Great Lakes Nickel Limited – s. 144
Headnote
Application for a revocation of a cease trade order -- subject to cease trade order as a result of its failure to file financial statements -- Issuer has brought its filings up-to-date -- Issuer is otherwise not in default of applicable securities legislation -- Issuer has provided an undertaking to the Commission that it will not complete (a) a restructuring transaction involving, directly or indirectly, an existing or proposed, material underlying business which is not located in Canada, (b) a reverse take-over with a reverse take-over acquirer that has a direct or indirect, existing or proposed, material underlying business which is not located in Canada, or (c) a significant acquisition involving, directly or indirectly, an existing or proposed, material underlying business which is not located in Canada, unless the issuer files a preliminary prospectus and a final prospectus with the Ontario Securities Commission and obtains receipts for the preliminary prospectus and the final prospectus from the Director under the Act.
Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c. S.5, as am., ss. 127(1), 127(5), 127(8), 144.
IN THE MATTER OF
THE SECURITIES ACT,
R.S.O. 1990, CHAPTER S.5, AS AMENDED
(THE “ACT”)
AND
IN THE MATTER OF
GREAT LAKES NICKEL LIMITED
(THE “COMPANY”)
ORDER
(Section 144)
WHEREAS the securities of the Company are subject to a temporary cease trade order dated December 4, 2002 issued by a Manager of the Ontario Securities Commission (the "Commission"), pursuant to paragraph 2 of subsection 127(1) and subsection 127(5) of the Act, as extended by a further cease trade order dated December 16, 2002 made by a Manager of the Commission (collectively, the "Cease Trade Order"), ordering that the trading in the securities of the Company cease until the Cease Trade Order is revoked by the Commission;
AND WHEREAS the Cease Trade Order was made on the basis that the Company was in default of certain filing requirements under Ontario securities laws as described in the Cease Trade Order;
AND WHEREAS the Company is also subject to a cease trade order dated December 11, 2002 issued by a Manager pursuant to section 164 of the Securities Act (British Columbia) (the "BC Cease Trade Order") ordering that the trading in the securities of the Company cease until the BC Cease Trade Order is revoked by the Executive Director;
AND WHEREAS the Company is also subject to a cease trade order dated February 21, 2003 issued by a Member pursuant to section 198 of the Securities Act (Alberta) (the "Alberta Cease Trade Order") ordering that the trading in the securities of the Company cease until the Alberta Cease Trade Order is revoked by the Executive Director;
AND WHEREAS the Company is also subject to a cease trade order dated December 6, 2002 issued by the Director pursuant to section 318 of the Loi sur les valeurs mobilièrs (the "Québec Cease Trade Order") ordering that the trading in the securities of the Company cease until the Québec Cease Trade Order is revoked by the Director;
AND WHEREAS the Company has applied to the Commission pursuant to section 144 of the Act for a revocation of the Cease Trade Order (the "Application");
AND WHEREAS the Company has concurrently applied to the British Columbia Securities Commission for an order for revocation of the BC Cease Trade Order, the Alberta Securities Commission for an order for revocation of the Alberta Cease Trade Order and the Autorité des marches financiers for an order for revocation of the Québec Cease Trade Order;
AND WHEREAS the Company has represented to the Commission that:
1. The Company was incorporated by amalgamation on August 20, 1969 under the Business Corporations Act (Ontario).
2. The Company's registered and head office is located at 545 King Street North, Waterloo, Ontario, Canada, N2L 5Z6.
3. The Company is a junior natural resource exploration company.
4. The Company is a reporting issuer under the securities legislation of the provinces of Ontario, British Columbia, Alberta and Québec.
5. The Company's authorized share capital consists of an unlimited number of common shares of which 5,641,524 common shares are issued and outstanding (the "Common Shares").
6. The Company issued a non-interest bearing promissory note with a face value of $1 million on January 1, 1986 (the "Note"). The current principal balance outstanding on the Note is $975,823. The Note is held by 153078 Canada Inc., a company that is indirectly controlled by Robin Lowe. The board of the Company and 153078 Canada Inc. amended the terms of the Note as described in Note 4 of the audited annual financial statements for the year ended December 31, 2012. Mr. Lowe would have cancelled the Note for the benefit of the Company, but has agreed to amend the Note at the request of the Company as the financial outcome is more favourable to the Company. The amendments to the Note are in the spirit of the Commission's November 2, 2010 partial revocation order as repayment of the Note is now payable only out of 50% of the royalty payments derived from production of minerals from the Pardee property. The Note has also been amended to expire on December 31, 2020. Management of the Company is currently of the view that no additional payments on the promissory note will be made in the future.
7. Due to financial difficulties, the Company effectively ceased operations in 2002 and was unable to file its financial statements and other continuous disclosure documents.
8. The Cease Trade Order, the BC Cease Trade Order, the Alberta Cease Trade Order and the Québec Cease Trade Order were issued as a result of the failure of the Company to file its financial statements.
9. The Common Shares were subject to a suspension of trading resulting from the issuance of the Cease Trade Order, the BC Cease Trade Order, the Alberta Cease Trade Order and the Québec Cease Trade Order, and on June 20, 2003 the Common Shares were delisted from the TSX Venture Exchange.
