Desert Mountain Energy Corp. — Proxy Solicitation & Information Statement 2020

Jan 10, 2020

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DESERT MOUNTAIN ENERGY CORP.

510 – 580 Hornby Street, Vancouver, BC, V6C 3B6

NOTICE OF ANNUAL AND SPECIAL MEETING

NOTICE IS HEREBY GIVEN that the annual and special meeting (the “Meeting”) of shareholders of Desert Mountain Energy Corp. (the “Company”) will be held at 650 West Georgia Street, Suite 2700, Vancouver, British Columbia, Canada V6B 4N9 at 11:00 a.m. (Pacific time) on Friday, January 31[st] , 2020 for the following purposes:

1. To receive the report of the directors of the Company;

2. To receive the audited financial statements of the Company for the financial year ended September 30, 2018 and accompanying report of the auditor;

3. To appoint Morgan & Company LLP Chartered Accountants, as the auditor of the Company for the ensuing year at a remuneration to be fixed by the directors;

4. To set the number of directors of the Company at six;

5. To elect the directors of the Company for the ensuing year;

6. To consider, and if thought fit, to pass a resolution re-approving the Amended, Ratified and Restated 2008 Stock Incentive Plan, as required by the TSX Venture Exchange; and

7. To transact such other business as may properly come before the Meeting.

The accompanying Information Circular provides additional information relating to the matters to be dealt with at the Meeting and is supplemental to and expressly made a part of this Notice of Meeting. A copy of the Amended, Ratified and Restated 2008 Stock Incentive Plan is available for inspection by shareholders at the Company’s office at 510 – 580 Hornby Street, Vancouver, BC, V6C 3B6 during statutory business hours prior to the Meeting.

If you are a registered shareholder of the Company and unable to attend the Meeting in person, please complete, date and sign the accompanying form of proxy and deposit it with TSX Trust Company, 200 University Avenue, Suite 300, Toronto, Ontario, Canada M5H 4H1 by 11:00 a.m. (Pacific time) on Wednesday, January 19[th] , 2020 or at least 48 hours (excluding Saturdays, Sundays and holidays) before the time that the Meeting is to be reconvened after any adjournment of the Meeting.

If you are a non-registered shareholder of the Company and received this Notice of Meeting and accompanying materials through a broker, a financial institution, a participant, a trustee or administrator of a self-administered retirement savings plan, retirement income fund, education savings plan or other similar self-administered savings or investment plan registered under the Income Tax Act (Canada), or a nominee of any of the foregoing that holds your security on your behalf (the “Intermediary”), please complete and return the materials in accordance with the instructions provided to you by your Intermediary.

DATED at Vancouver, British Columbia December 24[th] , 2019.

DESERT MOUNTAIN ENERGY CORP.

“Irwin A. Olian”

Irwin A. Olian Chief Executive Officer

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DESERT MOUNTAIN ENERGY CORP.

510 – 580 Hornby Street Vancouver, BC V6C 3B6 Canada

INFORMATION CIRCULAR

Dated as of December 24[th] , 2019

DESERT MOUNTAIN ENERGY CORP.

INFORMATION CIRCULAR

DATED AS OF DECEMBER 24[TH] , 2019

INTRODUCTION

This Information Circular accompanies the Notice of Annual & Special Meeting (the “Meeting”) of the shareholders of Desert Mountain Energy Corp. (the “Company”) to be held on Friday January 31[st] , 2020 at the time and place set out in the accompanying Notice of Annual & Special Meeting (the “Notice of Meeting”). This Information Circular is furnished in connection with the solicitation of proxies by management of the Company for use at the Meeting and at any adjournment of the Meeting .

PROXIES AND VOTING RIGHTS

Management Solicitation and Appointment of Proxies

Registered Shareholders

The persons named in the accompanying form of proxy are nominees of the Company’s management. A shareholder has the right to appoint a person or company (who need not be a shareholder) to attend and act for and on the shareholder’s behalf at the Meeting other than the person or company, if any, designated as proxyholders in the accompanying form of proxy. To exercise this right, the shareholder must either :

• (a) on the accompanying form of proxy, insert the name of the shareholder’s nominee in the blank space provided; or

• (b) complete another proper form of proxy.

To be valid, a proxy must be dated and signed by the shareholder or by the shareholder’s attorney authorized in writing. In the case of a corporation, the proxy must be signed by a duly authorized officer of or attorney for the corporation.

The completed proxy, together with the power of attorney or other authority, if any, under which the proxy was signed or a notarially certified copy of the power of attorney or other authority, must be delivered to TSX Trust Company, 200 University Avenue, Suite 300, Toronto, Ontario, Canada, M5H 4H1, by 11:00 a.m. (Pacific time) on Wednesday, January 29[th] , 2020 or at least 48 hours (excluding Saturdays, Sundays and holidays) before the time that the Meeting is to be reconvened after any adjournment of the Meeting.

Non-Registered Shareholders

Only registered shareholders or duly appointed proxyholders for registered shareholders are permitted to vote at the Meeting. Shareholders who do not hold their shares in their own names (referred to herein as “NonRegistered Shareholders”) are advised that only proxies from shareholders of record can be recognized and voted at the Meeting.

If shares are listed in an account statement provided to a shareholder by a broker, then in almost all cases those shares will not be registered in such shareholder’s name on the records of the Company. Such shares will more likely be registered under the name of the shareholder’s broker or an agent of that broker. Accordingly, most shareholders of the Company are “Non-Registered Shareholders” because the shares they own are not registered in their names but are instead registered in the name of the brokerage firm, bank or trust company through which they purchased the shares. More particularly, a person is a Non-Registered Shareholder in respect of shares which are held on behalf of that person, but which are registered either: (a) in the name of an intermediary (an “Intermediary”) that the Non-Registered Shareholder deals with in respect of the shares (Intermediaries include, among others, banks, trust companies, securities dealers or brokers and trustees or administrators of self-administered RRSPs, RRIFs, RESPs and similar plans); or (b) in the name of a clearing agency (such as The Canadian Depository for Securities Limited (“CDS”)) of which the Intermediary is a participant.

In Canada, the vast majority of such shares are registered under the name of CDS, which company acts as nominee for many Canadian brokerage firms. Shares so held by brokers or their nominees can only be voted (for or against resolutions) upon the instructions of the Non-Registered Shareholder. Without specific instructions, brokers/nominees are prohibited from voting shares held for Non-Registered Shareholders.

