Au Gold Corp. - M&A Activity 2020

SHARE EXCHANGE AGREEMENT

This share exchange agreement dated for reference October 27, 2020 (the “ Agreement ”)

AMONG:

SCHOONER CAPITAL CORP. , a corporation existing under the laws of the province of British Columbia with a head office at #110, 8 King Street East, Toronto, Ontario M5C 1B5

(“ Schooner ”)

AND:

1201361 B.C. LTD. , a corporation incorporated under the laws of the province of British Columbia with a head office at [Redacted: Confidential Information ]

(“ Target ”)

AND:

THE UNDERSIGNED VENDORS OF TARGET , whose names and addresses are set out in the attached Schedule A

(individually, a “ Vendor ” and collectively, the “ Vendors ”)

WHEREAS:

A. The Vendors are the registered and beneficial holders of all the outstanding securities of Target as indicated on Schedule A to this Agreement;
B. Schooner’s common shares are listed and posted for trading on the TSX Venture Exchange (the “ TSXV ”) under the symbol SCH.P;
C. The Vendors wish to sell to Schooner and Schooner wishes to purchase from the Vendors the Purchased Shares (as hereinafter defined) on the terms and conditions set out in this Agreement; and
D. The completion of the transactions contemplated by this Agreement will constitute a “Qualifying Transaction” of Schooner for the purposes of Policy 2.4 – Capital Pool Companies of the TSXV Corporate Finance Manual.

THEREFORE , in consideration of the mutual agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows.

ARTICLE 1 ‐ DEFINITIONS, INTERPRETATION AND SCHEDULES

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Definitions

In this Agreement, unless the context otherwise requires, the following words and terms have the meanings provided below:

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“ affiliate ” has the meaning given to that term in the BCBCA;

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“ Agreement ” means this share exchange agreement, together with the attached schedules, as amended or supplemented from time to time;
“ BCBCA ” means the Business Corporations Act (British Columbia);
“ Business Day ” means a day, other than a Saturday or Sunday, on which the principal commercial banks located in the City of Vancouver, British Columbia are open for business;
“ Closing ” means the completion of the Share Exchange;
“ Closing Date ” means such date as the parties may agree, subject to receipt of approval to close from the TSXV;
“ Closing Time ” means 10:00 a.m. (Vancouver time) on the Closing Date or such other time on such date as Schooner and Target may agree as the time at which the Closing will take place;
“ Completion Deadline ” means the latest date by which the transactions contemplated by this Agreement are to be completed, which date is January 27, 2021 or such later date as Schooner and Target may mutually agree;
“ Computershare ” means Computershare Investor Services Inc.;
“ Concurrent Offering ” means the Unit Financing and the FT Financing collectively;
“ Contract ” means any note, mortgage, indenture, non‐governmental permit or license, franchise, lease or other contract, agreement, commitment or arrangement binding upon Target or Schooner, as the case may be;
“ CPC Escrow Agreement ” means TSXV Form 2F CPC Escrow Agreement dated June 11, 2018 between Computershare, as escrow agent, Schooner and various holders of Schooner Shares;
“ Director Changes ” has the meaning set forth in §5.1;
“ DRS Statements ” means Direct Registration Advice Statements;
“ Elected Amount ” has the meaning set forth in §2.2;
“ Encumbrance ” means any mortgage, pledge, assignment, charge, lien, claim, security interest, adverse interest, other third person interest or encumbrance of any kind, whether contingent or absolute, and any agreement, option, right or privilege (whether by law, contract or otherwise) capable of becoming any of the foregoing;
“ Escrowed Schooner Shares ” means the Schooner Shares subject to the TSXV’s escrow requirements pursuant to the CPC Escrow Agreement, and as set forth in Schedule “C” attached hereto;

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“ Filing Statement ” means a filing statement on TSXV Form 3B2 ‐ Information Required in a Filing Statement for a Qualifying Transaction ;
“ FT Financing ” means non‐brokered private placement by Schooner of up to 10,000,000 FT Shares at a price of $0.10 (“ FT Price ”) per FT Share for gross proceeds to Schooner of $1,000,000;
“ FT Shares ” means flow‐through common shares of Schooner;
“ Governmental Entity ” means any applicable:

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multinational, federal, provincial, state, regional, municipal, local or other government, governmental or public department, central bank, court, tribunal, arbitral body, commission, board, bureau or agency, domestic or foreign;

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subdivision, agent, commission, board or authority of any of the foregoing;

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quasi‐governmental or private body, including any tribunal, commission, regulatory agency or self‐regulatory organization, exercising any regulatory, expropriation or taxing authority under or for the account of any of the foregoing, including without limitation, Securities Authorities; or

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stock exchange, including the TSXV;

“ IFRS ” means International Financial Reporting Standards, as adopted by the International Accounting Standards Board, as amended from time to time;
“ Laws ” means all laws, statutes, codes, ordinances, decrees, rules, regulations, by‐laws, statutory rules, principles of law, published policies and guidelines, judicial or arbitral or administrative or ministerial or departmental or regulatory judgments, orders, decisions, rulings or awards, including general principles of common and civil law, and terms and conditions of any grant of approval, permission, authority or license of any Governmental Entity, statutory body or self‐regulatory authority, and the term “applicable” with respect to Laws and in the context that refers to one or more Persons, means that the Laws apply to that Person or Persons or its or their business, undertaking, property or securities and emanate from a Governmental Entity (or any other Person) having jurisdiction over the aforesaid Person or Persons or its or their business, undertaking, property or securities;
“ LOI ” means the letter of intent between Schooner and Target dated August 14, 2020 in respect of the Transaction;
“ Material Adverse Change ” means any one or more changes, effects, events, occurrences or states of facts that, either individually or in the aggregate, have, or would reasonably be expected to have, a Material Adverse Effect on the relevant Party on a consolidated basis;

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“ Material Adverse Effect ” means any change, effect, event, occurrence or state of facts that, individually or in the aggregate, with other such changes, effects, events, occurrences or states of facts, is or would reasonably be expected to be material and adverse to the business, properties, operations, results of operations or financial condition of the applicable party and its Subsidiaries on a consolidated basis, except any change, effect, event, occurrence or state of facts resulting from or relating to:

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the announcement of the execution of this Agreement or the transactions contemplated hereby or the performance of any obligation hereunder or communication by the applicable party of its plans or intentions with respect to the other party and/or any of its Subsidiaries;

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changes in Canadian economy in general or the Canadian capital or currency markets in general;

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the threat, commencement, occurrence or continuation of any war, armed hostilities, acts of environmental groups, civil strife, or acts of terrorism;

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any change in applicable Laws or in the interpretation thereof by any Governmental Entity;

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any change in IFRS;

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any natural disaster;

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any change relating to foreign currency exchange rates; or changes affecting the bottled water industry generally, provided that, in the case of any changes referred to in clauses (ii) to (vi) above, inclusive, such changes do not have a materially disproportionate effect on the applicable party relative to comparable companies;

provided that the impacts of COVID‐19 on the business, operations or financial condition of a party shall not constitute a Material Adverse Effect;

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“ Material Contracts ” means all Contracts or other obligations or rights (and all amendments, modifications and supplements thereto and all side letters to which Target or Schooner, as the case may be, is a party affecting the obligations of any party thereunder) to which Target or Schooner, as the case may be, is a party or by which any of their respective assets are bound that are material to the business or assets of Target or Schooner, as the case may be, taken as a whole, including to the extent any of the following are material to the business or assets of Target or Schooner, as the case may be, taken as a whole, all:

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employment, severance, personal services, consulting, non‐competition or indemnification contracts (including any Contract to which Target or Schooner, as the case may be, is a party involving employees);

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Contracts granting a right of first refusal or first negotiation;

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partnership or joint venture agreements;

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Contracts for the acquisition, sale or lease of material properties or assets of Target or Schooner, as the case may be (by purchase or sale of assets or stock or otherwise);

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Contracts with any Governmental Entity;

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loan or credit agreements mortgages, indentures or other Contracts or instruments evidencing indebtedness for borrowed money by Target or Schooner, as the case may be, or any such agreement pursuant to which indebtedness for borrowed money may be incurred;

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Contracts that purport to limit, curtail or restrict the ability of Target or Schooner, as the case may be, to compete or acquire property (including, but not limited to, any real property or mineral tenures) in any geographic area or line of business;

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commitments and agreements to enter into any of the foregoing; and

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all Contracts that provide for annual payments to or from Target or Schooner, as the case may be, in excess of $10,000 per annum;
" NI 43‐101 " means National Instrument 43‐101 – Standards of Disclosure for Mineral Projects ;
“ Officer Changes ” has the meaning set forth in §5.2;
“ Option Agreements ” means Option Agreement No. 1 and Option Agreement No. 2, collectively;
“ Option Agreement No. 1 ” means the option agreement dated September 6, 2019 between Target and the Primary Optionor, pursuant to which Target holds an option to acquire a 60% interest in the Primary Claim comprising the Property;
“ Option Agreement No. 2 ” means the option agreement dated April 5, 2019, as amended on April 7, 2020 and October 6, 2020, among Target and the Surrounding Claims Optionors, pursuant to which Target holds a 100% option on the Surrounding Claims;
“ Person ” means an individual, individual, a corporation, partnership, limited liability company, association, trust, unincorporated organization, or other legal entity or organization, or a Governmental Entity;
“ Primary Claim ” means the unnamed (record number 521382) claim, as further described in the Technical Report;
“ Primary Optionor ” means Almadex Minerals Ltd.;
“ Primary Share Issuance ” means the issuance of 336,635 Target Shares to the Primary Optionor, on the business day immediately prior to the Closing Date;

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“ Principal ” has the meaning set out in TSXV Policy 1.1 – Interpretation ;

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“ Property ” means the Ponderosa Gold Property consisting of the 1 mineral claim comprising the Primary Claim and the 3 mineral claims comprising the Surrounding Claims, covering an area of approximately 420 hectares, approximately 16 kilometers southwest of the town of Merritt, British Columbia in the Nicola Mining Division, as further described in the Technical Report;

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“ Purchased Shares ” means all the Target Shares held by the Vendors and the Surrounding Claim Optionors at the Closing Time;

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“ Qualifying Transaction ” has the meaning set out in TSXV 2.4 – Capital Pool Companies ;

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“ Resulting Issuer ” means the resulting issuer after the business combination of Schooner and Target by means of the Share Exchange;

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“ Schooner Board ” means the board of directors of Schooner;

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“ Schooner Financial Statements ” has the meaning provided in §3.3(l) of this Agreement;

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“ Schooner Options ” means incentive stock options to acquire Schooner Shares;

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“ Schooner Payment Shares ” means the Schooner Shares to be issued to the Vendors pursuant to the Share Exchange;

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“ Schooner Public Documents ” means the public documents filed by Schooner since January 1, 2018 and available on SEDAR under Schooner’ SEDAR profile;

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“ Schooner Shares ” means common shares in the capital of Schooner;

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“ Securities Authorities ” means the securities commissions and/or other securities regulatory authorities in the provinces and territories of Canada;

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“ SEDAR ” means the System for Electronic Document Analysis and Retrieval;

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“ Share Exchange ” means the share exchange between Schooner and the Vendors pursuant to the terms and conditions set forth in this Agreement;

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“ Subsidiary ” has the meaning as set out in section 2(2) of the BCBCA;

