Guide to Interlisting on the Toronto Stock Exchange for International Companies

Transcription

1 Guide to Iterlistig o the Toroto Stock Exchage for Iteratioal Compaies As at Jauary 2011

2 Guide to Iterlistig o the TSX TABLE OF CONTENTS INTRODUCTION... 1 FREQUENTLY ASKED QUESTIONS (FAQS)... 3 The Applicatio... 3 Ogoig Requiremets... 6 Other Cosideratios... 8 APPENDIX A: Listig Requiremets for Exploratio & Miig Compaies APPENDIX B: Listig Requiremets for Oil & Gas (Exploratio or Producig) Compaies APPENDIX C: Liks to Required Listig Documets ad Associated Iformatio APPENDIX D: Origial Listig Fees for Iteratioal Issuers o the TSX Aual Sustaiig Fees for Issuers o the TSX APPENDIX E: Listig Fees for Issuers o the TSX-V Aual Sustaiig Fees for Issuers o the TSX-V APPENDIX F: Otario Corporate Fiace Participatio Fees gowligs at a glace Gowligs is oe of Caada s largest atioal full-service law firms. Gowligs employs over 700 professioals ad has 9 offices across Caada ad iteratioally. Gowligs is recogized for its expertise i corporate fiace, M&A, atural resources ad tax. We are focused o efficiet, high-quality cliet service ad place tremedous value o log-term relatioships. We will act quickly o matters as they arise ad allocate the ecessary, most efficiet ad cost-effective persoel to each matter, achievig excellet ecoomies of scale. Disclaimer: This guide is a summary ad iteded for geeral iformatio purposes oly. It is ot provided ad should ot be viewed as legal advice. Offerigs of securities i Caada are subject to detailed regulatio ad should be udertake oly with qualified legal cousel. Note: All currecy refereces are i Caadia dollars uless otherwise stated.

3 Guide to Iterlistig o the TSX INTRODUCTION The followig is a guide for iteratioal public compaies seekig to obtai a iterlistig o the Toroto Stock Exchage (TSX). A iterlistig ca also be referred to as a dual listig or cross listig. As Caada s seior equities exchage providig domestic ad iteratioal ivestors access to the Caadia marketplace, the TSX is the choice of most iteratioal compaies for a Caadia iterlistig. The TSX Veture Exchage (TSX-V), Caada s juior listigs exchage, provides compaies at the early stages of growth the opportuity to raise capital ad ca be suitable for a juior compay iterlistig. WHY CONSIDER AN INTERLISTING ON THE TSX? Iteratioal compaies may wish to cosider iterlistig o the TSX because a TSX iterlistig is straightforward ad cost effective, the TSX raks with the world s leadig stock exchages, ad a iterlistig ca provide may beefits to a iteratioal public compay, particularly i the atural resource sectors. Straightforward Process Iterlistig o the TSX is straightforward ad cost effective: Compaies ca utilize their home coutry disclosure documets for the listig applicatio; Compaies from certai coutries ca use their home coutry disclosure documets to satisfy Caadia cotiuous disclosure obligatios; Effective 2011, Caada has adopted Iteratioal Fiacial Reportig Stadards (IFRS) for fiacial statemets; ad Listig fees are reasoable. TSX Raks with the World Leaders With over 3,000 issuers listed, the TSX ad TSX-V rak amog the world s leadig stock exchages ad are home to the largest umber of issuers i North America. At the ed of 2010, over 300 iteratioal issuers were listed o the TSX ad TSX-V, which accouted for approximately 10 per cet of the compaies listed o these exchages. Global Equity Market Compariso - Jue 30, 2010 TSX / TSX-V NYSE / AMEX Nasdaq Hog Kog LSE/AIM Number of Issuers Listed 3,665 2,321 2,831 1,344 2,727 Quoted Market Value (US$ Billios) $1,687.2 $11,793.7 $3,165.2 $2,200.0 $2,407.4 Sources: Exchage Websites, World Federatio of Exchages, (TMX aalysis of public iformatio) 1

4 Guide to Iterlistig o the TSX Beefits of a Iterlistig A iterlistig o the TSX offers may beefits to a iteratioal public compay, such as: Access to a large active market for raisig additioal capital; Diversifyig ad broadeig the compay s ivestor base with North America ivestors; Icreasig marketability ad liquidity of the compay s shares; Achievig greater global brad recogitio; Opportuities for greater aalyst coverage, icludig, if applicable, aalyst coverage at fairly early stages of a compay s growth cycle; ad Access to North America s istitutioal ivestors. Source: TSX For iteratioal miig compaies, a TSX iterlistig has may additioal advatages: Caada is home to uparalleled miig ad metals kowledge ad expertise; Worldwide, 55 per cet of all public miig compaies raise capital i Caada ad list o the TSX ad TSX-V; 1 Over 1,500 miig compaies are listed o the TSX ad TSX-V. 1, 2 These compaies cotrol vast amouts of iteratioal mieral resources; I 2010, over $17 billio was raised by listed miig compaies o the TSX ad TSX-V i over 2,400 fiacigs; 1 Over 130 iteratioal miig compaies are listed o the TSX ad TSX-V, represetig a combied market capitalizatio of $52 billio; 2 $4.8 billio was raised i 2009 through 140 fiacigs by iteratioal miig compaies; 2 ad I 2009, 12 billio shares of iteratioal miig compaies were traded i 6 millio trasactios Source: TSX/TSX-V, A Capital Opportuity, Guide to Listig. 2. Source: TSX ad TSX Veture Miig Sector Overview. 2

