Canada: Capital Markets Bulletin - February 3-7, 2014


OSC Releases Report on Review of Mining Issuers' MD&A Disclosure

By: Angela Chu and Joel McElravy

Today, the OSC released Staff Notice 51-722, which presents the results of a review conducted by OSC staff into MD&A disclosure filed by mining issuers with a market capitalization of less than $100 million dollars. The purpose of the review was to allow the OSC to better-understand the issues faced by small mining issuers and to identify areas where increased regulatory guidance would improve issuer compliance.

The review focused on:

  • Venture issuer disclosure;
  • Discussion of operations;
  • Liquidity and capital resource disclosure;
  • Disclosure of transactions between related parties;
  • Disclosure of risk factors and uncertainties; and
  • Reporting on use of financing proceeds.

The notice summarizes the results of the review, identifies areas for improvement and provides concrete examples on how issuers can present their information in a relevant and meaningful manner.


Fewer Statute Barred Claims for Secondary Market Misrepresentations in the Future: Green v. Canadian Imperial Bank of Commerce, 2014 ONCA 90

By: Greg Hogan

The Ontario Court of Appeal released a decision on February 3, 2014, in three related cases dealing with the limitation period for actions for secondary market misrepresentations under the Securities Act (Ontario) (the "Securities Act"). As a result of the 2012 decision of the same Court of Appeal in Sharma v Timminco, ("Timminco") each claim was found to be statute barred. In each of the three cases, the relevant representative plaintiff commenced a class proceeding for common law negligent misrepresentation and included in their statement of claim a claim of secondary market misrepresentation under the Securities Act. The statements of claim were each issued and served within the three-year limitation period for bringing the statutory claim. However, leave to commence the statutory action was not obtained within the three-year period. Under the Class Proceedings Act (Ontario) (the "CPA"), limitation periods are suspended if a cause of action is "asserted" in a class proceeding. Timminco held that in order to be asserted, leave to commence the action must be obtained from the court under the Securities Act. If this does not happen within the three-year limitation period, the secondary market misrepresentation claim would be statute barred.

Having regard to the legislation response to Timminco and the purposes of secondary market liability in the Securities Act and of the CPA, the Court reversed itself, reinterpreting the word "asserted" such that pleading an intention to seek leave to commence an action for secondary market misrepresentation is sufficient for a cause of action to be asserted under the CPA and thus suspend the running of the limitation period. The Court felt that its interpretation in Timminco "undercuts the ability of investors to bring a class action within the limitation period because they do not have control of whether they can meet or toll the limitation period." It also stated that "[a]llowing the statutory claim to be asserted with the common law claim provides for procedural simplicity and reconciliation of the respective purposes of the CPA and the Securities Act."

The result of the decision will be that fewer future actions for secondary market misrepresentations will be statute barred.

Click here to view an e-LERT with further details about this decision from Wendy Berman and Alec Milne of our Securities Litigation Group.


Tips and guidelines to assist our clients in understanding the law and becoming better drafters.

Disclosure Matters

Forward Looking Information - A Cautionary Tale

By: Jennifer Hansen and Jennifer Poirier

As an update to the Capital Markets Bulletin for January 20 – 24, 2014, a recent real-life example provides a cautionary tale against the use of "boilerplate" language in a cautionary statement regarding forward-looking information. In re Symbol Technologies, Inc., the United States District Court Eastern District of New York denied a motion and found that Private Securities Litigation Reform Act safe harbour provisions, and the US "bespeaks caution doctrine", did not protect certain revenue projections that were at issue. The Court held that "the revenue projections are actionable because their cautionary language was merely boilerplate" and "the cautionary language 'did not specifically reveal the particular risks allegedly known to' Symbol Technologies, Inc., i.e., that the revenue projections were premised upon artificially inflated sales projections and artificially reduced inventory calculations". The Court cited precedents which stated that (i) meaningful cautionary statements must identify important factors that could cause actual results to differ materially from those in the forward-looking information, and (ii) no degree of cautionary language will protect material misrepresentations or omissions where defendants knew their statements were false when made. Although this case comes out of the United States, it should serve as a reminder to issuers to update their cautionary statement in their disclosure documents, and to add specificity in order to improve quality and transparency.

National Instrument 43-101: What Issuers Need to Know About the Application of the Instrument

By: Greg Hogan and Alexander Pizale

Numerous Canadian mining companies have recently found themselves publicly correcting or retracting disclosures made regarding their mineral projects. These corrections and retractions are the result of more detailed and frequent reviews by Canadian securities regulators and evidence certain themes and persistent areas of concern. To assist mining companies, we will be providing an overview of certain of the requirements of NI 43-101 and the areas in which issuers appear to be failing to meet the requirements of the rules. Our aim is to provide guidance that will help issuers avoid regulator intervention in the future.

Click here for the first instalment in a series that we expect will be periodically released over the coming months. This instalment includes a discussion of the application of the Instrument, including an overview of what can and cannot be said and of the specific requirements applicable to different types of disclosures.


Information and intelligence about what public companies are doing in the market.