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“ Surrounding Claims ” means the Pond 1, Pond 2 and Pond 3 claims, as further described in the Technical Report;

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“ Surrounding Claims Optionors ” means Edward Balon and Wojtek Jakubowski, collectively;

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“ Target ” means 1201361 B.C. Ltd.;

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“ Target Board ” means the board of directors of Target;

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“ Target Financial Statements ” has the meaning provided in §3.2(l) of this Agreement;
“ Tax ” and “ Taxes ” means all taxes, assessments, charges, dues, duties, rates, fees, imposts, levies and similar charges of any kind lawfully levied, assessed or imposed by any Governmental Entity, including all income taxes (including any tax on or based upon net income, gross income, income as specially defined, earnings, profits or selected items of income, earnings or profits) and all capital taxes, gross receipts taxes, environmental taxes, sales taxes, use taxes, ad valorem taxes, value added taxes, transfer taxes (including, without limitation, taxes relating to the transfer of interests in real property or entities holding interests therein), franchise taxes, license taxes, withholding taxes, payroll taxes, employment taxes, Canada Pension Plan contributions, excise, severance, social security, workers’ compensation, employment insurance or compensation taxes or premium, stamp taxes, occupation taxes, premium taxes, property taxes, windfall profits taxes, alternative or add‐on minimum taxes, goods and services tax, customs duties or other taxes, fees, imports, assessments or charges of any kind whatsoever, together with any interest and any penalties or additional amounts imposed by any taxing authority (domestic or foreign) on such entity, and any interest, penalties, additional taxes and additions to tax imposed with respect to the foregoing;
“ Tax Act ” means the Income Tax Act (Canada), as amended and the regulations thereunder, as amended;
“ Tax Returns ” means all returns, schedules, elections, declarations, reports, information returns, notices, forms, statements and other documents made, prepared or filed with any taxing authority or required to be made, prepared or filed with any taxing authority relating to Taxes;
“ Technical Report ” means the independent NI 43‐101 technical report on the Property dated effective August 5, 2020, as revised on October 6, 2020, entitled "Technical Report on the Ponderosa Property" prepared by Sean P. Butler (P.Geo.);
“ Transaction ” means the Share Exchange and the acquisition of all of the Purchased Shares by Schooner from the Vendors in exchange for the Schooner Shares pursuant to the terms and conditions of this Agreement, which will constitute the Qualifying Transaction of Schooner;
“ TSXV ” means the TSX Venture Exchange;
“ Unit Financing ” means a non‐brokered private placement by Schooner of up to 10,000,000 units at a price per unit of $0.10 for gross proceeds to Schooner of $1,000,000, with each unit comprised of one Schooner Share and one‐half of one common share purchase warrant exercisable for two years from the date of issuance to acquire one Schooner Share at a price equal to $0.15; and
“ Vendors ” has the meaning provided on the first page of this Agreement.

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Interpretation Not Affected by Headings

The division of this Agreement into articles, sections, subsections, paragraphs and subparagraphs and the insertion of headings herein are for convenience of reference only and will not affect in any way the meaning or interpretation of this Agreement.

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Number and Gender

In this Agreement, unless the context otherwise requires, words importing the singular only include the plural and vice versa and words importing the use of any gender include all genders.

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Date for any Action

If the date on which any action is required to be taken hereunder by any party is not a Business Day, that action will be required to be taken on the next succeeding day that is a Business Day.

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Statutory References

Any reference in this Agreement to a statute includes all regulations and rules made thereunder, all amendments to such statute or regulation in force from time to time and any statute or regulation that supplements or supersedes such statute or regulation.

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Currency

Unless otherwise stated, all references in this Agreement to dollar amounts are expressed in Canadian currency.

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Invalidity of Provisions

Each of the provisions contained in this Agreement is distinct and severable and a declaration of invalidity or unenforceability of any one provision or part thereof by a court of competent jurisdiction will not affect the validity or enforceability of any other provision hereof. To the extent permitted by applicable Laws, the parties waive any provision of Law that renders any provision of this Agreement or any part thereof invalid or unenforceable in any respect. The Parties will engage in good faith negotiations to replace any provision hereof or any part thereof that is declared invalid or unenforceable with a valid and enforceable provision or part thereof, the economic effect of which approximates as much as possible the invalid or unenforceable provision or part thereof that it replaces.

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Accounting Matters

Unless otherwise stated, all accounting terms used in this Agreement have the meanings attributable thereto under, and all determinations of an accounting nature required to be made hereunder will be made in a manner consistent with IFRS.

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Knowledge

Where the phrase “to the knowledge of Schooner” or “to the knowledge of Target”, as applicable, is used in respect of Schooner or Target, the phrase means, in respect of each representation and warranty or other statement which is qualified by one of those phrases, that the representation and warranty or other statement is being made based upon:

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in the case of Schooner, the actual knowledge of the Chief Executive Officer and Chief Financial Officer of Schooner after appropriate inquiries and investigations; and

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in the case of Target, the actual knowledge of Marc Blythe after appropriate inquiries and investigations.

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Meaning of Certain Phrases

In this Agreement, the phrase “in the ordinary and regular course of business” means and refers to those activities that are normally conducted by corporations engaged in the business of the party to whom the phrase is being applied; and the word “or” is not exclusive and the word “including” is not limited (whether or not non‐limited language, such as “without limitation” or “but not limited to” or words of similar import, is used with reference to that term).

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Subsidiaries and affiliates

Unless the context requires otherwise or as specifically designated to the contrary in a provision of this Agreement, “Target” and “Schooner” as used in this Agreement include all Subsidiaries of Target and Schooner, respectively.

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Schedules

The following schedules are attached to, and form part of, this Agreement:

Schedule A ‐ Vendors Schedule B ‐ Target Financial Statements Schedule C ‐ Escrow Transfers

ARTICLE 2 ‐ THE SHARE EXCHANGE

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Terms of Share Exchange

The parties hereby covenant and agree to implement the Share Exchange in accordance with the terms and subject to the conditions of this Agreement, as follows:

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In consideration for the acquisition of the Purchased Shares, Schooner will issue from treasury to the Vendors pro rata in proportion to their holdings of Purchased Shares at the Closing Time, an aggregate of 6,655,824 Schooner Payment Shares, free and clear of any Encumbrances, as set forth in Schedule A attached hereto, and 250,000 Schooner Payment Shares to each of the Surrounding Claim Optionors pursuant to the terms of Option Agreement No. 2. To the extent a Vendor or a Surrounding Claim Optionor is to receive a fractional Schooner Payment Share, that entitlement will be rounded down to the nearest whole number and no consideration will be payable therefor. The Schooner Payment Shares are being issued at a deemed value of $0.10 per Schooner Payment Share; and

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as a result of the foregoing, Target will be a wholly‐owned Subsidiary of Schooner.

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Tax Election

The parties covenant and agree to elect jointly under any applicable subsection of section 85 of the Tax Act (and any applicable provincial taxing legislation) in the prescribed form and within the prescribed time for purposes of the Tax Act (and such applicable provincial tax legislation) to make the purchase and sale of the Purchased Shares occur on a tax‐deferred basis for Canadian federal and provincial tax purposes, and shall therein agree that the proceeds of disposition to each Vendor of the Purchased Shares transferred by such Vendor and Schooner’s cost of the Payment Shares for purposes of the Tax Act and any applicable provincial tax legislation (in each case, the “ Elected Amount ”) shall be determined by each selling Vendor within the limitations set forth in the Tax Act, the regulations thereunder, and any applicable provincial tax legislation. Schooner covenants not to take any action or omit to take any action, as applicable, that would interfere with any Vendor’s ability to make any election or other filing required under the Tax Act or any applicable provincial tax legislation in respect of the purchase and sale of the Purchased Shares or to otherwise interfere with such purchase and sale occurring on a tax‐deferred basis.

Schooner shall, at the request and expense of any Vendor, execute in the exact form presented to Schooner, a Form T2057 prepared by such Vendor (and any applicable provincial counterpart or applicable form) for the purpose of making a joint election to have the applicable provisions of section 85 of the Tax Act apply to the purchase and sale of the Purchased Shares sold by such Vendor. The obligations of Schooner hereunder extend to every form or other document provided by every Vendor (irrespective of whether such document is being filed on a timely basis) that will allow for the purchase and sale of the Purchased Shares to occur on a tax‐deferred basis for such Vendor. Each Vendor shall be solely responsible for filing the Form T2057 (or any other applicable document) with the Canada Revenue Agency (or any other taxing authority). Schooner shall not be liable for any damages arising to a Vendor for a late filing of a Form T2057 or any errors or omissions on a Form T2057, except that Schooner shall be so liable and required to indemnify a Vendor for any losses, costs, expenses and taxes (including interests and penalties) arising from a delay, error or omission as a result of Schooner’s failure to timely and accurately execute any document provided to Schooner by such Vendor.

Notwithstanding anything contained in this Agreement and except for the specific liability created by this §2.2 on Schooner, Schooner does not assume and shall not be liable for any taxes under the Tax Act (or any applicable provincial taxing legislation) which may be or become payable by any Vendor including, without limiting the generality of the foregoing, any taxes resulting from or arising as a consequence of the sale by Vendor to Schooner of the Purchased Shares herein contemplated, or the availability (or lack thereof) of the provisions of section 85 of the Tax Act, or the content or impact of any election made under section 85 of the Tax Act.

In the event that the Canada Revenue Agency (or any applicable taxing authority) disputes any amount elected or relied upon by a Vendor and/or Schooner, including the Elected Amount, or a Vendor and Schooner determine among themselves some alternative amount or amounts upon which they wish to reasonably rely, such Vendor and Schooner agree to amend any applicable election or document in accordance with the provisions of the Tax Act, the regulations thereunder or any applicable provincial legislation so that the Elected Amount shall be the amount finally determined, whether by a court of competent jurisdiction or the Canada Revenue Agency or an applicable provincial tax authority (in either case, where no further right of appeal is available) or by a settlement approved by such Vendor and the Canada Revenue Agency or applicable provincial tax authority or by such Vendor and Schooner among themselves. All adjustments made under this §2.03 shall be made between a Vendor and Schooner nunc pro tunc .

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Closing Date

The Share Exchange will be completed on the Closing Date and will be effective at the Closing Time.

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Consultation

Schooner and Target will consult with each other in issuing any press release or otherwise making any public statement with respect to this Agreement or the Transaction and in making any filing with any Securities Authorities with respect thereto. Each of Schooner and Target will use its commercially reasonable efforts to enable the other to review and comment on all press releases and filings prior to their release or filing, as applicable, provided, however, that these consultation obligations will not prevent a party from making, after consultation with the other party, such disclosure as is required by applicable Laws or the rules and policies of any relevant stock exchange.