10. Other than a cease trade order of the Commission issued on June 12, 1998 which was revoked on June 26, 1998, the Cease Trade Order, the BC Cease Trade Order, the Alberta Cease Trade Order and the Québec Cease Trade Order, the Company has not been subject to any cease trade order in any jurisdiction.
11. On November 2, 2010, the Commission issued a partial revocation order in respect of the Cease Trade Order, pursuant to which, on February 15, 2011, Robin Lowe, among other things, indirectly acquired 2,652,533 Common Shares from Jacobus Hanemaayer, Community Expansion Inc. and 153078 Canada Inc. in connection with a purchase agreement between the parties dated February 11, 2012 (the "Acquisition"). Prior to the Acquisition, Robin Lowe held, directly or indirectly, approximately 7% of the Common Shares. Robin Lowe's intention in seeking and obtaining the partial revocation order from the Commission was to complete the Acquisition and to, among other things, meet with the board of the Company, to organize a shareholder meeting of the Company to be elected as a director, to approve the sale of the Pardee property, to bring up-to-date and file the financial statements and continuous disclosure documents of the Company and to apply for a full revocation order.
12. As a result of the closing of the Acquisition, Robin Lowe owns, directly or indirectly, 3,047,419 Common Shares, being approximately 54% of the outstanding Common Shares.
13. The Common Shares are not currently listed for trading on any exchange or marketplace and the Company has no current plans to have any of its securities listed for trading on any exchange or marketplace.
14. Other than the Note and the Common Shares, the Company has no securities outstanding.
15. The Company held a special meeting of shareholders on September 30, 2011 at which, among other things, a new board of directors was elected and a transaction involving an option agreement with Rio Tinto Exploration Canada Inc. ("RTEC") to acquire a 100% undivided interest in the Company's Pardee property was approved.
16. On November 18, 2011, the Company entered into an agreement with RTEC regarding an option by RTEC to acquire a 100% undivided interest in certain mining properties forming the Company's Pardee property in Ontario. The basic terms of the agreement are that RTEC may exercise the option upon paying $5,500,000 to the Company over the course of seven (7) years, at which time it will grant the Company a 2% net smelter returns royalty. During the option period, RTEC will have the right to make all exploration and development decisions and the Company will provide to RTEC all project data that it holds or has the right to receive. RTEC may elect to withdraw from the Pardee property at any time after making the first payment under the option, with no interest earned and no further rights and obligations. RTEC is required to maintain the Pardee property in good standing during the option period.
17. The Company's SEDAR profile and SEDI issuer profile supplement are current and accurate.
18. The Company has prepared and filed on SEDAR under the Company's profile its audited financial statements for the fiscal periods ended December 31, 2009, 2010, 2011 and 2012, including management's discussion and analysis for such periods, its interim unaudited financial statements for the period ended March 31, 2013, including management's discussion and analysis for that period and accompanying certificates as required by National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings (collectively, the "Outstanding Continuous Disclosure Documents").
19. The Company was inactive for the period between 2002 and early 2011 and the continuous disclosure documents listed in Schedule "A" hereto ("Unfiled Continuous Disclosure Documents") were not filed and will not be filed on SEDAR as they relate to periods that ended more than three years prior to the date hereof and would not provide useful or relevant information to shareholders of the Company or the public.
20. The Company confirms that there are no significant transactions or litigation that relate to the Unfiled Continuous Disclosure Documents.
21. The Company confirms that it will, to the extent necessary, disclose any material changes in its continuous disclosure filings for the year ended December 31, 2012.
22. The Company has paid all outstanding activity, participation and late filing fees to the Commission and has paid all outstanding activity, participation and late filing fees to the securities regulatory authority or regulator in each of the provinces of British Columbia, Alberta and Québec in connection with the filing of the Outstanding Continuous Disclosure Documents.
23. Other than the Unfiled Continuous Disclosure Documents, the Company has filed all outstanding continuous disclosure documents that are required to be filed under Ontario securities law and is not in default of any requirements in applicable securities legislation in any jurisdiction.
24. The Company held an annual general meeting of shareholders on December 28, 2012 at which shareholders (i) received the audited financial statements of the Company for the fiscal periods ended December 31, 2009, 2010 and 2011, (ii) appointed KPMG LLP as auditors of the Company, and (iii) elected directors to serve until the next annual meeting.
25. The Company's current directors are Robin Lowe, Greg Lowe, Roy Annett, Michael Power and Marcus Martin (collectively, the "Directors"). The Company's current executive officers are Robin Lowe, the President and Chief Executive Officer, and Greg Lowe, the Chief Financial Officer, Secretary and Treasurer. The Company's Directors were elected at the Company's special meeting of shareholders on September 30, 2011 and more recently at the Company's annual and general meeting of shareholders on December 28, 2012. On September 30, 2011, Robin Lowe was appointed the President and Chief Executive Officer and Greg Lowe was appointed the Chief Financial Officer, Secretary and Treasurer. There are no current or incoming directors, executive officers or promoters other than those which have been disclosed herein.
