Securities Law & Instruments

Headnote

Mutual Reliance Review System for ExemptiveRelief Applications -- take-over bid and collateral benefits-- agreement with a shareholder of the target of a take-overbid to acquire remaining shares of another company entered intofor reasons other than to increase the value of the considerationpaid to that shareholder under the bid -- agreement may be enteredinto notwithstanding the prohibition on collateral benefits.

Applicable Statutory Provisions

Securities Act, R.S.O. 1990, c. S.5, as amended,ss. 97(2) and 104(2)(a).

IN THE MATTER OF

THE SECURITIES LEGISLATIONOF

BRITISH COLUMBIA, ALBERTA,SASKATCHEWAN,

MANITOBA, ONTARIO, QUEBEC,NOVA SCOTIA

AND NEWFOUNDLAND AND LABRADOR

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEWSYSTEM

FOR EXEMPTIVE RELIEF APLICATIONS

AND

IN THE MATTER OF

WHEATON RIVER MINERALS LTD.,

TECK COMINCO LIMITED, AND

MIRANDA MINING CORPORATION

 

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker") in eachof British Columbia, Alberta, Saskatchewan, Manitoba, Ontario,Québec, Nova Scotia, and Newfoundland and Labrador (the"Jurisdictions") has received an application fromWheaton River Minerals Ltd. ("Wheaton River") fora decision under the securities legislation of the Jurisdictions(the "Legislation") that the provision in the Legislationthat an offeror who makes or intends to make a take-over bidor issuer bid and any person or company acting jointly or inconcert with the offeror must not enter into any collateralagreement, commitment or understanding with any holder or beneficialowner of securities of the offeree issuer that has the effectof providing to the holder or owner a consideration of greatervalue than that offered to other holders of the same class ofsecurities (the "Prohibition on Collateral Benefits"),will not apply to the Teck Transaction (as defined below) inconnection with the formal take over bid under the Legislation(the "Offer") by Wheaton River, directly or througha newly-incorporated subsidiary, to purchase all of the issuedand outstanding common shares (the "Shares") of MirandaMining Corporation (the "Company");

AND WHEREAS under the Mutual RelianceReview System for Exemptive Relief Application (the "System"),the British Columbia Securities Commission is the principalregulator for this application;

AND WHEREAS, unless otherwise defined,the terms herein have the meaning set out in National Instrument14-101 Definitions or in Québec Commission Notice 14-101;

AND WHEREAS the Offeror has representedto the Decision Makers that:

1. Wheaton River is a corporation incorporatedunder the laws of Ontario, is a reporting issuer in the provincesof British Columbia, Alberta, Saskatchewan, Manitoba, Ontario,Québec, New Brunswick, Nova Scotia, Prince Edward Island,and Newfoundland and Labrador and is not in default of anyprovisions of the Legislation;

2. the common shares of Wheaton River arelisted for trading on the Toronto Stock Exchange and the AmericanStock Exchange;

3. Wheaton River intends to incorporate awholly-owned subsidiary under the laws of Ontario or anotherCanadian province or territory in order to effect the Offer(Wheaton River and the subsidiary are referred to as the "Offeror");the subsidiary will not be and has no present intention ofbecoming a reporting issuer;

4. Wheaton River will provide adequate fundingto the subsidiary in order to permit it to complete the Offer;

5. before the Offer, Wheaton River did notown any Shares;

6. the Company was formed on November 21,2001 by Articles of Arrangement, Articles of Amalgamationand a Certificate of Amalgamation under the provisions ofthe Business Corporations Act (Yukon) (the "YBCA");the Company's head office is in Vancouver, British Columbia;

7. the Company is a reporting issuer in Alberta,British Columbia and Ontario;

8. the Company's authorized capital consistsof unlimited number of Shares without par value and an unlimitednumber of preferred shares without par value;

9. as of September 3, 2003, there were 71,902,535Shares outstanding on a fully-diluted basis; as of September3, 2003, there were no preferred shares issued and outstanding;

10. the Shares are listed on the TSX VentureExchange;

11. the Company indirectly owns 30% of theissued and outstanding Shares of Minera Nuteck S.A. de C.V.("Nuteck"); Teck Cominco Limited ("Teck")owns the remaining 70% of Nuteck's outstanding Shares throughits subsidiary, Oroteck Mexico S.A. de C.V.; Nuteck holdsa 100% interest in the Los Filos property located in the Stateof Guerrero, Mexico (the "Los Filos Property");

12. on May 28, 2003, the Company announcedthat its Board of Directors had initiated a review of alternativesto maximize shareholder value; in conjunction with the strategicreview, the Company and Teck agreed to jointly offer the opportunityfor a purchaser to acquire the Nuteck Interest (as definedbelow), and all of the Company's Shares as a package, enablinga purchaser to acquire 100% of Nuteck;

13. Wheaton River is advised that:

(a) the Company and Teck had, before enteringinto the negotiations with Wheaton River, negotiated atarms' length the basis on which consideration would be dividedas between the Nuteck Interest and the Shares of the Company;

(b) Teck and the Company concluded thatif they cooperated on the sale of Teck's interest in Nuteckand all of the Company's Shares, it would maximize valuefor Teck and the Company;

