Adventus Mining Corporation
Headnote
National Policy 11-206 Process for Cease to be a Reporting Issuer Applications -- application for an order that the issuer is not a reporting issuer under applicable securities laws, following completion of a plan of arrangement -- issuer does not satisfy the conditions for the simplified procedure in NP 11-206 -- issuer's outstanding securities, including debt securities, 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 -- issuer is in default of securities legislation for failure to file interim continuous disclosure filings.
Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c. S.5, as am., s. 1(10)(a)(ii).
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 ADVENTUS MINING 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 in Alberta, British Columbia, Manitoba, New Brunswick, 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 order, unless otherwise defined.
Representations
The order is based on the following facts represented by the Filer:
1. The Filer is a corporation governed by the Canada Business Corporations Act (the CBCA) and prior to the Arrangement (as defined below) its head office was located at 220 Bay Street, Suite 550, Toronto, Ontario, M5J 2W4. After the closing of the Arrangement and the Filer becoming a wholly-owned subsidiary of Silvercorp Metals Inc. (Silvercorp), the Filer's head office was changed to 1066 West Hastings Street, Suite 1750, Vancouver, British Columbia, V6E 3X1.
2. The Filer is a reporting issuer under the securities legislation in each of Ontario, Alberta, British Columbia, Manitoba, New Brunswick, and Newfoundland and Labrador. The Filer is not a reporting issuer in any other jurisdiction of Canada.
3. Under the terms and conditions of an arrangement agreement dated April 26, 2024 (the Arrangement Agreement) between the Filer and Silvercorp, effective at 12:01 a.m. (Toronto time) (the Effective Time) on July 31, 2024 (the Effective Date), Silvercorp acquired all of the issued and outstanding common shares in the capital of the Filer (the Filer Shares) by way of a statutory plan of arrangement under the CBCA (the Arrangement), resulting in the Filer becoming a wholly-owned subsidiary of Silvercorp.
4. On April 26, 2024, the Filer issued a news release, publicly announcing the Arrangement Agreement.
5. Silvercorp, the parent company of the Filer, is a corporation existing under the Business Corporations Act (British Columbia). Silvercorp's authorized share capital consists of an unlimited number of common shares (the Silvercorp Shares), which are listed on the Toronto Stock Exchange (TSX) under the symbol "SVM".
6. Immediately prior to the Effective Time on the Effective Date, the Filer had the following issued and outstanding securities: (a) 449,892,862 Filer Shares (including 67,441,217 Filer Shares already owned by Silvercorp, representing approximately 14.99% of the issued and outstanding Filer Shares); (b) 7,406,337 stock options exercisable to purchase a total of 17,406,337 Filer Shares (the Filer Options); (c) 4,108,000 restricted share units (the Filer RSUs), each exercisable for one Filer Share; and (d) 27,458,330 common share purchase warrants, each exercisable to purchase one Filer Share (the Filer Warrants).
7. The Filer Shares traded on the TSX Venture Exchange (TSXV) under the symbol "ADZN" and were quoted on the OTCQX under the symbol "ADVZF".
8. Under the Arrangement, at the Effective Time on the Effective Date:
(a) Silvercorp acquired all of the Filer Shares not already owned by Silvercorp;
(b) each holder of Filer Shares other than Silvercorp became entitled to receive, and Silvercorp became obligated to provide, 0.1015 of one Silvercorp Share in exchange for each Filer Share held immediately prior to the Effective Time on the Effective Date of the Arrangement (the Exchange Ratio);
(c) each Filer RSU outstanding immediately prior to the Effective Time on the Effective Date was deemed to be fully vested and was surrendered to the Filer in exchange for a cash payment from the Filer to each holder thereof equal to the volume-weighted average trading price of one Filer Share on the TSXV during the five trading days ending on the last trading day prior to the Effective Date of the Arrangement;
(d) each Filer Option outstanding immediately prior to the Effective Time on the Effective Date was exchanged for a replacement option of Silvercorp (each a Silvercorp Replacement Option) exercisable by the holder thereof for Silvercorp Shares, with the number and price of such Silvercorp Replacement Options adjusted in accordance with the Exchange Ratio; and
(e) each holder of a Filer Warrant outstanding immediately prior to the Effective Time on the Effective Date became entitled to receive, and Silvercorp became obligated to provide, upon exercise of each such Filer Warrant, such number of Silvercorp Shares calculated in accordance with the Exchange Ratio.