ARTICLE 3 ‐ REPRESENTATIONS AND WARRANTIES

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Representations and Warranties of the Vendors

Each of the Vendors hereby severally (and not jointly) represents and warrants to Schooner as follows, with respect to itself and not with respect to any other Vendor, and hereby acknowledges that Schooner is relying upon these representations and warranties in connection with entering into this Agreement and agreeing to complete the Share Exchange, as follows:

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the Vendor is the sole registered and beneficial owner of the number of Purchased Shares set out opposite the Vendor’s name in Schedule A;

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the Purchased Shares held by the Vendor are free and clear of all Encumbrances;

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the Vendor has the power and authority to enter into, deliver, and perform this Agreement on the terms and conditions set out in this Agreement and to transfer the legal and beneficial title and ownership of the Purchased Shares owned by the Vendor to Schooner;

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no Person has any agreement or option or a right capable of becoming an agreement for the purchase of the Purchased Shares owned by the Vendor, other than Schooner under this Agreement;

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if the Vendor is a corporation, all necessary corporate action on the part of Vendor will, at Closing, have been taken to validly authorize the signing, delivery, and performance of this Agreement and the completion of the Share Exchange;

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this Agreement constitutes a legal, valid and binding obligation of the Vendor enforceable against the Vendor in accordance with its terms, except as may be limited by laws of general application affecting the rights of creditors;

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the performance of this Agreement will not violate any applicable Laws or any agreement or other instrument to which the Vendor is a party;

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the Vendor is not indebted or under obligation to Target on any account;

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the Vendor is resident in the jurisdiction indicated on Schedule A; and

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the Vendor has been encouraged to obtain and has had opportunity to seek independent legal and tax advice regarding the Share Exchange and matters related thereto as they affect the Vendor and his or its associates and affiliates, and the Vendor is satisfied with the results thereof.

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Representations and Warranties of Target

Target hereby represents and warrants to Schooner, and hereby acknowledges that Schooner is relying upon these representations and warranties in connection with entering into this Agreement and agreeing to complete the Share Exchange, as follows:

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Organization. Target has been incorporated and, validly exists under the laws of its governing jurisdiction and is in good standing under applicable corporate laws and has full corporate and legal power and authority to own its assets and to conduct its business as currently owned and conducted. Target is registered, licensed, or otherwise qualified in each jurisdiction where the nature of its business or the location or character of the assets owned or leased by it requires it to be so registered, licensed or otherwise qualified, other than those jurisdictions where the failure to be so registered, licensed or otherwise qualified would not have a Material Adverse Effect on Target.

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Subsidiaries and Other Interests. Target has no Subsidiaries and does not own any securities issued by, or any equity or ownership interest in, any other Persons. Target is not subject to any obligation to make any investment in or to provide funds by way of loan, capital contribution or otherwise to any Persons.

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Capitalization. As of the date of this Agreement, Target is authorized to issue an unlimited number of Target Shares, and as of Closing, Target will be authorized to issue an unlimited number of Target Shares. As of the date of this Agreement, there are outstanding 12,975,012 Target Shares. Except as disclosed in and pursuant to this Agreement, as of the date hereof, there are no options, warrants, conversion privileges or other rights, agreements, arrangements or commitments (pre‐emptive, contingent or otherwise) obligating Target to issue or sell any shares of Target or any securities or obligations of any kind convertible into or exchangeable for any shares of Target. All outstanding Target Shares have been authorized and are validly issued and outstanding as fully paid and non‐ assessable shares, free of pre‐emptive rights. As of the date hereof, there are no outstanding bonds, debentures or other evidences of indebtedness of Target. There are no outstanding contractual obligations of Target to repurchase, redeem or otherwise acquire any outstanding Target Shares or with respect to the voting or disposition of any outstanding Target Shares.

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Authority. Target has all necessary corporate power, authority and capacity to enter into this Agreement and all other agreements and instruments to be executed by Target as contemplated by this Agreement, and to perform its obligations hereunder and under such other agreements and instruments. The execution and delivery of this Agreement by Target and the completion by Target of the Transaction have been authorized by the Target Board and, subject to the execution of this Agreement by the Vendors, no other corporate proceedings on the part of Target are necessary to authorize this Agreement or the completion by Target of the Transaction. This Agreement has been executed and

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delivered by Target and constitutes a legal, valid and binding obligation of Target, enforceable against Target in accordance with its terms, subject to bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium and other applicable Laws relating to or affecting creditors’ rights generally, and to general principles of equity. The execution and delivery by Target of this Agreement and the performance by Target of its obligations hereunder and the completion of the Transaction, do not and will not:

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result in a violation, contravention or breach or constitute a default under, or entitle any party to terminate, accelerate, modify or call any obligations or rights under, require any consent to be obtained under or give rise to any termination rights under any provision of:

A. the constating documents of Target;
B. any applicable Law, or
C. any credit arrangement, note, bond, mortgage, indenture, deed of trust, lease, franchise, concession, easement, contract, agreement, license, permit or other instrument to which Target is bound or is subject to or of which Target is the beneficiary;
D. in each case, which would, individually or in the aggregate, have a Material Adverse Effect on Schooner; cause any indebtedness owing by Schooner to come due before its stated maturity or cause any available credit to cease to be available which would, individually or in the aggregate, have a Material Adverse Effect on Schooner;

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cause any indebtedness owing by Target to come due before its stated maturity or cause any available credit to cease to be available which would, individually or in the aggregate, have a Material Adverse Effect on Target;

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result in the imposition of any Encumbrance upon any of the assets of Target or give any Person the right to acquire any of Target’s assets, or restrict, hinder, impair or limit the ability of Target or to conduct the business of Target as and where it is now being conducted which would, individually or in the aggregate, have a Material Adverse Effect on Target;

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result in or accelerate the time for payment or vesting of, or increase the amount of any severance, unemployment compensation, “golden parachute”, change of control provision, bonus, termination payments, retention bonus or otherwise, becoming due to any director or officer of Target or increase any benefits otherwise payable under any pension or benefits plan of Target or result in the acceleration of the time of payment or vesting of any such benefits.

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Consents. No consent, approval, order or authorization of, or declaration or filing with, any Governmental Entity is required to be obtained by Target in connection with the execution and delivery of this Agreement or the completion by Target of the Transaction other than:

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filings with and approvals by the TSXV; and

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any other consents, approvals, orders, authorizations, declarations or filings which, if not obtained, would not, individually or in the aggregate, have a Material Adverse Effect on Target.
Directors’ Approvals. The Target Board has unanimously:

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determined that the Share Exchange is in the best interests of Target; and

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authorized the entering into of this Agreement, and the performance of Target’s obligations hereunder.
Contracts. Each of the Material Contracts to which Target is a party constitutes a valid and legally binding obligation of Target, enforceable in accordance with its terms (except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’ rights or by general principles of equity).
Waivers, Consents. There are no waivers, consents, notices or approvals required for Target to complete the Transaction from other parties to the Material Contracts of Target or otherwise.
No Defaults. Target is not in default under, and, there exists no event, condition or occurrence which, after notice or lapse of time or both, would constitute a default by Target under any credit arrangement, note, bond, mortgage, indenture, deed of trust, lease, franchise, concession, easement, Contract of Target, agreement, licence, permit or other instrument that is material to the conduct of the business of Target to which Target is a party or by which Target is bound or subject to that would, individually or in the aggregate, have a Material Adverse Effect on Target. No party to any Contract of Target has given written notice to Target of or made a claim against Target with respect to any breach or default thereunder, in any such case in which such breach or default constitutes a Material Adverse Effect on Target.
Absence of Changes. Except as disclosed to Schooner in writing prior to the date hereof, since March 31, 2020 :

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Target has conducted its business only in the ordinary and regular course of business consistent with past practice;

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Target has not incurred or suffered a Material Adverse Change;

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there has not been any acquisition or sale by Target of any material property or assets thereof;

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other than in the ordinary and regular course of business consistent with past practice, there has not been any incurrence, assumption or guarantee by Target of any debt for borrowed money, any creation or assumption by Target of any Encumbrance, any making by Target of any loan, advance or capital contribution to or investment in any other Person or any entering into, amendment of, relinquishment, termination or non‐renewal by Target of any contract, agreement, licence, lease transaction, commitment or other right or obligation that would, individually or in the aggregate, have a Material Adverse Effect on Target;

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Target has not declared or paid any dividends or made any other distribution in respect of any of the Target Shares;

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Target has not effected or passed any resolution to approve a split, consolidation, or reclassification of any of the outstanding Target Shares;

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other than in the ordinary and regular course of business consistent with past practice, there has not been any material increase in or modification of the compensation payable by Target to any of its directors, officers, employees or consultants or any grant to any such director, officer, employee or consultant of any increase in severance or termination pay or any increase or modification of any bonus, pension, insurance or benefit arrangement (including, without limitation, the granting of incentive stock options) made to, for, or with any of the directors, officers, employees or consultants; and

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Target has not effected any material change in its accounting methods, principles or practices, other than as disclosed in the Target Financial Statements.

Employment Agreements . Target:

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has no employees;

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is not a party to any written or oral policy, agreement, obligation or understanding providing for retention bonuses, severance or termination payments to, or any employment or consulting agreement with, any director or officer of Target that would be triggered by Target’s entering into this Agreement or the completion of the Share Exchange; and

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has no employee or consultant whose employment or contract with Target cannot be terminated by Target in accordance with the provisions of the relevant employment or consultant contract following the completion of the Share Exchange.

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Financial Matters. The financial statements of Target for the year ended March 31, 2020 and the respective notes thereto, attached hereto as Schedule B (the “ Target Financial Statements ”), fairly present in all material respects the financial condition of Target at the respective dates indicated and the results of operations of Target for the periods covered. Except as disclosed in the Target Financial Statements or otherwise disclosed in writing to Schooner, as of the date hereof Target does not have any liability or obligation, whether accrued, absolute, contingent or otherwise, or any related party transactions or off‐balance sheet transactions not reflected in the corporate records and minute books of Target, except liabilities and obligations incurred in the ordinary and regular course of business, which liabilities or obligations would not reasonably be expected to have a Material Adverse Effect on Target.
Books and Records. The corporate records and minute books of Target have been maintained in accordance with all applicable Laws and are complete and accurate in all material respects, except where such incompleteness or inaccuracy would not have a Material Adverse Effect on Target.
Litigation. There is no claim, action, proceeding, or investigation pending or in progress or, to the knowledge of Target, threatened against or relating to Target, or affecting any of its assets before any Governmental Entity which individually or in the aggregate has, or could reasonably be expected to have, a Material Adverse Effect on Target, and, to the knowledge of Target, there is no existing ground on which any such claim, action, proceeding, or investigation might be commenced with any reasonable likelihood of success. There is no bankruptcy, liquidation, winding‐up or other similar proceeding pending or in progress, or, to the knowledge of Target, threatened against or relating to Target before any Governmental Entity. Neither Target nor any of its assets is subject to any outstanding judgment, order, writ, injunction or decree that involves or may involve, or restricts or may restrict the right or ability of Target to conduct its business in all material respects as it has been carried on prior to the date hereof, or that would materially impede the completion of the Transaction, except to the extent any such matter would not, individually or in the aggregate, have a Material Adverse Effect on Target.
Assets. Target has good and marketable title to its assets, free and clear of any Encumbrances whatsoever, except as disclosed to Schooner in writing prior to the date hereof.

Option Agreements .

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Each of the Option Agreements is in good standing and is in full force and effect, and is enforceable in accordance with its terms, and Target has not sent or received any notice of default, breach or termination relating to or in connection with the Option Agreements.

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There are no current or pending negotiations with respect to the termination or amendment of each of the Option Agreements. Target is not in default under, and there exists no event, condition or occurrence which, after notice or lapse of time or both, would constitute such a default under, the Option Agreements.

