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Headnote
MRRS
- National Instrument 43-101 - Relief granted from requirement
in subsection 4.1(1) to file a technical report upon first becoming
a reporting issuer - Issuer to become a reporting issuer as a
result of plan of arrangement where assets spun out of existing
reporting issuer - Business of new reporting issuer substantively
a continuation of business of existing reporting issuer.
Rules
Cited
National
Instrument 43-101 Standards of Disclosure for Mineral Projects,
ss 4.1(1) and 9.1(1).
IN THE MATTER OF
THE
SECURITIES LEGISLATION OF ALBERTA,
BRITISH
COLUMBIA, AND ONTARIO
AND
IN
THE MATTER OF
THE
MUTUAL RELIANCE REVIEW SYSTEM
FOR
EXEMPTIVE RELIEF APPLICATIONS
AND
IN
THE MATTER OF
CORONA
GOLD CORPORATION, BLUE ECHO VENTURES INC.
AND
UNISPHERE WASTE CONVERSION LTD.
MRRS
DECISION DOCUMENT
WHEREAS
the local securities regulatory authority or regulator (the "Decision
Maker") in each of Alberta, British Columbia, and Ontario (the
"Jurisdictions") has received an application from Corona Gold
Corporation ("Corona"), Blue Echo Ventures Inc. ("New Corona")
and Unisphere Waste Conversion Ltd. ("Unisphere") (collectively,
the "Filers") for a decision under the securities legislation
of the Jurisdictions (the "Legislation") that the requirements
of the Legislation to file a current technical report for each
material property upon first becoming a reporting issuer (the
"Technical Report Requirement") will not apply to New Corona;
AND
WHEREAS under the Mutual Reliance Review System for
Exemptive Relief Applications (the "System"), the Ontario Securities
Commission is the principal regulator for this application;
AND
WHEREAS the Filers have represented to the Decision Makers
that:
1.
Corona is a public company incorporated under the Business
Corporations Act (Ontario) (the "OBCA"), has been a reporting
issuer in the Provinces of British Columbia, Alberta and Ontario
for more than twelve months and is not in default of any requirements
of Legislation.
2.
The authorized capital of Corona consists of an unlimited number
of common shares ("Corona Common Shares") of which there are
12,641,287 Corona Common Shares outstanding.
3.
Corona also has outstanding options ("Corona Options") to purchase
an aggregate of 1,761,128 Corona Common Shares.
4.
Corona is involved in the exploration of geologically attractive
properties for precious and base metals and the Corona Common
Shares are listed for trading on The Toronto Stock Exchange
(the "TSE").
5.
New Corona is an inactive, private, wholly owned subsidiary
of Corona incorporated under the OBCA with no material assets
other than approximately $250,000 in cash and no liabilities.
6.
The authorized capital of New Corona consists of an unlimited
number of common shares ("New Corona Common Shares") of which
6,000,000 are issued and outstanding.
7.
New Corona has a stock option plan (the "New Corona Plan") for
directors, officers, employees and consultants of New Corona.
8.
Unisphere is a private company incorporated under the OBCA formed
for the purpose of introducing systems to process non-hazardous
waste and industrial waste in an environmentally safe manner,
principally through the thermochemical decomposition of scrap
tires.
9.
The authorized capital of Unisphere consists of 10,000,000 special
shares and an unlimited number of common shares ("Unisphere
Common Shares") of which there are no special shares and 7,707,549
Unisphere Common Shares outstanding.
10.
Unisphere also has outstanding: (a) options ("Unisphere Options")
to purchase an aggregate of 3,685,000 Unisphere Common Shares;
and (b) warrants to purchase an aggregate of 666,664 Unisphere
Common Shares. In addition, Unisphere has an agreement to grant
warrants to purchase an aggregate of 501,803 Unisphere Common
Shares immediately prior to the Arrangement.
11.
Corona, New Corona and Unisphere have agreed, subject to the
satisfaction of certain conditions precedent, to participate
in a proposed statutory plan of arrangement (the "Arrangement")
pursuant to section 182 of the OBCA, pursuant to which two separate
publicly traded companies will be formed, being New Corona and
the company resulting from the amalgamation of Corona and Unisphere
("New Unisphere").
12.
Corona will transfer its mineral assets to New Corona. New Corona
will conduct the mineral exploration operations previously carried
on by Corona and New Unisphere will conduct the waste tire recycling
business previously carried on by Unisphere.
13.
