SEMAFO Inc. and Orbis Gold Limited – s. 104(2)(c)

Headnote

Application under Section 104(2)(c) of the Securities Act (Ontario) – exemption from sections 93.1-99 of the Securities Act (Ontario) – take-over bid by offeror, a Canadian company, for an Australian target company that is publicly listed in Australia and that is not a reporting issuer in any Canadian jurisdiction – other than offeror, the Australian target company has two shareholders in Ontario, each a sophisticated shareholder, holding an aggregate of 18.72% of shares outstanding – offer to be subject to laws of Australia and the Australian Stock Exchange – security holders in Ontario to receive same information and participate on same terms – security holders in Ontario were informed of the offeror's application for relief – Commission granted relief – all shareholders treated equally.

Statutes Cited

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

IN THE MATTER OF
THE SECURITIES ACT,
R.S.O. 1990, CHAPTER S.5, AS AMENDED

AND

IN THE MATTER OF
SEMAFO INC. AND ORBIS GOLD LIMITED

ORDER
(Section 104(2)(c))

                UPON the application of SEMAFO Inc. (the “Filer”) to the Ontario Securities Commission (the “Commission”) for an order (the “Order”) pursuant to Section 104(2)(c) of the Securities Act, R.S.O. 1990, c. S.5, as amended (the “Act”) exempting the Filer from the requirements of Sections 93-99.1 of the Act (the “Take Over Bid Requirements”) as they would otherwise apply to an intended cash offer (the “Offer”) announced on October 15, 2014 (in Canada)/October 16, 2014 (in Australia) by the Filer by way of a press release to acquire all of the issued share capital of Orbis Gold Limited (the “Target”) not already owned by the Filer;

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

                AND UPON the Filer having represented to the Commission that:

1.             The Filer is a corporation incorporated under the laws of the Province of Québec with its head office located in Montreal, Québec.

2.             The Filer is a reporting issuer in the Provinces of British Columbia, Alberta, Ontario and Québec.

3.             The common shares of the Filer are listed on the Toronto Stock Exchange in Canada and the NASDAQ OMX Stockholm exchange in Sweden, in each case under the symbol “SMF”.

4.             The Filer owns 5,000 ordinary shares in the capital of the Target.

5.             The Filer is not in default of any requirement of securities legislation in the Provinces of British Columbia, Alberta, Ontario and Québec.

6.             The information herein concerning the Target and the Subject Shareholders (as defined below) has been obtained from publicly available information and therefore the Filer is not in a position to make any representations regarding such information.

7.             The Filer believes that the information herein concerning the Target and the Subject Shareholders is true.

8.             The Target is an Australian incorporated company having its registered address in Brisbane, Australia. The Target is an Australian-based resource company focussed on the discovery and development of gold projects in the Birimian Gold Province of West Africa and elsewhere.

9.             The ordinary shares of the Target (the “Target Shares”) are listed on the official list of ASX Limited (“ASX”) under the symbol “OBS”. The only published market on which the Target Shares have traded during the 12 months immediately preceding the date hereof is the ASX. The Target Shares have not traded on a published market in Canada.

10.          Based upon the Target’s 2014 annual report, as at September 19, 2014, the Target had an outstanding share capital of 249,886,056 Target Shares.

11.          The Target is not a reporting issuer in any Canadian province or territory.

12.          On October 15, 2014 (in Canada)/October 16, 2014 (in Australia), the Filer announced the Offer by way of a press release disseminated through media sources in Australia and lodged with the ASX.

13.          Under the terms of the Offer, shareholders of the Target will receive AUD$0.65 in cash for each Target Share that they tender to the Offer.

14.          The Filer intends to publish and mail a Bidder’s Statement (the “Bidder’s Statement”) to all holders of Target Shares as soon as practicable and, in any event is required to publish and mail a Bidder’s Statement to all holders of Target Shares by no later than December 14, 2014 (in Canada)/December 15, 2014 (in Australia) (being within two months of announcing the intention to make the Offer). The Bidder’s Statement will be completed and mailed and the Offer will be made in compliance with the laws of Australia, including the rules and regulations of the Australian Securities and Investments Commission (“ASIC”), the Australian Corporations Act 2001 (Cth) and the Australian Corporations Regulations 2001 (Cth). The Bidder’s Statement will include a full description of the Offer, including required information as to the (i) Filer, (ii) Target, (iii) background and reasons for the Offer, and (iv) terms and conditions of the Offer. The Bidder’s Statement and other material relating to the Offer sent by or on behalf of the Filer to holders of Target Shares will be in English.

15.          The Offer is subject to a number of conditions, including regulatory approvals and a minimum acceptance condition of 50.1% of the Target Shares, which condition may be waived at the Filer’s sole discretion.

16.          The Offer will be open for acceptance for a period of not less than one month following the mailing of the Bidder’s Statement to shareholders of the Target, as is required by applicable Australian law.

17.          The Offer will be governed by Australian law and will be subject to the jurisdiction of the Australian courts. The Offer will be subject to legal and regulatory requirements, including the rules and regulations of ASIC, the Australian Corporations Act 2001 (Cth) and the Australian Corporations Regulations 2001 (Cth).

