Securities Law & Instruments

Headnote

Section 144 -- application for variation of cease trade order -- issuer cease traded due to failure to file with the Commission annual financial statements -- issuer has applied for a variation of the cease trade order to permit the issuer to proceed with a private placement -- potential investors to be accredited investors and to receive copy of cease trade order and partial revocation order prior to making investment decision -- partial revocation granted subject to conditions.

Applicable Legislative Provisions

Securities Act , R.S.O. 1990, c. S.5, as am., ss. 127, 144.

National Instrument 45-106 Prospectus and Registration Exemptions.

IN THE MATTER OF

THE SECURITIES ACT

R.S.O. 1990, c. S-5, AS AMENDED

(the Act)

AND

IN THE MATTER OF

SOUTHEAST ASIA MINING CORP.

ORDER

(Section 144 of the Act)

WHEREAS the securities of Southeast Asia Mining Corp. (the Applicant) are subject to a temporary cease trade order issued by the Director on May 4, 2009 pursuant to subsections 127(1) and 127(5) of the Act and a further cease trade order issued by the Director on May 15, 2009 pursuant to subsection 127(1) of the Act (together, the Ontario Cease Trade Order), directing that all trading in the securities of the Applicant cease until further order by the Director;

AND WHEREAS the Applicant has applied to the Ontario Securities Commission (the Commission) for an order pursuant to section 144 of the Act (the Application) to partially revoke the Ontario Cease Trade Order;

AND WHEREAS the Applicant has represented to the Commission that:

1. The Applicant was incorporated under the laws of Canada on August 18, 2006. The Applicant's head and registered office is located at 130 Adelaide Street West, Suite 2700, Toronto, Ontario, M5H 3P5. The Applicant's records are currently located at 130 Adelaide Street West, Suite 2700, Toronto, Ontario, M5H 3P5.

2. As at the date hereof, the authorized capital of the Applicant consists of an unlimited number of common shares (the Common Shares) of which 53,484,262 are issued and outstanding.

3. The Applicant became a reporting issuer in the provinces of British Columbia, Alberta, Saskatchewan, Manitoba and Ontario on November 28, 2008 by filing a long form prospectus with the Ontario Securities Commission and with the securities commissions of British Columbia, Alberta, Saskatchewan and Manitoba under Multilateral Instrument 11-102 Passport System. The Applicant is not a reporting issuer or the equivalent in any other jurisdiction in Canada.

4. The Applicant does not have any securities listed or quoted on any exchange or market in Canada or elsewhere.

5. The Ontario Cease Trade Order was issued as a result of the Applicant's failure to file, in accordance with the requirements of Ontario securities law, audited annual financial statements and the related management's discussion and analysis for the year ended December 31, 2008 (together, the 2008 Annual Statements). The Applicant has not filed any further financial statements or other continuous disclosure documents required by Ontario securities law for periods or matters arising subsequent to December 31, 2008.

6. In addition to the Ontario Cease Trade Order, the Applicant is subject to the following cease trade orders, each of which was issued due to, in part, the failure to file the 2008 Annual Statements:

(a) an order issued by the British Columbia Securities Commission on May 5, 2009, as extended by a further order dated June 3, 2009;

(b) an order issued by the Manitoba Securities Commission on May 15, 2009; and

(c) an order issued by the Alberta Securities Commission on August 18, 2009.

7. The Applicant's failure to file financial statements commencing with the 2008 Annual Statements is a result of financial distress. If the Applicant cannot proceed with the Financing (as defined below), it is likely that the Applicant will not be able to continue its operations.

8. The Applicant intends to complete a non-brokered private placement of securities (the Financing) to raise up to $1,120,000 to allow the Applicant to bring itself back into compliance with its continuous disclosure obligations by filing the Required Documents (as defined below) and to satisfy certain outstanding debts, filing fees and other expenses of the Applicant as described more full in paragraph 10 below. The Financing will be conducted on a prospectus exempt basis with subscribers who are accredited investors (as such term is defined in National Instrument 45-106 Prospectus and Registration Exemptions) resident in the Province of Ontario only (each a Potential Investor).

