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
March 6, 2023
In the Matter of
the Securities Legislation of Ontario (the "Jurisdiction")
and
In the Matter of
the Process for Exemptive Relief in Multiple Jurisdictions and
In the Matter of
Amaroq Minerals Ltd. (the "Filer") Decision
Background
The securities regulatory authority or regulator in the Jurisdiction (the "principal regulator") has received an application from the Filer for a decision under the securities legislation of the Jurisdiction (the "Legislation") for relief from:
(a) the requirements otherwise applicable to the Filer as a reporting issuer who is not a venture issuer in each of the following instruments, including the forms thereof (collectively, the "Instruments"):
i. National Instrument 41-101 - General Prospectus Requirements;
ii. National Instrument 51-102 - Continuous Disclosure Obligations;
iii. National Instrument 52-107 - Acceptable Accounting Principles and Auditing Standards;
iv. National Instrument 52-109 - Certification of Disclosure in Issuer's Annual and Interim Filings;
v. National Instrument 52-110 - Audit Committees; and
vi. National Instrument 58-101 - Disclosure of Corporate Governance Practices;
(b) the formal valuation requirements in sections 4.3 and 5.4 of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions ("MI 61-101"); and
(c) the minority approval requirement in section 5.6 of MI 61-101 (the "Minority Approval Relief"); (collectively, the "Exemption Sought");
Securities legislation imposes obligations for all reporting issuers. There are different obligations applicable to reporting issuers who are venture issuers and to those that are non-venture issuers. The Exemption Sought, if granted, would permit the Filer to comply with the obligations applicable to venture issuers notwithstanding that the Filer does not meet the criteria in the definition of "venture issuer".
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 British Columbia, Alberta, Saskatchewan, Manitoba, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador.
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 is a corporation originally incorporated under the laws of Canada; the head office of the Filer is located c/o Bennett Jones LLP at 3400, One First Canadian Place, P.O. Box 130, Toronto, Ontario, M5X 1A4. The Filer is a mining company with its principal assets located in Greenland.
The Filer is a reporting issuer in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador.
The Filer's securities are listed on the TSX Venture Exchange (the "TSXV") and the AIM market of the London Stock Exchange ("AIM") under the symbol "AMRQ".
The Filer is authorized to issue an unlimited number of common shares and an unlimited number of preferred shares issuable in series, all without par value. As of December 7, 2022, the Filer has 263,073,022 common shares issued and outstanding.
On November 1, 2022, depositary receipts issued by the Filer (each representing an interest in one common share of the Filer) commenced trading on the NASDAQ First North Growth Market in Iceland, (the "First North Exchange"). The Filer sought a listing on the First North Exchange in order to increase the liquidity in the trading of its common shares.
The First North Exchange is a multilateral trading facility (MTF) as defined in Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments ("MiFID II") and has been registered as a SME growth market in accordance with Article 33 of MiFID
II. Issuers on the First North Exchange are subject the Nasdaq First North Growth Market Rulebook for Issuers of Shares which applies across the following MTFs which are jointly referred to as the "First North Markets": (i) Nasdaq First North Growth Market Sweden (operated by Nasdaq Stockholm AB);
(ii) Nasdaq First North Growth Market Denmark (operated by Nasdaq Copenhagen A/S); (iii) Nasdaq First North Growth Market Finland (operated by Nasdaq Helsinki Ltd.); and (iv) the First North
Exchange (as defined above and operated by Nasdaq Iceland hf.), save for minor differences required by local law.
In addition to the First North Markets, each of the Nasdaq affiliated companies also operate a regulated market (RM) as defined by the MiFID II and are jointly referred to as the "Nasdaq Nordic Main Markets". The Nasdaq Nordic Main Markets have more extensive reporting and listing requirements and are suited for developed companies that can adhere to the highest standards for reporting, transparency and accountability. The First North Markets (including the First North Exchange) are junior to the Nasdaq Nordic Main Markets and are generally considered as a starting place for smaller companies to reach the capital markets, to grow and to work towards a listing on one of the Nasdaq Nordic Main Markets.
