Orla Mining Ltd. – s. 4(b) of Ont. Reg. 289/00 made under the OBCA

Consent given to an offering corporation under the Business Corporations Act (Ontario) to continue under the Canada Business Corporations Act.

Statutes Cited

Business Corporations Act, R.S.O. 1990, c. B.16, as am., s. 181.
Securities Act, R.S.O. 1990, c. S.5, as am.

Regulations Cited

Regulation made under the Business Corporations Act, Ont. Reg. 289/00, as am., s. 4(b).

IN THE MATTER OF
R.R.O 1990, REGULATION 289/00
(THE “REGULATION”)
MADE UNDER THE BUSINESS CORPORATIONS ACT (ONTARIO),
R.S.O. 1990, c. B.16, AS AMENDED
(THE “OBCA”)

AND

IN THE MATTER OF
ORLA MINING LTD.

CONSENT
(Subsection 4(b) of the Regulation)

                UPON the application of Orla Mining Ltd. (the “Corporation”) to the Ontario Securities Commission (the “Commission”) requesting the consent from the Commission pursuant to subsection 4(b) of the Regulation, for the Corporation to continue in another jurisdiction pursuant to Section 181 of the OBCA;

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

                AND UPON the Corporation having represented to the Commission that:

1.             The Corporation was incorporated as Red Mile Capital Corp. under the Business Corporations Act (Alberta) (the “ABCA”) by Articles of Incorporation dated May 31, 2007. On February 18, 2010 the Corporation changed its name to Red Mile Minerals Corp and on June 3, 2010 was continued from the ABCA to the Business Corporations Act (British Columbia) (the “BCBCA”). On April 21, 2015 it was continued from the BCBCA to the OBCA and on June 12, 2015 changed its name to Orla Mining Ltd.

2.             The Corporation’s head office is located at Suite 1240, 1140 West Pender Street, Vancouver, BC V6E 4G1 and its registered office is located at Suite 2100, 40 King Street West, Toronto, Ontario, M5H 3C2.

3.             The Corporation has an authorized share capital consisting of an unlimited number of common shares (“Common Shares”) and an unlimited number of preferred shares. As at November 18, 2016, 32,962,924 Common Shares and no preferred shares were issued and outstanding.

4.             The Corporation’s outstanding Common Shares are listed and posted for trading on the TSX Venture Exchange (the “Exchange”) under the symbol “OLA”.

5.             The Corporation has applied to the Director under the OBCA pursuant to Section 181 of the OBCA (the “Application for Continuance”) for authorization to continue under the Canada Business Corporations Act, R.S.C. 1985, c. C-44, as amended (the “CBCA”), under its name “Orla Mining Ltd.” (the “Continuance”).

6.             Pursuant to subsection 4(b) of the Regulation, where an applicant corporation is an offering corporation, the Application for Continuance must be accompanied by a consent from the Commission.

7.             The Corporation is an offering corporation under the OBCA and is a reporting issuer under the Securities Act (Ontario) (the “Act”) and the securities legislation of each of British Columbia and Alberta (collectively, the “Legislation”). British Columbia is currently the Corporation’s principal regulator.

8.             The Corporation intends to remain a reporting issuer in Ontario and in the provinces of British Columbia and Alberta.

9.             The Corporation is not in default of (i) any of the provisions of the OBCA, the Act or the Legislation, including any of the rules or regulations made thereunder; and (ii) any of the rules, regulations or policies of the Exchange.

10.          The Corporation is not a party to any proceeding or, to the best of its knowledge, information and belief, pending proceeding under the OBCA, Act or Legislation.

11.          The Continuance has been proposed in order to enable the Corporation to be amalgamated with Pershimco Resources Inc. (“Pershimco”), a corporation organized under the CBCA, by way of a plan of arrangement and for the amalgamated company to thereafter conduct its business and affairs in accordance with the provisions of the CBCA. The arrangement transaction (the “Arrangement”) to which the proposed Continuance relates is disclosed in the management information circular of the Corporation dated October 31, 2016 (the “Circular”) and the management information circular of Pershimco dated October 31, 2016.

