Chieftain Metals Inc.

Decision

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- National Instrument 52-107, s. 5.1 Acceptable Accounting Principles and Auditing Standards - A reporting issuer wants to early adopt IFRS for purposes of preparing its financial statements - The issuer has assessed the readiness of its staff, board, audit committee, auditors and investors.

Applicable Legislative Provisions

National Instrument 52-107, s. 5.1.

February 11, 2011

IN THE MATTER OF

THE SECURITIES LEGISLATION

OF ONTARIO

(the Jurisdiction)

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

CHIEFTAIN METALS INC.

(the Filer)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) exempting the Filer from the requirements of Part 4 of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards (the Instrument) (the Exemption Sought) including the requirement that financial statements be prepared in accordance with generally accepted accounting principles determined with reference to Part V of the Handbook of the Canadian Institute of Chartered Accountants (the Handbook) applicable to public enterprises (Old Canadian GAAP), in order that the Filer may prepare financial statements for periods relating to financial years beginning on or after October 1, 2010 in accordance with generally accepted accounting principles determined with reference to Part I of the Handbook applicable to publicly accountable enterprises, that is International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IFRS-IASB).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):

(a) the Ontario Securities Commission (OSC) is the principal regulator for this application; and

(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 British Columbia, Alberta, Saskatchewan, Manitoba and Nova Scotia (the Passport Jurisdictions).

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

This decision is based on the following facts represented by the Filer:

1. The Filer is a corporation incorporated under the laws of Ontario on November 16, 2009.

2. The registered office of the Filer is located at 200 Bay Street, Suite 3800, Royal Bank Plaza, South Tower, Toronto, Ontario, M5J 2Z4 and its head office is located at 2 Bloor Street West, Suite 3400, Toronto, Ontario, M4W 3E2.

3. The Filer's principal business is the acquisition, exploration and, if warranted, development of mineral properties.

4. In anticipation of completing its initial public offering of its common shares (the IPO), the Filer retained MSCM LLP to audit its financial statements for the period from incorporation to September 30, 2010 (the Prospectus Financial Statements) for inclusion in the Prospectus (as defined below). The Prospectus Financial Statements were prepared in accordance with IFRS-IASB.

5. Pursuant to a pre-filing waiver application filed with the OSC on October 29, 2010, the Filer was granted exemptive relief (as evidenced by the receipt for a (final) prospectus dated December 16, 2010 (the Prospectus)) from certain of the requirements set out in the Instrument to allow the Filer to include the Prospectus Financial Statements in the Prospectus.

6. In connection with the IPO, the Filer filed a preliminary long form prospectus dated November 15, 2010, an amended and restated preliminary long form prospectus dated December 10, 2010 and the Prospectus and was issued a receipt for such filings on November 16, 2010, December 13, 2010 and December 17, 2010, respectively.

7. The receipt for the Prospectus dated December 17, 2010 constituted evidence of the relief referred to in paragraph 5 above.

8. The Filer completed its IPO on December 22, 2010 and is a reporting issuer in the Jurisdiction and the Passport Jurisdictions.

9. The Filer's common shares are listed on the Toronto Stock Exchange.

10. The financial year end of the Filer is September 30.

11. The Filer is not in default of securities legislation in the Jurisdiction or the Passport Jurisdictions.

12. Absent an exemption, section 4.2(1) of the Instrument requires, among other things, that the Filer's financial statements for periods relating to financial years beginning before (or prior to) January 1, 2011, other than acquisition statements, be prepared in accordance with Old Canadian GAAP.

13. The Canadian Accounting Standards Board has confirmed that publicly accountable enterprises will be required to prepare their financial statements in accordance with IFRS-IASB for financial statements relating to financial years beginning on or after January 1, 2011.

14. In CSA Staff Notice 52-321 Early Adoption of International Financial Reporting Standards, Use of US GAAP and Reference to IFRS-IASB, staff of the Canadian Securities Administrators recognized that some issuers may wish to prepare their financial statements in accordance with IFRS-IASB for periods beginning prior to January 1, 2011 and indicated that staff were prepared to recommend exemptive relief on a case by case basis to permit a domestic issuer to do so.

15. Subject to obtaining the Exemption Sought, the Filer intends to prepare and file its financial statements to be filed for periods relating to financial years beginning on and after October 1, 2010 in accordance with IFRS-IASB.

16. The Filer expended considerable resources in connection with the preparation and audit of the Prospectus Financial Statements in accordance with IFRS-IASB. Having already expended these resources, the Filer believes that requiring it to prepare financial statements in accordance with Old Canadian GAAP for its 2011 financial year only to then convert later back to IFRS-IASB for the financial year commencing October 1, 2011 would be costly and time-consuming and would create significant inefficiencies with respect to the Filer's financial statement preparation process. The Filer also believes such a requirement would be confusing to investors on account that the Prospectus Financial Statements were prepared in accordance with IFRS-IASB and previously made available to investors in connection with the IPO.

17. The Filer submits that early adoption of IFRS-IASB will eliminate the need to plan and perform a conversion from Old Canadian GAAP to IFRS. Further, early adoption of IFRS-IASB will eliminate the requirement to provide reconciliations of financial statements prepared under both Old Canadian GAAP and IFRS-IASB.

18. In addition, the Filer believes that the preparation and filing of its financial statements to be filed for periods relating to financial years beginning on and after October 1, 2010 (and its related disclosure practices for its 2011 financial year onward) in accordance with IFRS-IASB will benefit the Filer and its investors by offering continuity in form, presentation and public disclosure of its financial information consistent with the form, presentation and public disclosure of the Prospectus Financial Statements.

19. The Filer assessed the readiness of its staff, board of directors, auditors and other market participants for the immediate adoption by the Filer of IFRS-IASB for the presentation of its financial information in connection with the IPO and for all subsequent financial periods after the IPO and concluded that all parties are adequately prepared for the Filer's immediate adoption of IFRS-IASB.

20. The Filer considered the implications of early adoption of IFRS-IASB on its obligations under securities legislation including, but not limited to, those relating to CEO and CFO certifications, business acquisition reports, offering documents, and previously released material forward looking information, to the extent applicable.

Decision

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 the Filer:

1. prepares its financial statements to be filed for periods relating to financial years beginning on and after October 1, 2010 in accordance with IFRS-IASB;

2. complies with Part 3 of the Instrument for financial statements, financial information, operating statements and pro forma financial statements for periods relating to financial years beginning on or after October 1, 2010;

3. complies with the IFRS-related amendments to National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102) that came into force on January 1, 2011 and that apply to documents required to be prepared, filed, delivered, or sent under NI 51-102 for periods relating to financial years beginning on or after October 1, 2010;

4. complies with the IFRS-related amendments to National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings that came into force on January 1, 2011 and that apply to annual filings and interim filings for periods relating to financial years beginning on or after October 1, 2010; and

5. complies with the IFRS-related amendments to National Instrument 52-110 Audit Committees that came into force on January 1, 2011 and that apply to periods relating to financial years beginning on or after October 1, 2010.

"Jo-Anne Matear"
Assistant Manger
Ontario Securities Commission