In the Instruments, the definition of a "venture issuer" excludes a reporting issuer who, at the relevant time, has any of its securities listed or quoted on any of the Toronto Stock Exchange, Aequitas NEO Exchange Inc., a U.S. marketplace or a marketplace outside of Canada and the United States of America other than the AIM or the PLUS markets operated by PLUS Markets Group plc (the "Venture Issuer Definition").
As the First North Exchange is a marketplace and hence a "marketplace outside of Canada", the Filer does not, subsequent to November 1, 2022, meet the criteria in the Venture Issuer Definition.
The Filer acknowledges that any right of action, remedy, penalty or sanction available to any person or company or to a securities regulatory authority against the Filer from November 1, 2022 until the date of this decision are not terminated or altered as a result of this decision.
The First North Exchange is a junior market and is not regulated as a national securities exchange under section 6(a) of the Securities Exchange Act of 1934. The First North Exchange is junior to the TSXV in terms of its requirements, as the minimum listing requirements, the listing maintenance requirements and the continuous disclosure requirements (other than as noted in paragraph 12, below) are less onerous for the First North Exchange as compared to the TSXV.
Although the First North Exchange requires the filing of annual financial statements within 90 days following the most recently completed financial year (being 30 days sooner than the 120 day period applicable to TSXV issuers), this is the only continuous disclosure requirement which is more onerous for the Filer under the First North Exchange rules than the TSXV requirements. Issuers on the First North Exchange are not required to file interim financial statements and related management's discussion and analyses on a quarterly basis and, subject to certain exemptions, First North Exchange issuers are not required to prepare and file material change reports, copies of material contracts or other documents affecting the rights of securityholders, as compared to the TSXV. Also, the minimum listing requirements and listing maintenance requirements on the First North Exchange are less stringent than the TSXV, there is no requirement for a mining issuer to hold a significant interest in a qualifying property, no expenditure requirements or work program or exploration work limits.
The Filer will comply with applicable laws and regulations of the Filer’s home jurisdiction, including the policies of the TSXV.
The information that the Filer has provided regarding the First North Exchange and its status as a junior market for the purposes of review by staff of the principal regulator is accurate as at the date of this Decision.
The Filer is not in default of any securities legislation in any jurisdiction of 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 the Exemption Sought is granted provided that:
(a) the Filer complies with the conditions and requirements of Canadian securities legislation applicable to a venture issuer;
(b) the First North Exchange is not restructured in a manner that makes it unreasonable to conclude that it is still a junior market and the representations listed in paragraphs 11-12, above, continue to be true;
(c) the Filer shall inform the principal regulator of any material change regarding the First North Exchange in terms of its requirements, the minimum listing requirements, the listing maintenance requirements or any other changes which relate to its status as a junior market and inform the principal regulator of whether any such change impacts its status as a junior market;
(d) the Filer has common shares listed on the TSXV;
(e) the Filer does not have any of its securities listed or quoted on any of the Toronto Stock Exchange, Aequitas NEO Exchange Inc., a U.S. marketplace, or a marketplace outside of Canada and the United States of America other than the First North Exchange, the AIM or the PLUS markets operated by PLUS Markets Group plc;
(f) in the event an exemption under Canadian securities legislation applies to a requirement in the Instruments applicable to the Filer, and a condition to the exemption requires the issuer to be a venture issuer, the Filer may invoke the benefit of that exemption if the Filer meets the conditions required by the exemption except for the condition that the Filer be a venture issuer;
(g) in the event an exemption under Canadian securities legislation applies to a requirement applicable to the Filer as a reporting issuer who is not a venture issuer in the Instruments, and a condition to the exemption requires the issuer to not be a venture issuer, the Filer does not invoke the benefit of the exemption; and
(h) for the purposes of the Minority Approval Relief, in addition to conditions (a) through (g) above, the Filer would be entitled to rely on the exemption from the requirement to obtain minority approval set out in subsection 5.7(1)(b) of MI 61-101 but for the fact that the Filer does not satisfy the requirements of subsection 5.7(1)(b)(i) of MI 61-101.
“David Surat”
___________________________________ David Surat
Manager (Acting), Corporate Finance
Ontario Securities Commission
OSC File#: 2022/0553