Securities Law & Instruments


Headnote

Application by an issuer for a revocation of a cease trade order issued because the issuer failed to file certain continuous disclosure materials required by Ontario securities law – defaults subsequently remedied by bringing continuous disclosure filings up-to-date – Issuer has provided an undertaking to the Commission that it will not complete (a) a restructuring transaction involving, directly or indirectly, an existing or proposed, material underlying business which is not located in Canada, (b) a reverse takeover with a reverse takeover acquiror that has a direct or indirect, existing or proposed, material underlying business which is not located in Canada, or (c) a significant acquisition involving, directly or indirectly, an existing or proposed, material underlying business which is not located in Canada, unless the issuer files a preliminary prospectus and a final prospectus with the Ontario Securities Commission and obtains receipts for the preliminary prospectus and the final prospectus from the Director under the Act.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., s. 144.

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

AND

IN THE MATTER OF
BESRA GOLD INC.

ORDER
(Section 144 of the Act)

                WHEREAS the securities of Besra Gold Inc. (the Applicant) are subject to a temporary cease trade order made by the Director of the Ontario Securities Commission (the Commission) dated December 17, 2014 pursuant to paragraph 2 of subsection 127(1) and subsection 127(5) of the Act and a further cease trade order issued by the Director of the Commission on December 29, 2014 pursuant to paragraph 2 of subsection 127(1) of the Act (together, the Ontario Cease Trade Order) directing that trading in securities of the Applicant cease until further order by the Director;

                AND WHEREAS the Ontario Cease Trade Order was made on the basis that the Applicant was in default of certain filing requirements under Ontario securities law as described in the Ontario Cease Trade Order and below;

                AND WHEREAS the Applicant has applied to the Commission pursuant to section 144 of the Act to revoke the Ontario Cease Trade Order;

                AND UPON the Applicant having represented to the Commission that:

1.             The Applicant is a corporation existing under the Canada Business Corporations Act.

2.             The head office of the Applicant is located at Level 1, 63 Fort Street, Auckland, New Zealand, 1010.

3.             The Applicant is a reporting issuer in Ontario, British Columbia, Alberta and Quebec (collectively, the Jurisdictions). The Commission is the principal regulator for the Applicant.

4.             The Applicant’s authorized capital consists of an unlimited number of common shares (Common Shares) of which 2,618,450,593 Common Shares were issued and outstanding as of September 30, 2018.

5.             The Ontario Cease Trade Order was issued as a result of the Applicant failing to file its audited annual financial statements and management’s discussion and analysis (MD&A) for the year ended June 30, 2014, its annual information form for the year ended June 30, 2014, and its interim financial statements and MD&A for the three-month period ended September 30, 2014 within the timeframes as required under National Instrument 51-102 (NI 51-102) and related certifications (the NI 52-109 Certificates) as required by National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings (NI 52-109).

6.             The Applicant also is subject to cease trade orders (together with the Ontario Cease Trade Order, the Cease Trade Orders) issued by the British Columbia Securities Commission, by the Autorité des marchés financiers and by the Alberta Securities Commission.

7.             The Applicant subsequently failed to file other continuous disclosure documents within the prescribed timeframe in accordance with the requirements of Ontario securities law, including the following:

(a)           all audited financial statements, together with the corresponding MD&As, as required under NI 51-102 and NI 52-109 Certificates for the years ended June 30, 2015 to June 30, 2017; and

(b)           all unaudited interim financial statements, together with the corresponding MD&As, as required under NI 51-102 and NI 52-109 Certificates for the periods ended September 30, 2014 to March 31, 2018.

8.             The Applicant’s Common Shares were traded on the Toronto Stock Exchange (TSX) under the symbol “BEZ”. However, the TSX delisted the Applicant’s Common Shares effective October 17, 2014 for failure to maintain the TSX’s minimum listing requirements.

9.             In addition to its listing on the TSX, The Applicant was also listed on the Australian Securities Exchange (the ASX) under the symbol BEZ and traded on the OTCQX Bulletin Board (OTCQX), an over-the-counter market in the United States, under the symbol BSRAF. The ASX removed the Applicant from its official list as of the close of trading on August 31, 2015 and, accordingly, its securities are no longer traded on the ASX. The Applicant was downgraded from the OTCQX to the OTCQB Bulletin Board effective October 20, 2014 for failure to comply with OTCQX eligibility standards.