Upon the Arrangement becoming effective (the "Effective Date"),
Corona Common Shareholders will become holders of both New Corona
Common Shares and common shares of New Unisphere ("New Unisphere
Common Shares") and Unisphere Common Shareholders will become
holders of New Unisphere Common Shares.
14.
The relevant steps of the Arrangement can be summarized as follows:
()
the articles of Corona will be amended to create, and authorize
Corona to issue an unlimited number of, pre-amalgamation common
shares ("Pre-Amalgamation Common Shares");
(a)
Corona will transfer and assign to New Corona all of the non-cash
assets of Corona (plus $750,000 cash) at the fair market value
thereof and issue to New Corona a warrant (the "Corona Warrant")
entitling New Corona to purchase an aggregate
of 1,000,000 Corona Common Shares at a price of $2.00 per share
for a period of three years from the Effective Date in exchange
for the issue by New Corona to Corona of 6,641,287 New Corona
Common Shares;
(b)
all right, title and interest of the Corona Shareholders in
the Corona Common Shares will be surrendered to Corona for cancellation,
and such shares will be cancelled by Corona, and in exchange
therefor, each Corona Shareholder will receive from Corona one
Pre-Amalgamation Common Share and one New Corona Common Share
for each such Corona Common Share so surrendered and cancelled;
(c)
Corona and Unisphere will amalgamate, pursuant to the provisions
of the OBCA, and continue as New Unisphere;
(d)
each holder of Pre-Amalgamation Common Shares will receive one
New Unisphere Common Share for every one Pre-Amalgamation Common
Share held and each holder of Unisphere Common Shares will receive
3.28 New Unisphere Common Shares for each Unisphere Common Share
held;
(e)
each Corona Option will be amended so that each holder of a
Corona Option will be entitled to receive, on exercise of a
Corona Option, one New Unisphere Common Share for each Corona
Option held, on the same terms and conditions and at the same
expiry date or dates as set forth therein notwithstanding the
resignation, removal or termination of the holders;
(f)
each Unisphere Option will be amended so that each holder of
a Unisphere Option will be entitled to receive, on exercise
of a Unisphere Option, one New Unisphere Common Share for each
Unisphere Option held, on the same terms and conditions and
at the same expiry date or dates as set forth therein; and
(g)
the terms of the Corona Warrant will be amended to permit New
Corona to purchase up to 1,000,000 New Unisphere Common Shares
at a price of $2.00 per share for a period of three years from
the Effective Date.
2. The Arrangement has been approved by the
holders of Corona Common Shares, the holders of Unisphere Common
Shares and by the Superior Court of Justice (Ontario).
3.
The Arrangement is also subject to certain conditions precedent,
including:
()
the New Corona Common Shares and New Unisphere Common Shares
be freely tradable in all of the Jurisdictions at the Effective
Date;
(b)
Unisphere must have completed or received commitments on terms
satisfactory to Corona for additional equity financing of not
less than $3.5 million; and
(c)
the New Corona Common Shares and the New Unisphere Common Shares
must have been approved for listing by either the TSE or the
Canadian Venture Exchange.
4.
Prospectus-level disclosure relating to New Corona and New Unisphere,
after giving effect to the Arrangement, and the securities to
be distributed pursuant to the Arrangement, was included in
the joint management proxy circular (the "Circular") of Corona
and Unisphere dated July 23, 2001.
5.
Holders of Corona Common Shares and Unisphere Common Shares
had the right to dissent from the Arrangement under section
185 of the OBCA, and the Circular disclosed full particulars
of this right.
6.
New Unisphere will be a reporting issuer in each of British
Columbia, Alberta and Ontario upon the completion of the Arrangement.
New Corona will be a reporting issuer in each of British Columbia
and Alberta upon completion of the Arrangement. New Corona will
be a reporting issuer in Ontario upon the listing of the New
Corona Common Shares on the TSE.
7.
Corona's mineral exploration activities have been the subject
of continuous disclosure on an ongoing basis for more than 12
months pursuant to Corona's responsibilities as a reporting
issuer. The disclosure in the Circular also contained technical
disclosure regarding Corona's mineral exploration activities.
AND
WHEREAS under the System, this MRRS Document evidences
the decision of each Decision Maker (collectively, the "Decision");
AND
WHEREAS each of the Decision Makers is satisfied that
the test contained in the Legislation that provides the Decision
Maker with the jurisdiction to make the Decision has been met:
THE
DECISION of the Decision Makers under the Legislation
is that New Corona is exempt from the Technical Report Requirement.
April 10, 2002.
"Kathryn
Soden"
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