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To the knowledge of the Target, the Primary Optionor is not in default under and there exists no event, condition or occurrence which, after notice or lapse of time or both, would constitute such a default under, Option Agreement No. 1. To the knowledge of Target, there is no present intention on the part of the Primary Optionor to terminate or alter the Option Agreement.

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To the knowledge of the Target, the Surrounding Claims Optionors are not in default under and there exists no event, condition or occurrence which, after notice or lapse of time or both, would constitute such a default under, Option Agreement No. 2. To the knowledge of Target, there is no present intention on the part of the Surroundings Claim Optionors to terminate or alter the Option Agreement.

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To the knowledge of Target, there is no ongoing breach or default of any term of the Option Agreements by the Primary Optionor or the Surrounding Claims Optionors or of any fact or circumstance which could result in such a breach or default.

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Target has provided to Schooner all documents and information available to and in the possession of Target in respect of the Option Agreements, and Target has all right, title and authority to disclose to Schooner all such information.

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The only assets of Target consist of its beneficial rights in and to the Option Agreements.

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Target does not own any real estate, mineral rights, surface rights, water rights, easements, personal property or other intellectual property rights.

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Target is not a party to or bound by any non‐competition agreement or any other agreement, obligation or order which purports to limit the manner or the localities in which all or any material portion of its business is conducted or restrict any disposition of any property of Target.
Tax Matters. Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Target:

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Target has duly and timely made or prepared all Tax Returns required to be made or prepared by it, has duly and timely filed all Tax Returns required to be filed by it with the appropriate Governmental Entity and has, in all material respects, completely and correctly reported all income and all other amounts or information required to be reported thereon;

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Target has:

A. duly and timely paid all Taxes due and payable by it;
B. duly and timely withheld all Taxes and other amounts required by applicable Laws to be withheld by it and has duly and timely remitted to the appropriate Governmental Entity such Taxes and other amounts required by applicable Laws to be remitted by it; and
C. duly and timely collected all amounts on account of sales or transfer Taxes, including goods and services, harmonized sales and provincial or territorial sales Taxes, required by applicable Laws to be collected by it and has duly and timely remitted to the appropriate Governmental Entity any such amounts required by applicable Laws to be remitted by it;

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the charges, accruals and reserves for Taxes reflected on the Target Financial Statements (whether or not due and whether or not shown on any Tax Return but excluding any provision for deferred income taxes) are, in the opinion of Target, adequate under IFRS to cover Taxes with respect to Target accruing through the date hereof;

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there are no proceedings, investigations, audits, assessments, reassessments or claims now pending or, to the knowledge of Target, threatened against Target that propose to assess Taxes in addition to those reported in the Tax Returns; and

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no waiver of any statutory limitation period with respect to Taxes has been given or requested with respect to Target.
Compliance with Laws. Target has complied with and is not in violation of any applicable Laws other than such non‐compliance or violations that would not, individually or in the aggregate, have a Material Adverse Effect on Target.
No Option on Assets. Except as disclosed to Schooner in writing prior to the date hereof, no Person has any agreement or option or any right or privilege capable of becoming an agreement or option for the purchase from Target of any of the material assets of Target.
Certain Contracts. Target is not a party to or bound by any non‐competition agreement or, except as disclosed to Schooner in writing prior to the date hereof, any other agreement, obligation, judgment, injunction, order or decree that purports to:

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limit the manner or the localities in which all or any material portion of the business of Target is conducted; or

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limit any business practice of Target in any material respect.

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No Broker’s Commission. Except as disclosed to Schooner in writing prior to the date hereof, Target has not entered into any agreement that would entitle any Person to any valid claim against Target for a broker’s commission, finder’s fee or any like payment in respect of the Share Exchange or any other matter contemplated by this Agreement.

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Securities. The Purchased Shares to be transferred to Schooner pursuant to the Share Exchange are issued as fully paid and non‐assessable.

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No Shareholdings in Schooner. Target does not, legally or beneficially, own, directly or indirectly, any securities of Schooner and does not have any right, agreement or obligation to purchase any securities of Schooner or any securities or obligations of any kind convertible into or exchangeable for any securities of Schooner.

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Restrictions on Business Activities. There is no agreement, judgment, injunction, order or decree binding upon Target that has or could be reasonably expected to have the effect of prohibiting, restricting or materially impairing any business practice of Target, or the conduct of business by Target as currently conducted.

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Right to Use Personal Information. All personal information in the possession of Target has been collected, used, and disclosed in compliance with all applicable privacy Laws in those jurisdictions in which Target conducts its business. There are no claims pending or, to the knowledge of Target, threatened, with respect to Target’s collection, use or disclosure of personal information.

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Full disclosure . No representation or warranty by Target or the Vendors in this Agreement or any certificate or other document furnished or to be furnished to Schooner under this Agreement contains or will contain any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not misleading.

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Representations and Warranties of Schooner

Schooner hereby represents and warrants to Target and the Vendors, and hereby acknowledges that Target and the Vendors are relying upon these representations and warranties in connection with entering into this Agreement and agreeing to complete the Share Exchange, as follows:

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Organization . Schooner has been continued and validly exists under the laws of its governing jurisdiction and is in good standing under applicable corporate laws and has full corporate and legal power and authority to own its assets and to conduct its business as currently owned and conducted. Schooner is registered, licensed or otherwise qualified in each jurisdiction where the nature of the business or the location or character of the assets owned or leased by it requires it to be so registered, licensed or otherwise qualified, other than those jurisdictions where the failure to be so registered, licensed or otherwise qualified would not have a Material Adverse Effect on Schooner.

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Subsidiaries and Other Interests . Schooner has no Subsidiaries and does not own any securities issued by, or any equity or ownership interest in, any other Persons. Schooner is not subject to any obligation to make any investment in or to provide funds by way of loan, capital contribution or otherwise to any Persons.
Capitalization . As of the date of this Agreement and as of Closing, Schooner is authorized to issue an unlimited number of Schooner Shares. As of the date of this Agreement, there were outstanding 4,750,000 Schooner Shares and 475,000 Schooner Options. Except for the Schooner Options, and except pursuant to this Agreement and the transactions contemplated hereby, including the Concurrent Offering, as of the date hereof, there are no options, warrants, conversion privileges or other rights, agreements, arrangements or commitments (pre‐emptive, contingent or otherwise) obligating Schooner to issue or sell any shares of Schooner or any securities or obligations of any kind convertible into or exchangeable for any shares of Schooner. All outstanding Schooner Shares have been authorized and are validly issued and outstanding as fully paid and non‐assessable shares, free of pre‐emptive rights. As of the date hereof, there are no outstanding bonds, debentures or other evidences of indebtedness of Schooner. There are no outstanding contractual obligations of Schooner to repurchase, redeem or otherwise acquire any outstanding Schooner Shares or with respect to the voting or disposition of any outstanding Schooner Shares.
Authority . Schooner has all necessary corporate power, authority and capacity to enter into this Agreement and all other agreements and instruments to be executed by Schooner as contemplated by this Agreement, and to perform its obligations hereunder and under such other agreements and instruments. The execution and delivery of this Agreement by Schooner and the completion by Schooner of the Transaction have been authorized by the Schooner Board, and no other corporate proceedings on the part of Schooner are necessary to authorize this Agreement or the completion by Schooner of the Transaction. This Agreement has been executed and delivered by Schooner and constitutes a legal, valid and binding obligation of Schooner, enforceable against Schooner in accordance with its terms, subject to bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium and other applicable Laws relating to or affecting creditors’ rights generally, and to general principles of equity. The execution and delivery by Schooner of this Agreement and the performance by it of its obligations hereunder and the completion of the Transaction contemplated hereby, do not and will not:

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result in a violation, contravention or breach or constitute a default under, or entitle any party to terminate, accelerate, modify or call any obligations or rights under, require any consent to be obtained under or give rise to any termination rights under any provision of:
A. the constating documents of Schooner;
B. any applicable Law or rule or policy of the TSXV (except that the approval of the TSXV, which is required for the completion by Schooner of the Transaction, will be applied for by Schooner but has not been obtained as of the date hereof); or

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C. any credit arrangement, note, bond, mortgage, indenture, deed of trust, lease, franchise, concession, easement, contract, agreement, licence, permit or other instrument to which Schooner is bound or is subject to or of which Schooner is the beneficiary;
D. in each case, which would, individually or in the aggregate, have a Material Adverse Effect on Schooner; cause any indebtedness owing by Schooner to come due before its stated maturity or cause any available credit to cease to be available which would, individually or in the aggregate, have a Material Adverse Effect on Schooner;

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cause any indebtedness owing by Schooner to come due before its stated maturity or cause any available credit to cease to be available which would, individually or in the aggregate, have a Material Adverse Effect on Schooner;

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result in the imposition of any Encumbrance upon any of the property or assets of Schooner or give any Person the right to acquire any of Schooner’s assets, or restrict, hinder, impair or limit the ability of Schooner to conduct the business of Schooner as and where it is now being conducted which would, individually or in the aggregate, have a Material Adverse Effect on Schooner; or

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result in or accelerate the time for payment or vesting of, or increase the amount of any severance, unemployment compensation, “golden parachute”, change of control provision, bonus, termination payments, retention bonus or otherwise, becoming due to any director or officer of Schooner or increase any benefits otherwise payable under any pension or benefits plan of Schooner or result in the acceleration of the time of payment or vesting of any such benefits.
Consents . No consent, approval, order or authorization of, or declaration or filing with, any Governmental Entity is required to be obtained by Schooner in connection with the execution and delivery of this Agreement or the completion by Schooner of the Transaction other than:

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filings with and approvals by the TSXV;

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any other consents, approvals, orders, authorizations, declarations or filings which, if not obtained, would not, individually or in the aggregate, have a Material Adverse Effect on Schooner.
Directors’ Approvals . The Schooner Board has unanimously:

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determined that the Share Exchange is in the best interests of Schooner; ; and

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authorized the entering into of this Agreement, and the performance of Schooner’s obligations hereunder.
Contracts . Schooner is not a party to any Material Contracts.

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Waivers, Consents . There are no waivers, consents, notices or approvals required for Schooner to complete the Transaction, except for consent of the TSXV.
No Defaults . Schooner is not in default under, and, there exists no event, condition or occurrence which, after notice or lapse of time or both, would constitute a default by Schooner under any credit arrangement, note, bond, mortgage, indenture, deed of trust, lease, franchise, concession, easement, Contract of Schooner, agreement, licence, permit or other instrument that is material to the conduct of the business of Schooner to which it is a party or by which it is bound or subject to that would, individually or in the aggregate, have a Material Adverse Effect on Schooner. No party to any Contract of Schooner has given written notice to Schooner of or made a claim against Schooner with respect to any breach or default thereunder, in any such case in which such breach or default constitutes a Material Adverse Effect on Schooner.
Absence of Changes . Except as disclosed in the Schooner Public Documents, since December 31, 2019:

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Schooner has conducted its business only in the ordinary and regular course of business consistent with past practice;

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Schooner has not incurred or suffered a Material Adverse Change;

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there has not been any acquisition or sale by Schooner of any material property or assets thereof;

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other than in the ordinary and regular course of business consistent with past practice, there has not been any incurrence, assumption or guarantee by Schooner of any debt for borrowed money, any creation or assumption by Schooner of any Encumbrance, any making by Schooner of any loan, advance or capital contribution to or investment in any other Person or any entering into, amendment of, relinquishment, termination or non‐renewal by Schooner, of any contract, agreement, licence, lease transaction, commitment or other right or obligation that would, individually or in the aggregate, have a Material Adverse Effect on Schooner;

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Schooner has not declared or paid any dividends or made any other distribution in respect of any of the Schooner Shares;

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Except as contemplated hereunder, Schooner has not effected or passed any resolution to approve a split, consolidation or reclassification of any of the outstanding Schooner Shares;

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other than in the ordinary and regular course of business consistent with past practice, there has not been any material increase in or modification of the compensation payable by Schooner to any of its directors, officers, employees or consultants or any grant to any director, officer, employee or consultant of any increase in severance or termination pay or any increase or modification of any bonus, pension, insurance or benefit arrangement (including, without limitation, the granting of Schooner Options) made to, for or with any of such directors, officers, employees or consultants; and

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Schooner has not effected any material change in its accounting methods, principles or practices, other than as disclosed in the Schooner Financial Statements.

