Angus Mining Inc.

Order

Headnote

Application by an issuer for a revocation of a cease trade order issued by the Commission -- cease trade order issued because the issuer had failed to file certain continuous disclosure materials required by Ontario securities law -- defaults subsequently remedied by bringing continuous disclosure filings up-to-date -- cease trade order revoked.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 127 and 144.

IN THE MATTER OF THE SECURITIES ACT R.S.O. 1990, C. S-5, AS AMENDED (THE ACT) AND IN THE MATTER OF ANGUS MINING INC.

ORDER (Section 144 of the Act)

WHEREAS the securities of Angus Mining Inc. (the "Applicant") are subject to a temporary cease trade order made by the Director of the Ontario Securities Commission (the "Commission") dated May 8, 2015 pursuant to paragraph 2 of subsection 127(1) and subsection 127(5) of the Act, and a further cease trade order dated May 20, 2015 made by the Director of the Commission pursuant to paragraph 2 of subsection 127(1) of the Act, ordering that trading in securities of the Applicant cease (together, the "Cease Trade Order");

AND WHEREAS additional cease trade orders were issued by the British Columbia Securities Commission ("BCSC") on May 11, 2015 and the Alberta Securities Commission ("ASC") on August 21, 2015 (collectively, the "Other Cease Trade Orders");

AND WHEREAS the Applicant has applied to the Commission pursuant to section 144 of the Act to revoke the Cease Trade Order (the "Application");

AND WHEREAS the Applicant has represented to the Commission that:

1. The Applicant was incorporated as "Golconda Capital Corp." under the Business Corporations Act (Alberta) on February 12, 2007 and was classified as a "capital pool company" pursuant to the policies of the TSX Venture Exchange (the "TSXV"). In order to effect its "qualifying transaction", on September 23, 2010, the Applicant changed its name from Golconda Capital Corp. to Angus Mining (Namibia) Inc. and on September 24, 2014, a wholly-owned subsidiary of the Applicant amalgamated with Angus Mining (Namibia) Ltd. As a result, Angus Mining (Namibia) Ltd. became a wholly-owned subsidiary of the Applicant. On September 28, 2010, the Applicant continued into the Province of Ontario under the Business Corporations Act (Ontario). On July 16, 2012, the Applicant changed its name from Angus Mining (Namibia) Inc. to Angus Mining Inc.

2. The registered and records office of the Applicant, and the Applicants head office is 333 Bay Street, Suite 4600, Toronto, Ontario M5H 2S5.

3. The Applicant is a reporting issuer in Ontario, Alberta and British Columbia. The Applicant's principal regulator, as determined in accordance with Part 3 of National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions ("NP 11-203"), is Ontario.

4. The authorized capital of the Applicant comprises an unlimited number of common shares ("Common Shares"). As of the date hereof, 38,315,580 Common Shares are issued and outstanding.

5. The Common Shares were traded on the TSXV until May 8, 2015, on which date trading was suspended. Effective August 21, 2015, the Applicant's listing was transferred from the TSXV to the NEX Board and effective at the close of business on May 19, 2016, the Common Shares were delisted from the NEX Board.

6. On July 19, 2011, prior to the Cease Trade Order, the Company issued an unsecured promissory note (the "Promissory Note") in the amount of $1,000,000 to an arm's length third party lender ("Promissory Note Lender"). The Company has been in default on the Promissory Note since July 19, 2012. The total outstanding balance of the Promissory Note as of September 30, 2019, including accrued but unpaid interest, is $1,460,000.

7. On December 11, 2019, the Company entered into a debt settlement agreement (the "Settlement Agreement") with the Promissory Note Lender, pursuant to which the Promissory Note Lender agreed to accept a cash payment of $250,000 in full settlement of the outstanding balance of the Promissory Note. The cash payment was made on December 11, 2019.

8. As a result of the Applicant's failure to file:

a. annual audited financial statements for the year ended December 31, 2014;

b. management's discussion and analysis relating to the audited annual financial statements for the year ended December 31, 2014; and

c. certification of the foregoing filings as required by National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings ("NI 52-109");

the Commission issued the Cease Trade Order and the BCSC and ASC issued the Other Cease Trade Orders. The Applicant has filed applications with each of the Commission, BCSC and ASC for a partial revocation of Cease Trade Order and the Other Cease Trade Orders, respectively.

9. Since December 1, 2014, the Applicant has not filed any continuous disclosure documents, including:

a. annual audited financial statements for the years ended December 31, 2014, 2015, 2016, 2017, 2018 and 2019;

b. management's discussion and analysis relating to the audited annual financial statements for the years ended December 31, 2014, 2015, 2016, 2017, 2018 and 2019;

c. interim financial statements for the interim periods from March 31, 2014 to June 30, 2020;

d. management's discussion relating to the interim financial statements for the interim periods from March 31, 2014 to June 30, 2020;

e. the certification of the foregoing filings as required by NI 52-109; and

f. the statements of executive compensation for the financial years ended December 31, 2014, 2015, 2016, 2017, 2018 and 2019.

10. On August 13, 2018, the Company's President, Chief Executive Officer and sole Director, advanced the Company $12,500 in the form of a shareholder loan (the "Shareholder Loan"). The Applicant used the majority of the advances made under the Shareholder Loan to meet its operational and administrative expenses. The Applicant repaid the Shareholder Loan on October 30, 2018.

11. In October 2018, the Corporation received proceeds of US$400,000 as a result of the sale of its minority ownership in a private company that held the Ondundu gold project (the "Ondundu Sale"). The proceeds were converted into $523,167 Canadian dollars on October 30, 2018. The Corporation repaid the Shareholder Loan and a prior loan outstanding (the "Chairman Loan") from the proceeds of the Ondundu Sale. The Shareholder Loan and the Chairman Loan may have each constituted a "security". As such the acceptance of the Shareholder Loan and repayment of the Shareholder Loan and Chairman Loan may have constituted a violation of the Cease Trade Order.