5 Guide to Iterlistig o the TSX Guide to Iterlistig o the TSX The TSX ad TSX-V have more tha 390 listed oil & gas issuers, accoutig for a world leadig 20% of The total TSX ad market TSX-V capitalizatio. have more tha This listed outraks oil ad gas the issuers, ext accoutig closest for exchage a world-leadig this 20 per sector, cet of the total Australia market capitalizatio. Exchage, 1 This outraks which the ext has closest 216 exchage oil & gas i this issuers sector, listed. the Austra- 1 Stock lia Stock Exchage, which has 216 oil ad gas issuers listed. 1 Other sectors o the TSX ad TSX-V iclude diversified idustries, techology, life scieces, clea Other sectors techology, o the TSX fiacial ad TSX-V iclude services, diversified real estate, idustries such as techology, commuicatios life scieces, clea ad techology, media, utilities fiacial services, ad pipelies, real estate, commuicatios ad forest products. ad media, utilities ad pipelies, ad forest products. TSX & TSX-V: Diverse Idustry Sectors Source: TMX Source: TMX FREQUENTLY ASKED QUESTIONS (FAQs) The FREQUENTLY Applicatio ASKED QUESTIONS (FAQs) How log does the TSX listig process take? The Applicatio The time will vary i each case, but it usually takes betwee six ad 10 weeks to complete the iitial processig of a listig applicatio. How log does the TSX listig process take? What are the key listig applicatio documets? The The listig time documets will vary for a i TSX each applicatio case, are but set it out usually i Appedix takes C. Key betwee listig documets, 6 ad 10 i additio weeks to to the complete applicatio, the iclude: iitial processig of a listig applicatio. Pricipal Disclosure Documet Fees Fiacial statemets Persoal Iformatio ad crimial record coset forms for isiders What are the key listig applicatio documets? Sposorship report (if applicable) The Techical listig reports documets for miig for ad a oil TSX ad gas applicatio applicats are set forth i Appedix C. Key listig documets, i additio Projected to sources the Applicatio, ad uses of fuds iclude: (if applicable) Legal opiio Pricipal Disclosure Documet Durig the review process, additioal documets relatig to the applicat, such as material Fees cotracts ad security-based compesatio arragemets may be requested. Fiacial statemets Persoal Iformatio Forms ad crimial record coset forms for isiders 4 Sposorship report (if applicable) 3

6 Guide to Iterlistig o the TSX What is the Pricipal Disclosure Documet? The Pricipal Disclosure Documet provides a geeral descriptio of the busiess ad affairs of the applicat similar to a Form 10-K i the U.S. For a iterlistig, a documet already created for use i the issuer s home jurisdictio ca sometimes be submitted as a Pricipal Disclosure Documet, or a documet created for use i Caada or the U.S., depedig o the circumstaces of the issuer. If the iterlistig applicatio is made cocurret with a prospectus filig i Caada, the a Caadia log-form prospectus is typically used as the Pricipal Disclosure Documet. If the iterlistig applicatio is made without a prospectus filig, the the issuer ca file oe of: A Caadia Aual Iformatio Form (AIF) usig form NI F2; A Aual Report for U.S. Issuers (Form 10-K) (if applicable); A Aual Report for Foreig Private Issuers (U.S.) (Form 20-F) (if applicable); or Aother documet or form from aother jurisdictio icludig similar iformatio to that cotaied i the AIF, provided it is dated withi oe year of the listig applicatio submissio ad pre-cleared by the TSX. What are the fees? A o-refudable applicatio fee of $7,500 must be submitted with the iitial documets for a compay icorporated outside of Caada that is already listed o aother exchage. The listig fees ad cotiuig fees for listig o the TSX ad TSX-V, as at the date of this documet, are set out i Appedix D ad Appedix E. What is a Persoal Iformatio Form? The TSX requires that a Persoal Iformatio Form (PIF) must be submitted for all compay isiders icludig all seior officers ad directors of the compay ad holders of greater tha 10 per cet of the outstadig shares. A PIF provides backgroud iformatio regardig these persos. Alteratively, a Statutory Declaratio may be filed where a PIF for a isider has bee filed with the TSX i the last three years ad there have bee o chages. What are the fiacial statemet requiremets for a listig applicatio? Fiacial statemet requiremets deped o whether the applicat s Pricipal Disclosure Documet is a aual filig such as a AIF or its equivalet, or a prospectus for a Caadia public fiacig. Applicats who are ot filig a prospectus i Caada would be required to file their audited fiacial statemets for the most recetly completed fiacial year ad uaudited fiacial statemets for the most recet quarter (or half-year), depedig o the jurisdictio. Caada has coverted to IFRS for fiacial years begiig o or after Jauary 1, Applicats filig a prospectus i Caada i coectio with their listig applicatio are required to meet the prospectus fiacial statemet requiremets. These iclude a statemet of icome, retaied earigs ad cash flow for each of the three most recetly completed fiacial years, ad a balace sheet as of the ed of the two most recetly completed years, all of which must be accompaied by a auditor s report. There are exceptios to the rule if either the issuer or a predecessor etity has completed three fiacial years. Also, a issuer may be allowed to omit the statemet of icome, retaied earigs ad cash flow for the third most recetly completed fiacial year as well as the balace sheet for the secod most recetly completed fiacial year, if the prospectus icludes audited fiacial statemets for a fiacial year eded less tha 90 days before the date of the prospectus. They may also be omitted i a situatio where the busiess of the issuer is ot seasoal, ad the issuer icludes audited fiacial statemets for a period of at least ie moths commecig the day after the most recetly completed fiacial year. For ay quarterly period edig subsequet to the most recetly completed fiacial year, the prospectus must also iclude quarterly fiacial statemets with comparatives for the correspodig period i the immediately precedig fiacial year. What are the projected sources ad uses of fuds requiremets? Miig ad oil ad gas applicats must file a projected sources ad uses of fuds statemet for a period of 18 moths, icludig related assumptios, preseted o a quarterly basis ad prepared by maagemet, uless the applicat qualifies as a exempt issuer for TSX purposes. Techical reports required by Natioal Istrumet

