McWatters Mining Inc. - s. 144

Headnote

Section 144 - Revocation of cease trade order and management cease trade order- Issuer subject to cease trade order and management cease trade order as a result of its failure to file annual financial statements and interim financial statements - Issuer has brought its filings up-to-date.

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, c. S.5, AS AMENDED

(the "Act")

AND

IN THE MATTER OF

MCWATTERS MINING INC.

ORDER

(Section 144)

WHEREAS the securities of McWatters Mining Inc. (the "Applicant") are currently subject to (i) a cease trade order dated July 29, 2004, made under paragraph 2 of Subsection 127(1) and Subsection 127(5) of the Act, as extended on August 10, 2004, and ii) a management cease trade order dated May 26, 2004, made under paragraph 2 of Subsection 127(1) and Subsection 127(5) of the Act, as extended on June 8, 2004 (collectively, the "OSC Cease Trade Orders") made by the Ontario Securities Commission (the "Commission") each directing that trading in the securities of the Applicant cease unless revoked by a further order of revocation;

AND WHEREAS the Applicant has applied to the Commission pursuant to Section 144 of the Act for an order revoking the OSC Cease Trade Orders (the "Application");

AND WHEREAS the Applicant has represented to the Commission that:

1. The Applicant was incorporated under Part IA of the Companies Act (Québec) on November 15, 1994, and was formerly engaged in gold mining, development and exploration before it ceased all of its operations in 2004.

2. The Applicant is a reporting issuer or its equivalent in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Québec, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador.

3. The Applicant is not a reporting issuer or its equivalent in any other jurisdiction in Canada.

4. The head office of the Applicant is located in the Province of Québec.

5. The securities of the Applicant are currently subject to the OSC Cease Trade Orders.

6. The OSC Cease Trade Orders were made as a result of the failure of the Applicant to file its annual financial statements for the year ended December 31, 2003, as well as its interim financial statements for the quarter ended March 31, 2004.

7. The securities of the Applicant are also currently subject to cease trade orders in British Columbia, Alberta, Manitoba and Québec (collectively with the OSC Cease Trade Orders, the "Cease Trade Orders").

8. Applications were also made with the securities regulatory authorities of British Columbia, Alberta, Manitoba and Québec for the revocation of the above mentioned Cease Trade Orders.

9. On May 6, 2008, the shareholders of the Applicant approved an arrangement (the "Arrangement") under the provisions of Section 49 and 123.107 and following of the Companies Act (Québec) involving the Applicant, its shareholders and CFT Capital Inc. ("CFT Capital"). The Arrangement was subsequently approved by the Superior Court of Québec (the "Court") on May 26, 2008, and became effective on June 2, 2008.

10. On May 7, 2008, the creditors of the Applicant approved an amended proposal (the "Amended Proposal") submitted to them by Raymond Chabot Inc., in its capacity as interim receiver of the Applicant under the Bankruptcy and Insolvency Act (Canada). The Amended Proposal was subsequently approved by the Court on May 26, 2008.

11. As part of the Arrangement, effective as of June 2, 2008, among other things:

(a) Class A Preferred Shares of the share capital of the Applicant (the "Class A Preferred Shares") were created and the 560,652,194 common shares of the share capital of the Applicant (the "Common Shares") that were outstanding immediately prior to the effective time of the Arrangement were exchanged, on a one-for-one basis, for 560,652,194 Class A Preferred Shares representing approximately 80% of the voting rights attached to the outstanding shares of the share capital of the Applicant immediately following the completion of the Arrangement;

(b) Class A Common Shares of the share capital of the Applicant (the "Class A Common Shares") were created;

(c) CFT Capital subscribed for 140,163,049 Class A Common Shares representing approximately 20% of the voting rights attached to the outstanding shares of the share capital of the Applicant immediately following the completion of the Arrangement, for a subscription price of $200,000 in the aggregate;

(d) the Applicant's share capital was amended to delete the authorized Common Shares from the Applicant's share capital; and

(e) Robert A. Friesen, Douglas Proctor and Ray W. Jenner were appointed to the board of directors of the Applicant.

