Aurelius Minerals Inc.

MASTER TRANSACTION AGREEMENT

BETWEEN

SPROTT PRIVATE RESOURCE LENDING (COLLECTOR), LP

AND

MADE AS OF

FEBRUARY 27, 2020

ARTICLE	1	– INTERPRETATION..............................................................................................1
1.01		Definitions ...............................................................................................................1
1.02		Headings................................................................................................................11
1.03		Extended Meanings ...............................................................................................11
1.04		Statutory References..............................................................................................11
1.05		Accounting Principles ...........................................................................................11
1.06		Currency ................................................................................................................12
1.07		Schedules...............................................................................................................12
ARTICLE	2	- SALE AND PURCHASE.....................................................................................12
2.01		Purchase and Sale of Target Shares.......................................................................12
2.02		Purchase Price for Target Shares...........................................................................12
2.03		Payment of Purchase Price for Target Shares .......................................................13
2.04		Acceleration of Payment in Event of Equity Financings ......................................14
2.05		Acceleration of Payment in Event of Asset Sales .................................................14
2.06		Acceleration of Payment and Additional Proceeds in Event of Change of Control14
2.07		Acceleration of Payment for Certain Breach.........................................................15
2.08		Early Payment Option ...........................................................................................15
2.09		Unwinding of Acquisition .....................................................................................16
2.10		Nycon Agreement Payment and Expense Payment ..............................................17
2.11		Repayment of Sprott Existing Note and Sprott Return of Capital Note................18
ARTICLE	3	– EQUITY PARTICIPATION................................................................................18
3.01		Conversion of Advance Note ................................................................................18
3.02		Subscription for Subscription Shares ....................................................................18
ARTICLE	4	- REPRESENTATIONS AND WARRANTIES.....................................................18
4.01		Sprott’s Representations and Warranties in respect of the Acquisition ................18
4.02		Acquiror’s Representations and Warranties in respect of the Acquisition............28
ARTICLE	5	- CONDITIONS OF CLOSING AND CLOSING ARRANGEMENTS................29
5.01		Closing...................................................................................................................29
5.02		Conditions for the Benefit of Acquiror at Closing ................................................29
5.03		Deliveries by Sprott at Closing..............................................................................29
5.04		Conditions for the Benefit of Sprott at Closing.....................................................31
5.05		Deliveries by Acquiror at Closing.........................................................................31
5.06		Waiver of Condition..............................................................................................32

ARTICLE 6 - COVENANTS DURING DEFERRED PAYMENT PERIOD ............................32

6.01	Indebtedness ..........................................................................................................32
6.02	Security..................................................................................................................33
6.03	Encumbrances........................................................................................................33
6.04	Strategic Alternatives ............................................................................................33
ARTICLE	7- COVENANTS DURING EQUITY PARTICIPATION PERIOD .......................33
7.01	Participation Right in Equity Financing................................................................33
7.02	Catch Up Right......................................................................................................34
7.03	Board Representation ............................................................................................35
7.04	Securities Law and Corporate Covenants..............................................................36
7.05	Target Financial Statements ..................................................................................37
7.06	Draft Tax Returns for Target.................................................................................37
ARTICLE	8– TERMINATION ..................................................................................................37
8.01	Termination ...........................................................................................................37
8.02	Effect of Termination ............................................................................................37
ARTICLE	9– INDEMNIFICATION..........................................................................................38
9.01	Indemnification by Sprott......................................................................................38
9.02	Indemnification by Acquiror .................................................................................38
9.03	Limit of Liability...................................................................................................39
ARTICLE	10– GENERAL .........................................................................................................39
10.01	Further Assurances ................................................................................................39
10.02	Time of the Essence...............................................................................................39
10.03	Fees and Commissions ..........................................................................................39
10.04	Confidentiality.......................................................................................................40
10.05	Public Announcements..........................................................................................40
10.06	Benefit of the Agreement ......................................................................................40
10.07	Entire Agreement...................................................................................................41
10.08	Amendments and Waivers.....................................................................................41
10.09	Assignment............................................................................................................41
10.10	Notices...................................................................................................................41
10.11	Remedies Cumulative............................................................................................42
10.12	No Third Party Beneficiaries.................................................................................43
10.13	Governing Law......................................................................................................43
10.14	Attornment.............................................................................................................43
10.15	Counterparts ..........................................................................................................43
10.16	Electronic Execution..............................................................................................43

MASTER TRANSACTION AGREEMENT

THIS AGREEMENT is made as of February 27, 2020

BETWEEN

SPROTT PRIVATE RESOURCE LENDING

(COLLECTOR), LP , a limited partnership formed under the laws of Ontario, by its general partner Sprott Resource Lending Corp., a corporation incorporated under the laws of Canada (“ Sprott ”),

and -

AURELIUS MINERALS INC. , a corporation incorporated under the laws of the Province of British Columbia (“ Acquiror ”),

WHEREAS Sprott is the beneficial and registered owner of 100 common shares (the “ Target Shares ”) in the share capital of 2672403 Ontario Inc. (“ Target ”), a corporation incorporated under the laws of the Province of Ontario, which represent 100% of Target’s issued and outstanding share capital;

WHEREAS Sprott desires to sell, and Acquiror desires to purchase, the Target Shares upon and subject to the terms and conditions set out in this Agreement, including that the consideration will be paid on a deferred, conditional basis (the “ Acquisition ”);

AND WHEREAS Target desires to guarantee certain obligations of Acquiror under this Agreement, including the deferred payment obligations for the Acquisition, upon and subject to the terms and conditions set out in this Agreement and the Security Documents;

AND WHEREAS Sprott desires to subscribe for, and Acquiror desires to issue and sell on a private placement basis, the Subscription Shares (as defined below) upon and subject to the terms and conditions set out in this Agreement;

NOW THEREFORE, in consideration of the covenants and agreements herein contained, the parties agree as follows:

ARTICLE 1 – INTERPRETATION

1.01 Definitions

In this Agreement, unless something in the subject matter or context is inconsistent therewith:

“ Acceptance ” has the meaning set out in Section 2.09(2).

“ Accounting Records ” means all of the books of account, accounting records and other financial data and information of the Target for each of the fiscal years of the Target since incorporation.

“ Acquiror ” has the meaning set out in the recitals hereto.

“ Acquiror Change of Control ” means (i) the sale or other transfer of all or substantially all the consolidated assets of Acquiror other than in connection with an internal reorganization; or (ii) the completion of an amalgamation, arrangement, merger or other consolidation or combination involving Acquiror such that immediately following such event (a) the securityholders of Acquiror immediately prior to the event would not beneficially own, or exercise control or direction over, voting securities carrying the right to cast more than 50% of the votes attaching to all voting securities of the successor or continuing corporation or entity, or (b) the directors of Acquiror would not constitute a majority of the board of directors (or equivalent) of the successor or continuing corporation or entity, which, for greater certainty, is not a result of the resignation of one or more directors of Acquiror who are nominees of Sprott.

“ Acquiror Shares ” means common shares in the capital of Acquiror.

“ Acquisition ” has the meaning set out in the recitals hereto.

“ Additional Proceeds ” has the meaning set out in Section 2.06(1)(ii).

“ Advance Note ” means the unsecured non-interest bearing convertible promissory note of Acquiror issued to Sprott on December 19, 2019 in the aggregate principal amount of $456,200.

“ Affiliate ” has the meaning ascribed thereto in the Business Corporations Act (Ontario).

“ Agreement ” means this agreement, including its recitals and schedules, as amended from time to time.

“ Applicable Law ” means: (i)any applicable domestic or foreign law including any statute, subordinate legislation or treaty, and (ii) any applicable guideline, directive, rule, standard, requirement, policy, order, judgment, injunction, award or decree of a Governmental Authority having the force of law.

“ Ascot Shares ” means 229,128 common shares in the share capital of Ascot Resources Ltd.

“ Assets ” means all assets, property (real, personal and intellectual), agreements and undertakings, including all tangible and intangible goods, chattels, fixtures, improvements or other items of the Target, and including the Real Property, the Dufferin Gold Properties, the Buildings, the Equipment, the Contracts, the Licences, the Ascot Shares and any intellectual property rights, or any part thereof, or in which the Target has a right, title or interest, wherever it is situated.

“ Benefit Plans ” means all employee benefit plans or agreements (whether formal or informal, funded or unfunded) sponsored, maintained or contributed to or required to be sponsored, maintained or contributed, to by the Target for the benefit of any Employee, but excluding (a) any obligations with which the Target is required to comply, and (b) any individual employment agreement or contracts.

“ Board ” means the board of directors of Acquiror.

“ Books and Records ” means all books, records, Accounting Records, books of account, minute books, sales and purchase records, title records, lists of suppliers and customers, pricing and credit information, formulae, business, engineering and consulting reports, all recorded geotechnical and geoscientific information, surveys, maps, research and development information or mining plans relating to the Assets and in the possession or control of Sprott or the Target, and all other documents, files, records, correspondence or other data and information, financial or otherwise, which are relevant to the Assets or the Target and in the possession or control of Sprott or the Target, including, without limitation, all data information stored electronically or on computer-related media.

“ Buildings ” means all plants, mills, hoists, buildings, structures, erections, improvements, appurtenances and fixtures (including fixed machinery and fixed equipment) situated on or forming part of the Real Property, as set out in Schedule 1.01(ii).

“ Business Day ” means a day other than a Saturday, Sunday or statutory or civic holiday in the Province of Nova Scotia or Province of Ontario.

“ Catch Up Exercise Price ” shall mean: (i) in the event the Excluded Issuance triggering the Catch Up Right relates to the issuance of Acquiror Shares as partial or total consideration in exchange for mining or other properties in a bona fide transaction with arm’s length sellers, subject to approval by the TSXV (or such other Permitted Exchange as the Acquiror Shares are then listed), the price at which Acquiror Shares were issued pursuant to such transaction; and (ii) in relation to all other Excluded Issuances, the VWAP for the Acquiror Shares for the 15 most recent trading days on which there was a trade of the Acquiror Shares ending on the last trading day preceding the date of the Catch Up Notice, subject to the maximum permitted discount to the market price (including, for clarity, any minimum price per share) that is permitted by the TSXV (or such other Permitted Exchange as the Acquiror Shares are then listed).

“ Catch Up Notice ” has the meaning set out in Section 7.02(a).

“ Catch Up Period ” has the meaning set out in Section 7.02(b).

“ Catch Up Shares ” has the meaning set out in Section 7.02(b).

“ Catch Up Subscription Form ” has the meaning set out in Section 7.02(b).

“ Catch Up Right ” has the meaning set out in Section 7.02.

“ CIM Definitional Standards ” means the definitions adopted by the Canadian Institute of Mining, Metallurgy and Petroleum on May 10, 2014, which are utilized by the Canadian Securities Administrators in NI 43-101.

“ Claim ” means any actual or threatened civil, criminal, administrative, regulatory, arbitral or investigative inquiry, action, suit, investigation or proceeding and any claim or demand resulting therefrom or any other claim or demand of whatever nature or kind.

“ Closing ” means the completion of the Acquisition and the issuance of the Subscription Shares and the Advance Note Shares, as contemplated herein.

“ Closing Date ” means the date hereof.

“ Closing Document ” means any document delivered at the Closing Time as provided in or pursuant to this Agreement.

“ Closing Time ” means 9:00 a.m. (Toronto time) on the Closing Date.

“ Collective Agreement ” means any collective agreement, letters of understanding, letters of intent or other written commitment made by or on behalf of the Target with any trade union or association which may qualify as a trade union.

“ Contracts ” means the contracts, agreements, licence agreements and other legally binding instruments entered into by the Target, all of which Contracts are set forth in Schedule 1.01(i) attached hereto.

“ Deferred Payment” has the meaning set out in Section 2.03.

“ Deferred Payment Period ” means such period commencing as of the Closing Date and lasting so long as any Deferred Payment remains outstanding.

“ Dufferin Gold Properties ” means all mining or mineral claims (whether patented or unpatented), mining or mineral leases, sub-surface rights or other rights to prospect or explore for minerals, or to mine minerals, of which the Target is the recorded, registered or beneficial owners, or which are leased by the Target, or in which the Target has a right, title on interest or an option to acquire an interest, all of which Dufferin Gold Properties are set forth in Schedule 1.01(iii) attached hereto.

