Rio2 Limited
Headnote
National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- National Instrument 41-101, s. 19 General Prospectus Requirements -- National Instrument 51-102, s. 13.1 Continuous Disclosure Obligations -- National Instrument 52-107, s 5.1 Acceptable Accounting Principles and Auditing Standards -- National Instrument 52-109, s.8.6 Certification of Disclosure in Issuer's Annual and Interim Filings -National Instrument 52-110, s. 8.1 Audit Committees -- National Instrument 58-101, s.3.1 Disclosure of Corporate Governance Practices -- An issuer seeks relief from requirements applicable to a reporting issuer that does not have any of its securities listed or quoted on any of the Toronto Stock Exchange, Aequitas NEO Exchange Inc., a U.S. marketplace or a marketplace outside of Canada and the United States of America other than the Alternative Investment Market of the London Stock Exchange or the PLUS markets operated by PLUS Markets Group plc. -- a venture issuer with common shares listed on the TSXV is listed on a foreign exchange that does not meet the requirements of the definition of a venture issuer; the foreign exchange is a junior market that has less rigorous requirements than the TSXV; the issuer must continue to have its common shares listed on the TSXV and the foreign exchange must remain a junior market.
Applicable Legislative Provisions
National Instrument 41-101 General Prospectus Requirements, s. 19.
National Instrument 51-102 Continuous Disclosure Obligations, s. 13.1.
National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards, s. 5.1.
National Instrument 52-109 Certification of Disclosure in Issuer's Annual and Interim Filings, s. 8.6.
National Instrument 52-110 Audit Committees, s. 8.1.
National Instrument 58-101 Disclosure of Corporate Governance Practices, s. 3.1.
January 24, 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 RIO2 LIMITED (the Filer)
DECISION
Background
¶ 1 The securities regulatory authority or regulator in the Jurisdictions (Decision Maker) has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the Legislation) for relief from the requirements applicable to a reporting issuer that does not satisfy the Venture Issuer Definition (defined below) in each of the following instruments (collectively, the Instruments):
(a) National Instrument 41-101 General Prospectus Requirements;
(b) National Instrument 51-102 Continuous Disclosure Obligations;
(c) National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards;
(d) National Instrument 52-109 Certification of Disclosure in Issuer's Annual and Interim Filings;
(e) National Instrument 52-110 Audit Committees; and
(f) National Instrument 58-101 Disclosure of Corporate Governance Practices; (collectively, 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 subsection 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in Alberta, Saskatchewan, Manitoba, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland, Nunavut, Yukon and the Northwest Territories; and
(c) the decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.
Interpretation
¶ 2 Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.
In this decision, "Venture Issuer Definition" means a reporting issuer that does not have any of its securities listed or quoted on any of the Toronto Stock Exchange, Aequitas NEO Exchange Inc., a U.S. marketplace or a marketplace outside of Canada and the United States of America other than the Alternative Investment Market of the London Stock Exchange or the PLUS markets operated by PLUS Markets Group plc.
Representations
¶ 3 This decision is based on the following facts represented by the Filer:
1. the Filer's head office is located at Suite 1000 -- 355 Burrard Street, Vancouver, British Columbia V6C 2G8. The Filer is a reporting issuer in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland, Nunavut, Yukon and the Northwest Territories;
2. the Filer's securities are listed on the TSX Venture Exchange (TSXV) under the symbol "RIO", and the Filer trades on the OTCQX® Best Market under the symbol "RIOFF";
3. the Filer is authorized to issue an unlimited number of common shares. As at August 26, 2021, 254,336,483 Common Shares were issued and outstanding as fully paid and non-assessable shares;
4. on July 24, 2018, the Filer completed an acquisition by way of a court approved plan of arrangement through which the Filer and Atacama Pacific Gold Corporation amalgamated as a single entity with the name Rio2 Limited (the Amalgamation), whereby the Filer acquired the Cerro Maricunga Gold Project, located in Chile as its principal property;
5. at the time of the Amalgamation, the Filer's strategy was to allow Latin American investors with the possibility to invest within Latin America and participate in the Filer's growth with projects in the region, the Filer started listing its common shares on the Bolsa de Valores de Lima (the Foreign Exchange) on September 7, 2018, under the ticker symbol "RIO";
6. the common shares last traded on the Foreign Exchange on September 22, 2021 and since September 4, 2020 the total volume traded on the Foreign Exchange was 38,515 common shares;
7. as the Foreign Exchange is a marketplace and hence a "marketplace outside of Canada", the Filer does not, subsequent to September 7, 2018, satisfy the Venture Issuer Definition;
8. the Filer is not in default of securities legislation in any jurisdiction, except that from September 7, 2018 to the date of this decision, the Filer has been in default of securities legislation requirements in the Jurisdictions that apply to reporting issuers that are not venture issuers;
9. the Filer acknowledges that any right of action, remedy, penalty or sanction available to any person or company or to a securities regulatory authority against the Filer from September 7, 2018 until the date of this decision are not terminated or altered as a result of this decision;
10. the Foreign Exchange is a junior market;
11. the Foreign Exchange is junior or equivalent to the TSXV in terms of its requirements, as the minimum listing requirements, the listing maintenance requirements and the continuous disclosure requirements are much less onerous for the Foreign Exchange as compared to the TSXV;
12. the Foreign Exchange requires the Filer to comply with applicable laws and regulations of the Filer's home jurisdiction, including the policies of the TSXV; and
13. the information provided by the Filer about the Foreign Exchange and its status as a junior market for the purposes of review by capital markets staff of the principal regulator is accurate as at the date of the decision.
Decision
¶ 4 The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.
The decision of the principal regulator under the Legislation is that the Exemption Sought is granted provided that:
(a) the Filer complies with all the conditions and requirements of Canadian securities legislation applicable to a reporting issuer that satisfies the Venture Issuer Definition;
(b) the representations in sections 10 to 13, above, continue to be true;
(c) the Filer will inform the principal regulator of any material change regarding the Foreign Exchange in terms of its requirements, the minimum listing requirements, the listing maintenance requirements or any other changes which relate to its status as a junior market and inform the regulatory authority of whether any such change impacts its status as a junior market;
(d) the Filer continues to have its common shares listed on the TSXV;
(e) the Filer does not have any of its securities listed or quoted on any of the Toronto Stock Exchange, Aequitas NEO Exchange Inc., a U.S. marketplace or a marketplace outside of Canada and the United States of America other than the Foreign Exchange, the Alternative Investment Market of the London Stock Exchange or the PLUS markets operated by PLUS Markets Group plc;
(f) if there is an exemption in Canadian securities legislation available for an issuer that satisfies the Venture Issuer Definition, the Filer may use that exemption if the Filer meets all of the other conditions of that exemption; and
(g) if there is an exemption in the Instruments that is not available for issuers that satisfy the Venture Issuer Definition, the Filer must not use that exemption.
"John Hinze"
Director
British Columbia Securities Commission
OSC File #: 2021/0434