In accordance with National Instrument 54-101 of the Canadian Securities Administrators, the Company has distributed copies of the Notice of Meeting, this Information Circular and the form of proxy (the “Meeting Materials”) to the clearing agencies and Intermediaries for onward distribution to Non-Registered Shareholders with a request for voting instructions as the Company is not sending the Meeting Materials using notice-and-access this year. Applicable regulatory policy requires Intermediaries/brokers to seek voting instructions from Non-Registered Shareholders in advance of shareholders’ meetings unless the Non-Registered Shareholders have waived the right to receive meeting materials and the Company will pay for the Intermediaries to deliver the Meeting Materials and a request for voting instructions form to all objecting beneficial owners. Every Intermediary/broker has its own mailing procedures and provides its own return instructions, which should be carefully followed by Non-Registered Shareholders in order to ensure that their shares are voted at the Meeting. Often the request for voting instructions supplied to a Non-Registered Shareholder by its broker is identical to the form of proxy provided by the Company to the registered shareholders. However, it is not a valid proxy; rather it is to be used as a means of instructing the registered shareholder how to vote on behalf of the Non-Registered Shareholder. Very often, Intermediaries will use service companies to forward the Meeting Materials to Non-Registered Shareholders. Generally, Non-Registered Shareholders who have not waived the right to receive Meeting Materials will either:

• (a) be given a form of proxy which has already been signed by the Intermediary (typically by a facsimile, stamped signature), which is restricted as to the number of shares beneficially owned by the Non-Registered Shareholder, but which is otherwise not completed. Because the Intermediary has already signed the form of proxy, this form of proxy is not required to be signed by the Non-Registered Shareholder when submitting the proxy. In this case, the Non-Registered Shareholder who wishes to submit a proxy should otherwise properly complete the form of proxy and deliver it to the Company’s registrar and transfer agent, TSX Trust Company, as provided above; or

• (b) more typically, be given a voting instruction form which is not signed by the Intermediary , and which, when properly completed and signed by the Non-Registered Shareholder and returned to the Intermediary or its service company, will constitute voting instructions (often called a “proxy authorization form”) which the Intermediary must follow. Typically, the proxy authorization form will consist of a one-page pre-printed form. Sometimes, instead of the onepage pre-printed form, the proxy authorization form will consist of a regular printed proxy form accompanied by a page of instructions, which contains a removable label containing a bar code and other information. In order for the form of proxy to validly constitute a proxy authorization form, the Non-Registered Shareholder must remove the label from the instructions and affix it to the form of proxy, properly complete and sign the form of proxy and return it to the Intermediary or its service company in accordance with the instructions of the Intermediary or its service company.

The majority of brokers now delegate responsibility for obtaining voting instructions from Non-Registered Shareholders to Broadridge Financial Solutions, Inc. (“Broadridge”). Broadridge typically supplies a special sticker to be attached to the proxy forms and asks Non-Registered Shareholders to return the completed proxy forms to Broadridge. Broadridge then tabulates the results of all instructions received and provides appropriate instructions respecting the voting of shares to be represented at the Meeting. A Non-Registered Shareholder receiving such a proxy from Broadridge cannot use that proxy to vote shares directly at the Meeting – the proxy must be returned to Broadridge well in advance of the Meeting in order to instruct Broadridge how to vote the shares.

In either case, the purpose of these procedures is to permit Non-Registered Shareholders to direct the voting of the shares of the Company which they beneficially own.

Should a Non-Registered Shareholder who receives one of the above forms wish to vote at the Meeting in person (or have another person attend and vote on behalf of the Non-Registered Shareholder), the Non-Registered Shareholder should insert the name of the Non-Registered Shareholder (or such other person voting on behalf of the Non-Registered Shareholder) in the blank space provided or follow such other instructions as may be provided by their brokers/nominees. In either case, Non-Registered Shareholders should carefully follow the instructions of their Intermediary, including those regarding when and where the proxy or proxy authorization form is to be delivered.

The Company has decided to take advantage of those provisions of National Instrument 54-101 that permit it to directly deliver proxy-related materials to its Non-Objecting Beneficial Owners (“NOBOs”). These Meeting Materials are being sent to both registered and non-registered owners of the common shares of the Company. If you are a NonRegistered Shareholder, and the Company or its agent has sent these materials directly to you, your name and address and information about your holdings of common shares, have been obtained in accordance with applicable securities regulatory requirements from the intermediary holding the common shares on your behalf. By choosing to send these materials to you directly, the Company (and not the intermediary holding on your behalf) has assumed responsibility for (i) delivering these materials to you, and (ii) executing your proper voting instructions. Please return your voting instructions as specified in the request for voting instructions. In this regard, NOBOs can expect to receive a voting instruction form which is to be completed and returned to TSX Trust Company. TSX Trust Company will tabulate the results received from NOBOs and will provide appropriate voting instructions at the Meeting with respect to those results.

All references to shareholders in this Information Circular and the accompanying Notice of Meeting and form of proxy are to registered shareholders of record unless specifically stated otherwise.

Revocation of Proxies

A shareholder who has given a proxy may revoke it at any time before the proxy is exercised:

(a) by an instrument in writing that is:

• (i) signed by the shareholder, the shareholder’s legal personal representative or attorney authorized in writing or, where the shareholder is a corporation, a duly authorized officer, attorney or representative of the corporation; and

(ii) delivered to TSX Trust Company, 200 University Avenue, Suite 300, Toronto, Ontario, Canada, M5H 4H1 or to the registered office of the Company located at 3148 Highland Boulevard, North Vancouver, British Columbia, V7R 2X6 at any time up to and including the last business day preceding the day of the Meeting or any adjournment of the Meeting, or delivered to the Chair of the Meeting on the day of the Meeting or any adjournment of the Meeting before any vote on a matter in respect of which the proxy is to be used has been taken; or

(b) in any other manner provided by law.

A revocation of a Proxy does not affect any matter on which a vote has been taken prior to the revocation.

Voting of Shares and Proxies and Exercise of Discretion by Proxyholders

Voting By Show of Hands

Voting at the Meeting generally will be by a show of hands, where every person present who is a shareholder or proxy holder and entitled to vote on the matter has one vote.

Voting By Poll

Voting at the Meeting will be by poll only if a poll is:

• (a) requested by a shareholder present at the Meeting in person or by proxy;

• (b) directed by the Chair; or

• (c) required by law because the number of shares represented by proxy that are to be voted against the motion is greater than 5% of the Company’s issued and outstanding shares.