10.          On January 29, 2016, the Applicant filed a proposal (the Proposal), as amended, on March 13, 2016, under the Bankruptcy and Insolvency Act (the BIA). The Proposal was approved by the creditors of the Applicant on April 7, 2016 and the Court on May 17, 2016 as required under the BIA.

11.          To facilitate the trades contemplated by the Proposal, the Commission granted a partial revocation order of the Cease Trade Order on October 14, 2016, as amended November 16, 2016. The trades were completed on or about November 17, 2017.

12.          Since the issuance of the Ontario Cease Trade Order, the Applicant has filed the following continuous disclosure documents with the Jurisdictions:

(a)           audited annual consolidated financial statements for the years ended June 30, 2018 together with comparative information for the financial year ended June 30, 2017;

(b)           MD&A relating to the above annual financial statements;

(c)           NI 52-109 Certificates relating to the above financial statements, as required by NI 52-109;

(d)           a statement of executive compensation for the years ended June 30, 2018 and 2017; and

(e)           audit committee and corporate governance disclosure for the year ended June 30, 2018.

13.          The Applicant has not filed the following:

(a)           the audited financial statements, together with the corresponding MD&As, as required under NI 51-102 and NI 52-109 Certificates for the years ended June 30, 2014 to June 30, 2016;

(b)           the unaudited interim financial statements, together with the corresponding MD&As, as required under NI 51-102 and NI 52-109 Certificates for the periods ended September 30, 2014 to March 31, 2018;

(c)           the annual information form for the year ended June 30, 2014;

(d)           the statements of executive compensation for the years ended June 30, 2014 to June 30, 2016; and

(e)           audit committee and corporate governance disclosure for the years ended June 30, 2014 to June 30, 2016,

                (collectively, the Outstanding Filings).

14.          The Applicant has requested that the Commission exercise its discretion in accordance with sections 6 and 7 of National Policy 12-202 Revocation of a Compliance-related Cease Trade Order (NP 12-202) and elect not to require the Applicant to file the Outstanding Filings.

15.          The Applicant has filed with the Commission all continuous disclosure that it is required to file under the Act, except for the Outstanding Filings and any other continuous disclosure that the Commission elected not to require as contemplated in sections 3.1(2) and (3) of NP 12-202, and has paid all activity, participation and late filing fees that it is required to pay to the Commission.

16.          Except for the failure to file the Outstanding Filings, the Applicant is (i) up-to-date with all of its other continuous disclosure obligations; (ii) is not in default of any of its obligations under the Cease Trade Orders; and (iii) is not in default of any requirements under the Act or the rules and regulations made pursuant thereto.

17.          As of the date hereof, the Applicant's profiles on the System for Electronic document Analysis and Retrieval (SEDAR) and the System for Electronic Disclosure by Insiders are current and accurate.

18.          The Applicant is not considering nor is it involved in any discussions related to, a reverse take-over, merger, amalgamation or other form of combination or transaction similar to any of the foregoing.

19.          The Applicant has given the Commission a written undertaking that:

(a)           the Applicant will hold an annual meeting of shareholders within three months after the date on which the Ontario Cease Trade Order is revoked; and

(b)           the Applicant will not complete:

(i)            a restructuring transaction involving, directly or indirectly, an existing or proposed, material underlying business which is not located in Canada,

(ii)           a reverse takeover with a reverse takeover acquirer that has a direct or indirect, existing or proposed, material underlying business which is not located in Canada, or

(iii)           a significant acquisition involving, directly or indirectly, an existing or proposed, material underlying business which is not located in Canada,

unless

(A)           the Applicant files a preliminary prospectus and a final prospectus with the Commission and obtains receipts for the preliminary and final prospectus from the Director under the Act,

(B)           the Applicant files or delivers with the preliminary prospectus and the final prospectus the documents required by Part 9 of National Instrument 41-101 General Prospectus Requirements (NI 41-101) including a completed personal information form and authorization in the form set out in Appendix A of NI 41-101 for each current and incoming director, executive officer and promoter of the Applicant, and

(C)          the preliminary prospectus and final prospectus contain the information required by applicable securities legislation, including the information required for a probable restructuring transaction, reverse takeover or significant acquisition (as applicable).

20.          Upon the revocation of the Ontario Cease Trade Order, the Applicant will issue a news release and concurrently file a material change report on SEDAR announcing the revocation of the Ontario Cease Trade Order and outlining the Applicant’s future plans.

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

                AND WHEREAS the Director 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 Ontario Cease Trade Order is revoked.

                DATED at Toronto, Ontario on this 8th day of November, 2018.

“Winnie Sanjoto”
Manager, Corporate Finance