7 Guide to Iterlistig o the TSX Stadards of Disclosure for Mieral Projects (NI ) ad Natioal Istrumet Stadards of Disclosure for Oil ad Gas Activities (NI ) should iclude a recommeded work program that is cosistet with the 18-moth projectio of sources ad uses of fuds. Techology applicats must file a projected sources ad uses of fuds statemet, icludig related assumptios, for a period of 12 moths, preseted o a quarterly basis, prepared by maagemet. Research ad developmet applicats must prepare the same for a period of 24 moths. What is the sposorship requiremet? A TSX listig applicat may be required to obtai sposorship by a participatig orgaizatio or member of the exchage. This is a oe-time requiremet at the time of the origial listig. Followig a due diligece review of the applicat to cofirm compliace with TSX listig requiremets, the sposor provides commets i writig to the exchage as part of the listig applicatio. Sposorship is ot required for a compay applyig to list as a exempt issuer. Sposorship may also be waived if a compay completes a prospectus offerig or brokered fiacig immediately before or cocurretly with the listig. What is a exempt issuer? Exempt issuers are exempt from certai approval ad otice requiremets ormally imposed by the TSX, as well as certai applicatio criteria such as projected sources of fuds ad sposorship. For example, o-exempt issuers must give otice to the TSX of ay proposed material chage i the busiess or affairs of the issuer. Exemptio criteria iclude: a) et tagible assets of $7,500,000; b) earigs from ogoig operatios of at least $300,000 before taxes ad extraordiary items i the fiscal year immediately precedig the filig of the listig applicatio; c) pre-tax cash flow of $700,000 i the fiscal year immediately precedig the filig of the listig applicatio ad a average pre-tax cash flow of $500,000 for the two fiscal years immediately precedig the filig of the listig applicatio; ad d) adequate workig capital to carry o the busiess ad a appropriate capital structure. Exceptioal circumstaces may justify the gratig of a exempt issuer status, such as a affiliatio with a substatial established eterprise ad/or a exceptioally strog fiacial positio. What are the techical report requiremets for miig ad oil ad gas applicats? Applicats are required to commissio full ad up-to-date techical reports o their material properties, i compliace with NI for miig properties, ad NI for oil ad gas properties. Reserve ad resource reportig uder NI icorporates the stadards adopted by the Caadia Istitute of Miig, Metallurgy ad Petroleum. Certai foreig resource ad reserve stadards are permitted for foreig issuers for the purpose of reportig uder NI , icludig the Australasia Code for Reportig of Mieral Resources ad Ore Reserves prepared by the Joit Ore Reserves Committee Code (JORC Code); the U.S. SEC Idustry Guide 7; the Reportig Code of the Istitute of Materials, Mierals ad Miig i the Uited Kigdom; ad the South Africa Code for Reportig of Mieral Resources ad Mieral Reserves (SAMREC Code), provided that certai aspects are recociled to Caadia stadards. Proposed amedmets to NI published for commet at the time of writig this guide would elimiate the eed for recociliatio ad expad the list of acceptable foreig codes. Reserve ad resource reportig uder NI must comply with stadards set out i the Caadia Oil ad Gas Evaluatio Hadbook, uless a exemptio is obtaied. Uder NI ad NI , whe filig a techical report, a compay must file a certificate of each qualified perso resposible for preparig each portio of the report, ad the certificate must be dated, siged ad, if the qualified perso has a seal, sealed. The purpose of NI ad NI is to prevet the dissemiatio to potetial ivestors of false or misleadig iformatio regardig mieral properties. NI ad NI apply to all disclosure, oral or writte, ad must be prepared by qualified persos specified i these atioal istrumets. Why is the legal opiio required ad ca my local cousel provide it? The purpose of the legal opiio is to cofirm that the applicat is a legal etity, ad that the securities listed have bee legally created ad will be validly issued. The opiio is required for all TSX listig applicats. Cousel i the local jurisdictio of the applicat ca provide this legal opiio. The TSX-V does ot require a legal opiio for a listig applicatio. 5