On a poll, every shareholder entitled to vote on the matter has one vote in respect of each share entitled to be voted on the matter and held by that shareholder and may exercise that vote either in person or by proxy.

Approval of Resolutions

To approve a motion for an ordinary resolution, a simple majority of the votes cast in person or by proxy will be required; to approve a motion for a special resolution, a majority of not less than two-thirds of the votes cast on the resolution will be required.

Voting of Proxies and Exercise of Discretion By Proxyholders

A shareholder may indicate the manner in which the persons named in the accompanying form of proxy are to vote with respect to a matter to be acted upon at the Meeting by marking the appropriate space. If the instructions as to voting indicated in the proxy are certain, the shares represented by the proxy will be voted or withheld from voting in accordance with the instructions given in the proxy on any ballot that may be called for.

If the shareholder specifies a choice in the proxy with respect to any matter to be acted upon, then the shares represented will be voted or withheld from the vote on that matter accordingly. If no choice is specified in the proxy with respect to any resolution to be acted upon, the proxy confers discretionary authority with respect to that resolution upon the proxyholder appointed. It is intended that the proxyholder named by management in the accompanying form of proxy will vote the shares represented by the proxy in favour of each resolution identified in the proxy and for the nominees of the Company’s Board of Directors for directors and auditor.

The accompanying form of proxy also confers discretionary authority upon the named proxyholder with respect to amendments or variations to the matters identified in the accompanying Notice of Meeting and with respect to any other matters which may properly come before the Meeting. As of the date of this Information Circular, management of the Company is not aware of any such amendments or variations, or any other matters that will be presented for action at the Meeting other than those referred to in the accompanying Notice of Meeting. If, however, other matters that are not now known to management properly come before the Meeting, then the persons named in the accompanying form of proxy intend to vote on them in accordance with their best judgment.

Solicitation of Proxies

It is expected that solicitations of proxies will be made primarily by mail and possibly supplemented by telephone or other personal contact by directors, officers and employees of the Company without special compensation. The Company may reimburse shareholders’ nominees or agents (including brokers holding shares on behalf of clients) for the costs incurred in obtaining authorization to execute forms of proxies from their principals. The costs of solicitation will be borne by the Company.

VOTING SECURITIES AND PRINCIPAL HOLDERS OF VOTING SECURITIES

Only shareholders of the Company who are listed on its Register of Shareholders on the record date of December 24[th] , 2019 are entitled to receive notice of and to attend and vote at the Meeting or any adjournment of the Meeting (see “Voting of Shares and Proxies and Exercise of Discretion by Proxyholders” above).

As of December 24[th] , 2019, the Company had 36,645,051 common shares issued and outstanding and no preferred shares issued and outstanding.

To the knowledge of the directors and executive officers of the Company, no person or company beneficially owns, or controls or directs, directly or indirectly, shares carrying more than 10% of the voting rights attached to all outstanding shares of the Company, other than as set out below:

Name	Number of Common Shares	Percentage of Outstanding Common Shares
Irwin A. Olian, Jr.	3,987,125	10.88%

RECEIPT OF DIRECTORS’ REPORT AND FINANCIAL STATEMENTS

The Directors’ Report and the financial statements of the Company for the financial year ended September 30, 2018 and accompanying auditor’s report will be presented at the Meeting.

APPOINTMENT OF AUDITOR

The shareholders will be asked to vote for the appointment of Morgan & Company LLP Chartered Accountants, as the auditor of the Company to hold office until the next annual general meeting of shareholders of the Company at a remuneration to be fixed by the directors. Morgan & Company LLP was first appointed as auditor of the Company on May 15, 2008.

ELECTION OF DIRECTORS

The term of the office of each of the present directors of the Company expires at this Meeting. The Company’s Board of Directors proposes to nominate the persons named in the table below for election as directors of the Company. Each director elected will hold office until the next annual general meeting of the Company or until his or her successor is duly elected or appointed, unless the office is earlier vacated in accordance with the Articles of the Company or the Business Corporations Act (British Columbia) or he or she becomes disqualified to act as a director.

The following table sets out the names of management’s nominees for election as directors, the place in which each is ordinarily resident, all offices of the Company now held by each of them, their principal occupations, the period of time during which each has been a director of the Company, and the number of common shares of the Company beneficially owned by each of them, or over which control or direction is exercised, directly or indirectly, as of the date of this Information Circular.

Name, Place of Residence and Offices Held with the Company(1)	Principal Occupation or Employment for Last Five Years(1)	Periods during which has served as a Director	Number of Shares Owned(1)
W. Benjamin Catalano(2) British Columbia, Canada Director	January 1991 to June 2019 – Realtor, Sutton Group. June 2019 – present, Team3000 Realty.	May 20, 2008 to present	200,000
Soren Christiansen British Columbia, Canada Director	2006 to present – Director of EnerMad Corp.	August 1, 2018 to present	Nil

Name, Place of Residence and Offices Held with the Company(1)	Principal Occupation or Employment for Last Five Years(1)	Periods during which has served as a Director	Number of Shares Owned(1)
Irwin A. Olian, Jr. Nevada, USA President, Chairman, Chief Executive Officer and Director	April 2008 to present – President and CEO of the Company; July 1997 to present – self-employed consultant.	April 30, 2008 to present	3,987,125
Robert Rohlfing(2) Oklahoma, USA Executive Vice President Head of Technical Operations and Director	1995 to 2013 – President, Open Door Productions Inc., Oil & Gas Production Company; 1995 to 2017 – President, Open Door Holdings Inc., Oil & Gas Exploration & Drilling Company; 2001 to 2018 – CEO Managing Partner, Seminole Oil Productions LLC., Oil & Gas Production Company. 2010 to present, Founder SJ&R. W. Rohlfing Scholarship Fund. 2018 to present, Director & EVP Desert Mountain Energy Corp.	January 17th, 2019 to present	1,962,000
Edward Schiller British Columbia, Canada Director	Retired Senior Geological Consultant.	May 20, 2008 to present	11,250
Gregory Sparks(2) Colorado, USA Director	January 1994 to December 2014 – self employed – GBS PC, a minerals engineering consulting company; 2004 to January 2010 – Senior VP Mining & Exploration of Sacre-Coeur Minerals Ltd.; January 2010 to August 2014 – President and CEO of Sacre- Coeur Minerals Ltd.; January 2015 to present – Managing Director Metals of The John T. Boyd Company – Mining and Geologic Consultants.	May 20, 2008 to present	21,750

Notes:

1. Information as to the place of residence, principal occupation and shares beneficially owned, or controlled or directed, directly or indirectly, has been furnished by the respective directors.