“ Employees ” means those individuals who were employed or are employed by the Target on the Closing Date, including pursuant to a contract for services or a written employment contract, and includes all non-executive officers.

“ Encumbrance ” means any encumbrance of any kind whatever (registered or unregistered) other than a Permitted Encumbrance and includes a security interest, mortgage, lien, hypothec, pledge, hypothecation, assignment, charge, any restriction or limitation on the transfer of the Target Shares, a proxy or power of attorney, a deposit by way of security and any easement, restrictive covenant or right of way, restriction, encroachment, burden or title reservation of any kind.

“ Environment ” means the air, surface water, underground water, any land, soil or underground space even if submerged under water or covered by a structure, all living organisms and interacting natural systems that include components of air, land, water, organic and inorganic matters and living organisms and environment or natural environment as defined in any Environmental Law and “ Environmental ” shall have a similar extended meaning.

“ Environmental Laws ” means all Applicable Laws relating in whole or in part to the Environment and includes those relating to pollution or protection of the Environment, health, safety or natural resources, including the storage, generation, use, handling, manufacture, processing, transportation, import, export, treatment, or Release of any Hazardous Substance.

“ Equipment ” means all tangible personal property owned or leased by the Target or which is used by the Target, whether moveable or immovable or fixed, except as otherwise captured in the definition of “Buildings”, including all machines, machinery, motor vehicles, trucks or other mobile equipment, mining equipment, rolling stock, fixtures, tools, furniture, furnishings, material handling equipment, computers, photocopiers, office equipment, implements and spare parts wherever located, a list of which is set out in Schedule 1.01(iv).

“ Equity Financing ” means, following the Closing Date, the offering of any equity securities, or securities exercisable for, convertible into or exchangeable for equity securities, of Acquiror whether pursuant to a public offering, a private placement or otherwise, any issuance of Acquiror Shares to Sprott pursuant to Sections 2.03 or 2.08 or an Excluded Issuance.

“ Equity Participation Period ” means such period commencing as of the Closing Date and lasting so long as Sprott, together with its Affiliates, continues to hold Acquiror Shares representing at least 9.9% of the issued and outstanding Acquiror Shares on a Non-Diluted Basis; provided for certainty that, if Sprott, together with its Affiliates, no longer hold at least 9.9% of the issued and outstanding Acquiror Shares on a Non-Diluted Basis as a result of Excluded Issuance(s) that would give rise to Sprott’s Catch Up Right, the Equity Participation Period shall continue until such time as Sprott has not exercised its Catch Up Right in accordance with Section 7.02 to continue to hold, together with its Affiliates, Acquiror Shares representing at least 9.9% of the issued and outstanding Acquiror Shares on a Non-Diluted Basis.

“ Excluded Issuance ” means the issuance of any securities of Acquiror: (a) for compensatory purposes to employees, directors or officers pursuant to ordinary course compensation arrangements; (b) upon the exercise or conversion of any convertible or exchangeable securities issued as at or prior to the date hereof; or (c) issued as partial or total consideration in exchange for mining or other properties in a bona fide transaction with arm’s length sellers.

“ Expense Amount ” has the meaning set out in Section 2.10.

“ First Deferred Payment ” has the meaning set out in Section 2.03(1)(a).

“ Force Majeure ” means any event arising after the date of this Agreement and that is beyond Acquiror’s or Target’s reasonable control which is unforeseen or, if foreseen, is unavoidable, and not as a result of the negligence or willful misconduct of Acquiror or Target, including without limitation, Acts of God, natural catastrophes, strikes, lockouts, fire, flood and war (declared or not).

“ Governmental Authority ” means any domestic, foreign, federal, provincial, state or local legislative, executive, judicial, regulatory, arbitral or administrative body having or purporting to have jurisdiction in the relevant circumstances, including any department, commission, board, agency, bureau, subdivision or instrumentality thereof.

“ Hazardous Substance ” means any pollutant, contaminant, waste, hazardous substance, hazardous material, toxic substance, dangerous substance or dangerous goods as defined, judicially interpreted or identified in any Environmental Law, including any that may impair the quality of any waters, and includes:

(a) petroleum, petroleum products, by-products or breakdown products, radio active materials, asbestos in any form that is friable or polychlorinated biphenyls; and

(b) any chemical, material or other substances so defined, judicially interpreted or identified.

“ IFRS ” means the international financial reporting standards issued by the International Accounting Standards Board.

“ Knowledge ” when used in reference to Sprott shall mean the actual knowledge of Jim Grosdanis after due inquiry, which shall include consultation with Jack Cartmel.

“ Liabilities ” means any and all debts, liabilities and obligations, whether accrued or fixed, absolute or contingent, matured or unmatured or determined or undeterminable, including, without limitation, both arising under any Applicable Law or Order and those arising under any contract, agreement, arrangement, commitment or undertaking or otherwise, including arising directly or indirectly under or pursuant to any loan, credit agreement, loan or credit facility transaction or arrangement or any off-balance sheet transaction or arrangement, in each case of Sprott, the Target or in respect of or arising out of the Assets.

“ Licence ” means any licence, permit, approval, right, privilege, concession or franchise issued, granted, conferred or otherwise created by a Governmental Authority.

“ Losses ” means all damages, fines, penalties, deficiencies, losses, liabilities (whether accrued, actual, contingent, latent or otherwise), costs, fees and expenses (including interest, court costs and reasonable fees and expenses of lawyers, accountants and other experts and professionals).

“ NI 43-101 ” means National Instrument 43-101 ( Standards of Disclosure for Mineral Projects ).

“ Nycon Agreement ” means an agreement to be entered into between Target and Nycon Resources Inc. pursuant to which Target agrees to purchase all mineral claims and leases known as the “Dufferin West Properties” and described at Schedule 1.01(v) hereto.

“ Nycon Purchase Amount ” has the meaning set out in Section 2.10.

“ Order ” means any order (including any judicial or administrative order and the terms of any administrative consent), judgement, injunction, decree, ruling or award of any court, arbitrator or Governmental Authority.

“ Partially-Diluted Basis ” means that number of Acquiror Shares issued and outstanding, without giving effect to the exercise, conversion or exchange of any securities exercisable for, convertible into or exchangeable for Acquiror Shares, other than securities exercisable for, convertible into or exchangeable for Acquiror Shares held by Sprott, together with its Affiliates.

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“ Participation Right ” has the meaning set out in Section 7.01.
“ Permitted Encumbrances ” means the following Encumbrances:
(a) any Encumbrance on any Asset existing on the Closing Date and set forth in Schedule 1.01(vi);
(b) any Encumbrance created by the Security Documents;
(c) any Encumbrance imposed by law that was incurred in the ordinary course of business, including, without limitation, construction, carriers’, materialmans’, suppliers’, contractors’, subcontractors’, workers’, repairmans’, builders’, warehousemen’s and mechanics’ liens and other similar Encumbrances arising in the ordinary course of business, in each case for sums not yet due or being contested in good faith by appropriate proceedings and for which appropriate reserves in accordance with IFRS have been established to the extent required by IFRS;
(d) any Encumbrance arising by operation of Applicable Law securing Taxes, assessments, royalties, rents and other governmental charges, the payment of which are not yet due or are being contested in good faith by appropriate proceedings and for which appropriate reserves in accordance with IFRS have been established to the extent required by IFRS;
(e) any reservations, or exceptions contained in the original grants of land or by applicable statute or the terms of any lease in respect of any Properties, or comprising the Properties which do not materially detract from the value of, or materially impair the use of, the Properties for the purpose of conducting and carrying out mining operations thereon;
(f) Encumbrances as a result of any judgment or order rendered or claim filed against Sprott which is being contested in good faith by proper legal proceedings (and as to which any enforcement proceedings shall have been suspended by operation of law or stayed pending an appeal or other proceeding) and for which appropriate reserves in accordance with IFRS have been established to the extent required by IFRS;
(g) title defects, encroachments or irregularities which are minor in nature with respect to the Properties, minor discrepancies in the legal description or acreage of or associated with the Properties or any adjoining properties which would be disclosed in an up to date survey and any pre-existing registered easements and pre existing registered restrictions or pre-existing covenants that run with the land, in either case which do not materially detract from the value of, or materially impair the use of, the Properties for the purpose of conducting and carrying out mining operations thereon;
(h) rights of way for, or reservations of rights of others for, sewers, water lines, gas lines, electric lines, telegraph and telephone lines, and other similar utilities, or zoning by-laws, ordinances, surface access rights, restrictions, servitudes or easements, which do not in the aggregate materially detract from the use of the affected property for the purpose for which it is used in the operation of the business;
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(i) security deposits pertaining to the Dufferin Gold Properties with any Governmental Authority and utilities in the ordinary course of business;
(j) a right of title retention or purchase money security interests, provided that any such purchase money security interest is limited to the specific asset that has been acquired and which has given rise to the purchase money security interest, in connection with the acquisition by the Target of goods pertaining to the Dufferin Gold Properties in the ordinary course of business;
(k) attachments, judgments and other similar Encumbrances arising in connection with court proceedings;
(l) the right reserved to or vested in any Governmental Authority by the terms of any lease, licence, franchise, grant, claim or permit acquired by the Target or by any statutory provision, to terminate any such lease, licence, franchise, grant, claim or permit, or to require annual or other payments as a condition to the continuance thereof;
(m)the restrictions, exceptions, reservations, limitations, provisos and conditions, if any, expressed in any original patents or grants from the Crown or other Governmental Authority, and any statutory and common law limitations, exceptions, reservations and qualifications;
(n) Encumbrances or any rights of distress that are required by Applicable Law;
(o) applicable zoning, land use, building restrictions and other municipal, governmental and other Governmental Authority restrictions affecting the use of land or the nature of any structures which may be erected thereon, provided such restrictions have been complied with in all material respects and such restrictions and regulations do not materially impair the use of the applicable property for the purpose for which it is held;
(p) Encumbrances in favour of customs and revenue authorities arising as a matter of Applicable Law to secure payment of custom duties in connection with the importation of goods provided such amounts do not exceed $50,000 in the aggregate;
(q) undetermined or inchoate Encumbrances, rights of distress and charges incidental to current operations arising or potentially arising under statutory provisions which have not at the time been filed or registered in accordance with Applicable Law or of which written notice has not been duly given to Sprott, Acquiror or the Target, as applicable, in accordance with Applicable Law or which although filed or registered, relate to obligations not due and delinquent;
(r) servicing agreements, development agreements, site plan agreements, and other agreements with governmental or public authorities pertaining to the use or development of any of the Properties, provided same are complied with including any obligations to deliver letters of credit and other security as required;
(s) any rights of expropriation, access or use or any other rights conferred or vested by or under statutes of Canada or applicable provinces; and
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(t) the extension or renewal or refinancing of any Permitted Encumbrance.

“ Permitted Exchange ” means TSXV, the NASDAQ Global Select Market, NASDAQ Global Market, NASDAQ Capital Market, NYSE, NYSE American LLC, Toronto Stock Exchange, London Stock Exchange Main Market and London Stock Exchange AIM.

“ Permitted Indebtedness ” means, in respect of Acquiror and the Target, unsecured indebtedness in the ordinary course of business, indebtedness incurred under this Agreement or the Security Documents, or indebtedness as set out in Schedule 1.01(vii).

“ Person ” shall be broadly interpreted and includes an individual, body corporate, partnership, joint venture, trust, association, unincorporated organization, the Crown, any Governmental Authority or any other entity recognized by law.

“ Properties ” means the Real Property and the Dufferin Gold Properties.

“ Purchase Price ” has the meaning set out in Section 2.02.

“ Qualifying Feasibility Report ” means a report in respect of all or part of the Dufferin Gold Properties that is prepared and filed in accordance with NI 43-101 reporting on a study that constitutes a “feasibility study” as such term is defined by the CIM Definitional Standards.

“ Qualifying Technical Report ” means a report in respect of all or part of the Dufferin Gold Properties that is prepared and filed in accordance with NI 43-101 and that establishes a minimum of 500,000 contained equivalent ounces of gold in “measured and indicated mineral resources”, as such terms are defined by the CIM Definitional Standards.

