McFarlane Lake Mining Limited — M&A Activity 2022

Jan 15, 2022

FILING STATEMENT

McFarlane Lake Mining Limited

Application for the listing on the Neo Exchange Inc. of the common shares in the capital of McFarlane Lake Mining Limited, the issuer resulting from the transactions described herein.

As of January 14, 2022*.*

Neither the Neo Exchange Inc. (the "Exchange") nor any securities regulatory authority has in any way passed upon the merits of the Transaction described in this Filing Statement.

All information contained in this Filing Statement with respect to 1287401 B.C. Ltd. ("401") and 1000034047 Ontario Inc. was supplied by 401 for inclusion herein.

All information contained in this Filing Statement with respect to McFarlane Lake Mining Incorporated ("McFarlane") was supplied by McFarlane for inclusion herein.

GLOSSARY OF TERMS6
FORWARD-LOOKING STATEMENTS 15
TECHNICAL INFORMATION16
CIM DEFINITION STANDARDS16
QUALIFIED PERSONS 17
MARKET AND INDUSTRY DATA17
EXCHANGE RATE AND CURRENCY INFORMATION 17
INFORMATION CONTAINED IN THIS FILING STATEMENT 17
PART I – SUMMARY OF FILING STATEMENT19
PART II – INFORMATION CONCERNING THE TRANSACTION27
BACKGROUND OF TRANSACTION 27
REASONS FOR THE TRANSACTION 27
SUMMARY OF THE TRANSACTION AND RELATED TRANSACTIONS 27
THE BUSINESS COMBINATION AGREEMENT AND THE TRANSACTION28
Representations, Warranties and Covenants28
Conditions of the Transaction28
Conditions for the Benefit of 401 29
Conditions for the Benefit of McFarlane 29
Covenants of the Parties during the Period prior to the Effective Date 30
Termination Rights30
Directors and Officers of the Resulting Issuer31
Business Combination Steps 31
401 CONTINUATION RESOLUTION 34
THE CONCURRENT FINANCINGS34
APPROVALS NECESSARY FOR THE TRANSACTION 34
Shareholder Approval34
Exchange Approval34
PART III – INFORMATION CONCERNING 40135
CORPORATE STRUCTURE35
Name and Incorporation35
Intercorporate Relationships 35
GENERAL DEVELOPMENT OF THE BUSINESS 35
Overview and History of 401 35
Narrative Description of the Business 35
401 SUBCO FINANCING 35
SELECTED CONSOLIDATED FINANCIALINFORMATION 35
MANAGEMENT'S DISCUSSION & ANALYSIS 36
DESCRIPTION OF THE SECURITIES 36
Common Shares36
Warrants 36
Options36
Stock Option Plan 36
PRIOR SALES 36
TRADING PRICE37
ARM'S LENGTH TRANSACTIONS 37
LEGAL PROCEEDINGS37
AUDITOR, TRANSFER AGENT AND REGISTRAR37
MATERIAL CONTRACTS 37
PART IV – INFORMATION CONCERNING MCFARLANE38

CORPORATE STRUCTURE38
Name and Incorporation38
INTERCORPORATE RELATIONSHIPS 38
GENERAL DEVELOPMENT OF THE BUSINESS 38
NARRATIVE DESCRIPTION OF THE BUSINESS38
The CSM Optioned Properties38
Other Inventory Properties40
The Mongowin Option 40
The Michaud/Munro Option 41
MATERIAL MINERAL PROJECT HIGH LAKE – WEST HAWK LAKE PROJECT41
Property Location and Description41
Geology41
Mineralization42
Exploration 42
Conclusions42
Recommendations43
High Lake Property43
West Hawk Property 43
SELECTED CONSOLIDATED FINANCIAL INFORMATION44
MANAGEMENT'S DISCUSSION AND ANALYSIS 44
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS 44
RISKS AND UNCERTAINTIES 44
DESCRIPTION OF SECURITIES 45
Authorized Capital45
CONSOLIDATED CAPITALIZATION 45
PRIOR SALES 45
OPTIONS46
THE MCFARLANE FINANCINGS 46
EXECUTIVE COMPENSATION 47
Compensation Discussion and Analysis47
Summary Compensation Table 47
MANAGEMENT CONTRACTS47
STOCK OPTION PLAN 47
INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS 48
INVESTOR RELATIONS ARRANGEMENTS 48
NON-ARM'S LENGTH PARTY TRANSACTIONS 48
LEGAL PROCEEDINGS49
AUDITOR, TRANSFER AGENT ANDREGISTRAR49
CONFLICTS OF INTEREST 49
MATERIAL CONTRACTS 49
PART V – INFORMATION CONCERNING THE RESULTING ISSUER 50
CORPORATE STRUCTURE OF THE RESULTING ISSUER50
Name and Incorporation50
Intercorporate Relationships 50
NARRATIVE DESCRIPTION OF THE BUSINESS50
STATED BUSINESS OBJECTIVES AND MILESTONES 51
DESCRIPTION OF THE RESULTING ISSUER SECURITIES51
Resulting Issuer Shares51
Resulting Issuer Warrants51
Resulting Issuer Replacement Broker Warrants51
Resulting Issuer Replacement Advisory Warrants51
Resulting Issuer Replacement Options51
DIVIDENDS51
PRO FORMA CONSOLIDATED CAPITALIZATION 52
FULLY DILUTED SHARECAPITAL52

SELECTED PRO FORMA FINANCIAL INFORMATION53
Pro Forma Consolidated Statement of Financial Position 53
ESTIMATED AVAILABLE FUNDS 53
PRINCIPAL PURPOSES54
PRINCIPAL SECURITYHOLDERS 54
DIRECTORS, OFFICERS AND PROMOTERS 55
Summary Information on Proposed Directors and Officers 55
Biographical Information 56
OTHER REPORTING ISSUER EXPERIENCE58
AUDIT COMMITTEE 58
CCGN COMMITTEE 59
NON-COMPLIANCE OR NON-DISCLOSURE AGREEMENTS 59
CORPORATE CEASE TRADE ORDERS OR BANKRUPTCIES59
INDIVIDUAL BANKRUPTCIES 60
PENALTIES OR SANCTIONS 60
CONFLICTS OF INTEREST60
PROPOSED EXECUTIVE COMPENSATION60
Compensation Discussion and Analysis60
Research and Benchmarking61
Mitigation of Compensation-Related Risk 61
Elements of the Resulting Issuer's Executive Compensation Program61
Named Executive Officers62
Summary Compensation Table 62
Management Contracts63
External Management Companies63
Stock Options and other Compensation Securities 63
Compensation of Directors63
Termination and Change of Control Benefits63
Pension Disclosure 64
RESULTING ISSUER DDSU PLAN 64
RESULTING ISSUER PR PLAN SUMMARY64
INDEBTEDNESS OF DIRECTORS AND OFFICERS 67
INVESTOR RELATIONS ARRANGEMENTS 67
OPTIONS TO PURCHASE SECURITIES67
Option-Based Awards67
STOCK OPTION PLAN 68
Resulting Issuer Option Plan 68
ESCROWED SECURITIES70
Terms of Escrow 70
MATERIAL CONTRACTS 72
STOCK EXCHANGE LISTING72
AUDITORS 72
TRANSFER AGENT AND REGISTRAR 72
EXPERTS 72
RISK FACTORS 72
OTHER MATERIAL FACTS72
PART VI – RISK FACTORS 73
RISKS RELATED TO THE TRANSACTION73
Completion of the Transaction and Exchange Approval 73
Termination of the Business Combination Agreement in Certain Circumstances 73
The Transaction Will Have a Dilutive Effect on the Ownership Interest of 401 Shareholders73
The Transaction May Divert the Attention of Management of McFarlane 74
Tax Consequences74
McFarlane May Not Realize Anticipated Benefits of the Transaction74
Pro Forma Financial Statements74

RISK FACTORS RELATING TO THE RESULTING ISSUER SHARES74
Market Price and Listing of Resulting Issuer Shares74
The Market Price of Resulting Issuer Shares May Be Volatile 75
The Resulting Issuer May Issue Additional Equity Securities75
Value Assigned to McFarlane May Be Incorrect75
No Assurance of Payment of Dividends75
RISKS RELATED TO RESULTING ISSUER'S BUSINESS 75
Limited Operating History 75
Dependence on the High Lake and West Hawk Lake Properties75
Mineral Deposits May Not Be Economical75
Changes in Market Price of Metals76
Volatility of Gold Price 76
Mining Operations May Not Be Established or Profitable76
The Resulting Issuer May Not Use the Available Funds as Described in this Filing Statement76
Ability to Exploit Future Discoveries76
Financing Risks77
Mining is Inherently Dangerous 77
Operations and Exploration Subject to Governmental Regulations77
Operation and Exploration Activities are Subject to Environmental and Endangered Species Laws and Regulations78
Mineral Properties May Be Subject to Rights of and Consultation With Indigenous Peoples78
Permits and Licences78
Community Relations79
Competition79
Defects in Title to Mineral Properties79
Future Litigation Could Affect Title80
Deficient Third Parties' Reviews, Reports and Projections80
Dependence on Key Individuals80
Directors and Officers May Have Conflicts of Interest 80
Global Financial Conditions May Be Volatile80
The Ongoing Spread of COVID-19 May Negatively Impact McFarlane's Business. 81
Adequate Infrastructure May Not Be Available to Develop the McFarlane Properties81
Future Acquisitions and Partnerships81
Anti-Bribery Laws (Such as the Corruption of Foreign Public Officials Act of Canada ("CFPOA")82
Equipment, Materials and Skilled Technical Workers82
Risks Relating to Attracting and Retaining Qualified Management and Technical Personnel82
McFarlane's Operations Are Subject to Human Error82
Disruption from Non-Governmental Organizations 82
Health & Safety83
Nature and Climatic Conditions 83
Uninsured or Uninsurable Risks83
Disruption in McFarlane's Activities Due to Acts of God May Adversely Affect McFarlane 83
SCHEDULE "A" – RESULTING ISSUER STOCK OPTION PLAN A-1
SCHEDULE "B" – BUSINESS COMBINATION AGREEMENT B-1
SCHEDULE "C" – 401 FINANCIALS & MANAGEMENT'S DISCUSSION AND ANALYSIS C-1
SCHEDULE "D" – MCFARLANE FINANCIALS & MANAGEMENT'S DISCUSSION AND ANALYSIS D-1
SCHEDULE "E" – PRO FORMA FINANCIAL STATEMENTE-1
SCHEDULE "F" – AUDIT COMMITTEE CHARTER F-1
SCHEDULE "G" – DDSU PLAN G-1
SCHEDULE "H" – RESULTING ISSUER PR PLAN H-1

GLOSSARY OF TERMS

Whenever used in this Filing Statement including the summary hereof, unless the context otherwise requires, the following terms shall have the indicated meanings and grammatical variations of such words and terms have corresponding meanings. Words importing the singular number, where the context requires, include the plural and vice versa and words importing any gender include all genders. In this Filing Statement, unless otherwise noted, all dollar amounts are expressed in Canadian dollars.

"2021 Non-Brokered Private Placement" means the non-brokered private placement of 22,075,000 McFarlane Shares, for $0.10 per McFarlane Share, for gross proceeds of $2,207,500, which closed on May 20, 2021;

"401" has the meaning set forth on the cover page;

"401 Continuation Resolution" means the written resolution of all of the shareholders of 401 authorizing the continuation of 401 from British Columbia to Ontario;

"401 Financial Statements" means the audited financial statements of 401 from the period of incorporation on February 3, 2021 to September 30, 2021 and the unaudited condensed interim consolidated financial statements of 401 from the period of incorporation on February 3, 2021 to September 30, 2021, available on 401's SEDAR profile at www.sedar.com and incorporated by reference herein;

"401 Shares" means the common shares in the capital of 401 (prior to completion of the Transaction);

"401 MD&A" means the management discussion and analysis for the 401 Financial Statements, which are attached hereto as Schedule "C";

"401 Offer" any form of offer that that may reasonably be expected to lead to any activity, arrangement or transaction or propose any activities or solicitations in opposition to or in competition with the Business Combination Agreement;

"401 Options" means incentive stock options to purchase 401 Shares;

"401 Shareholders" means the holders of 401 Shares from time to time;

"401 Share Split" means the split of the outstanding securities of 401 on the basis of 1.20967742 post split 401 Shares for each one pre-split 401 Share, completed on December 13, 2021;

"401 Subco" means 1000034047 Ontario Inc., a wholly-owned subsidiary of 401 newly incorporated under the OBCA for the sole purpose of effecting the Amalgamation;

"401 Subco Financing" means the non-brokered financing of 401 Subco that closed on December 9, 2021 for 65,000 401 Subco Units for gross proceeds of approximately $26,000;

"401 Subco Shares" means the common shares in the capital of 401 Subco;

"401 Subco Units" means units of 401 Subco consisting of one common share of 401 Subco and one-half of one common share purchase warrant of 401 Subco, on the same terms and conditions as the Units;

"401 Subco Warrants" means the one-half of one common share purchase warrants of 401 Subco issued in connection the 401 Subco Financing, each whole common share purchase warrant entitling the holder thereof to purchase one 401 Subco Share at a price of $0.60 per 401 Subco Share at any time until 36 months following the closing date of the 401 Subco Financing;

"401 Written Resolution" means the unanimous resolution of the 401 Shareholders approving the Incentive Plans and the New Slate and all matter related thereto;

"Advisory Warrants" mean the advisory warrant exercisable at any time prior to the date that is 36 months from the closing date of the Non-Brokered Financing to acquire one Unit at an exercise price of $0.40 per Unit;

"Affiliate" means a corporation that is affiliated with another corporation as follows:

• (a) a corporation is an "Affiliate" of another corporation if:
  • (i) one of them is the subsidiary of the other; or
  • (ii) each of them is controlled by the same Person;
• (b) a corporation is "controlled" by a Person if:
  • (i) voting securities of the corporation are held, other than by way of security only, by or for the benefit of that Person; and
  • (ii) the voting securities, if voted, entitle the Person to elect a majority of the directors of the corporation;
• (c) a Person beneficially owns securities that are beneficially owned by:
  • (i) a corporation controlled by that Person; or
  • (ii) an Affiliate of that Person or an Affiliate of any corporation controlled by that Person;

"Agency Agreement" means the agency agreement dated December 9, 2021 between McFarlane and the Agent pursuant to the Brokered Financing;

"Agent" mean Canaccord Genuity Corp., as lead agent and sole bookrunner of the Brokered Financing;

"Agent's Option" means the option of the Agent to increase the size of the Brokered Financing by up to 15%;

"Amalco" means the corporation resulting from the amalgamation of 401 Subco and McFarlane pursuant to the Amalgamation;

"Amalco Shares" means the common shares in the capital of Amalco;

"Amalgamating Parties" means, together, McFarlane and 401 Subco;

"Amalgamation" means the amalgamation of 401 Subco and McFarlane under Section 174 of the OBCA and in accordance with the terms and conditions of the Amalgamation Agreement;

"Amalgamation Agreement" means the amalgamation agreement to be entered into between 401, McFarlane and Subco pursuant to section 175 of the OBCA to effect the Amalgamation, which is attached as Schedule "A" of the Business Combination Agreement;

"Arrangement" means the plan of arrangement under the provisions of Section 288 of the BCBCA on the terms and subject to the conditions set out in the Arrangement Agreement, involving, among other things, 1289625 B.C. Ltd. reorganized its capital such that each holder of common shares in the capital of 1289625 B.C. Ltd. disposed of their common shares to 1289625 B.C. Ltd. and, in consideration therefor, each holder received, among other things, such number of 401 Shares in 401 equal to the product of the number of common shares in the capital of 1289625 B.C. Ltd. held multiplied by a conversion factor equal of 100,000. A copy of the Arrangement is available under 401's profile on SEDAR at www.sedar.com;

"Arrangement Agreement" means the arrangement agreement dated March 25, 2021 entered into between 401, 1289625 B.C. Ltd., 1287390 B.C. Ltd., 1287398 B.C. Ltd., 1287406 B.C. Ltd., 1287405 B.C. Ltd., 1287396 B.C. Ltd., 1287409 B.C. Ltd., 1287411 B.C. Ltd., 1287412 B.C. Ltd. and 1287413 B.C. Ltd. with respect to the Arrangement, a copy of which is available under 401's profile on SEDAR at www.sedar.com;

"Articles of Amalgamation" means the articles of Amalgamation to be filed with the Director, in the form agreed to between 401 and McFarlane, each acting reasonably;

"Arm's Length Transaction" means a transaction which is not a Related Party Transaction; "Associate(s)", when used to indicate a relationship with a person or company, means:

• (a) any company of which such person or company beneficially owns, directly or indirectly, voting securities carrying more than 10 per cent of the voting rights attached to all voting securities of the company for the time being outstanding;
• (b) any partner of that person or company;
• (c) 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;
• (d) any relative of that person who resides in the same home as that person;
• (e) any person who resides in the same home as that person and to whom that person is married or with whom that person is living in a conjugal relationship outside marriage; or
• (f) any relative of a person mentioned in clause (e) who has the same home as that person;

"Audit Committee" means the audit committee of the Resulting Issuer, as defined by NI 52-110;

"Authorizations" means any order, permit, approval, consent, waiver, license, certificates, registrations or similar authorization of any Governmental Authority having jurisdiction including, but not limited to, environmental permits;

"BCBCA" means the Business Corporations Act (British Columbia), as from time to time amended or re-enacted;

"Business Combination Agreement" means the business combination agreement effective January 12, to which the Amalgamation Agreement is attached as Schedule "A", pursuant to which 401, McFarlane and 401 Subco have agreed to effect the Transaction;

"Brokered Financing" means the brokered private placement that closed on December 9, 2021, conducted by the Agent pursuant to which McFarlane issued 8,346,813 Units, for $0.40 per Unit, and 3,967,500 FT Shares, for $0.40 per FT Share, for gross proceeds of $4,769,000;

"Broker Warrants" mean the broker warrant exercisable at any time prior to the date that is 36 months from the closing date of the Brokered Financing to acquire one Unit at an exercise price of $0.40 per Unit;

"Business Days" means a day other than a Saturday, Sunday or day on which the chartered banks are closed in the City of Toronto;

"CEO" means an individual who acted as chief executive officer of the company, or acted in a similar capacity, for any part of the most recently completed financial year;

"CCGN" means the Compensation, Corporate Governance and Nomination;

"CFO" means an individual who acted as chief financial officer of the company, or acted in a similar capacity, for any part of the most recently completed financial year;

"CIM Definition Standards" means the Canadian Institute of Mining, Metallurgy and Petroleum Definition Standards for Mineral Resources and Mineral Reserves adopted by the CIM Council on May 10, 2014, which are incorporated by reference in NI 43-101;

"Closing" means the closing of the Transaction;

"Closing Date" means the closing date of the Transaction;

"Closing Time" means 5:00 p.m. (Toronto time) on the Closing Date or such other time as agreed to in writing by the parties;

"Code" means the code of business conduct to be adopted by the Resulting Issuer Board following the completion of the Transaction;

"Concurrent Financings" means collectively: (i) the Brokered Financing; (ii) the Non-Brokered Financing; and (iii) the 401 Subco Financing;

"Corporate Finance Fee" means the corporate finance fee payable to the Agent in connection with the Brokered Financing and Non-Brokered Financing;

"COVID-19" means the novel coronavirus designated as a pandemic by the World Health Organization on March 11, 2020;

"CRA" means the Canada Revenue Agency;

"CSM" means Canadian Star Minerals Ltd., a private Ontario corporation;

"CSM Definitive Agreement" means the definitive property acquisition agreement between McFarlane and CSM effective December 30, 2021 entered into upon exercise of the CSM Option pursuant to which McFarlane acquired all of CSM's right, title and interest in and to the West Hawk Lake Property, High Lake Property and McMillan Property;

"CSM Option" means McFarlane's exclusive option to acquire a 100% interest in three separate mining properties: the High Lake Property, West Hawk Lake Property and McMillan Mine Property from CSM until April 30, 2022;

"CSM Optioned Properties" means the High Lake Property, West Hawk Lake Property and McMillan Mine Property;

"CSM Option Term" means the term of the CSM Option, which commenced on February 23, 2021 and expires on the sixmonth anniversary thereof, subject to an eight month extension period at McFarlane's option;

"DDSU Plan" means the proposed directors' deferred share unit plan;

"Dissent Rights" mean the rights of the McFarlane Dissenting Shareholders to dissent under section 185 of the OBCA with respect to the Amalgamation;

"DSUs" means deferred share units of the Resulting Issuer;

"Effective Date" means the date shown on the certificate of amalgamation issued by the Director giving effect to the Amalgamation;

"Effective Time" means the time on the Effective Date that the Amalgamation became effective;

"Encumbrance" means any mortgage, charge, pledge, hypothecation, security interest, assignment, lien (statutory or otherwise), title retention agreement or arrangement, restrictive covenant or other encumbrance of any nature or any other arrangement or condition that, in substance secures payment or performance of an obligation;

"Escrowed Shareholders" means certain proposed principals, directors and officers of the Resulting Issuer subject to the Security Escrow Agreement;

"Exchange" means the Neo Exchange Inc.;

"Exchange Ratio" means 1:1;

"Extension Period" means the eight-month term that the CSM Option can be extended by upon exercise of the Extension Right;

"Extension Right" means McFarlane's option to extend the CSM Option term by eight months;

"Filing Statement" means this filing statement, together with all schedules attached hereto and including the summary hereof;

"Final Exchange Bulletin" means the Exchange Bulletin which is issued following the submission of all required documentation and that evidences the final Exchange acceptance of the Listing upon completion of the RTO;

"Founders Financing I" means the sale and issuance of 32,000,000 McFarlane Shares by McFarlane to officers and directors

of McFarlane, for nominal consideration;

"Founders Financing II" means the sale and issuance of 5,000,000 McFarlane Shares by McFarlane to subscribers on a nonbrokered private placement basis, for nominal consideration;

"Founders Shares" means the McFarlane Shares issued in connection with the Founders Financing I and Founders Financing II;

"FT Shares" means flow-through shares issued pursuant to the Brokered Financing and Non-Brokered Financing, at a price of $0.40 per flow-through share, each of which qualifies as a "flow-through share" as defined in subsection 66(15) of the Tax Act;

"Governmental Authorities" means (i) any international, multinational, national, federal, provincial, state, municipal, local or other government or governmental or public ministry, department, court, commission, board, bureau, agency or instrumentality, domestic or foreign, (ii) any subdivision or authority of any of the foregoing, (iii) any quasi-governmental body exercising any regulatory, expropriation or taxing authority, or (iv) any stock exchange or securities market;

"High Lake Property" means the property located immediately east of the Ontario-Manitoba border in Northwestern Ontario, as further described in the High Lake – West Hawk Lake Project Technical Report;

"High Lake – West Hawk Lake Project" means the project described in the High Lake – West Hawks Lake Project Technical Report;

"High Lake – West Hawk Lake Project Technical Report" means the technical report prepared by Sears, Barry & Associates Limited (SBA) consultant Seymour M. Sears, B.A., B.Sc., PGO, titled "NI 43-101 Technical Report on the High Lake Property and West Hawk Lake Property" with an effective date of May 25, 2021;

"IFRS" means International Financial Reporting Standards;

"Incentive Plans" means collectively, the Resulting Issuer Option Plan, Resulting Issuer PR Plan and the DDSU Plan;

"Insider", if used in relation to an issuer, means:

• (a) a director or senior officer of the issuer;
• (b) a director or senior officer of the corporation that is an Insider or subsidiary of the issuer;
• (c) a Person that beneficially owns or controls, directly or indirectly, voting shares carrying more than 10% of the voting rights attached to all outstanding voting shares of the issuer; or
• (d) the issuer itself if it holds any of its own securities;

"km" means kilometer;

"Leases" means the portion of the CSM Optioned Properties comprised of leases which require the consent of the Ministry of Energy, Northern Development and Mines (or any other relevant regulatory body in Ontario or Manitoba) to be transferred to McFarlane by CSM;

"Letter of Intent" means the letter of intent entered into between 401 and McFarlane on August 16, 2021, pursuant to which the parties intend to complete the Transaction. On October 14, 2021, the letter of intent was amended to extend the deadline of the letter of intent to December 31, 2021. On December 31, 2021, the letter of intent was amended to extend the deadline of the letter of intent to January 14, 2022.

"Listing" means the listing on the Exchange of the Resulting Issuer Shares;

"Law" or "Laws" means all laws (including common law), by-laws, statutes, rules, regulations, principles of law and equity, orders, rulings, ordinances, judgements, injunctions, determinations, awards, decrees or other requirements, whether domestic or foreign, and the terms and conditions of any grant of approval, permission, authority or license of any governmental entity or self-regulatory authority (including the Exchange);

"McFarlane" has the meaning set forth on the cover page;

"McFarlane Board" means the board of directors of McFarlane as the same is constituted from time to time;

"McFarlane Dissent Procedures" means the dissent procedures provided to McFarlane Shareholders pursuant to section 185 of the OBCA;

"McFarlane Dissenting Shareholders" means a registered McFarlane Shareholder who exercises Dissent Rights in respect of the Amalgamation in strict compliance with the McFarlane Dissent Procedures;

"McFarlane Financial Statements" means the audited financial statements of McFarlane for the period from August 21, 2020 (incorporation) to August 31, 2020, and for the year ended August 31, 2021, including the notes thereto and the report of the auditors thereon;

"McFarlane MD&A" means the management discussion and analysis in respect of the McFarlane Financial Statements;

"McFarlane Offer" any form of offer that that may reasonably be expected to lead to any activity, arrangement or transaction or propose any activities or solicitations in opposition to or in competition with the Business Combination;

"McFarlane Option Plan" means the stock option plan of McFarlane dated May 31, 2021;

"McFarlane Options" means incentive stock options to purchase McFarlane Shares;

"McFarlane Properties" means the West Hawk Lake Property, High Lake Property, McMillan Property, Mongowin Property, Michaud Property and Munro Property;

"McFarlane Shareholders" means the holders McFarlane Shares;

"McFarlane Shares" means the common shares in the capital of McFarlane as presently constituted;

"McFarlane Warrants" means the one-half of one common share purchase warrants of McFarlane issued in connection the Brokered Financing, each whole common share purchase warrant entitling the holder thereof to purchase one McFarlane Share at a price of $0.60 per McFarlane Share at any time until 36 months following the closing date of the Brokered Financing;

"McMillan Property" means the mining property comprised of 12 mining claims totaling 268 hectares located within northeastern Ontario, approximately 13 km south of Espanola and 70 km southwest of Sudbury;

"Michaud/Munro Option" means McFarlane's exclusive option, held by the CEO of McFarlane, for access to and purchase of the Michaud and Munro Properties for five months and extendable for an additional three months, from a privately held Ontario numbered company;

"Michaud/Munro Properties" means the mining properties subject to the Michaud/Munro Option located in the prolific Timmins gold camp near the well-known Porcupine-Destor fault system which has seen numerous gold mines in operation over the past century, including 6 currently operating mines;

"Mongowin Option" means McFarlane's exclusive option for access to and purchase of the Mongowin Property for five months and extendable for an additional three months;

"Mongowin Property" means the mining property subject to the Mongowin Option located in Ontario adjacent to and along strike of the McMillan Mine and covers over 2600 hectares comprised of a number of mining leases and claims;

"Name Change" means the change of the name of 401 to "McFarlane Lake Mining Limited" or such name as may be determined in the sole discretion of the Resulting Issuer Board, subject to Applicable Laws and Exchange Policies;

"NEO" means each of the following individuals:

• (a) a CEO;
• (b) a CFO;
• (c) each of the three most highly compensated executive officers of the company, including any of its subsidiaries, or the three most highly compensated individuals acting in a similar capacity, other than the CEO and CFO, at the end of the most recently completed financial year whose total compensation was, individually, more than $150,000, as determined in accordance with subsection 1.3(6) of Form 51-102F6 "Statement of Executive Compensation", for that financial year; and
• (d) each individual who would be a NEO under paragraph (c) but for the fact that the individual was neither an executive officer of the company or its subsidiaries, nor acting in a similar capacity, at the end of that financial year;

"New Slate" means the McFarlane nominees for the Resulting Issuer Board;

"NI 43-101" means National Instrument 43-101 – Standards of Disclosure for Mineral Projects;

"NI 52-110" means National Instrument 52-110 – Audit Committees;

"NI 58-101" means National Instrument 58-101 – Disclosure of Corporate Governance Practices;

"NP 58-201" means National Policy 58-201 – Corporate Governance Guidelines;

"Non-Arm's Length Party" means in relation to a company, a Promoter, officer, director, other Insider or Control Person of that company (including an issuer) and any Associates or Affiliates of any of such Persons. In relation to an individual, means any Associate of the individual or any company of which the individual is a Promoter, officer, director, Insider or Control Person;

"Non-Brokered Financing" means the non-brokered private placement of 3,750,000 FT Shares for gross proceeds of $1,500,000, which closed on December 9, 2021;

"OBCA" means the Business Corporations Act (Ontario), including the regulations promulgated thereunder, as amended from time to time;

"Option Payments" means a payment of $50,000 within 3 business days following the execution of the CSM Option agreement, $200,000 payable in 4 equal payments of $50,000 on the first day of the second, third, fourth and fifth months of the Option Term and, if McFarlane exercises the Extension Right, $50,000 on the first day of every month for each month that the Option Term is extended;

"Person" includes an individual, partnership, association, body corporate, trustee, executor, administrator or legal representative;

"Promoter" means:

• (a) a person or company that, acting alone or in conjunction with one or more other persons, companies or a combination of them, directly or indirectly, takes the initiative in founding, organizing or substantially reorganizing the business of an issuer; or
• (b) a person or company that, in connection with the founding, organizing or substantial reorganizing of the business of an issuer, directly or indirectly, receives in consideration of services or property or both services and property, 10% or more of the issued securities of a class of securities of the issuer or 10% or more of the proceeds from the sale of a class of securities of a particular issue, but a person or company who receives the securities or proceeds either solely as underwriting commissions or solely in consideration of property shall not be considered a Promoter within the meaning of this definition where that person or company does not otherwise take part in founding, organizing or substantially reorganizing the business;

"PSU" means performance share units of the Resulting Issuer;

"Registry System" means collectively, the relevant Ontario mining registry (including for greater certainty, MLAS) and Land Titles Office (and any other registry system applicable to the Properties in the Province of Ontario) and the Manitoba Office of the Mining Recorder (and any other registry system applicable to the Properties in the Province of Manitoba);

"Related Party Transaction" has the meaning ascribed to that term in Multilateral Instrument 61-101 - "Protection of Minority Security Holders in Special Transactions", and includes a related party transaction that is determined by the Exchange to be a Related Party Transaction. The Exchange may deem a transaction to be a Related Party Transaction where the transaction involves Non-arm's Length Parties, or other circumstances exist which may compromise the independence of the issuer with respect to the transaction;

"Resulting Issuer" means McFarlane Lake Mining Limited (formerly 1287401 B.C. Ltd.), after giving effect to the Transaction;

"Resulting Issuer Board" means the board of directors of the Resulting Issuer;

"Resulting Issuer Escrow Agent" means the TSX Trust Company;

"Resulting Issuer Escrowed Options" means the Resulting Issuer Replacement Options subject to the Security Escrow Agreement;

"Resulting Issuer Escrowed Shares" means the Resulting Issuer Shares subject to the Security Escrow Agreement;

"Resulting Issuer Escrowed Warrants" means the Resulting Issuer Warrants subject to the Security Escrow Agreement;

"Resulting Issuer Officers" means the officers of Resulting Issuer, following the completion of the Transaction;

"Resulting Issuer Option Plan" means the stock option plan of the Resulting Issuer;

"Resulting Issuer PR Plan" means performance and restricted share unit plan of the Resulting Issuer;

"Resulting Issuer Replacement Advisory Warrants" means advisory warrants of 401 to be issued to holders of McFarlane Advisory Warrants pursuant to the Business Combination Agreement;

"Resulting Issuer Replacement Broker Warrants" means broker warrants of 401 to be issued to holders of McFarlane Broker Warrants pursuant to the Business Combination Agreement;

"Resulting Issuer Replacement Options" means the options to purchase Resulting Issuer Shares to be issued by the Resulting Issuer to holders of McFarlane Options;

"Resulting Issuer Shares" means the common shares in the capital of the Resulting Issuer (following completion of the Transaction);

"Resulting Issuer Warrants" means McFarlane Warrants, post-Amalgamation;

"RSUs" means restricted share units of the Resulting Issuer;

"Security Escrow Agreement" means the security escrow agreement among TSX Trust Company, as the Resulting Issuer Escrow Agent, the Resulting Issuer, McFarlane and the Escrowed Shareholders;

"SEDAR" means the System for Electronic Document Analysis and Retrieval;

"Tax Act" means the Income Tax Act (Canada), as amended;

"Transaction" or "RTO" means the business combination of 401, 401 Subco and McFarlane by way of a "three- cornered" amalgamation pursuant to the Amalgamation Agreement under the provisions of the OBCA, and will be read to include, collectively, as the context permits or requires, the Amalgamation, the Name Change and such other transactions contemplated by the Business Combination Agreement;

"Units" means the units issued pursuant to the Brokered Financing, at a price of $0.40 per Unit, with each Unit comprising one McFarlane Share and one-half of one McFarlane Warrant;

"U.S. Securities Act" means the United States Securities Act of 1933, as amended;

"Warrant Indenture" means the warrant indenture dated December 9, 2021 among McFarlane and Odyssey Trust Company, as warrant agent thereunder, governing the terms of the McFarlane Warrants; and

"West Hawk Lake Property" means the property along the Trans-Canada Highway just west of the Manitoba / Ontario border, approximately 53 km west of Kenora and 130 km east of Winnipeg.

FORWARD-LOOKING STATEMENTS

This Filing Statement contains certain forward-looking statements within the meaning of Canadian securities laws. These statements relate to future events or future performance and reflect management's expectations regarding the growth, results of operations, performance and business prospects and opportunities of McFarlane or the Resulting Issuer. All statements other than statements of historical fact are forward-looking statements. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue", "target" or the negative of these terms or other comparable terminology. These statements are only predictions. In addition, this Filing Statement may contain forward-looking statements attributed to third party industry sources.

Forward-looking statements are necessarily based on estimates and assumptions made by management in light of management's experience and perception of historical trends, current conditions and expected future developments, as well as factors that management believe are appropriate. Forward-looking statements in this Filing Statement include, but are not limited to: the anticipated Closing and Effective Date; the Resulting Issuer's anticipated capital structure; the anticipated legal name of the Resulting Issuer; the anticipated escrow periods, release schedules and contractual restrictions on transfer affecting the securities of the Resulting Issuer; the proposed directors, officers and insiders of the Resulting Issuer and their holdings of securities of the Resulting Issuer; the expected executive compensation and corporate governance practices of the Resulting Issuer; the future growth, results of operations, performance and business prospects and opportunities of McFarlane (and therefore, the Resulting Issuer); the funds available to the Resulting Issuer; the business objectives of McFarlane (and therefore, the Resulting Issuer); the ability of McFarlane to execute its business plan successfully or as disclosed herein, such that the future growth, results of operations, performance and business prospects and opportunities of McFarlane will be as anticipated; the ability for McFarlane to develop and commercialize the mining properties; and the impacts of the COVID-19 pandemic on the business and operations of McFarlane (and therefore, the Resulting Issuer).

Although management of McFarlane believes that the expectations reflected in the forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. McFarlane cannot guarantee future results, levels of activity, performance, or achievements. Some of the risks and other factors, some of which are beyond the control of McFarlane, which could cause results to differ materially from those expressed in the forward-looking statements contained in this Filing Statement include, but are not limited to: McFarlane may not complete the Transaction or receive Exchange approval; the Transaction will have a dilutive effect on the 401 Shareholders; the Transaction may divert the attention of the management of McFarlane; the tax consequences of the Transaction to various stakeholders; McFarlane may not realize anticipated benefits of the Transaction; pro-forma financial statements are illustrative only; the listing of the Resulting Issuer Shares is dependent on satisfaction of Exchange requirements and may not occur; the market price of the Resulting Issuer Shares, if listed, may be volatile; the Resulting Issuer may issue additional equity securities thus diluting existing security holders; the value assigned to McFarlane may be incorrect; there is no assurance that the Resulting Issuer will declare a dividend (and currently there are no plans to declare any dividends); the limited operating history of McFarlane; McFarlane has a history of negative cash flow and no assurance can be given that the Resulting Issuer will ever attain positive cash flow; dependence on the High Lake and West Hawk Lake Properties as McFarlane's principal properties of merit; mineral deposits may not be economical; changes in the market price of metals; volatility in the price of gold; there can be no assurances that mining operations will ever be established or profitable if they are; the Resulting Issuer may not use the available funds as described in the Filing Statement; McFarlane may not have the means or ability to exploit any future discoveries; financing risks; even if mining operations are established, mining is inherently dangerous; operations and exploration may be subject to governmental regulations; operation and exploration activities are subject to environmental and endangered species laws and regulations; mineral properties may be subject to the rights of indigenous peoples; permits and licences may not be forthcoming or available in a timely manner; additional costs to mineral property operators resulting from national or international climate control initiatives; positive community relations in the jurisdictions where McFarlane operates may not be successfully established despite its best efforts; competition; defects in title to McFarlane's mineral properties may have a deleterious effect on operations; future litigation, if any, could affect title; deficient third party reviews of McFarlane's activities and operations, reports and projections may be contra-indicative; dependence on key individuals; directors and officers may have conflicts of interest affecting operations; global financial conditions may be volatile; the ongoing spread of COVID-19 may negatively impact McFarlane's business; adequate infrastructure may not be available to develop the mining properties; anti-bribery laws; the availability of equipment, materials and skilled technical workers; the availability and commitment of qualified management and technical personnel; McFarlane's operations, which are subject to human error; disruption from non-governmental organizations; compliance with health and safety laws and regulations; nature and climate conditions could affect operations in ways in which McFarlane is unable to compensate; uninsured or uninsurable risks; and disruption in McFarlane's activities due to acts of God may adversely affect McFarlane.

This list is not exhaustive of the factors that may affect any of the forward-looking statements regarding McFarlane or the Resulting Issuer. Forward-looking statements are statements about the future and are inherently uncertain. Actual events or results could differ materially from those projected in the forward-looking statements including as a result of the matters set out in this Filing Statement generally and certain economic and business factors, some of which may be beyond the control of McFarlane (and therefore the Resulting Issuer). Some of the important risks and uncertainties that could affect forward-looking statements are described under the heading "PART VI – Risk Factors". Neither McFarlane or the Resulting Issuer intends, and neither assumes any obligation, to update any of the forward-looking statements after the date of this Filing Statement so as to conform such statements to actual results or to changes in the expectations of McFarlane, other than as required by applicable securities law. For all these reasons, readers should not place undue reliance on the forward-looking statements contained herein, as the Resulting Issuer's actual results, performance or achievements may differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements if known or unknown risks, uncertainties or other factors affect the Resulting Issuer's business, or if McFarlane's estimates or assumptions prove inaccurate. The forward-looking statements contained in this Filing Statement are expressly qualified by this cautionary statement.

TECHNICAL INFORMATION

Except where otherwise stated, the disclosure in this Filing Statement relating to the High Lake – West Hawk Lake Project is based on the High Lake – West Hawk Lake Project Technical Report prepared and published in accordance with NI 43-101. The disclosure in this Filing Statement regarding the High Lake – West Hawk Lake Project is qualified in its entirety to the full text of the High Lake – West Hawk Lake Project Technical Report which is available on www.SEDAR.com under 401's profile.

The High Lake – West Hawk Lake Project is material to McFarlane for the purposes of NI 43-101. McFarlane will continue to assess the materiality of its assets as such assets undergo exploration and as new assets are acquired.

CIM Definition Standards

Any reference to Measured Mineral Resource, Indicated Mineral Resource and Inferred Mineral Resource herein (including as used in the High Lake – West Hawk Lake Project Technical Report) have been used in accordance with the CIM Definition Standards, which are incorporated by reference in NI 43-101. The following definitions are reproduced from the CIM Definition Standards:

"Indicated Mineral Resource" means that part of a Mineral Resource (defined herein) for which quantity, grade or quality, densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors as described below in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Geological evidence is derived from adequately detailed and reliable exploration, sampling and testing and is sufficient to assume geological and grade or quality continuity between points of observation. An Indicated Mineral Resource has a lower level of confidence than that applying to a Measured Mineral Resource (defined herein) and may only be converted to a Probable Mineral Reserve (defined herein).

"Inferred Mineral Resource" means that part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity. An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.

"Measured Mineral Resource" means that part of a Mineral Resource for which quantity, grade or quality, densities, shape, and physical characteristics are estimated with confidence sufficient to allow the application of Modifying Factors to support detailed mine planning and final evaluation of the economic viability of the deposit. Geological evidence is derived from detailed and reliable exploration, sampling and testing and is sufficient to confirm geological and grade or quality continuity between points of observation. A Measured Mineral Resource has a higher level of confidence than that applying to either an Indicated Mineral Resource or an Inferred Mineral Resource. It may be converted to a Proven Mineral Reserve (defined herein) or to a Probable Mineral Reserve.

"Mineral Reserve" means the economically mineable part of a Measured and/or Indicated Mineral Resource. It includes diluting materials and allowances for losses, which may occur when the material is mined or extracted and is defined by studies at pre-feasibility or feasibility level as appropriate that include application of Modifying Factors. Such studies demonstrate that, at the time of reporting, extraction could reasonably be justified. The reference point at which Mineral Reserves are defined, usually the point where the minerals are delivered to the processing plant, must be stated. It is important that, in all situations where the reference point is different, such as for a saleable product, a clarifying statement is included to ensure that the reader is fully informed as to what is being reported. The public disclosure of a Mineral Reserve must be demonstrated by a Pre-Feasibility Study or Feasibility Study.

"Mineral Resource" means a concentration or occurrence of solid material of economic interest in or on the earth's crust in such form, grade or quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade or quality, continuity and other geological characteristics of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling.

For the purposes of the CIM Definition Standards, "Modifying Factors" are considerations used to convert Mineral Resources to Mineral Reserves. These include, but are not restricted to, mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social and governmental factors.

Qualified Persons

Seymour M. Sears, B.A., B.Sc., PGO, author of the High Lake – West Hawk Lake Project Technical Report, is a qualified persons for the purposes of NI 43-101 and has reviewed and approved the scientific and technical disclosure contained in this Filing Statement.

MARKET AND INDUSTRY DATA

Market and industry data presented throughout this Filing Statement was obtained from third-party sources, the market and industry data contained in this Filing Statement are based upon information from independent industry and other publications and McFarlane's management's knowledge of, and experience in, the industry in which McFarlane operates. None of the sources of market and industry data has provided any form of consultation, advice or counsel regarding any aspect of, or is in any way whatsoever associated with, the Transaction. Market and industry data are subject to variations and cannot be verified with complete certainty due to limits on the availability and reliability of raw data at any particular point in time, the voluntary nature of the data gathering process or other limitations and uncertainties inherent in any statistical survey. Accordingly, the accuracy and completeness of this data are not guaranteed. McFarlane has not independently verified any of the data from third party sources referred to in this Filing Statement or ascertained the underlying assumptions relied upon by such sources. References in this Filing Statement to research reports or to articles and publications should not be construed as depicting the complete findings of the entire referenced report or article. The information in each report or article is expressly not incorporated by reference into this Filing Statement.

EXCHANGE RATE AND CURRENCY INFORMATION

Unless otherwise indicated, all references to "$" or "Canadian dollars" in this Filing Statement refer to Canadian dollars. McFarlane's financial statements incorporated herein are reported in Canadian dollars and are prepared in accordance with IFRS.

INFORMATION CONTAINED IN THIS FILING STATEMENT

The information contained in this Filing Statement is given as at January 14, 2022, except where otherwise noted.

No Person has been authorized to give any information or to make any representation in connection with the Transaction and other matters described herein other than those contained in this Filing Statement and, if given or made, any such information or representation should be considered not to have been authorized by McFarlane or the Resulting Issuer and should not be relied upon.

The information concerning each party contained in this Filing Statement has been provided by management of that party. Although the parties have no specific knowledge that would indicate that any of such information regarding the other party is untrue or incomplete, the parties assume no responsibility for the accuracy or completeness of information or the failure by the other party to disclose events which may have occurred or may affect the completeness or accuracy of such information which are unknown to that party.

This Filing Statement does not constitute the solicitation of an offer to purchase any securities or the solicitation of a proxy by any Person in any jurisdiction.

Information contained in this Filing Statement should not be construed as legal, tax or financial advice and readers are urged to consult their own professional advisers in connection therewith.

All financial information in this Filing Statement has been prepared in accordance with IFRS, unless otherwise noted. The financial year end of McFarlane is August 31. The financial year end of 401 is December 31.

Words importing the singular, where the context requires, include the plural and vice versa and words importing any gender include all genders.

[Part I begins on following page]

PART I – SUMMARY OF FILING STATEMENT

The following is a summary of information relating to 401, McFarlane and the Resulting Issuer (assuming completion of the Transaction) and should be read together with the more detailed information and financial data and statements contained elsewhere in this Filing Statement. Reference is made to the Glossary of Terms for the definitions of certain abbreviations and terms used in this Filing Statement and in this summary. All information provided in this summary and in the Filing Statement is current as of January 14, 2022.

Parties	McFarlane is a private company that was incorporated on August 21, 2020 under the laws ofthe Province of Ontario and carries on the business of the acquisition, exploration anddevelopment of resource properties. For additional information about McFarlane, please see"Part IV – Information Concerning McFarlane".
	401 is a reporting issuer in the Provinces of British Columbia and Alberta and was incorporatedunder the laws of the Province of British Columbia on February 3, 2021. The 401 Shares arenot listed on any stock exchange and 401 has not carried on an active business sinceincorporation. For additional information about 401, please see "Part III – InformationConcerning 401".
	401 Subco was incorporated on November 23, 2021 under the OBCA. 401 Subco wasincorporated for the purpose of effecting the Amalgamation with McFarlane. For additionalinformation about 401, please see "Part III – Information Concerning 401 – CorporateStructure – Intercorporate Relationships".
BusinessCombination	The Transaction shall be completed by way of "three-cornered" amalgamation pursuant towhich McFarlane will amalgamate with 401 Subco and, in exchange for their securities ofMcFarlane and 401 Subco, the securityholders of McFarlane and 401 Subco shall receivesecurities of 401 on a 1:1 basis. McFarlane, 401 and 401 Subco shall enter into the BusinessCombination Agreement in connection with the Transaction. Following the Closing, theResulting Issuer will carry on the business of McFarlane under the name "McFarlane LakeMining Limited".
ProximateTransactions	401 is expected to change its name to "McFarlane Lake Mining Limited". McFarlane hasapplied to list the Resulting Issuer Shares on the Exchange under the symbol "MLM". Finalapproval of the Exchange for the listing will be subject to McFarlane and 401 fulfilling all ofthe listing conditions of the Exchange set forth in the conditional approval letter datedDecember 14, 2021. See "Part V – Information Concerning the Resulting Issuer – Descriptionof the Securities."
	Concurrent with the completion of the Transaction, the board of directors and officers of 401will be replaced with the New Slate, as further described herein.
	See "Part V – Information Concerning the Resulting Issuer – Directors, Officers andPromoters."
401 SubcoFinancing	In connection with the Transaction, 401 Subco has completed the 401 Subco Financing. The401 Subco Units were issued on a prospectus exempt basis to accredited investors (as definedin National Instrument 45-106 – Prospectus Exemptions).
McFarlaneFinancings	In connection with the Transaction, McFarlane has completed the Brokered Financing andNon-Brokered Financing. As part of the consideration for its services in connection with theBrokered Financing, the Agent received 834,575 Broker Warrants. The Agent was also paidthe Corporate Finance Fee consisting of the issuance of 391,813 Units. In connection withadvisory services provided pursuant to the Non-Brokered Financing, the Agent received anadvisory fee of $105,000 and was issued 262,500 Advisory Warrants.

	The Units and FT Shares issued in connection with the Brokered Financing and Non-BrokeredFinancing were issued on a prospectus exempt basis to accredited investors (as defined inNational Instrument 45-106 – Prospectus Exemptions) and family, friends and businessassociates.
	See "Part II – Information Concerning the Transaction – The Concurrent Financings" and"Part IV – Information Concerning McFarlane – The McFarlane Financings."
Principal Assets	McFarlane's only business is the identification, exploration and eventual development, ifwarranted, of mineral resource properties.
	McFarlane's principal assets are the West Hawk Lake Property, High Lake Property andMcMillan Property, which it acquired from CSM pursuant to the CSM Definitive Agreement.Pursuant to the CSM Definitive Agreement, McFarlane acquired beneficial title to the WestHawk Lake Property, High Lake Property and McMillan Property. CSM and McFarlane haveexecuted transfer documents to effect transfer of legal title to the West Hawk Lake Propertyand High Lake Property in the relevant land titles or registry offices in the Provinces ofManitoba and Ontario, respectively. The 12 claims comprising the McMillan Property havebeen transferred to McFarlane. McFarlane also has an option to purchase the MongowinProperty and the Michaud/Munro Property.
	See "Part IV – Information Concerning McFarlane – Narrative Description of the Business".
Conditions toCompletion ofthe Transaction	The completion of the Transaction is conditional upon, among other things, obtainingnecessary shareholder, regulatory and exchange approval or consents, where applicable, andmeeting the terms and conditions set forth in the Business Combination Agreement. See "PartII – Information Concerning the Transaction".
	The Resulting Issuer has been granted waivers of certain Initial Listing Requirements of theExchange.
Interests ofInsiders	No Insider of McFarlane or 401 and no Associate or Affiliate of the same, has any interest inthe Transaction, other than those which arise from the holding of 401 securities or McFarlanesecurities.
	There is no person or company that is a control person of McFarlane or that has been, withinthe two most recently completed financial years or during the current financial year, a promoterof McFarlane or any subsidiary of McFarlane, as such term is defined in the Securities Act(Ontario).
Arm's LengthTransaction	To the knowledge of 401 and McFarlane, the Transaction is not a Non-Arm's LengthTransaction pursuant to the policies of the Exchange. See "Part II – Information Concerningthe Transaction – Summary of the Transaction and Related Transactions", "Part III –Information Concerning 401 – Arm's Length Transactions" and "Part III – InformationConcerning 401 – Arm's Length Transactions".
Directors,Officers andPromoters ofthe ResultingIssuer	Concurrently with the completion of the Transaction, 401 will cause all of the then currentdirectors and officers of 401 and 401 Subco to resign without payment by or any liability to401, 401 Subco or Amalco, and to cause each such director and officer to execute and delivera release in favour of 401, 401 Subco and Amalco, in a form acceptable to 401 and McFarlane.The Resulting Issuer Board will consist of Mark Trevisiol, Charles Lilly, Roger Emdin, PerryN. Dellelce, Amanda Fullerton, Fergus Kerr and Guy Mahaffy. The management of theResulting Issuer will be comprised of Mark Trevisiol as Chief Executive Officer, Charles Lillyas Chief Financial Officer and Corporate Secretary, Roger Emdin as Chief Operating Officerand Robert Kusins as Vice President of Geology. It is anticipated that the number and

percentage of Resulting Issuer Shares over which such new directors and officers, and the Associates and Affiliates of such new directors and officers, exercise control, will be as set forth below. See "Part V – Information Concerning the Resulting Issuer – Directors, Officers and Promoters".