8 Guide to Iterlistig o the TSX Does it matter where a applicat compay is icorporated? No, the TSX ad TSX-V list compaies from all over the world, may of which are icorporated i iteratioal jurisdictios. How may shareholders are eeded to list o the TSX? The TSX requires a miimum of 300 public shareholders, each holdig oe board lot or more of freely tradable shares. There is o specific requiremet for havig Caadia shareholders at the time of listig. Ogoig Requiremets To which ogoig regulatory requiremets will we become subject if we list i Caada, ad are exemptios available to iterlisted iteratioal issuers? There are two basic ogoig regulatory requiremets for publicly listed compaies i Caada, each with exemptios available to iteratioal iterlisted issuers: TSX rules applicable to listed compaies; ad Caadia securities laws applicable to reportig issuers. TSX Rules ad Exemptios The TSX will accept certai public documets from other jurisdictios for filig to the extet that they provide sufficiet iformatio similar to that cotaied i the TSX forms. The use of ay such documet must be precleared by the TSX. Oce a compay is listed, the TSX will ot apply certai ogoig listig stadards to the issuer if it is listed o aother recogized exchage ad where, i the prior six-moth period, at least 75 per cet of its tradig value ad volume has occurred o the other exchage. Recogized exchages iclude the Australia Securities Exchage, the Lodo Stock Exchage, NASDAQ, NYSE ad NYSE Amex. Caadia Securities Laws ad Exemptios Caadia securities laws cover a rage of filig ad regulatory eforcemet topics, icludig the followig pricipal requiremets (the Pricipal Caadia Securities Requiremets): Disclosure of material chages; Preparatio, approval, delivery ad filig of iterim fiacial statemets, aual fiacial statemets ad auditor s report; Maagemet s Discussio ad Aalysis (MD&A); AIFs; Busiess acquisitio reports; Iformatio circulars ad proxy solicitatios i coectio with shareholder meetigs ad disclosure of votig results; Early warig of sigificat equity acquisitios; Isider reportig; Filig of ews releases disclosig iformatio regardig results of operatios or fiacial coditio; Filig of documets affectig the rights of security holders; Filig of material cotracts etered ito outside of the ordiary course of busiess; Regulatio of certai related party trasactios; Chage i year-ed; Chage of auditor; ad Disclosure ad miority approval requiremets for restricted securities. Natioal Istrumet Cotiuous Disclosure ad Other Exemptios Relatig to Foreig Issuers (NI ) permits two sub-catgories of foreig reportig issuers to satisfy these requiremets usig foreig documet filigs: 1. SEC Foreig Issuer Exemptio A SEC Foreig Issuer is a foreig issuer (i.e., icorporated or orgaized outside of Caada) that has a class of securities registered uder Sectio 12 of the U.S. Securities Exchage Act of 1934 (1934 Act) or is required to file reports uder paragraph 15(d) of the 1934 Act ad is ot registered or required to be registered as a ivestmet compay uder the Ivestmet Compay Act of A SEC Foreig Issuer may satisfy the Pricipal Caadia Securities Requiremets by complyig with the requiremets of U.S. federal securities law relatig to the comparable Caadia requiremets ad by filig all of the required documets with the relevat Caadia securities regulator. This exemptio is ot available where (a) more tha 50 per cet of the compay s votig securities are owed by Caadia residets, ad (b) 6

