Pelangio Mines Inc. - s. 147

Headnote

Section 147 - Exemption from provisions of sections 13.2 and 13.5 of OSC Policy 5.2 where price per share at which debt is to be converted into shares is below $0.20 per share and the amount of the debt exceeds $50,000.

Statutes Cited

Securities Act, R.S.O. 1990, c.S.5, as amended, ss. 6 and 147

Rules Cited

In the Matter of Certain Trades in Securities of Junior Natural Resource Issuers, (1997) 20 O.S.C.B. 1218, as amended

UPON the application (the "Application") of Pelangio Mines Inc. (the "Issuer") to the Ontario Securities Commission (the "Commission") for an order pursuant to section 147 of the Act exempting the Issuer from the provisions of sections 13.2 and 13.5 of Ontario Securities Commission Policy Statement No. 5.2 ("OSC Policy 5.2") now deemed to be a rule pursuant to the rule entitled In the Matter of Certain Trades in Securities of Junior Resource Issuers (1997) 20 OSCB 1218, as amended, (the "Junior Resource Issuers Rule"), which restricts the price per share at which any debt may be converted to shares;

AND UPON the Issuer having represented to the Commission that:

1.The Issuer was incorporated under the laws of the Province of Alberta on April 14, 1997.

2.The Issuer is a reporting issuer under the Act and in the Provinces of British Columbia, Alberta and Nova Scotia and is not in default of any of the requirements of the Act or the regulations made thereunder.

3.The common shares in the capital of the Issuer (the "Pelangio Shares") are listed and posted for trading on the Canadian Venture Exchange.

4.The price of the Pelangio Shares, using a 10 day weighted average closing price as of December 4, applied without a discount, is $0.07.

5.In connection with a debt settlement agreement entered into between the Issuer and an arm's length creditor (the "Creditor") pursuant to which the Issuer would issue shares in settlement of debt (the "Debt Settlement"), the Issuer proposes to issue 600,000 Pelangio Shares to the Creditor at a price of $0.10 per share in satisfaction of accounts payable in the amount of $60,000.

6.Section 13.2 of the Junior Resource Issuers Rule would require that the Pelangio Shares be issued at $0.20 per share.

7.Section 13.5 of the Junior Resource Issuers Rule would require that Pelangio obtain the approval of disinterested shareholders where the amount of the debt which has been settled by the issuance of shares in any 12-month period exceeds $50,000.

8.The Creditor has expressed its willingness to receive the 600,000 Pelangio Shares at $0.10 per share in satisfaction of such accounts payable.

9.The Debt Settlement will otherwise comply with the provisions of Article 13 of the Junior Resource Issuers Rule.

AND UPON the Creditor having represented that it is not in possession of knowledge of a material fact or material change with respect to the Issuer that has not been generally disclosed.

AND UPON considering the Application and the recommendation of the staff of the Commission;

AND UPON the Director being satisfied that to do so would not be prejudicial to the public interest;

IT IS ORDERED, pursuant to section 147 of the Act, that the Issuer is exempt from the provisions of sections 13.2 and 13.5 of the Junior Resource Issuers Rule in respect of the issuance of Pelangio Shares to the Creditor in relation to the Debt Settlement.

February 13, 2001.

Margo Paul
Manager, Corporate Finance