Proposed Directors, Officers and Promoters	Number and Percentage of ResultingIssuer Shares upon Completion of theTransaction and % of Class Held orcontrolled(1)
Charles Lilly	12,500
Chief Financial Officer, Corporate Secretary and	0.02%
Director
Mark Trevisiol	12,350,000(2)
Chief Executive Officer and Director	15.55%
Perry N. Dellelce	11,550,000(3)
Director	14.55%
Roger Emdin	3,050,000
Chief Operating Officer and Director	3.84%
Robert KusinsVice President, Geology	Nil
Amanda FullertonDirector	Nil
Guy Mahaffy	Nil
Director
Fergus Kerr	Nil
Director

Note:

(1) Calculation on an undiluted basis and based on 79,397,813 Resulting Issuer Shares outstanding upon the completion of the Transaction.

Available Funds The following table sets forth the funds anticipated to be available to the Resulting Issuer on a consolidated basis after giving effect to the Transaction:

Source of Funds	Amount ($)
Working capital of McFarlane as at August 31, 2021	1,438,045
Working capital of 401 as at August 31, 2021	(24,428)
Net proceeds from the Brokered Financing and Non-BrokeredFinancing(1)	5,708,780
Net proceeds from the 401 Subco Financing	26,200
Total Estimated Funds Available(2)	7,148,597

Notes:

(1) After deduction of the Agent's commission, advisory fees and expenses.

(2) Does not include expenses incurred in connection with the Transaction.

See "Part II – Information Concerning the Transaction - Available Funds."

Principal Purposes of Funds

The following table summarizes the expenditures anticipated by the Resulting Issuer required to achieve its business objectives until December 31, 2022:

Use of Funds	Amount of Funds ($)
Option agreements
Canadian Star	2,950,000(1)
Transition Minerals	100,000
1929941 Ontario	45,000
Technical Work
Consulting	460,000
Permitting	90,000
Exploration program	2,209,000
Corporate Development
Professional Fees	467,303
Preliminary RTO costs/other sec exchange costs	127,600
Management	516,250
Office and admin including digital marketing andinvestor relations	337,189
Total Estimated Funds Required	7,302,342
Working Capital	(153,745)
Total Estimated Funds Available	7,148,597
Notes:(1) $750,000 of which has been paid upon transfer of theMcMillan Property to McFarlane.

Notwithstanding the proposed uses of available funds discussed above, there may be circumstances where, for sound business reasons, a reallocation of funds may be necessary or prudent. It is difficult, at this time, to definitively project or allocate the funds necessary to effect the planned activities of the Resulting Issuer. For these reasons, management of 401 and McFarlane consider it to be in the best interests of the Resulting Issuer and its shareholders to afford management a reasonable degree of flexibility as to how the funds are employed among the uses identified above, or for other purposes, as the need arises. For additional information, see "Part V - Information Concerning the Resulting Issuer – Available Funds", "Part V – Information Concerning the Resulting Issuer – Principal Purposes" and "Part V - Information Concerning the Resulting Issuer – Narrative Description of the Business". Further, the above uses of available funds should be considered estimates. See "Forward- Looking Statements".

Dividends There will be no restrictions on the Resulting Issuer's ability to pay dividends on the Resulting Issuer Shares other than the Resulting Issuer's financial position. It is expected that Resulting Issuer will retain future profits to finance further growth and that no dividends will be paid in the immediate or foreseeable future following completion of the Transaction. However, the Resulting Issuer may consider paying dividends on the Resulting Issuer Shares in the future when circumstances permit, having regard to, among other things, its earnings, cash flow and financial requirements, as well as relevant legal and business considerations. All of the Resulting Issuer Shares are entitled to an equal share in any dividends declared and paid. See "Part V – Information Concerning the Resulting Issuer – Dividends."

The following table summarizes the distribution of securities that will be issued on completion of the Transaction, under the assumption that no McFarlane Options, Advisory Warrants, Broker Warrants, McFarlane Warrants or 401 Subco Warrants are exercised prior to the Effective Time and that no additional securities are issued by 401, 401 Subco and McFarlane.

Securityholder	ResultingIssuerShares	ResultingIssuerWarrants	ResultingIssuer Options
401	3,750,000	Nil	Nil
Securityholders
401 Subco Security	65,500	32,750	Nil
Holders
McFarlane	75,582,313	4,173,406	5,500,000
Securityholders
TotalResulting	79,397,813	4,206,156	5,500,000
Issuer

Selected ProFormaFinancial		McFarlaneas at August31, 2021	401 as atAugust 31,2021 ($)	Pro FormaAdjustments(1)($)	Pro FormaConsolidated(1) ($)
Information of		($)
the Resulting	Cash	1,820,454	Nil	5,656,370	7,476,824
Issuer	Total Assets	1,851,055	816	5,656,370	7,508,241
	Total Liabilities	413,010	25,244	964,688	1,402,942
	Total Shareholders'Equity	1,438,045	(24,428)	4,691,683	6,105,300
	Total Liabilities andShareholders' Equity	1,851,055	816	5,656,370	7,508,241
	Notes:(1) Includes net proceeds of the Concurrent FinancingsSee Schedule "E" - "Pro Forma Financial Statement".

Trading Price As the 401 Shares are not listed on a stock exchange, there is no trading price for 401 Shares.

See "Part III – Information Concerning 401 – Trading Price".

Shareholder Approval 401 obtained written shareholder approval on December 7, 2021 for, among other things, the appointment of the New Slate (i.e. the Resulting Issuer Board), the Name Change, the 401 Continuation Resolution and the Incentive Plans. 401 Subco obtained written shareholder approval on December 7, 2021 for, among other things, the Business Combination Agreement, Amalgamation Agreement and the Amalgamation. The McFarlane Shareholders approved the Amalgamation at a meeting of shareholders on December 6, 2021. Conflict of Other than the fact that the Michaud/Munro Properties have been optioned from a privately held

Interest

Selected Pro Forma Consolidated Capitalization of the Resulting

Issuer

Ontario numbered company partially held by the CEO of McFarlane, to the knowledge of

McFarlane, there are no other known material existing or potential conflicts of interest among McFarlane's directors, officers or other members of management, or any person expected to be a director or executive officer of the Resulting Issuer, as a result of their outside business interests as of the date of this Filing Statement.

Certain proposed directors of the Resulting Issuer are, or may in the future be, directors, officers or shareholders of other companies that are, or may in future be, engaged in the business of, or enter into transactions with, the Resulting Issuer. Such associations and transactions may give rise to conflicts of interest from time to time.

See "Part V - Information Concerning the Resulting Issuer – Conflicts of Interest".

Risk Factors Although management of McFarlane believes that the expectations reflected in the forwardlooking statements are reasonable, there can be no assurance that such expectations will prove to be correct. The following specific factors could materially adversely affect the Resulting Issuer and should be considered when deciding whether to make an investment in the Resulting Issuer. Other risks and uncertainties that management does not presently consider to be material, or of which management are not presently aware, may become important factors that affect management's future financial condition and results of operations The occurrence of any of the risks discussed below could materially adversely affect the Resulting Issuer's business, prospects, financial condition, results of operations, cash flow or the trading price of its securities.

Risks

• McFarlane may not complete the Transaction or receive Exchange approval to list its securities;
• the Business Combination Agreement may be terminated by either McFarlane or 401 in certain circumstances;
• the Transaction will have dilutive effect on 401 Shareholders;
• the Transaction may divert the attention of the management of McFarlane;
• the tax consequences of the Transaction;
• McFarlane may not realize anticipated benefits of the Transaction;
• pro-forma financial statements are illustrative only;
• market price and listing of the Resulting Issuer Shares is dependent on satisfaction of Exchange requirements;
• the market price of the Resulting Issuer Shares may be volatile;
• the Resulting Issuer may issue additional equity securities;
• the value assigned to McFarlane may be incorrect;
• there is no assurance that the Resulting Issuer will declare a dividend and no present intention to declare a dividend;
• the limited operating history of McFarlane;
• dependence on the High Lake West Hawk Lake Project;
• exploration activities may not result in the discovery of economically recoverable mineral deposits;
• changes in the market price of metals;
• mining operations may not be warranted, and, if warranted be established or profitable;
• the Resulting Issuer may not use the available funds as described in the Filing Statement;
• ability to exploit future discoveries;
• financing risks;
• mineral exploration, development and mining is inherently dangerous;
• operations and exploration may be subject to governmental regulations;
• operation and exploration activities are subject to environmental and endangered species laws and regulations;
• mineral properties may be subject to the prior rights of indigenous peoples;
• any necessary agreements may not be reached with indigenous peoples, thereby

• climate change may affect operations in ways not currently understood; • additional costs to mineral property operations resulting from climate control initiatives; • community relations; • competition; • defects in title to mineral properties; • future litigation could affect title; • deficient third party reviews, reports and projections; • dependence on key individuals; • directors and officers may have conflicts of interest; • global financial conditions may be volatile; • the ongoing spread of COVID-19 may negatively impact McFarlane's business; • adequate infrastructure may not be available to develop the High Lake – West Hawk Lake Project; • anti-bribery laws; • the availability of equipment, materials and skilled technical workers; • the Resulting Issuer will be exposed to foreign exchange risk; • the availability and commitment of qualified management and technical personnel; • McFarlane's operations are subject to human error; • disruption from non-governmental organizations; • compliance with health and safety laws and regulations; nature and climate conditions; • uninsured or uninsurable risks; and • disruption in McFarlane's activities due to acts of God may adversely affect McFarlane The Resulting Issuer's future development and actual operating results may be very different from those expected as at the date of this Filing Statement. No representation is or can be made as to the future performance of the Resulting Issuer and there can be no assurance that the Resulting Issuer will achieve its objectives. Accordingly, readers should carefully consider the

jeopardizing exploration and development activities;

activities (if warranted) may not be available or issued;

• permits and licences required to conduct mineral exploration, development and mining

	risk factors contained herein under "Part VI – Risk Factors".
ConditionalApproval	The Exchange conditionally accepted the Listing on December 14, 2021, subject to 401 andMcFarlane fulfilling all of the listing requirements of the Exchange. There is no guarantee that401 and McFarlane or the Resulting Issuer will be able to satisfy the requirements of theExchange such that the Exchange will issue the Final Exchange Bulletin. See "Risk Factors".
Auditor	The auditor of McFarlane is McGovern Hurley LLP, at its principal office in Toronto, Ontario.McGovern Hurley LLP is independent with respect to McFarlane within the meaning of theCode of Professional Conduct of the Chartered Professional Accountants of Ontario. Uponcompletion the Transaction, McGovern Hurley LLP is expected to become the auditor of theResulting Issuer. See "Part IV – Information Concerning McFarlane - Auditor, Transfer Agentand Registrar" and "Part V – Information Concerning the Resulting Issuer - Auditor, TransferAgent and Registrar".
Technical Report	Sears, Barry & Associates Limited (SBA) consultant Seymour M. Sears, B.A., B.Sc., PGO,prepared the High Lake – West Hawk Lake Project Technical Report titled "NI 43-101Technical Report on the High Lake Property and West Hawk Lake Property" with an effectivedate of May 25, 2021 (the "High Lake – West Hawk Lake Project Technical Report").Seymour M. Sears, B.A., B.Sc., PGO is a "qualified person" for the purposes of NI 43-101and is independent of McFarlane, verified and approved the technical and scientific disclosurecontained in this Filing Statement. See "Part IV - Information Concerning McFarlane – HighLake – West Hawk Lake Project"

None of the foregoing persons or any of their respective directors, officers or employees beneficially own, directly or indirectly, any securities, nor do they have any interest in the High Lake – West Hawk Lake Property, 401, McFarlane, the Resulting Issuer or any of their Associates or Affiliates. See "Part VII – General Matters – Interests of Experts."

[Part II begins on following page]

PART II – INFORMATION CONCERNING THE TRANSACTION

The following is a summary of the material terms of the Business Combination Agreement. This summary does not purport to be a complete summary of the Business Combination Agreement and is qualified in its entirety by reference to the full text of the Business Combination Agreement, a copy of which is available for review under 401's SEDAR profile at www.SEDAR.com.

Terms used in this "Part II – Information Concerning the Transaction" but not otherwise defined in this Filing Statement shall have the meaning ascribed thereto in the Business Combination Agreement.

Background of Transaction

401 was incorporated under BCBCA as "1287401 B.C. Ltd." on February 3, 2021 as a wholly-owned subsidiary of 1289625 B.C. Ltd. Pursuant to the Arrangement, 1289625 B.C. Ltd. reorganized its capital such that each holder of common shares disposed of their holdings to 1289625 B.C. Ltd. and, in consideration therefor, received, among other things, certain 401 Shares and which resulted in 401 ceasing to be a subsidiary of 1289625 B.C. Ltd. 401 is a reporting issuer under the securities laws of the jurisdictions of Alberta and British Columbia and currently has 3,000,000 401 Shares issued and outstanding. None of its securities, including the 401 Shares, are listed or posted for trading on any stock exchange and no public market exists for any securities of 401. See "Part III – Information Concerning 401".

401's head office is located at 3400 22 Adelaide S.W., Toronto, ON M5H 4E3 and its registered and records offices are located at 1200 Waterfront Centre, 200 Burrard Street, Vancouver, BC V7X 1T2.

McFarlane is a private company that was incorporated on August 21, 2020 under the laws of the Province of Ontario. Pursuant to the CSM Definitive Agreement, McFarlane acquired beneficial title to the West Hawk Lake Property, High Lake Property and McMillan Property. CSM and McFarlane have executed transfer documents to effect transfer of legal title to the West Hawk Lake Property and High Lake Property in the relevant land titles or registry offices in the Provinces of Manitoba and Ontario, respectively. The 12 claims comprising the McMillan Property have been transferred to McFarlane. McFarlane also has an option to purchase the Mongowin Property and the Michaud/Munro Property. See "Part IV – Information Concerning McFarlane".

On August 16, 2021, 401 entered into the Letter of Intent with McFarlane, pursuant to which the parties intend to complete the Transaction. McFarlane and 401 have applied to list the Resulting Issuer Shares on the Exchange concurrently with, or following, the completion of the Transaction. On October 14, 2021, the Letter of Intent was amended to extend the deadline to complete the Transaction to December 31, 2021. On December 14, 2021 the Letter of Intent was amended to extend the deadline to complete the Transaction to January 14, 2022. On January 12, 2022 401, 401 Subco and McFarlane entered into the Business Combination Agreement to, among other things, effect the Amalgamation pursuant to the Amalgamation Agreement attached as Schedule "A" thereto.

Reasons for the Transaction

The Transaction will provide McFarlane with additional capital to pursue its business objectives. The Transaction will also provide McFarlane with potentially greater access to capital markets in the future and may facilitate the completion of acquisitions on accretive terms in the future. Further, the Transaction provides the potential for liquidity to McFarlane's Shareholders.

Summary of the Transaction and Related Transactions

In connection with the completion of the Transaction and pursuant to the Business Combination Agreement, it is anticipated that the following transactions will be completed:

• (a) McFarlane Shares will be exchanged for Resulting Issuer Shares based on the Exchange Ratio;
• (b) 401 Subco Shares will be exchange for Resulting Issuer Shares based on the Exchange Ratio;
• (c) 401 will cause the current directors and officers of 401 and 401 Subco to resign, and McFarlane will designate the

Resulting Issuer Board and management thereof prior to the Effective Date, such designation to take effect as of the Effective Date;

• (d) 401 will acquire McFarlane through the Amalgamation, the steps of which are described further below under the heading Part II– Description of the Transaction – The Business Combination and the Transaction – Amalgamation Steps"; and
• (e) the Resulting Issuer will be renamed "McFarlane Lake Mining Limited", or such other name as determined by McFarlane.

The Transaction is intended to be completed prior to the Listing and will result in the reverse takeover of 401 by the shareholders of McFarlane. Completion of the Transaction is subject to compliance with the terms and conditions set forth in the Business Combination Agreement, which are discussed further below under the heading "Part II – Description of the Transaction – The Business Combination Agreement and the Transaction – Conditions of the Transaction". If the terms and conditions of the Business Combination Agreement are satisfied (or waived, as applicable), it is expected that the Transaction will be completed and become effective on or about January 14, 2022 or such other date as may be determined by the parties thereto. However, the effective date of the Transaction could be delayed for a number of reasons. See "Part VI– Risk Factors".

A corporate organizational chart reflecting the expected corporate structure of the Resulting Issuer following the Effective Date is set forth in Part V – Information Concerning the Resulting Issuer – Corporate Structure".

The terms of the Transaction, as set out in the Business Combination Agreement and summarized below, were established through arm's length negotiations between the respective management of McFarlane, 401 and 401 Subco.

The Business Combination Agreement and the Transaction

The Business Combination Agreement provides for the reverse takeover of 401 by the shareholders of McFarlane by way of a three-cornered amalgamation under the provisions of the OBCA pursuant to the Amalgamation Agreement attached as Schedule "A" thereto, pursuant to which McFarlane and 401 Subco will amalgamate and continue as one corporation to be named "McFarlane Lake Mining Incorporated", and 401 will hold a 100% shareholding interest in Amalco. The following is a summary of the Business Combination Agreement and is qualified in its entirety by the full text of the Business Combination Agreement, which has been filed on SEDAR and is incorporated by reference herein.

Representations, Warranties and Covenants

McFarlane and 401 have agreed to certain representations and warranties relating to, among other things: the incorporation and registration of each party; the absence of subsidiaries; absence of bankruptcy, insolvency or receivership proceedings; the power and authority to enter into and perform the obligations under the Business Combination Agreement and its ancillary documents; required approvals; absence of conflict; their capital stock; their options and other convertible securities; the absence of changes; the financial statements of each party; internal controls over financial reporting; no restrictions on activities; undisclosed liabilities; non-arm's length transactions; no guarantees; owned real property; material contracts; other contracts; taxes duly filed; environmental matters; compliance with laws; authorization and consents; employment matters and employee plans; no powers of attorney; absence of insurance; authorizations; absence of fees and commissions; books and records; no restrictions on business combinations; and absence of contingent tax liabilities; absence of litigation.

401 further represents and warrants that 401 is a Reporting Issuer under the securities legislation of British Columbia and Alberta; has no expenses or obligations; is authorized the issue shares; is current in its continuous disclosure obligations; has made no misrepresentation; and has supplied current information.

In addition, McFarlane agreed to other representations and warranties relating to, among other things: no shareholder or voting agreements; McFarlane's properties are in compliance with environmental laws and various matters with respect the Mining Properties; and other than disclosed there are no obligations for pre-emptive rights.

Conditions of the Transaction

The Business Combination Agreement contains a number of conditions precedent to the obligations of 401 and McFarlane.

Unless all such conditions are satisfied or waived by the party for whom benefit such conditions exist, to the extent it may be capable of waiver, the Transaction will not proceed. There is no assurance that these conditions will be satisfied or waived on a timely basis, or at all. The conditions to the Transaction becoming effective are set out in the Business Combination Agreement and are summarized below.

Conditions for the Benefit of 401

The completion of the Transaction is subject to the following conditions being satisfied at or prior to the Effective Date, which conditions are for the exclusive benefit of 401 and may be waived, in whole or in part, by 401 in its sole discretion:

• (a) receipt of constating documents and certificate of corporate existence from McFarlane;
• (b) the Exchange issuing conditional acceptance, subject only to customary conditions of closing, for trading of the Resulting Issuer Shares;
• (c) McFarlane shall have obtained the approval of its board of directors and shareholders, in accordance with the OBCA;
• (d) 401 shall have received from McFarlane a copy, certified by a duly authorized officer thereof, of the records of all corporate action taken to authorize the execution, delivery and performance of the Business Combination Agreement and the transactions contemplated thereby;
• (e) the representations and warranties of McFarlane being true and correct, and certificates of the CEO and the CFO of McFarlane will have been delivered to 401 confirming the foregoing;
• (f) covenants and conditions complied with and performed by McFarlane;
• (g) There will have been obtained, from all relevant Governmental Authorities, such Authorizations as are required to be obtained by McFarlane and 401 to consummate the Business Combination;
• (h) each of the parties as required by the Exchange shall have entered into an escrow agreement upon the terms and conditions imposed pursuant to the policies of the Exchange.
• (i) McFarlane having received all contractual consents described in the Business Combination Agreement;
• (j) no bona fide legal or regulatory action or proceeding will be pending or threatened by any Person to enjoin, restrict or prohibit the Business Combination or any other of the transactions contemplated thereby, or the right of 401, 401 Subco or McFarlane to conduct, expand, and develop their business;
• (k) there will have been no material adverse effect to McFarlane and a certificate of the Chief Executive Officer and the Chief Financial Officer of McFarlane to that effect will have been delivered to 401;
• (l) before giving effect to the securities issuable in connection with the Brokered Financing and Non-Brokered Financing or pursuant to permitted acquisitions, McFarlane shall have no securities issued and outstanding other than 59,075,000 McFarlane Shares, the McFarlane Warrants and the McFarlane Options; and
• (m) Dissent Rights will not have been exercised in respect of a total number of McFarlane Shares which would, if such shares were converted into 401 Shares pursuant to the Business Combination, exceed 5% of the 401 Shares outstanding upon completion of the Business Combination.

Conditions for the Benefit of McFarlane

The completion of the Transaction is subject to the following conditions being satisfied at or prior to the Effective Time, which conditions are for the exclusive benefit of McFarlane and may be waived, in whole or in part, by McFarlane in its sole discretion:

(a) receipt of constating documents and certificate of corporate existence from 401;

• (b) the Exchange issuing conditional acceptance, subject only to customary conditions of closing, for trading of the Resulting Issuer Shares;
• (c) 401 shall have obtained the approval of its board of directors and shareholders, in accordance with the OBCA;
• (d) McFarlane shall have received from 401 a copy, certified by a duly authorized officer thereof, of the records of all corporate action taken to authorize the execution, delivery and performance of the Business Combination Agreement and the transactions contemplated thereby;
• (e) the Name Change shall have been completed;
• (f) the representations and warranties of 401 being true and correct, and certificates of the CEO and the CFO of 401 will have been delivered to McFarlane confirming the foregoing;
• (g) There will have been obtained, from all relevant Governmental Authorities, such Authorizations as are required to be obtained by McFarlane and 401 to consummate the Business Combination;
• (h) 401 having received all contractual consents;
• (i) no bona fide legal or regulatory action or proceeding will be pending or threatened by any Person to enjoin, restrict or prohibit the Business Combination or any other of the transactions contemplated thereby, or the right of 401, 401 Subco or McFarlane to conduct, expand, and develop their business;
• (j) there will have been no material adverse effect to 401 and a certificate of the CEO and the CFO of 401 to that effect will have been delivered to McFarlane;
• (k) each of the directors and officers of 401 who resigns will have executed and delivered releases in favour of 401 in form and substance satisfactory to McFarlane, acting reasonably; and
• (l) Dissent Rights will not have been exercised in respect of a total number of McFarlane Common Shares which would, if such shares were converted into 401 Shares pursuant to the Business Combination, exceed 5% of the 401 Shares outstanding upon completion of the Business Combination.

Covenants of the Parties during the Period prior to the Effective Date

During the period from the date of the Amalgamation until the Closing time, each party will use its commercially reasonable efforts to take, or cause to be taken, all action and to do, or cause to be done, all things necessary, proper or advisable (i) to consummate and make effective as promptly as practicable the transactions contemplated by the Business Combination Agreement; (ii) to comply with all provisions of the Business Combination Agreement; and (iii) to cooperate with 401 in connection with the foregoing.

Termination Rights

The Business Combination Agreement may be terminated at any time before the Effective Time:

• (a) by the mutual agreement of 401 and McFarlane;

• (b) by either of McFarlane or 401 by notice to the other party if a Governmental Authority has notified either party in writing that it will not permit the Business Combination to proceed;

• (c) by either of McFarlane or 401 by notice to the other party if there has been a misrepresentation, breach or nonperformance by the breaching party of any representation, warranty, covenant or obligation contained in the Business Combination Agreement, which could reasonably be expected to have a material adverse effect on the terminating party or the ability of either party to complete the Business Combination in accordance with the terms of the Business Combination Agreement, provided the breaching party has been given notice of and ten (10) days to cure any such misrepresentation, breach or non-performance;

• (d) by McFarlane if it delivers to 401 a McFarlane Offer (as more particularly described in Business Combination Agreement), in which case McFarlane shall pay to 401 $50,000 plus 401's reasonable out-of-pocket expenses incurred in connection with the negotiation of the transactions contemplated by the Business Combination Agreement including the Letter of Intent by wire transfer of immediately available funds within five (5) Business Days from the date that 401 provides McFarlane with the quantum of the latter amount;

• (e) by McFarlane should the conditions for the benefit of McFarlane not be met;

• (f) by 401 if it delivers to McFarlane a 401 Offer (as more particularly described in Business Combination Agreement), in which case 401 shall pay to McFarlane the reasonable out-of-pocket expenses incurred by McFarlane in connection with the negotiation of the transactions contemplated by the Business Combination Agreement including the Letter of Intent, by wire transfer of immediately available funds within five (5) Business Days from the date that McFarlane provides 401 with the quantum of such amount;

• (g) by 401 should the conditions for the benefit of 401 not be met; and

• (h) by either McFarlane or 401, if the Business Combination has not been completed on or before March 31, 2022, or such later date as may be agreed to by McFarlane and 401, in which case McFarlane shall pay to 401 $75,000 by wire transfer of immediately available funds within five (5) Business Days from the date a notice of termination is delivered pursuant to this Section 8.01(i).

Upon the termination of the Business Combination Agreement, the parties shall be released from their obligations other than as expressly contemplated in the Business Combination Agreement, except as otherwise set forth therein, provided that nothing shall relieve a party from liability arising prior to such termination.

Directors and Officers of the Resulting Issuer

Concurrently with the completion of the Amalgamation, 401 will cause all of the then-current directors and officers of 401 and 401 Subco to resign without payment by or any liability to 401, 401 Subco or Amalco, and to cause each such director and officer to execute and deliver a release in favour of 401, 401 Subco and Amalco, in a form acceptable to 401 and McFarlane.

The Resulting Issuer Board will consist of Mark Trevisiol, Perry N. Dellelce, Roger Emdin, Charles Lilly, Amanda Fullerton, Guy Mahaffy and Fergus Kerr. Management of the Resulting Issuer will be comprised of Mark Trevisiol as Chief Executive Officer, Charles Lilly as Chief Financial Officer and Corporate Secretary, Roger Emdin as Chief Operating Officer and Robert Kusins as Vice President, Geology.

Business Combination Steps

Pursuant to the terms and conditions set forth in the Business Combination Agreement:

• (a) on the Closing Date and subject to approval by the Exchange, McFarlane and 401 Subco will amalgamate, pursuant to the provisions of the OBCA, by jointly completing and filing Articles of Amalgamation with the Director, and shall continue as one corporation (Amalco) effective at the Effective Time, giving effect to the Amalgamation, subject to the terms of the Business Combination Agreement (including for greater certainty the Amalgamation Agreement).
• (b) At the Effective Time and as a result of the Amalgamation:
  • (i) each holder of McFarlane Shares (other than McFarlane Dissenting Shareholders) shall receive that many fully paid and non-assessable 401 Shares equal to the number of McFarlane Shares held by such holder multiplied by the Exchange Ratio (subject to certain exceptions regarding fractional shares), following which all such McFarlane Shares shall be converted into Amalco Shares in consideration for the issuance of such 401 Shares on the basis of one Amalco Share for each 401 Share issued;
  • (ii) each holder of 401 Subco Shares (other than 401) shall receive that many fully paid and non-assessable 401 Shares equal to the number of 401 Subco Shares held by such holder multiplied by the Exchange Ratio (subject to certain exceptions regarding fractional shares), following which all such 401 Subco Shares shall be converted into Amalco Shares in consideration for the issuance of such 401 Shares on the basis of one

Amalco Share for each 401 Share issued;

• (iii) all 401 Subco Shares issued to and held by 401 shall be cancelled;
• (iv) 401 shall add to the stated capital maintained in respect of the 401 Shares an amount equal to the aggregate paid-up capital for purposes of the Tax Act of the McFarlane Shares and the 401 Subco Shares immediately prior to the Effective Time (less the paid-up capital of any McFarlane Shares held by dissenting McFarlane Shareholders who do not exchange their McFarlane Shares for 401 Shares on the Amalgamation);
• (v) Amalco shall add to the stated capital maintained in respect of the Amalco Shares an amount such that the stated capital of the Amalco Shares shall be equal to the aggregate paid-up capital for purposes of the Tax Act of the 401 Subco Shares and McFarlane Shares immediately prior to the Effective Time;
• (vi) no fractional 401 Shares will be issuable to shareholders of McFarlane or 401 Subco pursuant to the Amalgamation and no cash payment or other form of consideration will be payable in lieu thereof. In the event that a former holder of McFarlane Shares or 401 Subco Shares is entitled to receive a fractional 401 Share, any such fractional 401 Share interest to which a shareholder of McFarlane or 401 Subco would otherwise be entitled to pursuant to the Amalgamation will be rounded down to the nearest whole 401 Share;
• (vii) 401 shall be entitled to deduct and withhold from any consideration otherwise payable pursuant to the transactions contemplated by the Business Combination Agreement to any holder of McFarlane Shares or 401 Subco Shares, as the case may be, such amounts as it determines are required or permitted to be deducted and withheld with respect to such payment under the Tax Act or any provision of provincial, state, local or foreign tax law, in each case as amended; to the extent that amounts are so withheld, such withheld amounts shall be treated for all purposes hereof as having been paid to the holder of the McFarlane Shares or 401 Subco Shares, as the case may be, in respect of which such deduction and withholding was made, provided that such withheld amounts are actually remitted to the appropriate taxing authority; and
• (viii) Amalco will be a wholly-owned subsidiary of 401, and shall continue under the name "McFarlane Lake Mining Incorporated".
• (c) At the Effective Time:
  • (i) the registered holders of McFarlane Shares and 401 Subco Shares shall become the registered holders of the Resulting Issuer Shares to which they are entitled, calculated in accordance with the provisions hereof, and the holders of share certificates representing such McFarlane Shares and 401 Subco Shares may surrender such certificates to McFarlane's transfer agent and, upon such surrender, shall be entitled to receive and, as soon as reasonably practicable following the Effective Time, shall receive share certificates or direct registration advices representing the number of Resulting Issuer Shares to which they are so entitled;
  • (ii) 401 shall become the registered holder of the Amalco Shares to which it is entitled, calculated in accordance with the provisions hereof, and shall be entitled to receive a share certificate representing the number of Amalco Shares to which it is entitled, calculated in accordance with the provisions hereof; and
  • (iii) the New Slate of board members shall become effective.
• (d) At the Effective Time, the McFarlane Warrants and the 401 Subco Warrants shall be exchanged for Resulting Issuer Replacement Warrants exercisable to acquire, on the same terms and conditions as were applicable to such McFarlane Warrants and 401 Subco Warrants immediately prior to the Effective Time, the number of 401 Shares (rounded down to the nearest whole number) equal to the product of: (A) the number of McFarlane Shares subject to such McFarlane Warrant (in the case of the McFarlane Warrants) and the number of 401 Subco Shares subject to such 401 Subco Warrant (in the case of the 401 Subco Warrants), in each case immediately prior to the Effective Time; and (B) the Exchange Ratio. The exercise price per 401 Share subject to a Resulting Issuer Replacement Warrant shall be an amount (rounded up to the nearest tenth of a cent) equal to the quotient of: (A) the exercise price per McFarlane Share or 401 Subco Share subject to such McFarlane Warrant or 401 Subco Warrant (as applicable), immediately prior to the Effective Time divided by (B) the Exchange Ratio. Except as set out above, the term to expiry, conditions to and

manner of exercise and other terms and conditions of each Resulting Issuer Replacement Warrant shall be the same terms and conditions of the McFarlane Warrant or 401 Subco Warrant for which it was exchanged.

• (e) At the Effective Time, the McFarlane Options shall be exchanged for Resulting Issuer Replacement Options exercisable to acquire, on the same terms and conditions as were applicable to such McFarlane Options immediately prior to the Effective Time, the number of 401 Shares (rounded down to the nearest whole number) equal to the product of: (A) the number of McFarlane Shares subject to such McFarlane Option immediately prior to the Effective Time; and (B) the Exchange Ratio. The exercise price per Resulting Issuer Share subject to a Resulting Issuer Replacement Option shall be an amount (rounded up to the nearest tenth of a cent) equal to the quotient of: (A) the exercise price per McFarlane Share subject to such McFarlane Option immediately prior to the Effective Time divided by (B) the Exchange Ratio. Except as set out above, the term to expiry, conditions to and manner of exercise and other terms and conditions of each Resulting Issuer Replacement Option shall be the same terms and conditions of the McFarlane Option for which it was exchanged.
• (f) At the Effective Time, the Broker Warrants shall be exchanged for Resulting Issuer Replacement Broker Warrants exercisable to acquire, on the same terms and conditions as were applicable to such Broker Warrants immediately prior to the Effective Time, the number of 401 Shares and 401 Warrants (rounded down to the nearest whole number) equal to the product of: (A) the number of McFarlane Shares and McFarlane Warrants subject to such Broker Warrants immediately prior to the Effective Time; and (B) the Exchange Ratio. The exercise price per 401 Share subject to a Resulting Issuer Replacement Broker Warrant shall be an amount (rounded up to the nearest tenth of a cent) equal to the quotient of: (A) the exercise price per McFarlane Share subject to such McFarlane Broker Warrant immediately prior to the Effective Time divided by (B) the Exchange Ratio. Except as set out above, the term to expiry, conditions to and manner of exercise and other terms and conditions of each Resulting Issuer Replacement Broker Warrant shall be the same terms and conditions of the McFarlane Broker Warrant for which it was exchanged.
• (g) At the Effective Time, each McFarlane Share held by a McFarlane Dissenting Shareholder shall be deemed to be transferred by the holder thereof, without any further act or formality on its part, free and clear of any Encumbrance, to Amalco, and Amalco shall thereupon be obliged to pay the amount therefor determined and payable in accordance with the Business Combination Agreement, the name of such holder shall be removed from the central securities register as a holder of McFarlane Shares and such McFarlane Dissenting Shareholder will cease to have any rights as a McFarlane Shareholder, other than the right to be paid the fair value of its McFarlane Shares in accordance with Business Combination Agreement.
• (h) If a McFarlane Dissenting Shareholder fails to perfect or effectively withdraws its claim under section 185 of the OBCA or forfeits its right to make a claim under section 185 of the OBCA or if its rights as a McFarlane Shareholder are otherwise reinstated, such holder's McFarlane Shares shall thereupon be deemed to have been exchanged as of the Effective Time as prescribed by the Business Combination Agreement.
• (i) Upon the approval of the resolutions of the directors and shareholders of 401 authorizing the Name Change in accordance with the requirements of the BCBCA and immediately prior to the Effective Time, 401 shall complete and file Articles of Amendment, in the prescribed form, giving effect to the Name Change upon and subject to the terms of the Business Combination Agreement.
• (j) 401 Shares will only be issued to U.S. Persons that are accredited investors and shall be "restricted securities" as defined in Rule 144(a)(3) of the U.S. Securities Act and shall bear a legend in customary form restricting re-sale and transfer without registration under the U.S. Securities Act unless pursuant to an available exemption from registration under the U.S. Securities Act.

It is anticipated that immediately following completion of the foregoing steps, an aggregate of approximately 79,397,813 Resulting Issuer Shares will be issued and outstanding, and: (a) former McFarlane Shareholders will hold 75,582,313 Resulting Issuer Shares, representing approximately 95.19% of the outstanding Resulting Issuer Shares; (b) current 401 Shareholders will hold 3,750,000 Resulting Issuer Shares, representing approximately 4.72% of the outstanding Resulting Issuer Shares; and (iii) current 401 Subco Shareholders will hold 65,500 Resulting Issuer Shares, representing approximately 0.08% of the outstanding Resulting Issuer Shares, each on an undiluted basis.

401 Continuation Resolution

Pursuant to the terms of the Business Combination Agreement, 401 has sought, and obtained, shareholder approval for the continuation of 401 from British Columbia, where it is governed by the Business Corporations Act (British Columbia) to Ontario, where (if completed) it will be governed by the Business Corporations Act (Ontario). At this time, the Resulting Issuer intends to complete the continuation from British Columbia to Ontario pursuant to the 401 Continuation Resolution following the date hereof. Completion of the continuation will be subject to the Resulting Issuer obtaining all necessary regulatory consents and approvals. It is expected that continuing to Ontario, where the McFarlane Properties are located and where the management of the Resulting Issuer is resident, will be more appropriate and align better with its operations than remaining subject to the laws of British Columbia.

The Concurrent Financings

In connection with the Transaction, on December 9, 2021, McFarlane completed the Brokered Financing and Non-Brokered Financing. See "Part IV – Information Concerning the McFarlane – Financings".

Additionally, on December 9, 2021, 401 Subco completed the 401 Subco Financing. See "Part III – Information Concerning 401 – 401 Subco Financing".

Approvals Necessary for the Transaction

Shareholder Approval

401 obtained written shareholder approval on December 7, 2021 for, among other things, the appointment of the New Slate (i.e. the Resulting Issuer Board), the Name Change, the 401 Continuation Resolution and the Incentive Plans.

401 Subco obtained written shareholder approval on December 7, 2021 for, among other things, the Business Combination Agreement, Amalgamation Agreement and the Amalgamation.

The McFarlane Shareholders approved the Amalgamation on December 6, 2021.

Exchange Approval

On December 14, 2021, the Exchange conditionally approved the Listing of the Resulting Issuer Shares, including those to be issued pursuant to the Amalgamation to the former McFarlane Shareholders. Legally, the Effective Date of the Amalgamation will be on the date a certificate of amalgamation is issued in respect of the Amalgamation. However, the Listing will be completed on the date the Exchange issues a Final Exchange Bulletin in respect of the Listing, which is expected to occur within a reasonable time after the Effective Date, provided all required documentation is filed with the Exchange.

[Part III begins on following page]

PART III – INFORMATION CONCERNING 401

The following information is presented prior to giving effect to the Transaction as at the date hereof or as otherwise specified herein. See "Part V - Information Concerning the Resulting Issuer" for pro forma business, financial and share capital information relating to the Resulting Issuer.

Corporate Structure

Name and Incorporation

401 was incorporated under BCBCA as "1287401 B.C. Ltd." on February 3, 2021 as a wholly-owned subsidiary of 1289625 B.C. Ltd. Pursuant to the Arrangement, 1289625 B.C. Ltd. reorganized its capital such that each holder of common shares disposed of their holdings to 1289625 B.C. Ltd. and, in consideration therefor, received, among other things, certain 401 Shares and which resulted in 401 ceasing to be a subsidiary of 1289625 B.C. Ltd.

401 is a reporting issuer under the securities laws of the jurisdictions of Alberta and British Columbia and, after giving effect to the 401 Share Split, has 3,750,000 401 Shares issued and outstanding. None of its securities, including the 401 Shares, are listed or posted for trading on any stock exchange and no public market exists for any securities of 401.

401's head office is located at 3400 22 Adelaide S.W., Toronto, ON M5H 4E3 and its registered and records offices are located at 1200 Waterfront Centre, 200 Burrard Street, Vancouver, BC V7X 1T2.

Intercorporate Relationships

401 has one subsidiary, 401 Subco, formed for the purposes of completing the Business Combination. 401 Subco was incorporated under the OBCA as "1000034047 Ontario Inc." on November 23, 2021. The registered office address of 401 Subco is located at 3400 22 Adelaide S.W., Toronto, ON M5H 4E3.

General Development of the Business

Overview and History of 401

At a meeting of the shareholders of 1289625 BC Ltd. on March 30, 2021, the shareholders of 1289625 BC Ltd. approved the Arrangement under the provisions of the Act and on April 1, 2021, the Arrangement was approved by the Supreme Court of British Columbia.

Narrative Description of the Business

401 and 401 Subco currently have no material assets and do not conduct any operations or active business, other than the identification and evaluation of acquisition opportunities to permit 401 to acquire a business or assets in order to conduct commercial operations. This may involve the raising of additional funds in order to carry on its business and to finance an acquisition. 401 may use cash, bank financing, the issuance of treasury shares, public debt or equity financing or a combination thereof in order to finance its business and an acquisition.

401 and 401 Subco were only recently incorporated and have no history of earnings.

401 Subco Financing

Concurrently with the Brokered Financing and Non-Brokered Financing, on December 9, 2021, 401 Subco completed a nonbrokered private placement of 65,500 401 Subco Units at a price of $0.40 per 401 Subco Unit, for gross proceeds of approximately $26,200.

Selected Consolidated FinancialInformation

The following table sets forth selected unaudited condensed interim consolidated financial statements of 401 from the period of incorporation on February 3, 2021 to September 30, 2021. Such information has been derived from and should be read in conjunction with the 401 Financial Statements and the 401 MD&A, attached hereto as Schedule "C".

	Period fromFebruary 3, 2021 to September 30, 2021($)
Total assets	2,284
Total liabilities	56,069
Loss	(21,462)
Net and comprehensive income (loss)	(54,085)
Basic and diluted income (loss) per share	(0.027)

Management's Discussion & Analysis

The 401 MD&A is attached hereto as Schedule "C" and should be read in conjunction with the 401 Financial Statements, respectively.

Description of the Securities

Common Shares

There are currently 3,750,000 (post 401 Share Split) 401 Shares issued and outstanding. There are no other 401 securities, including securities exchangeable or exercisable for or convertible into 401 Shares, outstanding. There are currently 65,501 401 Subco Shares issued and outstanding.

Warrants

There are no outstanding warrants to purchase 401 Shares. There are currently 32,750 401 Subco Warrants outstanding to purchase 32,750 401 Subco Shares.

Options

There are currently no options to purchase 401 Shares outstanding. There are currently no options to purchase 401 Subco Shares outstanding.

Stock Option Plan

As of the date hereof, 401 does not have a stock option plan. Upon completion of the Transaction, the Resulting Issuer will adopt the Incentive Plans, which were approved by the 401 Written Resolution.

Prior Sales

The following table set outs the securities of 401 that have been issued within the twelve (12) months before the date of this Filing Statement:

	Type of Security	Number of		Price Per Securitygregate Gross Proceeds
Date		Securities(1)
February 3, 2021	401 Shares	1(2)	N/A	N/A
April 21, 2021	401 Shares	3,000,000(3)	N/A	N/A
April 28, 2021	401 Options	100,000(4)	$0.10	$10,000

Note:

• (1) Before giving effect to the 401 Share Split.
• (2) 401 Share issued upon incorporation of 401 on February 3, 2021.
• (3) 3,000,000 401 Shares were issued to shareholders of 1289625 B.C. Ltd. in connection with the Plan of Arrangement. Each shareholder of 128965 B.C. Ltd. was issued 100,000 401 Shares in exchange for each existing common share of 128965 B.C. Ltd.
• (4) Issued to James Ward on April 28, 2021. On December 8, 2021, James Ward elected to exercise 100,000 401 Options.

Trading Price

As the common share of 401 are not listed on a stock exchange, there is no recent trading price for 401 Shares.

Arm's Length Transactions

The Transaction is not a Non-Arm's Length Transaction within the meaning of the policies of the Exchange.

Legal Proceedings

To 401's knowledge, 401 is neither a party to, nor is any of its property the subject matter of, any legal proceedings, nor are any such proceedings known to 401 to be contemplated by any party since incorporation on February 3, 2021.

Auditor, Transfer Agent and Registrar

The auditor of 401 is Baker Tilly WM LLP, located at 3601 Hwy 7 East, Suite 1008, Markham, Ontario L3R 0M3. Baker Tilly is independent with respect to 401 in accordance with the Code of Professional Conduct of Chartered Professional Accountants of Ontario*.*

On February 3, 2021, 401 appointed TSX Trust Company as transfer agent, registrar and warrant agent.

Material Contracts

401 has not entered into any material contracts, outside of the ordinary course of business, prior to the date hereof, other than:

• (a) the Business Combination Agreement;
• (b) the Amalgamation Agreement;
• (c) the Transfer Agency and Registrar Agreement between 401 and TSX Trust Company; and
• (d) the Arrangement Agreement.

Copies of these agreements are available for inspection at the head office of 401 at 1200 Waterfront Centre, 200 Burrard Street, Vancouver, British Colombia, Canada V6C 3L6, during normal business hours until the completion of the Transaction and for a period of 30 days thereafter.

[Part IV begins on following page]

PART IV – INFORMATION CONCERNING MCFARLANE

The following information has been provided by McFarlane and is reflective of the current business, financial and share capital position of McFarlane. See also the McFarlane Financial Statements and the McFarlane MD&A attached hereto as Schedule "D". See "Part V - Information Concerning the Resulting Issuer" for pro forma business, financial and share capital information relating to the Resulting Issuer following theTransaction.

Although 401 has no knowledge that would indicate any statements contained herein relating to McFarlane, its affiliates or the McFarlane Shares taken from or based upon such information provided by McFarlane are untrue or incomplete, neither 401 nor any of its officers or directors assumes any responsibility for the accuracy or completeness of the information relating to McFarlane, its affiliates or the McFarlane Shares, or for any failure by McFarlane to disclose facts or events that may have occurred or may affect the significance or accuracy of any such information but which are unknown to 401.

Corporate Structure

Name and Incorporation

McFarlane's full name is "McFarlane Lake Mining Incorporated". McFarlane is a private company that was incorporated on August 21, 2020 under the laws of the Province of Ontario. McFarlane's registered office and principal place of business is located at 15 Kincora Court, Sudbury, Ontario, P3E 2B9.

Intercorporate Relationships

McFarlane currently has no intercorporate relationships.

Pursuant to the CSM Definitive Agreement executed effective December 30, 2021, McFarlane acquired beneficial title to the West Hawk Lake Property, the High Lake Property and the McMillan Property. CSM and McFarlane have executed transfer documents to effect transfer of legal title to the West Hawk Lake Property and High Lake Property in the relevant land titles or registry offices in the Provinces of Manitoba and Ontario, respectively. The 12 claims comprising the McMillan Property have been transferred to McFarlane. McFarlane also has an option to purchase the Mongowin Property and the Michaud/Munro Property. See "Part IV – Information Concerning McFarlane".

General Development of the Business

McFarlane is a private company existing under the laws of the Province of Ontario incorporated on August 21, 2020. Pursuant to the CSM Definitive Agreement executed effective December 30, 2021, McFarlane acquired beneficial title to the West Hawk Lake Property, the High Lake Property and the McMillan Property. CSM and McFarlane have executed transfer documents to effect transfer of legal title to the West Hawk Lake Property and High Lake Property in the relevant land titles or registry offices in the Provinces of Manitoba and Ontario, respectively. The 12 claims comprising the McMillan Property have been transferred to McFarlane. McFarlane also has an option to purchase the Mongowin Property and the Michaud/Munro Property. See "Part IV – Information Concerning McFarlane".

On August 16, 2021, 401 entered into the Letter of Intent with McFarlane, pursuant to which the parties intend to complete the Transaction. McFarlane and 401 have applied to list the Resulting Issuer Shares on the Exchange concurrently with, or following, the completion of the Transaction. On October 14, 2021, the Letter of Intent was amended to extend the deadline to complete the Transaction to December 31, 2021. On December 14, 2021 the Letter of Intent was amended to extend the deadline to complete the Transaction to January 14, 2022. On January 12, 2022 401, 401 Subco and McFarlane entered into the Business Combination Agreement to, among other things, effect the Amalgamation pursuant to the Amalgamation Agreement attached as Schedule "A" thereto.

Narrative Description of the Business

The CSM Optioned Properties

The CSM Option is with a private company called CSM. CSM held property rights to certain mineral properties in northern Ontario and Manitoba. CSM has granted to McFarlane an exclusive option to acquire a 100% interest in the CSM Optioned Properties. The CSM Option Term commenced on February 23, 2021 and expired on August 31, 2021, however was extended until April 30, 2022. McFarlane has provided notice to CSM that it wishes exercise its rights to the Extension Period. In order to keep the CSM Option in good standing, McFarlane must make the following payments to CSM:

• $50,000 within 3 business days following the execution of the CSM Option agreement; and
• $200,000 payable in 4 equal payments of $50,000 on the first day of the second, third, fourth and fifth months of the Option Term.

McFarlane and CSM have worked co-operatively to prepare the High Lake – West Hawk Lake Project Technical Report as the High Lake Property and the West Hawk Lake Property are, and are expected to continue to be, McFarlane's principal exploration focus.

The CSM Option was exercisable at any time during the Option Term or the Extension Period at McFarlane's discretion. McFarlane exercised the Extension Right and was required to pay to CSM on the first day of each month of the Extension Period an additional $50,000 for each month that the Option Term was extended up to a maximum of $400,000.

On December 10, 2021, McFarlane provided written notice of the exercise of the CSM Option setting out its determination to purchase the CSM Optioned Properties pursuant to the terms of the CSM Option. Effective December 30, 2021, McFarlane and CSM have entered into a definitive purchase agreement pursuant to which McFarlane purchased the CSM Optioned Properties for an aggregate purchase price of $5,500,000, comprised of: (i) the Option Payments made to date of the CSM Definitive Agreement, (ii) $2,750,000 in cash (the "Cash Consideration") and (iii) the issuance of $2,750,000 in McFarlane Shares or Resulting Issuer Shares at a deemed price of $0.40 per share, less any Option Payments (to a maximum of $550,000) made to CSM, which as of the date of the CSM Definitive Agreement totaled $500,000 (for a total of 5,6250,000 McFarlane Shares or Resulting Issuer Shares to be issued from treasury) (the "Consideration Shares") and (iii) 7,000,000 existing McFarlane Shares (or Resulting Issuer Shares, if transferred after the date of completion of the Transaction) transferred from Perry Dellelce and Mark Trevisiol (3,500,000 McFarlane Shares respectively) (the "Transferred Shares"). Consequently, a combined total of 12,625,000 McFarlane Shares will be issued and transferred to CSM pursuant to the CSM Option Agreement upon the occurrence of the Formal Transfer Event (as defined below).