9 Guide to Iterlistig o the TSX ay oe or more of the followig is true: the majority of executive officers or directors are Caadia residets, more tha 50 per cet of the cosolidated assets of the issuer are located i Caada, or the busiess is admiistered pricipally i Caada. 2. Desigated Foreig Issuer Exemptio A Desigated Foreig Issuer is a foreig issuer that is subject to the foreig disclosure requiremets of ay oe of 15 desigated foreig jurisdictios. A Desigated Foreig Issuer may satisfy the Pricipal Caadia Securities Requiremets by complyig with the foreig disclosure requiremets relatig to the comparable Caadia requiremets ad by filig all of the required documets with the relevat Caadia securities regulator. The desigated foreig jurisdictios are: Australia Frace Germay Hog Kog Italy Japa Mexico The Netherlads This exemptio is ot available where Caadia residets ow more tha 10 per cet of the issuer s equity securities o a fully diluted basis. What if we are a iteratioal issuer that is ot able to utilize the SEC or Desigated Foreig Issuer Exemptios? Iteratioal issuers ot able to utilize the SEC or Desigated Foreig Issuer Exemptios for istace, if Caadia owership levels are too high, or the issuer does ot report i the U.S. or oe of the other desigated jurisdictios would be required to meet the Pricipal Caadia Securities Requiremets by makig the Caadia form filigs ad meetig other Caadia requiremets i the same maer as domestic Caadia compaies. I may cases, iteratioal documets could be used as base documets for the Caadia filigs. New Zealad Sigapore South Africa Spai Swede Switzerlad Uited Kigdom Whe is the Caadia owership threshold calculatio made i order to determie SEC or Desigated Foreig Issuer exempt status? What happes if the Caadia owership level is exceeded i a give year? Geerally, the issuer will eed to test the availability of SEC or Desigated Foreig Issuer exemptios for its ogoig disclosure i Caada oce per year o the first day of its curret fiacial year. If the exemptio is available at the first day of the fiacial year, the the NI exemptio will be available for the aual ad periodic filigs over the remaider of the year, except for the quarterly fiacial statemets ad MD&A. Quarterly testig should be made, as of the first day of a quarter, for the purposes of the quarterly fiacial statemets ad MD&A, if the issuer s fiacial statemet ad MD&A filigs differ from Caadia stadards. If the Caadia owership level is exceeded at the time of the aual test, the issuer will o loger be exempt from Pricipal Caadia Securities Requiremets ad will be required thereafter to make filigs i accordace with Caadia requiremets. I what laguage must documets be filed? Documets must be filed i Eglish or Frech. How are documets filed i Caada? A SEC or Desigated Foreig Issuer must file documets electroically o SEDAR, a electroic filig system of securities iformatio i Caada. What are the ogoig fees of the Caadia securities regulators? Compaies listed o the TSX or the TSX-V automatically become a reportig issuer i the provices that regulate these exchages (Otario, for the TSX, Alberta ad British Columbia, for the TSX-V). Where a prospectus filig is made with the listig applicatio, the compaies would become reportig issuers i those provices of Caada where the prospectus is filed. Some of the Caadia provicial securities commissios levy a ogoig aual participatio fee for reportig issuers i their provice. Fees for most provices are flat ad less tha $1,000. British Columbia s fee is $600 ad Alberta s is $300, uless the issuer is eligible for the short-form prospectus system, i which case the Alberta fee is $2,400. For Otario, aual fees are based o the market capitalizatio of the 7

10 Guide to Iterlistig o the TSX issuer ad are set out i Appedix F. Fees are also charged by the provices for certai other filigs. A miimum of two idepedet directors; ad A desigated CEO, CFO ad Corporate Secretary. Reportig issuers are also required to pay fees for usig the SEDAR electroic disclosure filig system, icludig a aual fee of approximately $800 for sigle provice reporters ad $1,800 for multi-provice reporters. Other Cosideratios How ca iteratioal issuers access Caada s fiacig markets? A iteratioal issuer ca perform subsequet fiacigs i the Caadia capital markets through a public offerig of securities or through a private placemet. If a issuer is offerig securities to the public, the issuer must file a log-form prospectus, uless the issuer is qualified to file a short-form prospectus. Uder the expedited short-form regime, a issuer is allowed to icorporate by referece its fiacial statemets ad other ogoig disclosure, thereby reducig the time ad cost ivolved i a subsequet public offerig. I order to qualify for the short-form regime, amog other criteria, a issuer must be curret i its ogoig disclosure filigs, icludig a AIF ad aual fiacial statemets. However, a SEC Foreig Issuer ca qualify for the short-form regime by filig a curret Form 10-K, Form 10-KSB or Form 20-F, i place of a AIF. Compaies ca also issue securities by way of a private placemet, which is exempt from the prospectus requiremets. Exemptios are available to compaies that distribute securities to, amog others, accredited ivestors ad their ow employees. Private placemet securities issued by a public compay are subject to a four-moth hold period. Are there requiremets for the compositio of the board ad maagemet? The TSX requires: The board of directors of the applicat compay to have public market experiece icludig capital markets ad relevat idustry experiece for the sector; Are listed compaies required to have Caadiabased directors or maagemet? Directors ad maagemet are ot required to be Caadia residets. However, public compay experiece i Caada or North America is strogly preferred. Is a Caadia office required? A Caadia operatig office or headquarters is ot required. However, a Caadia presece i the form of a ivestor relatios cotact ad/ or a officer or director based i Caada is ecouraged. A listed compay should have a desigated idividual i Caada who ca aswer questios from North America shareholders, aalysts ad regulatory authorities. Is a audit committee required for the compay to list o the TSX? Yes, uless the compay is exempt uder NI A audit committee is made up of at least three members, ad for TSX issuers, all members must be idepedet as defied uder Natioal Istrumet Audit Committees. What type of accoutig stadards are acceptable? Fiacial statemets ca be prepared i accordace with IFRS. A SEC Foreig Issuer may use U.S. GAAP. As oted earlier, IFRS are required for domestic Caadia issuers as of Jauary 1, Are iterim quarterly fiacial statemets required? Yes, other tha for Desigated Foreig Issuers whose home jurisdictios require oly semi-aual fiacial statemets. 8