“ Real Property ” means (i) the real and immovable property (including all of the lands, Buildings situated thereon and surface rights) of which the Target is the recorded, registered or beneficial owner, but excluding the Dufferin Gold Properties, and (ii) the real and immovable property subject to all unexpired leases under which Target is a lessee, licensee or occupant, all of which Real Property is set forth on Schedule 1.01(viii) attached hereto.

“ Second Deferred Payment” has the meaning set out in Section 2.03(1)(a).

“ Security Documents ” means documents evidencing a first-ranking mortgage and charge in favour of Sprott subject to Permitted Encumbrances, over all Real Property of the Target and of the Dufferin Gold Properties, a pledge of the Target Shares in favour of Sprott, a general security agreement providing for charge over all Assets of Target (other than the Sprott Asset and the Ascot Shares) and such other security documents as Sprott may require, acting reasonably.

“ Securities Laws ” means as applicable, the securities laws, regulations and rules, and the blanket orders and rulings, policies and written interpretations of and multilateral or national instruments adopted by the securities regulators in the Provinces of British Columbia, Ontario and Alberta and the rules and policies of the TSXV and any other stock exchange where securities of Acquiror are listed for trading.

“ Sprott ” has the meaning set out in the recitals hereto.

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“ Sprott Asset ” means the US$3,510,934.39 portion of the US$8,830,000 Senior Unsecured Convertible Promissory Note issued by Ascot Resources Ltd. payable on January 18, 2021 that is held by Target.

“ Sprott Existing Note ” means the promissory note payable by Target to Sprott in the principal amount of $3,989,748, dated June 30, 2019, a copy of which is attached hereto at Schedule 1.01(ix).

“ Sprott GP ” means Sprott Resource Lending Corp.

“ Sprott Return of Capital Note ” means the promissory note to be issued prior to Closing by Target to Sprott as a return of capital immediately prior to Closing with a principal amount equal to: (i) the excess of the Canadian dollar equivalent of US$3,510,934.39 over the principal amount of the Sprott Existing Note; and (ii) the fair market value of the Ascot Shares, a form of which is attached hereto at Schedule 1.01(x).

“ Statutory Plans ” means all statutory plans for the benefit of any of the Employees or contractual workers or persons who were Employees or contractual workers of the Target with which such companies are required to comply, including plans administrated pursuant to applicable provincial health, workers' compensation, workers' safety and insurance and employment insurance legislation.

“ Subscription Agreement ” means the subscription agreement entered into between Acquiror and Sprott on the date hereof whereby Sprott or an Affiliate of Sprott agreed to purchase the Subscription Shares on the terms and conditions set out therein.

“ Subscription Amount ” means $1,143,800.

“ Subscription Price ” means $0.064 per Subscription Share.

“ Subscription Shares ” means 17,871,875 Acquiror Shares.

“ Target Articles ” means the articles of incorporation of the Target dated December 21, 2018.

“ Target Financial Statements ” means the audited financial statements of the Target for the fiscal years ended December 31, 2019 and December 31, 2018, prepared in accordance with IFRS, consisting of a balance sheet, a statement of financial position, a statement of profit and loss, a statement of changes in financial position, together with notes to such financial statements, and the auditor’s report thereon.

“ Target Shares ” has the meaning set out in the recitals hereto and for certainty and without limitation, includes 100% of the outstanding shares of the Target.

“ Tax Returns ” means all reports, returns and other documents filed or required to be filed by the Target in respect of Taxes or in respect of or pursuant to any foreign taxing statute.

“ Taxes ” means all taxes and similar governmental charges, including:

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(a) all income, franchise, capital, real property, withholding, payroll, employer health, transfer, sales, use, excise, consumption, anti-dumping, countervailing and value added taxes, all other taxes of any kind for which the Target may have any liability, whether disputed or not; and
(b) assessments, charges, duties, rates, fees, imposts, levies or other governmental charges and interest, penalties or additions associated therewith.
“ TSXV ” means the TSX Venture Exchange.
“ Unwinding Notice ” has the meaning set out in Section 2.09(1)(b).
“ VWAP ” means volume weighted average trading price.

1.02 Headings

The division of this Agreement into Articles and Sections and the insertion of a table of contents and headings are for convenience of reference only and do not affect the construction or interpretation of this Agreement. The terms “hereof”, “hereunder” and similar expressions refer to this Agreement and not to any particular Article, Section or other portion hereof. Unless something in the subject matter or context is inconsistent therewith, references herein to Articles, Sections and Schedules are to Articles and Sections of and Schedules to this Agreement.

1.03 Extended Meanings

In this Agreement words importing the singular number only include the plural and vice versa, words importing any gender include all genders and words importing persons include individuals, corporations, limited and unlimited liability companies, general and limited partnerships, associations, trusts, unincorporated organizations, joint ventures and Governmental Authorities. The term “including” means “including without limiting the generality of the foregoing” and the term “third party” means any person other than Sprott, Target and Acquiror.

1.04 Statutory References

In this Agreement, unless something in the subject matter or context is inconsistent therewith or unless otherwise herein provided, a reference to any statute is to that statute as now enacted or as the same may from time to time be amended, re-enacted or replaced and includes any regulations made thereunder.

1.05 Accounting Principles

Wherever in this Agreement reference is made to a calculation to be made or an action to be taken in accordance with generally accepted accounting principles, such reference will be deemed to be to the generally accepted accounting principles from time to time approved by the Canadian Institute of Chartered Accountants, or any successor institute, applicable as at the date on which such calculation or action is made or taken or required to be made or taken.

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1.06 Currency

Unless otherwise indicated, all references to currency herein are to lawful money of Canada. If any currency conversion is required in connection with any payment owed hereunder, the conversion will be made at the Bank of Canada daily exchange rate on the last Business Day before the date the payment is due.

1.07 Schedules

The following are the Schedules to this Agreement:

Schedule	1.01(i)	-	Contracts
Schedule	1.01(ii)	-	Buildings
Schedule	1.01(iii)	-	Dufferin Gold Properties
Schedule	1.01(iv)	-	Equipment
Schedule	1.01(v)	-	Dufferin West Properties
Schedule	1.01(vi)	-	Permitted Encumbrances
Schedule	1.01(vii)	-	Permitted Indebtedness
Schedule	1.01(viii)	-	Real Property
Schedule	1.01(ix)	-	Sprott Existing Note
Schedule	1.01(x)	-	Sprott Return of Capital Note
Schedule	2.09(2)(c)	-	Arbitration
Schedule	4.01(g)	-	Liabilities
Schedule	4.01(m)(iii)	-	Exceptions to Right, Title and Interest in the
			Dufferin Gold Properties
Schedule	4.01(o)(ii)	-	Environmental Proceedings
Schedule	4.01(q)(i)	-	Employees and Independent Contractors
Schedule	4.01(t)	-	Bank Accounts
Schedule	4.01(u)	-	Insurance Policy

ARTICLE 2 - SALE AND PURCHASE

2.01 Purchase and Sale of Target Shares

Upon and subject to the terms and conditions hereof, Sprott hereby agrees to sell, transfer, assign and convey to Acquiror, and Acquiror hereby agrees to purchase and acquire from Sprott, the Target Shares, free and clear of all Encumbrances.

2.02 Purchase Price for Target Shares

The purchase price (the “ Purchase Price ”) payable to Sprott for the Target Shares will be equal to the aggregate of US$8,200,000 subject to (i) adjustment pursuant to Sections 2.04 and 2.05; (ii) reduction in the event of early payment as described in Section 2.08 below; and (iii) unwinding of the Acquisition and termination of the Deferred Payment obligations in accordance with Section 2.09.

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2.03 Payment of Purchase Price for Target Shares

(1) Except as otherwise provided in this Article 2, the Purchase Price will be payable by Acquiror in accordance with the following:

(a) US$2,500,000 to be paid in cash or Acquiror Shares or a combination thereof, at the sole option of Acquiror and subject at all times to Section 2.03(2) below, to Sprott at any time and from time to time following the date hereof, in whole or in part, and in any event such payment (less any amounts already paid in accordance with this Section 2.03(1)(b)) shall be payable within 90 days following the date that Acquiror files a Qualifying Technical Report, any such cash payment to be made by wire transfer, certified cheque, money order or bank draft payable to Sprott and any such Acquiror Shares to be issued at the VWAP price for the Acquiror Shares for the 15 most recent trading days on which there was a trade of the Acquiror Shares ending on the last trading day preceding the date of payment, subject to the maximum permitted discount to the market price (including, for clarity, any minimum price per share) that is permitted by the TSXV (or such other Permitted Exchange as the Acquiror Shares are then listed) (the “ First Deferred Payment ”); and
(b) provided the First Deferred Payment has become due and payable, US$5,700,000 to be paid in cash or Acquiror Shares or a combination thereof, at the sole option of the Acquiror and subject at all times to Section 2.03(2) below, to Sprott at any time and from time to time, in whole or in part, and in any event such payment (less any amounts already paid in accordance with this Section 2.03(1)(c)) shall be payable on the first anniversary following the filing of a Qualifying Feasibility Study, any such cash payment to be made by wire transfer, certified cheque, money order or bank draft payable to Sprott and any such Acquiror Shares to be issued at the VWAP for the Acquiror Shares for the 15 most recent trading days on which there was a trade of the Acquiror Shares ending on the last trading day preceding the date of payment, subject to the maximum permitted discount to the market price (including, for clarity, any minimum price per share) that is permitted by the TSXV (or such other Permitted Exchange as the Acquiror Shares are then listed) “ Second Deferred Payment ” and, with the First Deferred Payment, each a “ Deferred Payment ”); and
(c) For greater certainty, the Purchase Price shall be adjusted to the extent Sprott does not become entitled to the Deferred Payments pursuant to Sections 2.08 or 2.09 and as otherwise provided in this Article 2.

(2) Where Acquiror elects to satisfy any Deferred Payment through the issuance of Acquiror Shares, Acquiror shall be limited to issuing only up to such number of Acquiror Shares to Sprott as would result in Sprott, together with its Affiliates, holding 24.9% of the issued and outstanding Acquiror Shares on a Partially-Diluted Basis immediately following such issuance, subject to the Acquiror’s receipt of all requisite approvals, including any TSXV and shareholder approvals, with the balance of such Deferred Payment to be satisfied in cash in accordance with Section 2.03.

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2.04 Acceleration of Payment in Event of Equity Financings

During the Deferred Payment Period and subject to the receipt of any requisite approval of the TSXV, upon the exercise by Sprott of (i) its Participation Right or (ii) its Catch Up Right, the parties hereto agree that the purchase price payable in respect of the issuance of additional Acquiror Shares to Sprott pursuant thereto will be satisfied by a corresponding reduction in the balance of the Deferred Payments, applied first to reduce the balance of the First Deferred Payment, and then to reduce the balance of the Second Deferred Payment, as applicable. For greater certainty, to the extent that such issuance includes the issuances of warrants or other convertible securities, Sprott will be required to pay the exercise price of such warrant or other convertible security, as applicable, in cash upon exercise.

2.05 Acceleration of Payment in Event of Asset Sales

During the Deferred Payment Period, upon the completion by Acquiror of a sale in respect of any of the Dufferin Gold Properties (excluding the abandonment or expropriation of any of the Dufferin Gold Properties) (each an “ Asset Sale ”) Sprott will be entitled to an immediate payment in an amount (the “ Asset Sale Accelerated Payment ”) equal to the proceeds of such Asset Sales up to the outstanding balance of the Deferred Payments and any payment required under Section 2.06(2), if applicable, net of external professional costs including, without limitation, broker fees, finders fees, legal fees and accounting fees associated therewith, to be made by wire transfer, certified cheque, money order or bank draft payable to Sprott and the balance of the Deferred Payments will be reduced by the amount of the Asset Sale Accelerated Payment, applied first to reduce the balance of the First Deferred Payment and then to reduce the balance of the Second Deferred Payment, as applicable.

