This decision of a panel of the British Columbia Securities
Commission (Panel) sheds some light on when drill results will be
considered a "material change" requiring the issuance of
a material change report. In this particular case, the Commission
determined that the infill drilling results merely added to the
understanding about the continuity of the deposit and were not
Canaco Resources Inc. (Canaco) had drilled approximately 100
drillholes at the Magambazi gold deposit in Tanzania. The drill
hole assay results in question were from eight holes drilled in the
Fall of 2010, and were disclosed in news releases dated December 6,
9, and 22, 2010. Canaco and its president were found to have known
about the results by no later than November 29, 2010. The press
releases that were ultimately issued by Canaco described some of
the results as "spectacular" and "fantastic
The executive director alleged that Canaco and certain of its
directors had contravened s. 85 of the Securities Act,
R.S.B.C. 1996, c. 418 (Act) by failing to disclose the results
immediately as a material change, and that the directors had failed
to act in the best interests of Canaco and acted contrary to the
public interest when they issued stock options with knowledge of
the undisclosed drill results. To prove either set of allegations,
the executive director needed to establish that the drill results
would reasonably be expected to have a significant effect on the
market price or value of Canaco's securities. As noted by the
Panel, this was to be assessed objectively from the perspective of
a reasonable investor.
In support of its position that the results were not material,
Canaco relied upon two reports from expert geologists, who asserted
that the infill holes did not expand on the known boundaries of the
deposit or change Canaco's understanding of the continuity of
the deposit. The Panel ultimately found this evidence relevant and
determined that because the boundaries and quality of the deposit
had already been disclosed, disclosing the results of the eight
infill holes would not have significantly affected the market value
or price of Canaco shares and were not a material change.
Canada is a constitutional monarchy, a parliamentary democracy and a federation comprised of ten provinces and three territories. Canada's judiciary is independent of the legislative and executive branches of Government.
The Government of Alberta recently announced a number of policy changes that will impact the Alberta Electricity Market, composed of its generators, transmitters, distributors, retailers, electricity consumers and wholesale electricity market.
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