Drummond Ventures Corp.

NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON FEBRUARY 7, 2020

AND

MANAGEMENT INFORMATION CIRCULAR

DATED: JANUARY 7, 2020

DRUMMOND VENTURES CORP.

NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS

TAKE NOTICE THAT an annual and special meeting (the “Meeting”) of the shareholders of Drummond Ventures Corp. (the “Corporation”) will be held at Suite 1400, 400 Burrard Street, Vancouver, British Columbia, V6C 3A6 on Friday, February 7, 2020 at 10:00 a.m. for the following purposes:

to receive the audited financial statements of the Corporation for the financial year ended June 30, 2019 and the accompanying report of the auditors thereon;
to appoint the auditor of the Corporation for the ensuing year and to authorize the directors of the Corporation to fix the auditor’s remuneration, as more fully described in the management information circular dated January 7, 2020 (the “Management Information Circular”) accompanying this notice of Meeting;
to set the number of directors of the Corporation at four (4);
to elect Craig Rollins, Marcel de Groot, Grant Kim, and David De Witt until the close of the next annual meeting of shareholders of the Corporation or until their successors are elected or appointed, as more fully described in the Management Information Circular;
to consider and if deemed appropriate, to pass, with or without variation, an ordinary resolution reapproving the stock option plan of the Corporation (attached as Schedule “B” to the Management Information Circular), as more fully described in the Management Information Circular;
to consider and if deemed appropriate, to pass, with or without variation, an ordinary resolution of disinterested shareholders of the Corporation approving a restricted share plan of the Corporation (attached as Schedule “C” to the Management Information Circular), as more fully described in the Management Information Circular; and
to transact such other business as may be properly brought before the Meeting or any postponement or adjournment thereof.

Only shareholders of record as of January 3, 2020 are entitled to notice of the Meeting and to vote at the Meeting or at any adjournment or postponement thereof.

It is desirable that as many common shares as possible be represented at the Meeting. If you are a registered shareholder of the Corporation and unable to attend the Meeting in person, please vote by proxy by following the instructions provided in the enclosed form of proxy at least 48 hours (excluding Saturdays, Sundays and holidays recognized in the Province of British Columbia) before the time and date of the Meeting or any adjournment or postponement thereof.

If you are a non-registered shareholder of the Corporation and received this Notice and accompanying materials through a broker, a financial institution, a participant, a trustee or administrator of a retirement savings plan, retirement income fund, education savings plan or other similar savings or investment plan registered under the Income Tax Act (Canada), or a nominee of any of the foregoing,

that holds your securities on your behalf (an “Intermediary”), please complete and return the materials in accordance with the instructions provided to you by your Intermediary.

Late instruments of proxy may be accepted or rejected by the Chairman of the Meeting in his discretion and the Chairman is under no obligation to accept or reject any particular late instruments of proxy.

DATED at Vancouver, British Columbia this 7th day of January 2020.

By Order of the Board of Directors of Drummond Ventures Corp.

(signed) “ Craig Rollins ”

Craig Rollins Chief Executive Officer, Chief Financial Officer and Corporate Secretary

iii

DRUMMOND VENTURES CORP. MANAGEMENT INFORMATION CIRCULAR

SOLICITATION OF PROXIES

This management information circular (this “Management Information Circular”) is provided in connection with the solicitation of proxies by management of Drummond Ventures Corp. (the “Corporation”) for use at an annual and special meeting (the “Meeting”) of the holders (“Shareholders”) of common shares (“Common Shares”) in the capital of the Corporation. The Meeting will be held on Friday, February 7, 2020 at 10:00 a.m. at the offices of the Corporation at Suite 1400, 400 Burrard Street, Vancouver, British Columbia, V6C 3A6, or at such other time or place to which the Meeting may be adjourned, for the purposes set forth in the notice of annual and special meeting accompanying this Management Information Circular (the “Notice”).

Although it is expected that the solicitation of proxies will be primarily by mail, proxies may also be solicited personally or by telephone, facsimile or other means of electronic communication. In accordance with National Instrument 54-101 - Communication with Beneficial Owners of Securities of a Reporting Issuer (“NI 54-101”), arrangements have been made with brokerage houses and other intermediaries, clearing agencies, custodians, nominees and fiduciaries to forward solicitation materials to the beneficial owners of the Common Shares held of record by such persons and the Corporation may reimburse such persons for reasonable fees and disbursements incurred by them in doing so.

These securityholder materials are being sent to both registered and non-registered owners of Common Shares. If you are a non-registered owner of Common Shares, and the Corporation 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 Common Shares on your behalf.

Accompanying this Management Information Circular (and filed with applicable securities regulatory authorities) is a form of proxy for use at the Meeting (an “Instrument of Proxy”). Each Shareholder who is entitled to attend at meetings of shareholders is encouraged to participate in the Meeting and all Shareholders are urged to vote on matters to be considered in person or by proxy.

Unless otherwise stated, the information contained in this Management Information Circular is given as of January 7, 2020 (the “Effective Date”).

All time references in this Management Information Circular are references to Vancouver time.

APPOINTMENT AND REVOCATION OF PROXIES

Appointment of a Proxy

Those Shareholders who wish to be represented at the Meeting by proxy must complete and deliver a proper form of proxy to Computershare Investor Services Inc. (the “Transfer Agent”) pursuant to the instructions in the enclosed Instrument of Proxy. The persons named as proxyholders in the Instrument of Proxy accompanying this Management Information Circular are directors or officers of the Corporation, or persons designated by management of the Corporation, and are representatives of the Corporation’s management for the Meeting. A Shareholder who wishes to appoint some other

person (who need not be a Shareholder) to attend and act for him, her or it and on his, her or its behalf at the Meeting other than the management nominee designated in the Instrument of Proxy may do so by either: (i) crossing out the names of the management nominees AND legibly printing the other person’s name in the blank space provided in the accompanying Instrument of Proxy; or (ii) completing another valid form of proxy. In either case, the completed form of proxy must be delivered to the Transfer Agent, at the place and within the time specified herein for the deposit of proxies. A Shareholder who appoints a proxy who is someone other than the management representatives named in the Instrument of Proxy should notify such alternative nominee of the appointment, obtain the nominee’s consent to act as proxy, and provide instructions on how the Common Shares are to be voted. The nominee should bring personal identification to the Meeting. In any case, the form of proxy should be dated and executed by the Shareholder or an attorney authorized in writing, with proof of such authorization attached (where an attorney executed the proxy form).

In order to validly appoint a proxy, Instruments of Proxy must be received by the Transfer Agent at least 48 hours, excluding Saturdays, Sundays and holidays, prior to the Meeting or any adjournment or postponement thereof. After such time, the Chairman of the Meeting may accept or reject a form of proxy delivered to him in his discretion but is under no obligation to accept or reject any particular late form of proxy.

Revoking a Proxy

A Shareholder who has validly given a proxy may revoke it for any matter upon which a vote has not already been cast by the proxyholder appointed therein. In addition to revocation in any other manner permitted by law, a proxy may be revoked with an instrument in writing signed and delivered to either the registered office of the Corporation or the Transfer Agent at any time up to and including the last business day preceding the date of the Meeting, or any postponement or adjournment thereof at which the proxy is to be used, or deposited with the Chairman of such Meeting on the day of the Meeting, or any postponement or adjournment thereof. The document used to revoke a proxy must be in writing and completed and signed by the Shareholder or his or her attorney authorized in writing or, if the Shareholder is a corporation, under its corporate seal or by an officer or attorney thereof duly authorized.

Also, a Shareholder who has given a proxy may attend the Meeting in person (or where the Shareholder is a corporation, its authorized representative may attend), revoke the proxy (by indicating such intention to the Chairman before the proxy is exercised) and vote in person (or withhold from voting).

Signature on Proxies

The form of proxy must be executed by the Shareholder or his or her duly appointed attorney authorized in writing or, if the Shareholder is a corporation, by a duly authorized officer whose title must be indicated. A form of proxy signed by a person acting as attorney or in some other representative capacity should indicate that person’s capacity (following his signature) and should be accompanied by the appropriate instrument evidencing qualification and authority to act (unless such instrument has been previously filed with the Corporation).

Voting of Proxies

Each Shareholder may instruct his, her or its proxy how to vote his, her or its Common Shares by completing the blanks on the Instrument of Proxy.

The Common Shares represented by the enclosed Instrument of Proxy will be voted or withheld from voting on any motion, by ballot or otherwise, in accordance with any indicated instructions. If a Shareholder specifies a choice with respect to any matter to be acted upon, the Common Shares will be voted accordingly. In the absence of such direction, such Common Shares will be voted FOR THE RESOLUTIONS DESCRIBED IN THE INSTRUMENT OF PROXY AND BELOW. If any amendment or variation to the matters identified in the Notice is proposed at the Meeting or any adjournment or postponement thereof, or if any other matters properly come before the Meeting or any adjournment or postponement thereof, the accompanying Instrument of Proxy confers discretionary authority to vote on such amendments or variations or such other matters according to the best judgment of the appointed proxyholder. Unless otherwise stated, the Common Shares represented by a valid Instrument of Proxy will be voted in favour of the election of nominees set forth in this Management Information Circular except where a vacancy among such nominees occurs prior to the Meeting, in which case, such Common Shares may be voted in favour of another nominee in the proxyholder’s discretion. As at the Effective Date, management of the Corporation knows of no such amendments or variations or other matters to come before the Meeting.

Advice to Beneficial Shareholders

The information set forth in this section is of importance to many Shareholders, as a substantial number of Shareholders do not hold Common Shares in their own name. Shareholders who hold their Common Shares through brokers, intermediaries, trustees or other persons, or who otherwise do not hold their Common Shares in their own name (“Beneficial Shareholders”) should note that only proxies deposited by Shareholders who are registered shareholders (that is, shareholders whose names appear on the records maintained by the registrar and transfer agent for the Common Shares as registered holders of Common Shares) will be recognized and acted upon at the Meeting. If Common Shares are listed in an account statement provided to a Beneficial Shareholder by a broker, those Common Shares will, in all likelihood, not be registered in the Shareholder’s name. Such Common Shares will more likely be registered under the name of the Shareholder’s broker or an agent of that broker. In Canada, the vast majority of such shares are registered under the name of CDS & Co. (the registration name for CDS Clearing and Depository Services Inc., which acts as nominee for many Canadian brokerage firms). Common Shares held by brokers (or their agents or nominees) on behalf of a broker’s client can only be voted at the direction of the Beneficial Shareholder. Without specific instructions, brokers (or their agents and nominees) are prohibited from voting shares for the broker’s clients. Subject to the following discussion in relation to NOBOs (as defined below), the Corporation does not know for whose benefit the shares of the Corporation registered in the name of CDS & Co., a broker or another nominee, are held.

There are two categories of Beneficial Shareholders for the purposes of applicable securities regulatory policy in relation to the mechanism of dissemination to Beneficial Shareholders of proxy-related materials and other securityholder materials and the request for voting instructions from such Beneficial Shareholders. Non-objecting beneficial owners (“NOBOs”) are Beneficial Shareholders who have advised their intermediary (such as brokers or other nominees) that they do not object to their intermediary

disclosing ownership information to the Corporation, consisting of their name, address, e-mail address, securities holdings and preferred language of communication. Securities legislation restricts the use of that information to matters strictly relating to the affairs of the Corporation. Objecting beneficial owners (“OBOs”) are Beneficial Shareholders who have advised their intermediary that they object to their intermediary disclosing such ownership information to the Corporation.

In accordance with the requirements of NI 54-101, the Corporation is sending the Notice of Meeting, this Management Information Circular, and a voting instruction form or a form of proxy, as applicable (collectively, the “Meeting Materials”), directly to NOBOs and indirectly through intermediaries to OBOs. NI 54-101 permits the Corporation, in its discretion, to obtain a list of its NOBOs from intermediaries and use such NOBO list for the purpose of distributing the Meeting Materials directly to, and seeking voting instructions directly from, such NOBOs. As a result, the Corporation is entitled to deliver Meeting Materials to Beneficial Shareholders in two manners: (a) directly to NOBOs and indirectly through intermediaries to OBOs; or (b) indirectly to all Beneficial Shareholders through intermediaries. In accordance with the requirements of NI 54-101, the Corporation is sending the Meeting Materials directly to NOBOs and indirectly through intermediaries to OBOs. The Corporation will pay the fees and expenses of intermediaries for their services in delivering Meeting Materials to OBOs in accordance with NI 54-101.

The Corporation has used a NOBO list to send the Meeting Materials directly to NOBOs whose names appear on that list. If the Transfer Agent has sent these materials directly to a NOBO, such NOBO’s name and address and information about its holdings of Common Shares have been obtained from the intermediary holding such shares on the NOBO’s behalf in accordance with applicable securities regulatory requirements. As a result, any NOBO of the Corporation can expect to receive a voting instruction form from the Transfer Agent. NOBOs should complete and return the voting instruction form to the Transfer Agent in the envelope provided. In addition, Internet voting is available. Instructions in respect of the procedure for Internet voting can be found in the voting instruction form. The Transfer Agent will tabulate the results of voting instruction forms received from NOBOs and will provide appropriate instructions at the Meeting with respect to the shares represented by such voting instruction forms.

Applicable securities regulatory policy requires intermediaries, on receipt of Meeting Materials that seek voting instructions from Beneficial Shareholders indirectly, to seek voting instructions from Beneficial Shareholders in advance of shareholders’ meetings on Form 54-101F7 – Request for Voting Instructions Made by Intermediaries (“Form 54-101F7”). Every intermediary/broker has its own mailing procedures and provides its own return instructions, which should be carefully followed by Beneficial Shareholders in order to ensure that their Common Shares are voted at the Meeting or any adjournment(s) or postponement(s) thereof. Often, the form of proxy supplied to a Beneficial Shareholder by its broker is identical to the form of proxy provided to registered shareholders; however, its purpose is limited to instructing the registered shareholder how to vote on behalf of the Beneficial Shareholder. Beneficial Shareholders who wish to appear in person and vote at the Meeting should be appointed as their own representatives at the Meeting in accordance with the directions of their intermediaries and Form 54101F7. Beneficial Shareholders can also write the name of someone else whom they wish to attend at the Meeting and vote on their behalf. Unless prohibited by law, the person whose name is written in the space provided in Form 54-101F7 will have full authority to present matters to the Meeting and vote on all matters that are presented at the Meeting, even if those matters are not set out in Form 54-101F7 or

this Management Information Circular. The majority of brokers now delegate responsibility for obtaining instructions from clients to Broadridge Financial Solutions, Inc. (“Broadridge”). Broadridge typically mails a voting instruction form in lieu of the form of proxy. Beneficial Shareholders are requested to complete and return the voting instruction form to Broadridge by mail or facsimile. Broadridge will then provide aggregate voting instructions to the Transfer Agent, which tabulates the results and provides appropriate instructions respecting the voting of shares to be represented at the Meeting or any adjournment or postponement thereof.