Pursuant to the terms of the CSM Definitive Agreement, the parties agreed that notwithstanding the immediate transfer of beneficial title to the CSM Optioned Properties on December 30, 2021, neither the Cash Consideration, the issuance of the Consideration Shares or the transfer of the Transferred Shares shall occur until legal title to the High Lake Property, the West Hawk Lake Property and the McMillan Property have been formally transferred to the Purchaser in the relevant land titles Registry System (each such transfer, a "Formal Transfer Event"). In the event that the requisite regulatory approvals are not obtained in respect of a Formal Transfer Event, and it is not possible to transfer legal title to the CSM Optioned Properties to McFarlane in accordance with the terms of the CSM Definitive Agreement, McFarlane shall re-transfer legal title to any of the CSM Optioned Properties that has been, at such time, formally transferred to McFarlane in the relevant land titles Registry System back to CSM but only in respect of such of the CSM Optioned Properties for which payment has not yet been made. Subsequent to the effective date of the CSM Definitive Agreement, legal title to the twelve claims comprising the McMillan Property have been transferred to McFarlane, and McFarlane has paid $750,000 in cash to CSM for these claims.

Pursuant to the terms of the CSM Definitive Agreement, McFarlane has provided a right of first refusal to CSM (the "CSM ROFR Agreement") to purchase up to $1,687,500 of equity securities sold by the Resulting Issuer pursuant to an equity financing, subject to all applicable securities laws and Exchange policies. Such right shall be exercisable until the earlier of (i) December 9, 2024 or (ii) the date that CSM has subscribed for the full amount of the ROFR Amount. In addition, McFarlane has entered into a consulting agreement with an entity owned by Christopher North, the President of CSM, for the provision of consulting services to McFarlane for a period of eighteen months at a cost of $10,000 per month plus applicable taxes (the "North Consulting Agreement").

McFarlane's near-term exploration work will focus on the West Hawk Lake Property in Manitoba followed by the High Lake Property in Ontario. These two properties cover an area totaling 660 hectares. The West Hawk Property is located in Southeastern Manitoba, Canada approximately 5 km west of the Ontario-Manitoba border near the community of Hawk Lake. on the Trans-Canada Highway. It consists of one mining lease covering an area of 318.68 hectares. It is centered approximately 53 km west of the town of Kenora and 130 km east of the city of Winnipeg. The High Lake Property is located immediately east of the Ontario-Manitoba border in Northwestern Ontario, Canada. It consists of 20 patented mining leases covering an area of 341.49 hectares. It is centered approximately 45 km west of the town of Kenora, approximately 8 km from the West Hawk Property. Both properties are near infrastructure (roads, power, gas), significant population basis and in a geo-politically stable environment.

There has been extensive work carried out by previous explorers on High Lake and West Hawk Lake Properties including the most recent work conducted by CSM from 2010 to 2012. Previous work included geological mapping, soil sampling, geophysical surveys (magnetometer and VLF/EM), trenching, rock sampling, and drilling. However, as the known mineralized zones on the CSM Optioned Properties have not been completely explored and delineated by drilling, McFarlane believes there is potential for expanding the known mineralized zones and locating other mineralized zones within the CSM Optioned Properties. McFarlane and CSM have contracted Sears, Barry & Associates Limited of Sudbury, Ontario to produce a technical report in the form mandated by NI 43-101. There have been historical resources noted on both the West Hawk and High Lake properties but as noted below "[t]he author has not done sufficient work to classify the historical estimates as a current mineral resource or reserve. The issuer is not treating the historical estimate as a current mineral resource or mineral reserve".

An additional property that was subject to the CSM Option, and has now been purchased by McFarlane, is the McMillan property. It lies 70 km southwest of Sudbury, Ontario near the town of Espanola along Highway 6, approximately 15 km from the Trans-Canada Highway. The McMillan Mine is a past producing underground gold mine and milling operation which was active some 90 years ago. The total property covers 268 hectares and comprises of 12 mining leases. Over 60,000 tonnes of mineral was mined historically at the McMillan Mine with a grade of 5.5 grams/tonne of gold (Ontario Geological Survey report 1991).

Other Inventory Properties

McFarlane also has rights by way of two option agreements to acquire three other mineral properties; (i) the Mongowin Property; and (ii) the Michaud/Munro Properties. As noted above, the focus of McFarlane's exploration and development activities will be on the High Lake and West Hawk Lake Properties. However, McFarlane has determined it is in the company's best interests to add these additional properties to its inventory as it believes that these additional properties show great potential. There will need to be a great deal of additional exploration work conducted on the Mongowin Property and the Michaud/Munro Properties before any assurances can be made in this regard.

The Mongowin Option

The Mongowin Property is located in Ontario and has been optioned from Transition Metals Corp. The Mongowin Property lies adjacent to and along strike of the McMillan Mine and covers over 2600 hectares comprised of a number of mining leases and claims. The Mongowin Property has two past gold producing mines; namely, the Fox Lake Mine and the Majestic Mine.

Key components of the Mongowin Option are:

• exclusive option for access to and purchase for 5 months; initial deposit of $15k, extendable for an additional 3 months at $15k /month, if required;
• total compensation upon purchase of $585k comprised of $85k in cash and $500k in stock; and
• 1.5% net smelter returns royalty across the property (in addition to an existing royalty on a small portion of the property in an underlying agreement of 1.0%, 0.5% of which can be re-purchased for $600k).
• Commencing the 5th year following the execution of a definitive agreement, McFarlane will pay the Transition Metals Corp. advanced royalty payments of $25,000 per year (in cash or stock) to be deducted from future royalty payments following commercial production to a maximum total of $250,000. Any exploration expenditures spent on the Mongowin Property will offset the payments on a dollar for dollar basis. If McFarlane does not pay the advanced royalty payments or spend the required exploration expenditure, Transition Metals Corp. may chose to purchase the property for $1;
• Transition Metals Corp. is entitled to a one-time milestone payment of $2,500,000 at any time commercial production is achieved;

The Michaud/Munro Option

The Michaud/Munro Properties have been optioned from a privately held Ontario numbered company partially held by the Chief Executive Officer of McFarlane. The Michaud/Munro property is located in Timmins near the well-known Porcupine-Destor fault system which has seen numerous gold mines in operation over the past century, including 6 currently operating mines. The Michaud Property lies adjacent to Mayfair Gold Corp.'s Fenn-Gib exploration property. The Munro property lies in the Kidd-Munro stratigraphic assemblage within the Abitibi Greenstone Belt. The current producing Kidd Creek mine and past producing Potter, Potterdoal and Hedman mines lie within this geological setting.

Key components of the Michaud/Munro Option are:

• exclusive option for access to and purchase for 5 months; initial deposit of $20,000;
• Compensation at closing is additional $30,000 and $550,000 in stock; and
• 1.5% royalty across the property with a re-purchase right of 1% for $1,500,000.

Material Mineral Project | High Lake – West Hawk Lake Project

The following disclosure regarding McFarlane's material project, the High Lake – West Hawk Lake Project, is derived from and is the complete text of the Summary section of the NI 43-101 technical report prepared by Sears, Barry & Associates Limited (SBA) consultant Seymour M. Sears, B.A., B.Sc., PGO, titled "NI 43-101 Technical Report on the High Lake Property and West Hawk Lake Property" with an effective date of May 25, 2021 (the "High Lake – West Hawk Lake Project Technical Report"). The High Lake – West Hawk Lake Project Technical Report is incorporated by reference herein and is available under 401's profile on SEDAR.

Seymour M. Sears, B.A., B.Sc., PGO, author of the High Lake – West Hawk Lake Project Technical Report, is a qualified person for the purposes of NI 43-101, and has reviewed and approved the scientific and technical disclosure contained in this Filing Statement.

Because the following section is derived entirely from the summary section of the Technical Report, defined terms in the following summary may differ from those used in this Filing Statement.

Property Location and Description

High Lake – West Hawk Lake Project comprises two properties, the High Lake Property, and the West Hawk Lake Property covering an area totaling 660.17 hectares. Both properties have excellent infrastructure.

The High Lake Property is located immediately east of the Ontario-Manitoba border in Northwestern Ontario, Canada. It consists of 20 mining leases covering an area of 341.49 hectares. It is centered approximately 45 km west of the town of Kenora at UTM And 1983 Zone 15North, 349,000 E, 5,508,500 N.

The West Hawk Property is located in Southeastern Manitoba, Canada approximately 5 km west of the Ontario-Manitoba border near the community of Hawk Lake. It consists of 1 mining lease covering an area of 318.68 hectares. It is centered approximately 53 km west of the town of Kenora and 130 km east of the city of Winnipeg. It lies immediately north of the Trans- Canada Highway and within the Whiteshell Provincial Park. It is centered at UTM Nad 83, Zone 15North 338,000 E, 5,512,000 N.

Geology

The High Lake Property and the West Hawk Lake Property both lie in the Lake of the Woods greenstone belt near the western end of the Wabigoon Subprovince, a 900 km long, east-west trending structural zone that is part of the Superior Province of the Canadian Shield. The Lake of the Woods greenstone belt is one of a series of six interconnected greenstone belts that make up the western part of the Wabigoon Subprovince in Northwestern Ontario. The greenstone belts, aged from 3.0 - 2.71 billion years (Ga), are made up of 60 – 80% ultramafic to felsic metavolcanic rocks of various types and 20 – 40% clastic and chemical metasediments. Numerous elliptical shaped granitic batholiths thought to be derived from the same parent magmas as the volcanic rocks (3.0 - 2.69 Ga old) are enclosed within the greenstone belts. All of these rocks have been extensively deformed and intruded locally by syntectonic and post tectonic plutons, dykes and small bodies of ultramafic to felsic composition.

The Lake of the Woods greenstone belt has been intruded locally by composite granitoid plutons, some of which are considered syn-volcanic. The High Lake Intrusive Complex, on the High Lake Property, and the Falcon Lake Igneous Complex, on the West Hawk Lake Property, appear to be important structures with respect to the known gold mineralization in these areas.

Mineralization

Several styles of mineralization occur on the High Lake Property. The most important of the known styles of mineralization consists of gold associated with quartz veining and silicified sheared zones that are spatially related to the contact between quartz-feldspar porphyry sills or dykes and mafic to intermediate volcanic rocks. The volcanic rocks sometimes occur as large rafts or roof pendants within the quartz-feldspar porphyry body. Pyrite and chalcopyrite are typically associated with the gold as well as tourmaline, sericite, chlorite and carbonate. Zones of this style include: i) the Purdex A, B and P Zones; ii) the Electrum Prospect P, R and W Zones. The High Lake Property hosts historical resources of 270,000 tonnes grading 9.83 g/t Au. See Item 6.1.3. NOTE: The author has not done sufficient work to classify the historical estimate on the High Lake as a current mineral resource or reserve. The issuer is not treating the historical estimate as a current mineral resource or mineral reserve.

Two styles of gold mineralization are known to occur on the West Hawk Mining Lease. The host rock for the first style is a concentrically banded pipe-like structure, referred to as a breccia pipe. Gold occurs in siliceous bands, small quartz veinlets, and with local sericitic patches. Associated mineralization includes pyrite, galena, sphalerite, chalcopyrite and pyrrhotite as well as minor arsenopyrite and tetrahedrite. The Sunbeam and Moonbeam Prospects are examples of this style of mineralization.

The second style of gold bearing structure consists of narrow shear zones that occur within all rock types but particularly near the contacts of the various phases of the intrusive complex. Gold is generally associated with narrow quartz veining and gashes within en-echelon lenses and wider bodies of biotite schist but it also occurs along joint surfaces within and adjacent to these shears. Mineralization of this style includes the Waverly Veins and the Sundog Zone. The West Hawk Lake Property hosts historical resources of 457,200 tonnes grading 13.90 g/t Au. See Item 6.2.3. NOTE: The author has not done sufficient work to classify the historical estimate on the West Hawk Lake as a current mineral resource or reserve. The issuer is not treating the historical estimate as a current mineral resource or mineral reserve.

Exploration

There has been extensive work carried out by previous explorers including the most recent work by CSM from 2010 – 2012. Previous work included geological mapping, soil sampling, geophysical surveys (magnetometer and VLF/EM), trenching, rock sampling, and drilling. A shaft was sunk on the West Hawk Lake Property.

Conclusions

Both the High Lake and West Hawk Projects are at an exploration stage and contain numerous gold prospects, occurrences and other mineralized zones. The principal geological model being explored for is a lode vein gold deposit although there is some potential for larger intrusion related deposits such as the reported porphyry type Au-Cu zone on the High Lake Property and the known breccia pipe host rocks on the West Hawk Property.

There are 6 gold prospects on the High Lake Property and several others have been referred to in historical reports but have not yet been verified. The best-known targets consist of gold mineralization in alteration zones (silica-sericite-sulphide) associated with structural features (shear zones and wall rock xenoliths) that have been developed proximal to contacts between quartz-feldspar porphyry sills and mafic to intermediate metavolcanic rocks. All of the above zones remain open at depth and the host structures are open along strike. Previous explorers have estimated mineralized material totaling 270,000 tonnes grading 9.83 g/t Au located within 4 mineralized zones on the High Lake Property. See Item 6.1.3. NOTE: The author has not done sufficient work to classify the historical estimate on the High Lake as a current mineral resource or reserve. The issuer is not treating the historical estimate as a current mineral resource or mineral reserve. In 2006, the author collected a 10-metre panel sample from a trench on the Purdex Gold Zone which averaged 9.84 g/t Au. This further confirms the presence of gold on the High Lake Property. See Item 12. None of the known mineralized zones on the High Lake Property have been completely explored and delineated by drilling. There is excellent potential for expanding the known mineralization and locating other mineralized zones within the property.

During 2009 – 2010, Canadian Star carried out an exploration program on the High Lake Property in 2009 – 2010 that focused on the Purdex Gold Zone. The work included locating of some of the old drill collars, a metallurgical test on grab samples from an old trench and the initiation of a drill program to verify historical gold intersections. The drill program was terminated prior to completion of the first hole due to opposition from some members of a local First Nation community.

The West Hawk Property is also host to numerous gold occurrences, six of which have been tested by underground development and/or diamond drilling. In 1983, Goldbeam Resources Ltd. prepared an estimate of mineral resources on these 6 prospects totaling 457,200 tonnes grading 13.90 g/t Au. See Item 6.2.3. NOTE: The author has not done sufficient work to classify the historical estimate on the West Hawk Lake as a current mineral resource or reserve. The issuer is not treating the historical estimate as a current mineral resource or mineral reserve. All of the above gold mineralized zones on the Hawk Lake Property are open at depth; two of these are pipe-like structures and the remaining four (4) are tabular zones and open along strike.

Between 2010 – 2012, Canadian Star carried out an exploration program on the West Hawk Lake Property. The program included a 12 km cut grid, ground magnetic and VLF-EM surveys, geological mapping and 8 drill holes totaling 983 metres. The drill holes were intended to test 4 targets – the Sunbeam breccia pipe, the Waverly Shaft and Letain Zones and the Waverly Raise Zone. The holes testing the Sunbeam breccia pipe penetrated only it's margin and intersected low but interesting gold values. Three holes testing the Waverly and Letain Zones returned only weak values. The best intersections from the drilling program were from three holes that tested the Waverly Raise Zone. All three holes intersected encouraging gold values from the zone including 31.6 g/t Au over 2.0 m in Hole CM-WH-12-05; 25.1 g/t Au over 1.0 m in Hole CSM-WH-12-07; and 7.14 g/t Au over 0.95 in Hole CM-WH-12-08. See Item 10.

Surface sampling and limited drilling has confirmed the existence of many of the known gold- bearing zones on the properties so there is very little risk that the historical data supporting the known mineralized zones is not valid. The author is not aware of any significant risks or uncertainties that could reasonably be expected to affect the reliability or confidence in the exploration information. New data will have to be collected and the grades and tonnages verified before any mineral resources can be estimated. As in all exploration projects, there is a risk of issues relating to the local community, First Nations and the Social License to Operate as the project advances.

Both the High Lake and the West Hawk Lake Properties are properties of merit and further exploration work is warranted.

Recommendations

The recommended Phase 1 Budgets for both the High Lake Property and West Hawk Lake Property is a total of $740,000.

High Lake Property

A multi-phased exploration program is highly recommended on the High Lake/Electrum Lake Property. Prior to drilling, the work should include: 1) re-logging the historical drill core stored at the MNDMF core library in Kenora; 2) an airborne (helicopter or drone based) geophysical survey (EM/Resistivity, Magnetics and Radiometer); 3) acquisition of detailed satellitebased imagery to provide a good base-map for the property; and 4) geological mapping and sampling program to accurately locate all of the known prospects. An estimate of the cost of the Phase 1 program is $415,000.

Phase 1 - Budget - High Lake Property
Description	CAD
Geological Mapping, Sampling and Data Compilation	103,000
Geophysical Surveys	35,000
Core Drilling	167,000
Support Costs	75,000
Contingency and Administration @ approximately 10%	35,000
TOTAL	415,000

West Hawk Property

A new and accurate base-map should be prepared for the West Hawk Lake Project in order to locate precisely the known prospects and geology. This can be accomplished with a differential GPS unit or by acquiring detailed satellite-based imagery. The historical underground information should then be digitized and incorporated into the overall database. An Induced Polarization (IP) survey should be completed over the existing grid (12 km) for the purpose of detecting areas of disseminated sulphides that appear to be related to the known gold bearing zones. An estimate of the cost of this Phase I program is CAD 400,000.

Phase 1 Budget - West Hawk Lake Property
Description	CAD
Geological Mapping & Sampling	64,000
Ground Geophysical Survey (IP)	18,000
Core Drilling	226,000
Support Costs	59,000
Contingency and Administration @	33,000
approximately 10%
TOTAL	400,000

Following the Phase 1 work programs, the Phase 2 for both of the properties should be contingent on positive results from the Phase 1 programs and should include an extensive drilling program.

Selected Consolidated Financial Information

The following table sets forth selected consolidated audited financial information of McFarlane for the period from August 31, 2020 to August 31, 2021. Such information has been derived from and should be read in conjunction with the McFarlane Financial Statements and the McFarlane MD&A, attached to this Filing Statement as Schedule "D".

	Period from August 31, 2020
	to
	August 31, 2021 ($)
Total assets	1,851,055
Total liabilities	413,010
Shareholder's equity	1,438,045
Total income (loss)	(1,230,433)
Net and comprehensive income (loss)	(1,230,433)
Basic and diluted income (loss) per share	(0.031)

Management's Discussion and Analysis

Included as Schedule "D" to this Filing Statement is McFarlane's MD&A for the period from August 31, 2020, to August 31, 2021. It includes financial information from, and should be read in conjunction with, the McFarlane Financial Statements for the period from August 31, 2020 to August 31, 2021 and the notes thereto, which are attached as Schedule "D" to this Filing Statement, as well as the disclosure contained throughout this Filing Statement.

Management's Responsibility for Financial Statements

The information provided in this Filing Statement, including the McFarlane Financial Statements, is the responsibility of management. In the preparation of these statements, estimates are sometimes necessary to make a determination of future values for certain assets or liabilities. Management believes such estimates have been based on careful judgments and have been properly reflected in the McFarlane Financial Statements. Management maintains a system of internal controls to provide reasonable assurance that McFarlane's assets are safeguarded and to facilitate the preparation of relevant and timely information.

Risks and Uncertainties

McFarlane is subject to a number of risks and uncertainties that could significantly affect its financial condition and performance. If and when McFarlane grows and enters into new markets, these risks can change. These risk factors are not a definitive list of all risk factors associated with an investment in McFarlane or in connection with McFarlane's operations. Such risk factors are more particularly described in this Filing Statement under the heading "Part VI - Risk Factors".

Description of Securities

Authorized Capital

McFarlane is currently authorized to issue an unlimited number of McFarlane Shares, of which 75,582,313 McFarlane Shares are issued and outstanding. There are also: (i) 4,173,406 McFarlane Warrants issued and outstanding; (ii) 5,500,000 McFarlane Options issued and outstanding; (iii) 834,575 Broker Warrants issued and outstanding; and (iv) 262,500 Advisory Warrants issued and outstanding. There are no other McFarlane securities, including securities exchangeable or exercisable for or convertible into McFarlane Shares, outstanding.

Holders of McFarlane Shares have the right to receive notice of any meeting of shareholders of McFarlane, to attend such meeting and to vote thereat, with the exception of meetings at which only holders of other classes of shares are entitled to vote. Holders of McFarlane Shares are entitled to receive, pari passu with one another, non-cumulative dividends if, as and when declared by the McFarlane Board. McFarlane Shares will be entitled to receive dividends or other distributions on the McFarlane Shares. Furthermore, holders of McFarlane Shares are entitled to receive, on a pari passu basis, (i) the remaining property of McFarlane upon its liquidation, dissolution or winding-up, and (ii) the remaining proceeds in the event of a change of control. As a private company, none of the securities of McFarlane are currently listed or quoted for trading on any stock exchange.

Consolidated Capitalization

The following table sets forth McFarlane's capitalization as at the dates indicated below, as more particularly described in the McFarlane Financial Statements, which are attached hereto at Schedule "D".

Designation of Security or Debt	Amount Outstanding asof August 31, 2021	Amount Outstanding asof the Filing Statement Date(prior to giving effect to theTransaction)
McFarlane Shares	59,075,000	75,582,313
McFarlane Options	5,500,000	5,500,000
McFarlane Warrants	Nil	4,173,406
Broker Warrants	Nil	834,575
Advisory Warrants	Nil	262,500

Prior Sales

The following table set outs the securities of McFarlane that have been issued since incorporation on August 21, 2020:

Date	Type of Security	Number of Securities	Issue Price perSecurity	Aggregate Issue Price
August 20, 2020	McFarlane Shares	32,000,000(1)	$0.00001	$320
April 30, 2021	McFarlane Shares	5,000,000(2)	$0.01	$5,000
May 20, 2021	McFarlane Shares	22,075,000(3)	$0.10	$2,207,500
December 9, 2021	McFarlane Units	8,346,813(4)	$0.40	$3,182,000
December 9, 2021	FT Shares	7,717,500(5)	$0.40	$3,087,000
December 9, 2021	Broker Warrants	834,575(6)	n/a	n/a
December 9, 2021	Advisory Warrants	262,500(7)	n/a	n/a
December 16, 2021	McFarlane Shares	443,000(8)	$0.275(9)	$121,825

Notes:

• (1) Issued in connection to the Founders Financing I.
• (2) Issued in connection to the Founders Financing II.
• (3) Issued in connection with the 2021 Non-Brokered Private Placement.
• (4) Issued in connection with the Brokered Financing. This number also includes 391,813 Units issued to the Agent in satisfaction of the Corporate Finance Fee payable to the Agent in connection with the Brokered Financing and Non-Brokered Financing.
• (5) Issued in connection with the Brokered Financing and Non-Brokered Financing.
• (6) Issued to the Agent for services rendered in connection with the Brokered Financing.
• (7) Issued to the Agent for advisory services rendered in connection with the Non-Brokered Financing.
• (8) Issued to WD Capital Markets Inc. in consideration for certain advisory services provided to McFarlane.
• (9) Equal to the price of the McFarlane Shares underlying the McFarlane Units.

There is currently no public market for the McFarlane Shares or McFarlane Warrants. See "Part VI - Risk Factors".

The following table shows, as of the date of this Filing Statement, prior to giving effect to the Transaction, each person who is known to McFarlane, or its directors and officers, to beneficially own, directly or indirectly, or to exercise control or direction over securities carrying more than 10% of the voting rights attached to any class of outstanding voting securities of McFarlane entitled to be voted at the McFarlane meeting of Shareholders.

Name of Shareholder & Municipality of	Number of Shares Owned (Percentage of Ownership)
Residence	McFarlane Shares	Percentage of Voting Rights
Mark Trevisiol(Sudbury, Ontario)	12,350,000	16.33%
Perry Dellelce(Toronto, Ontario)	11,550,000	15.28%

Notes:

(1) Perry Dellelce holds 1,250,000 McFarlane Shares directly and 10,300,000 McFarlane Shares beneficially through Perry N. Dellelce Professional Corporation.

(2) Mark Trevisiol holds 2,390,000 McFarlane Shares directly; 2,000,000 McFarlane Shares beneficially through 1930153 Ontario Ltd.; and 7,960,000 McFarlane Shares beneficially through 1039593 Ontario Inc.

Options

As of the date hereof, there are 5,500,000 McFarlane Options outstanding. The McFarlane Options were granted under the McFarlane Option Plan to certain, directors, officers, employees and consultants of McFarlane. Each McFarlane Option entitles the holder thereof to purchase one McFarlane Share at an exercise price of $0.10 per McFarlane Share at any time until May 31, 2026.

The McFarlane Financings

In connection with the Transaction, on December 9, 2021, McFarlane completed the Brokered Financing and Non-Brokered Financing, issuing 7,955,000 Units and 7,717,500 FT Shares at a price of $0.40 per Unit and $0.40 per FT Share for gross proceeds of $6,269,000. Canaccord Genuity Corp. acted as lead agent in connection with the Brokered Financing and provided advisory services to McFarlane in connection with the Non-Brokered Financing. As part consideration for its services in connection with the Brokered Financing and Non-Brokered Financing, the Agent received: (i) 834,575 Broker Warrants; (ii) 262,500 Advisory Warrants; (iii) 391,813 Units in satisfaction of the Corporate Finance Fee; (iv) $333,830 as payment of the commission; and (v) $105,000 as payment of the advisory fee.

Executive Compensation

Compensation Discussion and Analysis

At no time prior to the date of this Filing Statement was McFarlane a reporting issuer for the purposes of Canadian securities laws. Significant elements of the compensation to be awarded to, earned by, paid to or payable to named executive officers of the Resulting Issuer following the Closing, to the extent it has been determined, is set forth in "Part V - Information Concerning the Resulting Issuer".

Summary Compensation Table

During the most recently completed financial year of McFarlane, the following compensation was paid to NEOs or directors of McFarlane.

Name andposition	Year	Salary,consultingfee,retainer orcommission(CDN$)	Bonus(CDN$)	Committeeor meetingfees(CDN$)	Value ofperquisites(CDN$)	Value of allothercompensation(CDN$)	Totalcompensation(CDN$)
Mark Trevisiol,Chief ExecutiveOfficer, Presidentand Director	2021	20,000	Nil	Nil	Nil	193,443(1)	$213,433
Charles Lilly,Chief FinancialOfficer andDirector	2021	10,000	Nil	Nil	Nil	96,721(2)	$106,721
Roger Emdin,Vice-President,ProjectDevelopment andDirector	2021	112,519	Nil	Nil	Nil	96,721 (3)	$209,352
Perry Dellelce,Director	2021	Nil	Nil	Nil	Nil	96,721(4)	$96,721
Robert Kusins,Vice-PresidentGeology	2021	58,500	Nil	Nil	Nil	48,361(6)	$106,861

Notes:

(1) 2,000,000 McFarlane Options valued using the Black Sholes model.

(2) 1,000,000 McFarlane Options valued using the Black Sholes model.

(3) 1,000,000 McFarlane Options valued using the Black Sholes model.

(4) 1,000,000 McFarlane Options valued using the Black Sholes model.

(6) 500,000 McFarlane Options valued using the Black Sholes model.

Management Contracts

Management functions of McFarlane are, and since incorporation have been, performed by the directors of McFarlane, and are not to any substantial degree performed by any other person or corporation.

Each of McFarlane's NEOs are retained as independent contractors to provide the services for the consideration discussed in the above table. In the case of the consulting agreements with each other NEO, such agreement contains a termination clause that states, among other things, that said consulting agreement can be terminated by McFarlane in the event that the consultant is in material breach of any of the terms or conditions of the agreement.

Stock Option Plan

The McFarlane Board may from time to time, in its discretion, and in accordance with the Exchange requirements, grant to directors, officers and employees of McFarlane and its Affiliates and to consultants and management company employees ("McFarlane Optionees"), non-transferable McFarlane Options to purchase McFarlane Shares for a period of up to five years from the date of the grant, provided that the number of McFarlane Shares reserved for issuance may not exceed 15% of the total issued and outstanding McFarlane Shares at the date of the grant.

The purposes of the McFarlane Option Plan established by McFarlane, pursuant to which it may grant incentive stock options, is to promote the profitability and growth of McFarlane by facilitating the efforts of McFarlane to obtain and retain employees, officers, directors and consultants. The McFarlane Option Plan provides an incentive for, and encourages ownership of the McFarlane Shares, by these key individuals so that they may increase their stake in McFarlane and benefit from increases in the value of the McFarlane Shares.

Unless the McFarlane Board determines otherwise, McFarlane Options shall be exercisable in whole or in part at any time during this period in accordance with such vesting provisions, conditions or limitations (including applicable hold periods) as are contained in the McFarlane Option Plan or as the McFarlane Board may from time to time impose, or as may be required by the Exchange or under applicable securities law. Each McFarlane Option and all rights thereunder shall expire at the expiry time, but will be subject to earlier termination in accordance with the terms of the McFarlane Option Plan.

Subject to the terms of the applicable stock option agreement, in the event that a McFarlane Optionee ceases to be a director, officer, employee or consultant of McFarlane for any reason other than death, the McFarlane Option may be exercised at any time up to the earlier of (a) the Expiry Time and (b) a date that is 90 days following the effective date of the resignation, retirement or notice of termination of employment. In the event of death of a McFarlane Optionee on or prior to the Expiry Time, the McFarlane Options may be exercised within a maximum period of 180 days after suchdeath.

Interest of Management and Others in Material Transactions

Other than as set out in this Filing Statement or below, within three years prior to the date of this Filing Statement, no director, executive officer, or person or company that beneficially owns, or controls or directs, directly or indirectly, more than 10 percent of any class or series of outstanding voting securities of McFarlane, or any known associates or Affiliates of such persons, has or has had any material interest, direct or indirect, in any transaction that has materially affected or is reasonably expected to materially affect McFarlane.

In addition, other than as set out in this Filing Statement or below, within three years prior to the date of this Filing Statement, no director, no person expected to be a director, executive officer, or person or company that beneficially owns, or controls or directs, directly or indirectly, more than 10 percent of any class or series of outstanding voting securities of the Resulting Issuer, or any known associates or Affiliates of such persons, has any material interest, direct or indirect, in any transaction that is reasonably expected to materially affect the Resulting Issuer.

Investor Relations Arrangements

McFarlane has entered into written agreement with Hybrid Financial Ltd. ("Hybrid"), pursuant to which Hybrid has agreed to provide promotional or investor relations services to Resulting Issuer upon completion of the RTO.

Non-Arm's Length Party Transactions

To the knowledge of McFarlane, there have been no transactions before the date of this Filing Statement, or proposed, in which any director, officer, Promoter or principal stockholder of McFarlane or Associates or Affiliates thereof have or have had a material interest, other than as set out below:

• (i) The Michaud/Munro Option is optioned from 1929941 Ontario Limited, a private company partially controlled by Mark Trevisiol, Chief Executive Officer, President and Director of McFarlane.
• (ii) On April 22, 2021, McFarlane issued a promissory note in the amount of $60,000 bearing interest at 12% per annum to a holding company controlled by Mark Trevisiol, chief executive officer, president and director of McFarlane. The note remains outstanding as of the date hereof.
• (iii) On April 22, 2021 McFarlane issued a promissory note in the amount of $135,000 bearing interest at 12% per annum to a professional corporation controlled by Perry Dellelce, a director of McFarlane. The note remains outstanding as of the date hereof.
• (iv) On December 16, 2021, McFarlane paid an advisory fee of 443,000 McFarlane Shares to WD Capital Markets Inc., a company associated with Perry Dellelce, a director of McFarlane, in connection to WD Capital Markets Inc.'s role as financial advisor to McFarlane.

Legal Proceedings

To the knowledge of McFarlane, there are no legal proceedings to which McFarlane is a party to, or in respect of which any of its assets are the subject of, which is or will be material to McFarlane, and McFarlane is not aware of any such legal proceedings that are contemplated.

Auditor, Transfer Agent and Registrar

The auditor of McFarlane is McGovern Hurley LLP, located at 251 Consumers Road, Suite 800, North York, ON M2J 4R3.

The transfer agent of McFarlane is Odyssey Trust Company, located at 300 5th Avenue SW, Suite 1230, Calgary, Alberta T2P 3C4.

Conflicts Of Interest

There are potential conflicts of interest to which the directors and officers of McFarlane may be subject in connection with their duties as a director, officer, promoter or member of management of other public corporations. Some of the directors and officers have been and will continue to be engaged in the identification and evaluation of investment opportunities, with a view to potential acquisition of interests in businesses and corporations on their own behalf and on behalf of other corporations, and situations may arise where the directors and officers will be in direct competition with McFarlane. Conflicts, if any, will be subject to the procedures and remedies under the OBCA, as the case may be.

Material Contracts

Except for contracts entered into by McFarlane in the ordinary course of business, the only current material contracts entered into or currently anticipated to be entered into by McFarlane which can reasonably be regarded as presently material are:

• the Business Combination Agreement;
• the Agency Agreement;
• the CSM Option Agreement;
• the CSM Definitive Agreement;
• the North Consulting Agreement;
• the CSM ROFR Agreement; and
• the Warrant Indenture.

After completion of the Transaction, the material agreements listed above will be considered to be the material agreements of the Resulting Issuer.

Copies of all material agreements referred to in this Filing Statement may be inspected at the head office of McFarlane located at 15 Kincora Court, Sudbury, Ontario, P3E 2B9 during normal business hours until the closing of the Transaction and for a period of thirty (30) days thereafter.

The Business Combination Agreement, the Agency Agreement, the CSM Option Agreement, the CSM Definitive Agreement and the Warrant Indenture will also be available under the Resulting Issuer's profile on SEDAR at www.sedar.com

[Part V begins on following page]

PART V – INFORMATION CONCERNING THE RESULTING ISSUER

The following information is presented on a post-Transaction basis and is reflective of the projected business, financial and share capital position of the Resulting Issuer. This section only includes information respecting the Resulting Issuer that is materially different from information provided earlier in this Filing Statement. Following the completion of the Transaction, the Resulting Issuer will carry on the businesses currently carried on by McFarlane. See the various headings under "Information Concerning 401" and "Information Concerning McFarlane" for additional information regarding 401 and McFarlane, respectively. See also the Pro Forma Financial Statements of the Resulting Issuer attached hereto as Schedule "E"

Corporate Structure of the Resulting Issuer

Name and Incorporation

The Resulting Issuer will be the entity resulting from the Transaction and will be named "McFarlane Lake Mining Limited" and while originally governed by the provisions of the BCBCA, it will be governed by the provisions of the OBCA upon filing articles of continuance and obtaining a certificate of continuance from the Director. The Resulting Issuer's registered office and principal place of business will be located at 15 Kincora Court, Sudbury, Ontario, P3E 2B9.

Intercorporate Relationships

Pursuant to the Transaction, McFarlane will amalgamate with 401 Subco and continue as McFarlane Lake Mining Incorporated, which will be a wholly-owned subsidiary of the Resulting Issuer. Prior to completion of the Transaction, 401 will change its name to "McFarlane Lake Mining Limited". Following the Transaction, the Resulting Issuer will be the sole shareholder of Amalco. Amalco will continue the business of McFarlane. It is expected that the Resulting Issuer will continue under the laws of the Province of Ontario following completion of the Transaction, subject to receipt of all regulatory approvals. The corporate structure chart for the Resulting Issuer as of the Effective Time is expected to be as follows:

Narrative Description of the Business

The following disclosure contains forward-looking statements, including with respect to the Resulting Issuer's business objectives and milestones. Such statements involve known and unknown risks, uncertainties and other factors outside of management's control, including the risk factors set forth elsewhere in this Filing Statement that could cause results to differ materially from those described or anticipated in such forward-looking statements.

Upon completion of the Transaction, the Resulting Issuer will carry on the businesses of McFarlane. See "Part IV – Information Concerning McFarlane – Narrative Description of the Business", Part V – Information Concerning the Resulting Issuer – Available Funds" and Part V – Information Concerning the Resulting Issuer – Principal Purposes". Furthermore, upon completion of the Transaction, the Resulting Issuer Board will adopt such board committee charters, codes and policies as it deems necessary in accordance with good corporate governance practices given the stage of the Resulting Issuer.

Stated Business Objectives and Milestones

The Resulting Issuer's near-term objectives will be to finalize the purchase of its remaining optioned properties and execute an exploration program focusing on the West Hawk Lake Property in Manitoba followed by the High Lake Property in Ontario. Permitting in Manitoba is in process and should be approved in Q1-Q2 allowing line-cutting, geophysics and a diamond drilling program to start before the end of the year. First Nations Consultation is required as part of the permitting process in Ontario. McFarlane has engaged with consultants to assist in this process and will begin engagement with the First Nations groups when the property purchase is complete. The expectation in Ontario is that the process will take approximately six months to complete allowing McFarlane to start its High Lake exploration program in mid-2022.

Description of the Resulting Issuer Securities

Resulting Issuer Shares

The Resulting Issuer will be authorized to issue an unlimited number of common shares with no par value. The holders of Resulting Issuer Shares will be entitled to receive notice of and attend all meetings of the shareholders of Resulting Issuer and will be entitled to one vote in respect of each Resulting Issuer Share held at such meetings.

Resulting Issuer Warrants

The Resulting Issuer Warrants will be exercisable into one Resulting Issuer Shares at a price of $0.60 for a period of three (3) years from December 9, 2021.

Resulting Issuer Replacement Broker Warrants

The Resulting Issuer Replacement Broker Warrants will be exercisable into one Resulting Issuer Unit at a price of $0.40 for a period 36 months from December 9, 2021. Each Resulting Issuer Unit will consist of one Resulting Issuer Share and one-half of one Resulting Issuer Warrant. Each whole Resulting Issuer Warrant will be exercisable into one Resulting Issuer Sale at a price of $0.60 for a period of three (3) years from December 9, 2021.

Resulting Issuer Replacement Advisory Warrants

The Resulting Issuer Replacement Advisory Warrants will be exercisable into one Resulting Issuer Unit at a price of $0.40 for a period 36 months from December 9, 2021. Each Resulting Issuer Unit will consist of one Resulting Issuer Share and one-half of one Resulting Issuer Warrant. Each whole Resulting Issuer Warrant will be exercisable into one Resulting Issuer Share at a price of $0.60 for a period of three (3) years from December 9, 2021.

Resulting Issuer Replacement Options

The Resulting Issuer Replacement Options will be exercisable to acquire one Resulting Issuer Share at an exercise price of $0.10 per Resulting Issuer Replacement Option for a period of five (5) years, expiring on May 31, 2026.

See "Part V – Information Concerning the Resulting Issuer – Fully Diluted Share Capital" of this Filing Statement for the total issued and outstanding share capital of the Resulting Issuer and securities convertible into Resulting Issuer Shares.

Dividends

There will be no restrictions on the Resulting Issuer's ability to pay dividends on the Resulting Issuer Shares other than the Resulting Issuer's financial position. It is expected that Resulting Issuer will retain future profits to finance further growth and that any dividends will be paid in the immediate or foreseeable future following completion of the Transaction. However, the Resulting Issuer may consider paying dividends on the Resulting Issuer Shares in the future when circumstances permit, having regard to, among other things, its earnings, cash flow and financial requirements, as well as relevant legal and business considerations. All of the Resulting Issuer Shares are entitled to an equal share in any dividends declared and paid.

Pro Forma Consolidated Capitalization

The following table sets forth the pro forma capitalization of the Resulting Issuer based on the pro forma unaudited statement of financial position of the Resulting Issuer set forth in Schedule "E" to this Filing Statement and should be read in conjunction with such pro forma unaudited statement of financial position and the notes thereto:

	Amount Authorized or to beAuthorized	Amount Outstanding as at August 31,2021 After Giving Effect to the BusinessCombination and Concurrent Financings
Designation of Security
Resulting Issuer Shares	Unlimited	79,397,813
Resulting Issuer Replacement Options	N/A	5,500,000
Resulting Issuer Warrants	N/A	4,206,156
Resulting Issuer Replacement BrokerWarrants	N/A	834,575
Resulting Issuer ReplacementAdvisory Warrants	N/A	262,500

Fully Diluted Share Capital

In addition to the information set out in the capitalization table above, the following table sets out the fully diluted share capital of the Resulting Issuer immediately following completion of all of the transactions contemplated herein.

	Number of Resulting IssuerShares	Percentage of Total DilutedResulting Issuer Shares AfterGiving Effect to the BusinessCombination
ResultingIssuerSharesissuableto401Shareholders in connection with the BusinessCombination	3,750,000	4.13%
Resulting Issuer Shares issuable to 401 SubcoShareholders	65,500	0.07%
Resulting Issuer Shares issuable to McFarlaneShareholders in connection with the BusinessCombination	75,582,313	83.29%
TOTAL Undiluted	79,397,813	87.49%
Resulting Issuer Shares issuable to the holders ofResulting Issuer Replacement Broker Warrants(1)	1,251,862	1.38%
Resulting Issuer Shares issuable to the holders ofResultingIssuerReplacementAdvisoryWarrants(2)	393,750	0.43%
Resulting Issuer Shares issuable to holders ofMcFarlane Warrants as part of the BrokeredFinancing(3)	4,173,406	4.60%

	Number of Resulting IssuerShares	Percentage of Total DilutedResulting Issuer Shares AfterGiving Effect to the BusinessCombination
Resulting Issuer Shares issuable to holders of401 Subco Warrants	32,750	0.04%
Resulting Issuer Replacement Options held bycertain members of management	5,500,000	6.06%
TOTAL Number of Fully Diluted ResultingIssuer Shares	90,749,581	100%

Notes:

(1) Assumes the exercise of 417,287 warrants underlying the Resulting Issuer Unit, which underlies the Resulting Issuer Replacement Broker Warrants.

(2) Assumes the exercise of 131,250 warrants underlying the Resulting Issuer Unit, which underlies the Resulting Issuer Replacement Advisory Warrants. (3) Includes 3,977,500 McFarlane Warrants issued pursuant to the Brokered Financing, as well as 195,906 McFarlane Warrants underlying the McFarlane Units issued to the Agent in satisfaction of the Corporate Finance Fee.

Selected Pro Forma Financial Information

The unaudited pro forma statement of financial position of the Resulting Issuer is attached as Schedule "E" to this Filing Statement. The unaudited pro forma consolidated statement of financial position of the Resulting Issuer as at August 31, 2021 has been prepared from the financial statements of 401 (see Schedule "C") and the audited financial statements of McFarlane (see Schedule "D"). The unaudited pro forma consolidated statement of financial position of the Resulting Issuer gives effect to the proposed Business Combination and to the Concurrent Financings, as described below and in the notes to the unaudited pro forma statement of financial position of the Resulting Issuer. The unaudited pro forma consolidated statement of financial position and the notes thereto should be read in conjunction with the financial statements of 401 and McFarlane, including the notes thereto, included at Schedules "C" and "D", respectively.

Pro Forma Consolidated Statement of Financial Position

	As at August 31, 2021 after giving effect to the Business Combination and theConcurrent Financings(unaudited)($)
Total Assets	7,508,241
Total Liabilities	1,402,942

Estimated Available Funds

The following table sets forth the funds anticipated to be available to the Resulting Issuer on a consolidated basis after giving effect to the Transaction:

Available Funds	Amount ($)
Working capital of McFarlane as at August 31, 2021	1,438,045
Working capital of 401 as at August 31, 2021	(24,428)
Net proceeds from the Brokered Financing and Non-Brokered Financing(1)	5,708,780
Net proceeds from the 401 Subco Financing	26,200

Total Estimated Funds Available	7,148,597
Notes:

(1) After deduction of the Agents' commission, advisory fees and expenses.

(2) Does not include expenses incurred in connection with the Transaction.

Principal Purposes

The following table summarizes the expenditures anticipated by the Resulting Issuer required to achieve its business objectives until December 31, 2022:

Anticipated Use of Funds	Amount of Funds ($)
Option agreements
Canadian Star	2,950,000(1)
Transition Minerals	100,000
1929941 Ontario	45,000
Technical Work
Consulting	460,000
Permitting	90,000
Exploration program	2,209,000
Corporate Development
Professional Fees	467,303
Preliminary RTO costs/other exchange costs	127,600
Management	516,250
Office and admin including digital marketing and investor relations	337,189
Total Estimated Funds Required	7,302,342
Working Capital	(153,745)
Total Estimated Funds Available	7,148,597
Notes:

(1) $750,000 of which has been paid upon transfer of the McMillan Property to McFarlane.

The Resulting Issuer intends to spend the funds available to it as stated in the table above. However, there may be circumstances where, for sound business reasons, a reallocation of funds may be necessary for the Resulting Issuer to achieve its objectives or to pursue other opportunities that management believes are in the interests of the Resulting Issuer.

Principal Securityholders

As at the date of this filing statement, the Resulting Issuer will have a total of 79,397,813 Resulting Issuer Shares issued and outstanding (on a non-diluted basis) following the completion of the Transaction. To the knowledge of McFarlane and 401, upon completion of the Transaction, no Person will beneficially own, directly or indirectly, or exercise control or direction over, Resulting Issuer Shares carrying more than 10% of the voting rights attached to the Resulting Issuer Shares, other than as set out below:

Name andMunicipality of	Designation of Class	Prior to Giving Effect to theTransaction		After Giving Effect to theTransaction
Residence ofSecurityholder	of Security	No. of SecuritiesSubject to Lock Up	ercentageofClass	No. of Securities Subjectto Lock Up	centageofClass
Perry N. Dellelce(Toronto, Ontario)	Resulting Issuer Shares	Nil	N/A	11,550,000(1)	14.55%
Mark Trevisiol(Sudbury, Ontario)	Resulting Issuer Shares	Nil	N/A	12,350,000(2)	15.55%

Notes:

(1) Perry Dellelce holds 1,250,000 Resulting Issuer Shares directly and 11,550,000 Resulting Issuer Shares beneficially through Perry N. Dellelce Professional Corporation.

(2) Mark Trevisiol holds 2,390,000 Resulting Issuer Shares directly; 2,000,000 Resulting Issuer Shares beneficially through 1930153 Ontario Ltd.; and 7,960,000 Resulting Issuer Shares beneficially through 1039593 Ontario Inc.

Directors, Officers and Promoters

Summary Information on Proposed Directors and Officers

The following are the names, age and municipalities of residence of those individuals who will serve as directors and officers of the Resulting Issuer, their positions and offices with the Resulting Issuer, their principal occupations during the last five years, the number of Resulting Issuer Shares, Resulting Issuer Warrants and Resulting Issuer Options that each will hold upon completion of the Transaction and the percentage of the class that such holdings represent. The information concerning the initial directors of the Resulting Issuer is as furnished by such directors.

Name andResidence	Proposed Position(s)with Resulting Issuer	Principal OccupationsDuring the Past FiveYears	Number and Percentageof Resulting Issuer SharesBeneficially Owned orControlled	Number andPercentage ofResulting IssuerOptions	Number andPercentage ofResulting IssuerWarrants
Mark TrevisiolSudbury,Ontario, Canada	Chief Executive Officer,President and Director	Vice President of Project atFirst Cobalt CorpSite Manager at NorthernSun Mining Corp.	12,350,00015.55%	2,000,00036.36%	Nil
Charles LillySudbury,Ontario, Canada	Chief Financial Officer,Corporate Secretary andDirector	PartnerandowneratSRWC LLP	12,5000.02%	1,000,00018.18%	6,2500.14%
Perry DellelceToronto,Ontario, Canada	Director	ManagingPartneratWildeboer Dellelce LLP	11,550,00014.55%	1,000,00018.18%	Nil
Robert KusinsSudbury,Ontario, Canada	Vice-PresidentofGeology	Geology Manager at HarteGold Corp.	Nil	500,0009.09%	Nil
Roger EmdinSudbury,Ontario, Canada	Chief Operating Officerand Director	Vice President, ProjectsandVicePresident,Operations at Harte GoldCorp.	3,050,0003.84%	1,000,00018.18%	Nil

AmandaFullertonToronto,Ontario, Canada	Director	Vice President, Legal &CorporateSecretaryatGCM Mining Corp. andCorporateSecretaryatDenarius Silver Corp.	Nil	Nil	Nil
Guy MahaffySudbury,Ontario, Canada	Director	Mr.Mahaffyisthemanaging director of W.G.Mahaffy Ltd., a financialadvisory firm.	Nil	Nil	Nil
Fergus KerrSudbury,Ontario, Canada	Director	Currently self employed asa consultant. From 2011 to2018 served as the VicePresident of Operations ofGlobal Atomic Fuels.	Nil	Nil	Nil

The executive officers and directors of the Resulting Issuer are expected to own, directly or indirectly, or exercise control or direction over: (i) 26,962,500 Resulting Issuer Shares, representing approximately 33.96% of the Resulting Issuer Shares expected to be issued and outstanding following the Transaction; (ii) 5,500,000 Resulting Issuer Options, representing approximately 100% of the Resulting Issuer Options expected to be outstanding following the Transaction; and (iii) 6,250 Resulting Issuer Warrants, representing approximately 0.14% of the Resulting Issuer Warrants expected to be outstanding following the Transaction

Biographical Information

Biographical information regarding each such director and executive officer is presented below.

Mark Trevisiol, Proposed Chief Executive Officer, President and Director – 60

Mr. Trevisiol is a professional engineer with 30 years of experience in mineral processing, mining, capital projects and executive management. Mr. Trevisiol spent over 20 years with Glencore predecessor companies Falconbridge Ltd. and Xstrata Nickel, where he was General Manager of Business Development and Strategy, General Manager of the Sudbury Smelter Business Unit, Manager of Smelter Operations and Superintendent of the Kidd Creek Zinc Plant. More recently, Mark held a number of executive leadership and board positions, including CEO positions at Crow flight Minerals and Silver Bear Resources. During his career, Mr. Trevisiol has had responsibility in mining and mineral processing for teams of up to 300 people, with responsibility for operations, safety & environment, custom feed, engineering, maintenance and technology. He has a demonstrated track record of increasing plant efficiency and margins, notably in treating third party feeds. With Falconbridge Ltd., Mr. Trevisiol championed a new recycling facility primarily designed to handle spent cobalt-based lithium batteries. He has worked across several commodities, including nickel, cobalt, zinc, copper, lithium, gold, and silver. Mr. Trevisiol holds an Engineering degree from the University of Waterloo.

