Mutual Reliance Review System for ExemptiveRelief Applications -- variation of decision granting exemptionto issuer of exchangeable shares from certain continuous disclosurerequirements, subject to certain conditions. Decision amendedto permit issuer to issue debt obligations guaranteed by parentprovided that issuer files the continuous disclosure informationof the parent and summarized financial information with respectto issuer.
Ontario Securities Cited
Securities Act, R.S.O. C. S. 5 as am., s. 144.
IN THE MATTER OF
THE SECURITIES LEGISLATIONOF
BRITISH COLUMBIA, ALBERTA,SASKATCHEWAN, MANITOBA,
ONTARIO, QUEBEC, NEW BRUNSWICK,NOVA SCOTIA, PRINCE EDWARD ISLAND, NEWFOUNDLAND AND LABRADOR,THE YUKON TERRITORY, THE NORTHWEST TERRITORIES AND NUNAVUT
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEWSYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
IN THE MATTER OF
BARRICK GOLD CORPORATION
BARRICK GOLD INC.
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatoryauthority or regulator (the Decision Maker) in each of BritishColumbia, Alberta, Saskatchewan, Manitoba, Ontario, Québec,New Brunswick, Nova Scotia, Prince Edward Island, Newfoundlandand Labrador, the Yukon Territory, the Northwest Territoriesand Nunavut (the Jurisdictions) has received an applicationfrom Barrick Gold Corporation (Barrick) and Barrick Gold Inc.(formerly Homestake Canada Inc.) (BGI) (collectively, the Filer),for a decision pursuant to the securities legislation of theJurisdictions (the Legislation) that the decision dated September18, 2001 granted to Barrick and BGI by the Decision Maker ineach Jurisdiction (the Original Decision), as varied pursuantto the decision (the Variation) dated May 30, 2003 granted toBarrick and BGI by the Decision Makers, (together with the OriginalDecision, the Existing Decision) be further varied (i) so thatBGI shall be permitted to issue debt obligations which are fully,unconditionally and irrevocably guaranteed by Barrick and (ii)to set forth certain additional provisions which shall applyin respect of the Continuous Disclosure Requirements (as definedin the Original Decision) to which BGI would otherwise be subjectin the event of the issuance of any such debt obligations tothe public;
AND WHEREAS pursuant to the Mutual RelianceReview System for Exemptive Relief Applications (the System),the Ontario Securities Commission is the principal regulatorfor this Application;
AND WHEREAS, unless otherwise defined,the terms herein have the meaning set out in National Instrument14-101 or in Québec Commission Notice 14-101;
AND WHEREAS the Filer has representedto the Decision Makers as follows:
1. On December 14, 2001, Homestake MergerCo., a U.S. subsidiary of Barrick, merged with Homestake MiningCompany pursuant to an agreement and plan of merger datedJune 24, 2001 (the Merger). In connection with the Merger,the Exchangeable Shares remained outstanding, but each suchExchangeable Share became exchangeable for 0.53 Barrick commonshares, rather than for one share of Homestake Mining Companycommon stock.
2. In contemplation of the Merger, the OriginalDecision was obtained to, among other things, exempt BGI fromthe requirements contained in the Legislation of the Jurisdictionsin which BGI is a reporting issuer (or equivalent) to issuea press release and file a report upon the occurrence of amaterial change, to file and deliver an annual report, whereapplicable, to file and deliver interim and annual financialstatements and to file an information circular or analogousreport, provided that the conditions of the Original Decision,including in particular the requirement that holders of ExchangeableShares receive all disclosure material furnished to holdersof Barrick common shares pursuant to the Legislation, weresatisfied.
3. The Variation was obtained on May 30, 2003in contemplation of a proposed internal borrowing by BGI fromBarrick or one of its subsidiaries.
4. Barrick was formed by the amalgamationof three mining companies on July 14, 1984 under the BusinessCorporations Act (Ontario). Its head office is locatedat BCE Place, Canada Trust Tower, Suite 3700, 161 Bay Street,P.O. Box 212, Toronto, ON M5J 2S1.
5. The authorized capital of Barrick consistsof (i) an unlimited number of common shares, (ii) an unlimitednumber of first preferred shares, issuable in series of whichone has been designated as first preferred shares, seriesC special voting share, and (iii) an unlimited number of secondpreferred shares, issuable in series. As of April 30, 2003,Barrick had 541,460,118 common shares, one first preferredshare series C special voting share and no second preferredshares outstanding.