Public Offerings [lead underwriters noted]

Equity Offerings

  • On January 29, Global Convertibles Short Duration Fund filed a preliminary long form prospectus to qualify the distribution of 10,000,000 units for maximum gross proceeds of $100,000,000. [CIBC World Markets Inc. and RBC Dominion Securities Inc.]
  • On January 29, Lingxian Capital Inc. filed a preliminary prospectus to qualify the distribution of 2,000,000 common shares for gross proceeds of $200,000. [Leede Financial Markets Inc.]
  • On January 30, Euro Banc Capital Securities Trust filed a preliminary long form prospectus to qualify the distribution of class A units and/or class F units. The number of securities and distribution amount to be determined. [BMO Nesbitt Burns Inc.]
  • On January 30, Europe Blue-Chip Dividend & Growth Fund filed a preliminary long form prospectus to qualify the distribution of units. The number of units and distribution amount to be determined. [Scotia Capital Inc., BMO Nesbitt Burns Inc., National Bank Financial Inc. and TD Securities Inc.]
  • On January 31, PIMCO Global Income Opportunities Fund filed a preliminary long form prospectus to qualify the distribution of class A units. The number of units and distribution amount to be determined. [RBC Dominion Securities Inc., CIBC World Markets Inc. and TD Securities Inc.]
  • On January 29, Storm Resources Ltd. filed a preliminary short form prospectus to qualify the distribution of 7,250,000 common shares for gross proceeds of $29,725,000. [FirstEnergy Capital Corp.]
  • On January 31, Dalradian Resources Inc. filed a preliminary short form prospectus to qualify the distribution of 17,250,000 units for gross proceeds of $12,075,000. [Canaccord Genuity Corp.]
  • On February 3, Lydian International Limited filed a preliminary short form prospectus to qualify the distribution of 15,000,000 ordinary shares for gross proceeds of $15,000,000. [GMP Securities L.P. and Scotia Capital Inc.]
  • On February 3, Tamarack Valley Energy Ltd. filed a preliminary short form prospectus to qualify the distribution of 14,000,000 common shares for gross proceeds of $60,200,000. [Dundee Securities Ltd.]
  • On February 3, TransGaming Inc. filed a preliminary short form prospectus to qualify the distribution of units. Number of units and distribution amount to be determined. [Global Maxfin Capital Inc.]
  • On February 3, Opsens Inc. filed an amended and restated preliminary short form prospectus to qualify the distribution of a maximum of 10,666,700 units or 10,959,000 common shares or any combination thereof up for maximum gross proceeds of approximately $8,000,000. [RBC Dominion Securities Inc.]

Take-Over Bids

  • On January 31, a take-over bid circular was filed under the profile of Rutter Inc. ("Rutter") by a corporation owned and controlled by members of the board of directors of Rutter, offering to purchase at a price $0.061 in cash, all of the common shares of Rutter.

Upcoming Shareholder Meetings

  • On February 20, 2014, the shareholders of Eagle Mountain Gold Corp. will be asked to vote to approve an amalgamation with a wholly-owned subsidiary of the company, with the continuing company to be wholly-owned by Goldsource Mines Inc.
  • On February 27, 2014, shareholders of Brigus Gold Corp. (formerly Apollo Gold Corporation) will be asked to vote to approve an arrangement among Brigus Gold Corp., Primero Mining Corp., and Fortune Bay Corp., pursuant to which Primero Mining Corp. will acquire all of the issued and outstanding common shares of Brigus Gold Corp.
  • On February 28, 2014, shareholders of Vinergy Resources Ltd. will be asked to vote to approve an which involves, among other things, the distribution to the Vinergy Shareholders shares of Arq Graphite Inc., 0990756 B.C. Ltd., Jonpol Rare Earths Inc., Leucadia Finance Partners Inc., Wayzata Film Finance Inc., and Wedona Uranium Inc., currently wholly–owned subsidiaries of Vinergy.
  • On March 3, 2014 the shareholders of Slate U.S. Opportunity (No. 1) Realty Trust and Slate U.S. Opportunity (No. 2) Realty Trust will be asked to vote on resolutions approving a combination transaction wherein Slate U.S. Opportunity (No. 1) Realty Trust will acquire all of the assets of Slate U.S. Opportunity (No. 2) Realty Trust along with U.S. Grocery Anchored Retail (1A), (1B) and (1C) Limited Partnerships into one Real Estate Investment Trust, to be named Slate Retail REIT, which will trade on the Toronto Stock Exchange.
  • On March 4, 2014, shareholders of Primary Petroleum Corporation will be asked to vote to approve a reverse takeover of the company and change of business to Keek Inc.
  • On March 5, 2014, shareholders of Vitran Corporation Inc. will be asked to vote to approve an arrangement pursuant to which a corporation indirectly owned and controlled by TransForce Inc. will acquire all of the issued and outstanding common shares of Vitran for consideration of USD$6.50 in cash for each common share.
  • On March 6, 2014, holders of restricted voting shares of Patheon Inc. will be asked to vote to approve a statutory plan of arrangement involving the acquisition by JLL/Delta Patheon Holdings, L.P. of all of the restricted voting shares of Pantheon Inc. for US$9.32 in cash per restricted voting share.



By: Greg Hogan

New Winter Olympic Sports? Who Knew? Here's a Primer

Apparently there are 8 new winter sports that are being introduced at the Sochi games. These include Team Ice Skating (which unfortunately does not involve the entire Canadian team all skating at the same time), Slopestyle Snowboarding and Skiing, Ski Half-pipe and Luge Team Relay. has a primer on all of the new events here.


Recent Transactions

We acted for BSM Technologies Inc., a Canadian company providing real-time GPS fleet and asset management solutions, in connection with short-form prospectus offering of common shares. The proceeds of the offering will be used for further expansion of the company's business as well as research and development.

We acted for VersaPay Corporation, a Canadian company delivering payment solutions for businesses, in connection with their bought-deal private placement of units. The proceeds of the offering will be used to fund the growth of the company's eInvoice Solutions product.

We acted for GMP Securities L.P. and BMO Capital Markets, and a syndicate of underwriters, in connection with a public offering of common shares by HudBay Minerals Inc. HudBay intends to use the proceeds for general corporate purposes. Click here for further details.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Gregory Hogan
Joyce Lim
Sean Williamson
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