2. Member of the Company’s Audit Committee.

The Company does not have an Executive Committee.

The Company’s Board of Directors does not contemplate that any of its nominees will be unable to serve as a director. If any vacancies occur in the slate of nominees listed above before the Meeting, then the proxyholders named in the accompanying form of proxy intend to exercise discretionary authority to vote the shares represented by proxy for the election of any other persons as directors.

Corporate Cease Trade Orders or Bankruptcies

During the ten years preceding the date of this Information Circular, other than as described below, no proposed director of the Company has, to the knowledge of the Company, been:

• (a) a director, chief executive officer or chief financial officer of any issuer that:

• (i) was the subject of a cease trade or similar order or an order that denied such issuer access to any exemption under securities legislation that was in effect for a period of more than thirty consecutive days (an “Order”) while the proposed director was acting in the capacity as director, chief executive officer or chief financial officer; or

• (ii) was subject to such an Order that was issued after the proposed director ceased to be a director, chief executive officer or chief financial officer in the company that is the subject of the Order and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer; or

• (b) a director or executive officer of any issuer that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold the assets of that issuer.

Individual Bankruptcies

During the ten years preceding the date of this Information Circular, no proposed director of the Company has, to the knowledge of the Company, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of that individual.

Penalties and Sanctions

None of the proposed nominees for election as a director of the Company has been subject to any penalties or sanctions imposed by a court or regulatory body or entered into a settlement agreement with any securities’ regulatory authority since December 31, 2000.

Audit Committee

Under National Instrument 52-110 – Audit Committee (“NI 52-110”), venture issuers are required to provide certain disclosure with respect to their audit committee, including the text of the audit committee’s charter, the composition of the audit committee and the fees paid to the external auditor. This information with respect to the Company is provided in Schedule “A”.

Corporate Governance Disclosure

Independence

The Board of Directors of the Company facilitates its exercise of independent supervision over management by having meetings of the Board of Directors, both with and without members of the Company’s management (including members of management who are also directors) being in attendance, and by having four independent directors on the Board of Directors, being Benjamin Catalano, Gregory Sparks, Edward Schiller and Soren Christiansen. The directors of the Company who are not independent are Irwin A. Olian, Jr. and Robert Rohlfing by reason of the fact that they are officers of the Company.

Directorships

The following directors of the Company are also directors of the following other reporting issuers:

Name of Director of the Company	Names of Other Reporting Issuers
Benjamin Catalano	Advanced Proteome Therapeutics
GregoryB. Sparks	Triumph Gold Corp.

Orientation and Continuing Education

The Company has not yet developed an official orientation or training program for directors. However, if and when a new director is added, they will have the opportunity to become familiar with the Company by meeting with the other directors and with officers and employees of the Company. As each director has a different skill set and professional background, orientation and training activities will be tailored to the particular needs and experience of each director.

Ethical Business Conduct

To encourage and promote a culture of ethical business conduct, the Board of Directors monitors the ethical conduct of the Company and ensures that it complies with applicable legal and regulatory requirements, such as those of relevant securities commissions and stock exchanges. The Board of Directors has found that fiduciary duties placed on individual directors by the Company’s governing corporate legislation and the common law, as well as the restrictions placed by applicable corporate legislation on the individual director’s participation in decisions of the Board of Directors in which the director has an interest, have been sufficient to ensure that the Board of Directors operated independently of management and in the best interests of the Company.

Nominations

The Board of Directors has not appointed a nominating committee. Rather, the Board of Directors as a whole is responsible for identifying and recommending new candidates, having regard to the appropriate size of the Board of Directors and the necessary competencies and skills of the Board of Directors as a whole and of each director individually. New nominees should have a track record in general business management, special expertise in an area of strategic interest to the Company, and the ability to devote the time required.

Compensation

The Board of Directors is responsible for determining all forms of compensation to be granted to the Chief Executive Officer of the Company and the directors, and for reviewing the President’s recommendations respecting compensation of the other senior executives of the Company, to ensure such arrangements reflect the responsibilities and risks associated with each position. When determining the compensation of its executive officers, the Board of Directors considers: (i) recruiting and retaining executives critical to the success of the Company and the enhancement of shareholder value; (ii) providing fair and competitive compensation compared to the remuneration paid by other reporting issuers similarly placed within the same business as the Company; (iii) balancing the interests of management and the Company’s shareholders; and (iv) rewarding performance, both on an individual basis and with respect to operations in general. In order to achieve these objectives, the compensation paid to the Company’s executive officers consists of three components: (i) base salary; (ii) annual bonus; and (iii) long-term incentive in the form of stock options.

Other Board Committees

The Company does not currently have any committees of its Board of Directors other than its audit committee.

Assessments

The Board of Directors will annually review its own performance to satisfy itself that the Board of Directors, its committees, and its individual directors are performing effectively.

STATEMENT OF EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

The Company has no formal compensation policy. The Board of Directors as a whole is responsible for reviewing and approving corporate goals and objectives relevant to an NEO’s (as defined below) compensation, evaluating the NEO’s performance in light of those goals and objectives and making recommendations with respect to the NEO’s compensation based on this evaluation.

The Board of Directors monitors levels of executive remuneration to ensure overall compensation reflects the Company’s objectives and philosophies and meets the Company’s desired relative compensation position. The key components comprising executive officer compensation are base salary, annual bonuses and participation in the Company’s incentive stock option plan. These components are normal for companies that are comparable to the Company. Executive compensation is based on a number of factors including a comparative review of information provided to the Company by compensation consultants, recruitment agencies and auditors. At the end of each year, the Board of Directors also reviews actual performance against corporate objectives.

Executive officers’ compensation is designed in a manner to recognize and reward executive officers based upon individual and corporate performance, to be competitive with the compensation arrangements and programs established by other resource companies with which the Company compares itself, and to be consistent with the executive officers’ respective contributions to the overall benefit of the Company.

CEO compensation is determined by the Board of Directors. The Board of Directors’ view is that the salary of the CEO should be in line with competitive salaries for positions of similar responsibility at companies that are, like the Company, publicly held. In assessing compensation paid to the CEO, the Board of Directors also reviews available industry data relating to such companies and information or advice provided by compensation consultants or recruitment agencies. The CEO participates in discussions or reviews relating to executive compensation for NEOs, but does not participate in the discussions and reviews relating to his own compensation.

