties underlying the Royalty Portfolio and the Royalty Options, as available at the date of such disclosure and such information and disclosure may not comply with the requirements of NI 43-101.
10The public disclosures of certain of the owners and operators of the properties underlying the Royalty Portfolio and the Royalty Options are subject to technical disclosure requirements that exist in other jurisdictions pursuant to the Foreign Codes.
11The Filer wishes to provide the Foreign Code Disclosure to Canadian investors because it believes that investors could find such additional disclosure to be useful in understanding the Filer's business as a natural resources royalty company and evaluating an investment in the Filer. However, any such Foreign Code Disclosure will be subject to the requirements of NI 43-101.
12Section 7.1 of NI 43-101 provides an exemption from section 2.2 of NI 43-101 that is similar to the Exemption Sought. It allows certain issuers to make disclosure and file a technical report that uses the mineral resource and mineral reserve categories of an acceptable foreign code (as defined in NI 43-101) provided that the issuer includes in such technical report a reconciliation of any material differences between the mineral resource and mineral reserve categories used under an acceptable foreign code and the analogous mineral resource and mineral reserve categories reported in the CIM Standards.
13The Filer cannot avail itself of the exemption in section 7.1 of NI 43-101 because (i) it is exempt from filing technical reports under subsection 9.2(1) of NI 43-101, which provides an exemption for royalty or other similar issuers from the requirement to file a technical report under certain conditions and (ii) as a result of the Filer's limited, if any, access to non-public scientific and technical information in respect of the properties underlying the Royalty Portfolio and the Royalty Options as set out in paragraph 9 and the fact that certain of the owners and operators of the properties underlying the Royalty Portfolio and the Royalty Options report scientific and technical information in accordance with the Foreign Codes (or may, in the future, report scientific and technical information in accordance with the Foreign Codes), the Filer is often unable (or may, in the future, be unable) to take the necessary steps required to describe the material differences between any mineral resource and mineral reserve categories reported in the Foreign Codes as reported in respect of the properties underlying the Royalty Portfolio and the Royalty Options and the CIM Standards.
14On September 24, 2012, the Principal Regulator granted the Filer an exemption from the requirements of section 2.2 of NI 43-101 that the Filer must disclose any information about a mineral resource or mineral reserve using only the meanings ascribed to those terms by the CIM Standards (the Initial Order). The Initial Order was granted on substantially the same basis as the Exemption Sought and was revoked in the Subsequent Order (as defined below).
15On June 24, 2015, the Principal Regulator granted the Filer an exemption from the requirements of section 2.2 of NI 43-101 that the Filer must disclose any information about a mineral resource or mineral reserve using only the meanings ascribed to those terms by the CIM Standards (the Subsequent Order). The Subsequent Order was granted on substantially the same basis as the Exemption Sought and expired in June 2018.
16The Filer is not in default of securities legislation in any of the jurisdictions in Canada.
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 under the Legislation is that:
1 The Subsequent Order is revoked; and
2 The Exemption Sought is granted provided that:
(a) the Exemption Sought applies solely to Foreign Code Disclosure in respect of the properties underlying the Royalty Portfolio or the Royalty Options whose owners and operators are subject to the Foreign Code Disclosure requirements of and report scientific and technical information in accordance with the Foreign Codes;
(b) the Filer extracts the Foreign Code Disclosure from information publicly disclosed in documents disclosed by the owners and operators of the properties underlying the Royalty Portfolio or the Royalty Options, from information available in the public domain or from information available on the relevant issuer’s website and information available on other public websites;
(c) the Filer’s disclosure which includes the Foreign Code Disclosure made in reliance of the Exemption Sought will contain the following cautionary statement, as appropriately modified for the circumstances:
“National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) contains certain requirements relating to the use of mineral resource and mineral reserve categories of an “acceptable foreign code” (as defined in NI 43-101) in “disclosure” (as defined in NI 43-101) made by Anglo Pacific Group PLC with respect to a “mineral project” (as defined in NI 43-101), including the requirement to include a reconciliation of any material differences between the mineral resource and mineral reserve categories used under an acceptable foreign code and the standards developed by the Canadian Institute of Mining, Metallurgy and Petroleum, as the CIM Definition Standards on Mineral Resources and Mineral Reserves adopted by CIM Council, as amended (the “CIM Standards”) in respect of a mineral project. Pursuant to an exemption order granted to Anglo Pacific Group PLC by the Ontario Securities Commission, the information contained herein with respect to the [name applicable properties underlying the Royalty Portfolio/Royalty Option] has been extracted from information publicly disclosed, disseminated, filed, furnished or similarly communicated to the public by an issuer whose securities trade on a “specified exchange” (as defined in NI 43-101) that discloses mineral reserves and mineral resources under one of the JORC Code, the PERC Code, the SAMREC Code, SEC Industry Guide 7 or the Certification Code (each as defined in NI 43-101). As the definitions and standards of the JORC Code, the PERC Code, the SAMREC Code, SEC Industry Guide 7 and the Certification Code are substantially similar to the CIM Standards, a reconciliation of any material differences between the mineral resource and mineral reserve categories reported under the JORC Code, the PERC Code, the SAMREC Code, SEC Industry Guide 7 and the Certification Code, as applicable, to categories under the CIM Standards is not included and no Form 43-101F1 technical report will be filed to support the disclosure based upon such exemption.”, and
(d) this decision will terminate 60 months after the date hereof.
“Winnie Sanjoto”
__________________________
Winnie Sanjoto
Manager, Corporate Finance Branch Ontario Securities Commission