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TSX-V Extends Relief Measures from Certain Pricing Requirements for Private Placements

On April 12, 2013, the TSX Venture Exchange (“TSX-V”) extended to August 31, 2013, temporary relief from certain pricing requirements related to private placement financings that were originally granted on August 17, 2012, and extended and modified on December 12, 2012.

The temporary relief measures (the “Relief Measures”) are:

(a) allowing a share/unit offering with an offering price below $0.05 (the “Offering Price Relief Measure”);

(b) allowing a debenture offering with a debenture conversion price below $0.10 (the “Conversion Price Relief Measure”);

(c) allowing offerings involving a warrant with an exercise price below $0.10 (the “Exercise Price Relief Measure”); and

(d) with respect to the Offering Price Relief Measure and the Conversion Price Relief Measure, up to $50,000 of the gross proceeds raised by an issuer in reliance upon these Relief Measures can be used for general working capital purposes and is not subject to the “Maintain/Preserve Existing Business” or “No Payments to Related Parties” conditions.

The TSX-V also added the following temporary relief measures that are also in effect until August 31, 2013:

(a) with respect to the Offering Price Relief Measure and the Conversion Price Relief Measure, the TSX-V is modifying the 75% arm’s length requirement to allow up to an aggregate of $200,000 to be raised from related parties of the issuer without any arm’s length component to the private placement being required;

(b) with respect to the Exercise Price Relief Measure, the TSX-V is removing the 75% arm’s length requirement; and

(c) the TSX-V is clarifying that Capital Pool Companies, including those listed on NEX, are not permitted to rely upon the Relief Measures.

Specifics of the requirements and conditions associated with the use of the Relief Measures are detailed in the Corporate Finance Bulletin and Notice to Issuers.

TSX-V Extends Relief Measures from Certain Pricing Requirements for Private Placements

AMF Publishes Consultation Paper on Alternative Approach to Securities Regulators’ Intervention in Defensive Tactics

Further to an earlier post, the Autorité des marchés financiers (“AMF”) has published a consultation paper (the “AMF Proposal”) inviting comments on an alternative approach to that contemplated by the Canadian Securities Administrators’ Proposed National Instrument 62-105 – Securities Holder Rights Plans.

The AMF states that the aim of the AMF Proposal is to restore the regulatory balance between bidders and target boards and update the policy framework of the current take-over bid regime to reflect the current legal and economic environment and market practices respecting unsolicited take-over bids.

The AMF Proposal introduces two significant changes to the current take-over bid regime that would:

1. replace National Policy 62-202 with a new policy on defensive tactics that would clearly recognize the fiduciary duty of directors to the corporation in responding to an unsolicited take-over bid and would redefine securities regulators’ intervention on the ground of public interest; and

2. require, as an irrevocable condition of any bid for all securities of a class, and for any partial bids, that more than 50% of the outstanding securities of the class held by persons other than the offeror and those acting in concert with it, be tendered and not withdrawn on the date the bid would otherwise expire.

The AMF believes that the implementation of these changes would have the following effects:

  • it would give directors more latitude to exercise their fiduciary duty and consider all alternatives to maximize security holder value, without securities regulators’ intervention;
  • it would create a revised framework for the regulation of all defensive tactics, not only rights plans;
  • it would mitigate the coercion effects of the current take-over bid regime for all bids and not just those subject to rights plans;
  • it would provide a direct regulatory solution to some gaps in the current take-over bid regime;
  • it could minimize the ability of arbitrageurs to exert influence on the sale of take-over targets ; and
  • it could encourage bidders to negotiate with boards and, as a result, possibly maximize security holder value.

The AMF Proposal can be found by clicking here.

AMF Publishes Consultation Paper on Alternative Approach to Securities Regulators’ Intervention in Defensive Tactics

BCSC releases 2012 Mining Report

Natasha Singh, articling student, assisted in the preparation of this article.

On January 24, 2013, the British Columbia Securities Commission (“BCSC”) released its 2012 Mining Report (the “Report”). The Report is the first of its kind for the BCSC and serves to strengthen the BCSC’s efforts to be Canada’s leading junior mining regulator. The Report provides an overview of the common pitfalls in mining disclosure and outlines areas where market participants could improve their disclosure.

The Report identifies and discusses the following common areas of deficiencies in mining issuers’ disclosure:

1. Technical Disclosure – The common downfalls in technical disclosure are (i) the failure to file current or fully compliant reports; (ii) the failure to include the required cautionary statements for preliminary economic assessments, historical estimates and exploration targets; (iii) disclosure of mineral resources and mineral reserves that do not fully comply with NI 43-101; (iv) misleading references to mining studies; and (v) the failure to name the qualified person.

2. Company Disclosure – In general, voluntary disclosure is less likely to comply with regulations when compared to required filings. For instance, an issuer’s website, investor relations materials and corporate presentations is less likely to comply with the BCSC’s rules and regulations when compared with required filings, such as technical reports and annual information form.

3. Technical Reports – The common problems in technical reports are (i) missing or altered statements in certificate or consents of qualified persons; (ii) prohibited disclaimers or statements of reliance on other experts; and (iii) non-compliant disclosure or mineral resources and mineral reserves, historical estimates, and exploration targets.

The BCSC is hoping that the Report will help issuers address the foregoing problems and in turn, avoid costly and time-consuming mining disclosure reviews. A copy of the Report can be found here.

BCSC releases 2012 Mining Report

Ontario’s Mining Act: New Rules Take Effect

On November 1, 2012, new rules and changes to existing rules came into effect under the Mining Act in Ontario.

The Mining Act was originally enacted in the 19th century and has remained relatively unchanged since. Several key changes to the Mining Act were enacted in 2009 when the Mining Amendment Act, 2009 was passed.

The changes are geared towards exploration companies and focus on early consultation with Aboriginal communities. The changes have not been without controversy as many in the mining industry see the additional requirements under the Mining Amendment Act, 2009 as costly and time-consuming, and ultimately, as a hindrance to investment in Ontario.

The new rules are:

1. Anyone wishing to apply or renew a prospector’s license must complete the Mining Act Awareness Program.

2. Land may be withdrawn from prospecting or staking, or have its mining rights or surface rights withdrawn if it is a site of Aboriginal cultural significance.

3. An Exploration Plan must be submitted before certain early exploration activities are performed. Compliance with this requirement is voluntary from November 1, 2012 and mandatory from April 1, 2013.

4. An Exploration Permit must be obtained from the Ministry of Northern Development and Mines before certain early exploration activities are performed. Compliance with this requirement is voluntary from November 1, 2012 and mandatory from April 1, 2013.

Changes to existing rules regarding voluntary rehabilitation of existing mines, GPS georeferencing data on ground staked mining claims, assessment work credits, the amount of material that will be considered a bulk sample, and Aboriginal consultation on a mine closure plan have also come into effect.

For more details, please refer to the Ministry of Northern Development and Mines’ website, which can be found here.

Ontario’s Mining Act: New Rules Take Effect