In establishing compensation objectives for executive officers, the Board of Directors seeks to:

1. motivate executives to achieve corporate performance objectives and reward them when such objectives are met;

2. recruit and subsequently retain highly qualified executive officers by offering overall compensation which is competitive with that offered for comparable positions in similar companies; and

3. align the interest of executive officers with the long-term interests of shareholders through participation in the Company’s stock incentive plan.

The Board of Directors determines the number of stock options to be awarded. Stock options are generally awarded to executive officers at the commencement of employment and periodically thereafter. Stock options are granted to reward individuals for current performance, expected future performance and value to the Company. The size of awards made subsequent to the commencement of employment takes into account stock options already held by the individual.

Summary Compensation Table

For the purposes of this Information Circular, “executive officer” of the Company means an individual who at any time during the year was the Chair or a Vice-Chair of the Company; the President; any Vice-President in charge of a principal business unit, division or function including sales, finance or production; and any officer of the Company or of a subsidiary of the Company or any other individual who performed a policy-making function in respect of the Company.

The summary compensation table below discloses compensation paid to the following individuals:

(a) each chief executive officer (“CEO”) of the Company;

• (b) each chief financial officer (“CFO”) of the Company;

• (c) each of the Company’s three most highly compensated executive officers, or the three most highly compensated individuals acting in a similar capacity, other than the CEO and CFO, at the end of the most recently completed financial year whose total compensation was, individually, more than $150,000 for that financial year; and

• (d) each individual who would be an NEO under paragraph (c) but for the fact that the individual was neither an executive officer of the Company, nor acting in a similar capacity, at the end of that financial year,

(each, a “Named Executive Officer” or “NEO”).

The Company currently has three Named Executive Officers, being Irwin A. Olian, Jr., its President and Chief Executive Officer, Scott Davis as its Chief Financial Officer and Robert Rohlfing as its Executive VP Head of Technical Operations and Director. Jenniffer Toddhunter resigned as Chief Financial Officer during the year.

For each NEO in the most recently completed financial year, the following table contains a summary of the compensation paid to them for each of the Company’s three most recently completed financial years.

Name and Principal Position	Year	Salary ($)	Share- based awards ($)	Option- based awards ($)	Non-equity incentive plan compensation($)	Non-equity incentive plan compensation($)	Pension value ($)	All other compen- sation ($)	Total compen- sation ($)
					Annual incentive plans	Long- term incentive plans
Irwin A. Olian, Jr. (1) President & CEO	2018 2017 2016	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	74,583 69,180 69,180	74,583 69,180 69,180
Jennifer Todhunter (2) CFO - Resigned	2018 2017 2016	36,000 36,000 37,058	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	36,000 36,000 37,058
Robert Rohlfing Executive VP Head of Technical Operations and Director	2018 2017 2016	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil
Scott Davis CFO	2018 2017 2016	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil

Notes:

1. Irwin Olian, President and CEO, was paid a monthly consulting fee of $5,000 to June 2018. From July 2018 to September 2018, he was paid a monthly consulting fee of $5,000 USD. He also received bonuses of $9,894 in fiscal 2018, $9,180 in fiscal 2017, and $9,180 in fiscal 2016. Mr. Olian was not paid any compensation for his services as a director of the Company.

2. Jennifer Todhunter, CFO, was monthly fee of $3,000, representing a part-time commitment. Ms. Todhunter was not paid any compensation for her services as a director of the Company.

Incentive Plan Awards

The Company has an incentive stock option plan which permits the granting of options (“Options”) to eligible participants to purchase up to a maximum of such number of common shares as is equal to 10% of the then issued and outstanding common shares of the Company. For further particulars of the stock incentive plan, see “Securities Authorized for Issuance under Equity Compensation Plans – Amended and Restated 2008 Stock Incentive Plan”.

Outstanding Share-based Awards and Option-based Awards

Share-based awards and option-based awards outstanding at the end of the most recently completed financial year are disclosed in the following table. None of the persons included in the table held any share-based awards as at September 30, 2018.

30, 2018.
		Option-based Awards			Share-based Awards
Name	Number of Securities underlying unexercised options (#)	Option exercise price ($)	Option expiration date	Value of unexercised in-the- money options(1) ($)	Number of shares or units of shares that have not vested (#)	Market or payout value of share-based awards that have not vested ($)	Market or payout value of vested share- based awards not paid out or distribute d ($)
Irwin A. Olian, Jr.CEO	250,000 62,500	$0.20 $0.20	November 12, 2018 January 9, 2020	Nil Nil	Nil	Nil	Nil
Jennifer Todhunter_CFO - _Resigned	150,000	$0.20	January 31, 2020	Nil	Nil	Nil	Nil
Robert Rohlfing Executive VP Head of Technical Operations and Director	N/A	N/A	N/A	N/A	N/A	N/A	N/A
Scott Davis CFO	N/A	N/A	N/A	N/A	N/A	N/A	N/A

Note:

1. Amounts shown in the “Value of unexercised in-the-money options” have been calculated based on the September 30, 2018 closing price of $0.17.

Incentive Plan Awards – Value Vested or Earned During the Year

The following table discloses incentive plan awards – value vested or earned during the most recently completed financial year. None of the persons included in the table held any share-based awards.

Name	Option-based awards – Value vested during the year ($)(1)	Share-based awards – Value vested during the year ($)	Non-equity incentive plan compensation – Value earned during the year ($)
Irwin Olian,CEO	Nil	Nil	Nil

Name	Option-based awards – Value vested during the year ($)(1)	Share-based awards – Value vested during the year ($)	Non-equity incentive plan compensation – Value earned during the year ($)
Jennifer Todhunter,CFO (Resigned)	Nil	Nil	Nil
Robert Rohlfing Executive VP Head of Technical Operations and Director	Nil	Nil	Nil
Scott Davis,CFO	Nil	Nil	Nil

Note:

1. These amounts represent the aggregate dollar value that would have been realized if the options under the option-based awards had been exercised on the vesting date. The value of each amount has been calculated by taking the difference between the market price of the option at date of exercise and the exercise or base price of the option under the optionbased award on vest day. No value was attributed to unexercised vested options that were out of the money on the date that they vested.

Pension Plan Benefits

The Company does not have any retirement plan.

Termination and Change of Control Benefits

The Company has no compensatory contract, agreement, plan or arrangement whereby any Named Executive Officer may be compensated in an amount exceeding $50,000 in the event of that officer’s resignation, retirement or other termination of employment, or in the event of a change of control of the Company or a subsidiary or a change in the Named Executive Officer’s responsibilities.