Employment Agreements . Schooner:

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is not a party to any written or oral policy, agreement, obligation or understanding providing for retention bonuses, severance or termination payments to, or any employment or consulting agreement with any director or officer of Schooner that would be triggered by Schooner entering into this Agreement or the completion of the Share Exchange; and

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does not have any employee or consultant whose employment or contract with Schooner cannot be terminated by Schooner in accordance with the provisions of the relevant employment or consultant contract following the completion of the Share Exchange.
Financial Matters . The audited financial statements of Schooner for the years ended December 31, 2019 and ended December 31, 2018 and the respective notes thereto (collectively, the “ Schooner Financial Statements ”) were prepared in accordance with IFRS consistently applied, and fairly present in all material respects the consolidated financial condition of Schooner at the respective dates indicated and the results of operations of Schooner for the period covered on a consolidated basis. Except as disclosed in the Schooner Financial Statements, as of the date hereof Schooner does not have any liability or obligation, whether accrued, absolute, contingent or otherwise, or any related party transactions or off‐balance sheet transactions not reflected in the Schooner Financial Statements, except liabilities and obligations incurred in the ordinary and regular course of business since December 31, 2019, which liabilities or obligations would not reasonably be expected to have a Material Adverse Effect on Schooner.
Books and Records . The corporate records and minute books of Schooner have been maintained in accordance with all applicable Laws and are complete and accurate in all material respects, except where such incompleteness or inaccuracy would not have a Material Adverse Effect on Schooner.

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Litigation . There is no claim, action, proceeding, or investigation pending or in progress or, to the knowledge of Schooner threatened against or relating to Schooner or affecting any of its assets before any Governmental Entity which individually or in the aggregate has, or could reasonably be expected to have, a Material Adverse Effect on Schooner, and Schooner is not aware of any existing ground on which any such claim, action, proceeding, or investigation might be commenced with any reasonable likelihood of success. There is no bankruptcy, liquidation, winding‐up or other similar proceeding pending or in progress, or, to the knowledge of Schooner, threatened against or relating to Schooner before any Governmental Entity. Neither Schooner nor any of its assets are subject to any outstanding judgment, order, writ, injunction or decree that involves or may involve, or restricts or may restrict the right or ability of Schooner to conduct its business in all material respects as it has been carried on prior to the date hereof, or that would materially impede the completion of the Transaction, except to the extent any such matter would not, individually or in the aggregate, have a Material Adverse Effect on Schooner.
Assets . Schooner has good and marketable title to its assets free and clear of any Encumbrances whatsoever, except as disclosed in the Schooner Public Documents.
Insurance . Schooner maintains policies of insurance in amounts and in respect of such risks as are normal and usual for companies of a similar size and business and those policies are in full force and effect as of the date hereof.
Tax Matters . Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Schooner:

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Schooner has duly and timely made or prepared all Tax Returns required to be made or prepared by it, has duly and timely filed all Tax Returns required to be filed by it with the appropriate Governmental Entity and has, in all material respects, completely and correctly reported all income and all other amounts or information required to be reported thereon;

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Schooner has:

A. duly and timely paid all Taxes due and payable by it;
B. duly and timely withheld all Taxes and other amounts required by applicable Laws to be withheld by it and has duly and timely remitted to the appropriate Governmental Entity such Taxes and other amounts required by applicable Laws to be remitted by it; and
C. duly and timely collected all amounts on account of sales or transfer taxes, including goods and services, harmonized sales and provincial or territorial sales taxes, required by applicable Laws to be collected by it and has duly and timely remitted to the appropriate Governmental Entity any such amounts required by applicable Laws to be remitted by it;

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the charges, accruals and reserves for Taxes reflected on the Schooner Financial Statements (whether or not due and whether or not shown on any Tax Return but excluding any provision for deferred income taxes) are, in the opinion of Schooner, adequate under IFRS, as applicable, to cover Taxes with respect to Schooner accruing through the date hereof;

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there are no proceedings, investigations, audits, assessments, reassessments or claims now pending or to the knowledge of Schooner, threatened against Schooner that propose to assess Taxes in addition to those reported in the Tax Returns; and

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no waiver of any statutory limitation period with respect to Taxes has been given or requested with respect to Schooner.
Reporting Status . Schooner is a reporting issuer in good standing in the provinces of British Columbia, Ontario and Alberta. The Schooner Shares are listed on the TSXV.
Reports . Since December 7, 2017, Schooner has filed with the Securities Authorities, all applicable self‐regulatory authorities and the TSXV, a true and complete copy of all forms, reports, schedules, statements, certifications, material change reports and other documents required to be filed by it, including the Schooner Public Documents. The Schooner Public Documents, at the time filed or, if amended, as of the date of such amendment:

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did not contain any misrepresentation (as defined in the Securities Act (British Columbia)) and did not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading;

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complied in all material respects with the requirements of applicable securities Laws and the rules, policies and instruments of all Governmental Entities having jurisdiction over Schooner; and

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Schooner has not filed any confidential material change or other report or other document with any Securities Authority, which at the date hereof remains confidential.
Compliance with Laws . Schooner has complied with and is not in violation of any applicable Laws other than such non‐compliance or violations that would not, individually or in the aggregate, have a Material Adverse Effect on Schooner.
Certain Contracts . Schooner is not a party to or bound by any non‐competition agreement or any other agreement, obligation, judgment, injunction, order or decree that purports to:

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limit the manner or the localities in which all or any material portion of the business of Schooner is conducted; or

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limit any business practice of Schooner in any material respect.

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No Broker’s Commission . Schooner has not entered into any agreement that would entitle any Person to any valid claim against Schooner for a broker’s commission, finder’s fee or any like payment in respect of the Share Exchange or any other matter contemplated by this Agreement.

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Shares . The Schooner Shares to be issued pursuant to the Share Exchange will, upon issue, (i) be issued as fully paid and non‐assessable; (ii) be free‐trading shares, subject to any applicable escrow provisions under the rules of the TSXV or applicable securities Laws; and (iii) subject to the approval of the TSXV, be listed for trading on the TSXV.

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No Shareholdings in Target . Schooner does not, legally or beneficially, own, directly or indirectly, any securities of Target and does not have any right, agreement or obligation to purchase any securities of Target or any securities or obligations of any kind convertible into or exchangeable for any securities of Target.

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Restrictions on Business Activities . There is no agreement, judgment, injunction, order or decree binding upon Schooner or that has or could be reasonably expected to have the effect of prohibiting, restricting or materially impairing any business practice of Schooner, or the conduct of business by Schooner as currently conducted.

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Right to Use Personal Information . All personal information in the possession of Schooner has been collected, used, and disclosed in compliance with all applicable privacy Laws in those jurisdictions in which Schooner conducts its business. There are no claims pending or, to the knowledge of Schooner, threatened, with respect to Schooner’s collection, use or disclosure of personal information.

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Full disclosure . No representation or warranty by Schooner in this Agreement or any certificate or other document furnished or to be furnished to Target or the Vendors under this Agreement contains or will contain any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not misleading.

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Survival of Representations and Warranties

The representations and warranties contained in this Agreement will survive the execution and delivery of this Agreement and will expire and be terminated and extinguished upon the date that is one year after the Closing Date.

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Vendors’ Acknowledgements

Each Vendor acknowledges and agrees that a portion of the Schooner Payment Shares to be issued to the Vendors pursuant to the Share Exchange may be subject to escrow provisions under the rules of the TSXV or applicable securities Laws.

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ARTICLE 4 ‐ COVENANTS

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Covenants of Target

Target covenants and agrees with Schooner that until the earlier of the Closing Date and the date upon which this Agreement is terminated in accordance with its terms, it will:

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in a timely and expeditious manner, assist Schooner in the preparation of a submission to the TSXV for a sponsorship waiver for the Transaction;

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in a timely and expeditious manner, provide such information with respect to Target as Schooner may reasonably require in connection with the preparation of the Filing Statement with respect to the Transaction, including providing certain financial statements and such information in relation to the business, affairs, and assets of Target as may be necessary to comply with applicable Laws and the policies of the TSXV;

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ensure that the Filing Statement does not contain a misrepresentation as it relates to Target, including in respect of its assets, liabilities, operations, and business;

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not solicit, initiate, knowingly encourage, cooperate with or facilitate (including by way of furnishing any non‐public information or entering into any form of agreement, arrangement or understanding) the submission, initiation or continuation of any oral or written inquiries or proposals or expressions of interest regarding, constituting or that may reasonably be expected to lead to any activity, arrangement or transaction or propose any activities or solicitations in opposition to or in competition with the Transaction, and without limiting the generality of the foregoing, not to induce or attempt to induce any other person to initiate any shareholder proposal or “takeover bid,” exempt or otherwise, within the meaning of the Securities Act (British Columbia), for securities or assets of Target, nor to undertake any transaction or negotiate any transaction which would be or potentially could be in conflict with the Transaction, including, without limitation, allowing access to any third party to conduct due diligence, nor to permit any of its officers or directors to authorize such access, except as required by statutory obligations. If Target, including any of its officers or directors, receives any form of offer or inquiry, Target will forthwith (in any event within one business day following receipt) notify Schooner of the offer or inquiry and provide Schooner with such details as it may request;

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make available and afford Schooner and its authorized representatives (and, if requested by Schooner, provide a copies of) all contracts, financial statements, minute books, share certificate books, if any, share registers, plans, reports, licences, orders, permits, books of account, accounting records, constating documents and all other documents and information relating to Target. Target will afford Schooner and its authorized representatives every reasonable opportunity to have free and unrestricted access to Target’s assets, undertaking, records and documents. At the request of Schooner, Target will execute or cause to be executed such consents, authorizations and directions as may be necessary to permit any inspection of Target’s business or to enable Schooner or its authorized representatives to obtain full access to all files and records relating to any of the assets of Target maintained by a Governmental Entity. The obligations in this §4.1(e)

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are subject to any access or disclosure contemplated herein not being otherwise prohibited by reason of a confidentiality obligation owed to a third party for which a waiver cannot be obtained, provided that in such a circumstance Target will be required to disclose that information has been withheld on this basis. The exercise of any rights of inspection by or on behalf of Schooner under this §4.1(e) will not limit or otherwise affect the representations and warranties of Target hereunder;

