BCSC Partial Revocation of Cease Trade Order

Citation: 2018 BCSECCOM 398

Partial Revocation Order

American CuMo Mining Corporation

Section 171 of the Securities Act, R.S.B.C. 1996, c. 418

¶ 1 On November 2, 2018, the Executive Director issued an order (the Cease Trade Order) under section 164(1) of the Securities Act, R.S.B.C. 1996, c. 418 (the Act) that all trading in the securities of American CuMo Mining Corporation (American CuMo) cease until it files the required records referred to in the Cease Trade Order.

American CuMo has made an application to the Executive Director under section 171 of the Act for a partial revocation of the Cease Trade Order to permit certain trades in connection with the issuance of securities as described below.

¶ 2 American CuMo represented to the Commission that:

1. American CuMo's head office is located in British Columbia.

2. American CuMo is a reporting issuer in the provinces of British Columbia and Alberta.

3. American CuMo is seeking a partial revocation of the Cease Trade Order in order to complete a private placement of up to 10,000,000 units (the Units) at price of $0.05 per Unit for aggregate gross proceeds of up to $500,000 (the Private Placement). Each Unit will consist of one common share of American CuMo and one common share purchase warrant (a Warrant). The Warrants will be exercisable for a price per common share of $0.075 for a period of two years from the date of issue.

4. American CuMo seeks to conduct the Private Placement to enable it to raise sufficient funds to prepare and file a technical report (the Technical Report) in respect of American CuMo's CuMo property (the CuMo Property) and to pay costs of environmental studies (the Environmental Studies) for the permit for the CuMo Property. With the proceeds from the Private Placement, American CuMo expects to have sufficient working capital to continue its operations until it can apply for and receive a full revocation of the CTO.

5. American CuMo intends to apply to the Executive Director for a full revocation of the Cease Trade Order.

6. For each distribution made in respect of the Private Placement, American CuMo will avail itself of one or more prospectus exemptions, including the accredited investor exemptions contained in section 2.3 of National Instrument 45-106 Prospectus Exemptions ("NI 45-106"); the family, friends and business associates exemption in section 2.5 of NI 45- 106; the employee, executive officer, director and consultant exemption in section 2.24 of NI 45-106 (American CuMo will only use the exemption in section 2.24 of NI 45-106 to raise funds from executive officers and directors and not to raise funds from employees or consultants); the exemption provided by BC Instrument 45-536 Exemption from prospectus requirement for certain distributions through an investment dealer (and the equivalent exemption in other provinces); the exemption provided by BC Instrument 45-534 Exemption from prospectus requirement for certain trades to existing security holders (and the equivalent exemption in other provinces); and the exemption provided by BC Instrument 72-503 Distribution of Securities outside British Columbia.

7. The Private Placement is intended to take place in British Columbia, Alberta and possibly other jurisdictions in Canada, the United States and possibly other foreign jurisdictions.

8. American CuMo reasonably expects the proceeds from the Private Placement will be used in a manner consistent with the below table:

9. American CuMo reasonably expects that with the proceeds from the Private
Placement, it will have sufficient funds to prepare and file the Technical
Report, to pay for the Environmental Studies and to apply for a full revocation
of the Cease Trade Order.

10. Before completing the Private Placement, American CuMo will:

(a) Provide each investor in the Private Placement a copy of the Cease Trade Order;

(b) Provide each investor in the Private Placement a copy of this Partial Revocation Order; and

(c) Obtain a signed and dated acknowledgement from each investor or participant in the Private Placement, which clearly states that the securities acquired by such investor or participant pursuant to the Private Placement will remain subject to the Cease Trade Order and the issuance of a partial revocation order does not guarantee the issuance of a full revocation in the future.

¶ 3 The Executive Director is satisfied that this order is not prejudicial to the public interest.

¶ 4 The Executive Director orders under section 171 of the Act that the Cease Trade Order be partially revoked solely to permit completion of the Private Placement.

¶ 5 December 10, 2018

Allan Lim, CPA, CA
Manager
Corporate Finance

Original