9. The Financing will entail a private placement of units (Units) priced at $0.25 per Unit, with each Unit being composed of one Common Share of the Applicant and one-half of one Common Share purchase warrant (each whole common share purchase warrant, a Warrant) exercisable for a period of two years at a price of $0.35 per Warrant. To the knowledge of the Applicant none of the Potential Investors will be insiders or related parties of the Applicant.

10. The proceeds of the Financing is estimated to be applied as follows:

a.
Legal, accounting and audit fees:
$395,000
 
b.
Outstanding salary payments (at 50%)
$260,000
 
c.
Property payments
$400,000
 
d.
General office expense
$35,000
 
e.
Fees and penalties for late filings of materials
$30,000
 
Total Expenses
$1,120,000

11. As the Financing would involve a trade of securities and acts in furtherance of trades, the Financing could not be completed without a partial revocation of the Ontario Cease Trade Order.

12. The Financing will be completed in accordance with all applicable laws.

13. The Applicant believes that the proceeds of the Financing will be sufficient to bring its continuous disclosure obligations up to date and pay all related outstanding fees.

14. Prior to completion of the Financing, each Potential Investor will receive:

(a) a copy of the Ontario Cease Trade Order,

(b) a copy of this Order, and

(c) written notice from the Applicant, and will provide a written acknowledgement to the Applicant, that all of the Applicant's securities, including the Units, Common Shares and Warrants issued in connection with the Financing, will remain subject to the Ontario Cease Trade Order until it is revoked, and that the granting of this partial revocation Order does not guarantee the issuance of a full revocation in the future.

15. Upon issuance of this Order, the Applicant will issue a press release and file a material change report announcing the Financing and this Order.

16. To bring its continuous disclosure record up to date, the Applicant intends, within a reasonable time following completion of the Financing, to file the following documents on SEDAR once completed (collectively, the Required Documents):

(a) the 2008 Annual Statements;

(b) interim financial statements and related management's discussion and analysis for the three, six and nine month periods ended March 31, 2009, June 30, 2009 and September 30, 2009, respectively (the 2009 Interim Statements);

(c) all certifications by the Chief Executive Officer and the Chief Financial Officer of the Applicant with respect to the Applicant's 2008 Annual Statements and 2009 Interim Statements required by National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings; and

(d) all other continuous disclosure documents required by applicable securities legislation to be filed by the Applicant.

17. Upon completion of the Financing, the Applicant will apply to the Commission and to the other securities regulatory authorities where cease trade orders are in effect for a full revocation of the Ontario Cease Trade Order and those other cease trade orders.

18. The Applicant has not been previously subject to a cease trade order by the Commission.

19. The Applicant is not in default of any requirements of the Cease Trade Order or the Act or the rules and regulations, subject to the deficiencies outlined in paragraph 5 above.

20. The Applicant is not considering, nor is it involved in any discussion relating to, a reverse take-over, merger, amalgamation or other form of combination or transaction similar to any of the foregoing.

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

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

IT IS ORDERED, pursuant to section 144 of the Act, that the Ontario Cease Trade Order is partially revoked solely to permit trades in securities of the Applicant (including, for greater certainty, acts in furtherance of trades in securities of the Applicant) that are necessary for and are in connection with the Financing, provided that:

(a) prior to the completion of the Financing, each Potential Investor:

(i) receives a copy of the Ontario Cease Trade Order,

(ii) receives a copy of this Order, and

(iii) receives written notice from the Applicant, and provides a written acknowledgement to the Applicant, that all of the Applicant's securities, including the Units, Common Shares and Warrants issued in connection with the Financing, will remain subject to the Ontario Cease Trade Order until it is revoked, and that the granting of this partial revocation Order does not guarantee the issuance of a full revocation in the future; and

(b) the Applicant undertakes to make available copies of the written acknowledgements to staff of the Commission on request; and

(c) this Order will terminate on the earlier of:

(i) the closing of the Financing; and

(ii) 120 days from the date hereof.

DATED at Toronto this 18th day of December, 2009.

"Michael Brown"
Assistant Manager, Corporate Finance
Ontario Securities Commission