9. The Filer distributed the meeting materials (which included, among other things, the management information circular, notice of meeting, and letter of transmittal) on June 4, 2024 to the holders of Filer Shares, Filer Options, and Filer RSUs (collectively, the Voting Filer Securityholders), in connection with the special meeting of Voting Filer Securityholders that took place on June 26, 2024 (the Meeting) to consider the Arrangement, in accordance with the interim order of the Ontario Superior Court of Justice (Commercial List) (the Court) rendered May 22, 2024.
10. As was required pursuant to the terms of the Arrangement,
(a) the special resolution approving the Arrangement was approved at the Meeting, by the affirmative votes of at least: (i) 66 2/3% of the votes cast in person or by proxy by holders of Filer Shares; (ii) 66 2/3% of the votes cast in person or by proxy by Voting Filer Securityholders, voting as a single class; and (iii) a simple majority of the votes cast by holders of Filer Shares, excluding the votes cast by Silvercorp and other interested parties, in accordance with the minority approval requirements for a business combination under Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions; and
(b) the Filer received a final order from the Court on July 2, 2024, approving the Arrangement.
11. The full details of the Arrangement are contained in the Filer's management information circular dated May 21, 2024.
12. On July 31, 2024, the Filer issued a news release, publicly announcing: (i) the completion of the Arrangement, and (ii) the Filer's related intention to submit an application to cease to be a reporting issuer under applicable Canadian securities laws.
13. The Filer Shares were delisted from the TSXV and withdrawn from the OTCQB in the United States effective at the close of business on August 6, 2024.
14. All of the issued and outstanding Filer Shares are owned by Silvercorp.
15. 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 for trading on the TSXV. The Filer Warrants are the only outstanding securities of the Filer held by persons other than Silvercorp.
16. Upon the exercise of the Filer Warrants, only Silvercorp Shares are issuable. No Filer Shares or other securities of the Filer are issuable upon the exercise of the Filer Warrants.
17. 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 Warrants. The Investigation included the procurement of a shareholder report provided by Computershare Trust Company of Canada, and a geographic report provided by Broadridge Financial Services Inc. Based on the Investigation, there are at least 88 beneficial holders of Filer Warrants, 2 of which are in Alberta, 56 of which are in British Columbia, 6 of which are in Ontario, 2 of which are in Saskatchewan, 2 of which are in the United States, and 20 of which are in a foreign jurisdiction other than the United States.
18. There are 17 registered holders of Filer Warrants, 7 of which are in British Columbia, 2 of which are in Ontario, 6 of which are in the United States, and 2 of which are in a foreign jurisdiction other than the United States.
19. 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.
20. In connection with the Arrangement, up to 2,114,583 Silvercorp Shares were reserved for issuance upon exercise of the Filer Warrants.
21. Silvercorp, the parent company of the Filer, is a reporting issuer in each of Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island, Quebec, and Saskatchewan.
22. Silvercorp is not in default of securities legislation in any jurisdiction.
23. The Filer is not an OTC issuer as that term is defined under Multilateral Instrument 51-105 Issuers Quoted in the U.S. Over-the-Counter Markets.
24. The Filer has no intention to seek public financing by way of an offering of securities.
25. 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.
26. 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 currently a reporting issuer.
27. The Filer is not in default of securities legislation in any jurisdiction, except for its failure to file on or before August 29, 2024 its interim financial report and related interim management's discussion and analysis for its interim period ended June 30, 2024, as required under National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102), and related certificates as required under National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings (collectively, the Q2 Interims).
28. The Filer cannot rely on the exemption available in section 13.3 of NI 51-102 for issuers of exchangeable securities because the Filer Warrants are not "designated exchangeable securities" as that term is defined in NI 51-102. The Filer Warrants do not provide their holders with voting rights in respect of Silvercorp.
29. 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 because: (i) the outstanding securities of the Filer, namely 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; and (ii) the Filer is in default of securities legislation for failure to file the Q2 Interims by the prescribed deadline.
30. Upon the granting of the Order Sought, the Filer will not be a reporting issuer or the equivalent in any jurisdiction in 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 22nd day of October, 2024.
OSC File #: 2024/0469