This is the hole to dig out of:> Cease Trade Order
> Priority Ventures Ltd.
> Section 164 of the Securities Act, R.S.B.C. 1996, c. 418 (the Act)
>
> 1 Priority Ventures Ltd. (the Company) is a reporting issuer in
> British Columbia and an exchange issuer as defined in the Act. The
> Company is required, among other things, to file certain records, in
> the required form, under the Act and the regulations.
>
> 2 The Company is a development stage exploration company. It holds
> rights to certain coal licenses on Vancouver Island, British Columbia,
> including the Suquash coal licenses near Port McNeill and the Dove
> Creek coal licenses near Courtney. The Company is exploring these
> licenses for their coal and coalbed methane potential.
>
> 3 The Company relied on sections 128 (a), (b) and (h) of the rules
> accompanying the Act (the Rules) to raise approximately $2,600,000
> through four separate private offerings of its securities. An offering
> memorandum (OM) was delivered to the purchasers of each of these
> offerings and filed with the Commission . The OMs delivered consisted
> of an undated OM filed on August 25, 2000 and three OMs dated February
> 29, June 1, and November 1, 2001. All of the securities issued under
> the offerings were issued with reduced hold periods.
>
> 4 In order to qualify securities for a reduced hold period the
> securities laws require a company to, among other things, have filed
> an annual information form (AIF) with the Commission at the time of,
> or prior to, the offering. At the time of each offering the Company
> had not filed an AIF as required by sections 2.5 or 2.6 of
> Multilateral Instrument 45-102 (or its predecessor BCI 45-506) to
> qualify these securities for the reduced hold period.
>
> 5 The Company has disclosed historical coal resources and reserves
> for the Suquash licenses and both historical reserves and resources
> and current resources for the Dove Creek licenses in various press
> releases since April 2001. The Company failed to file technical
> reports within 30 days of each press release as required under section
> 4.2(1) 10 of National Instrument 43-101 (NI 43-101).
>
> 6 The Company disclosed a measured and indicated coal resource of 20
> million tons, and an inferred resource of 90 million tons for the Dove
> Creek licenses in the OM dated November 1, 2001. The Company failed to
> file a technical report in support of technical information in the OM
> as required under section 4.2(1) 4 of NI 43-101.
>
> 7 The Company's 2000 annual report dated May 3, 2001 contained
> material information concerning its coal and coalbed methane projects,
> including an historical coal reserve estimate for the Suquash license.
> None of this information was contained in a disclosure document or
> technical report filed before February 1, 2001. The Company failed to
> file a technical report in support of this material information as
> required under section 4.2(1) 6 of NI 43-101.
>
> 8 The Company filed material change reports (MCR) under section 85
> of the Act that were not sufficiently complete to enable a reader to
> appreciate the significance of the material change without reference
> to other material, as required by item 5 of BCF 53-901F. Specifically:
> 1. The April 26, 2001, August 7, 2001, August 16, 2001, June 27, 2002,
> and August 26, 2002 MCRs contained information not in compliance with
> NI 43-101. They also failed to disclose material risk and qualifying
> information relating to coal and gas resource and reserve estimates,
> ownership of gas rights, and financial projections.
> 2. The February 12, 2002 MCR disclosed the Company had received
> authorization to drill a coalbed methane production well. However the
> well authorized by the B.C. Oil and Gas Commission was for
> exploration, not production. The Company failed to make this
> distinction clear.
> 3. The August 26, 2002 MCR disclosed a coalbed gas resource of 5.6 to
> 11.5 billion cubic feet (Bcf) within a 40 million tonne measured and
> indicated coal resource. It also projected a total gas resource in
> excess of 30 Bcf for the Dove Creek coal license area. The Company
> projected the value of 1 Bcf of gas for Vancouver Island users as high
> as $13 million. The MCR also disclosed the possibility of establishing
> a mineable coal reserve based on gas production drilling. The MCR
> failed to disclose the following material information:
> (a) Classification of the gas resource and the resource definitions,
> terminology and evaluation standards that were used.
> (b) Fact that the gas resources, and the projections of value based on
> them, were speculative and non-commercial.
> (c) The qualifications and independence of the persons making the gas
> resource estimates and the methodologies and key assumptions used.
> (d) The portion of the gas resource expected to be recoverable, over
> what time frame, under what conditions and at what cost.
> (e) Projected gas values of $13 million represented the retail price
> residential gas consumers were expected to be pay. The Company omitted
> additional material information, including the cost it expected to incur
in
> extracting the gas from the ground and related recovery factors.
> (f) Fact that the gas rights were not automatically included in the
> coal licenses and that the Company did not own the gas rights for the
> entire coal license area.
> (g) Fact that almost all of the 40 million tonne coal resource is not
> of immediate interest for mining due to low seam thickness, excessive rock
> partings and other factors.
> (h) Fact that a coal reserve cannot be mined while it is being used to
> produce gas.
>
> 9 The Company filed quarterly reports (QR) for the three months
> ended March 31, 2002 and the six months ended June 30, 2002. These QRs
> that were not in the required form, BC Form 51-901F. Schedule C
> (Management Discussion and Analysis) of the QRs failed to provide a
> meaningful discussion of the Company's operations, including the
> Vancouver Island projects, a reconciliation of actual exploration
> expenditures to those budgeted in the Company's OMs, and related
> issues. The reports also contained projections of coal gas reserves
> and representations of commercial viability without disclosing key
> risks, underlying assumptions and other important qualifying
> information.
>
> 10 Each technical report, AIF, MCR and QR (collectively, the
> Required Records) constitutes a record required to be filed in the
> required form under the Act and the regulations.
>
> 11 The Executive Director is satisfied that the reasons set out in
> sections 164(2)(a) and (b) of the Act have been met. The Company
> failed to file certain records required to be filed under the Act and
> the regulations. The Company also filed certain records required to be
> filed under the Act and the regulations that were not prepared in the
> required form.
>
> 12 Under section 164(1) of the Act, the Executive Director orders
> that all trading in the securities of the Company cease until:
> 1. The Required Records are completed in the required form and filed
> under the Act and the regulations, and
> 2. The Executive Director makes an order under section 171 of the Act
> revoking the decision to cease all trading in the securities of the
> Company.
>
>