McFarlane Lake Mining Limited — Capital/Financing Update 2022

Jan 15, 2022

RIGHT OF FIRST REFUSAL AGREEMENT

THIS AGREEMENT made effective as of the 30th day of December, 2021.

B E T W E E N:

CANADIAN STAR MINERALS LTD., a corporation existing under the laws of the Province of Ontario

(the "Vendor")

OF THE FIRST PART

• and -

MCFARLANE LAKE MINING INCORPORATED, a corporation existing under the laws of the Province of Ontario

(the "Company")

OF THE SECOND PART

WHEREAS:

• A. The Company and the Vendor have entered into a definitive property purchase agreement dated of even date herewith (the "Purchase Agreement") pursuant to which the Vendor will be issued common shares in the authorized share structure of the Resulting Issuer; and
• B. As a condition of the Vendor entering into the Purchase Agreement, the Company has agreed to grant a right of first refusal (the "ROFR") to acquire additional securities of the Resulting Issuer as set out herein to the Vendor, on the terms and conditions set out herein.

NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of the respective covenants and agreements of the Parties herein contained and for other good and valuable consideration (the receipt and sufficiency of which are acknowledged by each party), the Parties agree as follows:

1. DEFINITIONS

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

• (a) "Affiliate(s)" means any Person which directly or indirectly controls, is controlled by, or is under common control with, the Vendor; for purposes of the preceding sentence, "control" means possession, directly or indirectly, of the power to direct or cause direction of management and policies through ownership of voting securities, contract, voting trust or otherwise;

• (b) "Business Day" means any day other than a Saturday, Sunday or a day that is a statutory holiday or a civic holiday in the Province of Ontario;

• (c) "Equity Financing" means the issue and sale, directly or indirectly, of Equity Securities for cash or other valuable consideration other than: (i) the grant of stock options to directors, officers, employees or consultants of the Company or any subsidiary of the Company, or the issue of Equity Securities upon the exercise of any such stock options, in each case following the date hereof; (ii) the issue of Equity Securities or securities convertible into Equity Securities as a bona fide commission or finder's fee; (iii) the issue of Equity Securities in connection with the acquisition of mineral properties; and (iv) the issue of Equity Securities in satisfaction of fees owing by the Company;

• (d) "Equity Financing Notice" has the meaning ascribed thereto in section 3(a);

• (e) "Equity Financing Option Period" has the meaning ascribed thereto in section 3(b);

• (f) "Equity Financing Subscription Notice" has the meaning ascribed thereto in section 3(b);

• (g) "Equity Securities" means Shares and/or securities convertible into or exercisable or exchangeable for Shares including, without limitation, warrants issued as a component of a unit and convertible debt securities;

• (h) "Go-Public Transaction" means any transaction or series of related transactions in connection with the Company's proposed initial public offering, reverse take-over, or other going public transaction, one of the results of which is that the Company or the Resulting Issuer becomes a reporting issuer for purposes of the Securities Act (Ontario) or similar legislation in another province of Canada, or any class of the shares of the Company or the Resulting Issuer become listed and posted for trading on a stock exchange or quoted on an over-the-counter-market;

• (i) "Party" or "Parties" means a party to this Agreement, its successors and assigns;

• (j) "Person" means a natural person, partnership, limited partnership, limited liability partnership, company, corporation, limited liability corporation, unlimited corporation, joint stock company, trust, unincorporated association, joint venture or other entity or governmental authority, and pronouns have a similarly extended meaning;

• (k) "Resulting Issuer" means the offering corporation (as such term is defined in the Business Corporations Act (Ontario)) existing upon completion of the Go-Public Transaction, of which the Company is or will be a wholly-owned subsidiary;

• (l) "Shares" means the issued and outstanding common shares in the authorized share structure of the Resulting Issuer;

• (m) "Subscription Agreement" has the meaning ascribed thereto in the recitals of this Agreement; and

• (n) "Term" shall have the meaning given to such term in Section 6.