18.          The Offer constitutes a “take-over bid” under the definition of such term in Section 89(1) of the Act as certain holders of Target Shares are in Ontario. The Offer is therefore subject to the Take Over Bid Requirements unless otherwise exempted.

19.          In response to a request made by the Filer on October 14, 2014, the Target provided a copy of the share register maintained by Link Market Services Limited, the transfer agent for the Target, to the Filer on October 21, 2014. Such share register indicates that there are no registered shareholders of the Target in Canada and, to the best of the knowledge of the Filer as of November 17, 2014, there are no shareholders of the Target whose last address shown on the books of the Target is in Canada.

20.          Notwithstanding the share register, based upon the Target’s 2014 Annual Report and publicly available substantial shareholder notices filed with the ASX, Goodman & Company, Investment Counsel Inc., a subsidiary of Dundee Corporation (“Goodman”), and 1832 Asset Management L.P., a wholly-owned affiliate of The Bank of Nova Scotia (“1832AMLP” and together with Goodman, the “Subject Shareholders”), are the beneficial owners of 20,400,000 Target Shares and 26,400,000 Target Shares, respectively, repre-senting, in the aggregate, 18.7% of the issued and outstanding Target Shares as at September 19, 2014.

21.          Goodman is an Ontario based corporation having its head office in Toronto, Ontario.

22.          Goodman is registered with the Commission as an exempt market dealer, investment fund manager and portfolio manager.

23.          The 20,400,000 Target Shares beneficially owned by Goodman represent 8.16% of the issued and outstanding Target Shares as at September 19, 2014.

24.          1832AMLP is a limited partnership formed under the laws of the Province of Ontario and its head office is located in Toronto, Ontario. Its general partner is wholly-owned by The Bank of Nova Scotia.

25.          1832AMLP is registered with the Commission as an exempt market dealer, investment fund manager, portfolio manager and commodity trading manager.

26.          The 26,400,000 Target Shares beneficially owned by 1832AMLP represent 10.56% of the issued and outstanding Target Shares as at September 19, 2014.

27.          Offers under an off-market take-over bid made in accordance with applicable Australian law are made to those holders of Target Shares shown on the register of shareholders as at the relevant “register date” set for the take-over bid. The Filer has complied with Australian law in requesting and obtaining a copy of the Target’s share register showing all of the registered holders of Target Shares.

28.          Information in relation to beneficial ownership of Target Shares is only made readily publicly available when a shareholder becomes a “substantial holder” under applicable Australian law (that is, the shareholder has voting power greater than 5% in the target company).

29.          To the best of the Filer’s knowledge as of November 17, 2014, the Filer reasonably believes that, other than Goodman and 1832AMLP, there are no other beneficial holders of Target Shares in Ontario or elsewhere in Canada.

30.          To the best of the Filer’s knowledge as of November 17, 2014, the Target has not conducted any prospectus exempt offerings in Canada.

31.          The Filer has communicated with each of the Subject Shareholders in order to notify the Subject Shareholders of the Filer’s application for exemptive relief from the requirements in sections 93-99.1 of the Securities Act (Ontario) in connection with the Offer.

32.          The Offer and any amendments to the Offer will be made in compliance with the laws of Australia, including the rules and regulations of ASIC, the Australian Corporations Act 2001 (Cth) and the Australian Corporations Regulations 2001 (Cth).

33.          Canadian holders of Target Shares will be entitled to participate in the Offer on terms at least as favourable as the terms that apply to the general body of holders of Target Shares.

34.          At the same time as the Bidder’s Statement and other material relating to the bid is sent by or on behalf of the Filer to holders of Target Shares resident in Australia, the material will be filed and sent to holders of Target Shares whose last address as shown on the share register of the Target is in Canada.

                AND UPON the Commission being satisfied that it would not be prejudicial to the public interest for the Commission to grant the Order;

                IT IS ORDERED, pursuant to Section 104(2)(c) of the Act, that the Filer be exempt from the Take Over Bid Requirements in connection with the Offer provided that:

(i)            the Offer and any amendments to the Offer are made in compliance with the laws of Australia, including the rules and regulations of ASIC, the Australian Corporations Act 2001 (Cth) and Australian Corporations Regulations 2001 (Cth);

(ii)           the Bidder’s Statement is published and mailed to holders of Target Shares no later than December 14, 2014 (in Canada)/December 15, 2014 (in Australia);

(iii)          Canadian holders of Target Shares are entitled to participate in the Offer and any amendments to the Offer on terms at least as favourable as the terms that apply to the general body of holders of Target Shares; and

(iv)          at the same time as the Bidder’s Statement and other material relating to the Offer are sent by or on behalf of the Filer to holders of Target Shares resident in Australia, the material is filed with the Commission and sent to holders of Target Shares whose last address as shown on the share register of the Target is in Canada.

                DATED this 18th day of November, 2014.

“Christopher Portner”
Commissioner
Ontario Securities Commission

“Judith Robertson”
Commissioner
Ontario Securities Commission