(c) the Company received financial advicefrom Macquarie North America Ltd. in connection with theallocation of the consideration between the Nuteck Interestand the Company's Shares;

14. on September 3, 2003, Wheaton River andthe Company entered into an agreement (the "Agreement")which provides that the Offer will be made, for cash, to allholders of the Shares for an aggregate of US$38.62 millionfor all the Shares (whether issued or issuable); this representsan amount of US$0.537 per Share based on 71,902,535 Sharesbeing outstanding on a fully-diluted basis;

15. the Agreement provides that the considerationto be paid to Teck for its Shares deposited under the Offeris the same as the consideration to be paid to all other holdersof Shares who deposit their Shares under the Offer;

16. the obligation of the Offeror to makethe Offer is conditional upon the Offeror entering into adefinitive agreement (the "Definitive Purchase Agreement")with Teck to purchase Teck's 70% interest in Nuteck (the "NuteckInterest"), the owner of the Los Filos Property, fora cash purchase price of US$48.4 million (the "Teck Transaction");this condition is expressed to be for the sole benefit ofWheaton River and may be waived by Wheaton River;

17. on September 3, 2003, Teck and WheatonRiver entered into an agreement concerning the terms of WheatonRiver's purchase of the Nuteck Interest;

18. under Lock-up and Support Agreements,dated September 3, 2003, principal shareholders of the Companyand Teck severally agreed with Wheaton River that they wouldsupport the Offer and would deposit and not withdraw all ofthe 43,517,641 Shares and any Shares resulting from the exerciseof 710,000 convertible securities (the "Lock-up Shares")held by them under the Offer; the Lock-up Shares representapproximately 61.5% of the issued and outstanding Shares ona fully-diluted basis;

19. Teck also agreed separately with WheatonRiver to cancel, for no additional consideration, 500,000Special Warrants entitling it to acquire 500,000 Shares incertain circumstances;

20. the 2,400,000 Shares owned by Teck, whichare included in the Lock-up Shares, represent approximately3.33% of the issued and outstanding Shares on a fully-dilutedbasis;

21. under the Agreement, the obligation ofthe Offeror to complete the Offer, and take up the Sharesdeposited, is conditional on certain conditions including:

(i) the completion of the Teck Transactionin accordance with the terms of a Definitive Purchase Agreement;

(ii) the granting of this relief; and

(iii) 90% of the Shares then outstandingon a fully diluted basis, other than Shares held by theOfferor, having been deposited under the Offer and not withdrawn;

22. the Board of Directors of the Companyhas received an opinion from Macquarie North America Ltd.that the consideration to be paid under the Offer is fairfrom a financial point of view to the Company's shareholders,and has unanimously recommended that the Company's shareholdersaccept the Offer;

23. following the completion of the Offer,the Offeror proposes to acquire any Shares which have notbeen tendered to the Offer, under the compulsory right ofacquisition in the YBCA, if permitted to do so under the YBCA;if that right is not available, the Offeror may consider otherways to acquire, directly or indirectly, all of the Sharesnot deposited under the Offer;

24. except as set out in this decision, theOffer is being made in compliance with the applicable provisionsof the securities laws of the Jurisdictions;

25. the Teck Transaction will not be enteredinto for the purpose of increasing the consideration to bepaid to Teck for its Shares; the Teck Transaction will permitWheaton River to secure 100% ownership, and therefore fullcontrol, of the Los Filos Property; the Teck Transaction isconsistent with Wheaton River's primary focus on acquiringand operating precious metal properties; Wheaton River couldonly be assured of acquiring 100% of Nuteck by dealing withboth Teck and the Company in accordance with their plan tomarket the Nuteck Interest and the Company together;

26. because the Company and Teck marketedthe Nuteck Interest and the Company's Shares as a single package,only an aggregate purchase price was negotiated by WheatonRiver; the allocation of the aggregate proceeds to be paidby Wheaton River between the Company's Shares and the NuteckInterest was negotiated at arm's length between Teck and theCompany before Wheaton River made the Offer; as Wheaton Riverdid not influence the allocation of the proceeds as betweenthe Nuteck Interest and the Company's Shares, Wheaton Rivercould not confer a benefit on Teck (in its capacity as a shareholderof the Company) that was not conferred on the other shareholdersof the Company;

27. Teck's interest in the Company (3.33%of the issued and outstanding Shares on a fully diluted basis)is not financially material to Teck in comparison to the valueof the Nuteck Interest or material to Wheaton River in relationto the Offer;

AND WHEREAS under the System, this MRRSDecision Document evidences the decision of each Decision Maker(collectively, the "Decision");

AND WHEREAS each Decision Maker is satisfiedthat the test contained in the Legislation that provides theDecision Maker with the jurisdiction to make the Decision hasbeen met;

THE DECISION of the Decision Makers underthe Legislation is that, in connection with the Offer, the TeckTransaction is being made for reasons other than to increasethe value of the consideration to be paid to Teck for its Sharesunder the Offer, and may be entered into despite the Prohibitionon Collateral Benefits.

October 3, 2003.

"Brenda Leong"