Ontario Commission des 22nd Floor 22e étage
Securities valeurs mobilières 20 Queen Street West 20, rue queen ouest
Commission de l’Ontario Toronto ON M5H 3S8 Toronto ON M5H 3S8
In the Matter of the
Securities Legislation of Ontario
(the Jurisdiction)
AND
IN THE MATTER OF
THE PROCESS FOR CEASE TO BE A REPORTING
ISSUER APPLICATIONS
AND
IN THE MATTER OF
EASTMAIN RESOURCES INC. (THE FILER)
ORDER
Background
The principal regulator in the Jurisdiction has received an application from the Filer for an order under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) that the Filer has ceased to be a reporting issuer in all jurisdictions of Canada in which it is a reporting issuer (the Order Sought).
Under the Process for Cease to be a Reporting Issuer Applications (for a passport application):
(a) the Ontario Securities Commission is the principal regulator for this application, and
(b) the Filer has provided notice that subsection 4C.5(1) of Multilateral Instrument 11-102 – Passport System (MI 11-102) is intended to be relied upon in British Columbia and Québec.
Interpretation
Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this order, unless otherwise defined.
Representations
This order is based on the following facts represented by the Filer:
The Filer was incorporated under the Business Corporations Act (Ontario) (the OBCA) on April 28, 1992.
The Filer’s head office is at 82 Richmond Street East, Suite 201, Toronto, Ontario, Canada, M5C 1P1.
The Filer entered into an arrangement agreement dated July 29, 2020, as amended by an addendum dated October 8, 2020, with Fury Gold Mines Limited (Fury) and two wholly-owned subsidiaries of Fury, Sombrero Resources Inc. and Tier One Metals Inc. (the Arrangement Agreement).
Fury is a corporation existing under the Business Corporations Act (British Columbia). The authorized share capital of Fury consists of an unlimited number of common shares (the Fury Shares). The Fury Shares are listed on the Toronto Stock Exchange (the TSX) under the symbol “FURY”. Fury is a reporting issuer in British Columbia, Alberta, Ontario and Québec.
Immediately prior to the Effective Time (defined below), the Filer had the following issued and outstanding securities: (i) 292,239,761 common shares (the Filer Shares); (ii) 14,395,233 options to purchase Filer Shares (the Filer Options); (iii) 11,120,455 warrants to purchase Filer Shares (the Filer Warrants); and 116,666 restricted share units (the Filer RSUs). The Filer Shares were listed on the TSX under the symbol “ER”. No other securities of the Filer were listed on any exchange.
To the best of the Filer’s knowledge there are 24 holders of Filer Warrants, 14 of which are in Ontario (5,643,115 Filer Warrants representing 50.75% of the total aggregate Filer Warrants), 2 of which are in British Columbia (345,520 Filer Warrants representing 3.11% of the total aggregate Filer Warrants), 2 of which are in Québec (1,926,851 Filer Warrants representing 17.33% of the total aggregate Filer Warrants), 2 of which are in the United States (1,054,969 Filer Warrants representing 9.49% of the total aggregate Filer Warrants), and 4 of which are in other foreign jurisdictions (2,150,000 Filer Warrants representing 19.33% of the total aggregate Filer Warrants).
The Filer distributed the meeting materials (which included, among other things, the information circular, notice of meeting, notice of application, and the interim order) on September 11, 2020 to the holders of the Filer Shares, Filer Options and Filer Warrants in connection with the special meeting of holders of Filer Shares that took place on October 5, 2020 to consider the Arrangement in accordance with the order of the Ontario Superior Court. Holders of Filer RSUs were distributed the meeting materials in their capacity as holders of other Filer securities listed above.
On October 5, 2020, the shareholders of each of Fury and the Filer approved a statutory plan of arrangement under the OBCA pursuant to the Arrangement Agreement (the Arrangement).
On October 9, 2020 (the Effective Date), Fury acquired all of the issued and outstanding common shares of the Filer, pursuant to the Arrangement, which became effective at 7:15 AM (Toronto time) (the Effective Time) on the Effective Date.
