Israel Chemicals Ltd.

Decision

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- National Instrument 43-101 Standards of Disclosure for Mineral Projects, s. 9.1 -- National Instrument 51-102 Continuous Disclosure Obligations, s. 13.1 -- non-reporting issuer seeking relief from the requirement to file a technical report and provide disclosure relating to issuer's material mineral projects -- issuer announced arrangement agreement with Canadian reporting issuer pursuant to which securities of the non-reporting issuer will only be offered to one US securityholder -- relief granted subject to conditions.

Applicable Legislative Provisions

National Instrument 43-101 Standards of Disclosure for Mineral Projects, ss. 4.1(1), 4.2(c) and 9.1

National Instrument 51-102 Continuous Disclosure Obligations, s 13.1; Form 51-102F5, s. 14.2.

April 1, 2015

IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO (the Jurisdiction) AND IN THE MATTER O THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF ISRAEL CHEMICALS LTD. (the Filer)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) exempting the Filer, pursuant to section 9.1 of National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101), from the Filer's obligation to: (i) file a technical report pursuant to subsection 4.2(1)(c) of NI 43-101 and comply with disclosure obligations relating to its material mineral projects under section 14.2 of Form 51-102F5 Information Circular (Form 51-102F5) and file a certificate of qualified persons under NI 43-101 in connection therewith (the Section 4.2 Exemptive Relief Requested); and (ii) to file a technical report pursuant to section 4.1 of NI 43-101 and file a certificate of qualified persons under NI 43-101 in connection therewith (the Section 4.1 Exemptive Relief Requested, and together with the Section 4.2 Exemptive Relief Requested, the Total Exemptive Relief Requested).

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

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

(b) the Filer has provided notice that subsection 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in each of British Columbia, Alberta, Saskatchewan, Manitoba, Québec, New Brunswick, Prince Edward Island, Nova Scotia, Newfoundland and Labrador, the Yukon Territory, the Northwest Territories and Nunavut.

Interpretation

Terms defined in National Instrument 14-101 Definitions and MI 11-102 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 limited liability company under the laws of Israel. Its registered and head office is in Tel-Aviv, Israel, and it operates through subsidiaries domiciled primarily in Israel, Netherlands, United Kingdom, Spain, China, Brazil, the United States and Germany.

2. The ordinary shares of the Filer (Ordinary Shares) are listed on the Tel Aviv Stock Exchange and the New York Stock Exchange (NYSE). The Filer is a "foreign private issuer" under U.S. securities laws and is in compliance with the securities laws of Israel and the United States.

3. The Filer is not a reporting issuer in any of the provinces or territories of Canada and is not in default of the securities legislation in any of such jurisdictions.

4. The Filer is a specialty minerals company that extracts raw materials and processes and formulates products primarily to customers in three end-markets: agriculture, food and engineered materials. The Filer's principal assets include (i) potash and bromine mines or concessions in the Dead Sea and related production facilities, (ii) potash concessions or permits in the United Kingdom and Spain and related facilities, (iii) phosphate permits in Israel and related facilities, (iv) bromine compounds processing facilities in Israel, the Netherlands and China, and (v) a global logistics and distribution network with operations in over 30 countries.

5. The Filer is subject to the regulatory oversight of the securities regulators of the U.S. The Filer's disclosure of scientific and technical information related to the Filer's mineral projects is in compliance with the laws of the U.S. and Israel, including SEC Industry Guide 7 (as defined in NI 43-101).

6. In 2014, approximately 40% of net sales of the Filer related to minerals that were extracted from the Dead Sea. The Dead Sea contains a supply of raw materials that is, for all practical purposes, unlimited. The Filer has not prepared an assessment of reserves or resources with respect to its Dead Sea concessions. The Filer, in consultation with its U.S. counsel and DMT Consulting Limited, an independent third party, determined that the Dead Sea mineral concession did not constitute a "reserve" under SEC Industry Guide 7, as the concession to distill minerals from the water is not a mineral deposit, and the definition of reserve under SEC Industry Guide 7 only applies to mineral deposits. Similarly, NI 43-101 does not apply to the extraction of minerals from water above the ground.

7. With respect to all concessions and permits, other than the Dead Sea, the Filer bases its mineral reserve estimates on engineering, economic and geological data assembled and analyzed by its engineers and geologists. Reserves are categorized in accordance with SEC Industry Guide 7. The Filer is not required to, and does not, publish resource estimates as SEC Industry Guide 7 does not apply to resources. In addition, the Filer does not have third parties prepare reports that would conform to NI 43-101.

8. Allana Potash Corp. (Allana) is governed by the Business Corporations Act (Ontario), and its registered and head office is in Toronto, Ontario.