Charles Lilly, Proposed Chief Financial Officer and Director – 63

Mr. Lilly is a partner in the public accounting firm of Sostarich, Ross, Wright & Cecutti, LLP. He has a B. Comm from Laurentian University, where he graduated Summa Cum Laude, and an M.B.A. from the University of Toronto. Mr. Lilly has served as an officer or a director of a number of public corporations listed on the Toronto Stock Exchange and the Toronto Venture Stock Exchange.

Perry Dellelce, Proposed Director – 58

Mr. Dellelce is a founder and the managing partner of Wildeboer Dellelce LLP, one of Canada's leading corporate finance and transactional law firms. Mr. Dellelce practices in the areas of securities, corporate finance and mergers and acquisitions. Mr. Dellelce serves on the boards of many of Canada's leading businesses, including but not limited to, Mount Logan Capital Inc. and Lendified Inc. Mr. Dellelce is the past chair and a current member of the board of directors of the Sunnybrook Foundation

and the current chair of the NEO Exchange Inc. and Canadian Olympic Foundation. Mr. Dellelce holds a BA from Western University, a LLB from the University of Ottawa and an MBA degree from the University of Notre Dame.

Robert Kusins, Proposed Vice-President, Geology – 66

Mr. Kusins B.Sc., P Geo has over 35 years of mining, exploration and consulting experience. Mr. Kusins has spent his career involved with exploring, developing, validating and mining of a number of deposits including the Golden Giant Mine (Newmont Canada), Holloway Mine (Newmont Canada), Tundra Project (Noranda), Timmins West Mine Complex (Lake Shore Gold – Pan American Silver) and most recently the Sugar Zone Mine (Harte Gold). Mr. Kusins has worked in the capacity of Chief Geologist, Chief Resource Geologist and Geology Manager at producing mines where he has co-authored several NI 43-101 Technical Reports. Previous to working for Harte, Mr. Kusins was employed by SRK as a Principal Consultant (Geology) in the Sudbury office. Proficient in GEOVIA GEMS with expertise in three-dimensional geological modeling, developing and managing exploration programs, data management and mineral resource estimation.

Roger Emdin, Proposed Chief Operating Officer and Director – 63

Mr. Emdin is a Professional Mining Engineer with more than 30 years of global experience in Operations, Projects, Engineering and Sustainable Development in both base metal and gold mining environments. Mr. Emdin started out in gold with the Dome and Canamax Resources in Ontario before turning to base metals in Zambia, returning to Canada but working globally as a consultant. Joined Glencore (Falconbridge) filling various roles including, Engineering Superintendent, Mine Manager (Craig & Nickel Rim South) and of Manager Sustainable Development for Sudbury Operations before coming back to gold in 2015 as the Vice President of Operations for Harte Gold. Mr. Emdin served as the Industry Co-Chair for the Mining Legislative Review Committee for 7 years, was active in the Ontario Mining Association and served as the Chair of the Board of Directors for the Centre for Excellence in Mining Innovation (CEMI). Mr. Emdin also participated with the Ontario government as a member of the Advisory Group to the Mining Health and Safety Prevention Review and was a member of the Board for Cambrian College for six years including roles of Chair of the Audit Committee and Chair of the Board.

Amanda Fullerton, Proposed Director – 41

Ms. Fullerton has been the Vice-President, Legal & Corporate Secretary of GCM Mining Corp. since March 25, 2019. She has also been the Corporate Secretary at Denarius Silver Corp. since February 2021. She was a Vice President, Legal (and prior thereto, Associate, Legal) of Macquarie Capital Markets Canada Ltd. from March 24, 2014, to March 22, 2019. Prior thereto, Ms. Fullerton was an associate with Fasken Martineau DuMoulin LLP from September 2008 to March 2011 and MacLeod Dixon LLP (now Norton Rose Fulbright LLP) from March 2011 to March 2014 and practiced in the areas of corporate finance, mergers and acquisitions and corporate/commercial law, focused primarily on the mining industry.

Guy Mahaffy, Proposed Director – 50

Mr. Mahaffy is the managing director of W.G. Mahaffy Limited, a financial advisory firm. He holds the professional designations of Chartered Accountant, Chartered Professional Accountant and Chartered Financial Analyst. He has over 25 years of experience, with the past 15 years focused on the junior resource sector. He has served as an officer and director of mineral resources exploration companies on both the Toronto Stock Exchange and the TSX Venture Exchange, including previously having served as a director and as the chief financial officer of Manitou Gold Inc. from June 2009 to June 2012. Mr. Mahaffy was reappointed to the board of directors of Manitou Gold in 2015 and currently serves as the Chair of that company's board of directors. He is also currently the Chief Financial Officer of SPC Nickel Corp.

Fergus Kerr, Proposed Director – 79

Mr. Kerr is a Professional Mining Engineer and is currently self employed as a consultant. Mr. Fergus Kerr is a graduate of the Royal School of Mines and a mining engineer with over 35 years of experience, including 14 years at Denison Mine's Elliot Lake uranium mine, where he served as General Manager for five years. Subsequent to Denison, Mr. Kerr served as Sector Director at Workplace Safety & Insurance Board, and Mine Manager, Sudbury Operations at Inco LLC Area Manager at Inco's Sudbury operations. Mr. Kerr is sought after health and safety specialist consulting globally with recent assignments in Mongolia, Indonesia and Australia.

Other Reporting Issuer Experience

The following table describes each director's and officer's personal experience as a director or officer of another reporting issuer (or the equivalent in another jurisdiction) in the last five-year period:

Name	NameandJurisdictionof	NameofTrading Market	Position	From	To
Mark Trevisiol	Reporting IssuerFirst Cobalt Corp.	TSXVentureExchange	VicePresident,ProjectDevelopment	August 2020	Present
Charles Lilly	BradmerPharmaceuticals Inc.	TSXVentureExchange	DirectorandTreasurer	September 2008	September 2018
Roger Emdin	Harte Gold Corp.	TSX Exchange	VicePresident,Operations	January 2017	October 2019
Harte Gold Corp.		TSX Exchange	VicePresident,Projects	October 2016	January 2017
Perry Dellelce	Mind Medicine Inc.	NASDAQ, NEOexchangeandFrankfurtStockExchange	Chair of the Boardand Director	February 2020	Present
LendifiedHoldingsInc.		TSXVVentureExchange	Director	April 2020	Present
	Mount Logan Capital		Director	October 2020	Present
AmandaFullerton	McDonaldMinesExploration Ltd.	NEO ExchangeTSXVVentureExchange	Director	June 2021	Present
Denarius Silver Corp.Aris Gold Corp.		TSXVVentureExchange	CorporateSecretary	February 2021	Present
		TSXVVentureExchange	Vice-President,LegalandCorporateSecretary	February 2020	February 2021
Guy Mahaffy	Manitou Gold	TSXVVentureExchange	Director	June 2015	Present
	SPC Nickel Corp.	TSXVVentureExchange	ChiefFinancialOfficer	November 2020	Present

Audit Committee

Assuming completion of the Transaction, it is proposed that the Resulting Issuer will have an Audit Committee comprising Guy Mahaffy, Amanda Fullerton and Fergus Kerr, all of whom will be considered "independent" as that term is defined in Multilateral Instrument 52-110 – Audit Committees. Also, all of the Audit Committee members are expected to be "financially literate" as defined in Multilateral Instrument 52-110 – Audit Committees. The Resulting Issuer will adopt a Charter of the Audit Committee in substantially the form set out at Schedule "F".

The mandate of the Audit Committee will be to assist the Resulting Issuer Board in fulfilling its oversight responsibilities relating to financial accounting, reporting and internal controls for the Resulting Issuer. The Audit Committee will be responsible for: conducting reviews and discussions with management and the external auditors relating to the audit and financial reporting; assessing the integrity of internal controls and financial reporting procedures; ensuring implementation of internal controls and procedures; reviewing the quarterly and annual financial statements and management's discussion and analysis of the Resulting Issuer; selecting and monitoring the independence, performance and remuneration of the external auditors; oversight of all disclosure relating to financial information.

The Audit Committee will also be responsible for reviewing and following the procedures established in the Resulting Issuer's codes, policies and guidelines as may be established from time to time.

For additional details regarding the relevant experience of each member of the Resulting Issuer's Audit Committee, see the relevant biographical experiences for each of the Resulting Issuer's directors and officers under the heading "PART VI – Directors, Officers and Promoters – Name, Occupation and Security Holding of Directors and Officers".

CCGN Committee

Upon completion of the Transaction, the CCGN Committee is expected to be comprised of Fergus Kerr, Amanda Fullerton and Roger Emdin. The CCGN Committee will be responsible for (i) assisting the board of directors in determining the compensation for the Resulting Issuer's executive officers and recommending these plans to the Resulting Issuer Board; and (ii) assisting the Resulting Issuer Board in matters pertaining to governance in accordance with good corporate practice and applicable regulatory requirements.

This CCGN Committee's responsibilities will include: reviewing and approving the compensation of the Chief Executive Officer and other officers of the Resulting Issuer appointed by the Resulting Issuer Board; reviewing and approving the compensation policies, plans and programs for the Resulting Issuer's executive officers and other senior management, as well as its overall compensation plans and structure; reviewing and discussing with management and recommending to the Resulting Issuer Board the disclosure to be included under the caption "Executive Compensation" for use in any annual reports, prospectuses, proxy circulars or information circulars; recommending to the board of directors the compensation for directors; administering the Resulting Issuer Stock Option Plan and share compensation arrangements; reviewing and approving any public disclosures regarding governance matters as may be required by securities regulatory authorities; reviewing transactions between the Resulting Issuer and its directors, officers, shareholders and other related parties for recommendation to the Resulting Issuer Board; evaluating the performance and effectiveness of the Resulting Issuer Board as a whole, the various committees of the board of directors of the Resulting Issuer and individual directors on a regular and ongoing basis; considering nominations for directors and approving director nominations for recommendation to the Resulting Issuer Board; reviewing and recommending changes in the role, composition and structure of the Resulting Issuer Board of the Resulting Issuer and its various committees; and establishing an orientation and education program for new directors and providing continuing education for existing directors.

The CCGN Committee will seek to ensure an objective process for determining compensation through compliance with the board's conflicts of interest guidelines. The CCGN Committee will review the various compensation elements both individually and in total to seek alignment with the Resulting Issuer's compensation program objectives. The CCGN will then make recommendations on all executive pay, short-term incentives and long-term incentive options to the Resulting Issuer Board for approval.

Non-Compliance or Non-Disclosure Agreements

None of the proposed directors or officers of Resulting Issuer have entered into any non-compliance or non-disclosure agreements with the Resulting Issuer, nor do any of the proposed directors or officers of Resulting Issuer propose to do so with Resulting Issuer.

Corporate Cease Trade Orders or Bankruptcies

No director, proposed director or executive officer of Resulting Issuer is at the date hereof, or within the ten years prior to the date hereof has been, a director, chief executive officer or chief financial officer of any company (including McFarlane) that, while that person was acting in that capacity:

• (i) was the subject of a cease trade or similar order or an order that denied the relevant company access to any exemption under securities legislation, that was in effect for a period of more than 30 consecutive days; or
• (ii) was subject to a cease trade order or similar order or an order that denied the relevant company access to any exemption under securities legislation, that was in effect 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 best of 401's and McFarlane's knowledge, no proposed director of Resulting Issuer is at the date hereof, or within the ten years prior to the date hereof has been, a director or executive officer of any company (including McFarlane) 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 its assets.

Individual Bankruptcies

No proposed director, officer, promoter or principal shareholder of Resulting Issuer is or has, within ten years prior to the date hereof, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold the assets of that individual.

Penalties or Sanctions

No proposed director or officer of Resulting Issuer 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 been subject to any other penalties or sanctions imposed by a court or regulatory body or self-regulatory authority that would be likely to be considered important to a reasonable investor making a decision about the Share Exchange.

Conflicts of Interest

Certain directors and officers of Resulting Issuer currently, or may in the future, act as directors or officers of other companies and, consequently, it is possible that a conflict may arise between their duties as a director or officer of Resulting Issuer and their duties as a director or officer of any other such company. There is no guarantee that while performing their duties for Resulting Issuer, the directors or officers of Resulting Issuer will not be in situations that could give rise to conflicts of interest. There is no guarantee that these conflicts will be resolved in favour of Resulting Issuer. The proposed directors and officers of Resulting Issuer are aware of the existence of laws governing accountability of directors and officers for corporate opportunity and requiring disclosure by directors and officers of conflicts of interest and the fact that Resulting Issuer will rely upon such laws in respect of any director's or officer's conflicts of interest or in respect of any breaches of duty by any of its directors or officers. All such conflicts must be disclosed by such directors or officers in accordance with the OBCA, and they will govern themselves in respect thereof to the best of their ability in accordance with the obligations imposed upon them by law.

Proposed Executive Compensation

The following information is presented in accordance with Form 51-102F6 - Statement of Executive Compensation and provides details of all compensation for each proposed director and NEO of the Resulting Issuer for the first 12 months following the Effective Date.

Compensation Discussion and Analysis

The Resulting Issuer expects to provide a market-based blend of base salaries, bonuses and equity incentive components in the form of Resulting Issuer Options to further align the interests of management with the interests of the Resulting Issuer's shareholders.

The Resulting Issuer expects to pay compensation to officers, directors, employees and consultants of the Resulting Issuer for their services; however, the board of directors of McFarlane has not yet determined the salaries and other compensation payable to its executives, leaving that decision to be made by the Resulting Issuer's CCGN Committee. Therefore, there is currently no proposed compensation to be reported with regard to the NEOs of the Resulting Issuer during the first 12 months following the Effective Date, other than the VP Geology.

It is expected that the Resulting Issuer's policies on compensation for its NEOs will be intended to provide appropriate compensation for executives that is internally equitable, externally competitive and reflects individual achievements in the context of the Resulting Issuer. The overriding principles in establishing executive compensation provide that compensation should:

• (a) reflect fair and competitive compensation commensurate with an individual's experience and expertise in order to attract and retain highly qualified executives;
• (b) reflect recognition and encouragement of leadership, entrepreneurial spirit and teamwork;
• (c) reflect an alignment of the financial interests of the executives with the financial interest of the shareholders;
• (d) include options and, in certain circumstances, bonuses to reward individual performance and contribution to the achievement of corporate performance and objectives;
• (e) reflect a contribution to enhancement of shareholder value; and
• (f) provide incentive to the executives to continuously improve operations and execute on corporate strategy. It is anticipated that the Resulting Issuer's executive compensation program will encompass three elements as follows:
  • (i) base salary;
    • (ii) short-term compensation incentives for management through cash bonuses; and
    • (iii) long-term compensation incentives (primarily options) related to long-term increases in share value.

Research and Benchmarking

McFarlane has not engaged in, and the Resulting Issuer may not immediately engage in, formal benchmarking with an independent advisory firm for the purpose of establishing the executive compensation program relative to any predetermined level or specified peer group of companies when considering the design of its program. It is anticipated that initially the CCGN Committee will make reference to internally prepared comparative analysis to peer companies provided by management to evaluate the appropriateness and competitiveness of its executive compensation program.

Mitigation of Compensation-Related Risk

As part of its annual review of the Resulting Issuer's compensation policies and practices, including the setting of annual corporate performance objectives, the CCGN Committee is expected to consider risks associated with such policies and practices. The Resulting Issuer Board and the CCGN Committee are expected to consider and assess, as necessary, risks relating to compensation prior to entering into or amending employment contracts with NEOs and when setting the compensation of directors. The Resulting Issuer Board and the CCGN Committee intend to establish compensation policies and practices are appropriate for its industry and stage of business and that such policies and practices do not have associated with them any risks that are reasonably likely to have a material adverse effect on the Resulting Issuer or which would encourage a NEO to take any inappropriate or excessive risks. The CCGN Committee is anticipated to continually review the Resulting Issuer's compensation policies, including its compensation-related risk profile, as necessary, to ensure its compensation policies and practices are not reasonably likely to have a material adverse effect on the Resulting Issuer or encourage a NEO to take any inappropriate or excessive risks.

Elements of the Resulting Issuer's Executive Compensation Program

Base Salary

Base salary represents a key component of an executive officer's compensation package as it is the first step in ensuring a competitive structure based on a number of factors, including peer group comparison.

It is anticipated that the base salary for each of the executive officers of the Resulting Issuer will be reviewed and established annually, typically during the first quarter of the fiscal year with changes to be implemented as of April 1st. Base salaries are expected to be determined according to the particular executive officer's personal performance and seniority, contribution to the business of the Resulting Issuer and the size and stage of development of the Resulting Issuer. Base salaries will also be reviewed from time to time to ensure comparability with industry norms. The Resulting Issuer anticipates hiring qualified management from around the world and therefore will likely look to compensation paid by Canadian competitors.

Short-Term Compensation Incentives

It is anticipated that the Resulting Issuer's compensation program will include a cash bonus program for executives and certain managers within the organization. Any cash bonus program will be designed to provide motivation to all participants to achieve near-term objectives aligned with the corporate strategy and to reward them when such objectives are met or exceeded. Annual awards at target levels under the cash bonus program may range from one to four months' salary depending on each individual's

position and responsibilities and the CCGN Committee will have the ability to apply its discretion to either increase or decrease an award where circumstances warrant. Long-Term Compensation Incentives

Long-term incentive compensation for executive officers is initially expected to be provided through grants of stock options pursuant to the Resulting Issuer Option Plan, a copy of which is attached as Schedule "A" and a summary of which appears below under "The Resulting Issuer Option Plan".

Option grants are anticipated to be made to executive officers periodically as the CCGN Committee determines appropriate. The number of Resulting Issuer Options to be granted is expected to be based on each individual's position, responsibility and performance and take into account the number and terms of Resulting Issuer Options that have been previously granted to that individual. McFarlane believes and anticipates that the Resulting Issuer's Board will believe that the grant of Resulting Issuer Options to the executive officers and share ownership by such executive officers will serve to motivate the achievement of the Resulting Issuer's long-term strategic objectives and will help align the financial interests of the executive officers with the financial interest of the shareholders.

The purpose of the Resulting Issuer Option Plan is to advance the interests of the Resulting Issuer, through the grant of Resulting Issuer Options, by: (i) providing an incentive mechanism to foster the interests of eligible participants under the plan (which includes directors, officers, employees and service providers of the Resulting Issuer and its subsidiaries) in the success of the Resulting Issuer, its affiliates and its subsidiaries, if any; (ii) encouraging such eligible participants to remain with the Resulting Issuer, its affiliates or its subsidiaries, if any; and (iii) attracting new directors, officers, employees and service providers. The Resulting Issuer Option Plan provides that the maximum number of Resulting Issuer Shares that may be reserved for issuance upon the exercise of all Resulting Issuer Options granted under the Resulting Issuer Option Plan shall not exceed, on a rolling basis, 10% of the aggregate number of Resulting issuer Shares issued and outstanding from time to time.

Named Executive Officers

The Resulting Issuer's "NEOs" include its Chief Executive Officer, Chief Financial Officer (or an individual that served in a similar capacity), Chief Operating Officer and its VP of Geology. There are no other executive officers whose total compensation exceeded $150,000.

Summary Compensation Table

The following table sets forth the proposed compensation to be earned by the Named Executive Officers and directors of the Resulting Issuer during the first 12 months following the Effective Date.

Name and		Salary/	Share	Option		Non-equity incentiveplan compensation($)	Pension	All other
PrincipalPosition	Year	ConsultingFees($)	basedawards($)	basedawards($)	Annualincentiveplans	Longtermincentiveplans	value($)	compensation($)	Total($)
MarkTrevisiolCEOandDirector	2022	96,000	-	200,000	-	-	-	-	296,000
CharlesLillyCFO,CorporateSecretaryandDirector	2022	60,000	-	100,000	-	-	-	-	160,000
RogerEmdinCOOandDirector	2022	180,000	-	100,000	-	-	-	-	280,000
RobertKusins,Vice	2022	180,000	-	50,000	-	-	-	-	230,000

President,Geology
PerryDellelceDirector	2022	Nil	-	100,000	-	-	-	-	100,000
AmandaFullertonDirector	2022	Nil	-	50,000	-	-	-	-	50,000
Fergus KerrDirector	2022	Nil	-	50,000	-	-	-	-	50,000
GuyMahaffyDirector	2022	Nil	-	50,000	-	-	-	-	50,000

Management Contracts

Management functions of the Resulting Issuer are expected to be performed by the directors and NEOs of McFarlane and are not to any substantial degree performed by any other person or corporation. Each of the Resulting Issuer's NEOs has or will be retained as independent contractors to provide the services for the consideration discussed in the above table.

External Management Companies

There are no proposed individuals that will act as Named Executive Officers for the first 12 months following the Effective Date that are not proposed employees or consultants of the Resulting Issuer.

Stock Options and other Compensation Securities

As at the date of this Filing Statement, there is no information concerning the proposed DSU or RSU based awards during the first 12 months following the effective date for each Named Executive Officer and director. It is anticipated that the CCGN Committee and Resulting Issuer Board will determine Incentive Plan grants following Closing. It is currently anticipated that the Resulting Issuer Board will be granted the number of Resulting Issuer Options set out opposite each member's name above over the course of the next 12 months. Any additional issuances of Resulting Issuer Options will be determined following Closing.

Compensation of Directors

The compensation of directors will be determined following Closing; however, it is expected that compensation of nonmanagement directors will comprise a cash payment per meeting of approximately $750 on account of carrying out director functions and any committee involvement as well as a grant of DSUs. In order to align better with the interests of shareholders, the Resulting Issuer Board expects to award securities underlying the Incentive Plans as its equity instruments for directors. It is currently anticipated that Amanda Fullerton, Guy Mahaffy and Fergus Kerr will be issued 125,000 Resulting Issuer Options each, with an exercise price of $0.40.

It is anticipated that non-management directors will be reimbursed for transportation and other out-of-pocket expenses incurred for attendance at board of directors meetings and in connection with discharging their director functions.

Termination and Change of Control Benefits

In the case of the consulting agreements with the CEO, CFO and COO (collectively, the "Senior Officers"), such agreements contain a termination clause that states, among other things, that said consulting agreement can be terminated by the Resulting Issuer for just cause in the event that the respective Senior Officer engages in: (i) dishonesty or fraud; (ii) theft; (iii) breach of fiduciary duties; (iv) being guilty of bribery or attempted bribery; (v) or gross mismanagement.

In the event of the termination without cause, the Senior Officers would be entitled to a payment equivalent to twelve months of their respective base fees within thirty days of the termination.

The Resulting Issuer recognizes that the enhancement of shareholder value could possibly involve the Resulting Issuer being acquired by a third party and the Resulting Issuer Board will seek to reward its executive officers for enhancing shareholder

value in the event of a change of control through consulting agreements with the Senior Officers and the VP of Geology for the fiscal year 2022 that provide for certain payments in the event a change of control does occur. Additionally, any stock options granted to Senior Officers with a consulting agreement that have not yet vested shall vest as determined by the respective Senior Officer.

Pension Disclosure

No retirement or pension benefits for directors and executive officers is implemented or proposed for the Resulting Issuer at this time.

Resulting Issuer DDSU Plan

The DDSU Plan, which was approved by the shareholders of 401 on December 7, 2021, is attached hereto as Schedule "G". The following description of the DDSU Plan is a summary only and is qualified in its entirety by the full text of the DDSU Plan.

Pursuant to the proposed DDSU Plan, non-executive directors who are eligible to participate in the DDSU Plan (each, a "Participant") may be granted DSUs entitling such Participant to a right to receive, in accordance with the terms and conditions of the DDSU Plan, the cash equivalent of the fair market value of one Resulting Issuer Share.

The Resulting Issuer Board shall have the right to grant, in its sole and absolute discretion, DSUs to any Participant, subject to the terms of the DDSU Plan and with such provisions and restrictions as the Resulting Issuer Board or the CCGN Committee may determine. The Resulting Issuer Board shall determine the grant amount based on recommendations from the CCGN Committee. Subject to the terms of the DDSU Plan, the DSUs shall vest immediately as of the date of grant unless otherwise determined. Upon any payout of the value of any DSUs pursuant to the terms of the DDSU Plan, such DSUs shall be cancelled without further compensation or payment in any manner whatsoever and upon such cancellation shall be null, void and of no further force or effect.

The DDSU Plan shall be administered by the Resulting Issuer Board; however, to the extent permitted by law, the Resulting Issuer Board may from time to time delegate to any executive officer or the CCGN Committee any or all of the powers conferred on the CCGN Committee under the DDSU Plan.

When a Participant ceases to be a director for any reason other than death, each DSU held by the Participant that has vested will be eligible for redemption for (i) a period of up to 90 days after the date such Participant ceases to be a director, or (ii) such other "reasonable" period as may be determined by the Resulting Issuer Board, which reasonable period cannot be less than 90 days without the agreement of the Participant. When a Participant ceases to be a director due to his or her death, the value of the Participant's DSUs, net of any applicable withholdings, shall be payable to the Participant's beneficiary, within 30 days after the Redemption Date (as defined in the DDSU Plan).

Resulting Issuer PR Plan Summary

Capitalized terms used in this summary that are not otherwise defined in this Filing Statement shall have the same meaning as defined in the Resulting Issuer PR Plan, which is attached hereto as Schedule "H".

The purposes of the Resulting Issuer PR Plan are to (i) promote a significant alignment between employees and directors of the Corporation and the growth objectives of the Corporation, (ii) associate a portion of participating employees' and directors' compensation with the performance of the Corporation over the long term, and (iii) to attract and retain critical personnel to drive the business success of the Corporation. Grants may be made under the Resulting Issuer PR Plan to directors, officers and employees of the Corporation or of any subsidiary of the Corporation, provided PSUs shall not be awarded to non-employee directors of the Corporation. PSU and RSU awards that vest in accordance with their terms will be paid in either (a) Shares issued from treasury; or (b) cash.

The aggregate number of Shares that are issuable under the Resulting Issuer PR Plan to pay awards which have been granted and are outstanding under the Resulting Issuer PR Plan, together with Shares that are issuable pursuant to outstanding awards or grants under any other Share Compensation Arrangement, shall not at any time exceed 15% of the Shares then issued and outstanding, subject to adjustment to give effect to any relevant changes in capitalization of the Corporation. Shares in respect

of which Awards have been granted but which are (i) vested and redeemed or (ii) forfeited, surrendered, cancelled or otherwise terminated or expire without the delivery of Shares shall be available for subsequent Awards. In addition, the number of Shares subject to an Award (or portion thereof) that the Corporation permits to be settled in cash in lieu of settlement in Shares shall be available for subsequent Awards. Within any one- year period, the aggregate number of Shares issued to Insiders (as a group) pursuant to the Resulting Issuer PR Plan and any other Share Compensation Arrangement shall not exceed 10% of the issued and outstanding Shares (on a non- diluted basis). As an "evergreen" plan, the NEO Exchange will require that all unallocated awards, rights and other entitlements under the Resulting Issuer PR Plan be approved by shareholders on a periodic basis, each approval being effective for a period of three years.

Awards under the Resulting Issuer PR Plan shall be limited as follows:

• (a) the total number of Shares reserved for issuance to Insiders (as a group) under the Resulting Issuer PR Plan, together with Shares reserved for issuance to Insiders under any other Share Compensation Arrangement, shall not at any time exceed 15% of the issued and outstanding Shares, provided that for the purpose of such calculation;
  • (i) within any one-year period the aggregate number of Shares issued to Insiders (as a group) pursuant to the Resulting Issuer PR Plan and any other Share Compensation Arrangement shall not exceed 15% of the issued and outstanding Shares;
• (b) the maximum aggregate grant date fair value using the Black-Scholes-Merton valuation model of awards under the Resulting Issuer PR Plan, together with awards or grants under any other Share Compensation Arrangement, to any non-employee director of the Corporation in any fiscal year of the Corporation shall not exceed $150,000; and
• (c) no award under the Resulting Issuer PR Plan may be made to any non-employee director if such award could result, together with awards or grants then outstanding under the Resulting Issuer PR Plan and any other Share Compensation Arrangement, in the issuance to non-employee directors as a group of a number of Shares exceeding 1% of the Shares issued and outstanding immediately prior to any such Share issuance.

All issuances of Shares from treasury to pay awards shall be deemed to be issued at a price per Share equal to the Market Value on the date of issuance.

Awards granted under the Resulting Issuer PR Plan will be made with a specified dollar value (i.e. the Award Value) as of the date of grant, as determined by the Board or by the grant of specific amounts of PSUs or RSUs. In the case of PSUs, the Board may determine any performance criteria applicable to the PSU.

Unless the Board determines to grant a Participant a specific number of PSUs without specifying an Award Value, the PSUs granted to a Participant for a Performance Period shall be determined by dividing the Award Value determined for the Participant for such Performance Period by the Market Value (with currency conversion if necessary) as at the end of the calendar quarter immediately preceding the Award Date, rounded down to the next whole number.

Unless the Board determines to grant a Participant a specific number of RSUs without specifying an Award Value, the RSUs granted to a Participant shall be determined by dividing the Award Value of an award to be provided to the Participant in the form of RSUs by the Market Value (with currency conversion if necessary) as at the end of the calendar quarter immediately preceding the Award Date, rounded down to the next whole number.

Each whole PSU and RSU will give a Participant the right to receive either a Share or a cash payment, as determined by the Board, in an amount determined in accordance with the terms of the Resulting Issuer PR Plan and the applicable Award Agreement. For greater certainty, a Participant shall have no right to receive Shares or a cash payment with respect to any PSUs or RSUs that do not become Vested PSUs or Vested RSUs.

When and if cash dividends are paid on the Shares during the period from the Award Date under the Award Agreement to the date of settlement of the PSUs or RSUs granted thereunder, additional PSUs or RSUs, as applicable, will be credited to the Participant's Account (i.e. Dividend Equivalent Units) in accordance with the terms of the Resulting Issuer PR Plan. Dividend Equivalent Units shall be subject to the same Vesting conditions and shall Vest and be paid at the same time as the PSUs or RSUs, as applicable, to which they relate.

Upon the first day immediately following the end of the Performance Period, PSUs represented by the PSU Balance as at such date shall Vest subject to the terms of the Resulting Issuer PR Plan, with the number of Vested PSUs being equal to the PSU Balance as at such date multiplied by the Performance Adjustment Factor as determined by the Board in accordance with the Award Agreement. For certainty, in the event the Performance Adjustment Factor is equal to zero, no PSUs will vest. PSUs which do not become Vested PSUs shall be forfeited by the Participant and the Participant will have no further right, title or interest in such PSUs.

Upon the Vesting Date(s) specified in the applicable Award Agreement the RSUs comprising a Participant's RSU Balance shall Vest in such proportion as may be determined in accordance with the Award Agreement. RSUs which do not become Vested RSUs shall be forfeited by the Participant and the Participant will have no further right, title or interest in such RSUs.

In the event that a Participant's Vested PSUs or Vested RSUs have been designated by the Board for settlement in Shares issued from treasury, the Participant or his legal representative, as applicable, shall receive a number of Shares equal to the number of Vested PSUs or Vested RSUs, as the case may be, credited to the Participant's Account (rounded down to the nearest whole number of Shares). In such event, such Shares shall be distributed to the Participant or his legal representative, as applicable, as soon as practicable following the applicable Vesting Date but in no event shall the payment be made later than December 31 of the third calendar year following the year in which the services giving rise to the award of PSUs or RSUs were rendered.

In the event that a Participant's Vested PSUs or Vested RSUs have not been designated by the Board for settlement in Shares issued from treasury, the Participant or his legal representative, as applicable, shall receive a cash payment equal to: (i) in the case of PSUs, the Market Value determined as of the last day of the Performance Period multiplied by the number of Vested PSUs credited to his PSU Account as of the last day of such Performance Period, (rounded down to the nearest whole number of PSUs); and (ii) in the case of RSUs, the Market Value determined as of the Vesting Date of such RSUs multiplied by the number of Vested RSUs credited to his Account as of the Vesting Date (rounded down to the nearest whole number of RSUs). The cash payment shall be made to the Participant or his legal representative, as applicable, in a single lump sum as soon as practicable following the applicable Vesting Date but in no event shall the payment be made later than December 31 of the third calendar year following the year in which the services giving rise to the award of PSUs or RSUs were rendered.

Except as otherwise provided in the Award Agreement governing the grant of PSUs or RSUs to a Participant or a written employment or other agreement between the Participant and the Corporation or any Subsidiary, in the event that, during a Performance Period with respect to PSUs or prior to a Vesting Date with respect to RSUs, (i) the Participant's employment or service as a director is terminated by the Corporation or a Subsidiary of the Corporation for any reason, or (ii) a Participant voluntarily terminates his employment with the Corporation or a Subsidiary of the Corporation or service as a director, including due to retirement, no portion of the PSUs subject to such Performance Period or RSUs that would otherwise Vest on such Vesting Date shall Vest and the Participant shall receive no payment or other compensation in respect of such PSUs or RSUs or loss thereof, on account of damages or otherwise; provided that any Vested PSUs and Vested RSUs will be settled in accordance with the payment of cash or Shares sections of the Resulting Issuer PR Plan.

The Resulting Issuer PR Plan may be amended or terminated at any time by the Board in whole or in part, provided that:

• (a) no amendment of the Resulting Issuer PR Plan shall, without the consent of the Participants affected by the amendment, or unless required by Applicable Law, adversely affect the rights accrued to such Participants with respect to PSUs or RSUs granted prior to the date of the amendment;

• (b) no amendment of the Resulting Issuer PR Plan shall be effective unless such amendment is approved by the NEO Exchange; and

• (c) the approval of shareholders of the Corporation shall be obtained for any:

  • (i) amendment for which, under the requirements of the Stock Exchange or any applicable law, shareholder approval is required;
  • (ii) a reduction in pricing of an award under the Resulting Issuer PR Plan (other than an adjustment pursuant to Section 5.3 of the Resulting Issuer PR Plan in respect of certain transactions of the Corporation or its capital) or the cancellation and reissuance of awards under the Resulting Issuer PR Plan;
  • (iii) extension of the term of an award under the Resulting Issuer PR Plan;
  • (iv) any amendment to remove or exceed the Insider participation limits under the Resulting Issuer PR Plan;
  • (v) any amendment to remove or exceed the limits on participation in the Resulting Issuer PR Plan by nonemployee directors;
  • (vi) an increase to the maximum number of Shares which may be issuable under the Resulting Issuer PR Plan, other than an adjustment pursuant to Section 5.3 of the Resulting Issuer PR Plan in respect of certain transactions of the Corporation or its capital;

• (vii) the addition of additional categories of Participants that may permit the introduction or re- introduction of non-employee directors on a discretionary basis;

• (viii) allowance of awards granted under the Resulting Issuer PR Plan to be transferable or assignable other than for normal estate settlement purposes; or

• (ix) amendment to the amendment section of the Resulting Issuer PR Plan.

Subject to the terms of the relevant Award Agreement, in the event of a Change in Control, the PSUs and RSUs credited to the account of the Participant as at the date of the Change in Control, will become vested PSUs and RSUs on a one-for-one basis on the date of Change in Control, unless otherwise determined by the Board. As soon as practical following the Change in Control, the Participant, at the discretion of the Board, will receive a payment in cash or in Shares equal to the number of vested RSUs or PSUs, as applicable, multiplied by the price at which the Shares are valued for the purposes of the transactions giving rise to the Change in Control.

The assignment or transfer of the PSUs or RSUs, or any other benefits under the Resulting Issuer PR Plan, shall not be permitted, other than by operation of law. The Corporation shall not provide financial assistance to Participants in connection with the Resulting Issuer PR Plan. Any awarding of PSUs or RSUs under the Resulting Issuer PR Plan, the Vesting thereof and the settlement of Awards pursuant thereto are subject to the Compensation Recoupment Policy of the Corporation.

Indebtedness of Directors and Officers

As of the completion of the Transaction, no proposed director, executive officer or senior officer of the Resulting Issuer or any Associate thereof, will be indebted to the Resulting Issuer or any of its subsidiaries, or has been at any time during the preceding financial year except as related to arranged payment terms under consulting agreements, other than as set out below:

• (i) On April 22, 2021 McFarlane issued a promissory note in the amount of $60,000 bearing interest at 12% per annum to a holding company controlled by Mark Trevisiol, chief executive officer, president and director of McFarlane. The note remains outstanding as of the date hereof.
• (ii) On April 22, 2021 McFarlane issued a promissory note in the amount of $135,000 bearing interest at 12% per annum to a professional corporation controlled by Perry Dellelce, a director of McFarlane. The note remains outstanding as of the date hereof.

Investor Relations Arrangements

The Resulting Issuer will become a party to McFarlane's written agreement with Hybrid, pursuant to which Hybrid has agreed to provide promotional or investor relations services to Resulting Issuer. The Resulting Issuer has an annual investor relations budget of over $50,000 which will be used to prepare a written investor relations strategy and to provide information which facilitates informed investment decisions. McFarlane is currently interviewing and negotiating with a number of candidates to consult with and assist it with running an investor relations function and campaign once the Business Combination is completed.

Options to Purchase Securities

Option-Based Awards

The Resulting Issuer intends to grant Resulting Issuer Options to its directors, officers, employees and consultants; however, the details of certain of such grants have not yet been determined and will be subject to the prior approval of the Resulting Issuer's board of directors. Such stock options are expected to be granted under the Stock Option Plan in effect upon completion of the Transaction. For an overview of the Stock Option Plan, please see the discussion under the heading "Information Concerning – Stock Option Plan".

The following table provides information regarding holders of Resulting Issuer Options that will be outstanding upon completion of the Transaction. The Resulting Issuer Board will determine any additional incentive plan grants following Closing.

Class of Optionee	Number and Nameof Persons in Class	Number ofResulting IssuerOptions (1)	ExercisePrice ($)	Expiry Date
Proposed directors and officers of	Mark Trevisiol	2,000,000	0.10	May 31, 2026
the Resulting Issuer	Roger Emdin	1,000,000
	Charles Lilly	1,000,000
	Robert Kusins	500,000
	Perry Dellelce	1,000,000
Total		5,500,000	0.10

Stock Option Plan

It is anticipated that the Resulting Issuer will adopt the Resulting Issuer Option Plan. The following description of the Resulting Issuer Option Plan is a summary only and is qualified in its entirety by the full text of the Resulting Issuer Option Plan, which is attached hereto as Schedule "A". Copies of the Resulting Issuer Option Plan may be inspected at no charge during regular business hours upon received written request one (1) Business Day in advance at the principal offices of Buccaneers until Closing and at the principal offices of the Resulting Issuer for a period of 30 days thereafter.

Resulting Issuer Option Plan

The following is a summary of the Resulting Issuer Option Plan, which is qualified in its entirety by the full text of the Resulting Issuer Option Plan, which is attached hereto as Schedule "A".

The Resulting Issuer Option Plan is expected to provide that the maximum number of Resulting Issuer Shares that may be reserved for issuance upon the exercise of all Resulting Issuer Options granted under the Resulting Issuer Option Plan shall not exceed, on a rolling basis, 10% of the aggregate number of Resulting Issuer Shares issued and outstanding from time to time. Following Closing, 7,939,781 Resulting Issuer Shares, representing 10% of the Resulting Issuer Shares issued and outstanding immediately after the completion of the Transaction, would be issuable under the Resulting Issuer Option Plan. The purpose of the Resulting Issuer Option Plan is to advance the interests of the Resulting Issuer by: (i) providing an incentive mechanism to foster the interests of eligible participants under the Resulting Issuer Option Plan (which includes directors, officers, employees and consultants of the Resulting Issuer or its subsidiaries) in the success of the Resulting Issuer, its affiliates and its subsidiaries, if any; (ii) encouraging such eligible participants to remain with the Resulting Issuer, its affiliates or its subsidiaries, if any; and (iii) attracting new directors, officers, employees and consultants.

• (a) Number of Resulting Issuer Shares Reserved. The aggregate number of Resulting Issuer Shares available to be reserved for issuance under the Resulting Issuer Option Plan, on a rolling basis, is 10% of the number of Resulting Issuer Shares outstanding less any Resulting Issuer Shares reserved pursuant to the Resulting Issuer's other share compensation arrangements, if any, at the time of reservation. Any Resulting Issuer Shares subject to a Resulting Issuer Option which has been granted under the Resulting Issuer Option Plan and which has been surrendered, expired or terminated in accordance with the terms of the Resulting Issuer Option Plan without having been exercised will again be available under the Resulting Issuer Option Plan.

• (b) Administration. The Resulting Issuer Option Plan is to be administered by the Resulting Issuer Board, or any duly authorized committee thereof.

• (c) Eligible Persons. Resulting Issuer Options under the Resulting Issuer Option Plan may only be issued to: directors, officers, employees and consultants of the Resulting Issuer and its affiliates and its subsidiaries (for purposes of the Resulting Issuer Option Plan, "Eligible Persons").

• (d) Terms of Resulting Issuer Options. The Resulting Issuer Option Plan provides that the exercise price, vesting provisions, the extent to which such Resulting Issuer Option is exercisable, acceleration of vesting in connection with a take-over bid or other specified event and other terms and conditions relating to such Resulting Issuer Options shall be determined by the Resulting Issuer Board or applicable committee thereof, as applicable, and subject to compliance with the policies of the Exchange.

• (e) Maximum Term of Resulting Issuer Options. Resulting Issuer Options granted under the Resulting Issuer Option Plan will be for a term not exceeding 10 years from the date of grant.

• (f) Blackout Periods. Resulting Issuer Options may not be exercised during any blackout period imposed by the Resulting Issuer with respect to trading in securities of the Resulting Issuer by Eligible Persons. Where the expiry date for a Resulting Issuer Option occurs during a blackout period or within two (2) Business Days of a blackout period, the expiry date will be extended to the date that is ten (10) days following the end of such blackout period.

• (g) Termination Prior to Expiry. If an optionee ceases to be an Eligible Person, the Resulting Issuer Options held by that person and that were exercisable on the date upon which that person ceased to be an Eligible Person (for purposes of the Resulting Issuer Option Plan, the "Termination Date") will expire on the earlier of the 90th day following the Termination Date (or for whatever period after the Eligible person ceases to serve in such capacity, as determined by the Resulting Issuer) and the expiry date of the applicable Resulting Issuer Options.

• (h) Death of an Optionee. If an optionee dies, Resulting Issuer Options held by the deceased optionee will be exercisable by the deceased optionee's personal representative, and will expire on the earlier of the one-year anniversary of the date of death of the optionee and the expiry date of the applicable Resulting Issuer Options.

• (i) Conditions of Exercise of Resulting Issuer Options. The Resulting Issuer will not issue Resulting Issuer Shares pursuant to the exercise of Resulting Issuer Options unless and until written notice of exercise addressed to the Corporate Secretary of the Resulting Issuer has been received, the Resulting Issuer Shares have been fully paid for, all applicable regulatory approvals have been received and any applicable withholding tax obligations have been satisfied.

• (j) Reduction of Exercise Price. Subject to any required regulatory and shareholder approvals and the consent of the optionee affected thereby, the Resulting Issuer Board may amend or modify any outstanding Resulting Issuer Option. The exercise price of Resulting Issuer Options granted to Insiders may not be decreased, and the term of Resulting Issuer Options granted to Insiders may not be extended, without shareholder approval.

• (k) No Assignment. Resulting Issuer Options may not be assigned or transferred, except in limited circumstances including the transfer of Resulting Issuer Options to a wholly-owned personal holding company or to a registered retirement savings plan established for the sole benefit of such participant, and for estate planning or estate settlement purposes.

• (l) Amendments. Generally, the Resulting Issuer Board may amend the Resulting Issuer Option Plan, subject to any necessary regulatory approval.

• (m) Termination of Resulting Issuer Option Plan. The Resulting Issuer Option Plan may be discontinued by the Resulting Issuer Board, provided that such termination will not alter the terms or conditions of any Resulting Issuer Option or impair any right of any optionee pursuant to any Resulting Issuer Option granted prior to the date of such termination, which will continue to be governed by the provisions of the Resulting Issuer Option Plan.

Locked-Up Securities

All of the directors, senior officers and certain shareholders of McFarlane identified by the Agent are subject to the following contractual lock-up period in accordance with the terms of the Agency Agreement pursuant to the Brokered Financing:

• (i) 37,000,000 McFarlane Shares issued in the Founders Financing have an initial lockup period of 12-months from the completion of the RTO, followed by releases of 10% on that date that is 12 months from completion of the RTO, 15% on the date that is 18-months from completion of the RTO and 25% on the dates that are 24- 30- and 36- months from the completion of the RTO;

• (ii) 22,075,000 McFarlane Shares issued in the 2021 Non-Brokered Private Placement have an initial lockup period of 6 months from the completion of the RTO followed by releases of 25% on the dates that are 6- 12- 18- and 24- months from completion of the RTO;

• (iii) 12,625,000 McFarlane Shares issued in connection with the exercise of property option agreements have an initial lock-up period of 6 months from the completion of the RTO followed by releases of 25% on the dates that are 6- 12- 18- and 24-months from completion of the RTO; and

• (iv) 3,750,000 McFarlane Shares issued to 401 in connection with the RTO have an initial lock-up period of 12 months from the completion of the RTO , followed by releases of 10% on the date that is 12 months from completion of the RTO, 15% on the date that is 18 months from completion of the RTO and 25% on the dates that are 24- 30- and 36 months from completion of the RTO.

Escrowed Securities

Pursuant to the Exchange Listing Manual section 9.03(4), upon listing of the Resulting Issuer Shares, all securities of the Resulting Issuer that are held by "principals" of the Resulting Issuer must be placed into escrow. Upon completion of the Transaction, it is expected that there will be an aggregate of 30,345,400 Resulting Issuer Shares, 131,250 Resulting Issuer Warrants and 5,000,000 Resulting Issuer Replacement Options held pursuant to a Security Escrow Agreement (collectively, the "Escrowed Securities") entered into among TSX Trust Company, as Resulting Issuer Escrow Agent, the Resulting Issuer, McFarlane and certain proposed principals, directors and officers of the Resulting Issuer (the "Escrowed Shareholders"). The Escrowed Securities will be released as follows:

Release Schedule	Number of Escrowed Securities Release
On the Listing Date	1/4 of the Escrowed Securities
6 months after the Listing Date	1/3 of the Escrowed Securities
12 months after the Listing Date	1/2 of the Escrowed Securities
18 months after the Listing Date	The remaining Escrowed Securities

Terms of Escrow

The Escrowed Securities may not be transferred without the approval of the Exchange, other than in specified circumstances set out in the Resulting Issuer Escrow Agreement or in accordance with the restrictive legend set forth on the applicable security certificates. Any entity controlled by one or more persons, that holds escrowed Resulting Issuer Shares, may not participate in a transaction that results in a change of its control or a change in the economic exposure of the persons to the risks of holding escrowed Resulting Issuer Shares. An aggregate of 30,345,400Resulting Issuer Shares are to be held in escrow which comprise all shares of the Resulting Issuer to "Principals" of the Issuer prior to the RTO, "Principals" being (i) directors and senior officers of the Resulting Issuer or any material operating subsidiary owning shares of the Issuer carrying 1% or more of the voting rights upon completion of the Transaction, (ii) promoters of the Resulting Issuer during the two years preceding the Transaction owning shares of the Resulting Issuer carrying 1% or more of the voting rights upon completion of the Transaction, (iii) holders of more than 10% of the outstanding shares of the Resulting Issuer immediately before the Closing Date who also have a right to elect or appoint a director or senior officer of the Resulting Issuer or a material operating subsidiary, (iv) holders of more than 20% of the outstanding shares of the Resulting Issuer immediately before the Closing Date, (v) companies, trusts, partnerships or other entities held more than 50% by one or more of the foregoing, and (vi) spouses or other relatives that live at the same address as any of the foregoing.

The following lists the Escrowed Shareholders who hold Resulting Issuer Escrowed Shares:

Name and Municipality ofResidence of Securityholder	Designation of Class of	After Giving Effect to the Transaction
	Security	No. of Securities Held inEscrow	centage of Class
Charles Lilly(Sudbury, Ontario)	Resulting Issuer Shares	12,500	0.02%
Susan Dellelce(Toronto, Ontario)	Resulting Issuer Shares	3,382,900	4.26%
Perry Dellelce(Toronto, Ontario)	Resulting Issuer Shares	1,250,000	1.57%

Perry N. Dellelce ProfessionalCorporation(Toronto, Ontario)	Resulting Issuer Shares	10,300,000(1)	12.97%
Mark Trevisiol(Sudbury, Ontario)	Resulting Issuer Shares	2,390,000	3.01%
1039593 Ontario Inc.(Sudbury, Ontario)	Resulting Issuer Shares	7,960,000(2)	10.03%
1930153 Ontario Ltd.(Sudbury, Ontario)	Resulting Issuer Shares	2,000,000	2.52%
Roger Emdin(Sudbury, Ontario)	Resulting Issuer Shares	350,000	0.44%
Roger Emdin Mining Inc.Resulting Issuer Shares(Sudbury, Ontario)		2,700,000	3.40%
Total:	N/A	30,345,400	38.22%

Notes:

(1) A professional company controlled by Perry Dellelce. In connection with the exercise of the CSM Option, 3,500,000 Resulting Issuer Shares will be transferred to CSM in accordance with the CSM Definitive Agreement.

(2) A company controlled by Mark Trevisiol. In connection with the exercise of the CSM Option, 3,500,000 Resulting Issuer Shares will be transferred to CSM in accordance with the CSM Definitive Agreement.

The following lists the Escrowed Shareholders who hold Resulting Issuer Replacement Options that will be subject to the Security Escrow Agreement:

Name and Municipality ofResidence of Securityholder	Designation of Class of	After Giving Effect to the Transaction
	Security	No. of Securities Held inEscrow	centage of Class
Charles Lilly	Resulting Issuer
(Sudbury, Ontario)	Replacement Options	1,000,000	18.18%
Perry Dellelce	Resulting Issuer		18.18%
(Toronto, Ontario)	Replacement Options	1,000,000
Mark Trevisiol	Resulting Issuer
(Sudbury, Ontario)	Replacement Options	2,000,000	36.36%
Roger Emdin	Resulting Issuer
(Sudbury, Ontario)	Replacement Options	1,000,000	18.18%
Total:	N/A		90.90%

The following lists the Escrowed Shareholders who hold Resulting Issuer Escrowed Warrants:

Name and Municipality ofResidence of Securityholder	Designation of Class of	After Giving Effect to the Transaction
	Security	No. of Securities Held inEscrow	centage of Class
Charles Lilly(Sudbury, Ontario)	Resulting Issuer Warrants	6,250	0.15%
Susan Dellelce(Toronto, Ontario)	Resulting Issuer Warrants	125,000	2.97%
Total:	N/A	131,250	3.12%

Material Contracts

The material contracts of the Resulting Issuer are the material contracts of 401 as described under "Part III - Information Concerning 401 - Material Contracts" and McFarlane as described under "Part IV - Information Concerning McFarlane - Material Contracts".

