Breakwater Resources Ltd. - cl. 104(2)(c)

le 30 mars 2001

Order

IN THE MATTER OF

THE SECURITIES ACT

R.S.O. 1990, c. S.5, AS AMENDED (the "Act")

AND

IN THE MATTER OF

BREAKWATER RESOURCES LTD.

ORDER

(Clause 104(2)(c))

UPON the application of Breakwater Resources Ltd. ("Breakwater") to the Ontario Securities Commission (the "Commission") for an order pursuant to clause 104(2)(c) of the Act that the transfer to Breakwater of the 525,000 common shares of Breakwater (the "Shares") held by Watercan Inc. ("Watercan"), a wholly-owned subsidiary of Breakwater, in connection with the winding-up of Watercan be exempt from the requirements of:

(a) sections 95, 96, 97, 98 and 100 of the Act, and

(b) subparagraph 203.1(1)(b)(ii) of the regulation under the Act, R.R.O. 1990, Reg. 1015, as amended (the "Regulation");

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

AND UPON Breakwater having represented to the Commission as follows:

1. Breakwater was incorporated under the laws of British Columbia on October 15, 1979 with the name Gambier Exploration Ltd. By articles of amendment effective June 23, 1981, Gambier changed its name to Breakwater Resources Ltd. Breakwater was continued under the Canada Business Corporations Act effective May 11, 1992.

2. Breakwater is currently a reporting issuer or the equivalent in each province and territory of Canada and is not on the list of defaulting reporting issuers maintained pursuant to subsection 72(9) of the Act.

3. Breakwater is authorized to issue, among other things, an unlimited number of common shares. As of March 5, 2001, Breakwater had 92,715,812 common shares outstanding.

4. The Breakwater common shares are listed on The Toronto Stock Exchange (the "TSE") under the symbol "BWR".

5. Watercan is a corporation incorporated under the Business Corporations Act (Ontario), is not a reporting issuer under the Act and is a wholly-owned subsidiary of Breakwater.

6. Watercan acquired the Shares, which represent approximately 0.56% of the outstanding Breakwater common shares, when it amalgamated with Jascan Resources Inc. pursuant to a plan of arrangement under the Business Corporations Act (Ontario) approved by Jascan shareholders on October 24, 2000.

7. Breakwater has determined to wind-up Watercan (the "Winding-Up"), which will result in the transfer of the Shares to Breakwater from Watercan. Such transfer of the Shares constitutes an issuer bid for purposes of the Act for which there is no exemption available from the requirements of sections 95, 96, 97, 98 and 100 of the Act.

8. Upon the Winding-Up becoming effective, the Shares will be canceled.

9. The acquisition of the Shares by Breakwater will have no material adverse economic effect on, or material tax consequences to, and will in no way prejudice, Breakwater or its public shareholders.

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

IT IS ORDERED, pursuant to clause 104(2)(c) of the Act, that Breakwater be exempt from the requirements of sections 95, 96, 97, 98 and 100 of the Act and subparagraph 203.1(1)(b)(ii) of the Regulation in connection with the transfer of the Shares to Breakwater from Watercan pursuant to the Winding-Up.

March 30, 2001.

J. A. Geller,K. D. Adams