By choosing to send the Meeting Materials to NOBOs directly, the Corporation (and not the intermediary holding Common Shares 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.

All references to Shareholders in this Management Information Circular and the accompanying Instrument of Proxy and Notice are to registered Shareholders unless specifically stated otherwise.

QUALIFYING TRANSACTION

The Corporation has entered into a definitive agreement dated December 2, 2019 (the “Definitive Agreement”) with Sun Machine Entertainment Inc. (“SME”) to provide for the completion of a business combination with the Corporation (the “SME Transaction”). The SME Transaction is structured as a “three-cornered” amalgamation under the provisions of the Business Corporation Act (British Columbia), pursuant to which, among other things: (i) SME will amalgamate with a wholly owned subsidiary of the Corporation and the amalgamated company will become a wholly-owned subsidiary of the Corporation; and (ii) the shareholders of SME (pre-SME Transaction) will hold a significant majority of the outstanding Common Shares following the SME Transaction. Upon completion of the SME Transaction, the Corporation intends to change its name to “Sun Machine Entertainment Inc.”, or such other name as may be determined by the parties. If completed, the SME Transaction is intended to constitute the “Qualifying Transaction” of the Corporation under Policy 2.4 - Capital Pool Companies (the “CPC Policy”) of the TSX Venture Exchange (the “TSXV”). All references herein to “Resulting Issuer” refer to the Corporation after completion of the SME Transaction.

SHAREHOLDERS ARE NOT REQUIRED TO APPROVE THE SME TRANSACTION. However, the SME Transaction is very important to the Corporation and certain matters to be considered at the Meeting are to prepare the Corporation to complete the SME Transaction. Full details regarding SME and the SME Transaction will be disclosed by the Corporation in a filing statement (the “Filing Statement”) to be prepared and filed under the CPC Policy. The Filing Statement will be posted on SEDAR at www.sedar.com prior to completion of the SME Transaction. Management of the Corporation will endeavour to post the Filing Statement on SEDAR as quickly as possible; however, the posting thereof is not expected until after the date of the Meeting. Shareholders are urged to review the press releases issued by the Corporation on September 26, 2019 and December 2, 2019 announcing the proposed SME Transaction and the entering into of the Definitive Agreement as well as the Filing Statement of the Corporation if, as and when filed on SEDAR, as it contains important disclosure regarding the Resulting Issuer and the SME Transaction.

Subject to receipt of all requisite approvals, including from the TSXV, the SME Transaction is anticipated to close in February 2020 or early March 2020. Failure to pass certain resolutions such as increasing the

board size to four (4) and the Restricted Share Plan (as defined below) could impede or prevent the completion of the SME Transaction as contemplated.

VOTING SHARES AND PRINCIPAL HOLDERS OF VOTING SECURITIES

Shareholders of record as of January 3, 2020 (the “Record Date”) are entitled to receive notice and attend and vote at the Meeting. As at the Effective Date, the Corporation had 5,125,000 issued and outstanding Common Shares. These Common Shares are the only voting shares of the Corporation which are issued and outstanding as of the Record Date. Each Common Share entitles the holder to one vote in respect of any matter that may come before the Meeting.

To the knowledge of the directors and officers of the Corporation, as at the Effective Date, no person or corporation beneficially owns, directly or indirectly, or exercises control or direction over, more than 10% of the issued and outstanding Common Shares, other than:

Name	Type of Ownership	Number of Common Shares Owned or Controlled at the Effective Date(1)	Percent of Outstanding Common Shares
Craig Rollins	Direct and Beneficial	1,000,000	19.51%
David De Witt	Direct and Beneficial	1,000,000	19.51%
Marcel de Groot	Direct and Beneficial	1,000,000	19.51%
Grant Kim	Direct and Beneficial	1,000,000	19.51%

Notes:

(1) As at the Effective Date, there were 5,125,000 Common Shares issued and outstanding.

INDEBTEDNESS OF DIRECTORS AND OFFICERS

No directors or officers of the Corporation, nor any proposed nominee for election as a director of the Corporation, nor any associate or affiliate of any one of them, is or was indebted, directly or indirectly, to the Corporation or its subsidiaries at any time since incorporation.

INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS

Except as disclosed in this Management Information Circular, no director or officer of the Corporation, nor any proposed nominee for election as a director of the Corporation, nor any other insider of the Corporation, nor any associate or affiliate of any one of them, has or has had, at any time since incorporation of the Corporation, any material interest, direct or indirect, in any transaction or proposed transaction that has materially affected or would materially affect the Corporation.

INTEREST OF DIRECTORS AND OFFICERS IN MATTERS TO BE ACTED UPON

Except as disclosed in this Management Information Circular, no director or senior officer of the Corporation, nor any proposed nominee for election as a director of the Corporation, has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter to be acted on at the Meeting (other than the election of directors).

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

All capitalized terms used herein shall have the meaning ascribed thereto in the CPC Policy, unless otherwise defined herein. Section 8.1 of the CPC Policy states that until the completion of the Qualifying Transaction, no payment of any kind may be made, directly or indirectly, by a CPC to a Non-Arm’s Length Party of the CPC or a Non-Arm’s Length Party to the Qualifying Transaction, or to any person engaged in Investor Relations Activities in respect of the CPC or the securities of the CPC or any resulting issuer by any means including: (a) remuneration, which includes, but is not limited to: (i) salaries; (ii) consulting fees; (iii) management contract fees or directors’ fees; (iv) finder’s fees; (v) loans; (vi) advances; (vii) bonuses; and (b) deposits and similar payments.

The only compensation that is permitted to be provided to the directors, officers, employees and consultants of the Corporation, so long as it is a CPC, is the grant of incentive stock options. Due to the foregoing limitation, the board of directors of the Corporation does not consider the implications of the risks associated with the Corporation’s compensation policies and practices. In addition, no officer or director of the Corporation is permitted to purchase financial instruments that are designed to hedge or offset a decrease in the market value of equity securities granted as compensation or held, directly or indirectly, by such officers and directors.

Compensation of Executive Officers

The following table sets forth information concerning the total compensation for the financial years ended June 30, 2019 and 2018 for Craig Rollins, the Chief Executive Officer, Chief Financial Officer, and Corporate Secretary of the Corporation (the “Named Executive Officer”). Mr. Rollins is the only officer of the Corporation and he also serves as a director of the Corporation.

					Non-Equity Incentive Plan Compensation($)	Non-Equity Incentive Plan Compensation($)
Name and Principal Position	Year Ended June 30	Salary ($)	Share- Based Awards ($)	Option- Based Awards ($)	Annual Incentive Plans	Long- Term Incentive Plans	Pension Value ($)	All Other Compensation ($)	Total Compensation ($)
Craig Rollins Chief Executive Officer, Chief Financial Officer And Corporate Secretary	2019 2018(2)	Nil Nil	Nil Nil	23,334(1) Nil	Nil Nil	Nil Nil	Nil Nil	Nil Nil	23,334 Nil

Notes:

(1) Based on a grant date of December 21, 2018. The fair value of these stock options of $23,334 was estimated at the grant date based on the Black-Scholes pricing model, using the following weighted average assumptions:

Share price: $0.20 Expected dividend yield: Nil Risk-free interest rate: 2.08% Expected life: 10.0 years Expected volatility: 100% (as historical volatility of the Common Shares was not available, expected volatility was based on the historical performance of the common shares of other similar companies.)

(2) The Corporation was incorporated on March 28, 2018.

Outstanding Share-Based Awards and Option-Based Awards

The following table sets forth all share-based and option-based awards of the Corporation granted to the Named Executive Officer that were granted before, and remain outstanding as of, the end of the Corporation’s most recently completed financial year (June 30, 2019).

	Share-Based Awards	Share-Based Awards	Share-Based Awards		Option-Based Awards	Option-Based Awards
Named Executive Officer	Number of Shares or Units of Shares that Have Not Vested	Market or Payout Value of Share- Based Awards that Have Not Vested ($)	Market or Payout Value of Vested Share-Based Awards Not Paid Out of Distributed	Number of Securities Underlying Unexercised Options	Option Exercise Price ($)	Option Expiration Date(1)	Value of Unexercised in- the-money Options ($)(2)
Craig Rollins Chief Executive Officer, Chief Financial Officer and Corporate Secretary	Nil	Nil	Nil	130,000	0.20	December 21, 2028	6,500

Notes:

(1) The options expire on the earlier of: (A) December 21, 2028; or (B) if Mr. Rollins does not continue as a director, officer, or an employee of the Corporation following a Qualifying Transaction, on the later of 12 months following the completion of a Qualifying Transaction and the 90[th] day following the date Mr. Rollins ceases to be a director and officer of the Corporation, provided that if cessation of office was by reason of death, the options may be exercised within a maximum period of 12 months after such death.
(2) Calculated based on the difference between the market value of the Common Shares underlying the options at June 30, 2019 and the exercise price of the options. The last trading price of the Common Shares on the TSXV prior to June 30, 2019 was $0.25 per Common Share. The Common Shares last traded on the TSXV on August 19, 2019 at a last trading price of $0.35 per Common Share.

During the financial year ended June 30, 2019 and as of January 7, 2020, no options were exercised by the Named Executive Officer.

Incentive Plan Awards – Value Vested or Earned During the Financial Period

The following table sets forth the value of all incentive plan awards of the Corporation granted to the Named Executive Officer that vested or were awarded during the Corporation’s most recently completed financial year (June 30, 2019).

Named Executive Officer	Share-Based Awards – Value Vested During the Year ($)	Option-Based Awards – Value Vested During the Year ($)(1)	Non-Equity Incentive Plan Compensation – Value Earned During the Year ($)
Craig Rollins Chief Executive Officer, Chief Financial Officer and Corporate Secretary	Nil	Nil	Nil

Notes:

(1) Calculated by multiplying the number of options that vested during the year by the difference between the exercise price and the closing price of the Common Shares on the TSXV on the date of vesting. All options held by the Named Executive Officer vested immediately upon grant during the financial year ended June 30, 2019.

Securities Authorized for Issuance under Equity Compensation Plans

The following table sets forth the securities of the Corporation that are authorized for issuance under equity compensation plans as at the end of the Corporation’s most recently completed financial year (June 30, 2019).

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 compensationplans(1)
Equity compensation plans approved by securityholders	130,000 Common Shares	$0.20 per Common Share	382,500(2)
Equity compensation plans not approved by securityholders	Nil	Nil	Nil
Total	130,000 Common Shares	$0.20 per Common Share	Nil

Notes:

(1) As of the Effective Date, the Corporation had 5,125,000 Common Shares issued and outstanding.
(2) The aggregate number of Common Shares reserved for issuance upon the exercise of options pursuant to the Option Plan (defined below) is such number of Common Shares as is equal to 10% (equaling 512,500 as of the Effective Date) of the number of issued and outstanding Common Shares.

Pension and Other Benefit Plans

The Corporation has no pension or other benefit plans currently in place.

Termination of Employment, Change in Responsibilities and Employment Contracts

As at the Effective Date, the Corporation did not have any plan, contract or arrangement, compensatory or otherwise: (1) regarding the employment of a Named Executive Officer; or (2) whereby a Named Executive Officer is entitled to any payment in the event of the Named Executive Officer’s resignation, retirement or employment, a change of control of the Corporation, or a change in the Named Executive Officer’s responsibilities following a change in control of the Corporation.

Compensation of Directors

Since incorporation, the Corporation has not compensated the directors for serving in their capacity as directors. The Corporation reimburses the out-of-pocket expenses of its directors incurred in connection with attendance at or participation in meetings of the board of directors (the “Board”). The Named Executive Officer is also a director of the Corporation and did not receive any additional compensation for services rendered in such capacity. See “Compensation of Executive Officers”.

Stock Options

Pursuant to the stock option plan (the “Option Plan”) of the Corporation, the Corporation granted stock options to Craig Rollins on December 21, 2018. Mr. Rollins was granted options exercisable to acquire a total of 130,000 Common Shares at a price of $0.20 per share. The options are non-assignable. All of the options expire on the earlier of: (A) December 21, 2028; or (B) if Mr. Rollins does not continue as a director, officer, or an employee of the Corporation following a Qualifying Transaction, on the later of 12 months following the completion of a Qualifying Transaction and the 90th day following the date the Optionee ceases to be a director and officer of the Corporation, provided that if the cessation was by reason of death, the options may be exercised within a maximum period of 12 months after such death. All Common Shares acquired on the exercise of the options prior to completion of a Qualifying Transaction must be deposited in escrow until the Final Exchange Bulletin is issued.

The full text of the Option Plan is set out in Schedule “B” to the Management Information Circular.

AUDIT COMMITTEE

Under National Instrument 52-110 - Audit Committees (“NI 52-110”), the Corporation is required to include in this Management Information Circular the disclosure required under Form 52-110F2 with respect to the audit committee (the “Audit Committee”) of the Board, including the composition of the Audit Committee, the text of the Audit Committee charter (attached hereto as Schedule “A”), and the fees paid to the external auditor.

Composition of the Audit Committee

The following are the current members of the Audit Committee:

Name	Independence(1)	Financial Literacy
Marcel de Groot	Independent	FinanciallyLiterate
Grant Kim	Independent	FinanciallyLiterate
Craig Rollins	Not Independent(2)	FinanciallyLiterate

Notes:

(1) The Corporation is a “venture issuer” for the purposes of NI 52-110. As such, the Corporation is exempt from the requirement to have the Audit Committee comprised entirely of independent members.

(2) Mr. Rollins is not independent under NI 52-110 because he is the Chief Executive Officer, Chief Financial Officer and Corporate Secretary of the Corporation.

Relevant Education and Experience

Marcel de Groot - Marcel de Groot co-founded Pathway Capital Ltd., a Vancouver-based venture capital company, in September 2004 and serves as its President. Mr. de Groot has extensive public company experience. He currently serves as a director of Asanko Gold Inc., a gold mining company listed on the TSX with its flagship project located in West Africa, Equinox Gold Corp., a gold mining company listed on the TSX with properties in Brazil and California, and Magnitude Mining Ltd., a CPC focused on the mining industry. Mr. de Groot holds a Bachelor of Commerce degree from the University of British Columbia and is a Chartered Professional Accountant with the Chartered Professional Accountants of British Columbia.