6. As at March 31, 2003, Barrick had approximatelyU.S. $757 million in long-term debt outstanding. Allrated debt of Barrick is currently rated "A" byStandard & Poor's and "A3" by Moody's InvestorServices.
7. Barrick is a reporting issuer (or equivalent)in each of the provinces and territories of Canada and isnot on the list of reporting issuers in default in any ofthose Jurisdictions.
8. The Barrick common shares are listed andposted for trading on The Toronto Stock Exchange, the NewYork Stock Exchange, the London Stock Exchange, the SwissExchange and the Paris Bourse.
9. BGI is a corporation governed by the BusinessCorporations Act (Ontario).
10. BGI is an indirect subsidiary of Barrick.
11. The authorized capital of BGI consistsof (i) an unlimited number of Class A common shares, (ii)an unlimited number of Class B common shares, (iii) an unlimitednumber of Exchangeable Shares, (iv) an unlimited number ofthird preference shares, issuable in series, of which 10,000,000have been designated as third preference shares, series 1,and (v) an unlimited number of fourth preference shares. Asof April 30, 2003, 100,000 Class A common shares, 1,570,522Exchangeable Shares (excluding shares held by Barrick andits affiliates), 103,986,397 Class B common shares, no thirdpreference shares and 277,775,266 fourth preference shareswere outstanding. All of BGI's outstanding shares, other thanthe Exchangeable Shares held by the public, are held by Barrickand its affiliates.
12. BGI is a reporting issuer (or equivalent)in Ontario, Québec, British Columbia, Saskatchewan,Manitoba and Nova Scotia and is not on the list of reportingissuers in default in any of those Jurisdictions.
13. The Exchangeable Shares are listed andposted for trading on The Toronto Stock Exchange.
14. Each Exchangeable Share provides the holderthereof with the economic and voting equivalent, to the extentpracticable, of 0.53 Barrick common shares and the holdersof Exchangeable Shares receive the same disclosure that Barrickprovides to holders of Barrick common shares.
15. BGI carries on more than minimal operationsthat are independent of Barrick.
16. Barrick and BGI propose to file a preliminaryshelf prospectus (the Preliminary Shelf Prospectus) and finalshelf prospectus (the Final Shelf Prospectus) pursuant toNational Instruments 44-101 and 44-102 (collectively, theShelf Requirements) pursuant to which they may issue up toa fixed aggregate principal amount of debentures, notes and/orother similar evidences of indebtedness (Debt Securities)from time to time over the period of effectiveness of theFinal Shelf Prospectus. Any Debt Securities issued by BGI(BGI Debt Securities) will be fully, unconditionally and irrevocablyguaranteed by Barrick as to payment of principal, interestand all other amounts due thereunder. The BGI Debt Securitieswill not be convertible into equity securities of BGI, Barrickor any other entity. The Preliminary Shelf Prospectus andthe Final Shelf Prospectus will be filed in Canada only inthe Province of Ontario and will also be filed in the UnitedStates under the Multijurisdictional Review System.
17. In connection with any offering of DebtSecurities (any such offering, an Offering):
(a) the Final Shelf Prospectus and a prospectussupplement or supplements (collectively, the Prospectus)will be prepared pursuant to the Shelf Requirements, withthe disclosure required by:
(i) Item 4.1 of Form 44-101F3 being addressedby including the required disclosure with respect to Barrickonly;
(ii) Item 7 of Form 44-101F3 being addressedby including the required disclosure with respect to Barrickonly;
(iii) Item 12 of Form 44-101F3 being addressedby incorporating by reference Barrick's public disclosuredocuments, including Barrick's most recent annual report;and
(iv) Item 13 of Form 44-101F3 being addressedby incorporating by reference the audited annual financialstatements of Barrick for the year ended December 31,2002, including the note thereto which contains a summaryof selected consolidated financial information for BGI,including information as to its consolidated revenuesand other income, costs and expenses, income before taxes,net income, current assets, non-current assets, currentliabilities and non-current liabilities;
(b) a separate application has been madein the Province of Ontario for a decision permitting thevariation from the requirements of Form 44-101F3 describedin clauses (a)(i) through (a)(iii) above in connection withthe filing of the Preliminary Shelf Prospectus and the FinalShelf Prospectus;
(c) the Prospectus will include all materialdisclosure required by the Shelf Requirements concerningBarrick and BGI;
(d) the Prospectus will incorporate by referenceBarrick's current and future public disclosure documentsas required by Item 12 of Form 44-101F3 and will state thatpurchasers of BGI Debt Securities will not receive separatecontinuous disclosure information regarding BGI;
(e) Barrick will fully, unconditionallyand irrevocably guarantee payment of the principal and intereston any BGI Debt Securities, together with any other amountsthat may be due under any provisions of the trust indenturerelating to such BGI Debt Securities;
(f) the Debt Securities will have an approvedrating (as defined in National Instrument 44-101);
(g) Barrick will sign the Prospectus asissuer and credit supporter; and
(h) Barrick will continue to file with thesecurities regulatory authorities in each of the Jurisdictionsall documents required to be filed by it under the Legislation.