2.06 Acceleration of Payment and Additional Proceeds in Event of Change of Control

(1) Upon the occurrence of an Acquiror Change of Control during the Deferred Payment Period:

(i) Sprott will be entitled to an immediate acceleration and payment of the remaining balance of the Deferred Payments, as adjusted in accordance with Sections 2.04 and 2.05, if applicable, provided that in the event the securityholders of Acquiror receive non-cash consideration in connection with the Acquiror Change of Control, subject to requisite securities laws and stock exchange rules and third party requirements, the Deferred Payments will be satisfied on the same non-cash basis to the extent Sprott, together with its Affiliates, would not hold greater than 19.9% of the issued and outstanding shares of the successor or continuing corporation or entity, with any balance remaining payable in cash based on the market price of such non-cash consideration as at the date of payment. All cash payments are to be made by wire transfer, certified cheque, money order or bank draft payable to Sprott; and
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(ii) in addition to the amounts to be paid to Sprott in (a) above and subject to Section 2.06(2) below, Sprott will be entitled to an immediate payment (the “ Additional Proceeds ”) equal to 10% of the aggregate proceeds payable for the Acquiror Shares (which, in the event that holders of the Acquiror Shares will receive non-cash consideration for the Acquiror Shares held, such aggregate proceeds will be calculated based on the market price of any such non-cash consideration as at the date of payment) in connection with an Acquiror Change of Control to be made by wire transfer, certified cheque, money order or bank draft payable to Sprott.

(2) Until the third anniversary of the Closing Date, Acquiror shall have the sole and unfettered right, in its sole discretion to extinguish Sprott’s right to receive the Additional Proceeds for a payment of US$1,000,000 to be made by wire transfer, certified cheque, money order or bank draft payable to Sprott.

2.07 Acceleration of Payment for Certain Breach

During the Deferred Payment Period, upon any breach by Acquiror of the covenants set out in Sections 6.01, 6.02 or 6.03 hereto, Sprott will be entitled to, in addition to other remedies available at law or equity or otherwise, an immediate acceleration and payment of the remaining balance of the Deferred Payments, as adjusted in accordance with Sections 2.04 and 2.05, if applicable, to be made by wire transfer, certified cheque, money order or bank draft payable to Sprott.

2.08 Early Payment Option

(1) Until the third anniversary of the Closing Date, Acquiror is entitled to settle its obligation to make the Deferred Payments and extinguish the Security Documents by payment of US$4,000,000, less any prior payments made pursuant to Sections 2.04 or 2.05, such payment to be payable in cash or Acquiror Shares or a combination thereof, at the sole option of Acquiror and subject at all times to Section 2.08(2) below, any such cash payment to be made by wire transfer, certified cheque, money order or bank draft payable to Sprott and any such Acquiror Shares to be issued at the VWAP for the Acquiror Shares for the 15 most recent trading days on which there was a trade of the Acquiror Shares ending on the last trading day preceding the date of payment, subject to the maximum permitted discount to the market price (including, for clarity, any minimum price per share) that is permitted by the TSXV (or such other Permitted Exchange as the Acquiror Shares are then listed). Acquiror will provide written notice to Sprott five (5) Business Days prior to exercising its rights under this Section 2.08.

(2) Where Acquiror elects to satisfy the early payment option set out in Section 2.08(1) above through the issuance of Acquiror Shares, Acquiror shall be limited to issuing only up to such number of Acquiror Shares to Sprott as would result in Sprott, together with its Affiliates, holding 24.9% of the issued and outstanding Acquiror Shares on a Partially-Diluted Basis immediately following such issuance, subject to the Acquiror’s receipt of all requisite approvals, including any TSXV and shareholder approvals, with the balance of such early payment option to be satisfied in cash in accordance with Section 2.08(1).

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2.09 Unwinding of Acquisition

(1) Provided that (i) an Acquiror Change of Control has not occurred and is not contemplated at such time; and (ii) there is no ongoing breach of the covenants set out in any of Sections 6.01, 6.02 or 6.03, Acquiror is entitled:

(a) at any time after the fifth anniversary of the Closing Date, or
(b) at any time after the Closing Date if Acquiror has determined in good faith that it will not proceed with preparing any Qualifying Technical Report and/or Qualifying Feasibility Report,

to provide notice to Sprott that it desires to unwind the Acquisition (the “ Unwinding Notice ”).

(2) Upon receipt of an Unwinding Notice,
(a) subject to the provisions of Section 2.09(3), Sprott will be deemed to have accepted an Unwinding Notice within 15 days after receipt of same (an “ Acceptance ”), and the provisions of Section 2.09(3) shall be applicable;
(b) Sprott may elect to reject an Unwinding Notice within 15 days after receipt of same if at the date of the Unwinding Notice, Target and/or the Dufferin Gold Properties (and to the extent then owned by Target, the Dufferin West Properties) are subject to: (i) material environmental liabilities which are not attributable to an event of Force Majeure and did not exist as at the date of the environmental audit to be managed by Acquiror at the expense of Target and addressed and delivered to Target, Sprott and Acquiror by no later than June 30, 2020 (the “ Environmental Audit ”); or (ii) any other material liabilities which are not attributable to an event of Force Majeure and did not exist as of the date hereof. If Sprott makes a determination that there shall not be an Acceptance, Sprott shall deliver a written rejection notice stating the reasons therefor within 15 days after receipt of an Unwinding Notice (a “ Rejection ”). If Acquiror does not receive a Rejection within the said 15 days, the provisions of Section 2.09(2)(a) shall be applicable;
(c) if Acquiror receives a Rejection within the time period specified in Section 2.09(2)(b), then within a period of 72 hours after receipt of such Rejection, Acquiror shall have the right to initiate the dispute resolution proceedings set forth in Schedule 2.09(2)(c) (the “ Dispute Resolution Notice ”) or to accept by written notice the Rejection and deem the provisions of Section 2.09(2)(d) to be applicable (the “ Rejection Acceptance ”);
(d) if Acquiror accepts a Rejection, then the provisions of Section 2.09(3) shall not be applicable and instead, upon receipt of the Rejection Notice, each of Sprott and Acquiror shall take all actions necessary, including without limitation, executing all documents, obtaining any consents, waivers or other concessions required so as to ensure that, with no additional consideration payable: (i) all remaining
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Deferred Payments are cancelled or waived; (ii) all Additional Payments are cancelled or waived; and (iii) all Security Documents are terminated and any underlying security interests are discharged, with such extinguishment and discharge to be certified to Acquiror in writing by a senior officer of Sprott alongside any additional documentation evidencing such cancellation or waiver of the Deferred Payments and any payments of the Additional Proceeds and the Security Documents as Acquiror may reasonably request; and

(e) Sprott shall indemnify and save harmless Acquiror from and against any Losses Acquiror may suffer as a result of Sprott’s failure to comply with the provisions of this Section 2.09(2). This indemnity shall be unlimited as to time and shall not be subject to a monetary or other ceiling or cap.

(3) Following an Acceptance, each of Sprott and Acquiror agree to take all actions necessary, with no additional consideration payable to Sprott, to cause the Target Shares (and/or such other securities representing 100% of the ownership of Target) to be transferred back to Sprott or to an Affiliate designated by Sprott on a quitclaim basis and without covenants, representations and warranties (other than in respect of ownership of the Target Shares), overhang obligations or indemnifications. In addition to the foregoing, Sprott shall take all actions necessary, including, without limitation, executing all documents, obtaining any consents, waivers or other concessions required so as to ensure that all then outstanding obligations of Acquiror to make any Deferred Payments and any payment of the Additional Proceeds are extinguished and that all Security Documents are terminated and any underlying security interests are discharged, with such extinguishment and discharge to be certified to Acquiror in writing by a senior officer of Sprott alongside any additional documentation evidencing such extinguishment or discharge of the Deferred Payments and any payment of the Additional Proceeds and Security Documents as Acquiror may reasonably request.

(4) Upon completion of the unwinding of the Acquisition in accordance with this Section 2.09, (i) all directors of the Target nominated by Acquiror shall immediately resign; and (ii) other than with respect to its obligations during the Equity Participation Period under Articles 7, 8 and 10 hereunder and the general interpretation sections of this Agreement, Acquiror shall have no further obligations under this Agreement whatsoever.

2.10 Nycon Agreement Payment and Expense Payment

(1) In connection with the payment of the purchase price under the Nycon Agreement by Target, prior to Closing, Sprott will deposit US$500,000 in the bank account of Target (the “ Nycon Purchase Amount ”).

(2) Prior to Closing, Sprott will deposit US$250,000 in the bank account of Target in connection with the payment of certain costs of Acquiror and Target which will include: (i) costs associated with the negotiation and completion of the Nycon Agreement; (ii) costs associated with the completion of the Environmental Audit; and (iii) certain legal and audit expenses related to the Acquisition (the “ Expense Amount ”). Sprott will also complete payments to satisfy the outstanding balance of reclamation security in the approximate amount of C$225,000 owed to

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the Nova Scotia Department of Energy and Mines in respect of the Dufferin Gold Properties when such amounts become due.

(3) The Nycon Purchase Amount and the Expense Amount will be added to the stated capital account for the common shares of Target. Following payment of the Nycon Purchase Amount and the Expense Amount as contemplated by this Section 2.10, Sprott will have no further obligations to Acquiror or Target in connection with the Nycon Agreement or in connection with the cost of completing the Environmental Audit.

2.11 Repayment of Sprott Existing Note and Sprott Return of Capital Note

Immediately after Closing, Target shall repay the Sprott Existing Note and the Sprott Return of Capital Note by assigning the Sprott Asset and the Ascot Shares to Sprott.

ARTICLE 3 – EQUITY PARTICIPATION

3.01 Conversion of Advance Note

Concurrently upon completion of the Acquisition, at the Closing Time, the Advance Note shall be converted in accordance with its terms into Acquiror Shares (the “ Advance Note Shares ”).

3.02 Subscription for Subscription Shares

Pursuant to the terms and conditions of this Agreement and the Subscription Agreement, Sprott agrees to subscribe for and purchase from Acquiror, and Acquiror agrees to issue from treasury and sell to Sprott, the Subscription Shares at the Subscription Price for a total purchase price equal to the Subscription Amount. Acquiror agrees that it will only use the Subscription Amount for the exploration and development of the Dufferin Gold Properties and for general corporate and working capital purposes.

ARTICLE 4- REPRESENTATIONS AND WARRANTIES

4.01 Sprott’s Representations and Warranties in respect of the Acquisition

Sprott hereby represents and warrants to Acquiror and acknowledges that Acquiror is relying on such representations and warranties in connection with the transactions related to the Acquisition and otherwise contemplated herein, that:

(a) Corporate Matters Sprott and the Target
(i) Sprott is a limited partnership formed and existing under the laws of the Province of Ontario.
(ii) The Target is a corporation duly incorporated, organized, validly existing and in good standing under the laws of its jurisdiction of incorporation.
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(iii) Sprott GP has all necessary corporate power and capacity to execute and deliver, and to observe and perform its covenants and obligations under, this Agreement and the Closing Documents contemplated by this Agreement to which Sprott or Sprott GP, as the case may be, are or will be parties. Each of Sprott GP and Sprott have taken all action necessary to authorize the execution and delivery, and the observance and performance of their covenants and obligations under, this Agreement and the Closing Documents to which Sprott or Sprott GP, as the case may be, are or will be parties.
(iv) This Agreement has been, and each Closing Document to which Sprott is a party will, when executed and delivered be, duly executed and delivered by Sprott, and this Agreement constitutes, and each Closing Document to which Sprott is a party will, when executed and delivered, constitute a valid and binding obligation of Sprott enforceable against Sprott in accordance with their terms.
(v) No proceedings have been taken or authorized by Sprott or the Target, or, to Sprott’s Knowledge, by any other Person, with respect to the bankruptcy, insolvency, liquidation, dissolution or winding up of Sprott or the Target or with respect to any amalgamation, merger, consolidation, arrangement or reorganization relating to the Target.
(vi) The Target has all necessary corporate power and authority to own the assets currently owned by it, including its right, title, and interest in and to the Dufferin Gold Properties.
(vii) A true copy of the Target Articles and all by-laws of Target has been made available to Acquiror before the Closing Date. The Target Articles and such by-laws of the Target constitute all of the articles and by-laws of the Target, are complete and correct and are in full force and effect and no proceedings or actions have been initiated or are pending to amend the Target Articles and by-laws of the Target.
(viii) The original or true copies of all minute books and share transfer records of the Target have been made available to Acquiror for review prior to the Closing Date. Such corporate records have been maintained in accordance with Applicable Law and contain complete and accurate: (A) minutes of all meetings of the directors and the shareholders of the Target; and (B) originals or true copies of all resolutions of the directors, any committee thereof and the shareholders of the Target passed by signature in writing; and reflect all actions taken and resolutions passed by the directors and shareholders of the Target.