Grant Kim - Mr. Kim is a private investor and currently Executive Director of Axion Ventures Inc. (TSXV). During the last five years, Mr. Kim has been an active shareholder in various businesses. Mr. Kim was a partner in a private equity group making direct investments in Asia since 2004.

Craig Rollins - Mr. Rollins was a lawyer at Clark Wilson LLP in the Corporate Finance, Securities & M&A (public and private) practice groups from 2010 until December 2016. From December 2016 to April 2019, Mr. Rollins was General Counsel and Corporate Secretary for a TSXV-listed technology investment company. Mr. Rollins holds his undergraduate and law degrees from the University of British Columbia and the University of Windsor, respectively.

Audit Committee Oversight

At no time since the commencement of the Corporation’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.

Reliance on Certain Exemptions

The Corporation is relying on the exemption provided in Section 6.1 of NI 52-110 as the Corporation is a “venture issuer”. As a result, the Corporation is exempt from the requirements of Part 3 (Composition of Audit Committee) and Part 5 (Reporting Obligations) of NI 52-110.

Audit Committee Charter

The Audit Committee has recently adopted specific policies and procedures for the engagement of nonaudit services as described in Schedule “A” attached hereto.

External Auditor Service Fees (By Category)

The aggregate fees billed by the Corporation’s external auditor in the financial years ended June 30, 2019 and 2018 are as follows:

Financial Year Ending	Audit Fees(1)	Audit Related Fees	Tax Fees	All Other Fees
June 30,2019	$16,000	Nil	Nil	Nil
June 30,2018(2)	$6,000	Nil	Nil	$4,000(3)

Notes:

(1) The audit services related to professional services rendered for audits of the Corporation’s annual financial statements.

(2) The Corporation was incorporated on March 28, 2018.

(3) Related to the filing of the Corporation’s prospectus for its initial public offering and billed in the financial year ended June 30, 2019.

AUDITOR

The auditor of the Corporation is Ernst & Young LLP, 700 W. Georgia St., Vancouver, BC V7Y 1C7, Canada. Ernst & Young LLP has served as the Corporation’s auditor since July 19, 2018.

CORPORATE GOVERNANCE

The Board assumes overall responsibility for the direction of the Corporation through its delegation to senior management and through the ongoing function of the Board and its committees, as applicable.

The sole business activity of the Corporation to date has been the identification of a potential Qualifying Transaction.

There are three directors on the Board. Marcel de Groot and Grant Kim are independent directors. Craig Rollins is not considered independent as he is an executive officer of the Corporation.

MATTERS TO BE CONSIDERED AT THE MEETING

To the knowledge of the Board, the only matters to be brought before the Meeting are set forth in the accompanying Notice of Meeting. These matters are described in more detail under the headings below.

1. Financial Statements

The audited financial statements of the Corporation and the auditor’s report thereon to be received by the Shareholders at the Meeting are as at and for the financial year ended June 30, 2019. The annual financial statements were audited by Ernst & Young LLP of Vancouver, British Columbia.

2. Appointment of Auditor

At the Meeting, the Shareholders are required to appoint the auditor of the Corporation. Ordinarily, that would involve re-appointing Ernst & Young LLP, the Corporation’s current auditor, to hold office until the next annual meeting of Shareholders. However, if the SME Transaction is completed, it will be desirable to change the auditor of the Corporation to the auditor of SME. In such circumstance, the Shareholders would be asked to consider appointing MNP LLP, MNP Tower, 1021 W Hastings St #2200, Vancouver, BC V6E 0C3, as auditor of the Corporation. At the time of the Meeting, the SME Transaction is not expected to have been completed and there can be no assurance at that time that it will be completed.

In order to avoid changing the auditor of the Corporation should it prove unnecessary to do so, and in order to dispense with the need to call an additional meeting of Shareholders to approve a change of auditor following completion of the SME Transaction, the Shareholders will be asked at the Meeting to consider, and if thought appropriate, to pass an ordinary resolution, the text of which is as follows:

“ BE IT HEREBY RESOLVED that:

(1) the appointment of Ernst & Young LLP as auditor of the Corporation to hold office until the earlier of:
(a) the close of the next annual meeting of the Shareholders, or

(b) 12:01 a.m. on the day following the date on which the SME Transaction is completed (the “Change of Auditor Time”),

is hereby approved;

(2) the appointment of MNP LLP as auditor of the Corporation to hold office from the Change of Auditor Time until the close of the next annual meeting of the Shareholders is hereby approved; and
(3) the Board is hereby authorized to fix the remuneration of the auditors so appointed.”

The determination not to re-appoint Ernst & Young LLP as auditor of the Corporation has been made in the context of the SME Transaction and not because of any reportable event (as that term is defined in National Instrument 51-102 – Continuous Disclosure Obligations ).

The persons designated as proxyholders in the accompanying Instrument of Proxy (absent contrary directions) intend to vote FOR the appointment of the auditors as set forth above and therein.

3. Number of Directors

While the Corporation is a public company, the Articles of the Corporation provide for the number of directors be set at the greater of three (3) and the most recently set by ordinary resolution at every annual general meeting. Between annual general meetings the directors may appoint one or more additional directors, but the number of additional directors appointed must not at any time exceed onethird (1/3) of the number of the current directors who were elected or appointed by ordinary shareholder resolution.

Upon completion of the SME Transaction, the Resulting Issuer board is anticipated to include five (5) directors. The Resulting Issuer board has not been finalized and therefore resolutions approving a current slate and new slate is not applicable. However, pursuant to the one-third (1/3) increase provisions noted above, at the Meeting, Shareholders will be asked to pass an ordinary resolution to increase and set the number of directors of the Company at four (4). As a result, upon closing of the SME Transaction, the Resulting Issuer board can be increased to five (5).

To set the number of directors of the Company at four (4), at the Meeting, Shareholders will be asked to pass an ordinary resolution to set the number of directors of the Company at four (4). An ordinary resolution needs to be passed by a simple majority of the votes cast by the Shareholders present in person or represented by proxy and entitled to vote at the Meeting.

“ BE IT HEREBY RESOLVED that the number of directors of the Corporation for the ensuring year be set at four (4)”.

The persons designated as proxyholders in the accompanying Instrument of Proxy (absent contrary directions) intend to vote FOR the approval of setting the number of directors of the Corporation at four (4).

4. Election of Directors

At the Meeting, Shareholders are required to elect the directors of the Corporation to hold office until the close of the next annual meeting of Shareholders or until their successors are elected or appointed. As noted above, it is desirable in connection with the SME Transaction to elect the four (4) the directors described below to serve from the close of the Meeting until the earlier of the close of the next annual meeting of Shareholders of the Corporation or until their successors are elected or appointed (e.g. pursuant to the SME Transaction).

At the time of the Meeting, the SME Transaction will not yet have been completed and there can be no assurance at that time that it will be completed. However, all four (4) directors are insiders (and/or current directors) of the Corporation.

The Shareholders will be asked at the Meeting to consider, and if thought appropriate, to pass an ordinary resolution, the text of which is as follows:

“ BE IT HEREBY RESOLVED that the election of each of Craig Rollins, Marcel de Groot, Grant Kim, and David De Witt as directors of the Corporation to hold office until the earlier of the close of the next annual meeting of shareholders of the Corporation or until their successors are elected or appointed.”

The persons designated as proxyholders in the accompanying Instrument of Proxy (absent contrary directions) intend to vote FOR the election of the directors as set forth above and therein. The Corporation does not contemplate that any of such nominees will be unable to serve as directors; however, if for any reason any of the proposed nominees do not stand for election or are unable to serve as such, proxies held by the persons designated as proxyholders in the accompanying Instrument of Proxy will be voted FOR another nominee in their discretion unless the Shareholder has specified in his or her form of proxy that his or her Common Shares are to be withheld from voting in the election of directors.

The following sets forth the name of each of the persons proposed to be nominated for election as a director of the Corporation, all positions and offices in the Corporation presently held by such nominees, the nominees’ municipality and country of residence, principal occupation at the present time and during the preceding five years, the period during which the respective nominees have served as directors, and the number and percentage of Common Shares beneficially owned by the nominees, directly or indirectly, or over which control or direction is exercised, as of the Effective Date.

Name and Place of Residence	Positions with the Corporation and Date First Appointed to the Board	Principal Occupation for Past Five (5) Years	Number and Percentage of Common Shares Beneficially Owned or Controlled(1)
Craig Rollins(2) Vancouver, British Columbia	CEO, CFO, Corporate Secretary and Director since March 28, 2018	Lawyer at Clark Wilson LLP from May 2010 until December 2016; and General Counsel of Axion Ventures Inc. from December 2016 until April 2019	1,000,000 (19.51)
Marcel de Groot(2) Vancouver, British Columbia	Director since March 28, 2018	Co-founder and President of Pathway Capital Ltd.; director of Asanko Gold Inc. (TSX), Equinox Gold Corp. (TSXV) and Magnitude MiningLtd.(TSX)	1,000,000 (19.51)
Grant Kim(2) Vancouver, British Columbia	Director since March 28, 2018	Executive Director of Axion Ventures Inc. from July 2016 until present; and during the past five years continues to be an active investor and shareholder in various businesses	1,000,000 (19.51)
David De Witt Vancouver, British Columbia	Proposed Director	Co-Founder and Chairman of Pathway Capital Ltd. since January 2002; Chairman of Sandstorm Gold since January2008	1,000,000 (19.51)

Notes:

(1) Based on 5,125,000 Common Shares issued and outstanding as at the Effective Date.

(2) Member of the Audit Committee.

Please see “Audit Committee – Relevant Experience and Education” above for additional biographical information regarding Mr. Rollins, Mr. de Groot, and Mr. Kim. For Mr. De Witt, additional biographical information is set out below:

David De Witt is a co-founder and the Chairman of Pathway Capital Ltd. and has over 35 years of experience in the capital markets. Prior to forming Pathway in 2004, Mr. De Witt was partner in a venture capital firm, where he was involved in strategic planning, acquisitions, and investment decisions. He also spent 18 years as a practicing lawyer before his retirement from law in 1997. Mr. De Witt is currently Chairman and Director of Sandstorm Gold Ltd., which is listed on the TSX and NYSE. Mr. De Witt’s focus has been mining but he also has experience in financing public and private companies and structuring and negotiating transactions in the biotechnology, software, and telecommunications industries. Mr. De Witt holds both a Bachelor of Commerce and a Bachelor of Law (LLB) from the University of British Columbia.

Other Reporting Issuer Experience

The following table sets out the names of the directors of the Corporation that are directors of other issuers that are reporting issuers (or the equivalent) in Canada or a foreign jurisdiction, the name of such reporting issuers and the name of the exchange or market applicable to such reporting issuers.

Name	Name of Reporting Issuer	Name of Exchange or Market (if applicable)
Marcel de Groot	Asanko Gold Inc. Equinox Gold Corp. Magnitude MiningLtd.	TSX/NYSE TSX/NYSE TSXV
David De Witt	Sandstorm Gold Ltd. Bear Creek Mining Corporation Fusion Gold Ltd.	TSX/NYSE TSXV TSXV
Grant Kim	Axion Ventures Inc.	TSXV

Cease Trade Orders, Bankruptcies and Penalties

To the knowledge of the Corporation, no proposed director is as at the Effective Date, or has been, within the 10 years prior to the Effective Date, a director, chief executive officer or chief financial officer of any company that:

a. was the subject of a cease trade or similar order, or an order that denied the other company access to any exemptions under applicable securities legislation for a period of more than 30 consecutive days that was issued while the proposed director was acting as director, chief executive officer or chief financial officer; or
b. was the subject of a cease trade or similar order, or an order that denied the other company access to any exemptions under applicable securities legislation for a period of more than 30 consecutive days that was issued after the proposed director ceased to be a director, chief executive officer or chief financial officer 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.

To the knowledge of the Corporation, no proposed director is, or has been within the past 10 years before the Effective Date, a director or executive officer of any other 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 person.

To the knowledge of the Corporation, no proposed director has, within the past 10 years before the Effective Date, 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 person.

To the knowledge of the Corporation, no proposed director has been subject to any penalties or sanctions imposed by a court relating to securities legislation or by any securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority or has been subject to any other penalties or sanctions imposed by a court or regulatory body that would be likely to be considered important to a reasonable securityholder in deciding whether to vote for the proposed director.

5. Approval of Stock Option Plan

The Corporation established the Option Plan to provide long term incentives to eligible directors, officers, employees and consultants of the Corporation. The Option Plan will continue to be the stock option plan of the Resulting Issuer following completion of the SME Transaction and will continue to be effective after the closing of the SME Transaction. However, if the SME Transaction is completed and the Restricted Share Plan, as defined and discussed below, is adopted, the Option Plan shall be slightly amended to clarify that the aggregate number of Common Shares issuable under the Option Plan, together with such number of Common Shares issuable under the Corporation’s other security-based compensation plans shall not exceed 10% of the issued and outstanding Common Shares of the Corporation from time to time.

Description of the Plan

The policies of the TSXV and Option Plan (established by the Board on June 22, 2018), provide that the Board may from time to time, in its discretion and in accordance with the TSXV requirements, grant to directors, officers and employees of the Corporation as well as Management Company Employees and Consultants (as such terms are defined in the TSXV’s Corporate Finance Manual Policy 4.4 as amended from time to time), non-transferable options to purchase Common Shares, provided that the number of Common Shares reserved for issuance will not exceed 10% of the total issued and outstanding Common Shares of the Corporation, exercisable for a period of up to 10 years from the date of the grant. In accordance with the CPC Policy, during the time that the Corporation is a CPC and prior to Completion of a Qualifying Transaction, the aggregate number of Common Shares issuable upon the exercise of all options granted under the Option Plan shall not exceed 10% of the Common Shares of the Corporation issued and outstanding at the closing of the Corporation's initial public offering (the “Offering”). The number of Common Shares reserved for issuance to any individual director or officer of the Corporation will not exceed 5% of the issued and outstanding Common Shares (2% in the case of all technical consultants of the Corporation in any 12-month period). In accordance with the CPC Policy, during the

time that the Corporation is a CPC and prior to Completion of a Qualifying Transaction, (i) options granted to a director or officer of the Corporation individually may not exceed 5% of the Common Shares of the Corporation issued and outstanding at the closing of the Offering; and (ii) options granted to all technical consultants may not exceed 2% of the Common Shares of the Corporation issued and outstanding at the closing of the Offering. The Board shall not grant any options to an eligible participant under the Option Plan providing investor relations activities, promotional or market-making services to the Corporation.