11 Guide to Iterlistig o the TSX Does Caada have a requiremet relatig to auditor attestatio of iteral cotrol over fiacial reportig as does the U.S.? No. However, TSX-listed compaies are subject to Natioal Istrumet Certificatio of Disclosure i Issuers Aual ad Iterim Filigs, which requires CEO/CFO certificatio of iteral cotrols over fiacial reportig ad disclosure cotrols ad procedures, uless the compay is exempt uder NI Does the TSX require a iterlisted compay to appoit a co-trasfer aget i Caada? Yes, co-trasfer agets must be appoited i Caada to facilitate the movemet of securities betwee each coutry s clearig ad settlemet services. Trasfer agets lik the clearig ad settlemet houses betwee the home market ad CDS Clearig ad Depository Services Ic. i Caada. The trasfer aget ca also assist with providig geeric share certificates ad mailig proxy material. Does the TSX require compaies to list exchageable or depository receipts for o-caadia compaies? No. Compaies ca list their uderlyig shares directly o the TSX (i.e., ordiary/commo shares). But, the TSX ca accommodate the listig of exchageable shares ad depository receipts. I what currecy do shares or depository receipts trade i? All shares ad depository receipts trade i Caadia or U.S. dollars. What are the mai differeces betwee the TSX ad the TSX-V for a iteratioal issuer cosiderig a iterlistig applicatio? As ca be expected, as a veture market, the requiremets for listig o the TSX-V are geerally lower tha those for listig o the TSX. For example, the TSX-V has lower miimum requiremets for public shareholders, public float, workig capital ad et tagible assets, earigs ad/or reveue. See Appedix A for more iformatio o the listig requiremets. The TSX-V does ot have exemptios from the mai ogoig listig stadards for foreig issuers, like those foud i Sectio 602(g) of the TSX Compay Maual, such as security-based compesatio arragemets, shareholder approvals ad private placemet oversight. Iteratioal issuers listig o the TSX-V are required to comply with both Caadia ad local rules i these areas. Accordigly, there would be less stock exchage ivolvemet i Caada for a foreig issuer listed o the TSX as compared to the TSX-V. 9

12 Source: TSX/TSX-V, A Capital Opportuity, Guide to Listig i Guide to Iterlistig o the TSX Appedix A APPENDIX A LISTING REQUIREMENTS FOR EXPLORATION & MINING COMPANIES TSX Veture Tier 1 TSX Veture Tier 2 TSX No-exempt Exploratio ad Developmet Stage TSX No-exempt Producer TSX Exempt Property Requiremets Material iterest i a Tier 1 property 4 Sigificat iterest 5 i a qualifyig property or, at discretio of the Exchage, a right to ear a sigificat iterest 5 i a qualifyig property; sufficiet evidece of o less tha $100,000 of exploratio expeditures o the qualifyig property i the past three years Advaced Exploratio Property 2 Miimum 50% owership i the property 3 Three years prove ad probable reserves as estimated by a idepedet qualified perso (if ot i productio, a productio decisio made) Three years prove ad probable reserves as estimated by a idepedet qualified perso Recommeded Work Program $500,000 o the Tier 1 property 4 as recommeded by geological report $200,000 o the qualifyig property as recommeded by geological report 6 $750,000 o advaced exploratio property 2 as recommeded i idepedet techical report 6 Brigig the mie ito commercial productio Commercial level miig operatios Workig Capital ad Fiacial Resources Adequate workig capital ad fiacial resources to carry out stated work program or execute busiess pla for 18 moths followig listig; $200,000 i uallocated fuds Adequate workig capital ad fiacial resources to carry out stated work program or execute busiess pla for 12 moths followig listig; $100,000 i uallocated fuds Miimum $2.0 millio workig capital, but sufficiet to complete recommeded programs, plus 18 moths G&A, aticipated property paymets ad capital expeditures. Appropriate capital structure Adequate fuds to brig the property ito commercial productio; plus adequate workig capital for all budgeted capital expeditures ad to carry o the busiess. Appropriate capital structure Adequate workig capital to carry o the busiess. Appropriate capital structure. Net Tagible Assets, Earigs or Reveue $2,000,000 et tagible assets No requiremet $3,000,000 et tagible assets $4,000,000 et tagible assets; evidece idicatig a reasoable likelihood of future profitability supported by a feasibility study or historical productio ad fiacial performace $7,500,000 et tagible assets; pre-tax profitability from ogoig operatios i last fiscal year; pre-tax cash flow of $700,000 i last fiscal year ad average of $500,000 for past two fiscal years Other Criteria Geological report 6 recommedig completio of work program Up-to-date, comprehesive techical report 6 prepared by idepedet qualified perso ad 18 moth projectio (by quarter) of sources ad uses of fuds, siged by CFO Up-to-date, comprehesive techical report 6 prepared by idepedet qualified perso Maagemet ad board of Directors Maagemet, icludig board of directors, should have adequate experiece ad techical expertise relevat to the compay's busiess ad idustry as well as adequate public compay experiece. Compaies are required to have at least two idepedet directors. Distributio, Market Capitalizatio ad Public Float Public float of 1,000,000 shares; 250 public shareholders each holdig a board lot ad havig o resale restrictios o their shares; 20% of issued ad outstadig shares i the hads of public shareholders Public float of 500,000 shares; 200 public shareholders each holdig a board lot ad havig o resale restrictios o their shares; 20% of issued ad outstadig shares i the hads of public shareholders $4,000,000 publicly held; 1,000,000 free tradig public shares; 300 public holders with board lots Sposorship Sposor report may be required Required (may be waived if sufficiet previous 3 rd party due diligece) Not required (1) G&A meas geeral ad admiistrative expeses. (2) advaced exploratio property refers to oe o which a zoe of mieralizatio has bee demostrated i three dimesios with reasoable cotiuity idicated. The mieralizatio idetified has ecoomically iterestig grades. (3) A compay must hold or have the right to ear ad maitai a 50% iterest i the property. Compaies holdig less tha a 50% iterest will be cosidered o a case-by-case basis lookig at program size, stage of advacemet of the property ad strategic alliaces. (4) Tier 1 property meas a property that has substatial geological merit ad is: (a) a property i which the Issuer holds a material iterest;; *Miig Disclosure Stadards Natioal Istrumet is the Caadia Securities Admiistrators ( CSA ) policy that govers the scietific ad techical disclosure for mieral projects made by mieral exploratio ad miig compaies, icludig the preparatio of techical reports. The istrumet covers oral statemets as well as writte documets ad websites. NI requires that all techical disclosure be prepared by or uder the supervisio of a qualified perso. Issuers are required to make disclosure of reserves ad resources usig defiitios approved by the Caadia Istitute of Miig, Metallurgy ad Petroleum. NI is available at: (b) (c) (d) a property o which previous exploratio, icludig detailed surface geological, geophysical ad/or geochemical surveyig ad at least a iitial phase of drillig or other detailed samplig (such as trech or udergroud opeig samplig), has bee completed; a property o which drillig or other detailed samplig o the property has idetified potetially ecoomic or ecoomic materializatio; ad a idepedet geological report recommeds a miimum $500,000 Phase 1 drillig (or other form of detailed samplig) program based o the merits of previous exploratio results; or a idepedet, positive, feasibility study demostrates that the property is capable of geeratig positive cash flow from ogoig operatios. Frequetly Asked Questios at: 43_101_ htm#faq (5) sigificat iterest meas at least 50% iterest (6) geological report or techical report, i the case of a miig property, is a report prepared i accordace with Natioal Istrumet Stadards of Disclosure for Mieral Projects or ay successor istrumet. Source: TSX/TSX-V, A Capital Opportuity, Guide to Listig All amouts are expressed i Caadia dollars. The foregoig is a summary of the applicable listig requiremets oly. For detailed listig requiremets, refer to the TSX Veture Exchage Corporate Fiace Maual ad the Toroto Stock Exchage Maual, both of which are available at 10