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except for non‐substantive communications, and provided that such disclosure is not otherwise prohibited by reason of a confidentiality obligation owed to a third party for which a waiver cannot be obtained (provided that in such circumstance Target will be required to disclose that information has been withheld on this basis), furnish promptly to Schooner a copy of each notice, report, schedule or other document or communication delivered, filed or received by Target in connection with or related to the Transaction, any filings under applicable Laws and any dealings with any Governmental Entity in connection with or in any way affecting the Transaction as contemplated herein;
use commercially reasonable efforts to satisfy (or cause the satisfaction of) the conditions precedent to its obligations set forth in this Agreement to the extent the same are within its control and to take, or cause to be taken, all other actions and to do, or cause to be done, all other things necessary, proper or advisable under all applicable laws to complete the Transaction, including using commercially reasonable efforts to:

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obtain all necessary waivers, consents and approvals required to be obtained by it from other parties to loan agreements, leases, licenses, agreements and other Contracts; and

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effect all necessary registrations and filings and submissions of information requested by any Governmental Entity required to be effected by it in connection with the Transaction and participate and appear in any proceedings of either Target or Schooner before any Governmental Entity to the extent permitted by the Governmental Entity;
subject to applicable Laws, not take any action, refrain from taking any action, or permit any action to be taken or not taken inconsistent with this Agreement or which would reasonably be expected to significantly impede the completion of the Transaction;
conduct and operate its business and affairs only in the ordinary course consistent with past practice and use commercially reasonable efforts to preserve its business organization, goodwill and material business relationships with other persons and, for greater certainty, it will not enter into any material transaction out of the ordinary course of business consistent with past practice without the prior consent of Schooner, and Target will keep Schooner fully informed as to the material decisions or actions required or required to be made with respect to the operation of its business, provided that such disclosure is not otherwise prohibited by reason of a confidentiality obligation owed to a third party for which a waiver could not be obtained;

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except as may be necessary or desirable in order to effect the Transaction as contemplated hereunder, not alter or amend its articles or by‐laws as the same exist at the date of this Agreement;

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not merge into or with, or amalgamate or consolidate with, or enter into any other corporate reorganization or arrangement with, or transfer its undertaking or assets as an entirety or substantially as an entirety to, any other person or perform any act which would render inaccurate in any material way any of its representations and warranties set forth herein as if such representations and warranties were made at a date subsequent to such act and all references to the date of this Agreement were deemed to be such later date, except as contemplated in this Agreement, and without limiting the generality of the foregoing, it will not:

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make any distribution by way of dividend, distribution of property or assets, return of capital or otherwise to or for the benefit of its shareholders;

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increase or decrease its paid‐up capital or purchase or redeem any shares; or

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issue or enter into any commitment to issue any of its shares or securities convertible into, or rights, warrants or options to acquire any such shares;

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take all necessary corporate action and proceedings to approve and authorize the valid and effective transfer of the Purchased Shares to Schooner.

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Covenants of the Vendors

Each of the Vendors covenants and agrees with the other parties hereto that until the earlier of the Closing Date and the date upon which this Agreement is terminated in accordance with its terms, it will:

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enter into such escrow arrangements in respect of the Schooner Payment Shares and the Escrowed Schooner Shares, as applicable, as may be required in accordance with applicable securities Laws or the policies of the TSXV;

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use commercially reasonable efforts to satisfy (or cause the satisfaction of) the conditions precedent to its obligations set forth in this Agreement to the extent the same are within its control and to take, or cause to be taken, all other action and to do, or cause to be done, all other things necessary, proper or advisable under all applicable laws to complete the Transaction, including using commercially reasonable efforts to effect all necessary registrations and filings and submissions of information requested by any Governmental Entity required to be effected by it in connection with the Transaction;

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subject to Applicable Laws, not take any action, refrain from taking any action, or permit any action to be taken or not taken, inconsistent with this Agreement or which would reasonably be expected to significantly impede the completion of the Transaction; and

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not encumber in any manner the Purchased Shares and ensure that at the Closing Time the Purchased Shares are free and clear of all Encumbrances.

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Covenants of Schooner

Schooner hereby covenants and agrees with Target and the Vendors that until the earlier of the Closing Date and the date upon which this Agreement is terminated in accordance with the terms of this Agreement, it will:

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use its reasonable commercial efforts to complete the Concurrent Offering;

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in a timely and expeditious manner, prepare the Filing Statement with respect to the Transaction, in compliance with applicable Laws and the policies of the TSXV;

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ensure that the Filing Statement does not contain a misrepresentation as it relates to Schooner, including in respect of its assets, liabilities, operations, business and properties;

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not solicit, initiate, knowingly encourage, cooperate with or facilitate (including by way of furnishing any non‐public information or entering into any form of agreement, arrangement or understanding) the submission, initiation or continuation of any oral or written inquiries or proposals or expressions of interest regarding, constituting or that may reasonably be expected to lead to any activity, arrangement or transaction or propose any activities or solicitations in opposition to or in competition with the Transaction, and without limiting the generality of the foregoing, not to induce or attempt to induce any other person to initiate any shareholder proposal or “takeover bid,” exempt or otherwise, within the meaning of the Securities Act (British Columbia), for securities or assets of Schooner, nor to undertake any transaction or negotiate any transaction which would be or potentially could be in conflict with the Transaction, including, without limitation, allowing access to any third party to conduct due diligence, nor to permit any of its officers or directors to authorize such access, except as required by statutory obligations. In the event Schooner, including any of its officers or directors, receives any form of offer or inquiry, Schooner will forthwith (in any event within one business day following receipt) notify Target of such offer or inquiry and provide Target with such details as it may request;

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to make available and afford Target and its authorized representatives (and, if requested by Target, provide copies of) all contracts, financial statements, minute books, share certificate books, if any, share registers, plans, reports, licences, orders, permits, books of account, accounting records, constating documents and all other documents and information relating to Schooner. Schooner will afford Target and its authorized representatives every reasonable opportunity to have free and unrestricted access to Schooner’s assets, undertaking, records and documents. At the request of Target, Schooner will execute or cause to be executed such consents, authorizations and directions as may be necessary to permit any inspection of Schooner’s business or to enable Target or its authorized representatives to obtain full access to all files and records relating to any of the assets of Schooner maintained by a Governmental Entity. The obligations in this §4.3(e) are subject to any access or disclosure contemplated herein not being otherwise prohibited by reason of a confidentiality obligation owed to a third party for which a waiver cannot be obtained, provided that in such circumstance Schooner will be required to disclose that information has been withheld on this basis. The exercise of

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any rights of inspection by or on behalf of Target under this §4.3(e) will not mitigate or otherwise affect the representations and warranties of Schooner hereunder;

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in a timely and expeditious manner, make application to the TSXV and diligently pursue the approval of the Transaction (including the obligation of Schooner to issue the Schooner Payment Shares), the Concurrent Offering, a waiver from the sponsorship requirements of the TSXV, and the listing of the Schooner Payment Shares;
except for non‐substantive communications, and provided that such disclosure is not otherwise prohibited by reason of a confidentiality obligation owed to a third party for which a waiver cannot be obtained (provided that in such circumstance Schooner will be required to disclose that information has been withheld on this basis), furnish promptly to Target (on behalf of the Vendors) a copy of each notice, report, schedule or other document or communication delivered, filed or received by Schooner in connection with or related to the Transaction, any filings under applicable Laws and any dealings with any Governmental Entity in connection with or in any way affecting the Transaction as contemplated herein;
use commercially reasonable efforts to satisfy (or cause the satisfaction of) the conditions precedent to its obligations set forth in this Agreement to the extent the same are within its control and to take, or cause to be taken, all other actions and to do, or cause to be done, all other things necessary, proper or advisable under all applicable Laws to complete the Transaction, including using commercially reasonable efforts to:

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obtain all necessary waivers, consents and approvals required to be obtained by it from other parties to loan agreements, leases, licenses, agreements and other Contracts, as applicable; and

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effect all necessary registrations and filings and submissions of information requested by any Governmental Entity required to be effected by it in connection with the Transaction and participate and appear in any proceedings of either Schooner or Target before any Governmental Entity to the extent permitted by such entities;
subject to applicable Laws, not take any action, refrain from taking any action, or permit any action to be taken or not taken inconsistent with this Agreement or which would reasonably be expected to significantly impede the completion of the Transaction;
conduct and operate its business and affairs only in the ordinary course consistent with past practice and use commercially reasonable efforts to preserve its business organization, goodwill and material business relationships with other persons and, for greater certainty, other than in respect of the Concurrent Offering, it will not enter into any material transaction out of the ordinary course of business consistent with past practice without the prior consent of Target and Schooner will keep Target fully informed as to the material decisions or actions required or required to be made with respect to the operation of its business, provided that such disclosure is not otherwise prohibited by reason of a confidentiality obligation owed to a third party for which a waiver could not be obtained;

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except as may be necessary or desirable in order to effect the Transaction as contemplated hereunder, not alter or amend its notice of articles or articles as the same exist at the date of this Agreement;
not merge into or with, or amalgamate or consolidate with, or enter into any other corporate reorganization or arrangement with, or transfer its undertaking or assets as an entirety or substantially as an entirety to, any other person or perform any act which would render inaccurate in any material way any of its representations and warranties set forth herein as if such representations and warranties were made at a date subsequent to such act and all references to the date of this Agreement were deemed to be such later date, except as contemplated in this Agreement, and without limiting the generality of the foregoing, it will not:

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make any distribution by way of dividend, distribution of property or assets, return of capital or otherwise to or for the benefit of its shareholders;

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increase or decrease its paid‐up capital or purchase or redeem any shares except: (A) pursuant to the Concurrent Offering; or (B) upon the exercise of Schooner Options; or

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issue or enter into any commitment to issue any of its shares or securities convertible into, or rights, warrants or options to acquire, any such shares, except: (A) pursuant to the Concurrent Offering; or (B) upon the exercise of Schooner Options;
take all necessary corporate action and proceedings to approve and authorize the valid and effective transfer of the Escrowed Schooner Shares from the Principals to certain incoming shareholders of the Resulting Issuer, as directed by Target;
take all necessary corporate action and proceedings to approve and authorize the issuance of the Schooner Payment Shares to the Vendors;
not to borrow money or incur any indebtedness for money borrowed, except as agreed to by Target in writing;
not to make loans, advances or other payments, excluding routine advances to directors or officers of Schooner for expenses incurred in the ordinary course, or as is agreed to by Target in writing;
take all necessary corporate action and proceedings to approve and authorize the Concurrent Offering and the issuance of the securities under the Concurrent Offering; and
prepare and file with all applicable Securities Authorities such notifications and fees necessary to permit, or that are required in connection with, the issuance of the Schooner Payment Shares to the Vendors on a basis exempt from the prospectus and registration requirements of the applicable securities Laws in the jurisdictions in which the Vendors are resident.

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Exclusivity

From the date of this Agreement until the earlier of the Closing or the termination of this Agreement, each Party and their respective directors, officers, employees and agents will not, and will not permit any other person to, directly or indirectly discuss, solicit, encourage, accept or approve any offer to acquire it or its business or assets, whether as a primary or back‐up offer, or take any other action with the intent or foreseeable effect of leading to any negotiation, agreement, commitment or understanding for the acquisition of it or its business or assets or leading to the frustration of or any interference with this Agreement. Notwithstanding the foregoing, nothing herein contained will be interpreted as limiting the directors of either Party from performing their fiduciary duties as directors under Applicable Law.