Director Compensation

We have no standard arrangement pursuant to which directors are compensated for their services in their capacity as directors except for the granting, from time to time, of incentive stock options in accordance with the Company’s stock option plan and the policies of the TSX Venture Exchange. No cash compensation was paid to any director of the Company for the director’s services as a director during the financial year ended September 30, 2018.

The following table sets out the director (other than NEO) compensation for the most recently completed financial year:

ear:
Name(1)	Fees earned ($)	Share- based awards ($)	Option- based awards(2) ($)	Non-equity incentive plan compensation ($)	Pension value ($)	All other compensation ($)	Total ($)
Soren Christiansen	Nil	Nil	19,260	Nil	Nil	Nil	19,260
Gregory Sparks	Nil	Nil	Nil	Nil	Nil	Nil	Nil
Benjamin Catalano	Nil	Nil	Nil	Nil	Nil	Nil	Nil
Edward Schiller	Nil	Nil	Nil	Nil	Nil	Nil	Nil

Notes:

1. This director compensation table does not include information for Irwin Olian and Jennifer Todhunter who are directors and Named Executive Officers. These individuals were not paid any compensation for their services as directors for the financial year ended September 30, 2018.

2. The Company has chosen to utilize the Black-Scholes model for determining the “grant date fair value” as the Company believes it is the most accepted model for determining such calculations and it is used when determining calculations for the Company’s financial statements. The Company has calculated the “grant date fair value” in the “Option-based awards” column using the Black-Scholes model, a mathematical valuation model that ascribes a value to a stock option based on a number of factors in valuing the option-based awards, including the exercise price of the option, the price of the underlying security and the risk-free rate of return.

Share-based Awards, Option-based Awards and Non-equity Incentive Plan Compensation

Share-based awards and option-based awards outstanding held by non-NEO directors at the end of the most recently completed financial year are disclosed in the following table None of the persons included in the table held any sharebased awards as at September 30, 2018.

		Option-based Awards	Option-based Awards		Share-based Awards	Share-based Awards	Share-based Awards
Name	Number of Securities underlying unexercised options (#)	Option exercise price ($)	Option expiration date	Value of unexercise d in-the- money options(1) ($)	Number of shares or units of shares that have not vested (#)	Market or payout value of share- based awards that have not vested ($)	Market or payout value of vested share- based awards not paid out or distributed ($)
Soren Christiansen	125,000	$0.20	August 1, 2021	Nil	Nil	Nil	Nil
Gregory Sparks	62,500 12,500	$0.20 $0.20	November 12, 2018 January 9, 2020	Nil	Nil	Nil	Nil
Benjamin Catalano	25,000 12,500	$0.20 $0.20	November 12, 2018 January 9, 2020	Nil	Nil	Nil	Nil
Edward Schiller	62,500 12,500	$0.20 $0.20	November 12, 2018 January 9, 2020	Nil	Nil	Nil	Nil

1. Amounts shown in the “Value of unexercised in-the-money options” have been calculated based on the September 30, 2018 closing price of $0.17.

The following table discloses incentive plan awards – value vested or earned during the most recently completed financial year. None of the persons included in the table held any share-based awards or option-based awards.

Name	Option-based awards – Value vested during the year ($)(1)	Share-based awards – Value vested during the year ($)	Non-equity incentive plan compensation – Value earned during the year ($)
Soren Christiansen	Nil	Nil	Nil
Gregory Sparks	Nil	Nil	Nil
Benjamin Catalano	Nil	Nil	Nil
Edward Schiller	Nil	Nil	Nil

Note:

1. These amounts represent the aggregate dollar value that would have been realized if the options under the option-based awards had been exercised on the vesting date. The value of each amount has been calculated by taking the difference between the market price of the option at date of exercise and the exercise or base price of the option under the optionbased award on vest day. No value was attributed to unexercised vested options that were out of the money on the date that they vested.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

Amended and Restated 2008 Stock Incentive Plan

On March 12, 2009, the shareholders of the Company adopted the Company’s Amended and Restated 2008 Stock Incentive Plan (the “Plan”), pursuant to which the Company may issue options to purchase in aggregate up to 10% of the number of common shares of the Company which are issued and outstanding on the particular date of grant. Pursuant to the policies of the TSX Venture Exchange (the “Exchange”), the Plan is subject to annual approval of the shareholders of the Company, as more particularly described below under “Particulars of Other Matters to be Acted Upon”.

On December 24[th] , 2019, the Board of Directors ratified the amended and restated Plan to extend its automatic expiration date from 10 years following the date the Plan was adopted by the Board (February 9, 2009) to 20 years. This amendment was effective January 31, 2019. No other changes were made to the Plan in connection with this amendment.

The purpose of the Plan is to provide incentive to the Company’s employees, officers, directors, advisors and consultants responsible for the continued success of the Company. The following is a summary of the Plan.

The Plan will be administered by the Board of Directors or by a committee (the “Committee”) of the Board of Directors. The Committee will administer the Plan on behalf of the Board of Directors in accordance with such terms and conditions as the Board of Directors may prescribe in accordance with the Plan.

The Plan provides that options may be granted to any employee, officer, director, advisor or consultant of the Company or a subsidiary of the Company.

The options issued pursuant to the Plan will be exercisable at a price not less than the greater of:

• (e) the lowest price allowable by the stock exchange on which the Company’s shares are then listed; and

• (f) the fair market value of the shares at the time the option is granted.

Options under the Plan will be granted for a term not to exceed ten years from the date of their grant.

Options granted under the Plan will be subject to such vesting schedule as the Committee may determine.

Options will also be non-assignable and non-transferable, provided that they will be exercisable by an optionee’s personal representatives for up to 12 months following the death of an optionee. All such options will continue to vest in accordance with their original vesting schedule.

If a material alteration in the capital structure of the Company occurs as a result of a recapitalization, stock split, reverse stock split, stock dividend, or otherwise, the Committee shall make adjustments to the Plan and to the options then outstanding under it as the Committee in its sole discretion determines to be appropriate and equitable under the circumstances, if any.

The maximum number of common shares to be reserved for issuance under the Plan, including options currently outstanding, will not exceed 10% of the number of common shares of the Company which are issued and outstanding on the particular date of grant.

