Accessing North America Capital

Deciding whether to access the capital markets in Canada or the United States requires an understanding of the opportunities that each market offers a resource-based issuer and the different steps an issuer must take in order to raise capital in either country. The required steps are based on rules and regulations of each country that can differ significantly in certain areas and it is essential for a resource-based issuer to understand these differences in order to make a well-informed decision.

2. OVERVIEW OF THE INDUSTRY AND REGULATORY FRAMEWORK

2.1 Mining and oil and gas industries in Canada, United States and Brazil

2.1.1 Canada

A large portion of Canada's economy is based on energy and natural resources. The mining and oil and gas industries are two of the largest industries in Canada and two of the most important sectors found on the Toronto Stock Exchange (“TSX”) and the TSX Venture Exchange (“TSXV”), the principal exchanges in Canada, in terms of number of listed issuers as well as total market capitalization. In March 2011, of the 3,508 listed issuers on the TSX and the TSXV, the metals and mining sector accounted for 1,441 issuers (41.1%) with a market capitalization of CAD$458.5 billion, which equals approximately 19.6% of the total market capitalization of the TSX and TSXV. The oil and gas sector accounted for 550 issuers (15.7%)