AND WHEREAS pursuant to the System thisMRRS Decision Document evidences the decision of each DecisionMaker (collectively, the Decision);
AND WHEREAS each of the Decision Makersis satisfied that the test contained in the Legislation thatprovides the Decision Maker with the jurisdiction to make theDecision has been met;
THE DECISION of the Decision Makers pursuantto the Legislation is that the Existing Decision is varied toreplace the existing paragraph 4(f) with the following:
"BGI does not issue any third preferenceshares or fourth preference shares or debt obligations, otherthan (i) debt obligations issued to Barrick and/or its subsidiaries,banks, loan corporations, trust corporations, treasury branches,credit unions, insurance companies or other financial institutionsor (ii) debt obligations which are fully, unconditionallyand irrevocably guaranteed by Barrick; and"
and to add to the Existing Decision the followingparagraph 4(g):
"(g) from the date that BGI first issuesdebt obligations to the public pursuant to clause (f)(ii)above by way of prospectus or prospectus supplement and continuingfor such time as such debt obligations remain outstandingand BGI continues to be a reporting issuer (or equivalent)in the Jurisdictions:
(i) Barrick sends or causes to be sent toall holders of such debt obligations resident in the Jurisdictionsall disclosure material that would have been required tobe sent by Barrick pursuant to the Legislation had suchdebt obligations been direct obligations of Barrick;
(ii) Barrick continues to fully, unconditionallyand irrevocably guarantee payment of the principal, intereston such debt obligations, together with any other amountsthat may be due under any provisions of the trust indentureor other instrument relating to such debt obligations, suchthat the debtors thereunder shall be entitled to receivepayment from Barrick in the event of any failure by BGIto make a payment as stipulated in such trust indentureor other instrument;
(iii) either: (A) the audited annual financialstatements of Barrick filed in any Jurisdiction in whichsuch prospectus or prospectus supplement is filed includeas a note thereto a summary of annual comparative selectedfinancial information for BGI; or (B) Barrick or BGI file,in electronic format, in any Jurisdiction in which suchprospectus or prospectus supplement is filed annual comparativeselected financial information for BGI derived from theaudited annual financial statements of Barrick for its mostrecently completed financial year and the financial yearimmediately preceding such financial year, accompanied bya selected procedures report of the auditors to Barrick;
(iv) either: (A) the unaudited interim financialstatements of Barrick filed in any Jurisdiction in whichsuch prospectus or prospectus supplement is filed includeas a note thereto a summary of interim comparative selectedfinancial information for BGI; or (B) Barrick or BGI file,in electronic format, in any Jurisdiction in which suchprospectus or prospectus supplement is filed interim comparativeselected financial information for BGI derived from theunaudited interim financial statements of Barrick for itsmost recently completed interim period and the correspondinginterim period of the immediately preceding financial year;
(v) the selected consolidated financialinformation for BGI referred to in items (iii) and (iv)above includes information as to the consolidated revenuesand other income, costs and expenses, income before taxes,net income, current assets, non-current assets, currentliabilities and non-current liabilities of BGI; and
(vi) the audited annual financial statementsof Barrick or annual comparative selected financial informationfor BGI referred to in item (iii) above and the unauditedinterim financial statements of Barrick or interim comparativeselected financial information for BGI referred to in item(iv) above are filed on the System for Electronic DocumentAnalysis and Retrieval (SEDAR) by BGI".
June 27, 2003.
"Paul M. Moore"
"Harold P. Hands"