The exercise price of any option granted pursuant to the Option Plan shall be determined by the Board when granted, but shall not be less than the Discounted Market Price (as such term is defined by the TSXV). Notwithstanding the foregoing, until Completion of the Qualifying Transaction the exercise price shall not be less than the greater of $0.20 and the Discounted Market Price. The options granted pursuant to the Option Plan are non-transferable, except by means of a will or pursuant to the laws of descent and distribution.

If the tenure of a director or officer or the employment of an employee of the Corporation is terminated for cause, no option held by such optionee may be exercised following the date upon which termination occurred. If termination occurs for any reason other than cause, then any option held by such optionee, shall be exercisable, in whole or in part, for a period not later than one year thereafter or prior to the expiry date of the option, whichever is sooner, or such shorter period of time as may be determined by the directors when the option is granted. Notwithstanding the foregoing, if the tenure of an optionee who is granted option upon completion of this Offering ends prior to the Completion of the Qualifying Transaction such Incentive Stock Options shall only be exercisable for 90 days.

The full text of the Option Plan is set out in Schedule “B” to the Management Information Circular.

Vote Required

Pursuant to TSXV Policy 4.4 – Incentive Stock Options , a listed corporation is required to obtain the approval of its shareholders for a “rolling” stock option plan at each annual meeting of shareholders. The Option Plan is a “rolling” stock option plan as the aggregate number of Common Shares reserved for issuance upon the exercise of the options pursuant to the Option Plan is such number of Common Shares as is equal to 10% of the total number of Common Shares issued and outstanding from time to time. Notwithstanding the foregoing, during the time that the Corporation is a CPC and prior to Completion of a Qualifying Transaction, the aggregate number of Common Shares issuable upon the exercise of all options granted under the Option Plan is limited to 10% of the Common Shares of the Corporation issued and outstanding at the closing of the Offering.

The complete text of the ordinary resolution which management intends to place before the Meeting re-approving the Option Plan is as follows:

“ BE IT HEREBY RESOLVED as an ordinary resolution of the Corporation that:
(1) the Corporation’s stock option plan (the “Option Plan”), substantially in the form attached as Schedule “B” to the Management Information Circular of the Corporation dated January 7, 2020 (the “Circular”), be and it is hereby re-approved and confirmed, including the reservation for issuance under the Option Plan at any time of a maximum of 10% of the then issued and

outstanding shares of the Corporation, in accordance with the policies of the TSX Venture Exchange;

(2) if the SME Transaction is completed and the Restricted Share Plan, both as defined and discussed the Circular, is adopted, the Option Plan shall be slightly amended to clarify that the aggregate number of shares issuable under the Option Plan, together with such number of shares issuable under the Corporation’s other security-based compensation plans shall not exceed 10% of the issued and outstanding Common Shares of the Corporation from time to time;
(3) any director or officer be and is hereby authorized to make any and all additions, deletions and modifications to the Option Plan as may be necessary or advisable to give effect to this ordinary resolution or as may be required by applicable regulatory authorities;
(4) any director or officer be and is hereby authorized, to execute and deliver all such other deeds, documents and other writings and perform such other acts as may be necessary or desirable to give effect to this resolution; and
(5) notwithstanding approval of the Shareholders of the Corporation as herein provided, the Board may, in its sole discretion, revoke this resolution before it is acted upon without further approval of the Shareholders of the Corporation.”

(the “ Option Plan Resolution ”)

The persons designated as proxyholders in the accompanying Instrument of Proxy (absent contrary directions) intend to vote FOR the Option Plan Resolution.

6. Approval of Restricted Share Plan

Background

Following completion of the SME Transaction, the parties to the SME Transaction have decided that is desirable that the Resulting Issuer have a range of incentive plans, including a restricted share plan available to attract, retain and motivate officers, directors, employees, management company employees, and consultants of the Corporation. Therefore, the Board has approved the adoption of a proposed restricted share plan of the Corporation (the “ Restricted Share Plan ”) upon closing of the SME Transaction. The Restricted Share Plan is subject to TSXV and disinterested shareholder approval, as described in more detail below.

Description of the Restricted Share Plan

The Restricted Share Plan provides for the acquisition of Common Shares by bona fide directors, officers, Employees, Management Company Employees or Consultants (as each term is defined under the policies of the TSXV) of the Corporation or its subsidiaries (“ Participants ”) for the purpose of advancing the interests of the Corporation through the motivation, attraction and retention of employees, directors, management company employees and consultants of the Corporation and its subsidiaries.

The Restricted Share Plan shall be administered by the directors or if the directors so determine in accordance with the Restricted Share Plan, a committee of the Directors authorized to administer the Restricted Share Plan (the “ Plan Committee ”). The Plan Committee shall have full authority to administer the Restricted Share Plan including the authority to interpret and construe any provision of the Restricted Share Plan and to adopt, amend and rescind such rules and regulations for administering the Restricted Share Plan as the Plan Committee may deem necessary in order to comply with the requirements of the Restricted Share Plan.

The maximum number of Common Shares reserved for issuance under the Restricted Share Plan from treasury shall not exceed 900,000 Common Shares (approximately 2% of the issued and outstanding Common Shares of the Resulting Issuer upon completion of the SME Transaction). Notwithstanding the foregoing, the aggregate maximum number of Common Shares reserved for issuance under the Restricted Share Plan shall be reduced by that number of Restricted Share Rights (as defined below), which are issued in accordance with the provisions of the Restricted Share Plan. The number of Common Shares which may be issuable under the Restricted Share Plan and all of the Corporation’s other previously established or proposed share compensation arrangements, within a 12-month period: (a) to any one Participant shall not exceed 5% of the total number of issue and outstanding Common Shares on the date of the grant on a non-diluted basis; (b) to insiders as a group shall not exceed 10% of the total number of issued and outstanding Common Shares on the date of the grant on a non-diluted basis; and (c) to any one consultant shall not exceed 2% in the aggregate of the total number of issued and outstanding Common Shares on the date of the grant on a non-diluted basis. In addition, all Common Shares issuable under the Restricted Share Plan and any Common Shares reserved for issuance under the Corporation’s other security-based compensation plans (e.g. the Option Plan) shall not exceed 10% of the issued and outstanding Common Shares of the Corporation from time to time.

Subject to maximum thresholds discussed above the Plan Committee shall have the ability to grant, in its sole and absolute discretion, to any Participant rights (“ Restricted Share Rights ”) to acquire any number of fully paid and non-assessable Common Shares as a discretionary payment in consideration of past services to the Corporation, subject to the Restricted Share Plan and with such provisions and restrictions as the Plan Committee may determine. At the end of the Restricted Period (as defined below) or, if applicable, at a later Deferred Payment Date (as defined below), and without payment of additional consideration or any other further action on the part of the holder of the Restricted Share Right, the Corporation shall issue to the Participant holding the Restricted Share Right one (1) Common Share for each Restricted Share Right held by the Participant for which the Restricted Period has expired.

For the purposes of the Restricted Share Plan:

“ Restricted Period ” means any period of time that a Restricted Share Right is not exercisable and the Participant holding such Restricted Share Right remains ineligible to receive the Common Shares issuable in satisfaction of the Restricted Share Rights (the “ Restricted Shares ”), determined by the Plan Committee in its absolute discretion, however, such period of time may be reduced or eliminated from time to time and at any time and for any reason as determined by the Plan Committee, including but not limited to circumstances involving death or disability of a Participant; and

“ Deferred Payment Date ” means the date which a Participant has elected to defer receipt of Restricted Shares under the Restricted Share Plan after the Restricted Period and not later than the Participant’s retirement date.

Each grant of a Restricted Share Right under the Restricted Share Plan shall be evidenced by a Restricted Share Right grant letter to the Participant from the Corporation. Such letter shall be subject to all applicable terms and conditions of the Restricted Share Plan and may be subject to any other terms and conditions which are not inconsistent with the Restricted Share Plan and which the Plan Committee deems appropriate for inclusion in a Restricted Share Right grant letter.

Upon the grant of Restricted Share Rights to a Participant, the Plan Committee shall determine the Restricted Periods applicable to such Restricted Share Rights. For greater certainty, all Restricted Share Rights granted under the Restricted Share Plan to a Participant shall vest over a three (3) year period from the grant date (e.g. one-third per year beginning on the first anniversary of the grant date), unless deferred in accordance with the Restricted Share Plan.

Participants may elect to defer the receipt of all or any part of their entitlement to Restricted Shares until a Deferred Payment Date. Participants who elect to set a Deferred Payment Date must give the Corporation written notice of one or more Deferred Payment Dates not later than thirty (30) days prior to the expiration of the Restricted Period. Participants may change a Deferred Payment Date by providing written notice to the Corporation not later than thirty (30) days prior to the Deferred Payment Date.

In the event of the retirement or termination of a Participant during the Restricted Period, any Restricted Share Rights held by the Participant shall immediately terminate and be of no further force or effect, provided that the Plan Committee has the absolute discretion to waive such termination. In the event of the retirement or termination of the Participant following the Restricted Period and, if applicable, prior to the Deferred Payment Date, the Corporation shall issue forthwith the Restricted Shares in accordance with the Restricted Share Rights held by the Participant. In the event of the death or total disability of a Participant, any Restricted Shares represented by Restricted Share Rights held by the Participant shall be immediately issuable by the Corporation.

The Restricted Share Plan shall be subject to the approval of the majority of votes cast by all shareholders of the Corporation to be given by a resolution passed at a meeting of the shareholders, excluding votes attached to the Common Shares of the Corporation beneficially owned by Insiders (as such term is defined in the rules and policies of the TSXV) and their associates (known as disinterested shareholder approval), and acceptance by the TSXV or any regulatory authority having jurisdiction over the securities of the Corporation. Subject to the policies, rules and regulations of any lawful authority having jurisdiction (including the rules and requirements of the TSXV or any other exchange on which the Common Shares are then listed ), the Plan Committee may at any time, without further action by the shareholders, amend or terminate the Restricted Share Plan or any Restricted Share Right granted thereunder in such respects as it may consider advisable and, without limiting the generality of the foregoing, it may do so to ensure that Restricted Share Right issued hereunder will comply with any provisions respecting Restricted Share Rights in the income tax or other laws in force in any country or jurisdiction of which a person to whom a Restricted Share Right has been granted may from time to time be resident. The Plan Committee may not, however, without the consent of the Participant, alter or impair any of the rights or obligations under any Restricted Share Right issued.

The Corporation is prohibited from providing financial assistance in the form of a loan or otherwise to Participants under the Restricted Share Plan for the purpose of settlement of equity awards under the Restricted Share Plan.

The full text of the Restricted Share Plan is set out in Schedule “C” to the Management Information Circular.

Votes Required

TSXV requires disinterested shareholder approval for the Restricted Share Plan. Disinterested shareholder approval is approval by a majority of the votes cast by all Shareholders at the Meeting excluding votes attaching to shares beneficially owned by “Insiders” to whom Restricted Share Rights may be granted under the Restricted Share Plan, and associates of such Insiders.

The complete text of the ordinary resolution of disinterested shareholders which management intends to place before the Meeting approving the Restricted Share Plan is as follows:

“ BE IT HEREBY RESOLVED as an ordinary resolution of disinterested shareholder of the Corporation that:

(1) the Corporation’s proposed restricted share plan (the “Restricted Share Plan”), substantially in the form attached as Schedule “C” to the Management Information Circular of the Corporation dated January 7, 2020, be and it is hereby approved, including the reservation for issuance under the Restricted Share Plan of 900,000 common shares of the Corporation, in accordance with the policies of the TSX Venture Exchange;
(2) any director or officer be and is hereby authorized to make any and all additions, deletions and modifications to the Restricted Share Plan as may be necessary or advisable to give effect to this ordinary resolution or as may be required by applicable regulatory authorities;
(3) any director or officer be and is hereby authorized, to execute and deliver all such other deeds, documents and other writings and perform such other acts as may be necessary or desirable to give effect to this resolution; and
(4) notwithstanding approval of the disinterested shareholders of the Corporation as herein provided, the Board may, in its sole discretion, revoke this resolution before it is acted upon without further approval of the Shareholders of the Corporation.”

(the “ Restricted Share Plan Resolution ”)

As discussed above, the Board has approved the Restricted Share Plan, subject to completion of the SME Transaction, receipt of disinterested shareholder approval, final TSXV acceptance, and subject to such amendments, variations or additions as may be approved at the Meeting.

The persons designated as proxyholders in the accompanying Instrument of Proxy (absent contrary directions) intend to vote FOR the Restricted Share Plan Resolution.

ADDITIONAL INFORMATION

Financial information pertaining to the Corporation is provided in the Corporation’s financial statements and management’s discussion and analysis (“MD&A”) for the financial year ended June 30, 2019. Copies of the Corporation’s financial statements and related MD&A can be obtained by contacting Craig Rollins, Chief Executive Officer of the Corporation, Suite 1400, 400 Burrard Street, Vancouver, British Columbia, V6C 3A6. Additional Information relating to the Corporation is available on the SEDAR website at www.sedar.com.

DIRECTOR APPROVAL

The contents of this Management Information Circular and the sending thereof to the Shareholders of the Corporation have been approved by the Board.

January 7, 2020

(signed) “ Craig Rollins ” Craig Rollins Chief Executive Officer, Chief Financial Officer and Corporate Secretary

Schedule “A” CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

DRUMMOND VENTURES CORP.

I. PURPOSE

The Audit Committee (the “Committee”) is appointed by the board of directors (the “Board”) of Drummond Ventures Corp. (the “Corporation”) to assist the Board in fulfilling its oversight responsibilities relating to financial accounting and reporting process and internal controls for the Corporation. The Committee’s primary duties and responsibilities are to:

conduct such reviews and discussions with management and the external auditors relating to the audit and financial reporting as are deemed appropriate by the Committee;
assess the integrity of internal controls and financial reporting procedures of the Corporation and ensure implementation of such controls and procedures;
ensure that there is an appropriate standard of corporate conduct;
review the quarterly and annual financial statements and management's discussion and analysis of the Corporation's financial position and operating results and report thereon to the Board for approval of same;
so long as the Corporation is a capital pool company (a “CPC”) within the meaning ascribed thereto in TSX Venture Exchange Policy 2.4 – “Capital Pool Companies” (“TSX-V Policy 2.4”), review quarterly the Corporation’s compliance with the financial requirements contained in TSXV Policy 2.4;
so long as the Corporation is a CPC, review all invoices prior to payments being made by the Corporation;
select and monitor the independence and performance of the Corporation's external auditors, including attending at private meetings with the external auditors and reviewing and approving all renewals or dismissals of the external auditors and their remuneration; and
provide oversight to related party transactions entered into by the Corporation.