2. RIGHT OF FIRST REFUSAL

Subject to section 10, the Company hereby grants to the Vendor the right (but not the obligation) to purchase up to $1,687,500 of Equity Securities (the "ROFR Amount") sold by Resulting Issuer in an Equity Financing of the Resulting Issuer. For greater certainty, neither the Company nor the Resulting Issuer shall be obligated to complete an Equity Financing at any time during the Term and nothing in this Agreement shall be construed as requiring the Company or the Resulting Issuer to offer the Equity Securities at any particular price or that any particular number of Equity Securities shall be sold by the Company or the Resulting Issuer pursuant to an Equity Financing

3. EQUITY FINANCING NOTICE

In the event that the Company proposes to issue Equity Securities in connection with an Equity Financing:

• (a) the Company will deliver a notice, in writing, to the Vendor at least 10 calendar days prior to the closing of any Equity Financing (the "Equity Financing Notice") specifying: (i) the consideration for which such Equity Securities are being offered; (ii) the proposed closing date of the Equity Financing; and (iii) any subscription documents (the "Subscription Documents") in respect of such Equity Financing then available to the Company;
• (b) the Vendor will have the option by written notice given to the Company (an "Equity Financing Subscription Notice"), to subscribe for up to the ROFR Amount of Equity Securities being offered for sale as described in the Equity Financing Notice. Such Equity Financing Subscription Notice may take the form of a properly completed and duly executed Subscription Document. In the Equity Financing Subscription Notice, the Vendor will specify the number of Shares beneficially owned, directly or indirectly, by it as at the date of the Equity Financing Notice. The option to subscribe is exercisable by the Vendor for such period of time as set out in the Equity Financing Notice, which will be in all cases, the lesser of: (i) the time period (if any), less 24 hours, given by a dealer, broker, underwriter or agent (as the case may be), acting reasonably, for the Company to respond to a proposed Equity Financing (which, in any event will not be less than two Business Days); and (ii) 5 Business Days after the date of delivery to the Vendor of the Equity Financing Notice (such period of time to be referred to as the "Equity Financing Option Period");
• (c) if the Vendor fails to deliver an Equity Financing Subscription Notice for the Equity Securities covered by the Equity Financing Notice in accordance with section 3(b) within the Equity Financing Option Period or waives its rights hereunder following receipt of an Equity Financing Notice, then any rights which the Vendor may have had to subscribe for any of the Equity Securities covered by the Equity Financing will be extinguished for the applicable Equity Financing, provided that the Company will not complete an Equity Financing for less consideration per Equity Security or on more favourable terms to purchasers of Equity Securities than those set out in the Equity Financing Notice without first providing the Vendor with an amended Equity Financing Notice. For clarity, the Vendor's failure to deliver an Equity Financing Subscription Notice in response to an Equity Financing Notice does not preclude the Vendor from participating in any future Equity Financing, in accordance with this section 3, so long as the Vendor has not previously subscribed for the entire amount of the ROFR Amount; and
• (d) each Equity Financing Notice and Equity Financing Subscription Notice, taken together, will constitute a binding agreement of the Vendor to subscribe for and take up, and by the Company to issue and sell to the Vendor, the number of Equity Securities subscribed for therein upon the terms and conditions specified in the Equity Financing Notice,

4. REGULATORY AND STOCK EXCHANGE APPROVAL

In the event that the Vendor exercises its right to acquire Equity Securities pursuant to sections 2 and 3 hereof, the Company will apply for and will use reasonable commercial efforts to obtain all applicable approvals, consents or authorizations required from all applicable securities regulatory authorities or stock exchanges. The Vendor acknowledges that the issuance of Equity Securities to it hereunder is subject to the availability of an applicable prospectus exemption, the receipt of all applicable approvals, consents or authorizations required to be obtained from securities regulatory authorities, the Company's shareholders and stock exchanges and all applicable laws, and the Vendor agrees that, if required by applicable securities laws or stock exchange rules, the Vendor will execute and deliver any reports, undertaking or other documents or furnish any required information in order for the Company to obtain such approvals with respect to the issue of Equity Securities contemplated hereunder as may be required thereunder.

5. TERM

The ROFR shall be exercisable until the earlier of (i) December 9, 2024 or (ii) the date that the Vendor has subscribed for the full amount of the ROFR Amount, in one or more Equity Financings, following which it shall be null and void and of no further force or effect (the "Term").

6. PUBLIC DISCLOSURE

The Vendor agrees that the Company shall have the right to publicly disclose this Agreement if required under applicable corporate or securities laws or stock exchange rules. The Vendorshall treat this Agreement as confidential and shall not disclose the existence of the Agreement without the prior written consent of the Company.

