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CNQ: Canada’s New Stock Exchange

CNQ: Canada’s New Stock Exchange. Benefits of Going Public. Access to Capital Vital in the mineral exploration business Platform to grow Currency to make acquisitions Maintain Control As little as 5% can be in public hands Profile Provide a secondary market for existing shareholders

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CNQ: Canada’s New Stock Exchange

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  1. CNQ: Canada’s New Stock Exchange

  2. Benefits of Going Public • Access to Capital • Vital in the mineral exploration business • Platform to grow • Currency to make acquisitions • Maintain Control • As little as 5% can be in public hands • Profile • Provide a secondary market for existing shareholders • Compensation • Share issuances, stock options, etc.

  3. Means of Going Public • Prospectus • Non-offering clears existing shareholders • IPO • Cheaper • Must go through Securities Commission(s) • Reverse Takeover (RTO) • Advantages • Faster • Built in distribution • Disadvantages • Expensive • “Homework” must be done

  4. CNQ • Recognized by OSC Feb. 28, 2003 as a quotation and trade reporting system • Launch – July 25, 2003 • Recognized as a stock exchange on May 7, 2004 • Designed to meet the needs of: • Issuers • Dealers • Investors

  5. CNQ Competitive Advantages • A cost effective exchange • Streamlined regulatory model • Liquidity • Multiple market making combined with client orders helps create orderly markets • Transparency • Integrity

  6. CNQ Overview • Fully electronic trading platform • Auction market + competitive market makers • Issuer standards + enhanced disclosure requirements

  7. CNQ Market Structure

  8. Overview of Listing Process • Application and agreement to comply • Listing Statement (Form 2A) • Prospectus level disclosure • Background checks on management and insiders to ensure they are acceptable • Documentation posted on CNQ.CA • Central repository for all CNQ enhanced disclosure and SEDAR filings • Approvals in as little as 3 weeks

  9. Overview of Listing Requirements • Public Float • 150 shareholders with a minimum one board lot each representing 10% of the issued and outstanding shares • Financial Resources • Revenues from business activity or a plan with the resources to achieve objectives (minimum $100,000 in working capital) • Resource companies must have a technical report compliant with the appropriate National Instrument • May retain your CCPC status while listed on CNQ

  10. Streamlined Regulation • Disclosure driven (CNQ.CA) • Listing Statement • Monthly Update • Quarterly Report • SEDAR + • No transaction reviews/approvals • Systematic reviews of the disclosure record

  11. Transaction Process • Post notice on CNQ.CA and observe Timely Disclosure Requirements • Post CNQ Form applicable to type of transaction • Post CEO certificate of compliance • Wait 24 hours • Close Transaction Therefore, no cost or delay!

  12. CNQ Issuer Fee Structure • Application fee $10,000 -Non refundable deposit of $2,000 + GST with initial application with the balance due six months after listing • Maintenance fee $300/month • No annual sustaining fee • No transaction fees

  13. Visibility on CNQ.CA • Disclosure Hall • Market info including depth with a 15 minute delay • Company info • Links to all disclosure • Centralized • Secure + Issuer controlled • Internet access for all investors

  14. CNQ Contacts416-572-2000 www.CNQ.CA Issuers: Radhika Joseph, Listings Coordinator Mark Faulkner, Director of Listings & Regulation Rob Theriault, Business Development, Listings Dealers: Natasha Blackburn, Market Development Bernard Chua, Market Operations Rules, General Policies Tim Baikie, General Counsel Western Canada: Mark Francis, 204-942-8992

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