9. The authorized capital of Allana consists of an unlimited number of common shares (Allana Shares), of which 325,225,006 Allana Shares were issued and outstanding as at March 26, 2015. Options (Options) entitling the holders thereof to acquire an aggregate of 17,902,500 Allana Shares were issued and outstanding on March 26, 2015.

10. The Allana Shares are currently listed on the Toronto Stock Exchange.

11. Allana is a reporting issuer in all the provinces of Canada except Québec (the Allana Jurisdictions) and is not in default of the securities legislation in any of the Allana Jurisdictions.

12. Allana is a mineral exploration corporation with a focus on the acquisition and development of potash assets internationally. Its principal asset is its Danakhil potash property in Ethiopia.

13. On March 26, 2015, the Filer and Allana announced that they had entered into an arrangement agreement (the Arrangement Agreement) pursuant to which the Filer will, through a wholly-owned subsidiary and subject to certain conditions, acquire all of the issued and outstanding Allana Shares not already owned by a subsidiary of the Filer in consideration for $0.50 per Allana Share (the Arrangement).

14. Each shareholder of Allana (an Allana Shareholder), other than Liberty Metals and Mining Holdings, LLC, a member of Liberty Mutual Group that is a Delaware member-managed, limited liability company with its head office in the U.S. and which holds approximately 11.87% of the issued and outstanding Allana Shares (LMM), will receive the consideration in cash and LMM will receive the consideration in Ordinary Shares (the Share Consideration). The Share Consideration will be $0.50 per Allana Share held by LMM calculated using the price equal to the average of the volume weighted average trading price of the Ordinary Shares on the NYSE for each of the five trading days in the period immediately prior to (and excluding) the business day prior to the effective date of the Arrangement (the Effective Date) (which average price will be converted into Canadian dollars based on the Bank of Canada noon rate as of such business day immediately prior to the Effective Date).

15. Holders of Options (Allana Optionholders) will receive cash equal to the difference between $0.50 and the exercise price of each Option held. Where the exercise price is equal to or greater than $0.50, such Options will be cancelled without the payment of any consideration.

16. The terms of the Arrangement will be submitted for approval at a meeting of Allana Shareholders and Allana Optionholders: (i) requiring the approval of 66 2/3% of the votes cast in person or by proxy of Allana Shareholders and Allana Optionholders, voting as a single class; and (ii) in accordance with the requirements of Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions (MI 61-101), pursuant to which, among other things, the votes of any "interested party" as defined under MI 61-101, including for greater certainty the Filer, the Chief Executive Officer of Allana and LMM, will not be counted in determining whether shareholder approval of the Arrangement is obtained.

17. Pursuant to the Legislation, in connection with the Arrangement, the Filer: (i) would be required to file a technical report under subsection 4.2(1)(c) of NI 43-101, and comply with certain disclosure obligations relating to its material mineral projects in the information circular pertaining to the Arrangement (the Allana Information Circular) pursuant to section 14.2 of Form 51-102F5 and file a certificate of qualified persons under NI 43-101 related thereto; and (ii) in connection with the Filer becoming a reporting issuer in the Allana Jurisdictions upon the closing of the Arrangement, would be required to file a technical report for each of its material mineral projects under section 4.1 of NI 43-101 and file a certificate of qualified persons under NI 43-101 related thereto.

18. If the Share Consideration was not being offered to LMM: (i) the obligation of the Filer to file a technical report and comply with certain disclosure obligations relating to its material mineral projects in connection with the Allana Information Circular would not be required; and (ii) the Filer would not become a reporting issuer under the Legislation and would therefore not be required to file a technical report for each of its material mineral projects.

19. The Filer intends to submit an application to obtain discretionary exemptive relief, effective following the closing of the Arrangement, from the securities regulatory authority or regulator of each of the Allana Jurisdictions to deem the Filer to have ceased to be a reporting issuer in the Allana Jurisdictions (the Reporting Issuer Exemptive Relief).

20. The disclosure relating to the Filer to be included in the Allana Information Circular will be prepared substantially in compliance with disclosure requirements in the United States.

21. The Filer believes that the Allana Information Circular will provide sufficient information about the Filer and the terms of the Arrangement to enable a reasonable Allana Shareholder to make an informed voting decision on whether to approve the Arrangement.

22. LMM has confirmed to the Filer that it does not object to the Total Exemptive Relief Requested.

Decision

The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.

The decision of the principal regulator under the Legislation is that:

1. the Section 4.2 Exemptive Relief Requested is granted; and

2. the Section 4.1 Exemptive Relief Requested is granted provided that the Arrangement is completed and the Filer obtains the Reporting Issuer Exemptive Relief within 45 days of the Effective Date.

"Kathryn Daniels"
Deputy Director
Corporate Finance Branch
Ontario Securities Commission