The Committee has the authority to conduct any investigation appropriate to its responsibilities, and it may request the external auditors as well as any officer of the Corporation, or outside counsel for the Corporation, to attend a meeting of the Committee or to meet with any members of, or advisors to, the Committee. The Committee shall have unrestricted access to the books and records of the Corporation and has the authority to retain, at the expense of the Corporation, special legal, accounting, or other consultants or experts to assist in the performance of the Committee’s duties.

The Committee shall review and assess the adequacy of this Charter annually and submit any proposed revisions to the Board for approval.

In fulfilling its responsibilities, the Committee will carry out the specific duties set out in Part IV of this Charter.

II. AUTHORITY OF THE AUDIT COMMITTEE

The Committee shall have the authority to:

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a. engage independent counsel and other advisors as it determines necessary to carry out its duties;
b. set and pay the compensation for advisors employed by the Committee; and
c. communicate directly with the internal and external auditors.

III. COMPOSITION AND MEETINGS

The Committee and its membership shall meet all applicable legal, regulatory and listing requirements, including, without limitation, those of the British Columbia Securities Commission, the TSX Venture Exchange, the Business Corporations Act (British Columbia) and all applicable securities regulatory authorities.
The Committee shall be composed of three or more directors as shall be designated by the Board from time to time. The members of the Committee shall appoint from among themselves a member who shall serve as Chair.
A majority of the members of the Committee shall not be officers or employees of the Corporation or any of its affiliates.
The Committee shall meet at least quarterly, at the discretion of the Chair or a majority of its members, as circumstances dictate or as may be required by applicable legal or listing requirements. A minimum of two and at least 50% of the members of the Committee present either in person or by telephone shall constitute a quorum.
If within one hour of the time appointed for a meeting of the Committee, a quorum is not present, the meeting shall stand adjourned to the same hour on the next business day following the date of such meeting at the same place. If at the adjourned meeting a quorum as hereinbefore specified is not present within one hour of the time appointed for such adjourned meeting, such meeting shall stand adjourned to the same hour on the second business day following the date of such meeting at the same place. If at the second adjourned meeting a quorum as hereinbefore specified is not present, the quorum for the adjourned meeting shall consist of the members then present.
If and whenever a vacancy shall exist, the remaining members of the Committee may exercise all of its powers and responsibilities so long as a quorum remains in office.
The time and place at which meetings of the Committee shall be held, and procedures at such meetings, shall be determined from time to time by the Committee. A meeting of the Committee may be called by letter, telephone, facsimile, email or other communication equipment, by giving at least 48 hours notice, provided that no notice of a meeting shall be necessary if all of the members are present either in person or by means of conference telephone or if those absent have waived notice or otherwise signified their consent to the holding of such meeting.

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Any member of the Committee may participate in the meeting of the Committee by means of conference telephone or other communication equipment, and the member participating in a meeting pursuant to this paragraph shall be deemed, for purposes hereof, to be present in person at the meeting.
The meetings of the Committee, including (without limitation) the quarterly reviews by the Committee of compliance by the Corporation with Section 8.4 – “Restrictions on Use of Proceeds” of TSX-V Policy 2.4, shall be formal and well documented. The Committee shall keep minutes of its meetings which shall be submitted to the Board. The Committee may, from time to time, appoint any person who need not be a member, to act as a secretary at any meeting.
The Committee may invite such officers, directors and employees of the Corporation and its subsidiaries as the Committee may see fit, from time to time, to attend at meetings of the Committee.
Any matters to be determined by the Committee shall be decided by a majority of votes cast at a meeting of the Committee called for such purpose. Actions of the Committee may be taken by an instrument or instruments in writing signed by all of the members of the Committee, and such actions shall be effective as though they had been decided by a majority of votes cast at a meeting of the Committee called for such purpose. All decisions or recommendations of the Committee shall require the approval of the Board prior to implementation.

The Committee members will be elected annually at the first meeting of the Board following the annual meeting of shareholders.

IV. APPROVAL OF PAYMENTS

So long as the Corporation is a CPC, a majority of the members of the Committee shall approve any payments to be made by the Corporation. No payments shall be made by the Corporation without receipt of a written invoice therefor.
The Committee shall be responsible for reviewing and approving all related party arrangements (including, without limitation, in respect of any professional services provided by any director or officer of the Corporation or any company or firm of which such director or officer is a director, officer, partner or employee), provided that any member of the Committee who has a conflict of interest arising from a related party arrangement will abstain from approving such related party arrangement.
Any member of the Committee who find himself or herself conflicted on a particular transaction subject to approval by the Committee shall declare his or her conflict of interest to the other members of the Committee and the Board prior to the entering of such transaction, or if the member was not interested in the proposed transaction at the time it was first considered or if the interest has changed, at the first meeting following the acquisition or change of the interest by the member.

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All cheques issued by the Corporation must be signed by at least two members of the Committee who are authorized signatories of the Corporation in accordance with TSX Venture Exchange Policy 3.1 – “Directors, Officers, Other Insiders & Personnel and Corporate Governance”.

V. RESPONSIBILITIES

A. Financial Accounting and Reporting Process and Internal Controls

The Committee shall review the annual audited financial statements to satisfy itself that they are presented in accordance with applicable International Financial Reporting Standards (“IFRS”) and report thereon to the Board and recommend to the Board whether or not same should be approved prior to their being filed with the appropriate regulatory authorities. The Committee shall also review the interim financial statements. With respect to the annual audited financial statements, the Committee shall discuss significant issues regarding financial standards, practices, and judgments of management with management and the external auditors as and when the Committee deems it appropriate to do so. The Committee shall satisfy itself that the information contained in the annual audited financial statements is not significantly erroneous, misleading or incomplete and that the audit function has been effectively carried out.
The Committee shall review any internal control reports prepared by management and the evaluation of such report by the external auditors, together with management’s response.
The Committee shall be satisfied that adequate procedures are in place for the review of the Corporation’s public disclosure of financial information extracted or derived from the Corporation’s financial statements, management’s discussion and analysis and interim earnings press releases, and periodically assess the adequacy of these procedures.
The Committee shall review management’s discussion and analysis relating to annual and interim financial statements and any other public disclosure documents, including interim earnings press releases, that are required to be reviewed by the Committee under any applicable laws before the Corporation publicly discloses this information.
So long as the Corporation is a CPC, the Committee shall monitor the use of the CPC’s proceeds to ensure that the Corporation is in compliance with “Section 8.4 – Restrictions on Use of Proceeds” of TSX-V Policy 2.4, including the restriction that no more than the lesser of 30% of the gross proceeds from the sale of securities issued by the CPC and $210,000 be used for purposes other than as provided in “Section 8.3 – Permitted Use of Proceeds” of TSX-V Policy 2.4.
The Committee shall oversee and review legal costs to determine whether such expenses are necessary and affordable, having regard to the circumstances of the Corporation.
The Committee shall ensure that written contracts are in place for related party arrangements and, so long as the Corporation is a CPC, review the payments made by the Corporation to related parties to ensure that such payments do not contravene “Section 8.1 – Prohibited Payments to

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Non-Arm’s Length Parties” of TSX-V Policy 2.4, and are in compliance with “Section 8.2 – Exceptions to the Prohibitions on Payments to Related Parties of the CPC” of TSX-V Policy 2.4.

In addition to the foregoing, so long as the Corporation is a CPC, the Committee shall satisfy itself that the Corporation is in compliance with any other financial requirements set out in TSX-V Policy 2.4.
The Committee shall meet no less frequently than annually with the external auditors and the Chief Financial Officer or, in the absence of a Chief Financial Officer, with the officer of the Corporation in charge of financial matters, to review accounting practices, internal controls and such other matters as the Committee, Chief Financial Officer or, in the absence of a Chief Financial Officer, the officer of the Corporation in charge of financial matters, deem appropriate.
The Committee shall inquire of management and the external auditors about significant risks or exposures, both internal and external, to which the Corporation may be subject, and assess the steps management has taken to minimize such risks.
The Committee shall review the post-audit or management letter containing the recommendations of the external auditors and management’s response and subsequent followup to any identified weaknesses.
The Committee shall ensure that there is an appropriate standard of corporate conduct including, if necessary, adopting a corporate code of ethics for senior financial personnel.
The Committee shall establish procedures for:
a. the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal accounting controls or auditing matters; and
b. the confidential, anonymous submission by employees of the Corporation of concerns regarding questionable accounting or auditing matters.
The Committee shall provide oversight to related party transactions entered into by the Corporation.

B. Independent Auditors

The Committee shall recommend to the Board the external auditors to be nominated, shall set the compensation for the external auditors, provide oversight of the external auditors and shall ensure that the external auditors report directly to the Committee.
The Committee shall be directly responsible for overseeing the work of the external auditors, including the resolution of disagreements between management and the external auditors regarding financial reporting.

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The Committee shall pre-approve all audit and non-audit services not prohibited by law to be provided by the external auditors in accordance with the terms of this charter.
The Committee shall monitor and assess the relationship between management and the external auditors and monitor, support and assure the independence and objectivity of the external auditors.
The Committee shall review the external auditors’ audit plan, including the scope, procedures and timing of the audit.
The Committee shall review the results of the annual audit with the external auditors, including matters related to the conduct of the audit.
The Committee shall obtain timely reports from the external auditors describing critical accounting policies and practices, alternative treatments of information within IFRS that were discussed with management, their ramifications, and the external auditors' preferred treatment and material written communications between the Corporation and the external auditors.
The Committee shall review fees paid by the Corporation to the external auditors and other professionals in respect of audit and non-audit services on an annual basis.
The Committee shall review and approve the Corporation's hiring policies regarding partners, employees and former partners and employees of the present and former auditors of the Corporation.
The Committee shall monitor and assess the relationship between management and the external auditors and monitor and support the independence and objectivity of the external auditors.

C. Other Responsibilities

The Committee shall perform any other activities consistent with this Charter and governing law, as the Committee or the Board deems necessary or appropriate.

Procedures for Receipt of Complaints and Submissions Relating to Accounting Matters

The Corporation shall inform employees on the Corporation’s intranet, if there is one, or via a newsletter or e-mail that is disseminated to all employees at least annually, of the officer (the “Complaints Officer”) designated from time to time by the Committee to whom complaints and submissions can be made regarding accounting, internal accounting controls or auditing matters or issues of concern regarding questionable accounting or auditing matters.
The Complaints Officer shall be informed that any complaints or submissions so received must be kept confidential and that the identity of employees making complaints or submissions shall be kept confidential and shall only be communicated to the Committee or the Chair of the Committee.

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The Complaints Officer shall be informed that he or she must report to the Committee as frequently as such Complaints Officer deems appropriate, but in any event no less frequently than on a quarterly basis prior to the quarterly meeting of the Committee called to approve interim and annual financial statements of the Corporation.
Upon receipt of a report from the Complaints Officer, the Committee shall discuss the report and take such steps as the Committee may deem appropriate.
The Complaints Officer shall retain a record of a complaint or submission received for a period of six years following resolution of the complaint or submission.

Procedures for Approval of Non-Audit Services

The Corporation’s external auditors shall be prohibited from performing for the Corporation the following categories of non-audit services:
a. bookkeeping or other services related to the Corporation’s accounting records or financial statements;
b. financial information systems design and implementation;
c. appraisal or valuation services, fairness opinion or contributions-in-kind reports;
d. actuarial services;
e. internal audit outsourcing services;
f. management functions;
g. human resources;
h. broker or dealer, investment adviser or investment banking services;
i. legal services;
j. expert services unrelated to the audit; and
k. any other service that the Canadian Public Accountability Board determines is impermissible.
If the Corporation wishes to retain the services of the Corporation’s external auditors for tax compliance, tax advice or tax planning, the Chief Financial Officer of the Corporation shall consult with the Chair of the Committee, who shall have the authority to approve or disapprove on behalf of the Committee, such non-audit services. All other non-audit services shall be approved or disapproved by the Committee as a whole.
The Chief Financial Officer of the Corporation shall maintain a record of non-audit services approved by the Chair of the Committee or the Committee for each fiscal year and provide a report to the Committee no less frequently than on a quarterly basis.

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Schedule “B”

STOCK OPTION PLAN

OF DRUMMOND VENTURES CORP.

1. Purpose

The purpose of the Stock Option Plan (the “ Plan ”) of DRUMMOND VENTURES CORP. , a company formed under the Business Corporations Act (British Columbia) (the “ Corporation ”), is to advance the interests of the Corporation by encouraging the directors, officers, employees and consultants of the Corporation or its subsidiaries, if any, to acquire common shares in the share capital of the Corporation (the “ Shares ”), thereby increasing their proprietary interest in the Corporation, encouraging them to remain associated with the Corporation and furnishing them with additional incentive in their efforts on behalf of the Corporation in the conduct of its affairs.

2. Administration

The Plan shall be administered by the Board of Directors of the Corporation or by a special committee of the directors appointed from time to time by the Board of Directors of the Corporation (such committee or, if no such committee is appointed, the Board of Directors of the Corporation, is hereinafter referred to as the “ Board ”).

Subject to the provisions of the Plan, the Board shall have authority to construe, interpret and apply the Plan and all option agreements entered into thereunder, to define the terms used in the Plan and in all option agreements entered into thereunder, to prescribe, amend and rescind the rules and regulations relating to the Plan and to make all other determinations necessary or advisable for the administration of the Plan. All determinations and interpretations made by the Board shall be binding and conclusive on all Participants (as hereinafter defined) in the Plan, holders of options granted under the Plan and their respective legal personal representatives and beneficiaries.

No member of the Board shall be liable for any action or determination taken or made in good faith in the administration, interpretation, construction or application of the Plan or any options granted under the Plan.

Each option granted under the Plan shall be evidenced by an option agreement, substantially in the form attached hereto as Schedule “A”, executed by the Corporation and the optionholder.

3. Compliance with Applicable Laws and Rules

All options granted under the Plan shall be subject to applicable laws and regulations (including, applicable securities laws), the rules and policies of any stock exchange on which the Shares are then listed (the “ Exchange ”), and the rules and policies of any other regulatory body having jurisdiction on the Corporation and its securities. If any provision of the Plan or of any option agreement delivered pursuant to the Plan contravenes any law or any order, policy, by-law or regulation of any regulatory

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body or Exchange having authority over the Corporation or the Plan, then such provision shall be deemed to be amended to the extent required to bring such provision into compliance therewith.