Stock Exchange Listing

401 is a "reporting issuer" under the securities laws of the Provinces of British Columbia and Alberta and the Resulting Issuer will continue to be a reporting issuer in those jurisdictions and become a reporting issuer in Ontario following the closing of the Transactions. 401 is not listed on any stock exchange. The Exchange has conditionally accepted the listing of the Resulting Issuer Shares subject to 401 and McFarlane fulfilling all of the requirements of the Exchange. The Resulting Issuer, if listed, expects to trade its common shares under the symbol "MLM".

Auditors

It is proposed that McGovern Hurley LLP, will be appointed as the auditors of the Resulting Issuer.

Transfer Agent and Registrar

It is proposed that TSX Trust Company will be the transfer agent and registrar for the Resulting Issuer Shares.

Odyssey Trust Company will be the warrant agent for the Resulting Issuer Warrants.

Experts

Certain legal matters in connection with the Transaction will be reviewed and passed upon by Wildeboer Dellelce LLP on behalf of McFarlane. Wildeboer Dellelce LLP and the partners and associates thereof beneficially own, directly or indirectly, 12,400,000 outstanding McFarlane Shares and 1,000,000 McFarlane Options.

Certain legal matters in connection with the Transaction will be reviewed and passed upon by BLG on behalf of 401. BLG and the partners and associates thereof beneficially own, directly or indirectly, no outstanding securities of the Corporation.

Baker Tilly WM LLP became the auditors of 401 on February 3, 2021 and is independent of 401 in accordance with the Code of Professional Conduct of the Chartered Professional Accountants of Ontario.

McGovern Hurley LLP are the auditors of McFarlane and are independent of McFarlane within the meaning of the Code of Professional Conduct of the Chartered Professional Accountants of Ontario.

McFarlane engaged M. Sears, B.A., B.Sc., PGO, to prepare the High Lake – West Hawk Lake Project Technical Report. The QP is a "qualified person" and considered "independent", as such terms are defined in NI 43-101. All of the scientific and technical mining disclosure contained in this Filing Statement regarding the High Lake – West Hawk Lake Project has been reviewed and approved by the QP. The materials in "Part IV – Information Concerning McFarlane - Material Mineral Project | High Lake – West Hawk Lake Project" are a complete extract from the summary section of the High Lake – West Hawk Lake Project Technical Report.

Risk Factors

Following the completion of the Business Combination, Resulting Issuer will carry on the same activities as those carried on by McFarlane as described in this Filing Statement. See "Part VI - Risk Factors".

Other Material Facts

Neither 401 nor McFarlane is aware of any other material facts except as otherwise set forth herein.

[Part VI begins on following page]

PART VI – RISK FACTORS

An investment in the securities of McFarlane or the Resulting Issuer is highly speculative, involves a high degree of risk and should be undertaken only by Persons whose financial resources are sufficient to enable them to assume such risks and who have no need for immediate liquidity in their investment. Prior to investing in such securities, you should carefully consider the risks described below, together with other information included in or incorporated by reference into this Filing Statement and filed on SEDAR at www.sedar.com. If any of the following risks materialize, the business, financial condition, results of operation and future prospects of McFarlane and the Resulting Issuer will likely be materially and adversely affected. This could cause actual future events to differ materially from those described in forward-looking statements and may cause the trading price of the Resulting Issuer's securities to decline.

The risks presented below should not be considered exhaustive and may not be all the risks the Resulting Issuer may face. Management of McFarlane believes that factors set out below could cause actual results to be different from expected and historical results. Other sections of this Filing Statement include additional factors that could have an effect on the business and financial performance of the Resulting Issuer's business following the completion of the Transaction. New risks may emerge from time to time and management may not be able to predict all of them, or be able to predict how they may cause actual results to be different from those contained in any forward-looking statements. You should not rely upon forward-looking statements as a prediction of future results.

References below to "McFarlane" will, as the context permits or requires, be read to include the "Resulting Issuer" upon the completion of the Transaction. Furthermore, references below to the "Resulting Issuer" refer to the Resulting Issuer and all of its subsidiaries, as applicable.

Risks Related to the Transaction

Completion of the Transaction and Exchange Approval

The completion of the Transaction is subject to several conditions precedent. There can be no assurance that the Transaction will be completed on the terms set out in the Business Combination Agreement, as negotiated, or at all. In the event that any of the conditions precedent are not satisfied or waived, the Transaction may not be completed. In addition, there is no guarantee that the Resulting Issuer will be able to satisfy the requirements of the Exchange such that it will issue the Final Exchange Bulletin. See "Part II – Information Concerning the Transaction – The Business Combination Agreement and the Transaction – Conditions of the Transaction". There is no certainty that these conditions will be satisfied on a timely basis or at all.

If the Transaction is not completed, McFarlane and 401 will each remain liable for significant consulting, accounting, legal and other costs relating to the Transaction and will not realize anticipated benefits of the Transaction.

Termination of the Business Combination Agreement in Certain Circumstances

Each of McFarlane and 401 has the right to terminate the Business Combination Agreement in certain circumstances. Accordingly, there is no certainty, nor can the parties provide any assurances that the Business Combination Agreement will not be terminated by any of McFarlane and 401 before the completion of the Transaction. Certain costs related to the Transaction, such as legal and accounting fees, must be paid by McFarlane and 401 regardless if the Transaction is completed. See "Part II – Information Concerning the Transaction – The Business Combination Agreement and the Transaction – Termination Rights".

The Transaction Will Have a Dilutive Effect on the Ownership Interest of 401 Shareholders

The issuance of Resulting Issuer Shares pursuant to the Transaction if it is completed will have a very significant dilutive effect on the ownership interest of the current 401 Shareholders.

The Transaction May Divert the Attention of Management of McFarlane

The Transaction could cause the attention of management of McFarlane to be diverted from their day-to-day operations. These disruptions could be exacerbated by a delay in completion of the Transaction and could have an adverse effect on the business, operating results or prospects of McFarlane regardless of whether the Transaction is ultimately completed, or of the Resulting Issuer if the Transaction is completed.

Tax Consequences

The transactions described herein may have tax consequences in Canada, or elsewhere, depending on each particular existing or prospective shareholder's specific circumstances. Such tax consequences are not described herein and this Filing Statement is not intended to be, nor should it be construed to be, legal or tax advice to any particular shareholder. Existing and prospective shareholders should consult their own tax advisors with respect to any such tax considerations.

McFarlane May Not Realize Anticipated Benefits of the Transaction

The Transaction is proposed to strengthen the position of McFarlane in the mining and exploration industry and to create the opportunity to realize certain benefits. Achieving the benefits of the Transaction depends in part on the ability of McFarlane to effectively capitalize on its scale, to realize the anticipated capital and operating synergies, to profitably sequence the growth prospects of its asset base and to maximize the potential of its improved growth opportunities and capital funding opportunities. A variety of factors, including those risk factors set forth in this Filing Statement may adversely affect the ability of McFarlane to achieve the anticipated benefits of the Transaction.

Pro Forma Financial Statements

The pro-forma financial statements attached to this Filing Statement and information derived therefrom contained in this Filing Statement are presented for illustrative purposes only and may not be an indication of McFarlane's financial condition following the Transaction for several reasons. For example, such pro-forma financial statements have been derived from the historical financial statements of McFarlane and certain assumptions have been made. The information upon which these assumptions have been made is historical, preliminary and subject to change. Moreover, the pro-forma financial statements do not reflect all costs that are expected to be incurred by McFarlane in connection with the Transaction. In addition, the assumptions used in preparing the pro-forma financial statements may not prove to be accurate.

Risk Factors Relating to the Resulting Issuer Shares

Market Price and Listing of Resulting Issuer Shares

The Resulting Issuer is seeking to have the Resulting Issuer Shares listed and posted for trading on the Exchange. The listing of the Resulting Issuer Shares will be subject to the satisfaction of all of the Exchange's initial listing requirements. If the Resulting Issuer receives final approval for listing the Resulting Issuer Shares on the Exchange, there is no assurance that it will maintain such listing on the Exchange or a listing on any other exchange or quotation service. There can be no assurance that an active trading market will develop or be sustained for the Resulting Issuer Shares. Shareholders may not be able to resell the Resulting Issuer Shares, which may affect the pricing of the Resulting Issuer Shares in the secondary market, the transparency and availability of trading prices and the liquidity of the Resulting Issuer Shares. If an active or liquid market for the Resulting Issuer Shares fails to develop or be sustained, the price at which the Resulting Issuer Shares trade may be adversely affected. An investment in McFarlane's securities is highly speculative, due to the high-risk nature of its business, lack of diversification and the present stage of its development. Shareholders of the Resulting Issuer may lose their entire investment.

If the Resulting Issuer Shares are publicly traded, the market price of the Resulting Issuer Shares may be affected by many variables not directly related to the corporate performance of McFarlane, including the market in which it is traded, the strength of the economy generally, the availability and attractiveness of alternative investments and the breadth of the public market for its shares. The effect of these and other factors on the market price of the Resulting Issuer Shares in the future cannot be predicted. The lack of an active public market could have a material adverse effect on the price of the Resulting Issuer Shares.

The Market Price of Resulting Issuer Shares May Be Volatile

The market price of Resulting Issuer Shares could be subject to significant fluctuations following completion of the Transaction. In addition, securities markets worldwide have experienced, and are likely to continue to experience, significant price and volume fluctuations. This market volatility, as well as general economic, market or political conditions and the risk factors described in this Filing Statement could subject the market price of Resulting Issuer Shares to wide price fluctuations regardless of the Resulting Issuer's operating performance.

The Resulting Issuer May Issue Additional Equity Securities

Following completion of the Transaction, the Resulting Issuer may issue equity securities and or securities convertible into equity securities to finance its activities, including in order to finance acquisitions. If the Resulting Issuer were to issue additional equity securities the ownership interest of existing shareholders may be diluted and some or all of the Resulting Issuer's financial measures on a per share basis could be reduced.

Value Assigned to McFarlane May Be Incorrect

The valuation placed on McFarlane for the purposes of the Transaction has been determined by negotiation among McFarlane and 401. There can be no assurance that the number of Resulting Issuer Shares will not, in the fullness of time, prove to be excessive. If the market determines that the number of Resulting Issuer Shares is excessive, the market price of the Resulting Issuer Shares will be adversely affected.

No Assurance of Payment of Dividends

The declaration, timing, amount and payment of dividends are at the discretion of the board of directors of the Resulting Issuer and will depend upon the Resulting Issuer's future earnings, cash flows, acquisition capital requirements and financial condition, and other relevant factors. There can be no assurance that the Resulting Issuer will declare a dividend on a quarterly, annual or other basis.

Risks Related to Resulting Issuer's Business

Limited Operating History

McFarlane was incorporated on August 21, 2020 and has a limited operating history. McFarlane does not have any history of earnings or profitability. The likelihood of success of the Resulting Issuer must be considered in light of the problems, expenses, difficulties, complication and delays frequently encountered in connection with the establishment of any business particularly in the junior mineral exploration sector. The Resulting Issuer will have limited financial resources and there is no assurance that additional funding will be available to it for further operations or to fulfill its obligations under applicable agreements. There is no assurance that the Resulting Issuer will be able to generate revenues, operate profitably, or provide a return on investment, or that it will successfully implement its plans.

Dependence on the High Lake and West Hawk Lake Properties

Presently, the High Lake and West Hawk Lake Properties will account for all of the Resulting Issuer's future revenue. Any adverse development affecting the progress of the High Lake and West Hawk Lake Properties such as, but not limited to, obtaining development financing on commercially suitable terms, hiring suitable personnel and mining contractors, or securing supply agreements on commercially suitable terms, may have a material adverse effect on the Resulting Issuer's financial performance and results of operations. Ongoing activity at the High Lake West and West Hawk Lake Properties will be undertaken without established Mineral Resources or Mineral Reserves and the economic viability of the operations on either project have not been established, and there can be no assurances that they will be established in the future.

Mineral Deposits May Not Be Economical

The determination of whether any mineral deposits at the High Lake and West Hawk Lake Properties are economical is affected by numerous factors beyond the control of McFarlane. These factors include: (a) the metallurgy of the mineralization forming the mineral deposit; (b) market fluctuations for metal prices; (c) the proximity and capacity of natural resource markets and processing equipment; and (d) government regulations, governing prices, taxes, royalties, land tenure, land use, importing and exporting of minerals, and environmental protection.

Changes in Market Price of Metals

The potential of the High Lake and West Hawk Lake Properties to be economically mined is significantly affected by changes in the market price of metals. The market price of metals is volatile and is impacted by numerous factors beyond the control of the Resulting Issuer, including: (a) expectations with respect to the rate of inflation; (b) the relative strength of the U.S. dollar and certain other currencies; (c) interest rates; (d) global or regional political or economic conditions; (e) supply and demand for jewelry and industrial products containing metals; and (f) sales by central banks, other holders, speculators, and producers of gold and other metals in response to any of the above factors. A decrease in the market price of metals could make it difficult or impossible to finance the exploration or development of the High Lake and West Hawk Lake Properties or cause McFarlane to determine that it is impractical to continue development of the High Lake and West Hawk Lake Properties, which would have a material adverse effect on the financial condition and results of operations of McFarlane. There can be no assurance that the market price of metals will not decrease.

Volatility of Gold Price

The price of gold is primarily influenced by interest rate cuts, volatility in the credit and financial markets, strong investment demand and inflation expectations. As with many other commodities, the price of gold has fluctuated widely in recent years and there can be no assurance that gold prices will remain at current levels or be such that the Resulting Issuer's properties can be exploited at a profit. If the price of gold declines, it could have a material adverse effect on the Resulting Issuer's share price, business and operations.

Mining Operations May Not Be Established or Profitable

The future development of the High Lake and West Hawk Lake Properties will require additional financing, permits, design, construction, processing plant, and related infrastructure. As a result, McFarlane will be subject to all of the risks associated with establishing mining operations and business enterprises, including: (a) the timing and cost, which will be considerable, of obtaining all necessary permits including environmental, construction, and operating permits; (b) the timing and cost, which will be considerable, of the construction of mining and processing facilities; (c) the availability and costs of skilled labour, power, water, transportation, and mining equipment; (d) the availability and cost of appropriate smelting and/or refining arrangements; (e) the need to obtain necessary environmental and other governmental approvals and permits, and the timing of those approvals and permits; and (f) the availability of funds to finance construction and development activities.

It is common in new mining operations to experience unexpected problems and delays during permitting, construction, and development. In addition, delays in the commencement of mineral production often occur, and once commenced, the production of a mine may not meet expectations or the estimates set forth in feasibility or other studies. Accordingly, there are no assurances that McFarlane will successfully establish mining operations or become profitable.

The Resulting Issuer May Not Use the Available Funds as Described in this Filing Statement

The Resulting Issuer currently intends to use its available funds as set out in this Filing Statement. However, the Resulting Issuer Board and/or management will have discretion in the actual application of the available funds and may elect to allocate them differently from that described in the Filing Statement if they believe it would be in the Resulting Issuer's best interests to do so. Shareholders may not agree with the manner in which the Resulting Issuer Board and/or management chooses to allocate and spend the net proceeds. The failure by the Resulting Issuer Board and/or management to apply these funds effectively could have a material adverse effect on the Resulting Issuer's profitability, results of operations and financial condition and the trading price of its securities.

Ability to Exploit Future Discoveries

It may not always be possible for the Resulting Issuer to participate in the exploitation of successful discoveries. Such exploitation may involve the need to obtain licenses or clearance from the relevant authorities, which may not be available on a timely basis or may require conditions to be satisfied and/or the exercise of discretion by such authorities. It may or may not be possible for such conditions to be satisfied, and such conditions may prove uneconomic or not practical. Furthermore, the decision to proceed to further exploitation may require the participation of other companies whose interest and objectives may not be consistent with those of the Resulting Issuer. Such further exploitation may also require the Resulting Issuer to meet or commit to financial obligations which it may not have anticipated or may not be able to commit to due to a lack of funds or an inability to raise funds.

Financing Risks

McFarlane expects to be substantially dependent upon the equity and debt capital markets or alternative sources of funding to pursue additional investments. There can be no assurance that such financing will be available to McFarlane on acceptable terms or at all.

From time to time, the Resulting Issuer may rely on debt financing for a portion of its business activities, including capital and operating expenditures. There are no assurances that the Resulting Issuer will be able to comply at all times with any covenants under its debt arrangements, if applicable; nor are there assurances that the Resulting Issuer will be able to secure new financing that may be necessary to finance its operations and capital growth program. Any failure of the Resulting Issuer to secure financing or refinancing, to obtain new financing or to comply with applicable covenants under its borrowings could have a material adverse effect on the Resulting Issuer's financial results. Further, any inability of the Resulting Issuer to obtain new financing may limit its ability to support future growth.

Additional equity or debt financings may significantly dilute positions held by shareholders of McFarlane, increase McFarlane's leverage or require McFarlane to grant security over its assets. If McFarlane is unable to obtain such financing, it may not be able to develop the High Lake and West Hawk Lake Properties or execute on its business strategy. If McFarlane is unable to obtain financing for business activities, it may determine to allocate income, if any, from other investments to finance business activities.

Mining is Inherently Dangerous

The business of mining is subject to a number of risks and hazards including environmental hazards, industrial accidents, labour disputes, cave-ins, pit wall failures, flooding, fires, rock bursts, explosions, power outages, periodic interruptions due to inclement or hazardous weather conditions, and other acts of God or unfavourable operating conditions. Such risks could result in damage to, or destruction of, mineral properties or processing facilities, personal injury or death, loss of key employees, environmental damage, delays in mining, increased production costs, monetary losses, and possible legal liability.

Where considered practical to do so, McFarlane will maintain insurance against risks in the operation of its business in amounts which it believes to be reasonable. Such insurance, however, contains exclusions and limitations on coverage. There can be no assurance that such insurance will continue to be available, will be available at economically acceptable premiums, or will be adequate to cover any resulting liability. In some cases, coverage is not available or is considered too expensive relative to the perceived risk. McFarlane may suffer a material adverse effect on its business if it incurs losses related to any significant events that are not covered sufficiently or at all by its insurance policies.

Operations and Exploration Subject to Governmental Regulations

McFarlane's operations and exploration and development activities are subject to extensive laws and regulations governing various matters, including: (a) environmental protection; (b) management and use of toxic substances and explosives; (c) management of natural resources; (d) management of tailings and other wastes; (e) mine construction; (f) exploration, development of mines, production and post-closure reclamation; (g) exports; (h) price controls; (i) taxation and mining royalties; (j) regulations concerning business dealings with indigenous groups; (k) labour standards and occupational health and safety, including mine safety; and (l) historic and cultural preservation. Failure to comply with applicable laws and regulations may result in civil or criminal fines or penalties or enforcement actions, including orders issued by regulatory or judicial authorities, enjoining or curtailing operations, or requiring corrective measures, installation of additional equipment, or remedial actions, any of which could result in McFarlane incurring significant expenditures. McFarlane may also be required to compensate private parties suffering loss or damage by reason of a breach of such laws, regulations, or permitting requirements. It is also possible that future laws and regulations, or a more stringent enforcement of current laws and regulations by governmental authorities, could cause additional expenses, capital expenditures, restrictions on or suspensions of McFarlane's operations, if any, and delays in the development of the High Lake and West Hawk Lake Properties.

Operation and Exploration Activities are Subject to Environmental and Endangered Species Laws and Regulations

All phases of the mining business present environmental risks and hazards and are subject to environmental regulation pursuant to a variety of government laws and regulations, including laws and regulations relating to the protection of endangered and threatened species. Compliance with such laws and regulations can require significant expenditures and a breach may result in the imposition of fines and penalties, which may be material. In addition, such laws and regulations can constrain or prohibit the exploration and development of new projects or the development or expansion of existing projects. Environmental legislation is evolving in a manner expected to result in stricter standards and enforcement, increases in land use restrictions, larger fines and liability and potentially increased capital expenditures and operating costs. Any breach of environmental legislation by owners or operators of the property underlying the Resulting Issuer's asset portfolio could have a material impact on the viability of the relevant property and impair the revenue derived from the owned property or applicable interest, which could have a material adverse effect on the Resulting Issuer's operations, financial condition and the trading price of its securities.

Mineral Properties May Be Subject to Rights of and Consultation With Indigenous Peoples

Various international, national, state and provincial laws, codes, resolutions, conventions, guidelines, treaties and other principles and considerations relate to the rights of indigenous peoples. The Resulting Issuer will hold, exploration interests in respect of operations located in some areas presently or previously inhabited or used by indigenous peoples. Many of these impose obligations on government to respect the rights of indigenous peoples. Some mandate consultation with indigenous peoples regarding actions which may affect indigenous peoples, including actions to approve or grant mining rights or permits. Initial exploration program at the High Lake Property will require consultation with First Nations. The obligations of government and private parties under the various international and national requirements, principles and considerations pertaining to indigenous peoples continue to evolve and be defined. The High Lake and West Hawk Lake Properties in respect of which the Resulting Issuer will hold a joint venture interest are subject to the risk that one or more groups of indigenous peoples may oppose operation or new development. Such opposition may be directed through legal or administrative proceedings or protests, roadblocks or other forms of public expression against the operator's activities. Opposition by indigenous peoples to such activities may require modification of or preclude operation or development of projects or may require the entering into of agreements with indigenous peoples. Claims and protests of indigenous peoples may disrupt or delay activities of the operators of assets in respect of which the Resulting Issuer holds an exploration interest which may result in a material adverse effect on the Resulting Issuer profitability, results of operations and financial condition and the trading price of itssecurities.

Permits and Licences

Operations of the Resulting Issuer will require licences and permits from various governmental authorities. The Resulting Issuer anticipates that it will be able to obtain in the future all necessary licences and permits to carry on the activities which it intends to conduct, and that it intends to comply in all material respects with the terms of such licences and permits. However, there can be no guarantee that the Resulting Issuer will be able to obtain at all or on reasonable terms, and maintain, at all times, all necessary licences and permits required to undertake its proposed exploration and development or to place its property into commercial production and to operate mining facilities thereon.

Additional Costs May Be Incurred by Mineral Property Operators as a Result of International Climate Change Initiatives

The Resulting Issuer acknowledges climate change as an international and community concern. The Resulting Issuer supports and endorses various initiatives for voluntary actions consistent with international initiatives on climate change. In addition to voluntary actions, governments are moving to introduce climate change legislation and treaties at the international, national, state/provincial and local levels. Where legislation already exists, regulation relating to emission levels and energy efficiency is becoming more stringent. Some of the costs associated with reducing emissions can be offset by increased energy efficiency and technological innovation. However, if the current regulatory trend continues, the Resulting Issuer expects this may result in increased costs at the High Lake and West Hawk Lake Properties, which could have a material impact on the viability of the property and impair the revenue derived from the interest, which could have a material adverse effect on the Resulting Issuer's profitability, results of operations and financial condition and the trading price of the Resulting Issuer'ssecurities.

Community Relations

McFarlane's relationships with the communities in which it operates and other stakeholders are critical to ensure the future success of its existing operations and the construction and development of its projects. There is an increasing level of public concern relating to the perceived effect of exploration activities on the environment and on communities impacted by such activities. Publicity adverse to McFarlane, its operations or extractive industries generally, could have an adverse effect on McFarlane and may impact relationships with the communities in which McFarlane operates. While McFarlane is committed to operating in a socially responsible manner, there can be no assurance that its efforts in this respect will mitigate this potential risk. Further, damage to McFarlane's reputation can be the result of the perceived or actual occurrence of any number of events, and could include any negative publicity, whether true or not. The increased usage of social media and other web-based tools used to generate, publish and discuss user-generated content and to connect with other users has made it increasingly easy for individuals and groups to communicate and share opinions and views in regards to McFarlane and its activities, whether true or not. While McFarlane strives to uphold and maintain a positive image and reputation, McFarlane does not ultimately have control over how it is perceived by others. Reputation loss may lead to increased challenges in developing, maintaining community relations and advancing its projects and decreased investor confidence, all of which may have a material adverse impact on the financial performance and growth of McFarlane.

Competition

The mining industry is intensely competitive. McFarlane will compete with other mining companies, many of which have greater financial resources for the acquisition of mineral claims, permits, and concessions, as well as for the recruitment and retention of qualified employees. Increased competition could adversely affect McFarlane's ability to attract necessary capital funding.

Defects in Title to Mineral Properties

Establishing title to mineral properties is a very detailed and time-consuming process. Title to the area of mineral properties may be disputed. While McFarlane has investigated title to all of its mineral claims and, to the best of its knowledge, title to all of its properties are in good standing, mineral properties may be subject to prior unregistered agreements or transfers and title may be affected by such undetected defects. There may be valid challenges to the title of McFarlane's properties which, if successful, could impair exploration, development and/or operations. McFarlane's mineral properties may be subject to aboriginal land claims, prior unregistered agreements or transfers and title may be affected by undetected defects. McFarlane cannot give any assurance that title to its properties will not be challenged.

Defects in or disputes relating to the interests the Resulting Issuer holds or acquires may prevent it from realizing the anticipated benefits from these interests. Material changes could also occur that may adversely affect management's estimate of the carrying value of the Resulting Issuer's interests and could result in impairment charges. While McFarlane currently seeks, and the Resulting Issuer will seek, to confirm the existence, validity, enforceability, terms and geographic extent of the interests it acquires, there can be no assurance that disputes or other problems concerning these and other matters or other problems will not arise. Confirming these matters is complex and is subject to the application of the laws of each jurisdiction to the particular circumstances of each parcel of mineral property and to the documents reflecting the interest. The discovery of any defects in, or any disputes in respect of, the Resulting Issuer's interests, could have a material adverse effect on the Resulting Issuer's profitability, results of operations and financial condition and the trading price of its securities.

A defect in the chain of title to one of the Resulting Issuer's interests or necessary for the anticipated development or operation of a particular project to which an interest relates may arise to defeat or impair the claim of the operator to a property which could in turn result in a loss of the Resulting Issuer's interest in respect of that property. In addition, claims by third parties or aboriginal groups in the Chile and elsewhere may impact on the operator's ability to conduct activities on a property to the detriment of the Resulting Issuer's interests. To the extent an owner or operator does not have title to the property, it may be required to cease operations or transfer operational control to another party. Certain interests can be contractual in nature, rather than an interest in land, with the risk that an assignment or bankruptcy or insolvency proceedings by an owner will result in the loss of any effective interest in a particular property. Further, even in those jurisdictions where there is a right to record or register interests held by the Resulting Issuer in land registries or mining recorders offices, such registrations may not necessarily provide any protection to the Resulting Issuer. As a result, known title defects, as well as unforeseen and unknown title defects may impact operations at a project in respect of which the Resulting Issuer has an interest and may result in a material adverse effect on the Resulting Issuer's profitability, results of operations and financial condition and the trading price

of its securities.

Future Litigation Could Affect Title

Potential litigation may arise on a property on which the Resulting Issuer holds an interest (for example, litigation between joint venture partners or between operators and original property owners or neighboring property owners), including the High Lake and West Hawk Lake Properties. As a holder of such interests, the Resulting Issuer will not generally have any influence on the litigation and will not generally have access to data. Any such litigation that results in the cessation or reduction of production from a property (whether temporary or permanent) or the expropriation or loss of rights to a property could have a material adverse effect on the Resulting Issuer's profitability, results of operations and financial condition and the trading price of its securities.

Deficient Third Parties' Reviews, Reports and Projections

The Resulting Issuer relies upon third parties to provide analysis, reviews, reports, advice and opinions regarding the Resulting Issuer's projects. There is a risk that such analysis, reviews, reports, advice, opinions are inaccurate, in particular with respect to resource estimation, process development and recommendations for products to be produced as well as with respect to economic assessments including estimating the capital and operation costs of the Resulting Issuer's project and forecasting potential future revenue streams. Uncertainties are also inherent in such estimations.

Dependence on Key Individuals

The Resulting Issuer is dependent on a relatively small number of key personnel, and the loss of any one of them could have an adverse effect on the Resulting Issuer. In addition, while certain of the Resulting Issuer's officers and directors have experience in the exploration and development of mineral producing properties; the Resulting Issuer will remain highly dependent upon contractors and other third parties in the performance of its exploration and development activities. There can be no guarantee that such contractors and third parties will be available to carry out such activities on behalf of the Resulting Issuer or be available upon commercially acceptable terms.

Directors and Officers May Have Conflicts of Interest

Certain of the proposed directors and/or officers of the Resulting Issuer, are or will be, and may continue to be, involved in other business ventures through their direct and indirect participation in corporations, partnerships, joint ventures, etc. that may become potential competitors of the technologies, products and services the Resulting Issuer intends to provide. Situations may arise where the other interest of these directors and officers conflict with, or diverge from, the Resulting Issuer's interest. Certain of such conflicts may be required to be disclosed in accordance with procedures and remedies, as applicable, under corporate law, however, such procedures and remedies may not fully protect the Resulting Issuer. In addition, in conflict of interest situations, the directors and officers of the Resulting Issuer may owe the same duty to another company and will need to balance their competing interest. Circumstances (including with respect to future corporate opportunities) may arise that may be resolved in a manner that is unfavorable to the Resulting Issuer.

Global Financial Conditions May Be Volatile

Market events and conditions, including the ongoing COVID-19 pandemic, disruptions in the international credit markets and other financial systems, along with political instability have resulted in commodity prices remaining volatile. These conditions have also caused a loss of confidence in global credit markets resulting in the collapse of, and government intervention in, major banks, financial institutions and insurers and creating a climate of greater volatility, tighter regulations, less liquidity, widening credit spreads, less price transparency, increased credit losses and tighter credit conditions. Notwithstanding various actions by governments, concerns about the general condition of the capital markets, financial instruments, banks and investment banks, insurers and other financial institutions caused the broader credit markets to be volatile and interest rates to remain at historical lows. These events are illustrative of the effect that events beyond the Resulting Issuer's control may have on commodity prices, demand for metals, including gold and silver, availability of credit, investor confidence, and general financial market liquidity, all of which may adversely affect Resulting Issuer's business. Global financial conditions have always been subject to volatility. Access to public financing has been negatively impacted by sovereign debt concerns in Europe and emerging markets, as well as concerns over global growth rates and conditions. These and other factors may impact the ability of Resulting Issuer to obtain equity or debt financing in the future and, if obtained, the favourability of the terms of such financing to Resulting Issuer. Increased levels of volatility and market turmoil can adversely impact Resulting Issuer's operations and the price of the Resulting Issuer Shares.

The Ongoing Spread of COVID-19 May Negatively Impact McFarlane's Business.

McFarlane's business, operations and financial condition could be materially adversely affected by the outbreak of pandemics or other health crises, such as the outbreak of COVID-19 that was designated as a pandemic by the World Health Organization on March 11, 2020. The international response to the spread of COVID-19 has led to significant restrictions on travel, temporary business closures, quarantines, global stock market volatility, and a general reduction in consumer activity. Such public health crises can result in operating, supply chain and project development delays and disruptions, global stock market and financial market volatility, declining trade and market sentiment, reduced movement of people and labour shortages, and travel and shipping disruption and shutdowns, including as a result of government regulation and prevention measures, or a fear of any of the foregoing, all of which could affect commodity prices, interest rates, credit risk and inflation. In addition, the current COVID-19 pandemic, and any future emergence and spread of similar pathogens could have an adverse impact on global economic conditions which may adversely impact the McFarlane's operations, and the operations of suppliers, contractors and service providers. McFarlane may experience business interruptions, including suspended (whether government mandated or otherwise) or reduced operations relating to COVID-19 and other such events outside of McFarlane's control, which could have a material adverse impact on its business, operations and operating results, financial condition and liquidity. As at the date hereof, the duration of the business disruptions internationally and related financial impact of COVID-19 cannot be reasonably estimated. It is unknown whether and how McFarlane may be affected if the pandemic persists for an extended period of time. McFarlane's exposure to such public health crises also includes risks to employee health and safety. Should an employee, contractor, community member or visitor become infected with a serious illness that has the potential to spread rapidly, this could place McFarlane's workforce at risk.

Adequate Infrastructure May Not Be Available to Develop the McFarlane Properties

Mining, processing, development and exploration activities depend, to one degree or another, on adequate infrastructure. Reliable roads, bridges, power sources and water supply are important determinants, which affect capital and operating costs. Unusual or infrequent weather phenomena, sabotage, government or other interference in the maintenance or provision of such infrastructure could adversely affect or inhibit the operations at the McFarlane Properties in respect of which the Resulting Issuer holds an interest, which may result in a material adverse effect on the Resulting Issuer's profitability, results of operations and financial condition and the trading price of their securities.

Future Acquisitions and Partnerships

As part of the Resulting Issuer's business strategy, it may seek to grow by acquiring companies and/or assets or establishing new joint ventures that it believes will complement its future business. In pursuit of such opportunities, the Resulting Issuer may fail to select appropriate acquisition candidates or negotiate acceptable agreements, including arrangements to finance the acquisitions or integrate the acquired businesses or their personnel into the Resulting Issuer. There can be no assurance that the Resulting Issuer will complete any acquisition or business arrangement that it pursues on favorable terms or at all, or that any acquisitions or business arrangements completed will ultimately benefit the Resulting Issuer.

There are risks inherent in such activities. Specifically, there could be unknown or undisclosed risks or liabilities of such companies for which the Resulting Issuer is not sufficiently indemnified. Any such unknown or undisclosed risks or liabilities could materially and adversely affect the Resulting Issuer's financial performance and results of operations. The Resulting Issuer may not effectively select acquisition candidates or negotiate or finance acquisitions or integrate the acquired businesses and their personnel or acquire assets for our business. The Resulting Issuer could encounter additional transaction and integration related costs or experience an impact to its operations or results of operation as a result of the failure to realize all of the anticipated benefits from such acquisitions or partnerships, or an inability to successfully integrate an acquisition as anticipated. As a result of integration efforts, the Resulting Issuer may experience interruptions in its business activities, costs of integration and harm to its reputation, all of which could have a material adverse effect on the Resulting Issuer's business, financial condition and results of operations. The Resulting Issuer may experience difficulties in combining corporate cultures, maintaining employee morale and retaining key employees. The integration of any such acquired companies may also impose substantial demands on management of the Resulting Issuer. There is no assurance that these acquisitions will be successfully integrated in a timely manner or without additional expenses incurred.

Anti-Bribery Laws (Such as the Corruption of Foreign Public Officials Act of Canada ("CFPOA")

The Resulting Issuer's business is subject to the CFPOA which generally prohibits companies and company employees from engaging in bribery or other prohibited payments to foreign officials for the purpose of obtaining or retaining business. The CFPOA also requires companies to maintain accurate books and records and internal controls, including all foreign-controlled subsidiaries. In addition, the Resulting Issuer is subject to other anti- bribery laws of the nations in which it conducts business that apply similar prohibitions as the CFPOA. The Resulting Issuer's employees or other agents may, without the Resulting Issuer's knowledge and despite its efforts, engage in prohibited conduct under the CFPOA or other anti-bribery laws that the Resulting Issuer may be subject to and for which it may be held responsible. If employees or other agents are found to have engaged in such practices, the Resulting Issuer could suffer severe penalties and other consequences that may have a material adverse effect on its business, financial condition and results of operations.

Equipment, Materials and Skilled Technical Workers

The Resulting Issuer is dependent on the availability of affordable and accessible equipment, replacement parts, and repair services and the absence or disrepair of such equipment, parts and services could affect or halt exploration or eventual production on the properties of the Resulting Issuer. There can be no guarantee that such equipment, parts or repair services will be available to the Resulting Issuer, or that such equipment, replacement parts or repair work will be available on commercially reasonable terms.

The Resulting Issuer is dependent on the availability of affordable and accessible materials. There can be no guarantee of the availability, quality and reliability of the supply of neither such materials, nor that such materials will continue to be available to the Resulting Issuer on commercially reasonable terms. The Resulting Issuer is also dependent on the availability of skilled technical workers to carry out various functions on the properties of the Resulting Issuer. There can be no guarantee that such skilled workers will be available to carry out such activities on behalf of the Resulting Issuer or that such workers will be available on commercially reasonable terms.

Risks Relating to Attracting and Retaining Qualified Management and Technical Personnel

The Resulting Issuer will be dependent upon the continued availability and commitment of its key management personnel, whose contributions to immediate and future operations of the Resulting Issuer are of significant importance. The loss of any such key management personnel could negatively affect business operations. From time to time, the Resulting Issuer may also need to identify and retain additional skilled management and specialized technical personnel to efficiently operate its business. In addition, the Resulting Issuer frequently retains third party specialized technical personnel to assess and execute on opportunities. These individuals may have conflicts of interest or scheduling conflicts, which may delay or inhibit the Resulting Issuer's ability to employ such individuals' expertise. Recruiting and retaining qualified personnel is critical to the Resulting Issuer's success and there can be no assurance that the Resulting Issuer will be able to recruit and retain such personnel. If the Resulting Issuer is not successful in recruiting and retaining qualified personnel, the Resulting Issuer's ability to execute its business model and growth strategy could be affected, which could have a material adverse impact on its profitability, results of operations and financial condition and the trading price of its securities.

McFarlane's Operations Are Subject to Human Error

Despite efforts to attract and retain qualified personnel, as well as the retention of qualified consultants, to manage McFarlane's interests, and even when those efforts are successful, people are fallible and human error could result in significant uninsured losses to McFarlane. These could include loss or forfeiture of mineral claims or other assets for non-payment of fees or taxes, significant tax liabilities in connection with any tax planning effort McFarlane might undertake and legal claims for errors or mistakes by McFarlane personnel.

Disruption from Non-Governmental Organizations

As is the case with any businesses which operate in the mining industry, the Resulting Issuer may become subject to pressure and lobbying from non-governmental organizations. There is a risk that the demands and actions of non-governmental organizations may cause significant disruption to the Resulting Issuer's business which may have a material adverse effect on its operations and financial condition.

Health & Safety

Mining, like many other exploration or extractive natural resource industries, is subject to potential risks and liabilities due to accidents that could result in serious injury or death. The impact of such accidents could affect the profitability of the operations, cause an interruption to operations, lead to a loss of licences, affect the reputation of the Resulting Issuer and its ability to obtain further licences, damage community relations and reduce the perceived appeal of the Resulting Issuer as an employer. There is no assurance that the Resulting Issuer has been or will at all times be in full compliance with all laws and regulations or hold, and be in full compliance with, all required health and safety permits. The potential costs and delays associated with compliance with such laws, regulations and permits could prevent the Resulting Issuer from proceeding with the development of a project or the operation or further development of a project, and any noncompliance therewith may adversely affect the Resulting Issuer's business, financial condition and results of operations. Amendments to current laws, regulations and permits governing operations and activities of mining companies, or more stringent implementation thereof, could have a material adverse impact on the Resulting Issuer and cause increases in exploration expenses, capital expenditures or production costs, reduction in the levels of production at producing properties, or abandonment or delays in development of new mining properties.

Nature and Climatic Conditions

The Resulting Issuer and the mining industry continuingly face geotechnical challenges which could adversely impact the Resulting Issuer's production and profitability. Unanticipated adverse geotechnical and hydrological conditions, such as severe rainfall, floods, landslides, droughts, pit wall failures and rock fragility may occur, and such events may not be detected in advance. Geotechnical instabilities and adverse climatic conditions can be difficult to predict are often affected by risks and hazards outside of the Resulting Issuer's control. Such conditions could result in limited access to mine sites, suspensions or reductions in operations, government investigations, increased monitoring costs, remediation costs, loss of minerals and other impacts which could cause the Resulting Issuer's projects to be less profitable than currently anticipated and could result in a material adverse effect on the Resulting Issuer's results of operations and financial position.

Uninsured or Uninsurable Risks

In the course of exploration, development and production of mineral resource properties, several risks and, in particular, significant risks that could result in damage to, or destruction of vessels and producing or processing facilities, personal injury or death, environmental damage, delays in mining, monetary losses and possible legal liability, may occur. It is not always possible to fully insure against such risks, and the Resulting Issuer may decide not to take out insurance against such risks as a result of high premiums or for other reasons. Should such liabilities arise they could reduce or eliminate any future profitability and result in an increase in costs and a decline in value of the securities of the Resulting Issuer. The Resulting Issuer cannot be certain that insurance will be available on acceptable terms or conditions. In some cases, coverage may not be acceptable or may be considered too expensive relative to the perceived risk.

Disruption in McFarlane's Activities Due to Acts of God May Adversely Affect McFarlane

Disruptions in the activities of McFarlane may be caused by natural disasters, effects of climate change and man- made activities, pandemics, trade disputes and disruptions, war, terrorism, and any other form of economic, health, or political disruptions. McFarlane's financial condition is reliant on continued operations, and in circumstances where continued operations are not possible, McFarlane is likely to experience a decline in its revenue, and may suffer additional disruptions in the form of lack of access to its workforce, customers, technology, or other assets. The extent of the impact on McFarlane will vary with the extent of the disruption and cannot be adequately predicted in advance.

CERTIFICATE OF 1287401 B.C. LTD.

The foregoing document constitutes full, true and plain disclosure of all material facts relating to the securities of 1287401 B.C. Ltd., assuming completion of the Transaction.

(signed) James Ward (signed) James Ward

Chief Executive Officer Chief Financial Officer

(signed) Branden Barry Keast (signed) Stephen Sandusky

Director Director

CERTIFICATE OF MCFARLANE LAKE MINING INCORPORATED

The foregoing document constitutes full, true and plain disclosure of all material facts relating to the securities of McFarlane Lake Mining Incorporated, assuming completion of the Transaction.

(signed) Mark Trevisiol (signed) Charles Lilly

Chief Executive Officer Chief Financial Officer

(signed) Roger Emdin (signed) Perry Dellelce

Director Director

SCHEDULE A RESULTING ISSUER STOCK OPTION PLAN

MCFARLANE LAKE MINING LIMITED (FORMERLY 1287401 B.C. LTD.) INCENTIVE STOCK OPTION PLAN

Approved by Shareholders: December 7, 2021 Effective Date: January 14, 2022

	ARTICLE 1 DEFINITIONS AND INTERPRETATION 1
1.1	Defined Terms 1
1.2	Interpretation 4
	ARTICLE 2 ESTABLISHMENT OF PLAN 4
2.1	Purpose 4
2.2	Shares Reserved 4
2.3	Non-Exclusivity 5
2.4	Effective Date 5
	ARTICLE 3 ADMINISTRATION OF PLAN 5
3.1	Administration 5
3.2	Amendment, Suspension and Termination 6
3.3	Compliance with Laws 6
	ARTICLE 4 OPTION GRANTS 7
4.1	Eligibility and Multiple Grants 7
4.2	Representation 7
	ARTICLE 5 OPTION TERMS 7
5.1	Exercise Price 7
5.2	Expiry Date 7
5.3	Vesting 7
5.4	Accelerated Vesting Event 7
5.5	Withholding Taxes 8
5.6	Non-Assignability 8
5.7	Ceasing to be Eligible Person 8
	ARTICLE 6 EXERCISE PROCEDURE 9
6.1	Exercise Procedure 9
	ARTICLE 7 APPROVALS, AMENDMENTS AND TERMINATION 9
7.1	Approvals Required for Plan 9
7.2	Permitted Amendments 9
7.3	Amendments Requiring Shareholder Approval 10
7.4	Consent to Amend 10
7.5	Amendment Subject to Approval 10
7.6	Termination 11
7.7	Agreement 11
	ARTICLE 8 MISCELLANEOUS 11
8.1	No Rights as Shareholder 11
8.2	No Right to Employment 11
8.3	Governing Law 11

ARTICLE 1 DEFINITIONS AND INTERPRETATION

1.1 Defined Terms

For the purposes of this Plan, the following terms shall have the following meanings:

• (a) "Accelerated Vesting Event" means the occurrence of any one of the following events:

  • (i) a take-over bid (as defined under applicable securities Laws) is made for Shares or Convertible Securities which, if successful would result (assuming the conversion, exchange or exercise of the Convertible Securities, if any, that are the subject of the take-over bid) in any Person or Persons acting jointly or in concert (as determined under applicable securities Laws) or Persons associated or affiliated with such Person or Persons (as determined under applicable securities Laws) beneficially, directly or indirectly, owning shares that would, notwithstanding any agreement to the contrary, entitle the holders thereof for the first time to cast at least 50% of the votes attaching to all shares in the capital of the Corporation that may be cast to elect Directors;
  • (ii) the acquisition or continuing ownership by any Person or Persons acting jointly or in concert (as determined under applicable securities Laws), directly or indirectly, of Shares or of Convertible Securities, which, when added to all other securities of the Corporation at the time held by such Person or Persons, Persons associated with such Person or Persons, or Persons affiliated with such Person or Persons (as determined under applicable securities Laws) (collectively, the "Acquirors"), and assuming the conversion, exchange or exercise of Convertible Securities beneficially owned by the Acquirors, results in the Acquirors beneficially owning shares that would, notwithstanding any agreement to the contrary, entitle the holders thereof for the first time to cast at least 50% of the votes attaching to all shares in the capital of the Corporation that may be cast to elect Directors;
  • (iii) an amalgamation, merger, arrangement or other business combination (a "Business Combination") involving the Corporation receives the approval of, or is accepted by, the securityholders of the Corporation (or all classes of securityholders whose approval or acceptance is required) or, if their approval or acceptance is not required in the circumstances, is approved or accepted by the Corporation and as a result of that Business Combination, parties to the Business Combination or securityholders of the parties to the Business Combination, other than the securityholders of the Corporation, own, directly or indirectly, shares of the continuing entity that entitle the holders thereof to cast at least 50% of the votes attaching to all shares in the capital of the continuing entity that may be cast to elect Directors;

• (b) "Affiliate" shall have the meaning ascribed thereto by the Securities Act (Ontario) in section 1(2) Interpretation;

• (c) "Associate" shall have the meaning ascribed thereto by the Securities Act (Ontario) in section 1(1) Interpretation;

• (d) "Award Date" means the date on which the Board grants and announces a particular Option;

• (e) "Black Out Period" means a temporary period during which Participants may not exercise their Options;

• (f) "Board" means the board of directors of the Corporation or, as applicable, a committee consisting of not less than 3 directors of the Corporation duly appointed to administer this Plan;

• (g) "Charitable Organization" means "charitable organization" as defined in the Income Tax Act (Canada) from time to time;

• (h) "Common Shares" means the common shares in the capital of the Corporation;

• (i) "Consultant" means an individual or Consultant Company, other than an Employee or a Director of the Corporation, that:

  • (i) is engaged to provide on an ongoing bona fide basis, consulting, technical, management or other services to the Corporation or to an Affiliate of the Corporation, other than services provided in relation to a Distribution,
  • (ii) provides the services under a written contract between the Corporation or an Affiliate of the Corporation on the one hand and the individual or the Consultant Company on the other,
  • (iii) in the reasonable opinion of the Corporation, spends or will spend a significant amount of time and attention on the business and affairs of the Corporation or an Affiliate of the Corporation, and
  • (iv) has a relationship with the Corporation or an Affiliate of the Corporation that enables the Consultant to be knowledgeable about the business and affairs of the Corporation;

• (j) "Consultant Company" means for an individual consultant, a company or partnership of which the individual is an employee, shareholder or partner;

• (k) "Control Person" has the meaning set forth in the Securities Act (Ontario);

• (l) "Convertible Securities" means securities convertible into, exchangeable for or representing the right to acquire Common Shares;

• (m) "Corporation" means McFarlane Lake Mining Limited and its predecessor and successor entities;

• (n) "Director" means directors, senior officers and Management Company Employees of the Corporation or its subsidiaries, if any, to whom stock options can be granted in reliance on a prospectus exemption under applicable securities Laws**;**

• (o) "Distribution" shall have the meaning ascribed thereto by the Securities Act (Ontario) in section 1(1) - Interpretation;

• (p) "Eligible Person" means

  • (i) a Director, Officer, Employee or Consultant of the Corporation or its subsidiaries, if any, at the time the option is granted, and includes companies that are wholly owned by Eligible Persons; and
  • (ii) a Charitable Organization at the time the Option is granted;

• (q) "Employee" means an individual who:

  • (i) is considered an employee of the Corporation or its subsidiaries, if any, under the Income Tax Act, (Canada) i.e. for whom income tax, employment insurance and Canada Pension Plan deductions must be made at source,
  • (ii) works full-time for the Corporation or its subsidiaries, if any, providing services normally provided by an employee and who is subject to the same control and direction by the Corporation over the details and methods of work as an employee of the Corporation, but for whom income tax deductions are not made at source, or

• (iii) works for the Corporation or its subsidiaries, if any, on a continuing and regular basis for a minimum amount of time per week providing services normally provided by an employee and who is subject to the same control and direction by the Corporation over the details and method of work as an employee of the Corporation, but for whom income tax deductions are not made at source;

• (r) "Exchange" means the Neo Exchange Inc. and any successor entity or any recognized Canadian stock exchange on which the Corporation may be listed from time-to-time;

• (s) "Exercise Period" means the period during which a particular Option may be exercised, being the period from and including the Award Date through to and including the Expiry Date;

• (t) "Exercise Price" means the price at which an Option may be exercised in accordance with Section 5.1;

• (u) "Expiry Date" means the last day of the term for an Option, as set by the Board at the time of grant in accordance with Section 5.2 and, if applicable, as amended from time to time;

• (v) "Governmental Authorities" means governments, regulatory authorities, governmental departments, agencies, commissions, bureaus, officials, ministers, Crown corporations, courts, bodies, boards, tribunals or dispute settlement panels or other law, rule or regulation-making organizations or entities:

  • (i) having or purporting to have jurisdiction on behalf of any nation, province, territory or state or any other geographic or political subdivision of any of them; or
  • (ii) exercising, or entitled or purporting to exercise any administrative, executive, judicial, legislative, policy, regulatory or taxing authority or power;

• (w) "Holding Company" has the meaning ascribed thereto in section 5.6;

• (x) "Insider" means a director or senior officer of the Corporation, a person that beneficially owns or controls, directly or indirectly, voting shares carrying more than 10% of the voting rights attached to all outstanding voting shares of the Corporation, a director or senior officer of a company that is an insider or a subsidiary of the Corporation, and the Corporation itself if it holds any of its own securities;

• (y) "Laws" means currently existing applicable statutes, by-laws, rules, regulations, orders, ordinances or judgments, in each case of any Governmental Authority having the force of law;

• (z) "Management Company Employee" means an individual who is employed by a Person providing management services to the Corporation which are required for the ongoing successful operation of the business enterprise of the Corporation;

• (aa) "Market Price" means the last closing price of the Company's securities listed on the Exchange on the date before any Option grant;

• (bb) "Officer" means an officer of the Corporation or its subsidiaries, if any;

• (cc) "Option" means a non-transferable and non-assignable option to purchase Common Shares granted to an Eligible Person pursuant to the terms of this Plan;

• (dd) "Other Share Compensation Arrangement" means, other than this Plan and any Options, any stock option plan, stock options, employee stock purchase plan or other compensation or incentive mechanism involving the issuance or potential issuance of Common Shares, including but not limited to a purchase of Common Shares from treasury which is financially assisted by the Corporation by way of loan, guarantee or otherwise;

• (ee) "Participant" means an Eligible Person who has been granted an Option;

• (ff) "Person" means any individual, sole proprietorship, partnership, firm, entity, unincorporated association, unincorporated syndicate, unincorporated organization, trust, body corporate, Governmental Authority, and where the context requires any of the foregoing when they are acting as trustee, executor, administrator or other legal representative;

• (gg) "Personal Representative" means (i) in the case of a deceased Participant, the executor or administrator of the deceased duly appointed by a court or public authority having jurisdiction to do so; and (ii) in the case of a Participant who for any reason is unable to manage his or her affairs, the person entitled by law to act on behalf of such Participant;

• (hh) "Plan" means this incentive stock option plan;

• (ii) "Related Person" means: (i) a "related party" as defined in Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions, of the Corporation; (ii) a promoter of Corporation, or, where the promoter is not an individual, an officer, director or Control Person of the promoter; and (iii) such other Person as may be designated from time to time by the Exchange.