Equity Compensation Plan Information

The following table sets forth details of the Company’s compensation plans under which equity securities of the Company are authorized for issuance at the end of the Company’s most recently completed financial year:

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)	(b)	(c)
Equity compensation plans approved by securityholders	2,581,250*	$0.21	594,401
Equity compensation plans not approved by securityholders	N/A	N/A	N/A
TOTAL	2,581,250	$0.21	594,401

• The maximum number of common shares of the Company which may be issued pursuant to the exercise of stock options granted is equal to 10% of the number of common shares of the Company issued and outstanding on the particular date of grant. As at September 30, 2018, the maximum was 3,175,651.

INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS

Other than routine indebtedness, no current or former executive officer, director or employee of the Company or any of its subsidiaries, or any proposed nominee for election as a director of the Company, or any associate or affiliate of any such executive officer, director, employee or proposed nominee, is or has been indebted to the Company or any of its subsidiaries, or to any other entity that was provided a guarantee, support agreement, letter of credit or other similar arrangement by the Company or any of its subsidiaries in connection with the indebtedness, at any time since the beginning of the most recently completed financial year of the Company.

MANAGEMENT CONTRACTS

Management functions of the Company or any subsidiary of the Company are not, to any substantial degree, performed by a person other than the directors or executive officers of the Company or its subsidiaries.

INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS

Other than as set forth in this Information Circular, no informed person of the Company, no proposed nominee for election as a director of the Company and no associate or affiliate of any such informed person or proposed nominee has had any material interest, direct or indirect, in any transaction since the commencement of the Company’s most recently completed financial year or in any proposed transaction that, in either case, has materially affected or would materially affect the Company or any of its subsidiaries.

INTEREST OF CERTAIN PERSONS OR COMPANIES IN MATTERS TO BE ACTED UPON

Other than as set forth in this Information Circular, no director or executive officer of the Company at any time since the beginning of the Company’s most recently completed financial year, no proposed nominee for election as a director of the Company and no associate or affiliate of any of such persons has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter to be acted upon at the Meeting, other than the election of directors, except for any interest arising from the ownership of shares of the Company where the shareholder will receive no extra or special benefit or advantage not shared on a pro-rata basis by all holders of shares in the capital of the Company.

PARTICULARS OF OTHER MATTERS TO BE ACTED UPON

Approval of the Amended and Restated 2008 Stock Incentive Plan, As Amended

As described above, the Company’s Amended and Restated 2008 Stock Incentive Plan (the “Plan”) is subject to annual approval of the shareholders of the Company pursuant to the policies of the Exchange. Management of the Company will be asking the Company’s shareholders to approve the Plan, as amended in 2019, at the Meeting.

A full copy of the Plan, as amended, will be available at the Meeting. Shareholders may obtain a copy of the Plan in advance of the Meeting upon request to the Company, 510-580 Hornby Street, Vancouver, BC, V6C 3B6, to the attention of Frances Murphy.

The following resolutions will be presented to the shareholders for approval:

“ BE IT RESOLVED that:

1. the amended and restated 2008 Stock Incentive Plan (the “Plan”), as amended and ratified, in the form presented to this Meeting, is ratified and approved and is hereby directed to be attached to the minutes of this Meeting as a Schedule thereto;

2. the Company is authorized to grant stock options pursuant and subject to the terms and conditions of the Plan, as amended, entitling all of the outstanding optionholders in aggregate to purchase up to such number of common shares of the Company as is equal to 10% of the number of common shares of the Company issued and outstanding on the applicable grant date;

3. any committee created pursuant to the Plan, as amended, is authorized to make such amendments to the Plan from time to time as the Board may, in its discretion, consider to be appropriate, provided that such amendments will be subject to the approval of all applicable regulatory authorities and in certain cases, in accordance with the terms of the Plan, the shareholders; and

4. the approval of the Plan, as amended, by the board of directors is hereby ratified and any one director of the Company is hereby authorized to execute any other documents as the director deems necessary to give effect to the transactions contemplated in the Plan.”

This resolution must be approved by a majority (more than 50%) of the votes cast by the shareholders of the Company who, being entitled to do so, vote in respect of this resolution. Management of the Company recommends that shareholders vote in favour of the foregoing resolution, and the persons named by management in the enclosed form of proxy intend to vote for the approval of the foregoing resolution at the Meeting unless otherwise directed by the shareholders appointing them or by management in the absence of such shareholder direction.

ADDITIONAL NFORMATION

Additional information relating to the Company is available on SEDAR at www.sedar.com.

Financial information is provided in the Company’s comparative financial statements and Management’s Discussion and Analysis for its most recently completed financial year. To request copies of the Company’s financial statements and Management’s Discussion and Analysis, please contact Scott Davis, the Chief Financial Officer of the Company, at 510-580 Hornby Street, Vancouver, BC, V5C 3B6 email sdavis@crossdavis.com.

APPROVAL OF THE BOARD OF DIRECTORS

The contents of this Information Circular have been approved, and the delivery of it to each shareholder of the Company entitled thereto and to the appropriate regulatory agencies has been authorized by the Board of Directors.

By Order of the Board of Directors of

AFRICAN QUEEN MINES LTD.

“Iriwn A. Olian”

Irwin A. Olian Chief Executive Officer and Director

SCHEDULE “A”

AUDIT COMMITTEE

The Audit Committee’s Charter

Mandate

The primary function of the audit committee (the “Committee”) is to assist the Board of Directors of African Queen Mines Ltd. (the “Company”) in fulfilling its financial oversight responsibilities by reviewing the financial statements, financial reports and other financial information provided by the Company to regulatory authorities and shareholders.

Not all members of the Committee are full-time employees of the Company and they may or may not be accountants or auditors by profession or experts in the fields of accounting or auditing and, in any event, do not serve in such capacity. Consequently, it is not the duty of the Committee to conduct audits or to determine that the Company’s financial statements and disclosures are complete and accurate and are in accordance with generally accepted accounting principles and applicable rules and regulations. These are the responsibilities of management and the external auditors.

Composition

The Committee shall be comprised of a minimum three directors as determined by the Board of Directors, who meet the requirements of the TSX Venture Exchange.

If the Company ceases to be a “venture issuer” as that term is defined in National Instrument 52-110 entitled “Audit Committees” (“NI 52-110”), then all of the members of the Committee shall be free from any material relationship with the Company. A material relationship means a relationship that could, in the view of the Company’s Board of Directors, reasonably interfere with the exercise of a member’s independent judgment. In any event, a member of the Committee has a material relationship with the Company if he is deemed to have one pursuant to NI 52-110.

If the Company ceases to be a “venture issuer” then all members of the Committee shall also have accounting or related financial management expertise. For the purposes of the Company’s Audit Committee Charter, the definition of “financially literate” is the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Company’s financial statements.