All resolutions contained in such records have been duly passed and all such meetings have been duly called and held, the share certificate books, register of shareholders, register of transfers and register of directors of the

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Target completely and accurately reflect all changes in the shareholders and directors of the Target since such date, and all applicable security transfer or documentary stamp taxes payable in respect of shares of the Target have been duly paid. The Target has completed all corporate registrations, recordings and filings as are required to be completed by it in accordance with Applicable Law, including, except as otherwise disclosed in writing to Acquiror, with any mining or real property registry.

(b) Authorized and Issued Capital of the Target

The authorized capital of the Target consists of an unlimited number of common shares of which 100 common shares have been validly issued and are outstanding as fully paid and nonassessable shares.

(c) Title to Shares

Sprott is the sole legal, beneficial and registered owner of the Target Shares. Sprott now has, and on Closing, Acquiror shall acquire, good and marketable title to the Target Shares, free and clear of all Encumbrances other than the restrictions on transfer set forth in the Target Articles and such liens, charges, encumbrances or rights as contemplated by the Security Documents. The Target Shares constitute all of the issued and outstanding securities of the Target. There are no restrictions on the transfer of the Target Shares except those set forth in the Target Articles. There are no agreements or understandings with respect to the voting, sale or transfer of any of the Target Shares or which prohibit, limit or would be breached by, the completion of the transactions contemplated by this Agreement. Upon Closing, Acquiror shall become the legal and beneficial owner of all of the Target Shares, with good and marketable title thereto, free and clear of all Encumbrances.

(d) No Options

No Person other than Acquiror or Sprott as provided in Section 2.09 of this Agreement has any oral or written agreement, option, right, privilege or any other right capable of becoming any of the foregoing (whether legal, equitable, contractual or otherwise) or for the purchase of the Target Shares and none of the Target Shares is subject to any of the foregoing. There are no outstanding agreements or other obligations of the Target to issue any securities of the Target to any Person or that would prohibit, or would be breached by, the completion of the transactions contemplated by this Agreement. None of the Target Shares is subject to any option, warrant, right of conversion, exchange or purchase, or any similar right. None of the Target Shares have been issued in violation of any pre-emptive rights of any Person, including any past or present shareholder of the Target or Sprott.

(e) Absence of Conflicting Agreements

To the Knowledge of Sprott, none of the execution and delivery of, or the observance and performance by Sprott of, any covenant, condition or obligation under this Agreement or any Closing Document to which Sprott is a party:

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(i) contravenes or results in, or will contravene or result in, a violation of or a default under (with or without the giving of notice or lapse of time, or both) or in the acceleration of any obligation under:
(A) any Applicable Law;
(B) any Licence of Sprott or the Target;
(C) the articles, by-laws, directors or shareholders resolutions of Sprott or the Target;
(D) the provisions of any contract, agreement or arrangement to which Sprott or the Target are a party, or by which Sprott, the Target or the Target Shares are bound or affected;
(ii) relieves any other party to any Contract or Lease to which the Target is a party of that party’s obligations thereunder or enable it to terminate its obligations thereunder; or
(iii) save and except as provided in this Agreement, results in the creation or imposition of any Encumbrance on the assets of the Target or the Target Shares.

(f) Consents and Approvals

To the Knowledge of Sprott, no consent, approval, Licence, Order, authorization, registration or declaration of, or filing with, any Governmental Authority or other Person is required by Sprott or the Target, in connection with:

(i) the Closing;
(ii) the execution and delivery by Sprott GP of this Agreement or the Closing Documents to which Sprott is a party; or
(iii) the observance and performance by Sprott of its obligations under this Agreement or the Closing Documents to which Sprott is bound.

(g) Liabilities

The Target does not have any outstanding Liabilities, contingent or otherwise, other than Permitted Indebtedness or the liabilities disclosed to Acquiror in Schedule 4.01(g) for the last completed fiscal year.

(h) Bank Creditors/Loans

Other than as disclosed to Acquiror in writing, there are no unsecured or secured creditors of the Target and there are no outstanding loans, credit facilities, promissory notes or financial arrangements entered into by the Target or lines of credit from banks or other financial

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institutions to the Target. Other than as disclosed to Acquiror in writing, the Target has not provided any form of financial assistance including any guarantees, to any person.

(i) Absence of Changes

Other than in connection with the Nycon Purchase Amount, Expense Amount and Sprott Return of Capital Note, there have been no material changes to the trial balance provided to the Acquiror dated January 31, 2020 since the date thereof through to the Closing Date.

(j) Absence of Extraordinary Transactions

Since June 28, 2019, save and except as specifically contemplated in this Agreement or as otherwise disclosed to Acquiror in writing, the Target has not, except as would not have a material adverse effect on the Target:

(i) transferred, assigned, sold or otherwise disposed of any of its assets, or cancelled any debts or claims;
(ii) incurred or assumed any obligation or Liability;
(iii) settled any material Liability, claim, dispute, proceedings, suit or appeal pending against it or against any of the Assets;
(iv) waived or omitted to take any action in respect of any rights of substantial value or entered into any commitment or transaction where such loss, rights, commitment or transaction is or would be material in relation to the Assets;
(v) created any Encumbrance on any of the Assets or the Target Shares or suffered or permitted any such Encumbrance that has arisen on the Assets or the Target Shares;
(vi) modified, amended or terminated any Contract or arrangement to which it is or was a party, or waived or released any of its contractual rights which it has or had, other than in the ordinary course of its business;
(vii) incurred any debt, Liability or obligation for borrowed money of any nature whatsoever, or incurred any other debt, Liability or obligation; or
(viii) authorized or agreed or otherwise become committed to do any of the foregoing.
(k) Tax Matters/Statutory Plans
(i) The Target has not yet been required to file any Tax Return and has no Statutory Plans.
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(ii) There are no Encumbrances for Taxes upon any property or assets of the Target, except for Encumbrances for Taxes not yet due and payable and Encumbrances for Taxes that are being contested in good faith by appropriate Claims.
(iii) The Target has withheld from each payment made by it to any of its present or former Employees, officers, directors and to all other applicable Persons the amount of all Taxes and all the deductions, whether statutory or otherwise, required to be withheld therefrom pursuant to any statute with which it is required to comply and has paid the same, together with all contributions of the Target pursuant to any statute with which it is required to comply, to the proper taxing or other authority within the time frames prescribed under any Applicable Law or, if payment thereof is not yet due, has made adequate provision therefore in its accounts, books and record and financial statements.
(iv) (A) there are no reassessments of Taxes that have been issued and are outstanding; (B) no Governmental Authority has challenged, disputed or questioned the Target in respect of Taxes or of any Tax Returns which challenge, dispute or question has not been resolved; (C) the Target is not negotiating any draft assessment or reassessment with any Governmental Authority; (D) the Target has not received any written indication from any Governmental Authority that an assessment or reassessment is proposed in respect of any Taxes, regardless of its merits; and (E) the Target has not executed or filed with any Governmental Authority any agreement extending the period for assessment, reassessment or collection of any Taxes.

(l) Compliance with Applicable Law

To the Knowledge of Sprott, the Target is and at all times has been in compliance with all Licences and all other Applicable Laws promulgated or issued by any Governmental Authority in respect of or applicable to the Target, the Assets, or the ownership or operation of the Assets by the Target, and the Target has completed all such registrations, recordings and filings in respect of itself, the Assets or the operation of the Assets as required under Applicable Laws

(m) Litigation

There are no Claims (including, for greater clarity, by any Governmental Authority) pending or, to the Knowledge of Sprott, threatened against or adversely affecting Target or any of its assets or that would challenge the validity of this Agreement or any Closing Document, or any other transactions contemplated hereby or thereby or action taken or to be taken by Sprott or the Target in connection herewith or therewith.

(n) Title to Properties and Equipment

(i) To the Knowledge of Sprott, Schedule 1.01(viii) sets forth a true, correct and complete list of all of the real and immovable property: (A) owned by
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the Target; and (B) leased by the Target. To the Knowledge of Sprott, the Target has an undivided 100% legal and beneficial good, valid, marketable and exclusive right, title and interest in and to, and actual and exclusive possession of, each parcel of owned Real Property, free and clear of all Encumbrances.

(ii) Schedule 1.01(iii) sets forth a true, correct and complete list of all of the Dufferin Gold Properties and the Target’s right, title or interest therein or thereto. The Target is the 100% legal and beneficial owner of its right, title or interest in and to the Dufferin Gold Properties, free and clear of all Encumbrances, and, to the Knowledge of Sprott: (A) the right, title or interest of the Target in and to the Dufferin Gold Properties is good, valid, marketable and exclusive, and (B) the Target has exclusive possession of all of the Dufferin Gold Properties. To the Knowledge of Sprott, the Target is in compliance with the terms of each lease in respect of those Dufferin Gold Properties that are leasehold interests, free and clear of all Encumbrances, and each such lease is in good standing, in full force and effect and is valid and enforceable in accordance with its terms. To the Knowledge of Sprott, the Dufferin Gold Properties have been duly and validly issued or granted to the Target and, to the Knowledge of Sprott, the conduct of exploration operations of the Target on, in, under or over the Dufferin Gold Properties has been at all times in accordance with the terms of the Dufferin Gold Properties and in accordance with all Applicable Laws.
(iii) To the Knowledge of Sprott and except as disclosed in Schedule 4.01(n)(iii), the Dufferin Gold Properties are in good standing with respect to all filings, fees, rents, taxes, assessments, work commitments and other similar matters required with respect thereto, and there are no adverse claims or challenges outstanding or threatened against the Target’s right, title or interest in and to the Dufferin Gold Properties.
(iv) To the Knowledge of Sprott, (A) Schedule 1.01(iv) contains a true, correct and complete list of each item of the Equipment with a value of at least $5,000 owned and located at or used by the Target and (B) the Target has an undivided 100% legal and beneficial good and marketable ownership title to such Equipment, free and clear of all Encumbrances.
(v) To the Knowledge of Sprott, the Target has not received any notice (A) of any work orders outstanding against the Properties; (B) of any deficiency notices, requests or written advice of any breach of any Applicable Law in respect of the foregoing which could, if not corrected, become a work order or could require performance of work or expenditure of money to correct; (C) of any outstanding application for a re zoning of any of the Properties or any proposed or pending change to any zoning affecting the Properties; (D) of any breach or default in any respect any Permitted Encumbrances which are easements or registered agreements or
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restrictions, or (E) of any event or condition which, in either case, with the giving of notice or the lapse of time, would constitute such a breach or default.

(o) Surface Rights

(i) The Target has not entered into any agreement to sell, transfer, encumber, or otherwise dispose of or impair its right, title and interest in and to the Properties or the air, surface, entry and easement rights relating to the Properties.
(ii) To the Knowledge of Sprott and except as disclosed in Schedule 4.01(n)(iii), no part of the Properties is subject to any use restriction that would restrict or prevent the use and operation of the Properties for the purpose of carrying on mining operations on the Properties.
(iii) To the Knowledge of Sprott, all Permitted Encumbrances which are easements or registered agreements or restrictions are in good standing, and all obligations thereunder of the Target have been performed. To the Knowledge of Sprott, the Target is not in breach or default under any such Permitted Encumbrance nor has there occurred any event nor does there exist any condition which, in either case, with the giving of notice or the lapse of time, would constitute such a breach or default.
(iv) To the Knowledge of Sprott and except as disclosed in Schedule 4.01(n)(iii), there are no matters affecting the right, title and interest of the Target in and to the Properties which would adversely affect the ability of the Target to carry on mining operations on the Properties.