Pursuant to the Arrangement, among other things, the following occurred as of the Effective Time:
(a) shareholders of the Filer received approximately 0.116685115 of a post-consolidated Fury Share for each Filer Share held (the Exchange Ratio) resulting in Fury issuing an aggregate of 34,100,000 post-consolidated Fury Shares to former shareholders of the Filer (the Consideration);
(b) former holders of Filer RSUs received Fury Shares, determined in accordance with the Arrangement Agreement and the Exchange Ratio. All Filer Options that were outstanding as of the Effective Time were exchanged for options to acquire Fury Shares (Fury Options) in accordance with the Arrangement Agreement and the Exchange Ratio; and
(c) pursuant to the terms of the certificates that govern all Filer Warrants (the Warrant Certificates), which provide for adjustment of the Filer Warrants in certain stated events, including amongst others, a corporate merger, amalgamation and consolidation, including the Arrangement, and each holder of a Filer Warrant is entitled to receive upon the exercise of such holder’s Filer Warrants, in lieu of the Filer Shares to which such holder was theretofore entitled upon such exercise, the Consideration which the holder would have been entitled to receive as a result of the transactions contemplated by the Arrangement if, immediately prior to the Effective Time, such holder had been the registered holder of the number of Filer Shares to which such holder would have been entitled if such holder had exercised such holder’s Filer Warrants immediately prior to the Effective Time, at the exercise price set out in such holder’s Warrant Certificates adjusted by the Exchange Ratio (the Warrant Adjustment). In accordance with the provisions of the Warrant Certificates, the Warrant Adjustment was confirmed by a notice of adjustment dated October 9, 2020 (the Fury Notice) from Fury to all holders of Filer Warrants.
Pursuant to the Arrangement Agreement, the Warrant Certificates and the Fury Notice, Fury is obligated and has agreed to issue the number of Fury Shares, adjusted in accordance with the terms of the Arrangement Agreement and the Exchange Ratio, required to meet the Filer’s obligations upon exercise of the Filer Warrants. The Warrant Adjustment describes the only changes to the Filer Warrants.
The Filer is not required to remain a reporting issuer pursuant to the terms of the Warrant Certificates.
In connection with the Arrangement, additional Fury Shares are authorized for issuance upon exercise of Filer Warrants and Fury Options.
The Filer Shares were delisted from the TSX effective at the close of business on the Effective Date.
The Filer is not eligible to surrender its status as a reporting issuer pursuant to the simplified procedure in National Policy 11-206 – Process for Cease to be a Reporting Issuer Applications because the Filer Warrants are not beneficially owned, directly or indirectly, by fewer than 15 securityholders in each of the jurisdictions of Canada and fewer than 51 securityholders in total worldwide.
The Filer is not a reporting issuer in any jurisdiction of Canada other than the jurisdictions identified in this order. The Filer is applying for an order that it has ceased to be a reporting issuer in all of the jurisdictions of Canada in which it is a reporting issuer.
Fury is not in default of its obligations as a reporting issuer under securities legislation in any jurisdiction.
The Filer is not in default of its obligations as a reporting issuer under securities legislation in any jurisdiction.
The Filer has no intention to seek public financing by way of an offering of securities.
The Filer is not an OTC reporting issuer under Multilateral Instrument 51-105 Issuers Quoted in the U.S. Over-the-Counter Markets.
No securities of the Filer, including debt securities, are traded in Canada or another country on a marketplace as defined in National Instrument 21-101 Marketplace Operation or any other facility for bringing together buyers and sellers of securities where trading data is publicly reported.
Upon the granting of the Order Sought, the Filer will not be a reporting issuer or the equivalent in any jurisdiction of Canada.
Order
The principal regulator is satisfied that the order meets the test set out in the Legislation for the principal regulator to make the order.
The decision of the principal regulator under the Legislation is that the Order Sought is granted.
DATED at Toronto on this 16th day of December, 2020.
“Cecilia Williams” “Frances Kordyback”
Commissioner Commissioner
Ontario Securities Commission Ontario Securities Commission