ARTICLE 5 ‐ CHANGE IN DIRECTORS AND OFFICERS, NAME CHANGE AND ESCROW TRANSFERS

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New Directors of Schooner as Resulting Issuer

Effective at the Closing, Schooner will cause the Schooner Board to be restructured, through resignations and appointments, so that it consists of the following four individuals (collectively, the “ Director Changes ”):

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Marc Blythe;

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Garrett Ainsworth;

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Neil Burns; and

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Scott Trebilcock

forming the initial Resulting Issuer Board immediately following Closing.

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New Officers of Schooner as Resulting Issuer

Effective at the Closing, the officers of the Resulting Issuer following the Transaction will be determined by the reconstituted Schooner Board per §5.1 , and Schooner and Target agree to take necessary action as permitted under applicable Laws so that the senior officers of the Resulting Issuer will be the following individuals (collectively, the “ Officer Changes ”):

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Marc Blythe, as Chief Executive Officer and President;

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Winnie Wong, as Chief Financial Officer and Corporate Secretary; and

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William A. Wengzynowski, as Exploration Manager.

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PIFs

Target will cause to be delivered to the TSXV (with copies to Schooner) a TSXV Form 2A ‐ Personal Information/Consent Form (or Form 2C1 ‐ Declaratio n, if applicable) duly completed by each of the proposed directors and officers and identified in § 5.1 and § 5.2 , on or before the Closing Date.

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Resignations

At the Closing, Schooner will deliver resignations of all directors and officers of Schooner who will not be directors and officers of the Resulting Issuer, such resignations to include waivers in respect of any liabilities of Schooner to them in a form acceptable to Target, acting reasonably.

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Name Change

Concurrent with the Closing, the parties will complete the following name changes:

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Schooner will change its name to “Au Gold Corp.” or such another names as directed by Target and Schooner; and

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Target will change its name to “Ponderosa Exploration Ltd.” or such another names as directed by Target and Schooner.

in either case provided the name is acceptable to the British Columbia Registrar of Companies.

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Escrow Transfers

Concurrent with the Closing, Schooner will cause the Principals to enter into share purchase agreements to complete the sale and transfer of their respective Escrowed Schooner Shares to certain incoming shareholders of the Resulting Issuer (the “ Escrowed Share Purchasers ”), as directed by Target and as set forth in Schedule “C” attached hereto. Schooner will cause the Principals and the Escrowed Share Purchasers to execute and deliver all such further assignments, agreements, notices, certificates and other documents and do all such further acts and things as Target may reasonably request, and in accordance with the requirements of Computershare and the TSXV, in order to give effect to the sale and transfer of the Escrowed Schooner Shares.

ARTICLE 6 ‐ CONDITIONS TO CLOSING

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Mutual Conditions in Favour of Schooner and Target

The respective obligations of Target and Schooner to complete the Share Exchange are subject to the fulfillment of the following conditions at or before the Closing Time or such other time as is specified below:

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the Concurrent Offering will have been completed, or if completed in escrow pending the Closing, then all conditions necessary to release the escrow will have been satisfied (other than the completion of the Transaction);

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the Director Changes and the Officer Changes will have been completed;

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all shareholder approvals required for completion of the Transaction will have been obtained;

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the parties will deliver the Technical Report, in compliance with the requirements of NI 43‐101 with respect to the Property and as approved by the TSXV;

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there will be no action taken under any applicable law by any court or Governmental Entity that makes it illegal or restrains, enjoins or prohibits the Transaction, results in a judgment or assessment of damages relating to the Transaction that is materially adverse to Schooner or Target or that could reasonably be expected to impose any condition or restriction upon Schooner or Target which, after giving effect to the Transaction, would so materially and adversely impact the economic or business benefits of the Transaction as to render inadvisable the completion of the Transaction;

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the receipt of all required third party consents and approvals, including, if required, the consent of the Principal Optionor to the transfer of Option Agreement No. 1 between the Target and Principal Optionor;

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the TSXV will have provided its conditional acceptance of the Qualifying Transaction and listing of the Resulting Issuer as a Tier 2 issuer on the TSXV, including the approval of the proposed directors and officers of the Resulting Issuer;

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the receipt of all required regulatory, stock exchange and securityholder approvals, consents, permits, waivers, exemptions and orders;

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neither party will be subject to unresolved litigation or court proceedings; and

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the Closing Date will occur on or before the Completion Deadline.

The foregoing conditions precedent are for the benefit of all parties and may be waived by Target (on its own behalf and on behalf of the Vendors) and Schooner, in whole or in part, without prejudice to any party’s right to rely on any other condition in favour of any party.

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Conditions in Favour of Target and Vendors

The obligation of Target and the Vendors to complete the Share Exchange is subject to the fulfillment of the following additional conditions at or before the Closing Time or such other time as is specified below:

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Schooner will have tendered all closing deliveries as set forth in §7.2;

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the transfer of all of the Escrowed Schooner Shares by the existing Principals of Schooner to the Escrowed Share Purchasers will be completed, as directed by Target and approved by the TSXV;

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the representations and warranties made by Schooner in this Agreement that are subject to a materiality qualifier will be true and correct as of the Closing Date as if made on and as of that date (except to the extent that any representations and warranties speak as of an earlier date, in which event those representations and warranties will be true and correct as of the earlier date), and all other representations and warranties made by Schooner in this Agreement will be true and correct in all material respects as of the Closing Date as if made on and as of that date (except to the extent that any representations and warranties speak as of an earlier date, in which event those representations and warranties will be true and correct as of the earlier date);

{D0132699:12}

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from the date of this Agreement to the Closing Date, there will not have occurred a Material Adverse Change in respect of Schooner;

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at the Closing Time, prior to the issuance of the Schooner Payment Shares pursuant to the terms of this Agreement, Schooner will have 4,750,000 Schooner Shares issued and outstanding;

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Schooner will have complied in all material respects with its covenants herein; and

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the Schooner Board will have adopted all necessary resolutions and all other necessary corporate action will have been taken by Schooner to permit the completion of the Share Exchange and the Transaction pursuant to the terms of this Agreement.

The foregoing conditions are for the benefit of Target and may be waived, in whole or in part, by Target in writing at any time.

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Conditions in Favour of Schooner

The obligation of Schooner to complete the Transaction is subject to the fulfillment of the following additional conditions at or before the Closing Time or such other time as is specified below:

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at the Closing Time, prior to the issuance of the Target Shares to Schooner pursuant to the terms of this Agreement, Target will have 13,311,647 Target Shares issued and outstanding, such amount inclusive of the Primary Share Issuance;

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Target will have tendered all closing deliveries on behalf of Target and the Vendors as set forth in §7.3;

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the representations and warranties made by Target in this Agreement that are subject to a materiality qualifier will be true and correct as of the Closing Date as if made on and as of that date (except to the extent that any representations and warranties speak as of an earlier date, in which event those representations and warranties will be true and correct as of the earlier date), and all other representations and warranties made by Target in this Agreement will be true and correct in all material respects as of the Closing Date as if made on and as of that date (except to the extent that any representations and warranties speak as of an earlier date, in which event those representations and warranties will be true and correct as of the earlier date);

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from the date of this Agreement to the Closing Date, there will not have occurred a Material Adverse Change in respect of Target;

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Target will have complied in all material respects with its covenants herein; and

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the Target Board will have adopted all necessary resolutions and all other necessary corporate action will have been taken by Target to permit the completion of the Share Exchange and the Transaction pursuant to the terms of this Agreement.

The foregoing conditions are for the benefit of Schooner and may be waived, in whole or in part, by Schooner in writing at any time.

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ARTICLE 7 ‐ CLOSING AND POST CLOSING ARRANGEMENTS

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Closing

The Closing will take place on the Closing Date by way of an exchange of documents between the solicitors for Schooner and the solicitors for Target and the deliveries and acts as provided in this Agreement to be done upon Closing, or on such other date and in such other manner as the parties may agree in writing.

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Closing Deliveries of Schooner

At the Time of Closing, Schooner will deliver or cause to be delivered:

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share certificates, or DRS Statements, as applicable, evidencing the Schooner Payment Shares registered as directed by the Vendors, provided, however, that certificates evidencing any Schooner Payment Shares required to be held in escrow in accordance with the requirements of the Securities Authorities, or otherwise, will be delivered directly to the escrow agent;

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share certificates, or DRS Statements, as applicable, evidencing the Escrowed Schooner Shares registered as directed by the respective Escrowed Share Purchasers, provided, however, that certificates evidencing any Schooner Payment Shares required to be held in escrow in accordance with the requirements of the Securities Authorities, or otherwise, will be delivered directly to the escrow agent;

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share certificates, or DRS Statements, as applicable, evidencing 250,000 Schooner Shares, issuable under Option Agreement No. 2 to each of the Surrounding Claims Optionors, in accordance with Option Agreement No. 2;

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the resignations of those of Schooner’s directors and officers who are not continuing as directors and officers of the Resulting Issuer, including waivers in respect of any liabilities of Schooner and the Resulting Issuer to them in a form acceptable to Target, acting reasonably;

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execute and deliver all such further assignments, agreements, notices, certificates and other documents and do all such further acts and things as Target may reasonably request in order to give effect to its purchase of the Purchased Shares as contemplated by this Agreement;

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an escrow agreement in a form satisfactory to the TSXV, among Schooner as Resulting Issuer, the escrow agent and those of the Vendors required by the TSXV to be parties thereto, duly executed by Schooner;

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a certificate of one of Schooner’s senior officers, dated as of the Closing Date, certifying: (i) that the representations and warranties of Schooner set out in §3.3 are true and correct in all respects (in the case of any representation or warranty containing any materiality or Material Adverse Effect qualifier) or in all material respects (in the case of any representation or warranty without any materiality or Material Adverse Effect qualifier) on and as of Closing, and (ii) confirming that the covenants of Schooner set out in §4.3 have been completed as at the Closing Date;

{D0132699:12}

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a certificate of good standing for Schooner;

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evidence satisfactory to Target, acting reasonably, of the completion of the Concurrent Offering (and, if applicable, the satisfaction of all conditions precedent for the release from escrow of the proceeds thereof (other than the completion of the Transaction)); and

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a favourable legal opinion regarding customary corporate and securities law matters from counsel to Schooner, in form and substance satisfactory to Target and their counsel, each acting reasonably.

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Closing Deliveries of Target and the Vendors

At the Time of Closing, Target will deliver or cause to be delivered:

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with respect to each Vendor, share certificates representing the Purchased Shares owned by the Vendor, duly endorsed in blank for transfer or accompanied by duly executed stock transfer powers;

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if required by the TSXV, an escrow agreement in a form satisfactory to the TSXV, among Schooner as the Resulting Issuer, the escrow agent and those of the Vendors required by the TSXV to be parties thereto, duly executed by those Vendors;

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consents to act for proposed directors of the Resulting Issuer and personal information forms for proposed directors and officers of the Resulting Issuer, if not previously provided;

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a certificate of one of Target’s senior officers, dated as of the Closing Date, certifying: (i) that the representations and warranties of Target set out in §3.2 are true and correct in all respects (in the case of any representation or warranty containing any materiality or Material Adverse Effect qualifier) or in all material respects (in the case of any representation or warranty without any materiality or Material Adverse Effect qualifier) on and as of Closing, and (ii) confirming that the covenants of Target set out in §4.1 have been completed as at the Closing Date;

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a certificate of good standing for Target; and

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a favourable legal opinion regarding customary corporate law matters from counsel to Target, in form and substance satisfactory to Schooner and its counsel, each acting reasonably.