• (jj) "RRSP" has the meaning ascribed thereto in section 5.6; and

• (kk) "Shareholder Approval" means approval by a majority of the votes cast by all shareholders entitled to vote at a meeting of shareholders of the Corporation excluding votes attached to shares beneficially owned by those excluded from voting by Exchange requirements, corporate or securities law or the constating documents of the Corporation;

• (ll) "Termination Date" means the date on which a Participant ceases to be an Eligible Person.

1.2 Interpretation

References to the outstanding Common Shares at any point in time shall be computed on a non-diluted basis.

ARTICLE 2 ESTABLISHMENT OF PLAN

2.1 Purpose

The purpose of this Plan is to advance the interests of the Corporation, through the grant of Options, by:

• (a) providing an incentive mechanism to foster the interest of Eligible Persons in the success of the Corporation, its Affiliates and its subsidiaries, if any;
• (b) encouraging Eligible Persons to remain with the Corporation, its Affiliates or its subsidiaries, if any; and
• (c) attracting new Directors, Officers, Employees and Consultants.

2.2 Shares Reserved

(a) The aggregate number of Common Shares that may be reserved for issuance pursuant to Options shall not exceed, on a rolling basis, 10% of the outstanding Common Shares at the time of the granting of an Option, LESS the aggregate number of Common Shares then reserved for issuance pursuant to any Other Share Compensation Arrangement. For greater certainty, if an Option is surrendered, terminated or expires without being exercised, the Common Shares reserved for issuance pursuant to such Option shall be available for new Options granted under this Plan.

• (b) If there is a change in the outstanding Common Shares by reason of any share consolidation or split, reclassification or other capital reorganization, or a stock dividend, arrangement, amalgamation, merger or combination, or any other change to, event affecting, exchange of or corporate change or transaction affecting the Common Shares, the Board shall make, as it shall deem advisable and subject to the requisite approval of the relevant regulatory authorities, appropriate substitution and/or adjustment in:
  • (i) the number and kind of shares or other securities or property reserved or to be allotted for issuance pursuant to this Plan;
  • (ii) the number and kind of shares or other securities or property reserved or to be allotted for issuance pursuant to any outstanding unexercised Options, and in the Exercise Price for such shares or other securities or property; and
  • (iii) the vesting of any Options, including the accelerated vesting thereof on conditions the Board deems advisable,

and if the Corporation undertakes an arrangement or is amalgamated, merged or combined with another corporation, the Board shall make such provision for the protection of the rights of Participants as it shall deem advisable.

• (c) No fractional Common Shares shall be reserved for issuance under this Plan and the Board may determine the manner in which an Option, insofar as it relates to the acquisition of a fractional Common Share, shall be treated.
• (d) The Corporation shall, at all times while this Plan is in effect, reserve and keep available such number of Common Shares as will be sufficient to satisfy the requirements of this Plan.

2.3 Non-Exclusivity

Nothing contained herein shall prevent the Board from adopting such other incentive or compensation arrangements as it shall deem advisable.

2.4 Effective Date

This Plan shall be subject to the approval of any regulatory authority whose approval is required. Any Options granted under this Plan prior to such approvals being given shall be conditional upon such approvals being given, and no such Options may be exercised unless and until such approvals are given.

ARTICLE 3 ADMINISTRATION OF PLAN

3.1 Administration

• (a) This Plan shall be administered by the Board or any committee established by the Board for the purpose of administering this Plan. Subject to the provisions of this Plan, the Board shall have the authority:
  • (i) to determine the Eligible Persons to whom Options are granted, to grant such Options, and to determine any terms and conditions, limitations and restrictions in respect of any particular Option grant, including but not limited to the nature and duration of the restrictions, if any, to be imposed upon the acquisition, sale or other disposition of Common Shares acquired upon

exercise of the Option, and the nature of the events and the duration of the period, if any, in which any Participant's rights in respect of an Option or Common Shares acquired upon exercise of an Option may be forfeited; and

• (ii) to interpret the terms of this Plan, to make all such determinations and take all such other actions in connection with the implementation, operation and administration of this Plan, and to adopt, amend and rescind such administrative guidelines and other rules and regulations relating to this Plan, as it shall from time to time deem advisable, including without limitation for the purpose of ensuring compliance with Section 3.3 hereof.
• (b) The Board's interpretations, determinations, guidelines, rules and regulations shall be conclusive and binding upon the Corporation, Eligible Persons, Participants and all other Persons.

3.2 Amendment, Suspension and Termination

The Board may amend, subject to the approval of any regulatory authority whose approval is required, suspend or terminate this Plan or any portion thereof. No such amendment, suspension or termination shall alter or impair any outstanding unexercised Options or any rights without the consent of such Participant. If this Plan is suspended or terminated, the provisions of this Plan and any administrative guidelines, rules and regulations relating to this Plan shall continue in effect for the duration of such time as any Option remains outstanding.

3.3 Compliance with Laws

• (a) This Plan, the grant and exercise of Options hereunder and the Corporation's obligation to sell, issue and deliver any Common Shares upon exercise of Options shall be subject to all applicable federal, provincial and foreign Laws, policies, rules and regulations, to the policies, rules and regulations of any stock exchanges or other markets on which the Common Shares are listed or quoted for trading and to such approvals by any Governmental Authority as may, in the opinion of counsel to the Corporation, be required. The Corporation shall not be obligated by the existence of this Plan or any provision of this Plan or the grant or exercise of Options hereunder to sell, issue or deliver Common Shares upon exercise of Options in violation of such Laws, policies, rules and regulations or any condition or requirement of such approvals.
• (b) No Option shall be granted and no Common Shares sold, issued or delivered hereunder where such grant, sale, issue or delivery would require registration or other qualification of this Plan or of the Common Shares under the applicable securities Laws of any foreign jurisdiction, and any purported grant of any Option or any sale, issue and delivery of Common Shares hereunder in violation of this provision shall be void. In addition, the Corporation shall have no obligation to sell, issue or deliver any Common Shares hereunder unless such Common Shares shall have been duly listed, upon official notice of issuance, with all stock exchanges on which the Common Shares are listed for trading.
• (c) Common Shares sold, issued and delivered to Participants pursuant to the exercise of Options shall be subject to restrictions on resale and transfer under applicable securities Laws and the requirements of any stock exchanges or other markets on which the Common Shares are listed or quoted for trading, and any certificates representing such Common Shares shall bear, as required, a restrictive legend in respect thereof.

ARTICLE 4 OPTION GRANTS

4.1 Eligibility and Multiple Grants

Options shall only be granted to Eligible Persons. An Eligible Person may receive Options on more than one occasion and may receive separate Options, with differing terms, on any one or more occasions.

4.2 Representation

The Corporation represents that an Employee, Consultant or Management Company Employee who is granted an Option or Options is a bona fide Employee, Consultant or Management Company Employee, as the case may be. In the event of any discrepancy between this Plan and an option agreement, the provisions of this Plan shall govern.

ARTICLE 5 OPTION TERMS

5.1 Exercise Price

Subject to a minimum Exercise Price of $0.05, the Exercise Price per Common Share for an Option shall not be less than the Market Price for the Corporation's common shares at the date of grant.

5.2 Expiry Date

Every Option granted shall, unless sooner terminated, have a term not exceeding and shall therefore expire no later than 10 years after the date of grant.

Notwithstanding anything contained herein, if the Expiry Date occurs during a Black Out Period or within 2 business days of a Black Out Period, the Expiry Date for such option shall be extended to 10 days from the end of the Black Out Period.

5.3 Vesting

Subject to the policies of the Exchange, the Board shall determine the manner in which an Option shall vest and become exercisable.

5.4 Accelerated Vesting Event

Subject to the policies of the Exchange, upon the occurrence of an Accelerated Vesting Event, the Board will have the power, at its sole discretion and without being required to obtain the approval of shareholders or the holder of any Option, to make such changes to the terms of Options as it considers fair and appropriate in the circumstances, including but not limited to: (a) accelerating the vesting of Options, conditionally or unconditionally; (b) terminating every Option if under the transaction giving rise to the Accelerated Vesting Event, options in replacement of the Options are proposed to be granted to or exchanged with the holders of Options, which replacement options treat the holders of Options in a manner which the Board considers fair and appropriate in the circumstances having regard to the treatment of holders of Shares under such transaction; (c) otherwise modifying the terms of any Option to assist the holder to tender into any take-over bid or other transaction constituting an Accelerated Vesting Event; or (d) following the successful completion of such Accelerated Vesting Event, terminating any Option to the extent it has not been exercised prior to successful completion of the Accelerated Vesting Event. The determination of the Board in respect of any such Accelerated Vesting Event shall for the purposes of this Plan be final, conclusive and binding.

5.5 Withholding Taxes

The exercise of each Option granted under this Plan is subject to the condition that if at any time the Corporation determines, in its discretion, that the satisfaction of withholding tax or other withholding liabilities is required under applicable law in respect of such exercise, such exercise is not effective unless such withholding has been effected to the satisfaction of the Corporation. In such circumstances, the Corporation may require that the Participant pay to the Corporation, in addition to and in the same manner as the Exercise Price for the Common Shares, such amount as the Corporation is obliged to remit to the relevant taxing authority in respect of the exercise of the Option. Any such additional payment is due no later than the date as of which any amount with respect to the Option exercised first becomes includable in the gross income of the Participant for tax purposes.

5.6 Non-Assignability

Options may not be assigned or transferred, and all Option certificates will be so legended, provided however that (i) the Participant may transfer the Option to a personal holding company wholly-owned and controlled by such Participant ("Holding Company") or to a registered retirement savings plan established for the sole benefit of such Participant ("RRSP") or from a Holding Company or RRSP to the Participant and, in either such event, the provisions of this Plan shall apply mutatis mutandis as though they were originally issued to and registered in the name of the Participant, (ii) the Participant may transfer the Option to a permitted assign (as defined in National Instrument 45-106 Prospectus and Registration Exemptions) or for estate planning or estate settlement purposes and, in any such event, the provisions of this Plan shall apply mutatis mutandis as though they were originally issued to and registered in the name of the Participant, or (iii) the Personal Representatives of a Participant may, to the extent permitted by section 6.1, exercise the Option within the Exercise Period.

5.7 Ceasing to be Eligible Person

• (a) If a Participant who is an Officer, Employee or Consultant is terminated for cause, each Option held by such Participant shall terminate and shall therefore cease to be exercisable upon such termination for cause.
• (b) If a Participant dies prior to otherwise ceasing to be an Eligible Person, each Option held by such Participant shall terminate and shall therefore cease to be exercisable no later than the earlier of the Expiry Date and the date which is twelve months after the date of the Participant's death.
• (c) Unless an option agreement specifies otherwise, if a Participant ceases to be an Eligible Person for any reason other than death, each Option held by the Participant will cease to be exercisable 90 days after the Termination Date or for whatever period after the Participant ceases to serve in such capacity, as determined by the Board.
• (d) For greater certainty, if a Participant dies, each Option held by such Participant shall be exercisable by the legal representative of such Participant until the earlier of (i) the date that is one year from the date of death or (ii) the date such Option terminates and therefore ceases to be exercisable pursuant to the terms of this Section.
• (e) If any portion of an Option is not vested at the time a Participant ceases, for any reason whatsoever, to be an Eligible Person, such unvested portion of the Option may not be thereafter exercised by the Participant or its legal representative, as the case may be, always provided that the Board may, in its discretion, thereafter permit the Participant or its legal representative, as the case may be, to exercise all or any part of such unvested portion of the Option that would have vested prior to the time such Option otherwise terminates and therefore ceases to be exercisable pursuant to the terms of this Section. For greater certainty, and without limitation, this provision will apply regardless of whether the Participant ceased to be an Eligible Person voluntarily or involuntarily, was dismissed with or without cause, and regardless of whether the Participant received

compensation in respect of dismissal or was entitled to a notice of termination for a period which would otherwise have permitted a greater portion of an Option to vest.

ARTICLE 6 EXERCISE PROCEDURE

6.1 Exercise Procedure

An Option may be exercised from time to time, and shall be deemed to be validly exercised by the Participant only upon the Participant's delivery to the Corporation at its head office of:

• (a) a written notice of exercise addressed to the Chief Financial Officer of the Corporation, specifying the number of Common Shares with respect to which the Option is being exercised;
• (b) the originally signed option agreement with respect to the Option being exercised;
• (c) a certified cheque or bank draft made payable to the Corporation for the aggregate Exercise Price for the number of Common Shares with respect to which the Option is being exercised; and
• (d) documents containing such representations, warranties, agreements and undertakings, including such as to the Participant's future dealings in such Common Shares, as counsel to the Corporation reasonably determines to be necessary or advisable in order to comply with or safeguard against the violation of the Laws of any jurisdiction;

and on the business day following, the Participant shall be deemed to be a holder of record of the Common Shares with respect to which the Option is being exercised, and thereafter the Corporation shall, within a reasonable amount of time, cause certificates for such Common Shares to be issued and delivered to the Participant.

ARTICLE 7 APPROVALS, AMENDMENTS AND TERMINATION

7.1 Approvals Required for Plan

Prior to its implementation by the Corporation, this Plan is subject to the receipt of approval by the shareholders of the Corporation at a general meeting and approval of the Exchange. Within three years after the institution of this Plan and within every three years thereafter, this Plan must be reapproved by a resolution of the shareholders of the Corporation at a general meeting. In addition, the resolution of the shareholders of the Corporation should include the next date by which the Corporation must seek Shareholder Approval, such date being no later than three years from the date such resolution was approved. If Shareholder Approval is not obtained within three years of either the institution of the Plan or subsequent approval, as the case may be, all unallocated entitlements shall be cancelled and the Corporation shall not be permitted to grant further entitlements under the Plan, until such time as Shareholder Approval is obtained. However, all allocated Options under the Plan, such as Options that have been granted but not yet exercised, may continue unaffected. If shareholders fail to approve the resolution for the renewal of the Plan, the Corporation shall forthwith stop granting Options under the Plan, even if such renewal approval was sought prior to the end of the three-year period.

7.2 Permitted Amendments

The Board may, at any time and from time to time, amend, suspend or terminate the Plan without shareholder approval, provided that no such amendment, suspension or termination may be made without obtaining any requisite regulatory or Exchange approval or the consent or deemed consent of a Participant where such amendment, suspension or termination materially prejudices the rights of the Participant. The types of amendments that do not require shareholder approval include but are not limited to:

• (a) amendments of a ''housekeeping'' nature, including those required to clarify any ambiguity or rectify any inconsistency in the Plan;
• (b) amendments required to comply with mandatory provisions of applicable law, including the rules and regulations of the Exchange;
• (c) amendments which are advisable to accommodate changes in tax laws;
• (d) extension of accelerated expiry dates to, but not beyond, the expiry date originally set at the time of the option grant; and
• (e) amendments to the terms of options in order to maintain option value in connection with a conversion, change, reclassification, redesignation, subdivision or consolidation of the Common Shares or a reorganization, amalgamation, consolidation, merger or takeover bid or similar type of transaction involving the Corporation.

7.3 Amendments Requiring Shareholder Approval

Notwithstanding the provisions of Section 7.2, the Board may not, without the prior approval of the shareholders of the Corporation, make any amendment that requires the approval of disinterested shareholders pursuant to Section 10.12(7) of the NEO Exchange Listing Manual, and make amendments to any of the following provisions of the Plan:

• (a) Persons eligible to be granted Options under the Plan;
• (b) the maximum percentage of shares that may be reserved under the Plan for issuance pursuant to the exercise of Options;
• (c) the method for determining the Exercise Price of Options;
• (d) the maximum term of Options;
• (e) the expiry and termination provisions applicable to Options;
• (f) any amendment to remove or to exceed limits on Options available to Related Persons of the Corporation; and
• (g) amendments to an amending provision within the Plan.

7.4 Consent to Amend

The Board may amend any Option with the consent of the affected Participant and the Exchange, including any shareholder approval required by the Exchange. For greater certainty, Shareholder Approval is required for: (i) a reduction in the Exercise Price of an Option if the Participant is an Insider at the time of the proposed amendment; (ii) an extension of the term of an Option if the Participant is an Insider at the time of the proposed amendment; or (iii) an extension of the term of an Option, where the Exercise Price is lower than the prevailing market price.

7.5 Amendment Subject to Approval

If the amendment of an Option requires regulatory or shareholder approval, such amendment may be made prior to such approvals being given, but no such amended Options may be exercised unless and until such approvals are given.

7.6 Termination

The Board may terminate this Plan at any time provided that such termination shall not alter the terms or conditions of any Option or impair any right of any Participant pursuant to any Option awarded prior to the date of such termination and notwithstanding such termination the Corporation, such Options and such Participants shall continue to be governed by the provisions of this Plan.

7.7 Agreement

The Corporation and every person to whom an Option is awarded hereunder shall be bound by and subject to the terms and conditions of this Plan.

ARTICLE 8 MISCELLANEOUS

8.1 No Rights as Shareholder

Nothing in this Plan or any Option shall confer upon a Participant any rights as a shareholder of the Corporation with respect to any of the Common Shares underlying an Option unless and until such Participant shall have become the holder of such Common Shares upon exercise of such Option in accordance with the terms of the Plan.

8.2 No Right to Employment

Nothing in this Plan or any Option shall confer upon a Participant any right to continue in the employ of the Corporation or any Affiliate or affect in any way the right of the Corporation or any Affiliate to terminate the Participant's employment, with or without cause, at any time; nor shall anything in the Plan or any Option be deemed or construed to constitute an agreement, or an expression of intent, on the part of the Corporation or any Affiliate to extend the employment of any Participant beyond the time which the Participant would normally be retired pursuant to the provisions of any present or future retirement plan of the Corporation or any Affiliate, or beyond the time at which he would otherwise be retired pursuant to the provisions of any contract of employment with the Corporation or any Affiliate.

8.3 Governing Law

This Plan, all option agreements, the grant and exercise of Options hereunder, and the sale, issue and delivery of Common Shares hereunder upon exercise of Options shall be, as applicable, governed by and construed in accordance with the Laws of the Province of Ontario and the federal Laws of Canada applicable therein. The Courts of the Province of Ontario shall have the exclusive jurisdiction to hear and decide any disputes or other matters arising herefrom.

SCHEDULE B BUSINESS COMBINATION AGREEMENT

EXECUTION VERSION

BUSINESS COMBINATION AGREEMENT

BETWEEN

1287401 B.C. LTD.

AND

1000034047 ONTARIO INC.

AND

MCFARLANE LAKE MINING INCORPORATED

MADE AS OF JANUARY 12, 2022

ARTICLE	1 INTERPRETATION1
1.01	Defined Terms1
1.02	Headings10
1.03	Extended Meanings10
1.04	Statutory References10
1.05	Accounting Principles11
1.06	Currency11
1.07	Schedules11
ARTICLE	2 BUSINESS COMBINATION11
2.01	Business Combination11
2.02	Dissent Rights14
ARTICLE	3 REPRESENTATIONS AND WARRANTIES OF MCFARLANE15
3.01	Incorporation and Registration15
3.02	Subsidiaries15
3.03	Bankruptcy, etc.15
3.04	Due Authorization, etc15
3.05	[intentionally deleted]16
3.06	Absence of Conflict16
3.07	Capital Stock16
3.08	Options and Other Convertible Securities16
3.09	No Pre-Emptive Rights16
3.10	No Shareholders/Voting Agreement17
3.11	Financial Statements17
3.12	Absence of Changes17
3.13	Internal Controls Over Financial Reporting17
3.14	No Restrictions on Activities17
3.15	Mining Matters18
3.16	Extent of Liabilities20
3.17	Non-Arm's Length Transactions20
3.18	No Guarantees20
3.19	Owned Real Property20
3.20	McFarlane Material Contracts20
3.21	Other Contracts21
3.22	Taxes and Governmental Charges21
3.23	Environmental Matters22
3.24	Absence of Litigation, etc22
3.25	Compliance with Laws22
3.26	Authorizations and Consents23
3.27	Employment Matters and Employee Plans23
3.28	No Powers of Attorney24

4.01	Incorporation25
4.02	Subsidiaries26
4.03	Bankruptcy, etc.26
4.04	Due Authorization, etc26
4.05	Absence of Conflict26
4.06	Capital Stock27
4.07	Options and Other Convertible Securities27
4.08	Financial Statements27
4.09	Absence of Changes27
4.10	Internal Controls Over Financial Reporting27
4.11	Ordinary Course28
4.12	No Restrictions on Activities28
4.13	Liabilities28
4.14	Non-Arm's Length Transactions28
4.15	No Guarantees28
4.16	128 Material Contracts28
4.17	Other Contracts29
4.18	Title to Property and Assets29
4.19	Taxes and Governmental Charges29
4.20	Absence ofLitigation, etc30
4.21	Compliance with Laws30
4.22	Authorizations and Consents30
4.23	Employment Matters and Employee Plans30
4.24	No Powers of Attorney31
4.25	Insurance31
4.26	Authorizations31
4.27	Fees and Commissions32
4.28	Books and Records32
4.29	Restrictions on Business Combination32
4.30	Reporting Issuer Status32
4.31	Expenses and Obligations32
4.32	Share Issuance32
4.33	Public Disclosure Documents33
4.34	No Misrepresentation33
4.35	Information Supplied33

5.01	Survival of Covenants, Representations and Warranties33
ARTICLE	6 COVENANTS33
6.01	Access to McFarlane33
6.02	Access to 12834
6.03	Confidentiality34
6.04	Filings and Indemnification36
6.05	Conduct of McFarlane Prior to Closing36
6.06	Conduct of 128 Prior to Closing39
6.07	Standstill of McFarlane41
6.08	Standstill of 12842
6.09	Change to Directors and Officers of 12842
ARTICLE	7 CONDITIONS OF CLOSING43
7.01	Conditions in Favour of 12843
7.02	Conditions in Favour of McFarlane44
7.03	Filing Articles46
7.04	FurtherAssurances46
ARTICLE	8 TERMINATION46
8.01	Termination46
8.02	Effectof Termination47
8.03	Waivers and Extensions48
ARTICLE	9 MISCELLANEOUS48

9.01	Further Assurances48
9.02	Transaction Costs48
9.03	Time of the Essence48
9.04	Public Announcements48
9.05	Benefit of the Agreement48
9.06	Entire Agreement49
9.07	Amendments and Waivers49
9.08	Assignment49
9.09	Notices49
9.10	Remedies Cumulative50
9.11	Governing Law50
9.12	Attornment50
9.13	Counterparts50
9.14	Electronic Execution51

SCHEDULES

• Schedule "A" Amalgamation Agreement Schedule "B" – McFarlane Disclosure Schedule
• Schedule "C" 128 Disclosure Schedule

BUSINESS COMBINATION AGREEMENT

THIS AGREEMENT is made as of January 12, 2022

B E T W E E N:

1287401 B.C LTD., a corporation incorporated under the laws of the Province of British Columbia,

(hereinafter called "128"),

• and -

1000034047 ONTARIO INC., a corporation incorporated under the laws of the Province of Ontario,

(hereinafter called "Subco"),

• and -

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

(hereinafter called "McFarlane"),

WHEREAS pursuant to the Letter of Intent (as defined herein), 128 and McFarlane propose to combine the business and assets of 128 with those of McFarlane and upon completion of such business combination, 128 will become the Resulting Issuer (as defined herein), a mineral exploration company with the name "McFarlane Lake Mining Limited" or such other similar name as may be accepted by the relevant regulatory authorities and approved by the board of directors of the Resulting Issuer;

AND WHEREAS the parties intend to carry out the proposed business combination whereby 128 will acquire all of the issued and outstanding shares of McFarlane by means of a three-cornered amalgamation among 128, McFarlane and Subco under the provisions of the OBCA (as defined herein) and related transaction steps;

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

ARTICLE 1 INTERPRETATION

1.01 Defined Terms

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

"128" means 1287401 B.C. Ltd., a corporation incorporated under the BCBCA;

"128 Continuation Resolution" means the written resolution of all of the shareholders of 128 authorizing the continuation of 128 from British Columbia to Ontario;

"128 Disclosure Schedule" means the disclosure schedule attached as Schedule "C" to this Agreement;

"128 Financial Statements" means the audited financial statements of 128 from the period of incorporation on February 3, 2021 to June 30, 2021 and the unaudited condensed interim consolidated financial statements of 401 for three months ended September 30, 2021;

"128 Listing" means the listing of the Resulting Issuer Shares on the Exchange;

"128 Material Adverse Effect" means any fact or state of facts, circumstance, effect, occurrence or event that individually or in the aggregate is, or could reasonably be expected to, have a material adverse effect on (i) the business, assets, liabilities, condition (financial or otherwise), management, results of operations or shareholders' equity of 128, or (ii) the ability of Subco to complete the Amalgamation, or (iii) the ability of 128 to complete the Amalgamation and the Business Combination; provided, however, that this will not include any fact, circumstance, event, change, effect, or occurrence relating to: (A) the global economy or securities markets in general; (B) changes in general economic conditions in Canada or any country or region in the world, or changes in conditions in the global economy generally; (C) changes in conditions in the financial markets, credit markets or capital markets in Canada or any other country or region in the world; (D) changes in political conditions in Canada or any other country or region in the world; (E) acts of war, sabotage or terrorism (including any escalation or general worsening of any such acts of war, sabotage or terrorism) in Canada or any other country or region in the world; (F) earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides, wild fires or other natural disasters, weather conditions and other force majeure events in Canada or any other country or region in the world; (G) the announcement of this Agreement or the pendency of consummation of the transactions contemplated hereby; (H) compliance with the terms of, or the taking of any action required or contemplated by, this Agreement or the failure to take any action prohibited by this Agreement; (I) any actions or failure to take action, in each case, to which McFarlane has in writing expressly approved, consented to or requested; or (J) changes in Laws, Taxes, IFRS or other legal or regulatory conditions (or the interpretation thereof);

"128 Name Change" means the change of 128's name to "McFarlane Lake Mining Limited", orsuch other name as is acceptable to McFarlane and the Director;

"128 Ordinary Course" means, with respect to any actions taken by 128, that such action is consistent with past practices;

"128 Shareholder" means a registered holder of 128 Shares;

"128 Share Split" means the split of the outstanding securities of 128 on the basis of 1.20967742 post-split 128 Shares for each one pre-split 128 Share, completed on December 13, 2021;

"128 Shares" means common shares in the capital of 128;

"Accredited Investor" means an "accredited investor" within the meaning of Rule 501(a) of Regulation D under the U.S. Securities Act;

"Affiliate" of any Person means, at the time such determination is being made, any other Person who has control or who is controlled by or under common control with such first Person, where "control"

means the possession, directly or indirectly, of the power to direct the management and policies of a Person through the legal or beneficial ownership of voting securities, the right to appoint directors or management, by contract, voting trust, or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing;

"Agreement" means this agreement, including its recitals and schedules, as amended from time to time;

"Amalco" has the meaning set out in Section 2.01(e);

"Amalco Shares" means common shares in the capital of Amalco;

"Amalgamation" means the amalgamation of McFarlane and Subco pursuant to section 174 of the OBCA as contemplated by this Agreement;

"Amalgamation Agreement" means the amalgamation agreementsubstantially in the form attached hereto as Schedule "A" to be entered into between 128, McFarlane and Subco pursuant to section 175 of the OBCA to effect the Amalgamation;

"Applicable Party" is defined in the definition of "Employee Plans";

"Articles of Amalgamation" means the articles of Amalgamation to be filed with the Director, in the form agreed to between 128 and McFarlane, each acting reasonably;

"Assets" means the assets, undertaking, property and rights of McFarlane of every kind and description and wheresoever situated, including the Contracts to which McFarlane is a party or has rights or obligations under and all other assets and property that McFarlane purports to own and all assets and property reflected as being owned by McFarlane in its respective financial books and records;

"Authorization" means any order, permit, approval, consent, waiver, license, certificates, registrations or similar authorization of any Governmental Authority having jurisdiction including, but not limited to, environmental permits;

"BCBCA" means the Business Corporations Act (British Columbia) as amended;

"Board Change" means the appointment of the new members to the board of directors of the Resulting Issuer;

"Business Combination" means the business combination among 128, Subco and McFarlane pursuant to which, among other things, McFarlane Common Shareholders will receive that number of 128 Shares equal to the number of McFarlane Common Shares held by such holder multiplied by the Exchange Ratio and pursuant to which 128 will become the parent company of Amalco and complete the 128 Listing;

"Business Day" means a day other than a Saturday, Sunday or statutory holiday in Toronto, Ontario;

"Canadian Jurisdictions" means each of the provinces of British Columbia and Alberta;

"Canadian Securities Laws" means all applicable securities Laws in each of the Canadian Jurisdictions and the respective rules and regulations made thereunder, together with applicable published policy statements, instruments, orders and rulings of the securities regulatory authorities in such provinces having the force of law;

"CSM" means Canadian Star Minerals Ltd.;

"CSM Consideration Shares" means the 5,625,000 McFarlane Shares or Resulting Issuer Shares, as the case may be, issuable to CSM in connection with the purchase of the McFarlane Mineral Properties;

"CSM Right of First Refusal" means the right of first refusal to purchase up to $1,687,500 of securities of the Resulting Issuer granted to CSM pursuant to terms and conditions set out in the Canadian Star Right of First Refusal Agreement;

"CSM Right of First Refusal Agreement" means the agreement dated effective December 30, 2021 pursuant to which the CSM Right of First Refusal was granted to CSM;

"Closing Date" means the closing date of the Business Combination, being January 14, 2022, or such other date as may be approved by both 128 and McFarlane;

"Compelled Disclosure" has the meaning set out in Section 6.03(d)(ii);

"Compensation Plan" means the stock and incentive compensation plan of the Resulting Issuer;

"Confidential Information" has the meaning set out in Section 6.03(a);

"Constating Documents" means, in respect of a body corporate, the articles and the by-laws, or other charter documents, together with any amendments thereto or replacements thereof;

"Contaminants" means any radioactive materials, asbestos materials, urea formaldehyde, hydrocarbon contaminants, underground or above-ground tanks, pollutants, contaminants, deleterious substances, dangerous substances or goods, hazardous, corrosive, or toxic substances, special waste or waste of any kind, or any other substance, the storage, manufacture, disposal, treatment, generation, use, transport, remediation, or Release into the environment which is prohibited, controlled, or regulated under Environmental Laws;

"Contract" means any agreement, contract, licence, undertaking, option, engagement, or commitment of any nature, written or oral, including any: (i) lease of personal property, (ii) unfilled purchase order, (iii) forward commitment for supplies or materials or other forward contract, (iv) derivative contract and (v) restrictive agreement or negative covenant agreement;

"Definitive Property Purchase Agreement" means the mineral property purchase agreement dated effective December 30, 2021 between Canadian Star Minerals Inc. and McFarlane providing for, among other things, the purchase by McFarlane of the McFarlane Mineral Properties;

"Director" means the Director appointed under the OBCA;

"Disclosing Party" has the meaning set out in Section 6.03(a);

"Dissent Rights" mean the rights of the McFarlane Dissenting Shareholders to dissent under section 185 of the OBCA with respect to the Amalgamation;

"Effective Date" means the effective date set forth in the certificate of amalgamation issued pursuant to the OBCA in respect of the Amalgamation;

"Effective Time" means the earliest moment on the Effective Date;

"Employee Plans" means, with respect to a party to this Agreement (the "Applicable Party"), all employee benefit, fringe benefit, supplemental unemployment benefit, bonus, incentive, profit sharing, termination, change of control, pension, retirement, stock option, stock purchase, stock appreciation, stock award, health, welfare, medical, dental, disability, life insurance and similar plans, programmes, arrangements or practices relating to the current or former directors, officers, or employees of the Applicable Party and its Subsidiaries, maintained, funded or sponsored or required to be contributed to by the Applicable Party or a Subsidiary thereof, whether written or oral, funded or unfunded, insured or self-insured, registered or unregistered, under which the Applicable Party or a Subsidiary thereof may have or would be reasonably expected to have any material Liability, contingent or otherwise, except for any statutory plans to which the Applicable Party or any of its Subsidiaries is obliged to contribute or comply with including the Canada/Québec Pension Plan, or plans administered pursuant to applicable federal or provincial health, worker's compensation or employment insurance legislation;

"Encumbrance" means any mortgage, charge, pledge, hypothecation, security interest, assignment, lien (statutory or otherwise), title retention agreement or arrangement, restrictive covenant or other encumbrance of any nature or any other arrangement or condition that, in substance secures payment or performance of an obligation;

"Environmental Laws" has the meaning set out in Section 3.23;

"Exchange" means the Aequitas NEO Exchange Inc. or any other recognized stock exchange on which the Resulting Issuer Shares are to be listed for trading;

"Exchange Ratio" means 1:1;

"Governmental Authority" means (i) any international, multinational, national, federal, provincial, state, municipal, local or other government or governmental or public ministry, department, court, commission, board, bureau, agency or instrumentality, domestic or foreign, (ii) any subdivision or authority of any of the foregoing, (iii) any quasi-governmental body exercising any regulatory, expropriation or taxing authority, or (iv) any stock exchange or securities market;

"Governmental Charges" means all Taxes, customs, duties, rates, levies, assessments, reassessments and other charges, unemployment insurance contributions, pension plan contributions and any deductions or other amounts which a Person is required by Law or Contract to pay, deduct, withhold, collect or remit to any Governmental Authority or other entities entitled to receive payment of such amounts, together with all penalties, interest and fines with respect thereto, payable to any Governmental Authority;

"IFRS" means International Financial Reporting Standards as issued by the International Accounting Standards Board and as adopted by the Chartered Professional Accounts of Canada;

"knowledge of 128" means the actual knowledge of the Chief Executive Officer of 128, after making due inquiries;

"knowledge of McFarlane" means the actual knowledge of the Chief Executive Officer or the Chief Financial Officer of McFarlane, after making due inquiries;

"Laws" means all laws, by-laws, rules, regulations, orders, ordinances, protocols, codes, instruments, policies, notices, directions and judgments or other requirements having the force of law of any Governmental Authority having jurisdiction over the matter or Person then being referred to;

"Leased Real Property" means lands or premises which are used by McFarlane and which are leased, subleased, licensed to or otherwise occupied by them;

"Letter of Intent" means the letter of intent dated August 13, 2021 between McFarlane and 128, as amended on October 14, 2021 and December 31, 2021, with respect to, among other things, the Business Combination;

"Liability" of any Person means (i) any right against such Person to payment, whether or not such right is reduced to judgment, and whether or not the amount is liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured; (ii) any right against such Person to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to any equitable remedy is reduced to judgment, and whether or not the amount is fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured; and (iii) any obligation of such Person for the performance of any covenant or agreement (whether for the payment of money or otherwise);

"Listing Statement" means the listing document to be prepared by 128 and McFarlane in accordance with Exchange listing requirements in respect of the Business Combination;

"Losses", in respect of any matter, means all claims, demands, proceedings, Losses, damages, liabilities, deficiencies, costs and expenses (including, without limitation, all legal and other professional fees and disbursements, interest, penalties and amounts paid in settlement) arising directly or indirectly as a consequence of such matter;

"McFarlane" means McFarlane Lake Mining Incorporated, a corporation incorporated under the OBCA;

"McFarlane Broker Warrants" means the broker warrants issued to certain brokers in connection with the McFarlane Private Placement;

"McFarlane Business" means the business of McFarlane, as more particularly described in the Listing Statement;

"McFarlane Common Shareholder" means a registered holder of McFarlane Common Shares;

"McFarlane Common Shareholder Approval" has the meaning set forth in Section 2.01;

"McFarlane Common Shares" means the common shares in the capital of McFarlane;

"McFarlane Disclosure Schedule" means the disclosure schedule attached as Schedule "B" to this Agreement;

"McFarlane Dissent Procedures" means the dissent procedures provided to McFarlane Common Shareholders pursuant to section 185 of the OBCA;

"McFarlane Dissenting Shareholder" means a registered McFarlane Common Shareholder who exercises Dissent Rights in respect of the Amalgamation in strict compliance with the McFarlane Dissent Procedures;

"McFarlane Financial Statements" means the audited consolidated financial statements of McFarlane for the annual period ended August 31, 2021 and for the period from the date of incorporation (August 20, 2020) to August 31, 2020;

"McFarlane Flow-Through Shares"means the McFarlane Common Shares issued as "flow-through shares" within the meaning of the Tax Act as part of the McFarlane Private Placement;

"McFarlane Material Adverse Effect" means any fact or state of facts, circumstance, effect, occurrence or event that individually or in the aggregate is, or could reasonably be expected to, have a material adverse effect on (i) the business, assets, liabilities, condition (financial or otherwise), management, results of operations or shareholders' equity of McFarlane, or (ii) the ability of McFarlane to complete the Business Combination and the Amalgamation; provided, however, that this will not include any fact, circumstance, event, change, effect, or occurrence: (A) relating to the global economy or securities markets in general; (B) relating to or affecting the mining industry in general, including the promulgation of laws or regulations affecting mining, and which does not have a materially disproportionate effect on McFarlane; (C) relating to changes in general economic conditions in Canada or any country or region in the world, or changes in conditions in the global economy generally (to the extent that such effect has not had a disproportionate effect on McFarlane relative to other companies in the industries in which it carries on business); (D) relating to changes in conditions in the financial markets, credit markets or capital markets in Canada or any other country or region in the world; (E) relating to changes in political conditions in Canada or any other country or region in the world (to the extent that such effect has not had a disproportionate impact on McFarlane relative to other companies in the industries in which McFarlane carries on business); (F) relating to acts of war, sabotage or terrorism (including any escalation or general worsening of any such acts of war, sabotage or terrorism) in Canada or any other country or region in the world (to the extent such effect has not had a disproportionate impact on McFarlane relative to other companies in the industries in which McFarlane carries on business); (G) relating to earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides, wild fires or other natural disasters, weather conditions and other force majeure events in Canada or any other country or region in the world (to the extent such effect has not had a disproportionate impact on McFarlane relative to other companies in the industries in which McFarlane carries on business); (H) relating to the announcement of this Agreement or the pendency of consummation of the transactions contemplated hereby; (I) relating to compliance with the terms of, or the taking of any action required or contemplated by, this Agreement or the failure to take any action prohibited by this Agreement; (J) relating to any actions or failure to take action, in each case, to which 128 has in writing expressly approved, consented to or requested; or (K) relating to changes in Law, Taxes, IFRS or other legal or regulatory conditions (or the interpretation thereof) (to the extent such change has not had a disproportionate impact on McFarlane relative to other companies in the industries in which McFarlane carries on business);

"McFarlane Material Contracts" means (i) every Contract to which McFarlane is a party requiring payment by or to McFarlane of an amount in any one year in the aggregate of $50,000; (ii) every Contract to which McFarlane is a party that has or would reasonably be expected to have any material direct or indirect effect (by license, assignment or otherwise) on the Assets or the McFarlane Business; and (iii) every Contract to which McFarlane is a party with any directors, officers, shareholders, consultants or key employees of McFarlane, but excluding employment contracts;

"McFarlane Meeting" means the special meeting of the holders of McFarlaneCommon Shares to be held to obtain the McFarlane Common Shareholder Approval, and any and all adjournments or postponements of such meeting;

"McFarlane Mineral Properties" includes the High Lake Property, the West Hawk Lake Property and the McMillan Mine properties described in greater detail in the McFarlane Disclosure Schedule;

"McFarlane Notice" means the notice of special meeting of shareholders of McFarlane to be sent to the McFarlane Common Shareholders in respect of the McFarlane Meeting;

"McFarlane Options" means the 5,500,000 stock options outstanding as of the date hereof issued pursuant to McFarlane's stock option plan;

"McFarlane Ordinary Course" means, with respect to any actions taken by McFarlane that such action is consistent in carrying out the McFarlane Business;

"McFarlane Private Placement" means the brokered private placement of McFarlane Flow-Through Shares and McFarlane Units on December 9, 2021;

"McFarlane Unit" means a unit of McFarlane comprised of one McFarlane Common Share and one half of one McFarlane Warrant;

"McFarlane Warrants" means the warrantsto acquire McFarlaneCommon Shares outstanding as of the date hereof, as set out in Section 1.01 of the McFarlane Disclosure Schedule;

"North Consulting Agreement" means the consulting services agreement between 1873344 Ontario Limited, Christopher North and McFarlane dated effective December 30, 2021 providing for the provision of mineral exploration consulting services to McFarlane;

"OBCA" means the Business Corporations Act (Ontario), as amended;

"Owned Real Property" means real property owned by McFarlane and real property, other than Leased Real Property, in which McFarlane has an ownership interest;

"Permitted Acquisition" means the acquisition of mineral properties by McFarlane in accordance with currently outstanding letters of intent or property acquisition agreements, as disclosed in the McFarlane Disclosure Schedule;

"Permitted Encumbrances" means (i) Encumbrances for Taxes not yet due and delinquent; (ii) inchoate or statutory Encumbrances of contractors, subcontractors, mechanics, workers, suppliers, materialmen, carriers and others in respect of the construction, maintenance, repair or operation of the Assets, provided that such Encumbrances are related to obligations not due or delinquent and in respect of which adequate holdbacks are being maintained as required by Law; (iii) the right reserved to or vested in any Governmental Authority by any statutory provision or by the terms of any lease, licence, franchise, grant or permit of McFarlane, to terminate any such lease, licence, franchise, grant or permit, or to require annual or other payments as a condition of their continuance; and (iv) Encumbrances listed and described in Section 3.02 of the McFarlane Disclosure Schedule;

"Person" means any corporation, partnership, limited liability company or partnership, joint venture, trust, unincorporated association or organization, business, enterprise or other entity; any individual; and any government;

"Public Record" means all information filed or to be filed by or on behalf of 128 after February 3, 2021, and prior to the earlier of the Effective Date or the termination of this Agreement with any securities commission or regulatory authority in compliance, or intended compliance, with the continuous disclosure obligations applicable to a reporting issuer under applicable Laws;

"Recipient" has the meaning set out in Section 6.03(a);

"Release" includes any release, spill, leak, pumping, pouring, emission, emptying, discharge, injection, escape, leaching, migration, disposal or dumping;

"Representatives" has the meaning set out in Section 6.03(a);

"Resulting Issuer" means 128 at the Effective Date which, following completion of the Transactions, will be a mineral exploration company and renamed "McFarlane Lake Mining Limited" or such other similar name as may be acceptable to McFarlane and by the relevant regulatory authorities;

"Resulting Issuer Replacement Broker Warrants" means broker warrants of 128 to be issued to holders of McFarlane Broker Warrants pursuant to Section 2.01(j);

"Resulting Issuer Replacement Options" means the options to purchase Resulting Issuer Shares to be issued by the Resulting Issuer to holders of McFarlane Options pursuant to Section 2.01(i);

"Resulting Issuer Replacement Warrants" means the warrantsto purchase Resulting Issuer Shares to be issued by the Resulting Issuer to holders of McFarlane Warrants pursuant to Section 2.01(h);

"Resulting Issuer Shares" means common shares in the capital of the Resulting Issuer;

"Subco" means 1000034047 Ontario Inc., a corporation incorporated under the OBCA and, prior to completion of the Subco Private Placement, a wholly-owned subsidiary of 128;

"Subco Common Shares" means the common shares in the capital of Subco;

"Subco Private Placement" means the non-brokered private placement of 65,500 Subco Units at the Subco Unit Price completed on December 9, 2021;

"Subco Unit" means a unit of Subco comprised of one Subco Common Share and one half of one Subco Warrant;

"Subco Unit Price" means $0.40 per Subco Unit;

"Subco Warrants" means the warrants to acquire Subco Common Shares at a price of $0.60 per share for a period of 36 months from the date of issuance, issued pursuant to the Subco Private Placement;

"Subsidiary" means, with respect to a specified body corporate, any body corporate of which the specified body corporate is entitled to elect a majority of the directors thereof or over which the specified body corporate holds more than 50% of the votes for the directors thereof and will include any body corporate, partnership, joint venture or other Person (other than an individual) over which such specified body corporate exercises direction or control or which is in a like relation to such a body corporate;

"Tax" or "Taxes" means, in relation to any Person, any and all taxes, whether or not referred to as taxes, (including any and all fines, interest and penalties in respect thereof) of any nature imposed, levied, withheld or assessed on or with respect to the income, profits, gross receipts, sales, capital, assets, real property, personal property, production, employees, payroll, benefit payments, purchases, payments, receipts or gains of such Person (including, without limitation, any federal or state income, franchise or sales taxes, corporation capital tax, customs or excise duties or municipal license fees, withholding tax and any taxes and other deductions required to be paid or withheld from any payment made to any Person) by Canada or any province thereof, the United States of America or any political subdivision or taxing authority thereof or therein, or by any other country or any political subdivision or taxing authority thereof or therein;

"Tax Act" means the Income Tax Act (Canada), as amended;

"Tax Returns" means all returns, declarations, reports, information returns and statements filed or required to be filed by any taxing authority relating to Taxes;

"Transactions" means the transactions contemplated by, or in relation to, this Agreement including the McFarlane Private Placement, the Amalgamation and the Business Combination;

"United States" means the United States of America, its territories and possessions, any state of the United States and the District of Columbia;

"U.S. Person" means a "U.S. person" as defined in Regulation S under the U.S. Securities Act; and

"U.S. Securities Act" means the United States Securities Act of 1933, as amended.

1.02 Headings

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

1.03 Extended Meanings

In this Agreement, words importing the singular number include the plural and vice versa, words importing any gender include all genders and words importing persons include individuals, corporations, limited and unlimited liability companies, general and limited partnerships, associations, trusts, unincorporated organizations, joint ventures and Governmental Authorities. The term "including" means "including without limiting the generality of the foregoing".

1.04 Statutory References

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

1.05 Accounting Principles

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

1.06 Currency

All references to currency herein are to lawful money of Canada.

1.07 Schedules

The following are the Schedules to this Agreement:

Schedule "A"	-	Amalgamation Agreement
Schedule "B"	-	McFarlaneDisclosure Schedule
Schedule "C"	-	128 Disclosure Schedule

ARTICLE 2 BUSINESS COMBINATION

2.01 Business Combination

(a) 128 and McFarlane agree to effect the combination of their respective businesses and assets by way of a "three-cornered amalgamation" among 128, Subco and McFarlane.

(b) McFarlane has called and has held a special meeting of McFarlane Common Shareholders on December 6, 2021 (the "Special Meeting") pursuant to the McFarlane Notice which it has mailed to the McFarlane Common Shareholders, at which Special Meeting McFarlane has obtained the approval of the McFarlane Common Shareholders (the "McFarlane Common Shareholder Approval") for, among other things, the Amalgamation, in accordance with McFarlane's articles and applicable Laws.

(c) The 128 Shareholders, by unanimous shareholder resolution dated December 7, 2021, have approved the 128 Continuation Resolution, Board Change and the Compensation Plan and that the directors of 128, by unanimous director resolution dated December 7, 2021, have approved the 128 Name Change, the 128 Share Split, the 128 Listing and the Compensation Plan. 128, as sole shareholder of Subco, has approved, by unanimous shareholder resolution dated December 7, 2021, the Amalgamation.

(d) Prior to the effectiveness of the transactions set out in 2.01(e) below, 128 shall implement the 128 Name Change and the 128 Share Split.

(e) On the Closing Date and subject to approval by the Exchange, McFarlane and Subco will amalgamate, pursuant to the provisions of the OBCA, by jointly completing and filing Articles of Amalgamation with the Director, and shall continue as one corporation ("Amalco") effective at the Effective Time, giving effect to the Amalgamation, subject to the terms of the Amalgamation Agreement.