(p) Environmental Matters

(i) To the Knowledge of Sprott, the Assets are and have been in compliance with all Environmental Laws and all Environmental Licences.
(ii) To the Knowledge of Sprott and except as disclosed in Schedule 4.01(p)(ii), there are no proceedings in progress or threatened which are expected to result in the cancellation, revocation, suspension, or modification of any Environmental Licence.
(iii) The Target has not been charged with or convicted of an offence, been fined or otherwise sentenced, or settled any prosecution short of conviction, for non-compliance with or breach of any Environmental Law.
(iv) The Target has not experienced any search and seizure and, to the Knowledge of Sprott, the Target is not under investigation related to, any breach or alleged breach of or non-compliance with any Environmental Law.
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(v) To the Knowledge of Sprott, the Target has not caused or permitted any Hazardous Substance to remain, be released or to be made subject to disposal or discharge, either on, in, over, from or under the Environment, including the Properties or any other properties, or to be transported, other than in accordance with all Environmental Licence and all Applicable Laws.
(vi) The Target has not planned any material unbudgeted expenditures in order to achieve or ensure compliance with Environmental Laws or Environmental Licences, other than the Environmental Audit.

(q) No Expropriation

The Target has not received any notice of expropriation of all or any of the Assets and, to the Knowledge of Sprott, there is no expropriation proceeding pending or threatened against or affecting the Assets or any discussions or negotiations that could lead to any such expropriation.

(r) No Operations

Since June 28, 2019, the Target has not carried on any mining operations on the Properties.

(s) Employment Matters
(i) Except for as set out in Schedule 4.01(s)(i), the Target currently does not have, and has not had since incorporation, any employees including individuals employed pursuant to a contract for services or other written employment contracts.
(ii) To the Knowledge of Sprott, other than as disclosed to Acquiror in writing, the Target has no Liabilities in respect of salaries, wages, Benefit Plans, Statutory Plans, social security or other contractual or mandatory benefits, bonuses, severance or, in general, any employment obligation pursuant to Applicable Laws or contractual obligations, including in respect of any former or retired employees.
(iii) The Target is not a party, either directly or by operation of law, to any Collective Agreement. To the Knowledge of Sprott, the Target has no labour problems that has or could reasonably be expected to adversely affect the Assets or the future operation thereof, or lead to an interruption of operations and, to the Knowledge of Sprott, none has been threatened.

(t) Subsidiaries and Investments

The Target does not own any subsidiaries or any securities in the capital of any other corporations other than the Ascot Shares nor has it agreed to acquire any subsidiaries or any securities in the capital of any other corporations or any ownership interest in any Person or to

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acquire or lease any other business operations, other than as contemplated in the Nycon Agreement.

(u) Bank Accounts and Powers of Attorney

Annexed hereto as Schedule 4.01(u) is an accurate and complete list showing:

(i) the name and address of each bank in which the Target has an account or safe deposit box, the number of any such account or any such box and the names of all Persons authorized to draw thereon or to have access thereto; and
(ii) the names of all Persons, if any, holding powers of attorney from the Target and a summary statement of the terms thereof.

(v) Insurance

The Target has the Assets insured by a reputable insurer against loss or damage pursuant to the insurance policy set out in Schedule 4.01(u) with a description of the the principal terms and conditions thereof (including coverage amounts and deductions) and such insurance coverage will be continued in full force and effect to and including the Closing Time

(w) Contracts and Commitments

To the Knowledge of Sprott, the Contracts set forth in Schedule 1.01(i) are the only material Contracts to which the Target or its Assets are bound and true and complete copies of all material Contracts have been delivered to Acquiror by Sprott and the Target. To the Knowledge of Sprott, the Target has performed all of the obligations required to be performed to date by the Target under the material Contracts, except for such obligations that nonperformance of which would not have a material adverse effect. To the Knowledge of Sprott, no party to any Contract is to make any gift of any of its property other than in default in any material respect thereunder and the Target has not waived, released or abrogated any of its rights under the Contracts. To the Knowledge of Sprott, each Contract constitutes as of the date of this Agreement a legal, valid and binding obligation of each party thereto, enforceable in accordance with its terms.

(x) Accuracy of Books and Records

To the Knowledge of Sprott, the Books and Records of the Target fairly and correctly set out and disclose in all material respects the financial position of the Target as at the Closing Date and all material financial transactions of the Target have been accurately recorded in such books and records.

(y) Non-Arm’s Length Transactions

Other than as disclosed to Acquiror in writing (including in connection with the Sprott Asset, the Ascot Shares, the Sprott Existing Note and the Sprott Return of Capital Note), the

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Target has not entered into any non-arm’s length transactions with Sprott or any Affiliate of or other Person related to Sprott.

(z) No Joint Venture Interests

To the Knowledge of Sprott, the Target is not a partner, co-tenant, joint venturer or otherwise a participant in any partnership, joint venture, co-tenancy, joint venture corporation or other similar jointly owned business, and save and except as provided in Section 2.09 of this Agreement, to the Knowledge of Sprott, none of the Assets, including the Properties, and none of the Target Shares is subject to any right of first refusal or other pre-emptive right of any Person.

(aa) No Default

To the Knowledge of Sprott, the Target is not in default or breach of any material Contract to which it is a party or by which it may be bound, and, to the Knowledge of Sprott, there exists no state of facts which after notice or lapse of time, or both, would constitute such a default or breach, and, to the Knowledge of Sprott, all material Contracts are now in good standing and the Target is entitled to all benefits thereunder.

(bb) Accuracy and Completeness

To the Knowledge of Sprott, there is no fact that materially and adversely affects the Assets, prospects or financial condition of the Target which has not been set forth in this Agreement or in the Schedules or the Closing Documents furnished in connection with the transactions contemplated by this Agreement.

4.02 Acquiror’s Representations and Warranties in respect of the Acquisition

Acquiror hereby represents and warrants to Sprott and acknowledges that Sprott is relying on such representations and warranties in connection with the transactions related to the Acquisition and otherwise contemplated herein, that:

(a) Acquiror is a corporation duly incorporated, organized and subsisting under the laws of the Province of British Columbia.
(b) Acquiror has good and sufficient power, authority and right to enter into and deliver this Agreement and to complete the transactions to be completed by Acquiror contemplated hereunder in respect of the Acquisition.
(c) This Agreement constitutes a valid and legally binding obligation of Acquiror, enforceable against Acquiror in accordance with its terms subject to applicable bankruptcy, insolvency, reorganization and other laws of general application limiting the enforcement of creditors’ rights generally and to the fact that specific performance is an equitable remedy available only in the discretion of the court.
(d) Neither the entering into nor the delivery of this Agreement nor the completion of the transactions contemplated hereby by Acquiror in respect of the Acquisition will result in a violation of:
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(i) any of the provisions of the constating documents or by-laws of Acquiror;
(ii) to the knowledge of Acquiror, any agreement or other instrument to which Acquiror is a party or by which Acquiror is bound; or
(iii) to the knowledge of Acquiror, any Applicable Law in respect of which Acquiror must comply.
(e) No authorization, consent or approval of, or filing with, any Governmental Authority is necessary on the part of Acquiror in connection with the execution and delivery of this Agreement in respect of the Acquisition or the completion by it of the relevant transactions contemplated hereby, other than the TSXV’s approval of the Acquisition transaction under TSXV Policy 5.3 ( Acquisitions And Dispositions Of Non-Cash Assets ), and the filings required to be made prior to or following Closing Date under the rules of the TSXV.

ARTICLE 5 - CONDITIONS OF CLOSING AND CLOSING ARRANGEMENTS

5.01 Closing

The sale and purchase of Target Shares and the issuance and sale of the Subscription Shares and the issuance of the Advance Note Shares will be completed at the Closing Time at the offices of McCarthy Tétrault LLP, Suite 5300, Toronto Dominion Bank Tower, Toronto, Ontario, Canada M5K 1E6.

5.02 Conditions for the Benefit of Acquiror at Closing

(1) The Closing is subject to the following conditions, which are for the exclusive benefit of Acquiror and which are to be performed or complied with at or prior to the Closing Time:

(a) all necessary steps and proceedings will have been taken by Sprott to permit the Target Shares purchased by Acquiror hereunder to be duly registered in the name of Acquiror, free and clear of all Encumbrances;
(b) Acquiror has been furnished with such certificates or other instruments of officers of Target and Sprott as Acquiror may reasonably think necessary in order to establish that the terms, covenants and conditions contained in this Agreement to have been performed or complied with;

5.03 Deliveries by Sprott at Closing

(1) At the Closing Time, Sprott shall deliver or cause to be delivered to Acquiror (unless delivered previously) the following documents, agreements, instruments and items, in form and substance satisfactory to Acquiror and its legal counsel, acting reasonably:

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(a) share certificates representing the Target Shares duly endorsed in blank for transfer, and shall cause the Target to enter Acquiror on the books of the Target as the sole holder of the Target Shares and to issue one or more share certificates representing the Target Shares to Acquiror;
(b) unless other arrangements acceptable to Acquiror and Sprott have been made, the Subscription Amount payable in respect of the Subscription Shares will be satisfied by delivery of the Subscription Amount by Sprott by wire transfer, certified cheque, money order or bank draft payable to Acquiror;
(c) resignations, effective as of the Closing Date, signed by each director and officer of the Target;
(d) a comprehensive mutual release effective as of the Closing Date, in form and substance satisfactory to Acquiror and Sprott, acting reasonably, executed by Target and each resigning director and officer of Target whereby (i) each director and officer releases all claims against the Target up to and including the Closing Time, including claims for current unpaid remuneration and advances made to the Target but excluding claims for indemnity to which they are entitled under the Target Articles or by-laws of the Target or under any Applicable Laws and (ii) the Target releases each director and officer from any and all possible Claims arising from any act, matter or thing arising at or prior to the Closing Date, other than any act, matter or thing constituting fraud or fraudulent misrepresentation;
(e) a certificate dated as of the Closing Date and signed on behalf of Sprott in the agreed form:
(i) to the effect that the articles and by-laws attached to the certificate are correct and complete copies of the articles and by-laws of Sprott and the Target Articles and by-law of the Target, as in effect at the Closing Date;
(ii) to the effect that the resolutions of the board of directors of Sprott (and the general partner of Sprott, if applicable) attached to the certificate authorizing the transfer of the Target Shares, approving this Agreement and authorising signature or execution of the same and of any documents required to be signed or executed by Sprott under this Agreement is a correct and complete copy of the relevant resolutions; and
(iii) attaching a copy of the signatures of the persons authorised to sign this Agreement and/or any of the documents contemplated herein on behalf of Sprott and certifying the genuineness of such signatures;
(f) evidence in form satisfactory to Acquiror, acting reasonably, that all actions required to be taken by Sprott prior to Closing have been taken and all consents, approvals, Orders and authorizations required to be obtained by Sprott for the Closing have been obtained;
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(g) Sprott shall deliver or cause to be delivered to Acquiror all Books and Records owned by or in the possession or control of Sprott on the Closing Date (or as soon thereafter as practicable);
(h) evidence in form satisfactory to Acquiror, acting reasonably, of the Nycon Purchase Amount and the Expense Amount having been transferred to the bank account of Target prior to Closing; and
(i) evidence in form satisfactory to Acquiror, acting reasonably, relating to the repayment of the Sprott Existing Note and Sprott Return of Capital Note immediately after Closing.

5.04 Conditions for the Benefit of Sprott at Closing

(1) The Closing is subject to the following conditions, which are for the exclusive benefit of Sprott and which are to be performed or complied with at or prior to the Closing Time:

(a) the form and legality of all matters incidental to the sale by Sprott and the purchase by Acquiror of the Target Shares will be subject to the approval of Sprott, acting reasonably;
(b) the TSXV will have approved the Acquisition; and
(c) the TSXV will have conditionally approved the listing of the Subscription Shares and the Advance Note Shares issuable by Acquiror.