ARTICLE 8 ‐ TERMINATION

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Termination

This Agreement may be terminated at any time prior to the Closing Time:

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by mutual written agreement by Target and Schooner;

{D0132699:12}

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by either Target or Schooner if the Closing has not been completed on or prior to the Completion Deadline, without liability to the terminating party on account of such a termination; provided that the right to terminate this Agreement pursuant to this §8.1 will not be available to a party whose breach or violation of any representation, warranty, covenant, obligation or agreement under this Agreement has been the cause of or has resulted in the failure of the Closing to occur on or before the Completion Deadline;

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by Schooner, if a breach of any representation or warranty or failure to perform any covenant or agreement on the part of Target or the Vendors set forth in this Agreement has occurred that would cause the conditions set forth in §6.3 not to be satisfied, and such conditions are incapable of being satisfied by the Completion Deadline, as reasonably determined by Schooner, and on condition that Schooner is not then in breach of this Agreement so as to cause any condition in §6.3 not to be satisfied;

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by Target, if a breach of any representation or warranty or failure to perform any covenant or agreement on the part of Schooner set forth in this Agreement has occurred that would cause the conditions set forth in §6.2 not to be satisfied, and such conditions are incapable of being satisfied by the Completion Deadline, as reasonably determined by Target, and on condition that Target is not then in breach of this Agreement so as to cause any condition in §6.2 not to be satisfied; and

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by any party, if any permanent injunction or other order of a court or other competent authority preventing the Closing will have become final and non‐appealable; provided, however, that no party will be entitled to terminate this Agreement if that party’s material breach of this Agreement or any of the documents contemplated hereby has resulted in the permanent injunction or order.

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Effect of Termination

Upon termination of this Agreement in accordance with the terms hereof, the parties hereto will have no further obligations under this Agreement, other than the obligations contained in §9.1 (Confidentiality) and §9.4 (Expenses).

ARTICLE 9 ‐ GENERAL

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Confidentiality

Prior to Closing and, if the Transaction is not completed, at all times thereafter, each of the parties hereto will keep confidential and refrain from using all information obtained by it in connection with the Transaction relating to any other party hereto, provided however that such obligation does not apply to any information that was in the public domain at the time of its disclosure to a party or that subsequently comes into the public domain other than as a result of a breach of the receiving party’s obligations under this § 9.1 . For greater certainty, nothing contained herein will prevent any disclosure of information that may be required pursuant to applicable Laws or pursuant to an order in judicial or administrative proceedings or any other order made by any Governmental Entity.

{D0132699:12}

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Notices

All notices, requests, consents, and other communications required or permitted under this Agreement must be in writing and addressed to the persons indicated below, as applicable, and will be deemed given when: (i) delivered personally; (ii) when sent by confirmed facsimile or email (with a copy sent by another means specified herein) during business hours in the destination; (iii) five Business Days after having been sent by registered mail; or (iv) one Business Day after deposit with a recognized next day courier, with written verification of receipt. Either party may change its address or representative or both by giving notice pursuant to this section.

The address for service of each of the parties hereto is as follows:

if to Target and the Vendors:

1201361 B.C. Ltd.

[Redacted: Confidential Information ]

Attn: Marc Blythe

Email: [Redacted: Confidential Information ]

With a copy to (which shall not constitute notice):

Forooghian + Company Law Corporation

[Redacted: Confidential Information ]

Attn: Farzad Forooghian

Email: [Redacted: Confidential Information ]

If to Schooner:

Schooner Capital Corp.

[Redacted: Confidential Information ]

Attn: Adam Spencer

Email: [Redacted: Confidential Information ]

With a copy to (which shall not constitute notice):

DuMoulin Black LLP

[Redacted: Confidential Information ]

Attn: David Gunasekera

Email: [Redacted: Confidential Information ]

{D0132699:12}

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Amendments

No amendment of any provision of this Agreement will be binding on any party unless consented to in writing by that party.

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Expenses

The Parties agree that each party will pay for its costs incurred in connection with this Agreement and the transactions contemplated hereby, including legal and accounting fees, printing costs, financial advisor fees and all disbursements by advisors, will be paid by the Party hereto incurring such expense and that nothing in this Agreement will be construed so as to prevent the payment of such expenses, whether or not the Share Exchange is completed. For clarity, the costs related to the preparation and filing of the Filing Statement will be paid by Schooner. The provisions of this § 9.4 will survive the termination of this Agreement.

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Time of the Essence

Time is of the essence of this Agreement.

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Entire Agreement

This Agreement, together with the agreements and other documents herein or therein referred to, constitute the entire agreement between the Parties pertaining to the subject matter hereof and supersede all prior agreements, understandings, negotiations and discussions, whether oral or written, between the Parties with respect to the subject matter hereof, including by way of example and not limitation, the LOI. There are no representations, warranties, covenants or conditions with respect to the subject matter hereof except as contained herein.

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Further Assurances

Each Party will, from time to time, and at all times hereafter, at the request of another party or parties, but without further consideration, do, or cause to be done, all such other acts and execute and deliver, or cause to be executed and delivered, all such further agreements, transfers, assurances, instruments or documents as will be reasonably required in order to fully perform and carry out the terms and intent of this Agreement.

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Governing Law

This Agreement is governed by and to be construed in accordance with the laws of the Province of British Columbia and the laws of Canada applicable therein. The parties hereto irrevocably attorn to the non‐ exclusive jurisdiction of the courts of the Province of British Columbia.

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Independent Legal Advice

The Vendors acknowledge that DuMoulin Black is acting as counsel for Schooner and Forooghian & Company Law Corporation is acting as counsel for Target with respect to the matters contemplated in this Agreement, and each of the Vendors acknowledge that they have been advised to obtain and have been given the opportunity to obtain their own independent legal advice with respect to the terms of this Agreement prior to its execution.

{D0132699:12}

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Waiver

No waiver or release by any Party hereto will be effective unless in writing and executed by the Party granting such waiver or release and any waiver or release will affect only the matter, and the occurrence thereof, specifically identified and will not extend to any other matter or occurrence. Waivers may only be granted upon compliance with the provisions governing amendments set forth in § 9.3 .

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No Personal Liability

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No director or officer of Target will have any personal liability whatsoever (other than in the case of fraud, negligence or wilful misconduct) to Schooner under this Agreement or any other document delivered in connection with this Agreement or the Share Exchange by or on behalf of Target.

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No director or officer of Schooner will have any personal liability whatsoever (other than in the case of fraud, negligence or wilful misconduct) to Target or the Vendors under this Agreement or any other document delivered in connection with this Agreement or the Share Exchange by or on behalf of Schooner.

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Enurement and Assignment

This Agreement will enure to the benefit of and be binding upon the parties and their respective heirs, executors, personal representatives, successors, and permitted assigns. No party may assign any rights or transfer any obligations under this Agreement without the prior written agreement of the parties.

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Execution in Counterparts

This Agreement may be executed in one or more counterparts and delivered by electronic means, each of which will be deemed an original, and all counterparts together will be deemed to constitute one and the same agreement.

[ Signature page follows ]

{D0132699:12}

The parties hereto have executed this Agreement with effect as of the date of the last signature to this Agreement.

SCHOONER CAPITAL CORP.

(Signed) “ Adam Spencer ”_ Authorized signatory Date:October 27, 2020_

1201361 B.C LTD.

(Signed) “ Marc Blythe ” _ Authorized signatory Date:October 27, 2020_

MARC BLYTHE

(Signed) “ Marc Blythe ” _ Date:October 27, 2020_

ODLUM BROWN LIMITED IN TRUST FOR ALMADEX MINERALS LTD.

(Signed) “ Doug McDonald ”__ Authorized signatory Date:_October 27, 2020______

SKIVIK HOLDING CO. LTD.

(Signed) “ William A. Wengzynowski ” Authorized signatory Date:October 27, 2020_

MALASPINA MINING SOLUTIONS LTD.

(Signed) “ Marc Blythe ” _ Authorized signatory Date:October 27, 2020_

{D0132699:12}

SCHEDULE A VENDORS

[Redacted: Confidential Information ]

{D0132699:12}

SCHEDULE B TARGET FINANCIAL STATEMENTS

[Redacted: Confidential Information ]

{D0132699:12}

SCHEDULE C ESCROW TRANSFERS TO THE ESCROWED SHARE PURCHASERS

[Redacted: Confidential Information ]

{D0132699:12}

AI assistant

Au Gold Corp. — M&A Activity 2020

47587_rns_2020-10-28_f7fffc9a-8b37-4e0c-a02d-fbfbda94608d.pdf

SHARE EXCHANGE AGREEMENT

AMONG:

(“ Schooner ”)

AND:

AND:

WHEREAS:

ARTICLE 1 ‐ DEFINITIONS, INTERPRETATION AND SCHEDULES

Definitions

Interpretation Not Affected by Headings

Number and Gender

Date for any Action

Statutory References

Currency

Invalidity of Provisions

Accounting Matters

Knowledge

Meaning of Certain Phrases

Subsidiaries and affiliates

Schedules

ARTICLE 2 ‐ THE SHARE EXCHANGE

Terms of Share Exchange

Tax Election

Closing Date

Consultation

ARTICLE 3 ‐ REPRESENTATIONS AND WARRANTIES

Representations and Warranties of the Vendors

Representations and Warranties of Target

Employment Agreements . Target:

Option Agreements .

Target has:

Representations and Warranties of Schooner

Employment Agreements . Schooner:

Schooner has:

Survival of Representations and Warranties

Vendors’ Acknowledgements

ARTICLE 4 ‐ COVENANTS

Covenants of Target

Covenants of the Vendors

Covenants of Schooner

Exclusivity

ARTICLE 5 ‐ CHANGE IN DIRECTORS AND OFFICERS, NAME CHANGE AND ESCROW TRANSFERS

New Directors of Schooner as Resulting Issuer

New Officers of Schooner as Resulting Issuer

PIFs

Resignations

Name Change

Escrow Transfers

ARTICLE 6 ‐ CONDITIONS TO CLOSING

Mutual Conditions in Favour of Schooner and Target

Conditions in Favour of Target and Vendors

Conditions in Favour of Schooner

ARTICLE 7 ‐ CLOSING AND POST CLOSING ARRANGEMENTS

Closing

Closing Deliveries of Schooner

Closing Deliveries of Target and the Vendors

ARTICLE 8 ‐ TERMINATION

Termination

Effect of Termination

ARTICLE 9 ‐ GENERAL

Confidentiality

Notices

Amendments

Expenses

Time of the Essence

Entire Agreement

Further Assurances

Governing Law

Independent Legal Advice

Waiver

No Personal Liability

Enurement and Assignment

Execution in Counterparts

[ Signature page follows ]

SCHOONER CAPITAL CORP.

1201361 B.C LTD.

SCHEDULE A VENDORS

SCHEDULE B TARGET FINANCIAL STATEMENTS

Au Gold Corp. M&A Activity 2020