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 Marathon Gold Corporation (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 British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Yukon Territory, Northwest Territories and Nunavut.
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 is a corporation existing under the federal laws of Canada with its head office located in Toronto, Ontario.
The Filer is a reporting issuer or the equivalent in each of the of the provinces and territories of Canada and the common shares of the Filer (the Filer Shares) were listed and traded on the Toronto Stock Exchange (the TSX) under the symbol "MOZ" until their de-listing on January 26, 2024.
All of the issued and outstanding Filer Shares are owned by Calibre Mining Corp. (Calibre).
Calibre, the parent company of the Filer, is a corporation existing under the Business Corporations Act (British Columbia). Calibre is a reporting issuer in the provinces of British Columbia, Alberta and Ontario, and the common shares of Calibre (the Calibre Shares) are listed and traded on the TSX under the symbol "CXB".
Upon completion of the court approved plan of arrangement (the Arrangement) under section 192 of the Canada Business Corporations Act (the CBCA), that was made effective at 12:01 a.m. (Toronto time) (the Effective Time) on January 24, 2024 (the Effective Date), pursuant to the arrangement agreement between Calibre and the Filer dated November 12, 2023 (the Arrangement Agreement), Calibre acquired all of the outstanding Filer Shares not already held by Calibre, in exchange for 0.6164 (the Exchange Ratio) of a Calibre Share (the Consideration).
On November 13, 2023, the Filer issued a news release, publicly announcing the Arrangement Agreement.
Immediately prior to the Effective Time, the Filer had the following issued and outstanding securities: (a) 469,163.035 Filer Shares (including 66,666,667 Filer Shares held by Calibre); (b) 16,298,450 stock options (the Filer Options); (c) 1,497,882 restricted share units (the RSUs); (d) 1,857,735 share-settled deferred share units (the Shares Settled DSUs); (e) 392,000 cash-settled deferred share units (the Cash Settled DSUs); (f) 1,549,767 performance share units (the PSUs); (g) 10,000,000 common share purchase warrants (the Filer Certificated Warrants) expiring on January 31, 2028, each exercisable to acquire one Filer Share at a price of $1.35 per Filer Share; and (h) 78,409,300 common share purchase warrants (the Filer Indenture Warrants, and together with the Filer Certificated Warrants, the Filer Warrants) expiring on September 20, 2024, each exercisable to acquire one Filer Share at a price of $1.35 per Filer Share.
Upon completion of the Arrangement, Calibre acquired all of the issued and outstanding Filer Shares (excluding the 66,666,667 Filer Shares already held by Calibre) in exchange for the Consideration for each Filer Share, resulting in Calibre owning all of the issued and outstanding Filer Shares and the Filer becoming a wholly-owned subsidiary of Calibre.
Pursuant to the Arrangement, each outstanding RSU, Share Settled DSU, Cash Settled DSU, and PSU was deemed to be fully vested and was surrendered to the Filer in exchange; (i) in the case of each outstanding RSU, Share Settled DSU, and PSU, for one Filer Share, which was subsequently exchanged for the Consideration; and (ii) in the case of each Cash Settled DSU, for cash.
Pursuant to the Arrangement, each outstanding Filer Option was exchanged for a replacement option (each, a Replacement Calibre Option) exercisable for Calibre Shares, with the number and price of such Replacement Calibre Options adjusted by the Exchange Ratio.
Pursuant to the Arrangement, the terms of the Filer Certificated Warrants and the terms of the Filer Indenture Warrants, each holder of a Filer Warrant outstanding immediately prior to the Effective Date, became entitled upon completion of the Arrangement, to receive, upon the exercise of such holder’s Filer Warrant, in lieu of each Filer Share to which such holder was previously entitled, 0.6164 of a Calibre Share. As a result of the Arrangement, the terms of the Filer Certificated Warrants and the terms of the Filer Indenture Warrants, Calibre is now obligated to issue Calibre Shares to satisfy the exercise of Filer Warrants.
The Filer distributed the meeting materials (which included, among other things, the management information circular, notice of meeting, and letter of transmittal) on December 22, 2023, to the holders of Filer Shares (the Filer Shareholders), Options, RSUs, Share Settled DSUs, Cash Settled DSUs, PSUs and Warrants, as well as the directors and auditors of the Filer, and to the Director appointed under the CBCA, in connection with the special meeting (the Filer Meeting) of Filer Shareholders that took place on January 16, 2024 to consider the Arrangement, in accordance with the interim order of the Ontario Superior Court of Justice (Commercial List) rendered December 11, 2023.