4. Shares Subject to Plan

The aggregate number of Shares issuable upon the exercise of all options granted under the Plan shall not exceed 10% of the issued and outstanding Shares of the Corporation from time to time. Notwithstanding the foregoing, during the time that the Corporation is a Capital Pool Company (as such term is defined in Policy 2.4 of the TSX Venture Exchange (“ TSXV” )) and prior to Completion of a Qualifying Transaction (as such term is defined in Policy 2.4 of the TSXV), the aggregate number of Shares issuable upon the exercise of all options granted under the Plan shall not exceed 10% of the Shares of the Corporation issued and outstanding at the closing of the Corporation’s initial public offering on the TSXV.

If any option granted under the Plan shall expire or terminate for any reason in accordance with the terms of the Plan without being exercised, the unpurchased Shares subject thereto shall be available for options to be granted thereafter pursuant to the provisions of the Plan.

5. Maintenance of Sufficient Capital

The Board shall at all times during the term of the Plan allot, set aside and reserve for issuance for the purpose of the Plan a sufficient number Shares such that the number of Shares issuable under Section 4 shall be properly allotted, set aside and reserved for issuance.

6. Eligibility and Participation

Only a director, officers, employee, Management Company Employee or Consultant (as such terms are defined in Policy 4.4 of the TSXV) of the Corporation or its subsidiaries shall be eligible for selection to participate in the Plan (such persons hereinafter collectively referred to as “ Participants ”). Participants may elect to hold options granted to them in an incorporated entity wholly owned by them and such entity shall be bound by the terms and conditions Plan in the same manner as if the options were held directly by the Participant, subject to compliance with any applicable requirements of the Exchange that the Shares may then be listed on.

Notwithstanding anything to the contrary herein, during the time that the Corporation is a Capital Pool Company and prior to Completion of a Qualifying Transaction, (i) options may only be granted under the Plan to a director or officer of the Corporation, and where permitted by applicable securities laws, a technical consultant whose particular industry expertise (as it relates to the business being acquired pursuant to a proposed Qualifying Transaction (as such term is defined in Policy 2.4 of TSXV)) is required to evaluate the proposed Qualifying Transaction; and (ii) the Board shall not grant any options to an eligible Participant providing investor relations activities, promotional or market-making services to the Corporation.

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Unless limited by the terms of the Plan or any regulatory or Exchange requirement, the Board shall have full and final authority to determine the Participants who shall be granted options, the terms and provisions of the respective option agreements (including any vesting conditions), the time or times at which such options shall be granted and vested, and the number of Shares to be subject to each option. In the case of employees, Consultants or Management Company Employees of the Corporation or its subsidiaries, the option agreements to which they are party must contain a representation of the Corporation that such employee, Consultant or Management Company Employee, as the case may be, is a bona fide employee, consultant or Management Company Employee of the Corporation or its subsidiaries.

The Board may at the time of granting options hereunder provide for additional terms and conditions which are not inconsistent with the terms and conditions of the Plan or any applicable regulatory or Exchange requirement, including, without limitation, terms and conditions which defer or delay the date on which an option may be exercised in whole or in part. Such additional terms and conditions shall be as set forth in the option agreement issued in respect of such option.

In determining any option grants to eligible Participants, the Board may give due consideration to the value of each such Participant’s present and potential contribution to the success of the Corporation.

A Participant who has been granted an option may, if such Participant is otherwise eligible, and if permitted under the rules and policies of the Exchange that the Shares may then be listed on, be granted an additional option or options if the Board shall so determine.

7. Exercise Price

(a) The exercise price of the Shares subject to each option shall be determined by the Board at the time any option is granted. If the Shares are listed on an Exchange, in no event shall such exercise price be lower than the exercise price permitted by the rules and policies of such Exchange. Notwithstanding the foregoing, during the time that the Corporation is a “Capital Pool Company” (as such term is defined in Policy 2.4 of the TSXV), the exercise price of the Shares shall not be lower than the greater of: (i) Corporation’s initial public offering price on the TSXV; and (ii) the Discounted Market Price (as such term is defined in the TSXV policies).
(b) If the Shares are listed on the TSXV, the Corporation will be required to obtain approval by a majority of the votes cast by all of the Corporation’s shareholders at a duly constituted meeting, excluding votes attached to the Shares of the Corporation beneficially owned by Insiders (as such term is defined in the rules and policies of the TSXV) and their associates (“ Disinterested Shareholder Approval ”) prior to any reduction in the exercise price of any option to purchase Shares previously granted to an Insider.

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8. Number of Optioned Shares

(a) Subject to this Section 8, the number of Shares subject to an option granted to any one Participant shall be determined by the Board, but no one Participant shall be granted an option to acquire Shares which exceeds the maximum number of Shares permitted by the requirements of the Exchange that the Shares may then be listed on.
(b) No single Participant may be granted options to purchase a number of Shares equalling more than 5% of the issued and outstanding Shares of the Corporation in any 12-month period unless the Corporation has obtained Disinterested Shareholder Approval in respect of such grant and meets the requirements of the Exchange that the Shares may then be listed on. Notwithstanding the foregoing, during the time that the Corporation is a “Capital Pool Company” (as such term is defined in Policy 2.4 of the TSXV), no single director or officer of the Corporation may be granted options to purchase a number of Shares equalling more than 5% of the issued and outstanding Shares of the Corporation as at the closing of the Corporation’s initial public offering on the TSXV.
(c) No Insiders (as a group) may be granted options to purchase a number of Shares equalling more than 10% of the issued and outstanding Shares of the Corporation in any 12-month period unless the Corporation has obtained Disinterested Shareholder Approval in respect of such grant and meets the applicable requirements of the Exchange that the Shares may then be listed on.
(d) Options shall not be granted if the exercise thereof would result in the issuance of more than 2% of the issued and outstanding Shares of the Corporation in any 12-month period to any one Consultant of the Corporation or any of its subsidiaries. Notwithstanding the foregoing, during the time that the Corporation is a “Capital Pool Company” (as such term is defined in Policy 2.4 of the TSXV), no Consultant of the Corporation may be granted options to purchase a number of Shares equalling more than 2% of the issued and outstanding Shares of the Corporation as at the closing of the Corporation’s initial public offering on the TSXV.
(e) Options shall not be granted if the exercise thereof would result in the issuance of more than 2% of the issued and outstanding Shares of the Corporation in any 12-month period to persons employed by the Corporation to provide investor relation services. Options granted to Consultants performing investor relations services will contain vesting provisions such that vesting occurs over at least 12 months, with no more than ¼ of the options vesting in any 3-month period.

9. Option Period

The period of time during which an option granted under this Plan will be exercisable by the holder thereof (the “ Option Period ”) shall be fixed by the Board, except that in no event may such exercise

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occur more than 10-years after the initial grant date of the option. The Option Period for any option shall be reduced as provided in Sections 11 and 12 in respect of a Participant who ceases to be a director, officer, employee, Management Company Employee or Consultant of the Corporation or its subsidiaries, or upon the death of a Participant.

10. Exercise, Consideration and Payment

(a) Subject to any vesting restrictions imposed by the Exchange that the Shares may then be listed on, the Board may, in its sole discretion, determine the time during which options shall vest, the method of vesting and the conditions of vesting, or that no vesting restriction shall exist.
(b) Subject to any vesting restrictions imposed by the Board, options may be exercised in whole or in part at any time and from time to time during the Option Period.
(c) Except as set forth in Sections 11 and 12, no option may be exercised unless the Participant is at the time of such exercise a director, officer, employee, Management Company Employee or Consultant of the Corporation or any of its subsidiaries.
(d) The exercise of any option will be contingent upon receipt by the Corporation prior to 5:00 p.m. (PST) on the last day of the Option Period at its head office of a written notice of exercise, specifying the number of Shares with respect to which the option is being exercised, accompanied by cash payment, certified cheque or bank draft for the full purchase price of such Shares with respect to which the option is exercised. No Participant or his, her or its legal representatives will be, or will be deemed to be, a holder of any Shares of the Corporation unless and until the certificates evidencing the Shares issuable pursuant to the exercise of an option under the Plan are issued to him, her or it under the terms of the Plan.
(e) Notwithstanding anything to the contrary herein, if the Corporation is a “Capital Pool Company” (as such term is defined in Policy 2.4 of the TSXV), options granted prior to the issuance of the Final Exchange Bulletin (as such term is defined in Policy 2.4 of the TSXV) may not be exercised before Completion of the Qualifying Transaction unless the optionholder agrees in writing to deposit the Shares acquired into escrow until the issuance of the Final Exchange Bulletin.

11. Ceasing to Be a Director, Officer, Consultant or Employee

(a) Subject to subsection Section 11(b), if a Participant shall cease to be a director, officer, employee, Management Company Employee or Consultant of the Corporation or its subsidiaries for any reason (other than death), such Participant may exercise his, her or its option to the extent that the Participant was entitled to exercise it at the date of such cessation, provided that such exercise must occur within 90 days after the Participant

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ceases to be a director, officer, employee, Management Company Employee or Consultant of the Corporation or its subsidiaries, unless such Participant was engaged in investor relations activities, in which case such exercise must occur within 30 days after the cessation of the Participant’s services to the Corporation.

(b) Notwithstanding anything to the contrary herein, if the Corporation is a “Capital Pool Company” and the Participant does not continue to be a director, officer, employee or Consultant of the Resulting Issuer upon the Completion of the Qualifying Transaction (as such terms are defined in Policy 2.4 of the TSXV)), then the options granted to such Participant must be exercised within the later of (i) 12 months after Completion of the Qualifying Transaction; and (ii) 90 days after the Participant ceases to become a director, officer, employee or Consultant of the Resulting Issuer.
(c) Nothing contained in the Plan, nor in any option granted pursuant to the Plan, shall confer upon any Participant any right with respect to continuance as a director, officer, employee, Management Company Employee or Consultant of the Corporation or of any of its subsidiaries.

12. Death of Participant

Notwithstanding section 11, in the event of the death of a Participant, the option previously granted to him or her shall be exercisable only within one (1) year after the date of death and then only:

(a) by the person or persons to whom the Participant's rights under the option shall pass by the Participant’s will or the laws of descent and distribution; and
(b) if such Participant was entitled to exercise the Option at the date of his or her death.

13. Rights of Optionee

No person entitled to exercise any option granted under the Plan shall have any of the rights or privileges of a shareholder of the Corporation in respect of any Shares issuable upon exercise of such option until such exercised Shares are recorded on the Corporation’s register as being issued and outstanding.

14. Extension of Options Expiring During Blackout Period

If the Shares are listed on an Exchange and the expiry date for an option falls within a blackout period, or within nine (9) business days following the expiration of a blackout period, such expiry date shall be automatically extended without any further act or formality to that day which is the tenth (10th) business day after the end of the blackout period, such tenth business day to be considered the expiry date for such Option for all purposes under the Plan. Notwithstanding Section 2, the tenth business day period may not be extended by the Board.

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15. Adjustments

If the Corporation amalgamates, consolidates with or merges with or into another corporation, any Shares receivable on the exercise of an option shall be converted into the securities, property or cash which the optionholder would have received upon such amalgamation, consolidation or merger if the optionholder had exercised his or her option immediately prior to the record date applicable to such amalgamation, consolidation or merger, and the exercise price of the option shall be adjusted appropriately by the Board and such adjustment shall be final, binding and conclusive for all purposes of the Plan.

If there is any change in the Shares through or by means of a declaration of stock dividends of Shares or consolidations, subdivisions or reclassification of Shares, or otherwise, the number of Shares available under the Plan, the Shares subject to any option, and the exercise price thereof shall be adjusted appropriately by the Board and such adjustment shall be final, binding and conclusive for all purposes of the Plan.

No fractional Shares shall be required to be issued under the Plan on any of the aforementioned adjustments.

16. Hold Period

All options and any Shares issued on the exercise of options may be subject to and legended with a fourmonth hold period commencing on the date the options were granted pursuant to the rules of the Exchange on which the Shares may then be listed and applicable securities laws. Any Shares issued on the exercise of options may be subject to resale restrictions contained in National Instrument 45-102 – Resale of Securities , which would apply to the first trade of the Shares.

17. Options Granted to Corporation

Except in relation to a Consultant that is a corporation, options may only be granted to an individual or a corporation that is wholly-owned by a Participant. If the Shares are listed on the TSXV and a corporation is an optionholder, the optionholder must provide the TSXV with a completed Form 4F – Certification and Undertaking Required from a Corporation Granted an Incentive Stock Option . The optionholder must also agree not to effect or permit any transfer of ownership or option of Shares of the Corporation, nor to issue further shares of any class in itself to any other individual or entity as long as the option remains outstanding, except with the written consent of the TSXV.

18. Transferability

All benefits, rights and options accruing to any Participant in accordance with the terms and conditions of the Plan shall not be transferable or assignable unless specifically provided herein or the extent, if any, permitted by the Exchange on which the Shares are then listed. During the lifetime of a Participant any benefits, rights and options may only be exercised by the Participant.

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19. Amendment and Termination of Plan

Subject to the policies, rules and regulations of any lawful authority having jurisdiction (including the rules and requirements of any Exchange on which the Common Shares are then listed ), the Board may at any time, without further action by the shareholders, amend or terminate the Plan or any option granted hereunder in such respects as it may consider advisable and, without limiting the generality of the foregoing, it may do so to ensure that options granted hereunder will comply with any provisions respecting stock options in the income tax or other laws in force in any country or jurisdiction of which a person to whom an option has been granted may from time to time be resident. The Board may not, however, without the consent of the optionholder, alter or impair any of the rights or obligations under any option granted.

20. Necessary Approvals

The ability of a Participant to exercise options and the obligation of the Corporation to issue and deliver Shares in accordance with the Plan is subject to any approvals which may be required from shareholders of the Corporation and any regulatory authority or Exchange having jurisdiction over the securities of the Corporation. If any Shares cannot be issued to any Participant for whatever reason, the obligation of the Corporation to issue such Shares shall terminate and any option exercise price paid to the Corporation will be returned to the Participant.