(f) At the Effective Time and as a result of the Amalgamation:

• (i) each holder of McFarlane Common Shares (other than McFarlane Dissenting Shareholders described in Section 2.02) shall receive that many fully paid and nonassessable 128 Shares equal to the number of McFarlane Common Shares held by such holder multiplied by the Exchange Ratio (subject to Section 2.01(f)(vii) regarding fractional shares), following which all such McFarlane Common Shares shall be converted into Amalco Sharesin consideration for the issuance of such 128 Shares on the basis of one Amalco Share for each 128 Share issued;

• (ii) each holder of Subco Common Shares (other than 128) shall receive that many fully paid and non-assessable 128 Shares equal to the number of Subco Common Shares held by such holder multiplied by the Exchange Ratio (subject to Section 2.01(f)(vii) regarding fractional shares), following which all such Subco Common Shares shall be converted into Amalco Shares in consideration for the issuance of such 128 Shares on the basis of one Amalco Share for each 128 Share issued;

• (iii) all Subco Common Shares issued to and held by 128 shall be cancelled;

• (iv) 128 shall add to the stated capital maintained in respect of the 128 Shares an amount equal to the aggregate paid-up capital for purposes of the Tax Act of the McFarlane Common Shares and the Subco Common Shares immediately prior to the Effective Time (less the paid-up capital of any McFarlane Common Shares held by dissenting McFarlane Common Shareholders who do not exchange their McFarlane Common Shares for 128 Shares on the Amalgamation);

• (v) Amalco shall add to the stated capital maintained in respect of the Amalco Shares an amount such that the stated capital of the Amalco Shares shall be equal to the aggregate paid-up capital for purposes of the Tax Act of the Subco Shares and McFarlane Common Shares immediately prior to the Effective Time;

• (vi) no fractional 128 Shares will be issuable to shareholders of McFarlane or Subco pursuant to the Amalgamation and no cash payment or other form of consideration will be payable in lieu thereof. In the event that a former holder of McFarlane Common Shares or Subco Common Shares is entitled to receive a fractional 128 Share, any such fractional 128 Share interest to which a shareholder of McFarlane or Subco would otherwise be entitled to pursuant to the Amalgamation will be rounded down to the nearest whole 128 Share;

• (vii) 128 shall be entitled to deduct and withhold from any consideration otherwise payable pursuant to the transactions contemplated by this Agreement to any holder of McFarlane Common Shares or Subco Common Shares, as the case may be, such amounts as it determines are required or permitted to be deducted and withheld with respect to such payment under the Tax Act or any provision of provincial, state, local or foreign tax law, in each case as amended; to the extent that amounts are so withheld, such withheld amounts shall be treated for all purposes hereof as having been paid to the holder of the McFarlane Common Shares or Subco Common Shares, as the case may be, in respect of which such deduction and withholding was made, provided that such withheld amounts are actually remitted to the appropriate taxing authority; and

• (viii) Amalco will be a wholly-owned subsidiary of 128.

• (g) At the Effective Time:

  • (i) subject to subsection 2.01(f), the registered holders of McFarlane Common Shares and Subco Common Shares shall become the registered holders of the Resulting Issuer Sharesto which they are entitled, calculated in accordance with the provisions hereof, and the holders of share certificates representing such McFarlane Common Shares and Subco Common Shares may surrender such certificates to McFarlane's transfer agent and, upon such surrender, shall be entitled to receive and, as soon as reasonably practicable following the Effective Time, shall receive share certificates or direct registration advices representing the number of Resulting Issuer Shares to which they are so entitled;
  • (ii) 128 shall become the registered holder of the Amalco Shares to which it is entitled, calculated in accordance with the provisions hereof, and shall be entitled to receive a share certificate representing the number of Amalco Shares to which it is entitled, calculated in accordance with the provisions hereof; and
  • (iii) the 128 Board Change shall become effective.

(h) At the Effective Time, the McFarlane Warrants and the Subco Warrants shall be exchanged for Resulting Issuer Replacement Warrants exercisable to acquire, on the same terms and conditions as were applicable to such McFarlane Warrants and Subco Warrants immediately prior to the Effective Time, the number of 128 Shares (rounded down to the nearest whole number) equal to the product of: (A) the number of McFarlane Common Shares subject to such McFarlane Warrant (in the case of the McFarlane Warrants) and the number of Subco Common Shares subject to such Subco Warrant (in the case of the Subco Warrants), in each case immediately prior to the Effective Time; and (B) the Exchange Ratio. The exercise price per 128 Share subject to a Resulting Issuer Replacement Warrant shall be an amount (rounded up to the nearest tenth of a cent) equal to the quotient of: (A) the exercise price per McFarlane Common Share or Subco Common Share subject to such McFarlane Warrant or Subco Warrant (as applicable), immediately prior to the Effective Time divided by (B) the Exchange Ratio. Except as set out above, the term to expiry, conditions to and manner of exercise and other terms and conditions of each Resulting Issuer Replacement Warrant shall be the same terms and conditions of the McFarlane Warrant or Subco Warrant for which it was exchanged.

(i) At the Effective Time, the McFarlane Options shall be exchanged for Resulting Issuer Replacement Options exercisable to acquire, on the same terms and conditions as were applicable to such McFarlane Options immediately prior to the Effective Time, the number of 128 Shares (rounded down to the nearest whole number) equal to the product of: (A) the number of McFarlane Common Shares subject to such McFarlane Option immediately prior to the Effective Time; and (B) the Exchange Ratio. The exercise price per Resulting Issuer Share subject to a Resulting Issuer Replacement Option shall be an amount (rounded up to the nearest tenth of a cent) equal to the quotient of: (A) the exercise price per McFarlane Common Share subject to such McFarlane Option immediately prior to the Effective Time divided by (B) the Exchange Ratio. Except as set out above, the term to expiry, conditions to and manner of exercise and other terms and conditions of each Resulting Issuer Replacement Option shall be the same terms and conditions of the McFarlane Option for which it was exchanged.

(j) At the Effective Time, the McFarlane Broker Warrants shall be exchanged for McFarlane Broker Warrants shall receive Resulting Issuer Replacement Broker Warrants exercisable to acquire, on the same terms and conditions as were applicable to such McFarlane Broker Warrants immediately prior to the Effective Time, the number of 128 Shares (rounded down to the nearest whole number) equal to the product of: (A) the number of McFarlane Common Shares subject to such McFarlane Broker Warrants immediately prior to the Effective Time; and (B) the Exchange Ratio. The exercise price per 128 Share subject to a Resulting Issuer Replacement Broker Warrant shall be an amount (rounded up to the nearest tenth of a cent) equal to the quotient of: (A) the exercise price per McFarlane Common Share subject to such McFarlane Broker Warrant immediately prior to the Effective Time divided by (B) the Exchange Ratio. Except as set out above, the term to expiry, conditions to and manner of exercise and other terms and conditions of each Resulting Issuer Replacement Broker Warrant shall be the same terms and conditions of the McFarlane Broker Warrant for which it was exchanged.

(k) At the Effective Time, each McFarlane Common Share held by a McFarlane Dissenting Shareholder shall be deemed to be transferred by the holder thereof, without any further act or formality on its part, free and clear of any Encumbrance, to Amalco, and Amalco shall thereupon be obliged to pay the amount therefor determined and payable in accordance with Section 2.02 hereof, the name of such holder shall be removed from the central securities register as a holder of McFarlane Common Shares and such McFarlane Dissenting Shareholder will cease to have any rights as a McFarlane Common Shareholder, other than the right to be paid the fair value of its McFarlane Common Shares in accordance with Section 2.02.

(l) If a McFarlane Dissenting Shareholder fails to perfect or effectively withdraws its claim under section 185 of the OBCA or forfeits its right to make a claim under section 185 of the OBCA or if its rights as a McFarlane Common Shareholder are otherwise reinstated, such holder's McFarlane Common Shares shall thereupon be deemed to have been exchanged as of the Effective Time as prescribed by paragraph 2.01(f)(i).

(m) Upon the approval of the resolutions of the directors and shareholders of 128 authorizing the 128 Name Change in accordance with the requirements of the BCBCA and immediately prior to the Effective Time, 128 shall complete and file Articles of Amendment, in the prescribed form, giving effect to the 128 Name Change upon and subject to the terms of this Agreement.

(n) 128 Shares will only be issued to U.S. Persons that are Accredited Investors and shall be "restricted securities" as defined in Rule 144(a)(3) of the U.S. Securities Act and shall bear a legend in customary form restricting re-sale and transfer without registration under the U.S. Securities Act unless pursuant to an available exemption from registration under the U.S. Securities Act.

2.02 Dissent Rights

Registered McFarlane Common Shareholders may exercise rights of dissent ("Dissent Rights") from the Amalgamation pursuant to, and in the manner set forth under, section 185 of the OBCA, provided that holders who exercise such rights of dissent and who:

• (a) are ultimately entitled to be paid fair value for their McFarlane Common Shares, which fair value shall be the fair value of such shares as at the close of business on the day prior to the McFarlane Meeting, shall be paid an amount equal to such fair value by Amalco; and
• (b) are ultimately not entitled, for any reason, to be paid fair value for their McFarlaneCommon Shares shall be deemed to have participated in the Amalgamation, as of the Effective Time, on the same basis as a non-dissenting holder of McFarlane Common Shares and shall be entitled to receive only the consideration contemplated in subsection 2.01(f)(i) hereof that such holder would have received pursuant to the Amalgamation if such holder had not exercised Dissent Rights;

but in no case shall 128, Subco, McFarlane or any other Person be required to recognize holders of McFarlane Common Shares who exercise Dissent Rights as holders of McFarlane Common Shares after the time that is immediately prior to the Effective Time, and the names of such holders of McFarlane Common Shares who exercise Dissent Rights shall be deleted from the register of McFarlane Common Shareholders at the Effective Time. In no circumstances shall 128, Subco, McFarlane or any other Person be required to recognize a Person exercising Dissent Rights unless such Person is a registered holder of McFarlaneCommon Shares in respect of which such Dissent Rights are sought to be exercised. A registered holder of McFarlane Common Shares is not entitled to exercise Dissent Rights with respect to McFarlane Common Shares if such holder votes (or instructs, or is deemed, by submission of any incomplete proxy, to have instructed his, her or its proxyholder to vote) in favour of the resolution approving the Amalgamation at the McFarlane Meeting.

ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF MCFARLANE

McFarlane represents and warrants to 128 as follows except as set forth in the McFarlane Disclosure Schedule and acknowledges and confirms that McFarlane is relying on such representations and warranties in connection with its entering into this Agreement:

3.01 Incorporation and Registration

McFarlane is a corporation duly incorporated and validly existing under the Laws of its jurisdiction of incorporation and has all necessary corporate power, authority and capacity to own its property and assets and to carry on its business as currently conducted. Neither the nature of its activities or the McFarlane Business nor the location or character of the Assets owned, operated or leased by McFarlane requires McFarlane to be registered, licensed or otherwise qualified as a foreign corporation or to be in good standing in any jurisdiction other than the jurisdictions where it is so registered, licensed or qualified. No proceedings have been instituted or are pending for the dissolution or liquidation of McFarlane.

3.02 Subsidiaries

McFarlane does not have any interest in any body corporate, partnership, joint ventures or other entity or Person. McFarlane is not a party to any agreement, option or commitment to acquire any shares or securities of any body corporate, partnership, trust, joint venture or other entity or Person other than in connection with the Business Combination.

3.03 Bankruptcy, etc.

No bankruptcy, insolvency, commercial proposals, assignments to creditors or receivership proceedings have been instituted by McFarlane or, to the knowledge of McFarlane, are pending against McFarlane and McFarlane is, in the McFarlane Ordinary Course, able to pay its debts and other obligations as they become due

3.04 Due Authorization, etc.

Subject to the requisite shareholder approvals, (i) McFarlane has all necessary corporate power, capacity and authority to enter into this Agreement and to carry out its obligations under this Agreement and to undertake the Business Combination. This Agreement has been duly authorized, executed and delivered by McFarlane and constitutes a valid and binding obligation of McFarlane enforceable against it in accordance with its terms, subject to limitations with respect to enforcement imposed by Law in connection with bankruptcy or similar proceedings and to the extent that equitable remedies such as specific performance and injunctions are in the discretion of the court from which they are sought.

3.05 [intentionally deleted]

3.06 Absence of Conflict

The entering into, and the performance by McFarlane of the transactions contemplated in, this

Agreement:

• (a) do not and will not require any consent, permit, approval, Authorization or order of any Governmental Authority, except that which may be required under applicable securities legislation or the rules of the Exchange and any approval or authorization under the OBCA for the Business Combination and the Amalgamation;
• (b) do not and will not contravene any applicable Laws or any rule or regulation of any Governmental Authority which is binding on McFarlane, where such contravention would reasonably be expected to materially and adversely affect the business, operations or condition (financial or otherwise) of McFarlane; and
• (c) does not and will not violate, result in the breach of, or be in conflict with, or constitute a default under, or create a state of facts which, after notice or lapse of time, or both, would constitute a default under any term or provision of (i) the Constating Documents of McFarlane, or any resolution of the directors or shareholders of McFarlane, or (ii) any Contract to which McFarlane is a party or by which the Assets or the McFarlane Business is bound or affected, or (iii) any judgment, decree or order or any term or provision thereof applicable to McFarlane or any of the Assets or the McFarlane Business, which breach, conflict or default would reasonably be expected to materially and adversely affect the business, operations or condition (financial or otherwise) of McFarlane or result in the creation of any Encumbrance upon any of the Assets.

3.07 Capital Stock

The authorized capital of McFarlane consists of an unlimited number of common shares of which 75,582,313 McFarlane Common Shares are issued and outstanding as at the date hereof. All of the issued shares of McFarlane have been duly and validly issued in compliance with applicable Law and are outstanding as fully paid and non-assessable shares in the capital of McFarlane**.**

3.08 Options and Other Convertible Securities

Except for (i) the McFarlane Warrants, McFarlane Options and the McFarlane Broker Warrantsissued pursuant to the McFarlane Private Placement;(ii) theCSM Consideration Sharesto be issued pursuant to the acquisition of the McFarlane Mineral Properties; and (iii) the right to purchase Resulting Issuer Common Shares pursuant to the CSM Right of First Refusal, no Person has or will have any right, agreement, warrant or option, present or future, contingent or absolute, or any right capable of becoming a right, agreement or option, for the purchase from McFarlane of any interest in any of the outstanding shares or securities of McFarlane, or for the issue or allotment of any unissued shares in the capital of McFarlane or any other security directly or indirectly convertible into or exchangeable for such shares in the capital of McFarlane.

3.09 No Pre-Emptive Rights

No holder of securities of McFarlane, other than pursuant to the McFarlane Warrants, McFarlane Options and the McFarlane Broker Warrants, and other than the right of CSM to the CSM Consideration Shares and pursuant to the CSM Right of First Refusal, is entitled to any pre-emptive or similar right to subscribe for securities of McFarlane.

3.10 No Shareholders/Voting Agreement

There are no shareholders' agreements or other agreements to which McFarlane is a party governing the voting, holding or sale of McFarlane Common Shares or the management of the affairs of McFarlane, and McFarlane is not aware of any other such agreement to which McFarlane is not a party.

3.11 Financial Statements

The McFarlane Financial Statements have been prepared in accordance with IFRS applied on a basis consistent with that of preceding periods, and:

• (a) the consolidated statements of financial position included in such McFarlane Financial Statements fairly present, in all material respects, the assets, liabilities (whether accrued, absolute, contingent or otherwise) and financial condition of McFarlane on the respective dates thereof and do not omit to state any material fact that is required by IFRS or by applicable Laws to be stated or reflected therein or which is necessary to make the statements contained therein not misleading; and
• (b) the consolidated statements of loss and comprehensive loss and consolidated statements of cash flows included in the McFarlane Financial Statements fairly present, in all material respects, the results of operations of McFarlane for the fiscal periods then ended.

There are no material off-balance sheet transactions, arrangements or obligations (including contingent obligations) of McFarlane which are required to be disclosed and are not disclosed or reflected in the McFarlane Financial Statements and McFarlane does not have any material liabilities, obligations, indebtedness or commitments, whether accrued, absolute, contingent or otherwise, which are not disclosed or referred to in the McFarlane Financial Statements.

3.12 Absence of Changes

Since August 31, 2021, there has not been any material adverse change in the McFarlane Business and the results of operations, financial condition, assets, properties, capital, liabilities (contingent or otherwise), cash flow or business operations of McFarlane considered on a consolidated basis;

3.13 Internal Controls Over Financial Reporting

To the knowledge of McFarlane, prior to the date of this Agreement, there is no fraud, whether or not material, that involves management or other employees who have a significant role in McFarlane's internal control over financial reporting. Since December 31, 2019, and prior to the date of this Agreement, McFarlane has received no (x) material complaints from any source regarding accounting, internal accounting controls or auditing matters or (y) expressions of concern from employees of McFarlane regarding questionable accounting or auditing matters.

3.14 No Restrictions on Activities

Other than as otherwise disclosed in the McFarlane Financial Statements, none of McFarlane is a party to or bound or affected by any commitments, agreement or document containing any covenant which expressly limits the freedom of McFarlane to compete in any line of business, or to use, transfer or move any of its respective Assets or operations, or which materially or adversely affects the business practices, operations or condition of McFarlane.

3.15 Mining Matters

• (a) Other than as disclosed in the McFarlane Disclosure Schedule, McFarlane is the absolute legal and beneficial owner of and has good and marketable title to, all of the material property or assets thereof as described in the McFarlane Disclosure Schedule, and except as set forth in the McFarlane Disclosure Schedule, such material properties and assets are free of all mortgages, liens, charges, pledges, security interests, Encumbrances, claims or demands whatsoever, and no other property rights (including access rights) are necessary for the conduct of the business of McFarlane currently conducted; McFarlane knows of no claim or basis for any claim that might or could adversely affect the right of McFarlane to use, transfer or otherwise exploit such property rights; and, except as disclosed in the McFarlane Disclosure Schedule, McFarlane does not have any responsibility or obligation to pay any commission, royalty, licence fee or similar payment to any person with respect to the property rights thereof;
• (b) McFarlane holds either freehold title, mining leases, mining claims or other conventional property, proprietary or contractual interests or rights, recognized in the jurisdiction in which a particular property is located in respect of the ore bodies and minerals located in properties in which McFarlane has an interest as described in the McFarlane Disclosure Schedule under valid, subsisting and enforceable title documents or other recognized and enforceable agreements or instruments, sufficient to permit McFarlane to access the property and explore the minerals relating thereto; all such property, leases or claims and all property, leases or claims in which McFarlane has any interests or right have been, to the knowledge of McFarlane, validly located and recorded in accordance with all applicable Laws, and are valid and subsisting; McFarlane has all necessary surface rights, access rights and other necessary rights and interests relating to the properties in which McFarlane has an interest as described in the McFarlane Disclosure Schedule granting McFarlane the right and ability to access the property and explore for minerals for development purposes as are appropriate in view of their respective rights and interests therein, with only such exceptions as do not materially interfere with the access and use by McFarlane of the rights or interests so held and each of the proprietary interests or rights and each of the documents, agreements and instruments and obligations relating thereto referred to above are currently in good standing in the name of McFarlane;
• (c) any and all of the agreements and other documents and instruments pursuant to which McFarlane holds its material property and assets are valid and subsisting agreements, documents or instruments in full force and effect, enforceable in accordance with the terms thereof, neither McFarlane is in default of any of the material provisions of any such agreements, documents or instruments, nor has any such default been alleged. None of the properties of McFarlane are subject to any right of first refusal or purchase or acquisition rights;
• (d) there are no claims with respect to native rights currently threatened or, to the best knowledge of McFarlane, pending with respect to any of the material properties of McFarlane;
• (e) McFarlane is in compliance in all material respects with all applicable federal, provincial, state, municipal and local laws, statutes, ordinances, by-laws and regulations and orders,

directives and decisions rendered by any ministry, department or administrative or regulatory agency, domestic or foreign, including laws, ordinances, regulations or orders, relating to the protection of the environment, occupational health and safety or the processing, use, treatment, storage, disposal, discharge, transport or handling of any pollutants, Contaminants, chemicals or industrial, toxic or hazardous wastes or substances (the "Environmental Laws");

• (f) McFarlane has obtained all material licences, permits, approvals, consents, certificates, registrations and other authorizations under all applicable Environmental Laws (the "Environmental Permits") necessary as at the date hereof for the operation of the business carried by McFarlane, and each Environmental Permit is valid, subsisting and in good standing and McFarlane is not in default or breach of any Environmental Permit in any material respect and no proceeding has been threatened, or to the best knowledge of McFarlane, is pending to revoke or limit any Environmental Permit;

• (g) McFarlane has not used, except in compliance in all material respects with all Environmental Laws and Environmental Permits, any property or facility which it owns or leases or previously owned or leased, to generate, manufacture, process, distribute, use, treat, store, dispose of, transport or handle any hazardous substance;

• (h) McFarlane has not received any notice of, or been prosecuted for an offence alleging, noncompliance with any laws, ordinances, regulations and orders, including Environmental Laws, and McFarlane has not settled any allegation of non-compliance short of prosecution. There are no orders or directions relating to environmental matters requiring any material work, repairs, construction or capital expenditures to be made with respect to any of the assets of McFarlane, nor has McFarlane received notice of any of the same;

• (i) there have been no past unresolved or threatened, and to the best of McFarlane's knowledge, there are no pending claims, complaints, notices or requests for information received by McFarlane with respect to any alleged material violation of any law, statute, order, regulation, ordinance or decree; and to the best of McFarlane's knowledge, no conditions exist at, on or under any property now or previously owned, operated or leased by McFarlane which, with the passage of time, or the giving of notice or both, would give rise to liability under any law, statute, order, regulation, ordinance or decree that, individually or in the aggregate, has or may reasonably be expected to have any materially adverse effect with respect to McFarlane, taken as a whole;

• (j) except as ordinarily or customarily required by applicable permit, McFarlane has not received any notice wherein it is alleged or stated that it is potentially responsible for a federal, provincial, state, municipal or local clean-up site or corrective action under any law including any Environmental Laws. McFarlane has not received any request for information in connection with any federal, state, municipal or local inquiries as to disposal sites;

• (k) all exploration and mining operations on the properties of McFarlane have been conducted in all respects in accordance with good mining and engineering practices and all applicable material workers' compensation and health and safety and workplace laws, regulations and policies have been complied with;

• (l) there are no environmental audits, evaluations, assessments, studies or tests relating to McFarlane except for ongoing assessments conducted by or on behalf of McFarlane in the ordinary course;

• (m) McFarlane is in compliance with the provisions of National Instrument 43-101 Standards of Disclosure for Mineral Projects;

• (o) McFarlane's mineral projects are comprised of the properties set forth in the McFarlane Disclosure Schedule, all of which are valid and in good standing.

3.16 Extent of Liabilities

Other than expenses incurred in connection with the Business Combination and in the McFarlane Ordinary Course, McFarlane has no Liabilities (accrued, absolute, contingent or otherwise), except as disclosed in the McFarlane Financial Statements.

3.17 Non-Arm's Length Transactions

Except as disclosed in the McFarlane Financial Statements:

(a) McFarlane has not engaged in any transaction with, made any payment or loan to, or borrowed any monies from or is otherwise indebted to, any director, officer, employee or shareholder of McFarlane or any other Person with whom McFarlane is not dealing at arm's length (within the meaning of the Tax Act) or any Affiliate of any of the foregoing, except for amounts due as normal compensation or reimbursement of ordinary business expenses; and

(b) McFarlane is not a party to any contract or agreement with any director, officer, employee or shareholder of McFarlane or any other Person with whom McFarlane is not dealing at arm's length (within the meaning of the Tax Act) or any Affiliate of any of the foregoing, other than employment agreements entered into in the McFarlane Ordinary Course.

3.18 No Guarantees

McFarlane is not bound by any Contract, assurance, bond, undertaking or guarantee under or pursuant to which it has guaranteed or endorsed the debts, obligations or Liabilities of any other Person, except as disclosed in the McFarlane Financial Statements.

3.19 Owned Real Property.

McFarlane does not own any real property.

3.20 McFarlane Material Contracts

As at the date of this Agreement, all of the McFarlane Material Contracts are set out in Schedule 3.25 of the McFarlane Disclosure Schedule, all such McFarlane Material Contracts are valid and subsisting agreements, enforceable in accordance with their terms, and can be fulfilled and performed in all material respects by McFarlane in the McFarlane Ordinary Course. Each such McFarlane Material Contract is unamended since being made available to 128, is in full force and effect, in good standing and no event of default has occurred and is continuing and no event has occurred which, with the giving of notice, the passing of time or both, would constitute an event of default by McFarlane under any McFarlane Material Contract. To the knowledge of McFarlane, no event has occurred which, with the giving of notice, the lapse of time or both, would constitute an event of default by any other party to any such McFarlane Material Contract, none of McFarlane is alleged to be in default of any of the provisions of such McFarlane Material Contracts, and McFarlane is not aware of any disputes with respect thereto.

3.21 Other Contracts

Other than the McFarlane Material Contracts, McFarlane is not a party to any Contract, the termination, expiry or non-renewal of which would reasonably be expected to have a McFarlane Material Adverse Effect.

3.22 Taxes and Governmental Charges

• (a) As of the date of this Agreement, McFarlane has:

  • (i) duly and in a timely manner filed all Tax Returns and reports required by Law to have been filed by it (except for such Tax Returns and reports with respect to which the failure to timely file would not reasonably be expected to have a McFarlane Material Adverse Effect), and all such Tax Returns and reports are true, correct and complete in all material respects;
  • (ii) duly kept all records which it is required to keep for Tax purposes or which would be needed to substantiate any claim made or position taken in relation to Tax by it, as applicable, and such records are available for inspection at the head office of McFarlane;
  • (iii) duly and correctly reported all income and other amounts required to be reported;
  • (iv) paid all Taxes to the extent that such Taxes have been assessed by the relevant taxation authority; and
  • (v) duly and in a timely manner paid, deducted, withheld, collected and remitted all Governmental Charges (other than Governmental Charges that are not yet due) and has made full provision for (including properly accruing and reflecting on its books and records) all Governmental Charges that are not yet due, that relate to periods (or portions thereof) ending prior to the date of this Agreement, except where the failure to pay any such Governmental Charges, or make any such remittance, deduction or contribution or other amount would not reasonably be expected to have a McFarlane Material Adverse Effect.

• (b) The McFarlane Financial Statements contain adequate provision for all Taxes, assessments and levies imposed on McFarlane, or their property or rights, arising out of operations on or before August 31, 2021, regardless of whether such amounts are payable before or after the Effective Date.

• (c) No deficiency in payment of any Taxes for any period has been asserted against McFarlane by any Governmental Authority and remains unsettled at the date hereof.

• (d) No Tax Return of McFarlane is being audited by the relevant taxing authority. There are no outstanding waivers, objections, extensions or comparable consentsregarding the application of the statute of limitations or period of reassessment with respect to any Taxes or Tax Returns that have been given or made by McFarlane (including the time for filing of Tax Returns or paying Taxes). To the knowledge of McFarlane, there are no pending requests for any such waivers, extensions or comparable consents. McFarlane has not received a ruling from any Governmental Authority or signed an agreement with any Governmental Authority that could reasonably be expected to have a McFarlane Material Adverse Effect.

• (e) There are no actions, suits, examinations, proceedings, investigations, audits or claims now pending or threatened or, to the knowledge of McFarlane, contemplated against McFarlane in respect of any Taxes and there are no matters under discussion with any Governmental Authority relating to any Taxes.

• (f) McFarlane has not been subject to or is currently subject to any investigation, audit or visit by any Governmental Authority relating to Tax which has been notified to McFarlane, and McFarlane is not aware of any such investigation, audit or visit planned for the next 12 months.

3.23 Environmental Matters

To the knowledge of McFarlane after due inquiry, all the properties in which McFarlane has any freehold, leasehold, license or other interest are free and clear of any hazardous or toxic material, pollution or other adverse environmental conditions which may give rise to any and all claims, actions, causes of action, damages, Losses, Liabilities, obligations, penalties, judgments, amounts paid in settlement, assessments, costs, disbursement or expenses (including, without limitation, attorneys' fees and costs, experts' fees and costs and consultant's fees and costs) of any kind or of any nature whatsoever that are asserted against McFarlane, alleging liability (including, without limitation, liability for studies, testing or investigatory costs, cleanup costs, response costs, removal costs, remediation costs, contaminant costs, restoration costs, corrective action costs, closure costs, reclamation costs, natural resource damages, property damages, business Losses, personal injuries, penalties or fines) arising out of, based on or resulting from (i) the presence, Release, threatened Release, discharge or emission into the environment of any hazardous materials or substances existing or arising on, beneath or above properties or emanating or migrating or threatening to emanate or migrate from such properties to off-site properties; (ii) physical disturbance of the environment; and (iii) the violation or alleged violation of all applicable Laws aimed at reclamation or restoration of such properties; abatement of pollution; protection of the environment, protection of wildlife, including endangered species; ensuring public safety from environmental hazards; protection of cultural and historic resources; management, storage or control of hazardous materials and substances; Releases or threatened Releases of pollutants, Contaminants, chemicals or industrial, toxic or hazardous substances as wastes into the environment, including without limitation, ambient air, surface water and groundwater; and all other applicable Laws relating to the manufacturing, processing, distribution, use, treatment, storage, disposal, handling or transport of pollutants, Contaminants, chemicals or industrial, toxic or hazardous substances or wastes (collectively, "Environmental Laws"); and to the knowledge of McFarlane, after due inquiry, all environmental approvals required pursuant to Environmental Laws with respect to activities carried out on any part of the lands covered by such properties have been obtained, are valid and in full force and effect and have been complied with; and there are no proceedings commenced or threatened to revoke or amend any such environmental approvals.

3.24 Absence of Litigation, etc.

There is not now in progress, pending or, to McFarlane's knowledge, threatened or contemplated against or affecting McFarlane, or any of their assets or properties, or any officer or director thereof in their capacity as an officer or director thereof, any litigation, action, suit, investigation, claim, complaint or other proceeding, including appeals and applications for review, by or before any Governmental Authority**.**

3.25 Compliance with Laws

The McFarlane Business has been, and is now being, conducted and all of the Assets have been, and are now being, used in compliance with all applicable Laws other than such non-compliance which - 23 -

would not reasonably be expected to have a McFarlane Material Adverse Effect, and no written notices have been received by McFarlane that the McFarlane Business is not being conducted or that any of such Assets are not being used in compliance with all applicable Laws other than any non-compliance that would not reasonably be expected to have a McFarlane Material Adverse Effect.

3.26 Authorizations and Consents

• (a) Except for the approval of the Exchange contemplated in Section 7.02(i), no Authorization or declaration or filing with any Governmental Authority on the part of McFarlane is required for the valid execution, delivery and performance of its obligations under this Agreement or the completion of the Business Combination pursuant to this Agreement.
• (b) No consent, approval or waiver is required pursuant to the terms of any McFarlane Material Contract for the valid execution, delivery and performance of its obligations under this Agreement or the completion of the Business Combination pursuant to this Agreement.

3.27 Employment Matters and Employee Plans

• (a) There are no Contracts, written or oral, between McFarlane on one side, and any other party on the other side, relating to payment, remuneration or compensation for work performed or services provided (other than professional advisors engaged by McFarlane to provide services in connection with the Business Combination and the McFarlane Private Placement) or that would require any payment to be made as a result of the completion of the transactions contemplated in this Agreement.
• (b) Section 3.27(b) of the McFarlane Disclosure Schedule contains a complete list of all employment agreements or contracts for services between McFarlane on one side, and any other party on the other side, including, but not limited to any of its directors, officers, employees or consultants, who have an annual salary greater than **$**50,000, and copies of all such agreements have been provided by McFarlane to 128.
• (c) Section 3.27(c) of the McFarlane Disclosure Schedule sets out any Employee Plans of McFarlane.
• (d) McFarlane is not a party to a collective bargaining agreement.
• (e) McFarlane has operated and is currently operating in compliance with all Laws relating to employees, including employment standards, human rights, occupational health and safety, all pay equity and employment equity legislation other than such non-compliance which would not reasonably be expected to have a McFarlane Material Adverse Effect and there have been no employment-related complaints against McFarlane.
• (f) There are no complaints, and to the knowledge of McFarlane, threatened complaints, against McFarlane before any employment standards branch or tribunal or human rights commission or tribunal, nor any occurrence which might lead to a complaint under any human rights legislation, employment standards legislation, health and safety legislation, workers' compensation legislation or pay equity legislation.
• (g) There are no outstanding decisions or settlements or pending settlements under employment standards, human rights legislation, health and safety legislation, workers' compensation legislation, payment equity legislation or labour relations legislation which place any

obligation upon McFarlane to do or refrain from doing any act or place a material financial obligation on McFarlane.

• (h) There are no actions, suits or claims pending, threatened or reasonably anticipated (other than routine claims for benefits) against any Employee Plan or its assets, and there are no audits, inquiries or proceedings pending or, to the knowledge of McFarlane, threatened by any Governmental Authority with respect to any Employee Plan, which in either case reasonably could be expected to result in material Liability to McFarlane.
• (i) Neither the execution and delivery of this Agreement nor the performance of the obligations of McFarlane hereunder will entitle any current or former employee of McFarlane to any severance pay, bonus or other similar payment.

3.28 No Powers of Attorney

There are no outstanding powers of attorney or other authorizations granted by McFarlane to any third party to bind McFarlane to any Contract, Liability or obligation.

3.29 Insurance

McFarlane does not have (nor has it ever had) any insurance of any nature whatsoever relating to it, the Assets, the McFarlane Business other than directors and officers liability insurance maintained in respect of McFarlane's directors and officers.

3.30 Authorizations

McFarlane has all Authorizations necessary to conduct the McFarlane Business as presently conducted or for the ownership and use of the Assets in compliance with applicable Laws, except for any Authorizations the lack of which would not reasonably be expected to materially and adversely affect the business, operations or condition (financial or otherwise) of McFarlane. McFarlane is not in default under, nor have any of them received any notice of any claim or default with respect to, any such Authorization. No registrations, filings, applications, notices, transfers, consents, approvals, audits, qualifications, waivers or other action of any kind is required by virtue of the execution and delivery of this Agreement, or of the consummation of the transactions contemplated hereby: (a) to avoid the loss of any Authorization or any asset, property or right pursuant to the terms thereof, or the violation or breach of any Law applicable thereto, or (b) to enable McFarlane to hold and enjoy any such Authorization, asset, property or right immediately after the Effective Date in the conduct of the McFarlane Business in the same manner as conducted prior to the Effective Date.

3.31 Fees and Commissions

McFarlane is not a party to or bound by any Contract to pay any royalty, license fee or management fee, except for the McFarlane Material Contracts. Other than brokers' fees payable pursuant to the McFarlane Private Placement, no broker, finder or similar intermediary has acted for or on behalf of or is entitled to any broker's, finder's or similar fee or other commission from McFarlane or 128 in connection with this Agreement.

3.32 Books and Records

Complete and correct copies of the Constating Documents, and of all amendments thereto, of McFarlane have been previously delivered to 128. The corporate records and minute books of McFarlane

contain, in all material respects, complete and accurate minutes of all meetings of the directors and shareholders thereof, since the date of incorporation, together with the full text of all resolutions of directors and shareholders passed in lieu ofsuch meetings duly signed. Except as reflected in such minute books, there are no minutes of meetings or consents in lieu of meetings of the board of directors (or its committees) or of the shareholders of McFarlane.

3.01 Information Supplied

None of the information regarding McFarlane or its assets or business that was supplied by McFarlane specifically for inclusion or incorporation by reference into the Listing Statement will, at the time of initial submission of the Listing Statement to the Exchange, or at the time of any amendment or supplement thereof, as amended or supplemented at such date or time, contain any misrepresentation or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances under which they are made.

3.02 Restrictions on Business Combination

Except to the extent that McFarlane must comply with the policies of the Exchange and applicable Laws, McFarlane is not a party to or bound or affected by any commitment, agreement or document containing any covenant which expressly limitsthe freedom of McFarlane to compete in any line of business, or to transfer or move any of its Assets or operations or which materially or adversely affects the business practices, operations or condition of McFarlane or which would prohibit or restrict McFarlane from entering into and completing the Business Combination.

ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF 128 AND SUBCO

128 and Subco jointly and severally represent and warrant to McFarlane as follows except as set forth in the 128 Disclosure Schedule and acknowledge and confirm that McFarlane is relying on such representations and warranties in connection with its entering into this Agreement:

4.01 Incorporation

Each of 128 and Subco is a corporation duly incorporated and validly existing under the Laws of its jurisdiction of incorporation and has all necessary corporate power, authority and capacity to own its property and assets and to carry on its business as currently conducted, except where the failure to have such power, authority and capacity would not reasonably be expected to have a 128 Material Adverse Effect. Neither the nature of its activities or business nor the location or character of the assets owned, operated or leased by 128 require it to be registered, licensed or otherwise qualified as a foreign corporation or to be in good standing in any jurisdiction other than the jurisdictions where it is so registered, licensed or qualified, except where the failure to be so registered, licensed or qualified or remain in good standing would not reasonably be expected to have a 128 Material Adverse Effect. No proceedings have been instituted or are pending for the dissolution or liquidation of 128 or Subco.

4.02 Subsidiaries

Except for its ownership of outstanding shares of Subco, 128 does not have any interest in any body corporate, partnership, joint ventures or other entity or Person. Neither of 128 nor Subco is a party to any agreement, option or commitment to acquire any shares or securities of any body corporate, partnership, trust, joint venture or other entity or Person other than in connection with the Business Combination. All of the Subco Common Shares held by 128 are held, free and clear of all Encumbrances, claims or demands of any kind whatsoever other than Permitted Encumbrances. All of such shares and securities have been fully authorized and validly issued and in the case of shares are outstanding as fully paid and non-assessable shares. Other than securities issued pursuant to the Subco Private Placement, no other securities of Subco are issued and outstanding, and no other securities of Subco will be issued and outstanding at the Effective Date.

4.03 Bankruptcy, etc.

No bankruptcy, insolvency or receivership proceedings have been instituted by 128 or Subco or, to the knowledge of 128, are pending against 128 or Subco.

4.04 Due Authorization, etc.

Subject to requisite shareholder approvals, (i) each of 128 and Subco has all necessary corporate power, capacity and authority to enter into this Agreement and to carry out its obligations under this Agreement and to undertake the Business Combination, and (ii) this Agreement has been duly authorized, executed and delivered by each of 128 and Subco and constitutes a valid and binding obligation of each of 128 and Subco enforceable against it in accordance with its terms, subject, however, to limitations with respect to enforcement imposed by Law in connection with bankruptcy or similar proceedings and to the extent that equitable remedies such as specific performance and injunctions are in the discretion of the court from which they are sought.

4.05 Absence of Conflict

The entering into, and the performance by 128 and Subco of the transactions contemplated in, this Agreement:

• (a) do not and will not require any consent, permit, approval, Authorization or order of any Governmental Authority, except that which may be required under applicable securities legislation or the rules of the Exchange and any approval or authorization under the: (i) BCBCA that may be required for the 128 Name Change and 128 Share Split; and (ii) and OBCA that may be required for the Business Combination;
• (b) do not and will not contravene any applicable Laws or any rule or regulation of any Governmental Authority which is binding on 128, where such contravention would reasonably be expected to have an 128 Material Adverse Effect; and
• (c) does not and will not violate, result in the breach of, or be in conflict with, or constitute a default under, or create a state of facts which, after notice or lapse of time, or both, would constitute a default under any term or provision of (i) the Constating Documents of 128 or Subco, or any resolution of the directors or shareholders of 128 or Subco, or (ii) any Contract to which 128 or Subco is a party or by which the assets or the business of 128 is bound or affected, or (iii) any judgment, decree or order or any term or provision thereof applicable to 128 or Subco or any of the assets or the business of 128, which breach, conflict or default

would reasonably be expected to have a 128 Material Adverse Effect or to result in the creation of any Encumbrance upon any of the assets of 128.

4.06 Capital Stock

The authorized share capital of 128 consists of an unlimited number of common shares without nominal or par value, of which 3,750,000 Shares are issued and outstanding as fully paid and nonassessable shares in the capital of 128. The authorized capital of Subco consists of an unlimited number of common shares without nominal or par value, of which 65,600 common shares are outstanding. All of the issued shares of 128 and Subco have been duly and validly issued in compliance with applicable Law and are outstanding as fully paid and non-assessable shares in the capital of 128 and Subco, respectively**.**

4.07 Options and Other Convertible Securities

No Person has any agreement or option or any right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement or option or right or privilege, for the purchase, subscription, allotment or issuance of any of the unissued shares in the capital of 128 or Subco or for the issue of any other securities of any nature or kind of 128 or Subco, other than in connection with the Subco Private Placement.

4.08 Financial Statements

The 128 Financial Statements have been prepared in accordance with IFRS applied on a basis consistent with that of preceding periods, and:

• (a) the balance sheets included in such 128 Financial Statements fairly present, in all material respects, the financial condition of 128 on the respective dates thereof; and
• (b) the statements of operations and deficit included in the 128 Financial Statements fairly present, in all material respects, the financial performance and its cash flows of 128 for the fiscal periods then ended.

4.09 Absence of Changes

Except as set out in the 128 Financial Statements, since incorporation, there has not been any material adverse change in the results of operations, financial condition, assets, properties, capital, liabilities (contingent or otherwise), cash flow or business operations of 128 that would reasonably be expected to have an 128 Material Adverse Effect.

4.10 Internal Controls Over Financial Reporting

To the knowledge of 128, prior to the date of this Agreement, there is no fraud, whether or not material, that involves management or other employees who have a significant role in 128's, internal control over financial reporting. Since incorporation and prior to the date of this Agreement, 128 has received no (x) material complaints from any source regarding accounting, internal accounting controls or auditing matters or (y) expressions of concern from employees of 128 regarding questionable accounting or auditing matters.

4.11 Ordinary Course

Since incorporation, 128 has carried on no business except as set out in the 128 Financial Statements and except for the transactions contemplated by this Agreement, 128 has carried on its business in the 128 Ordinary Course, and 128 has not carried on any business or entered into any Contract, commitment or agreement of any sort whatsoever other than as disclosed in the Public Record.

4.12 No Restrictions on Activities

128 is not a party to or bound or affected by any commitment, Contract or document containing any covenant which in any way expressly limits the freedom of 128 to compete in any line of business, or to use, transfer or move any of its assets or operations, or which materially or adversely affects the business practices, operations or condition of 128 or Subco, respectively, and taken as a whole.

4.13 Liabilities

Other than expenses incurred in connection with the Business Combination and in the 128 Ordinary Course, 128 has no outstanding Liabilities (accrued, absolute, contingent or otherwise), except as disclosed in the 128 Financial Statements.

4.14 Non-Arm's Length Transactions

Except as disclosed in the 128 Financial Statements:

(a) 128 has not engaged in any transaction with, made any payment or loan to, or borrowed any monies from or is otherwise indebted to, any director, officer, employee or shareholder of 128 or any other Person with whom 128 is not dealing at arm's length (within the meaning of the Tax Act) or any Affiliate of any of the foregoing, except for amounts due as normal compensation or reimbursement of ordinary business expenses; and

(b) 128 is not a party to any contract or agreement with any director, officer, employee or shareholder of 128 or any other Person with whom 128 is not dealing at arm's length (within the meaning of the Tax Act) or any Affiliate of any of the foregoing, other than employment agreements entered into in the 128 Ordinary Course.

4.15 No Guarantees

128 is not bound by any Contract, assurance, bond, undertaking or guarantee under or pursuant to which it has guaranteed or endorsed the debts, obligations or Liabilities of any other Person, except as disclosed in the 128 Financial Statements.

4.16 128 Material Contracts

Section 4.16 of the 128 Disclosure Schedule sets forth a true and complete list of all Contracts to which 128 is a party or by which 128 is bound which is material to 128. Each such Contract is a valid and subsisting agreement, enforceable in accordance with the terms thereof and can be fulfilled and performed in all material respects by 128 in the 128 Ordinary Course. Each such Contract is unamended, is in full force and effect, in good standing and no event of default has occurred and is continuing and no event has occurred which, with the giving of notice, the lapse of time or both, would constitute an event of default by 128 under any such Contract. To the knowledge of 128, no event has occurred which, with the giving of notice, the passing of time or both, would constitute an event of default by any other party to any such Contract, 128 is not alleged to be in default of any of the provisions of such Contracts, and 128 is not aware of any disputes with respect thereto.

4.17 Other Contracts

128 is not a party to any Contract, the termination, expiry or non-renewal of which would reasonably be expected to have a 128 Material Adverse Effect.

4.18 Title to Property and Assets

128 and Subco have no material property or assets except as set forth in the 128 Financial

Statements.

4.19 Taxes and Governmental Charges

• (a) As of the date of this Agreement, 128 has:
  • (i) duly and in a timely manner filed all Tax Returns and reports required by Law to have been filed by it (except for such Tax Returns and reports with respect to which the failure to timely file would not reasonably be expected to have a 128 Material Adverse Effect), and all such Tax Returns and reports are true, correct and complete in all material respects;
  • (ii) duly kept all records which it is required to keep for Tax purposes or which would be needed to substantiate any claim made or position taken in relation to Tax by it, as applicable, and such records are available for inspection at the head office of 128;
  • (iii) duly and correctly reported all income and other amounts required to be reported;
  • (iv) paid all Taxes to the extent that such Taxes have been assessed by the relevant taxation authority; and
  • (v) duly and in a timely manner paid, deducted, withheld, collected and remitted all Governmental Charges (other than Governmental Charges that are not yet due) and has made full provision for (including properly accruing and reflecting on its books and records) all Governmental Charges that are not yet due, that relate to periods (or portions thereof) ending prior to the date of this Agreement, except where the failure to pay any such Governmental Charges, or make any such remittance, deduction or contribution or other amount would not reasonably be expected to have a 128 Material Adverse Effect.
• (b) The 128 Financial Statements contain adequate provision for all Taxes, assessments and levies imposed on 128, or its property or rights, arising since incorporation, regardless of whether such amounts are payable before or after the Effective Date.
• (c) No deficiency in payment of any Taxes for any period has been asserted against 128 by any Governmental Authority and remains unsettled at the date hereof.
• (d) No Tax Return of 128 is being audited by the relevant taxing authority. There are no outstanding waivers, objections, extensions or comparable consentsregarding the application of the statute of limitations or period of reassessment with respect to any Taxes or Tax

Returns that have been given or made by 128 (including the time for filing of Tax Returns or paying Taxes). To the knowledge of 128, there are no pending requests for any such waivers, extensions, or comparable consents. 128 has not received a ruling from any Governmental Authority or signed an agreement with any Governmental Authority that could reasonably be expected to have a 128 Material Adverse Effect.

• (e) There are no actions, suits, examinations, proceedings, investigations, audits or claims now pending or threatened or, to the knowledge of 128, contemplated against 128 in respect of any Taxes and there are no matters under discussion with any Governmental Authority relating to any Taxes.
• (f) 128 has not been subject to or is currently subject to any investigation, audit or visit by any Governmental Authority relating to Tax which has been notified to 128, and 128 is not aware of any such investigation, audit or visit planned for the next twelve months.

4.20 Absence of Litigation, etc.

There is not now in progress, pending or, to 128's knowledge, threatened or contemplated against or affecting 128, or any of its assets or properties, or any officer or director thereof in their capacity as an officer or director thereof, any litigation, action, suit, investigation, claim, complaint or other proceeding, including appeals and applications for review, by or before any Governmental Authority, which if determined adversely to 128, individually or in the aggregate, would reasonably be expected to have an 128 Material Adverse Effect.

4.21 Compliance with Laws

The business of 128 has been, and is now being, conducted and all of its assets have been, and are now being, used in compliance with all applicable Laws other than such non-compliance which would not reasonably be expected to have an 128 Material Adverse Effect, and no written notices have been received by 128 that the business of 128 is not being conducted or that any of such assets are not being used in compliance with all applicable Laws other than any non-compliance that would not reasonably be expected to have a 128 Material Adverse Effect.

4.22 Authorizations and Consents

• (a) Except for the approval of the Exchange contemplated in Section 7.01(c), no Authorization or declaration or filing with any Governmental Authority on the part of 128 is required for the valid execution, delivery and performance of its obligations under this Agreement or the completion of the Business Combination pursuant to this Agreement.
• (b) No consent, approval or waiver is required pursuant to the terms of any material Contract to which 128 is a party for the valid execution, delivery and performance of its obligations under this Agreement or the completion of the Business Combination pursuant to this Agreement.

4.23 Employment Matters and Employee Plans

(a) 128 does not have any employees or independent contractors (other than professional advisors engaged by 128 to provide services in connection with the Business Combination and for bookkeeping and accounting services).

• (c) 128 does not have any Employee Plans of any nature whatsoever nor has it ever had any such plans.
• (d) 128 is operating in full compliance with all Laws relating to employees, including employment standards, human rights, occupational health and safety, all pay equity and employment equity legislation other than such non-compliance which would not reasonably be expected to have a 128 Material Adverse Effect and there have been no employmentrelated complaints against 128.
• (e) To the knowledge of 128, there are no complaints or threatened complaints against 128 before any employment standards branch or tribunal or human rights commission or tribunal, nor any occurrence which might lead to a complaint under any human rights legislation, employment standards legislation, health and safety legislation, workers' compensation legislation or pay equity legislation.
• (f) There are no outstanding decisions or settlements or pending settlements under employment standards, human rights legislation, health and safety legislation, workers' compensation legislation, payment equity legislation or labour relations legislation which place any obligation upon 128 to do or refrain from doing any act or place a material financial obligation on 128.
• (g) There are no actions, suits or claims pending, threatened or reasonably anticipated (other than routine claims for benefits) against any Employee Plan or its assets, and there are no audits, inquiries or proceedings pending or, to the knowledge of 128, threatened by any Governmental Authority with respect to any Employee Plan, which in either case reasonably could be expected to result in material Liability to 128.
• (h) Neither the execution and delivery of this Agreement nor the performance of the obligations of 128 hereunder will entitle any current or former employee of 128 to any severance pay, bonus or other similar payment.

4.24 No Powers of Attorney

There are no outstanding powers of attorney or other authorizations granted by 128 to any third party to bind 128 to any Contract, Liability or obligation.

4.25 Insurance

128 does not have any insurance of any nature whatsoever relating to it, its assets, its business, or its directors or officers.

4.26 Authorizations

128 has all Authorizations necessary to conduct its business as presently conducted or for the ownership and use of the Assets in compliance with applicable Laws, except for any Authorizations the lack of which would not reasonably be expected to have a 128 Material Adverse Effect. 128 is not in default under, nor have it received any notice of any claim or default with respect to, any such Authorization. No registrations, filings, applications, notices, transfers, consents, approvals, audits, qualifications, waivers or other action of any kind is required by virtue of the execution and delivery of this Agreement, or of the consummation of the transactions contemplated hereby: (a) to avoid the loss of any Authorization or any asset, property or right pursuant to the terms thereof, or the violation or breach of any Law applicable thereto, or (b) to enable 128 to hold and enjoy any such Authorization, asset, property or right immediately after the Effective Date in the conduct of its business in the same manner as conducted prior to the Effective Date.

4.27 Fees and Commissions

128 is not a party to or bound by any Contract to pay any royalty, license fee or management fee. No broker, finder or similar intermediary has acted for or on behalf of or is entitled to any broker's, finder's or similar fee or other commission from 128 in connection with this Agreement.

4.28 Books and Records

The corporate records and minute books of 128 contain or, at or prior to the Business Combination will contain, in all material respects, complete and accurate minutes of all meetings of the directors and shareholders since its date of incorporation, together with the full text of all resolutions of directors and shareholders passed in lieu of such meetings, duly signed.