12. On June 2, 2008, the board of directors of the Applicant appointed Robert A. Friesen as President and Secretary of the Applicant.

13. On June 10, 2008, in connection with the Arrangement, the board of directors of the Applicant appointed the accounting firm Harel Drouin -- PKF as its auditors.

14. The OSC Cease Trade Orders were partially revoked pursuant to an order made by the Commission on March 26, 2008, to permit certain trades in connection with the Arrangement.

15. The share capital of the Applicant currently consists in an unlimited number of Class A Common Shares and an unlimited number of Class A Preferred Shares, of which 140,163,049 Class A Common Shares and 560,652,194 Class A Preferred Shares are currently outstanding. The outstanding shares of the Applicant are not currently listed on any exchange.

16. In accordance with the letter of undertaking dated October 29, 2007 (the "Undertaking") addressed by CFT Capital to, and accepted by, the securities regulatory authorities of British Columbia, Alberta, Manitoba, Ontario and Québec, on October 10, 2008, the Applicant has filed on the System for Electronic Document Analysis and Retrieval ("SEDAR") audited annual financial statements and annual management's discussion and analysis ("MD&As") for its financial years ended on December 31, 2005, 2006 and 2007, as well as unaudited interim financial statements and interim MD&As for the interim periods ended March 31 and June 30, 2008, together with the related certificates required pursuant to Multilateral Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings ("MI 52-109").

17. In accordance with the Undertaking, the Applicant has not prepared or filed: (a) any annual or interim financial statements or annual or interim MD&As for its financial years ended on December 31, 2003 and 2004, nor the related certificates required pursuant to MI 52-109; (b) any interim financial statements or interim MD&As for its financial years ended on December 31, 2005, 2006 and 2007, nor the related certificates required pursuant to MI 52-109; (c) any annual information form for its financial years ended on December 31, 2003, 2004, 2005, 2006 and 2007; (d) any information circular for its financial years ended on December 31, 2003, 2004, 2005, 2006 and 2007.

18. On or about November 14, 2008, a notice of meeting, a management proxy circular and other proxy material in compliance with National Instrument 51-102 Continuous Disclosure Obligations and Form 51-102F5 Information Circular (collectively, the "Information Circular") were mailed to the Applicant's shareholders in connection with an annual general meeting of its shareholders (the "Meeting") to be held in Montréal on December 23, 2008 for the following purposes:

(a) to receive the financial statements of the Applicant for the financial years ended December 31, 2005, 2006 and 2007 and the report of the auditors thereon;

(b) to elect the directors;

(c) to appoint the auditors and to authorize the directors to fix their remuneration; and

(d) to transact such other business as may properly be brought before the Meeting or any adjournment thereof.

The Information Circular contained the disclosure required by Form 52-110F2 under Multilateral Instrument 52-110 Audit Committees and by Form 58-101F2 under National Instrument 58-101 Disclosure of Corporate Governance Practice.

19. As a result of the foregoing, the Applicant has now filed on SEDAR, in accordance with the Undertaking, all continuous disclosure documents required to be filed by the Applicant under the Act or the rules and regulations made pursuant thereto.

20. The Applicant's profiles on SEDAR and on the System for Electronic Disclosure for Insiders are up-to-date, and the Applicant has paid to the Commission all applicable outstanding activity and participation fee required by the Commission to be paid by the Applicant.

21. Forthwith after the revocation of the Cease Trade Orders, the Applicant will issue and file a news release and file a material change report on SEDAR disclosing the revocation of the Cease Trade Orders.

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

AND UPON being satisfied that the following order is not prejudicial to the public interest;

IT IS ORDERED, pursuant to Section 144 of the Act, that the OSC Cease Trade Orders are hereby revoked.

DATED at Toronto this 24th day of November, 2008