Orla Mining Ltd.
Headnote
Multilateral Instrument 11-102 Passport System and National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- National Instrument 51-102, s. 13.1 -- Continuous Disclosure Obligations -- An issuer requires relief from the requirement to include certain financial statements in a business acquisition report -- The acquired company filed an information circular before the date of the acquisition; the information circular included financial information for a period that ended not more than one interim period before the financial information that the issuer would be required to include in its BAR; the issuer could rely on the exemptions in subsections 8.4(4) and (6) but for the fact that the acquired company, and not the issuer, filed the information circular; the issuer will file the information circular under its SEDAR profile and will include in the BAR all of the relevant financial statements included in the information circular.
Applicable Legislative Provisions
National Instrument 51-102 Continuous Disclosure Obligations, s. 13.1.
October 5, 2022
IN THE MATTER OF THE SECURITIES LEGISLATION OF BRITISH COLUMBIA AND ONTARIO (the Jurisdictions) AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF ORLA MINING LTD. (the Filer)
DECISION
Background
¶ 1 The securities regulatory authority or regulator in each of the Jurisdictions (Decision Maker) has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the Legislation) exempting the Filer from the requirement in the Legislation to include certain interim financial statements in a business acquisition report in connection with the Acquisition (as defined herein) required under Part 8 of National Instrument 51-102 Continuous Disclosure Obligations (the Exemption Sought).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):
(a) the British Columbia Securities Commission is the principal regulator for this application;
(b) the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in Alberta, Saskatchewan, Manitoba, Québec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Yukon, Northwest Territories and Nunavut;
(c) the decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.
Interpretation
Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.
Representations
¶ 2 This decision is based on the following facts represented by the Filer:
1. the Filer is a company governed by the Canada Business Corporations Act;
2. the Filer's head office is located at 1010-1075 West Georgia Street, Vancouver, British Columbia, V6E 3C9;
3. the authorized capital of the Filer consists of an unlimited number of common shares and Class A preferred shares;
4. the common shares of the Filer are listed for trading on the Toronto Stock Exchange (TSX) under the trading symbol (OLA) and on the NYSE American under the trading symbol (ORLA);
5. the Filer is a reporting issuer in each jurisdiction of Canada;
6. the Filer is not in default of securities legislation in any jurisdiction;
7. the Filer is engaged in the acquisition, exploration, development and production of mineral properties in Mexico, Panama and the United States;
8. Gold Standard Ventures Corp. (GSV) was incorporated under the laws of British Columbia;
9. GSV is engaged in the exploration and development of mineral properties in Nevada;
10. on August 12, 2022, the Filer acquired all of the common shares of GSV (the Acquisition);
11. prior to the Acquisition, the common shares of GSV were listed for trading on the TSX and NYSE American and GSV was a reporting issuer in each of the jurisdictions of Canada;
12. the Acquisition was carried out pursuant to a court-approved plan of arrangement under Division 5 of Part 9 of the Business Corporations Act (British Columbia) (the Arrangement);
13. under the terms of the Arrangement, the common shares of GSV were exchanged for common shares of the Filer and GSV became a wholly-owned subsidiary of the Filer;
14. the Arrangement and the resulting Acquisition were approved by the British Columbia Supreme Court (the Court), the TSX, the NYSE American and by special resolution of the securityholders of GSV;
15. GSV delivered an information circular (the Information Circular) describing the Acquisition to its securityholders prior to the meeting at which securityholder approval of the Acquisition was obtained;
16. the contents of the Information Circular and interim order in respect of the Arrangement were approved by the Court prior to delivery to the securityholders of GSV;
17. under NI 51-102, the Information Circular was required to contain prospectus-level disclosure and include or incorporate by reference the financial statements required by a prospectus;
18. the Information Circular included or incorporated by reference the following financial statements relating to the Acquisition:
(a) the audited financial statements of GSV for the years ended December 31, 2021 and 2020, together with the notes thereto and the auditors' reports thereon;
(b) unaudited financial statements of GSV for the three-month interim period ended March 31, 2022 with comparatives for the three-month interim period ended March 31, 2021; and
(c) unaudited pro forma condensed interim consolidated balance sheet of the Filer as at March 31, 2022, a pro forma condensed interim consolidated income statement of the Filer for the three months ended March 31, 2022 and a pro forma consolidated income statement of the Filer for the year ended December 31, 2021,
(collectively, the Circular Statements);
19. GSV filed the Information Circular under its SEDAR profile on July 12, 2022; the Information Circular was, therefore, available to the public and to the securityholders of GSV and the shareholders of the Filer on the SEDAR website;
20. to the knowledge of the Filer, since the time the Information Circular was filed, there has not been any change in the GSV business that is material and adverse to the Filer;
21. the Acquisition constitutes a "significant acquisition" for the Filer for the purposes of NI 51102; consequently, under Part 8 of NI 51-102, the Filer is required to file a business acquisition report within 75 days of the Acquisition;
22. under NI 51-102, the business acquisition report must include the following financial statements:
(a) the audited financial statements of GSV for the years ended December 31, 2021 and 2020, together with the notes thereto and the auditors' reports thereon;
(b) unaudited financial statements of GSV for the three- and six-month interim period ended June 30, 2022, with comparatives for the three- and six-month interim period ended June 30, 2021 (the Updated Interim Financial Statements); and
(c) unaudited pro forma condensed interim consolidated balance sheet of the Filer as at June 30, 2022, a pro forma condensed interim consolidated income statement of the Filer for the three and six months ended June 30, 2022 and a pro forma consolidated income statement of the Filer for the year ended December 31, 2021 (together with the Updated Interim Financial Statements, the Updated Financial Statements);
23. subsection 8.4(4) of NI 51-102 permits an issuer to include in its business acquisition report financial statements for a period ending not more than one interim period before the interim period for which financial statements would be required to be included in the business acquisition report, if
(a) the business does not, or related businesses do not, constitute a material departure from the business or operations of the issuer immediately before the acquisition,
(b) before the date of acquisition, the issuer filed a document that included financial statements for the acquired business that would have been required to be included if the document were a prospectus, and
24. those financial statements are for a period ending not more than one interim period before the interim period for which financial statements would be required to be included in the business acquisition report;
25. subsection 8.4(6) of NI 51-102 permits an issuer to include in its business acquisition report pro forma financial statements based on the interim financial statements permitted to be filed under subsection 8.4(4);
26. because GSV, and not the Filer, filed the Information Circular, the Filer is not able to rely on the exemptions in subsections 8.4(4) and 8.4(6) of NI 51- 02; the Filer satisfies all the other conditions of these exemptions; and
27. the Filer is seeking an exemption from the requirement under section 8.4 of NI 51-102 to include the Updated Financial Statements in the business acquisition report, provided that the Filer includes the Circular Statements in the business acquisition report and files the Information Circular under its SEDAR profile.
Decision
¶ 3 Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.
The decision of the Decision Makers under the Legislation is that the Exemption Sought is granted provided that:
(a) the Filer files the Information Circular under its SEDAR profile; and
(b) the Filer includes the Circular Statements in its business acquisition report.