12.          A summary of the material provisions respecting the proposed Continuance was provided to the shareholders of the Corporation in the Circular in respect of the Corporation’s special meeting of shareholders which was held of November 30, 2016 (the “Meeting”). The Circular includes full disclosure of the reasons for, and the implications of, the proposed Continuance and a summary of the material differences between the OBCA and the CBCA. The Circular was mailed on November 3, 2016 and November 4, 2016 to the Corporation’s shareholders and optionholders of record at the close of business on October 21, 2016 and was filed on November 7, 2016 on the System for Electronic Document Analysis and Retrieval.

13.          The general nature of the Corporation’s business is that it is a mineral exploration company. Following the Continuance and completion of the Arrangement, the Corporation will focus on continued exploration and development at Pershimco’s Cerro Quema mineral project located in Panama and will seek further growth opportunities in the Americas.

14.          In accordance with the OBCA and the Corporation’s constating documents, the special resolution of shareholders (the “Continuance Resolution”) to be obtained at the Meeting in connection with the proposed Continuance requires the approval of not less than 66 2/3% of the aggregate votes cast by the shareholders present in person or represented by proxy at the Meeting. Each shareholder is entitled to one vote for each Common Share held. In accordance with the CBCA and the Corporation’s constating documents, the special resolution of shareholders and optionholders (the “Arrangement Resolution”) to be obtained at the Meeting in connection with the proposed Arrangement requires the approval of not less than 66 2/3% of the aggregate votes cast by the shareholders and optionholders present in person or represented by proxy at the Meeting. Each shareholder is entitled to one vote for each Common Share held and each optionholder is entitled to one vote for each Common Share issuable upon exercise of each option held. The shareholders and optionholders vote on the Arrangement Resolution together as a single class. Additionally, the Arrangement Resolution must be passed by a simple majority of the votes cast on the resolution by shareholders present in person or by proxy at the Meeting, excluding the votes cast for Common Shares held or controlled by “related parties” and “interested parties” as defined under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions.

15.          The Corporation’s shareholders of record as of the record date for the Meeting had the right to dissent with respect to the proposed Continuance pursuant to Section 185 of the OBCA and with respect to the proposed Arrangement pursuant to section 190 of the CBCA. The Circular disclosed full particulars of these rights in accordance with applicable law.

16.          The Continuance Resolution was approved at the Meeting by 99.98% of the votes cast by the shareholders of the Corporation. None of the shareholders of the Corporation exercised dissent rights in respect of the Continuance pursuant to Subsection 185 of the OBCA at the Meeting. The Arrangement Resolution was approved at the Meeting by (i) 99.98% of the votes cast by the shareholders and optionholders of the Corporation, voting as a single class, and (ii) 99.93% of the votes cast by shareholders of the Corporation, excluding votes cast in respect of shares over which Marc Prefontaine, Hans Smit, Troy Fierro, Richard Hall, Kerry Sparkes, Aaron Wolfe, Pierre Lassonde and John Graham, and their affiliates and joint actors, exercise control or direction. None of the shareholders of the Corporation exercised dissent rights in respect of the Arrangement pursuant to Subsection 190 of the CBCA at the Meeting.

17.          Following the Continuance, the Corporation intends to amalgamate with Pershimco and continue as a new corporation under the CBCA under the name “Orla Mining Ltd.”. The amalgamated corporation will be a reporting issuer in Ontario and in each of the other jurisdictions where it is currently a reporting issuer, and the British Columbia Securities Commission will remain as the Corporation’s principal regulator. The Corporation is required to be continued under the CBCA in order to effect the Arrangement.

18.          Following the Continuance, the Corporation’s head and registered office will both be located at Suite 1240, 1140 West Pender Street, Vancouver, BC V6E 4G1 and British Columbia will remain the Corporation’s principal regulator.

19.          The Corporation’s material rights, duties and obligations under the CBCA will be substantially similar to those of a corporation governed by the OBCA.

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

                THE COMMISSION HEREBY CONSENTS to the continuance of the Corporation as a corporation under the CBCA.

                DATED at Toronto, Ontario this 30th day of November, 2016.

“Garnet W. Fenn”
Commissioner
Ontario Securities Commission

“Edward P. Kerwin”
Commissioner
Ontario Securities Commission