The members of the Committee shall be elected by the Board of Directors at its first meeting following the annual shareholders’ meeting. Unless a Chair is elected by the full Board of Directors, the members of the Committee may designate a Chair by a majority vote of the full Committee membership.

Authority

The Committee has been expressly authorized by the Board of Directors of the Company to (a) engage independent counsel and other advisors as it determines necessary to carry out its duties, (b) set and pay the compensation for any advisors employed by the Audit Committee, and (c) communicate directly with the internal and external auditors.

Responsibilities

The Committee shall

1. recommend to the Board of Directors: (a) the external auditor to be nominated for the purpose of preparing or issuing an auditor’s report or performing other audit, review or attest services for the Company; and (b) the compensation of the external auditor;

2. be directly responsible for overseeing the work of the external auditor engaged for the purpose of preparing or issuing an auditor’s report or performing other audit, review or attest services for the Company, including the resolution of disagreements between management and the external auditor regarding financial reporting;

3. pre-approve all non-audit services to be provided to the Company or its subsidiary entities by the Company’s external auditor in accordance with the pre-approval process noted below;

4. review the Company’s financial statements, MD&A and annual and interim earnings press releases before the Company publicly discloses this information;

5. be satisfied that adequate procedures are in place for the review of the Company’s public disclosure of financial information extracted or derived from the Company’s financial statements, other than the public disclosure referred to in subsection (4), and must periodically assess the adequacy of those procedures;

6. establish procedures for (a) the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters; and (b) the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters; and

7. review and approve the Company’s hiring policies regarding partners, employees and former partners and employees of the present and former external auditor of the Company.

Pre-Approval of Non-Audit Services

The Committee satisfies the pre-approval requirement of item (3) of its Responsibilities if:

• (a) the aggregate amount of all the non-audit services that were not pre-approved is reasonably expected to constitute no more than five per cent of the total amount of fees paid by the Company and its subsidiary entities to the Company’s external auditor during the fiscal year in which the services are provided;

• (b) the Company or the subsidiary entity of the Company, as the case may be, did not recognize the services as non-audit services at the time of the engagement; and

• (c) the services are promptly brought to the attention of the Committee of the Company and approved, prior to the completion of the audit, by the Committee or by one or more of its members to whom authority to grant such approvals has been delegated by the Committee.

The Committee may delegate to one or more independent members the authority to pre-approve non-audit services in satisfaction of the requirement of item (3) of its Responsibilities. The pre-approval of non-audit services by any member to whom authority has been delegated pursuant hereto must be presented to the Audit Committee at its first scheduled meeting following such pre-approval.

The Committee satisfies the pre-approval requirement of item (3) of its Responsibilities if it adopts specific policies and procedures for the engagement of the non-audit services, if: (a) the pre-approval policies and procedures are detailed as to the particular service; (b) the Audit Committee is informed of each non-audit service; and (c) the procedures do not include delegation of the Audit Committee’s responsibilities to management.

Composition of the Audit Committee

Following the election of the directors pursuant to this Information Circular, it is intended that the following will be the members of the Audit Committee:

Name	Independence	Financial Literacy
Benjamin Catalano	Independent(1)	Financially literate(2)
Robert Rohlfing	N/A	Financially literate(2)
Gregory Sparks	Independent(1)	Financially literate(2)

Notes:

1. A member of an audit committee is independent if the member has no direct or indirect material relationship with the Company which could, in the view of the Board of Directors, reasonably interfere with the exercise of a member’s independent judgment.

2. An individual is financially literate if he has the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Company’s financial statements.

Relevant Education and Experience

– Benjamin Catalano January 1991 to June 2019 – Realtor, Sutton Group. June 2019 – present, Team3000 Realty.

Robert Rohlfing (Chair) - 1995 to 2013 – President, Open Door Productions Inc., Oil & Gas Production Company; 1995 to 2017 – President, Open Door Holdings Inc., Oil & Gas Exploration & Drilling Company; 2001 to 2018 – CEO Managing Partner, Seminole Oil Productions LLC., Oil & Gas Production Company. 2010 to present, Founder SJ&R. W. Rohlfing Scholarship Fund. 2018 to present, Director & EVP Desert Mountain Energy Corp.

Gregory Sparks – January 1994 to December 2014 – self employed GBS PC, a minerals engineering consulting company; 2004 to January 2010 – Senior VP Mining & Exploration of Sacre-Coeur Minerals Ltd.; January 2010 to August 2014 – President and CEO of Sacre-Coeur Minerals Ltd.; January 2015 to present – Managing Director Metals of The John T. Boyd Company – Mining and Geologic Consultants.

Audit Committee Oversight

At no time since the commencement of the Company’s most recently completed financial year was a recommendation of the Audit Committee to nominate or compensate an external auditor not adopted by the Board of Directors.

Reliance on Certain Exemptions

At no time since the commencement of the Company’s most recently completed financial year has the Company relied on the exemption in Section 2.4 of NI 52-110 (De Minimis Non-audit Services), or an exemption from NI 52-110, in whole or in part, granted under Part 8 of NI 52-110.

Pre-Approval Policies and Procedures

The Audit Committee is authorized by the Board of Directors to review the performance of the Company’s external auditors and approve in advance provision of services other than auditing and to consider the independence of the external auditors, including reviewing the range of services provided in the context of all consulting services bought by the Company. The Chairman of the Audit Committee is authorized to approve any non-audit services or additional work which the Chairman deems as necessary and is required to notify the other members of the Audit Committee of such non-audit or additional work.

External Auditor Service Fees (By Category)

The aggregate fees billed by the Company’s external auditors in each of the last two fiscal years for audit fees are as follows:

Financial Year Ending	Audit Fees(1)	Audit-Related Fees(2)	Tax Fees(3)	All Other Fees(4)
2016	$18,870	Nil	$975	Nil
2017	$18,870	Nil	$1,000	Nil
2018	$18,870	Nil	$975	Nil

Notes:

1. The aggregate audit fees billed.

2. The aggregate fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements which are not included under the heading “Audit Fees”.

3. The aggregate fees billed for professional services rendered for tax compliance, tax advice and tax planning, including preparation of the Company’s annual tax return and advice thereto.

4. The aggregate fees billed for products and services other than as set out under the headings “Audit Fees”, “Audit Related Fees” and “Tax Fees”.

Exemption

The Company is relying upon the exemption in section 6.1 of NI 52-110.