5.05 Deliveries by Acquiror at Closing

(1) At the Closing Time, Acquiror shall deliver or cause to be delivered to Sprott (unless delivered previously) the following documents, agreements, instruments and items, in form and substance satisfactory to Sprott and its legal counsel, acting reasonably:

(a) the Subscription Agreement duly executed by Acquiror;
(b) a certificate dated as of the Closing Date and signed on behalf of Acquiror in the agreed form:
(i) to the effect that the articles and by-laws attached to the certificate are correct and complete copies of the articles and by-laws of Acquiror Articles and by-law of Acquiror, as in effect at the Closing Date;
(ii) to the effect that the resolutions of the board of directors of Acquiror attached to the certificate approving this Agreement and authorising signature or execution of the same and of any documents required to be signed or executed by Acquiror under this Agreement is a correct and complete copy of the relevant resolutions; and
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(iii) attaching a copy of the signatures of the persons authorised to sign this Agreement and/or any of the documents contemplated herein on behalf of Acquiror and certifying the genuineness of such signatures;
(c) the Security Documents, in form and substance acceptable to Sprott, executed by the Target acting reasonably;
(d) a release in favour of Sprott from Kent Homes in respect of the guarantee provided by Sprott to Kent Homes dated August 1, 2019 guaranteeing certain obligations of Target;
(e) Share certificates representing the Subscription Shares and the Advance Note Shares registered in the name of Sprott (or as Sprott may otherwise direct in writing not less than two Business Days prior to the Closing Date), duly executed and issued by Acquiror and registered in the share register of Acquiror in the name of Sprott (or as Sprott may direct in writing not less than two Business Days prior to the Closing Date); and
(f) evidence in form satisfactory to Sprott, acting reasonably, that all actions required to be taken by Acquiror prior to Closing have been taken and all consents, approvals, Orders and authorizations required to be obtained by Acquiror for the Closing have been obtained.

5.06 Waiver of Condition

Acquiror, in the case of a condition set out in Section 5.02 and Sprott, in the case of a condition set out in Section 5.04, will have the exclusive right to waive the performance or compliance of such condition in whole or in part and on such terms as may be agreed upon without prejudice to any of its rights in the event of non-performance of or non-compliance with any other condition in whole or in part. Any such waiver will not constitute a waiver of any other conditions in favour of the waiving party. Such waiving party will retain the right to complete the transactions herein contemplated and sue another party in respect of any breach of the other party’s covenants, obligations or any inaccuracy or misrepresentation in a representation or warranty of another party which gave rise to the non-performance of or non-compliance with the condition so waived provided that such other party acknowledged in writing at the Closing Date that the waiving party had the right not to complete the transactions herein contemplated.

ARTICLE 6 - COVENANTS DURING DEFERRED PAYMENT PERIOD

6.01 Indebtedness

During the Deferred Payment Period, without prior written consent of Sprott, not to be unreasonably withheld, Acquiror will not, incur, assume or become liable for, and will not permit Target to incur, assume or become liable for any indebtedness or liabilities, including for greater clarity, entering into guarantees in respect of indebtedness or liabilities, except for Permitted Indebtedness.

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6.02 Security

During the Deferred Payment Period, Acquiror will, and will cause Target to, execute and deliver all such further agreements, instruments and documents in connection with the Security Documents as shall be required to effect the perfection of the Security Documents and to do all such things necessary from time to time in order to obtain, perfect and maintain the security interest reflected in the Security Documents. Neither Acquiror nor Target will contest the effectiveness, validity, binding nature or enforceability of the security granted pursuant to the Security Documents.

6.03 Encumbrances

During the Deferred Payment Period, without prior consent of Sprott, not to be unreasonably withheld, Acquiror will not, and will cause Target to not, create, assume, grant or permit to exist any Encumbrance in respect of all or any part of the Dufferin Gold Properties or the ownership of the Target.

6.04 Strategic Alternatives

On the earlier of (i) Mark NJ Ashcroft no longer acting as a director of Acquiror and (ii) the Deferred Payment Period extending beyond the third anniversary of the Closing Date, Acquiror will undertake to evaluate strategic alternatives on an annual basis thereafter.

ARTICLE 7 - COVENANTS DURING EQUITY PARTICIPATION PERIOD

7.01 Participation Right in Equity Financing

During the Equity Participation Period, if Acquiror proposes to complete an Equity Financing, Sprott shall be entitled to the right (the “ Participation Right ”), at least ten (10) Business Days prior to the first date of public announcement of the Equity Financing, to have Acquiror deliver a written offer (the “ Equity Financing Offer ”) to Sprott to subscribe for, at the same subscription price and on terms no less favourable to Sprott than those provided under any such Equity Financing, up to that number of offered securities that will enable Sprott (including its Affiliates), upon completion of the Equity Financing, to maintain the same basic ownership percentage (assuming the conversion or exchange of any offered securities that are convertible or exchangeable into equity securities of Acquiror) immediately prior to completion of the Equity Financing; provided that in the case of an Equity Financing that proceeds by way of a “bought deal”, Acquiror will deliver the Equity Financing Offer to Sprott as promptly as is commercially practicable in the circumstances and Sprott acknowledges that it may have to participate on a concurrent private placement basis. Sprott may accept the written offer to participate by giving written notice of such acceptance setting out the number of additional securities of Acquiror to be subscribed for by the close of business on the fifth Business Day following the day upon which the Equity Financing Offer is received by Sprott (or, in the case of a “bought deal” offering, on the third Business Day following the day upon which the Equity Financing Offer is received by Sprott). If Sprott does not respond to the offer notice from Acquiror within such timeframe, it will be deemed to have rejected the offer to subscribe.

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7.02 Catch Up Right

During the Equity Participation Period, Acquiror agrees that when one or more dilutive event(s) has occurred due to Excluded Issuance(s) which cumulatively dilute the basic ownership rights of Sprott and its Affiliates by at least 3% (the “ Catch Up Threshold ”) of the Acquiror Shares on a Partially-Diluted Basis in accordance with Section 7.02(b) below, Sprott will have the right (the “ Catch Up Right ”) to regain its basic ownership percentage (assuming the conversion or exchange of any offered securities that are convertible or exchangeable into equity securities of Acquiror) prior to such dilutive event(s). Acquiror shall advise and provide Sprott with such Catch-Up Right in accordance with the following terms:

(a) Immediately following Closing, Sprott shall provide Acquiror with a certificate signed on behalf of Sprott, which sets out the then current number of Acquiror Shares and securities convertible into Acquiror Shares held by Sprott and its Affiliates and shall be responsible for the ongoing monitoring of its securities ownership of Acquiror following Closing. Thereafter, in the event that the number of Acquiror Shares and/or securities convertible into Acquiror Shares held by Sprott and its Affiliates changes, Sprott shall provide Acquiror with an updated certificate within 10 days after the end of each month in which there is a change.
(b) Acquiror shall, within ten days following the occurrence of the dilutive event(s) which satisfy or exceed the Catch Up Threshold based on the most recent certificate furnished to Acquiror by Sprott in accordance with Section 7.02(a), notify Sprott in writing (the “ Catch Up Notice ”) of the Catch Up Right, including the number of securities of Acquiror that have been issued pursuant to Excluded Issuances that trigger the Catch Up Threshold and the total number of Acquiror Shares that Sprott may acquire pursuant to exercise of the Catch Up Right.
(c) Within 30 days of receiving a Catch Up Notice, or at such later time during the subsequent fiscal quarter at the request of Acquiror, acting reasonably (a “ Catch Up Period ”), Sprott may exercise its Catch Up Right by delivering to Acquiror a subscription form (the “ Catch Up Subscription Form ”) duly completed and executed by Sprott (in the form to be appended to the Catch Up Notice). Subject to Section 7.02(d), such exercise shall constitute a binding agreement of purchase and sale in respect of the number of Acquiror Shares stipulated in the Catch Up Subscription Form as being subscribed for pursuant to the exercise of the Catch Up Right (the “ Catch Up Shares ”). Within three Business Days following notice to Acquiror of approval from the TSXV, Sprott shall provide (A) if during the Deferred Payment Period, confirmation to Acquiror that payment for the Catch Up Shares shall be made by adjustment to the Deferred Payments pursuant to Section 2.04; and (B) if following the Deferred Payment Period, by bank draft, certified cheque payable to Acquiror or wire transfer to Acquiror of lawful money of Canada, in each case in an amount equal to the product of the Catch Up Exercise Price and the number of Catch Up Shares.
(d) Any subscription for Catch Up Shares will be reduced, if necessary (and payment returned to the extent applicable), to result in Sprott, together with its Affiliates,
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holding no more than 24.9% of the issued and outstanding Acquiror Shares on a Partially-Diluted Basis immediately following such issuance.

(e) Subject to Section 7.02(c), upon payment as provided in Section 7.02(b), Acquiror will cause to be issued to Sprott the Catch Up Shares and Sprott will become a shareholder in respect of such Catch Up Shares with effect from the date of such payment and will be entitled to delivery of a certificate evidencing such Catch Up Shares and Acquiror will cause such certificate to be delivered to Sprott within five Business Days of such payment (subject to the share transfer books of Acquiror being properly closed, prior to any meeting of shareholders or for the payment of dividends or any other purpose, in which case delivery may be postponed for a period not exceeding three Business Days after the date of the reopening of said share transfer books).
(f) Sprott may subscribe for and purchase a number of Acquiror Shares less than the number Sprott is entitled to purchase pursuant to the Catch Up Right.
(g) If Sprott does not exercise its Catch Up Right pursuant to a Catch Up Notice during the Catch Up Period or elects to only partially exercise its Catch Up Right, the Catch Up Right in respect of such dilutive event(s) shall expire and Sprott’s basic ownership percentage shall be reduced accordingly in respect of any future Catch Up Rights. For greater certainty, Sprott will be entitled to further Catch Up Rights following the occurrence of any subsequent dilutive event(s) that meet the Catch Up Threshold in respect of Sprott’s revised basic ownership percentage.
7.03 Board Representation

During the Equity Participation Period, Acquiror agrees that:

(a) Sprott will be entitled to nominate two individuals (the “ Sprott Nominees ”), one of whom must be independent, as such term is defined by Canadian securities laws to be nominated, approved and to serve as directors of Acquiror at each meeting of shareholders of Acquiror at which directors of Acquiror are to be elected, provided that any such Sprott Nominee consents in writing to serve as a director;
(b) Acquiror agrees that without the prior written consent of Sprott, the size of the Board shall not be increased above five;
(c) Any Sprott Nominee shall at the time of election or appointment to the Board for the first time meet the qualification requirements to serve as a director under the rules of the TSXV and shall be eligible under the Business Corporations Act (British Columbia) to serve as a director;
(d) Acquiror will take all steps as may be necessary to appoint the initial Sprott Nominees as directors of Acquiror promptly upon receiving notice of each Sprott Nominee’s designation and provided Acquiror has received from the nominee all
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information and materials required pursuant to Applicable Laws or stock exchange rules;

(e) Acquiror shall cause each Sprott Nominee to be included in the slate of nominees proposed by the Board to Acquiror’s shareholders for approval as directors at each meeting of the shareholders where directors are to be elected by shareholders.
(f) Acquiror shall use all reasonable efforts to cause the election of each Sprott Nominee, including soliciting proxies in favour of the election of each Sprott Nominee;
(g) Acquiror will reimburse each Sprott Nominee for his or her reasonable expenses incurred in connection with their duties as a director of Acquiror;
(h) Acquiror will maintain its normal course director and officer insurance, including for the benefit of each Sprott Nominee;
(i) if a technical committee of the board of directors of Acquiror is constituted, Sprott will be entitled to nominate one member to such committee; and
(j) if a compensation committee of the board of directors of Acquiror is constituted, Sprott will be entitled to nominate one member to such committee.

7.04 Securities Law and Corporate Covenants

During the Equity Participation Period:

(a) Acquiror will use commercially reasonable efforts to maintain its status as a “reporting issuer” in each of British Columbia, Ontario and Alberta, not in default of any requirement of the Securities Laws in any material respect.
(b) Acquiror will use commercially reasonable efforts to remain a corporation validly subsisting under the laws of its jurisdiction of continuance, licensed, registered or qualified as an extra-provincial or foreign corporation in all jurisdictions where the character of its properties owned or leased or the nature of the activities conducted by it make such licensing, registration or qualification necessary and will carry on its business in the ordinary course and in compliance in all material respects with all Applicable Laws.
(c) Acquiror will use its commercially reasonable efforts to maintain a listing of the Acquiror Shares on the TSXV or on a Permitted Exchange.
(d) Acquiror will file such forms and documents and pay any associated fees as may be required under the Securities Laws and the rules and policies of the TSXV relating to the issuance of the Subscription Shares and the Advance Note Shares which are prescribed by applicable Securities Laws and the rules and policies of the TSXV.
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7.05 Target Financial Statements

(a) As soon as practical following the Closing Date and in any event not later than March 31, 2020, Sprott will deliver to Acquiror true and correct copies of the Target Financial Statements which:
(i) present fairly, in all material respects, the financial position, results of operations and cash flows of the Target as at the date and for the periods indicated in such financial statements, in Canadian dollars and in accordance with IFRS;
(ii) are complete and accurate in all material respects and accurately disclose, in accordance with IFRS, the Assets, Liabilities and financial condition of the Target and the results of the operations of the Target as at the dates thereof and for the periods covered thereby; and
(iii) contain or reflect adequate accruals for all Liabilities in all locations of the Target of any nature whatsoever, whether absolute, contingent or otherwise, matured or unmatured, as at the date thereof;
(b) Acquiror and Target will provide Sprott and their representatives with all access and information necessary to complete the Target Financial Statements.

