Securities Law & Instruments

Headnote

Section 144 - application for revocation of cease trade order - issuer subject to cease trade order as a result of its failure to file with the Commission and send to its shareholders annual and interim financial statements - issuer has brought filings up to date - full revocation granted.

Applicable Ontario Statutory Provisions

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

IN THE MATTER OF

THE SECURITIES ACT,

R.S.O.1990, CHAPTER S.5, AS AMENDED (the "Act")

AND

IN THE MATTER OF

KICKING HORSE RESOURCES LTD.

 

ORDER

(Section 144)

WHEREAS the securities of Kicking Horse Resources Ltd. (the "Issuer") are subject to a cease trade order (the "Cease Trade Order") issued by the Ontario Securities Commission (the "Commission") on August 28, 2002, pursuant to paragraph 2 of subsection 127(1) and subsection 127(5) of the Act;

AND WHEREAS the Issuer has now applied to the Commission for an order pursuant to section 144 of the Act to revoke the Cease Trade Order;

AND WHEREAS the Issuer has represented to the Commission as follows:

1. The Issuer is a corporation amalgamated under the Business Corporations Act (Alberta) pursuant to a certificate of Amalgamation dated August 13, 1999.

2. The head office of the Issuer is in Calgary, Alberta.

3. The Issuer is a reporting issuer in Alberta, British Columbia, Saskatchewan, Manitoba, Ontario and Quebec.

4. The Issuer is authorized to issue an unlimited number of common shares ("Common Shares"). As of October 16, 2003, the Issuer had 47,757,3000 Common Shares and warrants outstanding.

5. The outstanding Common Shares are listed for trading on the TSX Venture Exchange (the "TSX Venture"). Trading of the Common Shares is currently suspended by the TSX Venture due to the Cease Trade Order and the other similar cease trade orders issued by the securities regulatory authorities or regulators in each of British Columbia, Manitoba, Alberta and Quebec.

6. The Cease Trade Order was issued as a result of the Issuer's failure to file and deliver annual audited financial statements for the year ended December 31, 2001 and the first quarter interim unaudited financial statements for the period ended March 31, 2002.

7. Over the past year, the Issuer issued to one of its principal shareholders, now a director, $2,500,000 of debentures (originally unsecured, now secured) due September 20, 2004 (the "Debentures"). In conjuncture with the Debentures, the Corporation committed to issue up to a total of 1,300,000 warrants ("Warrants") to purchase Common Shares, conditional upon (i) the revocation of the Cease Trade Order, and the similar orders of the securities regulatory authorities or regulators in British Columbia, Manitoba, Alberta and Quebec, and (ii) the approval of the TSX Venture. Each Warrant has an exercise price based on the average closing market price of the Common Shares for the first twenty days of trading following the resumption of trading and is exercisable until May 14, 2005. In issuing the Debentures, the Issuer contravened the terms of the Cease Trade Order. In committing to the issuance of the Warrants, the Issuer may have contravened the terms of the Cease Trade Order.

8. The Issuer has reorganized its affairs, including arranging the adequate financing, and has filed the following on the System for Electronic Document Analysis and Retrieval (SEDAR):

(a) on June 11, 2003, the annual audited financial statements for the years ended December 31, 2001 and December 31, 2002 and its first quarter interim unaudited financial statements for the period ending March 31, 2003;

(b) on August 22, 2003, its second quarter interim unaudited financial statements for the period ending June 30, 2003; and

(c) on October 16, 2003, a Form 13-502F1 and the appropriate participating fee for its 2003 financial year.

9. Except as noted in paragraphs 6 and 7, the Issuer is not otherwise in default of any requirement of the Act or the regulations made thereunder.

10. The securities regulatory authority or regulator in each of British Columbia, Alberta, Manitoba and Quebec have now revoked their respective cease trade orders.

AND WHEREAS the Commission has considered the application and the recommendation of staff;

AND UPON the Commission 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 Cease Trade Order be and is hereby revoked.

October 27, 2003.

"Erez Blumberger"