21. Withholding Taxes

The Corporation’s obligation to deliver Shares issuable on the exercise of an option shall be subject to a Participant’s satisfaction of all applicable income, employment and non-resident withholding tax obligations. Without limiting the generality of the foregoing, if the Corporation determines in its sole discretion that, under the requirements of applicable tax laws or regulations of any governmental authority whatsoever, it is obliged to withhold for remittance to a taxing authority any amount upon exercise of an option, the Corporation may take any steps it considers necessary or appropriate in the circumstances to withhold in connection with any option or other benefit under the Plan including, without limiting the generality of the foregoing:

(a) requiring the Participant exercising the option to pay the Corporation, in the same manner as the exercise price for the Shares issuable on exercise of an option, such amount as the Corporation is obliged to remit to such taxing authority in respect of the exercise of the option, with any such additional payment, in any event, being due no later than the date as of which any amount with respect to the option exercised first becomes included in the gross income of the Participant for tax purposes;
(b) issuing the Shares issuable on the exercise of an option to an agent on behalf of the Participant and directing the agent to sell a sufficient number of such Shares on behalf of the Participant to satisfy the amount of any such withholding obligation, with the agent paying the proceeds of any such sale to the Corporation for this purpose; and

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(c) to the extent permitted by law, deducting the amount of any such withholding obligation from any payment of any kind otherwise due to the Participant.

22. No Representation or Warranty

The Corporation makes no representation or warranty as the future market value of any Shares issued in accordance with the provisions of the Plan.

23. Governing Law

The Plan will be governed by and construed in accordance with the laws of the Province of British Columbia and the laws of Canada applicable therein.

24. Interpretation

The insertion of headings in this Plan is for convenience of reference only and in no way defines limits or enlarges the scope or meaning of this Plan or any of its provisions.

References to the words “herein”, “hereunder”, “hereof”, “hereto” and words of similar import refer to this Plan and any amendments hereto, and not to any particular section of this Plan. References to sections refer to the sections of this Plan unless otherwise stated.

In this Plan, words importing the singular include the plural and vice versa, words importing the masculine gender include the feminine and neuter genders and vice versa, and words importing persons include individuals, partnerships, associations, trusts, societies, unincorporated organizations and corporations.

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Schedule “A”

Form of Option Agreement

OPTION AGREEMENT STOCK OPTION PLAN - DRUMMOND VENTURES CORP.

Optionholder:

_____ (name) _____ _____ (address) _____ (email) Grant: _____ Maximum Number of Common Shares Subject to Option (the “Option Shares” ) Option Exercise Price: $___ per Option Share Date of Grant: __, 20_ Vesting Schedule: _____ Expiry Date: __, 20___.

This Option Agreement is made under and is subject in all respects to the Drummond Ventures Corp. Stock Option Plan (the “ Plan ”) (as the same may be supplemented and amended from time to time). In the event of any inconsistency between the terms of this Option Agreement and the Plan, the terms of the Plan will prevail. Capitalized terms used in this Option Agreement and not otherwise defined will have the meanings ascribed in the Plan.

The Optionholder acknowledges receipt of a copy of the Plan, a copy of which is delivered concurrently with this Option Agreement, and the Optionholder is deemed to have notice of and to be bound by all of the terms and provisions of the Plan, as if the Plan was set forth in full herein. The Optionholder further acknowledges that the Optionholder has read the Plan and this Option Agreement in their entirety and understands each of the Optionholder’s rights and obligations thereunder.

This Option Agreement evidences that the Optionholder named above is entitled, subject to and in accordance with the Plan, to purchase up to but not more than the maximum number of Shares set out above at the option exercise price set out above upon delivery of: (i) an exercise form substantially in the form attached hereto as Appendix “A”; and (ii) a cash payment, certified cheque or bank draft for the aggregate exercise price.

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The terms of this Option Agreement will be binding upon the executors, administrators, heirs, successors, and assigns of the Optionholder

Dated: ____, 20___.

DRUMMOND VENTURES CORP.

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Accepted: ___, 20
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By:
Authorized Signatory
Signature
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Witness (If Optionholder is an Individual)

Print the name of Optionholder

Print Name of Witness

If Optionholder is a corporation, print name and title of Authorized Signing Officer

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APPENDIX “A”

NOTICE OF EXERCISE

STOCK OPTION PLAN - DRUMMOND VENTURES CORP.

Capitalized terms used herein and not otherwise defined will have the meanings attributed to those terms in the Drummond Ventures Corp. Stock Option Plan (the “ Plan ”) (as the same may be supplemented and amended from time to time). All Shares acquired pursuant to an Option Agreement will be acquired in accordance with the terms, provisions and conditions of the Plan and the Option Agreement.

The undersigned Optionholder, or his, her or its legal representative(s) permitted under the Plan, hereby notifies the Corporation of the election to exercise certain options as set forth below:

(a) Optionholder Name: ___ (b) Optionholder Address: ___ ___ ___
(c) Number of Options to be Exercised: ___ (d) Option Exercise Price per Share: ___
(e) Aggregate Exercise Price ((c) multiplied by (d)): ____

and also tenders cash payment, certified cheque or bank draft for the aggregate exercise price.

Dated: ___, 20

Signature

Print the name of Optionholder

If Optionholder is a corporation, print name and title of Authorized Signing Officer

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Schedule “C”

RESTRICTED SHARE PLAN

SUN MACHINE ENTERTAINMENT INC. (FORMERLY DRUMMOND VENTURES CORP.)

_____ , 2020

ARTICLE 1 DEFINITIONS AND INTERPRETATION

1.01 Definitions

For purposes of this Plan, unless such word or term is otherwise defined herein or the context in which such word or term is used herein otherwise requires, the following words and terms with the initial letter or letters thereof capitalized shall have the following meanings:

A. “ Act ” means the Business Corporations Act (British Columbia) or its successor, as amended from time to time;
B. “ Associate ”, where used to indicate a relationship with any person or company, means: (i) any company of which such person or company beneficially owns, directly or indirectly, voting securities carrying more than 10% of the voting rights attached to all voting securities of the company for the time being outstanding; (ii) any partner of that person or company; (iii) any trust or estate in which such person or company has a substantial beneficial interest or as to which such person or company serves as trustee or in a similar capacity; (iv) any relative of that person who resides in the same home as that person; (v) any person who resides in the same home as that person and to whom that person is married, or any person of the opposite sex or the same sex who resides in the same home as that person and with whom that person is living in a conjugal relationship outside marriage; or (vi) any relative of a person mentioned in clause (v) who has the same home as that person;
C. “ Board ” means the Board of Directors of the Corporation;
D. “ Change of Control ” means the occurrence of any one or more of the following events:
i. a consolidation, reorganization, amalgamation, merger, acquisition or other business combination (or a plan of arrangement in connection with any of the foregoing), other than solely involving the Corporation and any one or more of its affiliates, with respect to which all or substantially all of the persons who were the beneficial owners of the Shares and other securities of the Corporation immediately prior to such consolidation, reorganization, amalgamation, merger, acquisition, business combination or plan of arrangement do not, following the completion of such consolidation, reorganization, amalgamation, merger, acquisition, business combination or plan of arrangement, beneficially own, directly or indirectly, more

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than 50% of the resulting voting rights (on a fully-diluted basis) of the Corporation or its successor;

ii. the sale, exchange or other disposition to a person other than an affiliate of the Corporation of all, or substantially all of the Corporation’s assets;
iii. a resolution is adopted to wind-up, dissolve or liquidate the Corporation;
iv. a change in the composition of the Board, which occurs at a single meeting of the shareholders of the Corporation or upon the execution of a shareholders’ resolution, such that individuals who are members of the Board immediately prior to such meeting or resolution cease to constitute a majority of the Board, without the Board, as constituted immediately prior to such meeting or resolution, having approved of such change; or
v. any person, entity or group of persons or entities acting jointly or in concert (an “ Acquiror ”) acquires or acquires control (including, without limitation, the right to vote or direct the voting) of Voting Securities of the Corporation which, when added to the Voting Securities owned of record or beneficially by the Acquiror or which the Acquiror has the right to vote or in respect of which the Acquiror has the right to direct the voting, would entitle the Acquiror and/or associates and/or affiliates of the Acquiror to cast or to direct the casting of 20% or more of the votes attached to all of the Corporation's outstanding Voting Securities which may be cast to elect directors of the Corporation or the successor corporation (regardless of whether a meeting has been called to elect directors);

For the purposes of the foregoing, “Voting Securities” means Shares and any other shares entitled to vote for the election of directors and shall include any security, whether or not issued by the Corporation, which are not shares entitled to vote for the election of directors but are convertible into or exchangeable for shares which are entitled to vote for the election of directors including any options or rights to purchase such shares or securities;

E. “ Committee ” means the Directors or if the Directors so determine in accordance with Section 2.03 of the Plan, the committee of the Directors authorized to administer the Plan which includes any compensation committee of the Board;
F. “ Consultant ” has the meaning set out in the TSXV Policies;
G. “ Corporation ” means Sun Machine Entertainment Inc. (formerly Drummond Ventures Corp.), a corporation incorporated under the Act and includes any successor corporation thereof;
H. “ Deferred Payment Date ” means the date for a Participant under the Plan after the Restricted Period and not later than the Participant’s Retirement Date which the Participant has elected to defer receipt of Restricted Shares;

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I. “ Directors ” means the board of directors of the Corporation from time to time;
J. “ Employee ” has the meaning set out in the TSXV Policies;
K. “ Insider ” means an “Insider” as defined in the TSXV Policies, other than a person who is an insider solely by virtue of being a director or senior officer of a subsidiary of the Corporation;
L. “ Investor Relations Activities ” has the meaning set out in the TSXV Policies;
M. “ Management Company Employee ” has the meaning set out in the TSXV Policies;
N. “ Participant ” for the Plan means bona fide Directors, officers, Employees, Management Company Employees or Consultants of the Corporation or its subsidiaries, which must be confirmed by representation at the date of grant;
O. “ Plan ” means the Corporation’s Restricted Share Plan, as same may be amended from time to time;
P. “ Restricted Period ” means any period of time that a Restricted Share Right is not exercisable and the Participant holding such Restricted Share Right remains ineligible to receive Restricted Shares, determined by the Committee in its absolute discretion, however, such period of time may be reduced or eliminated from time to time and at any time and for any reason as determined by the Committee, including but not limited to circumstances involving death or disability of a Participant;
Q. “ Retirement ” in respect of a Participant means the Participant ceasing to be an Employee, Director, Consultant or Management Company Employee after attaining a stipulated age in accordance with the Corporation’s normal retirement policy or earlier with the Corporation’s consent;
R. “ Retirement Date ” means the date that a Participant ceases to be an Employee, Director, Consultant or Management Company Employee due to the Retirement of the Participant;
S. “ Restricted Share Rights ” has such meaning as ascribed to such term at Section 3.02 of this Plan;
T. “ Restricted Shares ” means the Shares issuable in satisfaction of Restricted Share Rights;
U. “ Shares ” means the common shares in the capital of the Corporation, as adjusted in accordance with the provisions of Article Five of this Plan;
V. “ Termination ” means: (i) in the case of an Employee, the termination of the employment of the Employee with or without cause by the Corporation or a subsidiary or the cessation of

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employment of the Employee with the Corporation or a subsidiary as a result of the resignation or otherwise, other than the Retirement, of the Employee; (ii) in the case of a Director, the removal of or failure to re-elect or re-appoint the Director as a director of the Corporation or a subsidiary; and (iii) in the case of a Consultant, the termination of the services of the Consultant by the Corporation or a subsidiary; for greater certainty, in each case, other than for death or disability of a Participant;

W. “ TSXV ” means the TSX Venture Exchange; and
X. “ TSXV Policies ” means the policies included in the TSX Venture Exchange Corporate Finance Manual and “ TSXV Policy ” means any one of them.
1.02 Securities Definitions : In the Plan, the terms “affiliate” and “subsidiary” shall have the meanings given to such terms in the Securities Act (British Columbia).
1.03 Headings : The headings of all articles, Sections, and paragraphs in the Plan are inserted for convenience of reference only and shall not affect the construction or interpretation of the Plan.
1.04 Context, Construction : Whenever the singular or masculine are used in the Plan, the same shall be construed as being the plural or feminine or neuter or vice versa where the context so requires.
1.05 References to this Restricted Share Plan : The words “hereto”, “herein”, “hereby”, “hereunder”, “hereof” and similar expressions mean or refer to the Plan as a whole and not to any particular article, Section, paragraph or other part hereof.
1.06 Canadian Funds : Unless otherwise specifically provided, all references to dollar amounts in the Plan are references to lawful money of Canada.

ARTICLE 2 PURPOSE AND ADMINISTRATION OF THE RESTRICTED SHARE PLAN

2.01 Purpose of the Restricted Share Plan : The Plan provides for the acquisition of Shares by Participants for the purpose of advancing the interests of the Corporation through the motivation, attraction and retention of employees, directors, management company employees and consultants of the Corporation and its subsidiaries and to secure for the Corporation and the shareholders of the Corporation the benefits inherent in the ownership of Shares by key employees, consultants and directors of the Corporation and subsidiaries, it being generally recognized that restricted share plans aid in attracting, retaining and encouraging employees, consultants, management company employees and directors due to the opportunity offered to them to acquire a proprietary interest in the Corporation.
2.02 Administration of the Restricted Share Plan : The Plan shall be administered by the Committee and the Committee shall have full authority to administer the Plan including the authority to interpret and construe any provision of the Plan and to adopt, amend

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and rescind such rules and regulations for administering the Plan as the Committee may deem necessary in order to comply with the requirements of the Plan. All actions taken and all interpretations and determinations made by the Committee in good faith shall be final and conclusive and shall be binding on the Participants and the Corporation. No member of the Committee shall be personally liable for any action taken or determination or interpretation made in good faith in connection with the Plan and all members of the Committee shall, in addition to their rights as Directors, be fully protected, indemnified and held harmless by the Corporation with respect to any such action taken or determination or interpretation made. The appropriate officers of the Corporation are hereby authorized and empowered to do all things and execute and deliver all instruments, undertakings and applications and writings as they, in their absolute discretion, consider necessary for the implementation of the Plan and of the rules and regulations established for administering the Plan. All costs incurred in connection with the Plan shall be for the account of the Corporation.