As was required pursuant to the terms of the Arrangement:
(a) the resolution approving the Arrangement was approved by the Filer Shareholders at the Filer Meeting called for such purpose by an affirmative vote of at least 66 2/3% of the votes cast in person or by proxy at the Filer Meeting; and
(b) the Ontario Superior Court of Justice (Commercial List) granted its final approval of the Arrangement on January 22, 2024.
As a result of the completion of the Arrangement, 249,813,422 additional Calibre Shares were issued and listed and posted for trading on the TSX, up to 10,046,332 Calibre Shares were reserved for issuance upon exercise of the Replacement Calibre Options, and up to 54,495,490 Calibre Shares were reserved for issuance upon exercise of the Filer Warrants.
The Filer Shares were delisted from the TSX at the close of business on January 26, 2024 and following such date, no securities of the Filer are currently listed for trading on any stock exchange.
On completion of the Arrangement, the Filer Warrants continued to exist as warrants of the Filer. The Filer Warrants are not, and were not, listed on the TSX for trading. The Filer Warrants are the only outstanding securities of the Filer held by persons other than Calibre.
Calibre, on behalf of the Filer, has made diligent enquiry (the Investigation) to determine the number and jurisdiction of the beneficial holders of the Filer Warrants, however, it has been unable to determine with certainty the total number of beneficial holders of Filer Warrant. The Investigation included a request for geographical breakdown of ownership from Broadridge, resulting in the procurement of each of: (i) a Canadian geographical analysis report; and (ii) a United States geographical analysis report. Based on the Investigation, there are at least 457 beneficial holders of Filer Warrants, including (a) 132 beneficial holders of Filer Warrants resident in British Columbia (representing approximately 4.31% of the total aggregate Filer Warrants); (b) 56 beneficial holders of Filer Warrants resident in Alberta (representing approximately 1.36% of the total aggregate Filer Warrants); (c) 1 beneficial holder of Filer Warrants resident in Saskatchewan (representing approximately less than 0.01% of the total aggregate Filer Warrants); (d) 7 beneficial holders of Filer Warrants resident in Manitoba (representing approximately 0.11% of the total aggregate Filer Warrants); (e) 208 beneficial holders of Filer Warrants resident in Ontario (representing approximately 34.94% of the total aggregate Filer Warrants); (f) 4 beneficial holder of Filer Warrants resident in Quebec (representing approximately 0.44% of the total aggregate Filer Warrants); (g) 4 beneficial holders of Filer Warrants resident in Nova Scotia (representing approximately 0.02% of the total aggregate Filer Warrants); (h) 3 beneficial holders of Filer Warrants resident in New Brunswick (representing approximately 0.02% of the total aggregate Filer Warrants); (i) 5 beneficial holders of Filer Warrants resident in Newfoundland and Labrador (representing approximately 0.10% of the total aggregate Filer Warrants); (j) 18 beneficial holders of Filer Warrants resident in the United States (representing approximately 17.02% of the total aggregate Filer Warrants); and (k) 19 beneficial holders of Filer Warrants resident in international countries (i.e. outside of Canada and the United States) (representing approximately 27.95% of the total aggregate Filer Warrants). Each Filer Warrant is exercisable only for the Consideration, being 0.6164 of a Calibre Share. No Filer Shares or other securities of the Filer are issuable upon exercise of any Filer Warrants.
The Filer is not required to obtain any consents or approvals to cease to be a reporting issuer in any jurisdiction under any contractual arrangement between the Filer and the holders of the Filer Warrants.
The Filer cannot rely on the exemption available in Section 13.3 of National Instrument 51-102 -- Continuous Disclosure Obligations (NI 51-102) for issuers of exchangeable securities because the Filer Warrants are not "designated exchangeable securities" as defined in NI 51-102. The Filer Warrants do not provide their holders with voting rights in respect of Calibre.
The Filer is not eligible to surrender its status as a reporting issuer pursuant to the simplified procedure under section 19 of National Policy 11-206 Process for Cease to be a Reporting Issuer Applications as 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 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.
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.
The Filer and Calibre are not in default of any requirement under securities legislation in any jurisdiction.
The Filer has no intention to seek public financing by way of an offering of securities and has no intention of issuing any securities other than the issuance of securities to Calibre or its affiliates.
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 7th, day of March, 2024.
“Erin O’Donovan” ”
Erin O’Donovan
Manager, Corporate Finance
Ontario Securities Commission OSC File#: 2024/0080
SEDAR+#: 6083494