New Gold Bayfield Corp.

Decision

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Application for an order that the issuer is not a reporting issuer under applicable securities laws -- issuer has outstanding warrants exercisable into securities of parent that are held by 49 security holders -- more than 15 of the warrant holders are resident in British Columbia -- warrant holders no longer require public disclosure in respect of the issuer -- relief granted

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 1(10)(b).

February 18, 2015

IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO AND ALBERTA (the Jurisdictions) AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF NEW GOLD BAYFIELD CORP. (the Filer)

DECISION

Background

The securities regulatory authority or regulator in each of the Jurisdictions (Decision Maker) has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the Legislation) to cease to be a reporting issuer (the Exemption Sought).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a coordinated review application):

(a) the Ontario Securities Commission is the principal regulator for this application; and

(b) the decision is the decision of the principal regulator and evidences the decision of each other Decision Maker.

Interpretation

Terms defined in National Instrument 14-101 Definitions have the same meaning if used in this decision, unless otherwise defined.

Representations

This decision is based on the following facts represented by the Filer:

1. The Filer is a corporation existing under the laws of the Province of British Columbia and was formed by the amalgamation (the Amalgamation) of Bayfield Ventures Corp. (Bayfield) and 1019298 B.C. Ltd. (Subco), pursuant to the plan of arrangement (the Arrangement) made effective at 12:06 a.m. (Vancouver time) (the Effective Time) on January 1, 2015 (the Effective Date). The Filer's head office is located in Vancouver, British Columbia. All of the issued and outstanding common shares of the Filer (the Filer Shares) are owned by New Gold Inc.

2. The Filer is a reporting issuer or the equivalent in each of the Jurisdictions. The Filer is applying for a decision that it is not a reporting issuer in all of the jurisdictions in Canada in which it is currently a reporting issuer.

3. New Gold, the parent company of the Filer, is a corporation existing under the laws of the Province of British Columbia. New Gold is a reporting issuer or the equivalent in each of the Jurisdictions, as well as in all other provinces and territories of Canada, and the common shares of New Gold (the New Gold Shares) are listed and traded on the Toronto Stock Exchange (TSX) and on the NYSE MKT LLC under the symbol "NGD".

4. Immediately prior to the Effective Time, Bayfield was a corporation existing under the laws of the Province of British Columbia and had the following issued and outstanding securities: (a) 79,241,850 common shares (the Bayfield Shares); and (b) 4,497,547 common share purchase warrants (the Bayfield Warrants) expiring between May 6, 2016 and May 22, 2016, each Bayfield Warrant exercisable at a price of $0.255 or $0.35 into one Bayfield Share.

5. Bayfield was a reporting issuer or the equivalent in each of the Jurisdictions, as well as the Province of British Columbia, immediately prior to the Effective Time and the Bayfield Shares were listed and traded on the TSX Venture Exchange (TSXV) under the symbol "BYV".

6. At the Effective Time, New Gold acquired all of the issued and outstanding Bayfield Shares pursuant to the Arrangement in exchange for New Gold Shares on the basis of 0.0477 of a New Gold Share for each Bayfield Share.

7. As a result of the completion of the Arrangement, 3,779,836 additional New Gold Shares were listed and posted for trading on the TSX and 214,533 New Gold Shares were reserved for issuance upon exercise of the Bayfield Warrants. The Bayfield Shares were delisted from the TSXV at the close of business on January 2, 2015.

8. On completion of the Arrangement, the Filer became a reporting issuer as Bayfield, one of the amalgamating companies, was a reporting issuer for a period of at least twelve months prior to the Amalgamation.

9. On completion of the Arrangement, the Bayfield Warrants continued to exist as warrants of the Filer (the "Filer Warrants"), which are the only securities of the Filer that are not held by New Gold.

10. Pursuant to the terms of the Arrangement, each holder of a Bayfield Warrant outstanding immediately prior to the Effective Date, became entitled upon completion of the Arrangement, to receive, upon the exercise of such holder's warrant, in lieu of each Bayfield Share to which such holder was previously entitled to, 0.0477 of a New Gold Share for each Bayfield Warrant, subject to the adjustment provisions of such Bayfield Warrants. As a result of the terms of the Arrangement and the Amalgamation, New Gold is now obligated to issue the number of New Gold Shares necessary to meet, and in lieu of, the Filer's obligations upon the exercise of a Filer Warrant.

11. The simplified procedure under the Canadian Securities Administrators' Staff Notice 12-307 Application for a Decision that an Issuer is not a Reporting Issuer is not available to the Filer, as it will continue to have greater than 15 beneficial securityholders in the Province of British Columbia. There is one holder of Filer Shares and there are 49 holders of Filer Warrants.

12. The Filer has no intention of accessing the capital markets in the future by issuing any further securities to the public, and has no intention of issuing any securities.

13. No securities of the Filer are traded on a market place as defined in National Instrument 21-101 Marketplace Operation.

14. The Filer is not required to remain a reporting issuer in the Jurisdictions under any contractual arrangement between the Filer and the holders of the Filer Warrants.

15. The Filer and New Gold are not in default of any requirement of Canadian securities law as a reporting issuer.

Decision

Each of the Decision Makers is satisfied that the decision meets the test contained in the Legislation for the Decision Makers to make the decision.

The decision of the Decision Makers under the Legislation is that the Exemption Sought is granted.

"James Turner"
Vice-Chair
Ontario Securities Commission
 
"Judith Robertson"
Commissioner
Ontario Securities Commission