2.03 Delegation to Committee : All of the powers exercisable hereunder by the Directors may, to the extent permitted by applicable law and as determined by resolution of the Directors, be exercised by a committee of the Directors comprised of not less than three (3) Directors, including any compensation committee of the Board.
2.04 Record Keeping : The Corporation shall maintain a register in which shall be recorded:
a. the name and address of each Participant in the Plan;
b. the number of Restricted Share Rights granted to each Participant under the Plan; and
c. the number of Restricted Shares issued to each Participant under the Plan.
2.05 Determination of Participants and Participation : The Committee shall from time to time determine the Participants who may participate in the Plan. The Committee shall from time to time determine the Participants to whom Restricted Share Rights shall be granted and the provisions and restrictions with respect to such grant(s), all such determinations to be made in accordance with the terms and conditions of the Plan, and the Committee may take into consideration the present and potential contributions of and the services rendered by the particular Participant to the success of the Corporation and any other factors which the Committee deems appropriate and relevant.
2.06 Maximum Number of Shares : The maximum number of Shares reserved for issuance under the Plan from treasury shall not exceed 900,000 Shares. Notwithstanding the foregoing, the aggregate maximum number of Shares reserved for issuance under the Plan shall be reduced by that number of Restricted Share Rights (as defined below), which are issued in accordance with the provisions of the Plan.

The number of Shares which may be issuable under the Plan and all of the Corporation’s other previously established or proposed share compensation arrangements, within a 12-month period:

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a. to any one Participant shall not exceed 5% of the total number of issue and outstanding Shares on the date of the grant on a non-diluted basis;
b. to Insiders as a group shall not exceed 10% of the total number of issued and outstanding Shares on the date of the grant on a non-diluted basis; and
c. to any one Consultant shall not exceed 2% in the aggregate of the total number of issued and outstanding Shares on the date of the grant on a non-diluted basis.

In addition, all Shares issuable under the Plan and any Shares reserved for issuance under the Corporation’s other security-based compensation plans (e.g. the Corporation’s stock option plan) shall not exceed 10% of the issued and outstanding Shares of the Corporation from time to time.

ARTICLE 3 RESTRICTED SHARE PLAN

3.01 Restricted Share Plan : The Plan is hereby established for the Participants.

3.02 Participants : Subject to Section 2.06 the Committee shall have the right to grant, in its sole and absolute discretion, to any Participant rights (“ Restricted Share Rights ”) to acquire any number of fully paid and non-assessable Shares as a discretionary payment in consideration of past services to the Corporation, subject to the Plan and with such provisions and restrictions as the Committee may determine. At the end of the Restricted Period or, if applicable, at a later Deferred Payment Date, and without payment of additional consideration or any other further action on the part of the holder of the Restricted Share Right, the Corporation shall issue to the Participant holding the Restricted Share Right one (1) Share for each Restricted Share Right held by the Participant for which the Restricted Period has expired.

3.03 Restricted Share Right Grant Letter : Each grant of a Restricted Share Right under the Plan shall be evidenced by a Restricted Share Right Grant Letter to the Participant from the Corporation. Such Restricted Share Right Grant Letter shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions which are not inconsistent with the Plan and which the Committee deems appropriate for inclusion in a Restricted Share Right Grant Letter. The provisions of the various Restricted Share Right Grant Letters issued under the Plan need not be identical. To the extent that there is any inconsistency between the Plan and the Restricted Share Right Grant Letter or any other communications, the Plan shall prevail.

3.04 Restricted Period : Upon the grant of Restricted Share Rights to a Participant, the Committee shall determine the Restricted Periods applicable to such Restricted Share Rights. For greater certainty, all Restricted Share Rights granted hereunder to a Participant shall vest over a three (3) year period from the grant date (i.e. one-third per

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year beginning on the first anniversary of the grant date), unless deferred in accordance with Section 3.05 of the Plan.

3.05 Deferred Payment Date : Participants may elect to defer the receipt of all or any part of their entitlement to Restricted Shares until a Deferred Payment Date.
3.06 Prior Notice of Deferred Payment Date : Participants who elect to set a Deferred Payment Date must give the Corporation written notice of one or more Deferred Payment Dates not later than thirty (30) days prior to the expiration of the Restricted Period. Participants may change a Deferred Payment Date by providing written notice to the Corporation not later than thirty (30) days prior to the Deferred Payment Date.
3.07 Retirement or Termination during Restricted Period : In the event of the Retirement or Termination of a Participant during the Restricted Period, any Restricted Share Rights held by the Participant shall immediately terminate and be of no further force or effect, provided that the Committee has the absolute discretion to waive such termination.
3.08 Retirement or Termination after Restricted Period : In the event of the Retirement or Termination of the Participant following the Restricted Period and, if applicable, prior to the Deferred Payment Date, the Corporation shall issue forthwith the Restricted Shares in accordance with the Restricted Share Rights held by the Participant.
3.09 Death or Disability of Participant : In the event of the death or total disability of a Participant, any Restricted Shares represented by Restricted Share Rights held by the Participant shall be immediately issuable by the Corporation.
3.10 Change of Control : In the event of a Change of Control and if, at the time of the Change of Control:
a. the Participant is an Employee and, within 12 months of such Change of Control, the Corporation terminates the employment or services of said Participant/Employee for any reason other than just cause or any “event of termination” occurs (as defined in the employment agreement or other contractual arrangement in place between the Participant/Employee and the Corporation) (the “ Event of Termination ”), then, on the date of such Event of Termination, all Restricted Share Rights outstanding and held by the Participant shall immediately vest and the Corporation shall forthwith issue the Restricted Shares to the Participant notwithstanding any Restricted Period(s) or any applicable Deferred Payment Date(s);
b. the Participant is not an Employee of the Corporation, then all Restricted Share Rights outstanding and held by the Participant shall immediately vest and the Corporation shall forthwith issue the Restricted Shares to the Participant notwithstanding any Restricted Period(s) or any applicable Deferred Payment Date(s).
3.11 Necessary Approvals : The Plan shall be subject to the approval of the majority of votes cast by all shareholders of the Corporation to be given by a resolution passed at a

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meeting of the shareholders, excluding votes attached to the Shares of the Corporation beneficially owned by Insiders (as such term is defined in the rules and policies of the TSXV) and their associates (“ Disinterested Shareholder Approval ”), and acceptance by the TSXV or any regulatory authority having jurisdiction over the securities of the Corporation.

3.12 Term of the Restricted Share Plan : The Plan herein shall become effective on the date on which it is approved by the shareholders. The Plan shall remain in effect until it is terminated by the Board.

ARTICLE 4 WITHHOLDING TAXES

4.01 Withholding Taxes : The Corporation or any subsidiary may take such steps as are considered necessary or appropriate for the withholding of any taxes which the Corporation or any subsidiary of the Corporation is required by any law or regulation of any governmental authority whatsoever to withhold in connection with any Share including, without limiting the generality of the foregoing, the withholding of all or any portion of any payment or the withholding of the issue of Shares to be issued under the Plan, until such time as the Participant has paid the Corporation or any subsidiary of the Corporation for any amount which the Corporation or subsidiary of the Corporation is required to withhold with respect to such taxes or other amounts. Without limitation to the foregoing, the Committee may adopt administrative rules under the Plan which provide for the sale of Restricted Shares (or a portion thereof) in the market upon the issuance of such Shares under the provisions of the Plan to satisfy withholding obligations under the Plan.

ARTICLE 5 GENERAL

5.01 Effective Time of Restricted Share Plan : The Plan shall become effective upon a date to be determined by the Board.
5.02 Amendment and Termination of the Plan : Subject to the policies, rules and regulations of any lawful authority having jurisdiction (including the rules and requirements of the TSXV or any other exchange on which the Shares are then listed ), the Committee may at any time, without further action by the shareholders, amend or terminate the Plan or any Restricted Share Right granted hereunder in such respects as it may consider advisable and, without limiting the generality of the foregoing, it may do so to ensure that Restricted Share Right issued hereunder will comply with any provisions respecting Restricted Share Rights in the income tax or other laws in force in any country or jurisdiction of which a person to whom a Restricted Share Right has been granted may from time to time be resident. The Committee may not, however, without the consent of the Participant, alter or impair any of the rights or obligations under any Restricted Share Right issued.

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5.03 Non-Assignable : Except as otherwise may be expressly provided for under this Plan or pursuant to a will or by the laws of descent and distribution, no Restricted Share Right and no other right or interest of a Participant is assignable or transferable.
5.04 Rights as a Shareholder : No holder of any Restricted Share Rights shall have any rights as a shareholder of the Corporation prior to the end of the applicable Restricted Period or Deferred Payment Date, as applicable. No holder of any Restricted Share Rights shall be entitled to receive, and no adjustment shall be made for, any dividends, distributions or any other rights declared for shareholders of the Corporation for which the record date is prior to the date of expiry of the Restricted Period or Deferred Payment Date, as applicable.
5.05 No Contract of Employment : Nothing contained in the Plan shall confer or be deemed to confer upon any Participant the right to continue in the employment of, or to provide services to, the Corporation or any subsidiary nor interfere or be deemed to interfere in any way with any right of the Corporation or any subsidiary to discharge any Participant at any time for any reason whatsoever, with or without cause. Participation in the Plan by a Participant shall be voluntary.
5.06 Automatic Extension of Restricted Period or Deferred Payment Date during Black Outs : In the event any Restricted Period expires or a Deferred Payment Date occurs during a self imposed black out period on trading securities of the Corporation, such Restricted Period or Deferred Payment Date shall be automatically extended until 48 hours after such black out period has expired. Notwithstanding Section 3.07, if a Restricted Period is automatically extended pursuant to this Section 5.06, in the event of the Retirement or Termination of a Participant during the time the Restricted Period was extended, the Restricted Share Rights so extended held by the Participant shall not be terminated in accordance with Section 3.07 and shall continue to be in effect.
5.07 Adjustment in Number of Shares Subject to the Restricted Share Plan : In the event there is any change in the Shares, whether by reason of a stock dividend, consolidation, subdivision, reclassification or otherwise, an appropriate adjustment shall be made by the Committee in:
a. the number of Shares available under the Plan; and
b. the number of Shares subject to any Restricted Share Rights.

If the foregoing adjustment shall result in a fractional Share, the fraction shall be disregarded. All such adjustments shall be conclusive, final and binding for all purposes of the Plan.

5.08 Take-over Bid : In the event that the Corporation becomes the subject of a take-over bid pursuant to which 100% of the issued and outstanding Shares are acquired by the offeror either directly or as a result of the compulsory acquisition provisions of the incorporating statute, and where consideration is paid in whole or in part in equity securities of the offeror, the Committee may send notice to all holders of Restricted

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Share Rights requiring them to surrender their Restricted Share Rights within ten (10) days of the mailing of such notice, and the holders of Restricted Share Rights shall be deemed to have surrendered such Restricted Share Rights on the tenth (10th) day after the mailing of such notice without further formality, provided that:

a. the offeror delivers with such notice an irrevocable and unconditional offer to grant replacement restricted share rights to the holders of Restricted Share Rights on the equity securities offered as consideration;
b. the Committee has determined, in good faith, that such replacement restricted share rights have substantially the same economic value as the Restricted Share Rights being surrendered; and
c. the surrender of Restricted Share Rights and the granting of replacement restricted share rights can be effected on a tax-deferred basis under the Income Tax Act (Canada).
5.09 Financial Assistance Prohibited : The Corporation is prohibited from providing financial assistance in the form of a loan or otherwise to Participants under this Plan for the purpose of settlement of equity awards under this Plan.
5.10 No Representation or Warranty : The Corporation makes no representation or warranty as to the future market value of any Shares issued in accordance with the provisions of the Plan.
5.11 Compliance with Applicable Law : If any provision of the Plan or any Restricted Share Right contravenes any law or any order, policy, by-law or regulation of any regulatory body having jurisdiction, then such provision shall be deemed to be amended to the extent necessary to bring such provision into compliance therewith.
5.12 Interpretation : This Plan shall be governed by and construed in accordance with the laws of the Province of British Columbia.

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AI assistant

Drummond Ventures Corp. — Proxy Solicitation & Information Statement 2020

47655_rns_2020-01-13_848e6a0f-f81f-4d99-89e6-bd014d5ea639.pdf

DRUMMOND VENTURES CORP.

AND

MANAGEMENT INFORMATION CIRCULAR

DRUMMOND VENTURES CORP.

NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS

By Order of the Board of Directors of Drummond Ventures Corp.

DRUMMOND VENTURES CORP. MANAGEMENT INFORMATION CIRCULAR

SOLICITATION OF PROXIES

APPOINTMENT AND REVOCATION OF PROXIES

Appointment of a Proxy

Revoking a Proxy

Signature on Proxies

Voting of Proxies

Advice to Beneficial Shareholders

QUALIFYING TRANSACTION

VOTING SHARES AND PRINCIPAL HOLDERS OF VOTING SECURITIES

INDEBTEDNESS OF DIRECTORS AND OFFICERS

INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS

INTEREST OF DIRECTORS AND OFFICERS IN MATTERS TO BE ACTED UPON

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Compensation of Executive Officers

Outstanding Share-Based Awards and Option-Based Awards

Incentive Plan Awards – Value Vested or Earned During the Financial Period

Securities Authorized for Issuance under Equity Compensation Plans

Pension and Other Benefit Plans

Termination of Employment, Change in Responsibilities and Employment Contracts

Compensation of Directors

Stock Options

AUDIT COMMITTEE

Composition of the Audit Committee

Relevant Education and Experience

Audit Committee Oversight

Reliance on Certain Exemptions

Audit Committee Charter

External Auditor Service Fees (By Category)

AUDITOR

CORPORATE GOVERNANCE

MATTERS TO BE CONSIDERED AT THE MEETING

1. Financial Statements

2. Appointment of Auditor

“ BE IT HEREBY RESOLVED that:

3. Number of Directors

4. Election of Directors

Other Reporting Issuer Experience

Cease Trade Orders, Bankruptcies and Penalties

5. Approval of Stock Option Plan

Description of the Plan

Vote Required

(the “ Option Plan Resolution ”)

6. Approval of Restricted Share Plan

Background

Description of the Restricted Share Plan

Votes Required

(the “ Restricted Share Plan Resolution ”)

ADDITIONAL INFORMATION

DIRECTOR APPROVAL

Schedule “A” CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

DRUMMOND VENTURES CORP.

I. PURPOSE

II. AUTHORITY OF THE AUDIT COMMITTEE

III. COMPOSITION AND MEETINGS

IV. APPROVAL OF PAYMENTS

V. RESPONSIBILITIES

A. Financial Accounting and Reporting Process and Internal Controls

B. Independent Auditors

C. Other Responsibilities

Procedures for Receipt of Complaints and Submissions Relating to Accounting Matters

Procedures for Approval of Non-Audit Services

Schedule “B”

STOCK OPTION PLAN

OF DRUMMOND VENTURES CORP.

1. Purpose

2. Administration

3. Compliance with Applicable Laws and Rules

4. Shares Subject to Plan

5. Maintenance of Sufficient Capital

Drummond Ventures Corp. Proxy Solicitation & Information Statement 2020