26. The Company is not considering, nor is it involved in any discussions relating to, a reverse takeover, merger, amalgamation or other form of combination or transaction similar to any of the foregoing. However, it is the intention of management of the Company to investigate opportunities going forward. The Company has provided the Commission with an undertaking that the Company will not complete: (a) a restructuring transaction involving, directly or indirectly, an existing or proposed, material underlying business which is not located in Canada, (b) a reverse take-over with a reverse take-over acquirer that has direct or indirect, existing or proposed, material underlying business which is not located in Canada, or (c) a significant acquisition involving, directly or indirectly, an existing or proposed, material underlying business which is not located in Canada, unless, (A) the Company files a preliminary prospectus and a final prospectus with the Commission and obtains receipts for the preliminary prospectus and the final prospectus from the Director under the Act, (B) the Company files or delivers with the preliminary prospectus and the final prospectus the documents required by Part 9 of National Instrument 41-101 General Prospectus Requirements ("NI 41-101") including a completed personal information form and authorization in the form set out in Appendix A of NI 41-101 for each current and incoming director, executive officer and promoter of the Company, and (C) the preliminary prospectus and the final prospectus contain the information required by the applicable securities legislation, including the information required for a probable restructuring transaction, reverse takeover or significant acquisition (as applicable).
27. The Company has filed a completed personal information form and authorization form for each director and executive officer of the Company in the form of Appendix A of National Instrument 41-101 General Prospectus Requirements.
28. Upon the issuance of this revocation order, the Company will issue a news release and file a material change report on SEDAR disclosing the revocation of the cease trade orders and outlining the Company's future plans. The material change report will include disclosure on what remedial continuous disclosure documents have been filed on SEDAR and a description of the undertaking referred to in paragraph 26 above. The Company will concurrently file the news release and a material change report regarding the revocation of the cease trade orders on SEDAR.
AND UPON considering the Application and the recommendation of 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 144 of the Act that the Cease Trade Order is revoked.
DATED at Toronto, Ontario on this 30th day of July, 2013.
Schedule "A"
1. Interim financial statements for the period ended September 30, 2002 (and related MD&A).
2. Audited financial statements for the period ended December 31, 2002 (and related MD&A).
3. Interim financial statements for the period ended March 31, 2003 (and related MD&A).
4. Interim financial statements for the period ended June 30, 2003 (and related MD&A).
5. Interim financial statements for the period ended September 30, 2003 (and related MD&A).
6. Audited financial statements for the period ended December 31, 2003(and related MD&A).
7. Interim financial statements for the period ended March 31, 2004 (and related MD&A).
8. Interim financial statements for the period ended June 30, 2004 (and related MD&A).
9. Interim financial statements for the period ended September 30, 2004 (and related MD&A).
10. Audited financial statements for the period ended December 31, 2004 (and related MD&A).
11. Interim financial statements for the period ended March 31, 2005 (and related MD&A).
12. Interim financial statements for the period ended June 30, 2005 (and related MD&A).
13. Interim financial statements for the period ended September 30, 2005 (and related MD&A).
14. Audited financial statements for the period ended December 31, 2005(and related MD&A) .
15. Interim financial statements for the period ended March 31, 2006 (and related MD&A).
16. Interim financial statements for the period ended June 30, 2006 (and related MD&A).
17. Interim financial statements for the period ended September 30, 2006 (and related MD&A).
18. Audited financial statements for the period ended December 31, 2006 (and related MD&A).
19. Interim financial statements for the period ended March 31, 2007 (and related MD&A).
20. Interim financial statements for the period ended June 30, 2007 (and related MD&A).
21. Interim financial statements for the period ended September 30, 2007 (and related MD&A).
22. Audited financial statements for the period ended December 31, 2007 (and related MD&A).
23. Interim financial statements for the period ended March 31, 2008 (and related MD&A) .
24. Interim financial statements for the period ended June 30, 2008 (and related MD&A).
25. Interim financial statements for the period ended September 30, 2008 (and related MD&A).
26. Audited financial statements for the period ended December 31, 2008 (and related MD&A).
27. Interim financial statements for the period ended March 31, 2009 (and related MD&A).
28. Interim financial statements for the period ended June 30, 2009 (and related MD&A).
29. Interim financial statements for the period ended September 30, 2009 (and related MD&A).
30. National Instrument 52-109 Certificates for each filing period commencing on March 31, 2009 and ending on September 30, 2009 (both interim and annual).
31. Meeting materials (including management information circular and form of proxy) for 2003 annual meeting.
32. Meeting materials (including management information circular and form of proxy) for 2004 annual meeting.
33. Meeting materials (including management information circular and form of proxy) for 2005 annual meeting.
34. Meeting materials (including management information circular and form of proxy) for 2006 annual meeting.
35. Meeting materials (management information circular and form of proxy) for 2007 annual meeting.
36. Meeting materials (including management information circular and form of proxy) for 2008 annual meeting.
37. Meeting materials (including management information circular and form of proxy) for 2009 annual meeting.
38. Meeting materials (including management information circular and form of proxy) for 2010 annual meeting.