13 Guide to Iterlistig o the TSX APPENDIX b LISTING REQUIREMENTS FOR OIL & GAS (EXPLORATION OR PRODUCING) COMPANIES TSX Veture Tier 1 TSX Veture Tier 2 TSX No-Exempt Oil & Gas Exploratio ad Developmet Issuers TSX Exempt Oil & Gas Issuers 4 Net Tagible Assets, Earigs or Reveue No Requiremet Pre-tax profitability from ogoig operatios i last fiscal year. Pre-tax cash flow from ogoig operatios of $700,000 i last fiscal year ad average pre-tax cash flow from ogoig operatios of $500,000 for the past two fiscal years Workig Capital ad Fiacial Resources Adequate workig capital ad fiacial resources to carry out stated work program or execute busiess pla for 18 moths followig listig; $200,000 uallocated fuds Adequate workig capital ad fiacial resources to carry out stated work program or execute busiess pla for 12 moths followig listig; $100,000 uallocated fuds Adequate fuds to execute the program ad cover all other capital expeditures & G&A 1 + debt service expeses for 18 moths with a cotigecy allowace; 18 moth projectio of sources & uses of fuds siged by CFO; appropriate capital structure Adequate workig capital to carry o the busiess. Appropriate capital structure. Distributio, Market Capitalizatio ad Public Float Public float of 1,000,000 shares; 250 Public Shareholders each holdig a Board Lot ad havig o Resale Restrictios o their shares; 20% of issued ad outstadig shares i the hads of Public Shareholders Public float of 500,000 shares; 200 Public Shareholders each holdig a Board Lot ad havig o Resale Restrictios o their shares; 20% of issued ad outstadig shares i the hads of Public Shareholders At least 1,000,000 freely tradable shares with a aggregate market value of $4,000,000; 300 public holders, each with oe board lot or more Sposorship Sposor report may be required Not required Property Requiremets Exploratio - $3,000,000 i reserves of which a miimum of $1,000,000 must be proved developed reserves 2 ad the balace probable reserves Producig - $2,000,000 i proved developed reserves 2 Exploratio either (i) Issuer has a uprove property with prospects or (ii) Issuer has joit veture iterest ad $5,000,000 raised by Prospectus offerig Reserves either (i) $500,000 i proved developed producig reserves or (ii) $750,000 i proved plus probable reserves $3,000,000 proved developed reserves 2,5 $7,500,000 proved developed reserves 2, 5 Recommeded Work Program Exploratio - satisfactory work program (i) of o less tha $500,000 ad (ii) which ca reasoably be expected to icrease reserves, as recommeded i a Geological Report Producig - No requiremet Exploratio miimum of $1,500,000 allocated by Issuer to a work program as recommeded i a Geological Report except where Issuer has a joit veture iterest ad has raised $5,000,000 i Prospectus offerig Reserves (i) satisfactory work program ad (ii) i a amout of o less tha $300,000 if proved developed producig reserves have a value of less tha $500,000 as recommeded i Geological Report Clearly defied program to icrease reserves Maagemet ad board of Directors Maagemet, icludig board of directors, should have adequate experiece ad techical expertise relevat to the compay's busiess ad idustry as well as adequate public compay experiece. Compaies are required to have at least two idepedet directors. Other Criteria Geological Report recommedig completio of work program Up-to-date techical report prepared by a idepedet techical cosultat (NI ) 5 (1) G&A meas geeral ad admiistrative expeses. (2) Proved developmet reserves are defied as those reserves that are expected to be recovered from existig wells ad istalled facilities, or, if facilities have ot bee istalled, that would ivolve low expediture, whe compared to the cost of drillig a well, to put the reserves o productio. (3) NI Natioal Istrumet Stadards of Disclosure for Oil & Gas Activities available at: rule.pdf (4) Exceptioal circumstaces may justify the gratig of Exempt status otwithstadig the miimum requiremets geerally a affiliatio with a established busiess ad/or exceptioally strog fiacial positio is required. (5) Reserve value of pre-tax NPV of cash flows usig a 20% discout rate: costat pricig assumptios are used. Source: TSX/TSX-V, A Capital Opportuity, Guide to Listig All amouts are expressed i Caadia dollars. For detailed listig requiremets, go to