7.06 Draft Tax Returns for Target

As soon as practical following the Closing Date and in any event not later than March 31, 2020, Sprott will deliver to Acquiror initial draft tax returns for the Target for the tax years ended December 31, 2018 and December 31, 2019 and for the tax year ended on the Closing Date.

ARTICLE 8 – TERMINATION

8.01 Termination

(1) This Agreement will terminate automatically on the expiry of the Deferred Payment Period, except that: (i) Articles 7, 8 and 10 and the general interpretation sections of this Agreement shall continue in full force and will automatically terminate upon the expiry of the Equity Participation Period; and (ii) notwithstanding anything else in this Agreement, the representations and warranties of Sprott contained in Section 4.01 of this Agreement shall not survive beyond the second anniversary of the date hereof.

(2) This Agreement may be terminated by written agreement of Acquiror and Sprott.

8.02 Effect of Termination

The rights of termination under Section 8.01 are in addition to any other rights any party may have under this Agreement or otherwise, and the exercise of a right of termination

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will not be an election of remedies. If this Agreement is terminated pursuant to Section 8.01, all further obligations of the parties under this Agreement will terminate, except that Section 10.04 will survive.

ARTICLE 9 – INDEMNIFICATION

9.01 Indemnification by Sprott

(1) Subject to Section 9.03, and provided Acquiror has not sent or has no current intention to send notice pursuant to Section 2.09(1) of this Agreement, Sprott will indemnify and save harmless Acquiror and the directors, officers, employees and agents of Acquiror from and against:

(a) all Claims asserted against and Losses incurred by any of them directly or indirectly arising out of resulting from:
(i) any inaccuracy or misrepresentation in any representation or warranty of Sprott in this Agreement;
(ii) any breach of any covenant of Sprott in this Agreement;
(b) any and all Taxes imposed on Target for the period up to and including the Closing Date;
(c) any and all Taxes imposed on Target as a result of, based upon, in connection with or arising from the repayment of the Sprott Existing Note and Sprott Return of Capital Note as contemplated by Section 2.11; and
(d) during the Deferred Payment Period, any Losses identified by the Environmental Audit that are not otherwise covered, if applicable, by the existing C$1,321,546.83, of reclamation security that has been paid to the Nova Scotia Department of Energy and Mines as of the Closing Date in respect of the Dufferin Gold Properties.

9.02 Indemnification by Acquiror

(1) Subject to Section 9.03, Acquiror will indemnify and save harmless Sprott and its directors, officers, employees and agents from and against all Claims asserted against and Losses incurred by any of them directly or indirectly arising out of resulting from:

(a) any inaccuracy or misrepresentation in any representation or warranty of Acquiror in this Agreement, or
(b) any breach of any covenant of Acquiror in this Agreement.
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9.03 Limit of Liability

Notwithstanding anything expressed in or implied by this Agreement, (i) neither Sprott or Acquiror, as the case may be, is obligated to indemnify and save harmless the other party hereto against any Claim if such Claim or the corresponding Losses arise out of or result from Sprott’s or Acquiror’s, as the case may be, gross negligence or wilful misconduct, (ii) the aggregate liability of Acquiror to indemnify Sprott will be limited to the amount of US$9,800,000; and (iii) the aggregate liability of Sprott to indemnify Acquiror will be limited to the amount of US$8,200,000, which, at the sole discretion of Acquiror, will be satisfied by Sprott by either (A) where the Deferred Payments remain outstanding, a reduction in the amount of the then outstanding Deferred Payments in an amount equal to any such Claim or Losses; or (B) where the First Deferred Payment has been paid by Acquiror to Sprott and the Second Deferred Payment remains outstanding, first, a cash repayment of the First Deferred Payment and then as to the remainder of the amount of any such Losses, a reduction in the amount of the then outstanding Second Deferred Payment; or (C) the unwinding of the transaction in accordance with Section 2.09. Notwithstanding the foregoing, with respect to those Tax and other indemnities provided under Sections 9.01(1)(b), 9.01(1)(c) and 9.01(1)(d), Sprott’s liability shall be unlimited as to time, amount and without regard as to whether any Deferred Payments have been made by Acquiror, with any such amount payable by Sprott to Acquiror in cash.

ARTICLE 10 – GENERAL

10.01 Further Assurances

Each of the parties hereto will from time to time execute and deliver all such further documents and instruments and do all acts and things as the other party may, either before or after the Closing Date, reasonably require to effectively carry out or better evidence or perfect the full intent and meaning of this Agreement.

10.02 Time of the Essence

Time is of the essence of this Agreement.

10.03 Fees and Commissions

Each of the parties hereto will pay its respective legal and accounting costs and expenses incurred in connection with the preparation, execution and delivery of this Agreement and all documents and instruments executed pursuant to this Agreement and any other costs and expenses whatsoever and howsoever incurred by it in connection with the transactions under this Agreement, except as otherwise agreed in connection with the Expense Amount paid by Sprott pursuant to Section 2.10 (and, for greater certainty, the parties hereto agree that all fees and expenses (including travel) incurred in excess of the Expense Amount in respect of: (i) work required to resolve all Dufferin Gold Property title issues and to transfer all necessary approvals, permits, leases and mineral and/or surface rights relating to the Dufferin Gold Properties to the Target; (ii) work required to complete the Environmental Audit, and (iii) legal and audit expenses related to the Acquisition, will be paid by the Acquiror.

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10.04 Confidentiality

No party may, directly or indirectly, without the prior written consent of the party to whom the Confidential Information relates, disclose to any person any Confidential Information, except that such information may be disclosed (i) to a party’s representatives in the normal course of the performance of their duties (so long as any such representative is advised of the confidential nature of such information and is directed to keep such information confidential and the disclosing party remains liable for any breach of confidentiality by such representative), (ii) to the extent required by Applicable Law or requested pursuant to any court order, judicial process, subpoena or civil investigative demand or by any Governmental Authority or (iii) in connection with any dispute or proceeding related to this Agreement or the Security Documents; provided that, in the case of clause (ii), the disclosing party agrees, to the extent legally permissible and practicable, to give the applicable party reasonably prompt notice of any such requirement or request so that the applicable party may seek (at its own cost) an appropriate protective order or similar relief (and the disclosing party will in any event make only the minimum disclosure required by such Applicable Law or request). For purposes of this Section 10.04, “ Confidential Information ” consists of all confidential information relating to the business, operations or affairs of the applicable party, except for information that is or becomes available to the public other than as a result of a breach of this Section 10.04. For certainty, following the Closing Time, all Confidential Information relating to the Target shall belong to Acquiror.

10.05 Public Announcements

Each party hereto agrees to consult with the other parties hereto before issuing any press release or making any public statement or disclosure with respect to this Agreement, the Security Documents or the transactions contemplated hereby and thereby and agrees not to issue any such press release or make any such public statement or disclosure without the prior written consent of the other parties (not to be unreasonably withheld, delayed or conditioned); provided that a party may without the prior written consent of the other party issue any such press release or make any such public announcements or disclosures if such party has used commercially reasonable efforts to consult with the other party and to obtain the consent of such other party but has been unable to do so prior to the time such press release or public announcement or disclosure is required to be released pursuant to Applicable Law or the rules and regulations of any stock exchange or securities regulatory authority; and provided that such party has also notified the other parties in writing of the details and content of the press release, announcement or disclosure to be released reasonably in advance of such release, announcement or disclosure.

10.06 Benefit of the Agreement

This Agreement will enure to the benefit of and be binding upon the respective successors and permitted assigns of the parties hereto.

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10.07 Entire Agreement

This Agreement, together with the Security Documents, constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and cancels and supersedes any prior understandings and agreements between the parties hereto with respect thereto. There are no representations, warranties, terms, conditions, undertakings or collateral agreements, express, implied or statutory, between the parties other than as expressly set forth in this Agreement and the Security Documents.

10.08 Amendments and Waivers

No amendment to this Agreement will be valid or binding unless set forth in writing and duly executed by each of the parties hereto. No waiver of any breach of any provision of this Agreement will be effective or binding unless made in writing and signed by the party purporting to give the same and, unless otherwise provided, will be limited to the specific breach waived.

10.09 Assignment

This Agreement may not be assigned by Acquiror without the prior written consent of Sprott. With the exception of Article 3, Article 4 and Article 7 in this Agreement, which may not be assigned by Sprott to a non-Affiliate without the prior written consent of Acquiror, Sprott may assign all or part of the Agreement with prior written notice to Acquiror, provided that the assignee signs a joinder agreement agreeing to be bound by the provisions of this Agreement in all respects and to the same extent as Sprott is bound.

10.10 Notices

Any demand, notice or other communication to be given in connection with this Agreement must be given in writing and will be given by personal delivery, by registered mail or by electronic means of communication addressed to the recipient as follows:

(a) To Acquiror:

110 Yonge Street, Suite 1900 Toronto, Ontario M5C 1T4 Canada

Attention: Lorna MacGillivray, Secretary Email: [email protected]

with a copy to:

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Cassels Brock & Blackwell LLP Suite 2100, Scotia Plaza 40 King Street West Toronto ON, M5H 3C2 Canada Attention: Jay King Email: [email protected]

(b) To Sprott:

c/o Sprott Private Resource Lending (Collector), LP Royal Bank Plaza, South Tower 200 Bay Street, Suite 2600 Toronto, Ontario M5J2J1 Canada Attention: Managing Partner Email: [Redacted]

with a copy to:

McCarthy Tétrault LLP Suite 5300, TD Bank Tower Box 48, 66 Wellington Street West Toronto, Ontario, Canada M5K 1E6

Attention: Robert Hansen; Michael Eldridge; Email: [email protected]; [email protected]

or to such other street address, individual or electronic communication number or address as may be designated by notice given by either party to the other. Any demand, notice or other communication given by personal delivery will be conclusively deemed to have been given on the day of actual delivery thereof and, if given by registered mail, on the fifth Business Day following the deposit thereof in the mail and, if given by electronic communication, on the day of transmittal thereof if given during the normal business hours of the recipient and on the Business Day during which such normal business hours next occur if not given during such hours on any day. If the party giving any demand, notice or other communication knows or ought reasonably to know of any difficulties with the postal system that might affect the delivery of mail, any such demand, notice or other communication may not be mailed but must be given by personal delivery or by electronic communication.

10.11 Remedies Cumulative

The right and remedies of the parties under this Agreement are cumulative and are in addition to, and not in substitution for, any other rights and remedies available at law or in equity or otherwise. No single or partial exercise by a party of any right or remedy precludes or otherwise affects the exercise of any other right or remedy to which that party may be entitled.

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10.12 No Third Party Beneficiaries

This Agreement is solely for the benefit of parties hereto and this Agreement will not be deemed to confer upon or give to any other person any Claim or other right or remedy.

10.13 Governing Law

This Agreement is governed by and will be construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein.

10.14 Attornment

For the purpose of all legal proceedings this Agreement will be deemed to have been performed in the Province of Ontario and the courts of the Province of Ontario will have jurisdiction to entertain any action arising under this Agreement. Each of the parties hereto attorns to the jurisdiction of the courts of the Province of Ontario.

10.15 Counterparts

This Agreement may be executed in any number of counterparts, each of which will be deemed to be an original and all of which taken together will be deemed to constitute one and the same instrument.

10.16 Electronic Execution

Delivery of an executed signature page to this Agreement by any party by electronic transmission will be as effective as delivery of a manually executed copy of this Agreement by such party.

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IN WITNESS WHEREOF the parties have executed this Agreement.