7. FURTHER ASSURANCES

Each of the Company and the Vendor hereby covenant and agree that at any time and from time to time they will, upon the request of the other, do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered all such further acts, deeds, assignments, transfers, conveyances and assurances as may be required for the better carrying out and performance of all the terms of this Agreement including, without limitation, any documents required to comply with securities or stock exchange requirements.

11. NOTICES

Any notice, certificate, consent, determination or other communication required or permitted to be given or made under this Agreement, including without limitation, the Equity Financing Subscription Notice, shall be in writing and shall be effectively given and made if (i) delivered personally, (ii) sent by prepaid courier service or mail, or (iii) sent by fax, e-mail or other similar means of electronic communication, in each case to the applicable addresses set out below:

If to the Vendor:	Canadian Star Minerals Ltd.129 Midland AvenueScarborough, Ontario M1N 3Z8
	Telephone	(647) 550-6200
	Email:	cnorth@cdnstar.com
	Attention:	Chris North
If to the Company:	McFarlane Lake Mining Incorporated
	15 Kincora Court
	Sudbury, Ontario P3E 2B9
	Email:	mtrevisiol@mcfarlanelakemining.com
	Attention:	Mark Trevisiol

and any such communication so given or made shall be deemed to have been given or made and to have received on the day of delivery if delivered, or on the day of faxing or sending by other means of recorded electronic communication, provided that such day in either event is a Business Day as defined herein and the communication is so delivered, faxed or sent prior to 5:00 pm on such day. Otherwise, such communication shall be deemed to have been given and made and to have been received on the next following Business Day. Any such communication sent by mail shall be deemed to have been given and made and to have been received on the fifth (5th) Business Day following the mailing thereof; provided however that no such communication shall be mailed during any actual or apprehended disruption of postal services. Any such communication given or made in any other manner shall be deemed to have been given or made and to have been received only upon actual receipt

12. COUNTERPARTS

This Agreement may be executed in several counterparts, each of which so executed will be deemed to be an original, and such counterparts together will constitute but one and the same instrument. Delivery of an executed counterpart of this Agreement by facsimile or other electronic image scan transmission such as PDF shall be effective as delivery of an original counterpart hereof.

13. SUCCESSORS AND ASSIGNS

This Agreement will be binding upon, inure to the benefit of, and be enforceable by, the Parties and their respective successors and permitted assigns. Any beneficiary or assignee of the ROFR that is the subject of this Agreement must be acceptable to the Company and must execute all documents required by the Company, under applicable securities laws and pursuant to stock exchange rules.

14. ENTIRE AGREEMENT

This Agreement constitute the entire agreement among the Parties and supersede all prior agreements, representations, warranties, statements, promises, information, arrangements and understandings, whether oral or written, express or implied, with respect to the subject matter hereof.

15. WAIVER

Any Party hereto which is entitled to the benefits of this Agreement may, and has the right to, waive any term or condition hereof; provided, however, that such waiver must be evidenced by written instrument duly executed on behalf of such Party.

16. AMENDMENT

No modification or amendment to this Agreement may be made unless agreed to by the Parties in writing.

17. GOVERNING LAW

This Agreement will be governed by and construed in accordance with the laws of the Province of Ontario and the federal Laws of Canada applicable therein. Each of the Parties irrevocably agrees that any legal action or proceeding arising out of or relating to this Agreement brought by any other Party shall be brought and determined in the courts of the Province of Ontario or, if such court shall not have jurisdiction, any federal court located in the Province of Ontario, and each of the Parties hereby irrevocably submits to the exclusive jurisdiction of the aforesaid courts for itself and with respect to its property, generally and unconditionally, with regard to any such action or proceeding.

18. SEVERABILITY

If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any Law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect.

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IN WITNESS WHEREOF the Parties have executed this Agreement as of the day and year first above written.

CANADIAN STAR MINERALS LTD.

By: (signed) "Chris North" Name: Chris North Title: Authorized Signatory

I have authority to bind the corporation

MCFARLANE LAKE MINING INCORPORATED

By: (signed) "Mark Trevisiol"

Name: Mark Trevisiol, P. Eng. Title: Chief Executive Officer

I have authority to bind the corporation