12. Effective November 30, 2019, each of Donn Burchill and John McBride were appointed as independent directors of the Applicant (the "Director Appointments"). Other than these appointments, the Applicant has had no changes to its directors since the date of the Cease Trade Order.

13. If the Shareholder Loan (including the repayment thereof), the repayment of the Chairman Loan, the Ondundu Sale, the settlement of the Promissory Note and the Director Appointments, were material changes, the Applicant was required to, but did not, file material change reports in connection with such transactions. Although the Applicant has been inactive during most of the period since the date of the Cease Trade Order, there may have been additional events in which a material change report may have been required, but was not filed.

14. The Applicant has failed to pay certain fees to the Commission and the securities regulatory authorities where the Other Cease Trade Orders are in effect.

15. The Applicant has now filed the following documents on SEDAR:

a. annual audited financial statements for the years ended December 31, 2017, 2018 and 2019;

b. management's discussion and analysis relating to the audited annual financial statements for the years ended December 31, 2017, 2018 and 2019;

c. unaudited interim financial statements for the three, six and nine month interim periods ended March 31, June 30 and September 30 for the years ended December 31, 2017, 2018 and 2019 and the three month interim period ended March 31, 2020 and the six month interim period ended June 30, 2020;

d. management's discussion relating to the interim financial statements for the three, six and nine month interim periods ended March 31, June 30 and September 30 for the years ended December 31, 2017, 2018 and 2019 and the three month interim period ended March 31, 2020 and the six month interim period ended June 30, 2020;

e. the certification of the foregoing filings as required by NI 52-109;

f. the statements of executive compensation for the financial years ended December 31, 2017, 2018 and 2019; and

g. the Notice of Change of Auditor, Letter of Former Auditor and Letter of Successor Auditor in connection with the change of auditors.

16. The applicant has also filed material change reports related to the Ondundu Sale, the Shareholder Loan and the Chairman Loan, the settlement of the Promissory Note and the appointment of Donn Burchill and John McBride as directors.

17. The Applicant has not filed (i) audited annual financial statements, and related management's discussion and analysis, and related NI 52-109 certificates for the fiscal years ended December 31, 2014 to December 31, 2016; (ii) unaudited interim financial statements, related MD&A, and related NI 52-109 certificates for the interim periods ended March 31, 2014 to September 30, 2019; and (iii) statements of executive compensation for the years ended December 31, 2014 to December 31, 2016 (collectively, the "Outstanding Filings").

18. Following the revocation of the Cease Trade Order and the Other Cease Trade Orders, the Applicant intends to conduct a private placement with certain insiders of the Applicant, as well as other arm's length parties (the "Private Placement"). The Applicant is of the view that preliminary discussions with potential subscribers regarding the Private Placement may have constituted an "act in furtherance of a trade" in contravention of the Cease Trade Order and the Other Cease Trade Orders.

19. Apart from the Outstanding Filings and the matters disclosed in paragraphs 9, 10, 11, 13 and 14, the Applicant is not to its knowledge, in default of any requirements of the Act or the rules and regulations made pursuant thereto. Apart from the matters disclosed in paragraph 11 and 18, the Applicant is not to its knowledge, in default of any requirements of the Cease Trade Order or the Other Cease Trade Orders. Apart from the Outstanding Filings, the Applicant is up-to-date on all is continuous disclosure obligations, except for the existence of the Cease Trade Order and the Other Cease Trade Orders.

20. The Applicant's issuer profile on the System for Electronic Document Analysis and Retrieval (SEDAR) and issuer profile supplement on the System for Electronic Disclosure by Insiders (SEDI) are current and accurate.

21. The Applicant has paid all outstanding activity, participation and late filing fees that are required to be paid to the Commission and has filed all forms associated with such payments.

22. The Applicant is concurrently being granted a revocation of the Other Cease Trade Orders by the BCSC and the ASC.

23. The Applicant is currently inactive and following the revocation of the Cease Trade Order, and the Other Cease Trade Orders, the Applicant intends to reactivate itself. The Applicant does not have any definitive plans in place for the operation of the business going forward. In particular, other than the Private Placement to fund its general working capital, and to attempt to settle with certain creditors for monies owing, the Applicant is not presently considering, nor is it involved in any discussions relating to, an acquisition, a reverse takeover or similar transaction. However, it is the intention of management of the Applicant to investigate opportunities going forward. The Applicant has provided the Commission with an undertaking 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 acquirer that has a direct or indirect, existing or proposed, material underlying business which is not located in Canada,

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

unless

i. the Applicant 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, and

ii. the preliminary prospectus and final prospectus contain the information required by applicable securities legislation.

24. The Applicant has given the Commission a written undertaking that it will hold an annual meeting of its shareholders within three months after the date on which the Cease Trade Order is revoked. The information circular in respect of such meeting shall include the "reporting package" (as defined in section 4.11 of National Instrument 51-102 Continuous Disclosure Obligations) for the change of auditor.

25. Upon the issuance of this revocation order and concurrent revocation orders from the ASC and the BCSC, the Applicant will issue a news release announcing the revocation of the Cease Trade Order and the Other Cease Trade Orders and concurrently file the news release and a related material change report on SEDAR.

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

AND WHEREAS the Director being satisfied that it would not be prejudicial to the public interest to revoke the Cease Trade Order;

IT IS ORDERED under section 144 of the Act that the Cease Trade Order is revoked.

DATED at Toronto on this 18th day of September, 2020.

"Jo-Anne Matear"

Manager, Corporate Finance

Ontario Securities Commission