14 14 Guide to Iterlistig o the TSX APPENDIX C LINKS TO REQUIRED LISTING DOCUMENTS AND ASSOCIATED INFORMATION Listig Documet Title Lik TSX ad TSX-V Listig Process TSX Listig Applicatio TSX Persoal Iformatio Form ad TSX Declaratio Form TSX Listig Fee Schedule TSX-V Persoal Iformatio Form TSX-V Declaratio Form Other Importat TSX-V Forms TSX-V Listig Applicatio TSX-V Listig Fee Schedule Source: TMX Source: TMX 12

15 15 Guide to Iterlistig o the TSX APPENDIX D Origial Listig Fees for Iteratioal Issuers o the TSX Listig Capitalizatio base Listig Capitalizatio base Fee + Variable Fee Rate for Listig Capitalizatio i Excess of based Listig Capitalizatio $0 up to $5M $7, % $5M up to $10M $12, % $10M up to $50M $17, % $50M up to $100M $57, % $100M ad above $105, % The maximum fee is $150,000. Aual Sustaiig Fees for Issuers o the TSX Listig Capitalizatio base Listig Capitalizatio base Fee + Variable Fee Rate for Market Capitalizatio i Excess of base Market Capitalizatio $0 up to $100M $12, % $100M up to $500M $20, % $500M ad above $50, % The maximum fee is $95,000. Source: TMX Source: TMX 13

16 Guide to Iterlistig o the TSX Applicatio Fee detailed prelimiary assessmet New Listig / RTO / QT / COb Deemed value of the shares issued of less tha $6 millio Deemed value of the shares issued greater or equal to $6 millio CPC Listig APPENDIX E APPENDIX E Listig Fees for Issuers o the TSX-V Miimum Maximum Fee Calculatio $2,500 $2,500 Paymet to be applied toward the formal filig of the New Listig, CPC, QT, RTO or COB applicatio $10,000 $30,000 $7, % of the deemed value of shares issued $30,000 $40,000 $30, % of the deemed value of shares issued exceedig $6 millio Listig fee $15,000 $15,000 A o-refudable $5,000 fee is payable with the iitial submissio. The $10,000 balace is payable prior to listig. Market Capitalizatio Source: TMX Source: TMX Aual Sustaiig Fees for Issuers o the TSX-V Miimum Maximum Fee Calculatio $5M or less $5,200 $5,200 Flat fee Greater tha $5M ad less tha $100M Greater tha $100M ad less tha $440M $5,300 $14,800 $5,300 + $100 for each $1,000,000 i market capitalizatio or part thereof above $5 millio $16,750 $50,750 $16,750 + $100 for each $1,000,000 i market capitalizatio or part thereof above $100 millio $440M or above $51,000 $90,000 $51,000 + $100 for each $1,000,000 i market capitalizatio or part thereof above $440 millio 14 16

17 Guide to Iterlistig o the TSX APPENDIX F Otario Corporate Fiace Participatio Fees Capitalizatio for the Previous Fiscal Year uder $25 millio $820 $25 millio to uder $50 millio $1,780 $50 millio to uder $100 millio $4,380 $100 millio to uder $250 millio $9,200 $250 millio to uder $500 millio $20,100 $500 millio to uder $1 billio $28,100 $1 billio to uder $5 billio $40,700 $5 billio to uder $10 billio $52,400 $10 billio to uder $25 billio $61,200 $25 billio ad over $68,900 Source: TMX Participatio Fee 17 15

18 16 Notes

19 Notes 17

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