4.29 Restrictions on Business Combination

Except to the extent that 128 must comply with the policies of the Exchange and applicable Laws, 128 is not a party to or bound or affected by any commitment, agreement or document which would prohibit or restrict 128 from entering into and completing the Business Combination.

4.30 Reporting Issuer Status

128 is a "reporting issuer" in each of the Canadian Jurisdictions within the meaning of the Canadian Securities Laws, is in material compliance with its obligations as a reporting issuer, and none of the British Columbia Securities Commission or the Alberta Securities Commission, the Exchange or other Governmental Authority has issued any order preventing the Business Combination or the trading of any securities of 128.

4.31 Expenses and Obligations

128 has no obligations or commitments to incur any expenses of any sort whatsoever from the date hereof until completion of the Business Combination, other than general administrative expenses consistent with past practice and expenses relating to the completion of the Business Combination.

4.32 Share Issuance

Subject to applicable Canadian Securities Laws and the rules and policies of the Exchange, 128 has the full and lawful right and authority to issue 128 Shares to the McFarlane Common Shareholders, in connection with the Business Combination, and upon issuance such shares will be validly issued asfully paid and non-assessable common shares in the capital of 128 free and clear of all Encumbrances.

4.33 Public Disclosure Documents

128 is current in the filing of all public disclosure documents required to be filed by 128 under applicable Canadian Securities Laws (including all Contracts required by Canadian Securities Laws to be filed by 128), there are no filings that have been made thereunder on a confidential basis and all of such filings comply with the requirements of all applicable Canadian Securities Laws except where such noncompliance has not and would not reasonably be expected to have a 128 Material Adverse Effect.

4.34 No Misrepresentation

No portion of the Public Record contained a misrepresentation (as such term is defined in the Securities Act (Ontario)) as at its date of public dissemination or as at the date hereof.

4.35 Information Supplied

None of the information regarding 128 or its assets or business that was supplied by 128 specifically for inclusion or incorporation by reference into the Listing Statement will, at the time of initial submission of the Listing Statement to the Exchange, or at the time of any amendment or supplement thereof, as amended or supplemented at such date or time, contain any misrepresentation or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances under which they are made.

ARTICLE 5 SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES

5.01 Survival of Covenants, Representations and Warranties

No investigation by or on behalf of any party prior to the execution of this Agreement will mitigate, diminish or affect the representations and warranties made by the other parties. The representations and warranties of the parties contained in this Agreement will not survive the completion of the Business Combination and will expire and be terminated on the earlier of the Effective Time and the date on which this Agreement is terminated in accordance with its terms. This Section 5.01 will not limit any covenant or agreement of any of the parties, which, by its terms, contemplates performance after the Effective Time or the date on which this Agreement is terminated, as the case may be.

ARTICLE 6 COVENANTS

6.01 Access to McFarlane

McFarlane s will forthwith make available to 128 and its authorized representatives and, if requested by 128, provide a copy to 128 of all title documents, Contracts, financial statements, Constating Documents, minute books, share certificate books, share registers, plans, reports, licences, orders, permits, books of account, accounting records and all other documents, information or data relating to McFarlane and the McFarlane Business. McFarlane will afford 128 and its authorized representatives every reasonable opportunity to have access during normal business hoursto the McFarlane Business and the property, assets, undertaking, records and documents of McFarlane. At the request of 128, McFarlane will execute or cause to be executed such consents, authorizations and directions as may be necessary to permit any inspection of the McFarlane Business and any property of McFarlane or to enable 128 or its authorized representatives to obtain full access to all files and records relating to McFarlane and any of the assets of McFarlanemaintained by Governmental Authorities. At 128's request, McFarlane will co-operate with 128 in arranging any such meetings as 128 should reasonably request with:

• (a) employees, directors and officers of McFarlane;
• (b) persons who have or have had a business relationship with McFarlane and
• (c) auditors, solicitors or any other persons engaged or previously engaged to provide services to McFarlane who have knowledge of matters relating to McFarlane and the McFarlane Business.

6.02 Access to 128

128 will forthwith make available to McFarlane and its authorized representatives and, if requested by McFarlane, provide a copy to McFarlane of all title documents, Contracts, financial statements, Constating Documents, minute books, share certificate books, share registers, plans, reports, licences, orders, permits, books of account, accounting records and all other documents, information or data relating to 128 and its business. 128 will afford McFarlane and its authorized representatives every reasonable opportunity to have access, during normal business hours, to its business and the property, assets, undertaking, records and documents of 128. At the request of McFarlane, 128 will execute or cause to be executed such consents, authorizations and directions as may be necessary to permit any inspection of its business and any property of 128 or any of its subsidiaries or to enable McFarlane or its authorized representatives to obtain full access to all files and records relating to 128 or any of its subsidiaries and any of the assets of 128 or any of its subsidiaries maintained by Governmental Authorities. At McFarlane's request, 128 will co-operate with McFarlane in arranging any such meetings as McFarlane should reasonably request with:

• (a) employees, directors and officers of 128;
• (b) persons who have or have had a business relationship with 128; and
• (c) auditors, solicitors or any other persons engaged or previously engaged to provide services to 128 who have knowledge of matters relating to 128 and its business.

6.03 Confidentiality

• (a) Each party hereto agrees that it shall keep strictly confidential and shall not disclose, copy, reproduce or distribute, or cause or permit to be disclosed, copied, reproduced or distributed any information concerning another party hereto (the "Disclosing Party"), its business, operations, assets and liabilities, that was obtained from another party hereto (or such party's Representatives (as defined below)) including pursuant to Sections 6.01 and 6.02 hereof, respectively (the "Confidential Information") to anyone except (i) the receiving party's (the "Recipient") directors, officers, employees, Affiliates and advisors (the "Representatives") to whom disclosure is reasonably necessary for the purposes of, or in connection with, the transactions contemplated herein and who have agreed to be bound by the terms of this Agreement, or (ii) as otherwise consented to in writing by the Disclosing Party. Each Recipient shall use its best efforts to ensure that the Confidential Information remains strictly confidential and is not disclosed to or seen, used or obtained by any Person or entity except in accordance with the terms of this Agreement.
• (b) Prior to the Effective Date, each Recipient and its Representatives shall not use or cause to be used any Confidential Information for any purpose other than in connection with

evaluating, negotiating or advising in connection with the transactions contemplated herein, and at no time shall a Recipient or its Representatives otherwise use or cause to be used any Confidential Information for the benefit of itself or any other third party or in any manner adverse to, or to the detriment of, the Disclosing Party or its shareholders.

• (c) Each Recipient shall instruct its Representatives to whom it makes disclosure that the disclosure is made in confidence and shall be kept in confidence and used only in accordance with this Agreement. The Recipient is liable for any breach of the obligations under this Agreement committed by its Representatives.
• (d) Notwithstanding the foregoing,
  • (i) the obligations of the Recipient under this Section 6.03 shall not apply to any information that (A) is publicly available or becomes publicly available through no action or fault of the Recipient, (B) was already in the Recipient's possession or known to the Recipient prior to being disclosed or provided to the Recipient by or on behalf of the Disclosing Party, provided that the source of such information or material was not bound by a contractual, legal or fiduciary obligation of confidentiality to the Disclosing Party or any other party with respect thereto, (C) is obtained by the Recipient from a third party, provided that such third party has the lawful right to disclose the Confidential Information, or (D) is independently developed by the Recipient without reference to the Confidential Information; and
  • (ii) a Recipient may disclose Confidential Information if and to the extent legally required or compelled to do so by applicable Law or in any governmental, administrative or judicial process (the "Compelled Disclosure"). The Recipient shall provide the Disclosing Party with prompt written notice of any request or requirement for Compelled Disclosure and shall co-operate with the Disclosing Party as the latter may reasonably and lawfully request with respect to the form, timing and nature of any Compelled Disclosure or seeking a protective order or other appropriate remedy. The Recipient may disclose only such Confidential Information as is specifically required or compelled to be disclosed and shall continue to use its best efforts to preserve the confidentiality of the Confidential Information.
• (e) Upon the termination or rescission of this Agreement, each Recipient will promptly, if requested to do so by the Disclosing Party, destroy, or return to the Disclosing Party, all Confidential Information (including notes, writings and other material developed therefrom by Recipient) and all copies thereof and retain none for its files. The requirements of confidentiality set forth herein shall survive the return or destruction of such Confidential Information.
• (f) Each Recipient hereby agrees that itsfailure or threat of failure to perform any obligation or duty which it has agreed to perform under this Agreement may cause irreparable harm to the Disclosing Party, which harm cannot be adequately compensated for by monetary damages. It is further agreed by each Recipient that an order of specific performance, injunctive relief or other equitable relief (or any combination thereof) against the Recipient in the event of a breach or default, or the threat of a breach or default, under the terms of this Agreement would be equitable and would not work a hardship on the Recipient and accordingly, in such event the Disclosing Party, without any bond or other security being required and in addition to whatever other remedies are or might be available at law or in equity, shall have the right

to commence an action against the Recipient either to compel specific performance by, or to obtain injunctive relief or other equitable relief (or any combination thereof) against, the Recipient with respect to any such event.

(g) Each Recipient acknowledges that the Recipient is aware, and shall advise its Representatives, that Canadian Securities Laws prohibit any Person who has received material non-public information from an issuer from purchasing or selling securities ofsuch issuer or from communicating such information to any other Person.

6.04 Filings and Indemnification

• (a) 128 and McFarlane shall prepare and file, or cause to be filed, any filings required under any applicable Laws, or the rules and policies of the Exchange or other Governmental Authorities relating to the Business Combination and the Amalgamation, and shall provide on a timely basis such information to each other as is necessary to complete such filings.
• (b) 128 covenants and agrees: (i) to take, in a timely manner, all commercially reasonable actions and steps necessary in order that, effective as at the Effective Date, the 128 Shares, including for greater certainty, the 128 Shares issuable pursuant to the Business Combination, be listed and posted for trading on the Exchange; (ii) that, when received, 128 shall provide McFarlane with copies of the conditional and final approval of the Exchange respecting the Business Combination and the listing and posting for trading of the additional Resulting Issuer Shares to be issued pursuant to the Business Combination; and (iii) that, the distribution of Resulting Issuer Shares to the shareholders of McFarlane upon the completion of the Business Combination is exempt from the prospectus and registration requirements of the Canadian Securities Laws.
• (c) 128 shall indemnify and save McFarlane harmless from and against any and all liabilities, losses (except for loss of profits or consequential losses), claims, judgments, damages, expenses and costs (including, without limitation, reasonable legal fees and costs and expenses incurred in connection therewith) (collectively, the "Indemnifiable Damages") suffered or incurred by McFarlane as a result of any misrepresentation contained in the Listing Statement that arises from information specifically provided by 128 for inclusion in the Listing Statement in writing.
• (d) McFarlane shall indemnify and save 128 harmless from and against any Indemnifiable Damages suffered or incurred by 128 as a result of any misrepresentation contained in the Listing Statement that arises from information specifically provided by McFarlane for inclusion in the Listing Statement in writing.

6.05 Conduct of McFarlane Prior to Closing

Without in any way limiting any other obligations of McFarlane hereunder, during the period from the date hereof until the earlier of the Effective Date or the date this Agreement is terminated in accordance with its terms, McFarlane will use its commercially reasonable efforts to take, or cause to be taken, all action and to do, or cause to be done, all things necessary, proper or advisable (i) to consummate and make effective as promptly as practicable the transactions contemplated by this Agreement, (ii) to comply with all provisions of this Agreement and (iii) to cooperate with 128 in connection with the foregoing, including, without limitation, the following actions:

• (a) Conduct Business in the Ordinary Course. Other than as permitted under this Agreement including in connection with a Permitted Acquisition, McFarlane will conduct the McFarlane Business and its operations and affairs only in the McFarlane Ordinary Course and in a manner consistent with past practice and McFarlane will not, without the prior written consent of 128, take any action or enter into any transaction that, if effected before the date of this Agreement, would constitute a breach of any representation, warranty, covenant or other obligation of McFarlane contained herein, or which may interfere with or be inconsistent with the successful completion of the transactions contemplated herein.

• (b) Material Adverse Effects. McFarlane shall notify 128 of any McFarlane Material Adverse Effect.

• (c) Corporate Action. McFarlane will use its commercially reasonable efforts to take all necessary corporate action, steps and proceedings to approve or authorize, validly and effectively, the execution, delivery and performance of this Agreement and the other agreements and documents contemplated hereby and to complete the Business Combination and the transactions contemplated thereby, and to cause all necessary meetings of directors and shareholders of McFarlane to be held for such purpose. In particular, McFarlane will obtain the McFarlane Common Shareholder Approval as soon as practicable upon execution of this Agreement. McFarlane will not, in connection with the McFarlane Common Shareholder Approval, mail or otherwise transmit any information circular or form of proxy or other solicitation material to any Person in the United States except to McFarlane Common Shareholders resident in the United States.

• (d) Regulatory Consents. McFarlane will use its commercially reasonable efforts to obtain, prior to the completion of the Business Combination, from all appropriate Governmental Authorities, all Authorizations required as a condition of the lawful consummation of the Business Combination, including, without limitation, federal, departmental or municipal approvals under the Laws of the Canada and the provision of reasonable assistance to 128 to obtain the approval of the Exchange, and will affect all necessary registrations and other filings and submissions of information requested by Governmental Authorities in connection with the same.

• (e) Restrictive Covenants. McFarlane shall not, directly or indirectly, other than as permitted under this Agreement including in connection with the McFarlane Private Placement and a Permitted Acquisition:

  • (i) amend its Constating Documents;
  • (ii) issue, sell, pledge, hypothecate, lease, dispose of or encumber any of its shares or other securities, or any right, option or warrant with respect thereto;
  • (iii) split, combine or reclassify any of its securities or declare, pay or make any dividend or other distribution on the McFarlane Common Shares, or distribute any of its properties or Assets to any Person;
  • (iv) other than as disclosed to 128, enter into or amend any employment agreements with any director, officer or key employee, create or amend any Employee Plan, make any increases in the base compensation, bonuses, paid vacation time allowed or benefits for its directors, officers, employees or consultants;

• (v) hire or dismiss any employees whose total annual compensation exceeds $50,000 without the prior written consent of 128;

• (vi) other than in the McFarlane Ordinary Course, acquire or agree to acquire (by tender offer, exchange offer, merger, amalgamation, acquisition of shares or assets or otherwise) any Person, partnership, joint venture or other business organization or division or acquire or agree to acquire any material assets;

• (vii) create any stock option or bonus plan, pay any bonuses, deferred or otherwise, or defer any compensation to any of its directors, officers or employees;

• (viii) make any material change in accounting procedures or practices;

• (ix) mortgage, pledge or hypothecate any of its Assets, or subject them to any Encumbrance, other than a Permitted Encumbrance;

• (x) borrow any money or incur any indebtedness in an aggregate amount in excess of $50,000 (other than trade payables incurred in the McFarlane Ordinary Course), without the prior written consent of 128, not to be unreasonably withheld;

• (xi) make loans, advances or other similar payments to any party, excluding routine advances to employees for expenses incurred in the McFarlane Ordinary Course or as is reasonable agreed to by 128 in writing;

• (xii) make any capital expenditures in an amount exceeding $50,000 the aggregate without the prior written consent of 128, not to be unreasonably withheld;

• (xiii) enter into any Contract or arrangement granting any rights to purchase or lease any of its Assets or requiring the consent of any Person to the transfer, assignment or lease of any of its Assets;

• (xiv) enter into any transaction or material Contract not in the McFarlane Ordinary Course or engage in any business enterprise or activity different than the McFarlane Business, without the prior written consent of 128, not to be unreasonably withheld;

• (xv) sell, lease, sublease, assign or transfer (by tender offer, exchange offer, merger, amalgamation, sale of shares or assets or otherwise) any of its Assets;

• (xvi) cancel, waive or compromise any debts or claims, including accounts payable to and receivable from Affiliates;

• (xvii) enter into any other material transaction or any amendment of any Contract or Authorization which is material to the McFarlane Business;

• (xviii) settle any outstanding claim, dispute, litigation matter, or tax dispute;

• (xix) transfer any Assets to any of its shareholders or any of their subsidiaries or Affiliates or assume any indebtedness or Liability from a shareholder or any of their subsidiaries or Affiliates or enter into any other related party transactions;

• (xx) enter into any material Contract regarding its business operations, including any joint venture, partnership or other arrangement; or

• (xxi) enter into any agreement or understanding to do any of the foregoing.

• (f) Contractual Consents. McFarlane will give all notices and use its commercially reasonable efforts to obtain all waivers, consents and approvals required under any Contract to which McFarlane is a party or by which it is bound to consummate the transactions contemplated in this Agreement.

• (g) Preserve Goodwill. McFarlane will use its commercially reasonable efforts to preserve intact the McFarlane Business and the property, Assets, operations and affairs of McFarlane and to carry on the McFarlane Business and the affairs of McFarlane in the McFarlane Ordinary Course, and to maintain and preserve its business relationships and the goodwill of all persons having business relations with McFarlane.

6.06 Conduct of 128 Prior to Closing

Without in any way limiting any other obligations of 128 hereunder, during the period from the date hereof until the earlier of the Effective Date or the date this Agreement is terminated in accordance with its terms, 128 will use its commercially reasonable efforts to take, or cause to be taken, all action and to do, or cause to be done, all things necessary, proper or advisable (i) to consummate and make effective as promptly as practicable the transactions contemplated by this Agreement, (ii) to comply with all provisions of this Agreement and (iii) to cooperate with McFarlane in connection with the foregoing, including, without limitation, the following actions:

• (a) Conduct Business in the Ordinary Course. 128 will not carry on any business other than to pursue the Business Combination, and, other than with respect to the Subco Private Placement, 128 will not, without the prior written consent of McFarlane, take any action, enter into any transaction that, if effected before the date of this Agreement, would constitute a breach of any representation, warranty, covenant or other obligation of 128 contained herein, or which may interfere with or be inconsistent with the successful completion of the transactions contemplated herein.

• (b) Material Adverse Effects. 128 shall notify McFarlane of any 128 Material Adverse Effect.

• (c) Corporate Action. 128 will use its commercially reasonable efforts to take all necessary corporate action, steps and proceedings to approve or authorize, validly and effectively, the execution, delivery and performance of this Agreement and the other agreements and documents contemplated hereby and to complete the Business Combination and to cause all necessary meetings of directors and shareholders of 128 and Subco to be held for such purpose.

• (d) Name Change. 128 will use its commercially reasonable efforts to complete the 128 Name Change immediately prior to the completion of the Business Combination.

• (e) Restrictive Covenants. 128 shall not, directly or indirectly, other than in connection with the 128 Name Change, the 128 Share Split and the 128 Recapitalization:

  • (i) amend its Constating Documents;

• (ii) issue, sell, pledge, hypothecate, lease, dispose of or encumber any of its shares or other securities, or any right, option or warrant with respect thereto;

• (iii) split, combine or reclassify any of its securities or declare, pay or make any dividend or other distribution on the 128 Shares, or distribute any of its properties or assets to any Person;

• (iv) enter into or amend any employment agreements with any director, officer or key employee, create or amend any Employee Plan, make any increases in the base compensation, bonuses, paid vacation time allowed or benefits for its directors, officers, employees or consultants;

• (v) hire or dismiss any employees;

• (vi) acquire or agree to acquire (by tender offer, exchange offer, merger, amalgamation, acquisition of shares or assets or otherwise) any Person, partnership, joint venture or other business organization or division or acquire or agree to acquire any material assets;

• (vii) create any stock option or bonus plan, pay any bonuses, deferred or otherwise, or defer any compensation to any of its directors, officers or employees;

• (viii) make any material change in accounting procedures or practices;

• (ix) mortgage, pledge or hypothecate any of its assets, or subject them to any Encumbrance, other than a Permitted Encumbrance;

• (x) borrow any material sums of money or incur any indebtedness (other than in the ordinary course) in excess of $5,000 which shall exclude any expenses incurred in connection with the transactions contemplated by this Agreement or in connection with 128's annual financial statement audit, nor make loans, advances or similar payments to any party (excluding routine advances to employees of 128 for expenses incurred in the ordinary course), nor make any capital expenditures;

• (xi) enter into any Contract requiring the consent of any Person to the transfer, assignment or lease of any of its assets;

• (xii) enter into any other material transaction or any amendment of any Contract or Authorization which is material to its business, other than any transaction pursuant to which 128 settles outstanding Liabilitiesin consideration for cash or other assets;

• (xiii) settle any outstanding claim, dispute, litigation matter or tax dispute;

• (xiv) enter into any material Contract regarding its business operations, including any joint venture, partnership or other arrangement, other than any transaction pursuant to which 128 settles outstanding Liabilities in consideration for cash or other assets; or

• (xv) enter into any agreement or understanding to do any of the foregoing.

• (f) Regulatory Consents. 128 will use its commercially reasonable efforts to obtain, prior to the Business Combination, from all appropriate Governmental Authorities, the Authorizations required as a condition of the lawful consummation of the transactions contemplated by this Agreement, including the approval of the NEO, and will effect all necessary registrations and other filings and submissions of information requested by Governmental Authorities in connection with the same.

• (g) Contractual Consents. 128 will give any notices and use its commercially reasonable efforts to obtain any consents and approvals required under any Contract to which 128 is a party or by which it is bound to consummate the transactions contemplated hereby.

• (h) Contracts. 128 will not, without the prior written consent of McFarlane (such consent not to be unreasonably withheld or delayed), enter into any new Contract or amend the terms of any existing Contract to which it is a party except for the Contracts necessary to carry out the transactions contemplated in this Agreement, including the 128 Recapitalization.

• (i) Subco Private Placement. 128 will provide McFarlane with satisfactory evidence that it has completed the Subco Private Placement.

6.07 Standstill of McFarlane

Unless and until this Agreement is terminated pursuant to the terms hereof, McFarlane agrees not to solicit, initiate, knowingly encourage, cooperate with or facilitate (including by way of furnishing any Confidential Information or entering into any form of agreement, arrangement or understanding) the submission, initiation or continuation of any oral or written inquiries or proposals or expressions of interest regarding, constituting or that may reasonably be expected to lead to any activity, arrangement or transaction or propose any activities or solicitations in opposition to or in competition with the Business Combination, and without limiting the generality of the foregoing, not to induce or attempt to induce any other Person to initiate any offer, shareholder proposal, "business combination", "takeover bid,", "qualifying transaction", exempt or otherwise, within the meaning of the Canadian Securities Laws, for securities or Assets of McFarlane (other than pursuant to the McFarlane Private Placement or in connection with a Permitted Acquisition), nor to undertake any transaction or negotiate any transaction which would be or potentially could reasonably be in conflict with the Business Combination, including, without limitation, allowing access to any third party to conduct due diligence, nor to permit any of its officers or directors to do so, except as required by statutory obligations and in connection with a Permitted Acquisition, provided however McFarlane may enter into discussions or negotiations with a third party who (without any solicitation, initiation or encouragement, directly or indirectly, after the date of this Agreement, by McFarlane or any of its officers, directors or employees or any financial advisor, expert or other representative retained by it) seeks to initiate such discussions or negotiations and, subject to execution of a confidentiality and standstill (provided that such confidentiality agreement shall provide for disclosure thereof (along with all information provided thereunder) to 128) may furnish to such third party information concerning such party and McFarlane's business, properties and assets, in each case if, and only to the extent that the board of directors of McFarlane determines in good faith that engaging in such discussions or negotiations is necessary for the board of directors to discharge its fiduciary duties under applicable Laws. In the event McFarlane, including any of its officers or directors, receives any form of offer that it wishes to pursue, McFarlane shall forthwith (and in any event within one Business Day following receipt) notify 128 of such offer or inquiry and provide 128 with such details as it may request (the "McFarlane Offer").

6.08 Standstill of 128

(a) Unless and until this Agreement is terminated pursuant to the terms hereof, 128 agrees not to solicit, initiate, knowingly encourage, cooperate with or facilitate (including by way of furnishing any Confidential Information or entering into any form of agreement, arrangement or understanding) the submission, initiation or continuation of any oral or written inquiries or proposals or expressions of interest regarding, constituting or that may reasonably be expected to lead to any activity, arrangement or transaction or propose any activities or solicitations in opposition to or in competition with the Business Combination, and without limiting the generality of the foregoing, not to induce or attempt to induce any other Person to initiate any offer, shareholder proposal, "business combination", "takeover bid," or "qualifying transaction", exempt or otherwise, within the meaning of the Canadian Securities Laws or the policies of the Exchange, as applicable, for securities or assets of 128, nor to undertake any transaction or negotiate any transaction which would be or potentially could reasonably be in conflict with the Business Combination, including, without limitation, allowing access to any third party to conduct due diligence, nor to permit any of its officers or directors to do so, except as required by statutory obligations provided however 128 may enter into discussions or negotiations with a third party who (without any solicitation, initiation or encouragement, directly or indirectly, after the date of this Agreement, by 128 or any of its officers, directors or employees or any financial advisor, expert or other representative retained by it) seeks to initiate such discussions or negotiations and, subject to execution of a confidentiality and standstill (provided that such confidentiality agreement shall provide for disclosure thereof (along with all information provided thereunder) to McFarlane) may furnish to such third party information concerning such party and 128's business, properties and assets, in each case if, and only to the extent that the board of directors of 128 determines in good faith that engaging in such discussions or negotiations is necessary for the board of directors to discharge its fiduciary duties under applicable Laws. In the event 128, including any of its officers or directors, receives any form of offer that it wishes to pursue, 128 shall forthwith (and in any event within one Business Day following receipt) notify McFarlane of such offer or inquiry and provide McFarlane with such details as it may request (the "128 Offer").

6.09 Change to Directors and Officers of 128

Upon the completion of the Business Combination:

• (a) all of the directors of 128 will resign and there will be appointed in their place as directors of 128 such persons as McFarlane shall designate; and
• (b) all of the officers of 128 will resign and there will be appointed in their place as officers of 128 such persons as McFarlane shall designate.

ARTICLE 7 CONDITIONS OF CLOSING

7.01 Conditions in Favour of 128

The consummation of the Business Combination is subject to the following terms and conditions for the exclusive benefit of 128, to be fulfilled or performed at or prior to the Effective Time:

• (a) Constating Documents and Certificate of Corporate Existence. 128 shall have received from McFarlane: (i) a copy of the Constating Documents of McFarlane, certified by a duly authorized officer of McFarlane to be true and complete as of the Effective Date; and (ii) a certificate or the equivalent, dated not more than three days prior to the Effective Date, of the jurisdiction of incorporation of McFarlane as to the corporate good standing thereof.

• (b) Exchange Listing. The Exchange shall have conditionally approved the listing of the Resulting Issuer Shares, and all conditions shall been satisfied or are capable of being satisfied or waived in connection therewith.

• (c) Required Approvals. McFarlane shall have obtained the approval of its board of directors and shareholders, in accordance with the OBCA, for this Agreement and the Transactions contemplated hereby.

• (d) Proof of Corporate Action. 128 shall have received from McFarlane a copy, certified by a duly authorized officer thereof to be true and complete as of the Effective Date, of the records of all corporate action taken to authorize the execution, delivery and performance of this Agreement and the transactions contemplated hereby.

• (a) Representations and Warranties. The representations and warranties of McFarlane contained in this Agreement will be true and correct at the Effective Time with the same force and effect as if such representations and warranties were made at and as of such date (except the representations and warranties of McFarlane qualified by materiality or McFarlane Material Adverse Effect qualifications shall be true and correct in all respects and all other representations and warranties of McFarlane shall be true and correct in all material respects, in each case as of the Effective Time as if made on and as of such date except to the extent that such representations and warranties speak as of an earlier date, in which event such representations and warranties shall be accordingly true and correct as of such earlier date), and certificates of the Chief Executive Officer and the Chief Financial Officer of McFarlane dated the Effective Date will have been delivered to 128 confirming the foregoing.

• (b) Covenants. All of the terms, covenants and conditions of this Agreement to be complied with or performed by McFarlane at or before the Effective Time will have been complied with or performed in all material respects, and certificates of the Chief Executive Officer and the Chief Financial Officer of McFarlane dated the Effective Date will have been delivered to 128 confirming the foregoing.

• (c) Regulatory Consents. There will have been obtained, from all relevant Governmental Authorities, such Authorizations as are required to be obtained by McFarlane and 128 to consummate the Business Combination, including the approval of the Exchange for the listing on the Exchange of the Resulting Issuer Shares issuable pursuant to the Business Combination pursuant to the terms of this Agreement.

• (d) Exchange Escrow. On completion of the Business Combination, each of the parties as required by the Exchange shall have entered into an escrow agreement upon the terms and conditions imposed pursuant to the policies of the Exchange.

• (e) Contractual Consents. McFarlane will have given or obtained the notices, consents and approvals referred to in subsection 6.05(e), as applicable, in each case in form and substance satisfactory to 128, acting reasonably.

• (f) No Action or Proceeding. No bona fide legal or regulatory action or proceeding will be pending or threatened by any Person to enjoin, restrict or prohibit the Business Combination or any other of the transactions contemplated hereby, or the right of 128, Subco or McFarlane to conduct, expand, and develop their business.

• (g) No Material Adverse Effect. There will have been no McFarlane Material Adverse Effect since the date hereof and a certificate of the Chief Executive Officer and the Chief Financial Officer of McFarlane dated the Effective Date to that effect will have been delivered to 128.

• (h) Capitalization. Before giving effect to the securities issuable in connection with the McFarlane Private Placement or pursuant to a Permitted Acquisition, McFarlane shall have no securities issued and outstanding other than 74,747,500 McFarlane Common Shares, the McFarlane Warrants and the McFarlane Options.

• (i) Dissent Rights. Dissent Rights will not have been exercised in respect of a total number of McFarlane Common Shares which would, if such shares were converted into 128 Shares pursuant to the Business Combination, exceed 5% of the 128 Shares outstanding upon completion of the Business Combination.

If any of the conditions contained in this Section 7.01 have not been performed or fulfilled at or prior to the Effective Time to the satisfaction of 128, acting reasonably, 128 may, by notice to McFarlane, terminate this Agreement and the obligations of McFarlane and 128 under this Agreement. Any such condition may be waived in whole or in part by 128 without prejudice to any claimsit may have for breach of covenant, representation or warranty or otherwise.

7.02 Conditions in Favour of McFarlane

The consummation of the Business Combination is subject to the following terms and conditions for the exclusive benefit of McFarlane, to be fulfilled or performed at or prior to the Effective Time:

• (a) Constating Documents and Certificate of Corporate Existence. McFarlane shall have received: (i) a copy of the Constating Documents of each of 128 and Subco, certified by a duly authorized officer of 128 and Subco, as the case may be, to be true and complete as of the Effective Date; and (ii) a certificate or the equivalent, dated not more than three days prior to the Effective Date, of the jurisdiction of incorporation of each of 128 and Subco as to the corporate good standing thereof.

• (b) Exchange Listing. The Exchange shall have conditionally approved the listing of the Resulting Issuer Shares, together with any Resulting Issuer Shares issuable upon the conversion of securities of the Resulting Issuer outstanding on the Effective Date, and all conditions shall been satisfied or are capable of being satisfied or waived in connection therewith.

• (c) Required Approvals. Each of 128 and Subco shall have obtained the approval of its board of directors, and if required or permitted by the BCBCA and OBCA, as applicable, its shareholders, for this Agreement and the transactions contemplated hereby.

• (d) Proof of Corporate Action. McFarlane shall have received from each of 128 and Subco a copy, certified by a duly authorized officer thereof to be true and complete as of the Effective Date, of the records of all corporate action taken to authorize the execution, delivery and performance of this Agreement and the transactions contemplated hereby.

• (e) Name Change. The 128 Name Change and 128 Share Split will have been completed, and the 128 Continuation Resolution will have been approved.

• (f) Capitalization. There shall be no more than 3,750,000 128 Shares outstanding and no securities convertible into 128 Shares, and no more than 65,600 Subco Shares and 32,750 Subco Warrants outstanding.

• (g) Representations and Warranties. The representations and warranties of 128 contained in this Agreement will be true and correct at the Effective Time with the same force and effect as if such representations and warranties were made at and as of such date (except the representations and warranties of 128 qualified by materiality or 128 Material Adverse Effect qualifications shall be true and correct in all respects and all other representations and warranties of 128 shall be true and correct in all material respects, in each case as of the Effective Time as if made on and as of such date except to the extent that such representations and warranties speak as of an earlier date, in which event such representations and warranties shall be accordingly true and correct as of such earlier date), and certificates of the Chief Executive Officer and the Chief Financial Officer of 128 dated the Effective Date will have been delivered to McFarlane confirming the foregoing.

• (h) Covenants. All of the terms, covenants and conditions of this Agreement to be complied with or performed by 128 at or before the Effective Time will have been complied with or performed in all material respects, and a certificate of the Chief Executive Officer and the Chief Financial Officer of 128 dated the Effective Date will have been delivered to McFarlane confirming the foregoing.

• (i) Regulatory Consents. There will have been obtained, from all relevant Governmental Authorities, such Authorizations as are required to be obtained by McFarlane and 128 to consummate the Business Combination, including the approval of the Exchange for the listing on the Exchange of the Resulting Issuer Shares issuable pursuant to the Business Combination (including the exercise of the Resulting Issuer Replacement Broker Warrants issued in replacement for or in lieu of the McFarlane Broker Warrants pursuant to the terms of this Agreement), in each case in form and substance satisfactory to McFarlane, acting reasonably.

• (j) Contractual Consents. 128 will have given or obtained the notices, consents and approvals referred to in subsection 6.06(g), in each case in form and substance satisfactory to McFarlane, acting reasonably.

• (k) No Action or Proceeding. No bona fide legal or regulatory action or proceeding will be pending or threatened by any Person to enjoin, restrict or prohibit the Business Combination or any other of the transactions contemplated thereby, or the right of 128, Subco or McFarlane to conduct, expand and develop their business.

• (l) 128 Material Adverse Effect. There will have been no 128 Material Adverse Effect and a certificate of the Chief Executive Officer and the Chief Financial Officer of 128 dated the Effective Date to that effect will have been delivered to McFarlane.

• (m) Release by Directors and Officers. Each of the directors and officers of 128 who resigns as contemplated in Section 6.09 will have executed and delivered releases in favour of 128 in form and substance satisfactory to McFarlane, acting reasonably.

• (n) Dissent Rights. Dissent Rights will not have been exercised in respect of a total number of McFarlane Common Shares which would, if such shares were converted into 128 Shares pursuant to the Business Combination, exceed 5% of the 128 Shares outstanding upon completion of the Business Combination.

If any of the conditions in this Section 7.02 have not been performed or fulfilled at or prior to the Effective Time to the satisfaction of McFarlane, acting reasonably, McFarlane may, by notice to 128, terminate this Agreement and the obligations of McFarlane and 128 under this Agreement. Any such condition may be waived in whole or in part by McFarlane without prejudice to any claims it may have for breach of covenant, representation or warranty or otherwise.

7.03 Filing Articles

McFarlane and 128 will jointly file with the Director Articles of Amalgamation and such other documents as may be required to complete the Business Combination and effect the 128 Name Change as soon as practical and in any event within one Business Day after all conditions set out in Sections 7.01 and 7.02 have been satisfied or waived.

7.04 Further Assurances

Each party to this Agreement covenants and agrees that, from time to time prior to and subsequent to the Business Combination, it will execute and deliver all such documents, including all such additional conveyances, transfers, consents and other assurances and do all such other acts and things as the other party hereto, acting reasonably, may from time to time request be executed or done in order to better evidence or perfect or effectuate any provision of this Agreement or of any agreement or other document executed pursuant to this Agreement or any of the respective obligations intended to be created hereby or thereby.

ARTICLE 8 TERMINATION

8.01 Termination

This Agreement may be terminated at any time before the Effective Time:

• (a) by the mutual agreement of 128 and McFarlane;
• (b) by either of McFarlane or 128 by notice to the other party if a Governmental Authority has notified either party in writing that it will not permit the Business Combination to proceed;
• (c) by either of McFarlane or 128 by notice to the other party if there has been a misrepresentation, breach or non-performance by the breaching party of any representation, warranty, covenant or obligation contained in this Agreement, which could reasonably be

expected to have a 128 Material Adverse Effect or McFarlane Material Adverse Effective, as applicable, on the terminating party or the ability of either party to complete the Business Combination in accordance with the terms of this Agreement, provided the breaching party has been given notice of and ten (10) days to cure any such misrepresentation, breach or nonperformance;

• (d) by McFarlane if it delivers to 128 a McFarlane Offer pursuant to Section 6.07, in which case McFarlane shall pay to 128 $50,000 plus 128's reasonable out-of-pocket expenses incurred in connection with the negotiation of the transactions contemplated by this Agreement including the Letter of Intent by wire transfer of immediately available funds within five (5) Business Days from the date that 128 provides McFarlane with the quantum of the latter amount;
• (e) by McFarlane pursuant to Section 7.02;
• (f) by 128 if it delivers to McFarlane a 128 Offer pursuant to Section 6.08, in which case 128 shall pay to McFarlane the reasonable out-of-pocket expenses incurred by McFarlane in connection with the negotiation of the transactions contemplated by this Agreement including the Letter of Intent, by wire transfer of immediately available funds within five (5) Business Days from the date that McFarlane provides 128 with the quantum of such amount;
• (g) by 128 pursuant to Section 7.01;
• (h) by either McFarlane or 128, if the Business Combination has not been completed on or before March 31, 2022, or such later date as may be agreed to by McFarlane and 128 (provided, that the right to terminate this Agreement under this Section 8.01(h) shall not be available to any party whose failure to fulfill any of its obligations under this Agreement has been the cause of or resulted in the failure to consummate the transactions contemplated hereby by such date), in which case McFarlane shall pay to 128 $75,000 by wire transfer of immediately available funds within five (5) Business Days from the date a notice of termination is delivered pursuant to this Section 8.01(i);

provided that the right to terminate this Agreement and the right to receive any fee payable under this Agreement is not available to a party if it is in material breach of any representation, warranty or covenant hereof.

8.02 Effect of Termination

If this Agreement is terminated in accordance with Section 8.01:

• (a) this Agreement shall forthwith have no further force or effect and there shall be no obligation on the part of the parties hereunder except with respect to (i) Section 6.03, any fee payable under Section 8.01, Section 9.02, Section 9.06, Section 9.09, Section 9.11 and Section 9.12, which will survive such termination, and (ii) a breach arising from the fraud or wilful misconduct of any party; and
• (b) neither 128 nor McFarlane will have any further liability to the other party except as expressly contemplated hereby, provided that the termination of this Agreement (i) will not relieve either 128 nor McFarlane from any liability for breach by it of this Agreement prior to such termination or (ii) preclude a party from seeking injunctive relief to restrain any

breach or threatened breach of this Agreement or otherwise to obtain specific performance of any provision of this Agreement.

8.03 Waivers and Extensions

At any time prior to the earlier of the Effective Time or the termination of this Agreement in accordance with the provisions thereof, each of the parties hereto may (a) extend the time for the performance of any of the obligations or other acts of another party hereto, (b) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto or (c) waive compliance with any of the agreements or conditions contained herein. Any such extension or waiver shall be valid if set forth in an instrument in writing signed by the party to be bound thereby.

ARTICLE 9 MISCELLANEOUS

9.01 Further Assurances

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

9.02 Transaction Costs

Each party hereto will pay its respective costs and expenses (including but not limited to its legal and accounting costs) incurred in connection with the preparation, execution, delivery and performance of this Agreement and all documents and instruments executed pursuant to this Agreement and all transactions contemplated by this Agreement, and any other costs and expenses whatsoever and howsoever incurred. Notwithstanding the foregoing, McFarlane shall also be responsible for the reasonable fees (not to exceed $100,000 without written approval of McFarlane), disbursements and taxes of 128's legal counsel incurred in connection with the Business Combination.

9.03 Time of the Essence

Time is of the essence of this Agreement.

9.04 Public Announcements

The parties hereto shall not make any public announcement or press release concerning this Agreement or the matters contemplated herein, their discussions or any other memoranda, letters or agreements between the parties relating to the matters contemplated herein without the prior consent of each other, which consent shall not be unreasonably withheld, provided that no party shall be prevented from making any disclosure which is required to be made by Law or any rules of a stock exchange or similar organization by which it is bound.

9.05 Benefit of the Agreement

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

9.06 Entire Agreement

This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and cancels and supersedes any prior understandings and agreements between the parties hereto with respect thereto, including for greater certainty the Letter of Intent. The parties agree that the Letter of Intent is terminated upon the execution hereof. There are no representations, warranties, terms, conditions, undertakings or collateral agreements, express, implied or statutory, between the parties other than as expressly set forth in this Agreement.

9.07 Amendments and Waivers

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

9.08 Assignment

This Agreement may not be assigned by a party hereto without the written consent of the other parties hereto, such consent not to be unreasonably withheld or delayed.

9.09 Notices

Any demand, notice or communication to be made or given under or pursuant to this Agreement isto be in writing, except as otherwise expressly permitted or required under this Agreement, and may be made or given by personal delivery, by registered mail or by transmittal by electronic mail addressed to the respective parties as follows:

(a) If to 128, then to the following address:

162 Lascelles Blvd. Toronto, Ontario M5P 2E6

Attention: Patrick McBride, Director and Chief Executive Officer Email: pat@hicksongroup.com

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

Borden Ladner Gervais LLP 520-3rd Avenue S.W., Suite 1900

Attention: Robb McNaughton@blg.com Email: rmcnaughton@blg.com

(b) If to McFarlane, then to the following address:

41 Field Street Lively, Ontario P3Y 1B5

Attention: Roger Emdin

Email: remdin@mcfarlanelakemining.com

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

Wildeboer Dellelce LLP Wildeboer Dellelce Place 365 Bay Street, Suite 800 Toronto, Ontario M5H 2V1

Attention: Al Wiens Email: awiens@wildlaw.ca

or to such other mailing or electronic mail address as any party may from time notify the others of in accordance with this paragraph. Any demand, notice or communication made or given by personal delivery is conclusively deemed to have been given on the day of actual delivery thereof or, if made or given by registered mail, on the fifth (5th) business day following the deposit thereof in the mail or, if made or given by electronic mail, on the day of transmittal thereof if given during the normal business hours of the recipient and on the business day during which such normal business hours next occur if not given during such hours on any day. If the party making or giving such demand, notice or communication knows, or ought reasonably to know, of difficulties with the postal system which might affect the delivery of mail, any such demand, notice or communication is not to be mailed but is to be made or given by personal delivery or by electronic mail transmission.

9.10 Remedies Cumulative

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

9.11 Governing Law

This Agreement is governed by and will be construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein, without giving effect to any choice or conflict of law provision or rule that would cause the application of the domestic substantive laws of any other jurisdiction.

9.12 Attornment

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

9.13 Counterparts

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

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

[The remainder of this page has been left intentionally blank. Signature page follows.]

IN WITNESS WHEREOF the parties have executed this Agreement as of the date first written above.

1287401 B.C. LTD.

By: (signed) James Ward Name: James Ward Title: Chief Executive Officer

1000034047 ONTARIO INC.

By: (signed) James Ward Name: James Ward Title: President

MCARLANE LAKE MINING INCOPORPRATED

By: (signed) Mark Trevisiol Name: Mark Trevisiol Title: Chief Executive Officer and President

SCHEDULE A AMALGAMATION AGREEMENT

THIS AGREEMENT made as of the 14th day of January, 2022.

B E T W E N:

MCFARLANE LAKE MINING INCORPORATED

existing under the Business Corporations Act (Ontario)

(hereinafter referred to as "McFarlane")

• and -

1000034047 ONTARIO INC. existing under the Business Corporations Act (Ontario)

(hereinafter referred to as "Subco")

• and -

1287401 B.C. LTD. existing under the Business Corporations Act (British Columbia)

(hereinafter referred to as "128")

WHEREAS:

• 1. The parties hereto have entered into a business combination agreement dated as of January 12, 2022 pursuant to which the parties thereto have agreed that the business and assets of McFarlane will be combined with those of Subco (the "Business Combination Agreement").
• 1. The authorized capital of Subco consists of an unlimited number of common shares of which 65,600 are issued and outstanding as fully paid and non-assessable common shares in the capital of Subco.

The authorized capital of McFarlane consists of an unlimited number of common shares ("McFarlane Common Shares") of which 74,747,500 are issued and outstanding as fully paid and non-assessable common shares in the capital of McFarlane.

• 1. Subco and McFarlane have agreed to amalgamate under the OBCA (as hereinafter defined) upon the terms and conditions hereinafter set out.
• 1. Effective upon the Amalgamation (as hereinafter defined), 128 shall issue to each McFarlane Common Shareholder (as hereinafter defined) one common share in its capital for each one McFarlane Common Share (as hereinafter defined).

NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties hereto do hereby agree as follows:

1. Interpretation

In this Agreement, including the recitals:

"128 Shares" means common shares in the capital of 128;

"Agreement" means this amalgamation agreement, as it may be amended or supplemented at any time and from time to time after the date hereof;

"Amalco" means the corporation resulting from the amalgamation of Subco and McFarlane pursuant to the Amalgamation;

"Amalco Shares" means the common shares in the capital of Amalco;

"Amalgamating Corporation" means either of Subco or McFarlane and "Amalgamating Corporations" means both of them;

"Amalgamation" means the amalgamation of the Amalgamating Corporations under Section 174 of the OBCA on the terms and subject to the conditions set out in this Agreement;

"Business Combination" means the business combination among 128, Subco and McFarlane pursuant to which McFarlane Common Shareholders and Subco Shareholders will receive one 128 Shares for each McFarlane Common Share and Subco Share held and 128 will become the parent company of Amalco;

"Business Combination Agreement" has the meaning ascribed thereto in the preamble to this Agreement;

"Certificate of Amalgamation" means the certificate of amalgamation to be issued by the Director in respect of the Amalgamation;

"Director" means the director appointed under Section 278 of the OBCA;

"Dissenting McFarlane Common Shareholder" means a McFarlane Common Shareholder who dissents from the McFarlane Amalgamation Special Resolution in compliance with the OBCA;

"Effective Date" means the date shown on the Certificate of Amalgamation;

"Effective Time" has the meaning ascribed to it in Section 12;

"Exchange" means the Aequitas NEO Exchange Inc. or any other recognized stock exchange on which the Resulting Issuer Shares are to be listed for trading;

"Government Authority" means and includes, without limitation, any foreign, national, provincial, local or state government, or political subdivision of any government, judicial, public or statutory instrumentality, court, tribunal, commission, board, agency (including those pertaining to health, safety or the environment), authority, body or entity, or other regulatory bureau, authority, body or entity having legal jurisdiction over the activity or Person in question and, for greater certainty, includes the Exchange;

"McFarlane Amalgamation Special Resolution" means the special resolution of the shareholders of McFarlane approving the Amalgamation;

"McFarlane Common Shareholder" means a registered holder of McFarlane Common Shares, from time to time, and "McFarlane Common Shareholders" means all of such holders;

"McFarlane Common Shares" means common shares in the capital of McFarlane;

"OBCA" means the Business Corporations Act (Ontario), as amended from time to time;

"Parties" means Subco and McFarlane;

"Person" includes any individual, sole proprietorship, firm, partnership, joint venture, venture capital fund, limited liability company, unlimited liability company, association, trust, trustee, executor, administrator, legal personal representative, estate, group, body corporate, corporation, unincorporated association or organization, union, Government Authority, syndicate or other entity, whether or not having legal status;

"Subco Shareholder" means the holders of Subco Shares;

"Subco Shares" means common shares in the capital of Subco; and

"Transfer Agent" means the registrar and transfer agent of 128.

2. Paramountcy

In the event of any conflict between the provisions of this Agreement and the provisions of the Business Combination Agreement, the provisions of the Business Combination Agreement shall prevail.

3. Agreement to Amalgamate

Each of the Parties hereby agrees to the Amalgamation. The Amalgamating Corporations shall amalgamate to create Amalco on the terms and conditions set out in this Agreement.

4. Amalgamation Events

Under the Amalgamation, at the Effective Time:

• (a) the Amalgamating Corporations shall be amalgamated and shall continue as one corporation effective on the date of the Certificate of Amalgamation under the terms and conditions prescribed in this Agreement;
• (b) the Amalgamating Corporations shall cease to exist as entities separate from Amalco;
• (c) Amalco shall possess all the property, rights, privileges and franchises and be subject to all the liabilities, including civil, criminal and quasi-criminal, and all the contracts, disabilities and debts of each of the Amalgamating Corporations;
• (d) a conviction against, or ruling, order or judgment in favour of or against an Amalgamating Corporation may be enforced by or against Amalco;
• (e) the Articles of Amalgamation of Amalco shall be deemed to be the articles of incorporation of Amalco, and the Certificate of Amalgamation, except for purposes of subsection 117(1) of the OBCA, shall be deemed to be the certificate of incorporation of Amalco; and

(f) Amalco shall be deemed to be the party plaintiff or the party defendant, as the case may be, in any civil action commenced by or against an Amalgamating Corporation before the Amalgamation has become effective.

All rights of creditors against the property, rights and assets of the Amalgamating Corporations and all liens upon their property, rights and assets shall be unimpaired by such amalgamation and all debts, contracts, liabilities and duties of the Amalgamating Corporations shall attach to Amalco and may be enforced against it. No action or proceeding by or against any of the Amalgamating Corporations shall abate or be affected by the Amalgamation.

5. Issuance of Shares

At the Effective Time, the authorized but unissued shares and the issued and outstanding shares in the capital of the Amalgamating Corporations shall be respectively converted into issued shares in the capital of Amalco or 128 as follows:

• (a) each one McFarlane Common Share (other than McFarlane Common Shares held by a Dissenting McFarlane Common Shareholder) shall be exchanged for one fully-paid and nonassessable 128 Share;
• (b) each one Subco Share (other than Subco Shares held by 128) shall be exchanged for one fully paid and non-assessable 128 Share;
• (c) each Subco Share held by 128 shall be cancelled;
• (d) as consideration for the issuance of the 128 Shares to effect the Amalgamation, 128 will receive one Amalco Share for each one 128 Share issued to holders of McFarlane Common Shares and Subco Shares; and
• (e) Amalco will be a wholly-owned subsidiary of 128.

6. Delivery of Securities Following Amalgamation

In accordance with normal commercial practice, as soon as practicable but in any event within three business days following the Effective Date, 128, directly or through the Transfer Agent, shall issue certificates, or direct registration system ("DRS") advices, representing the appropriate number of 128 Shares to the former McFarlane Common Shareholders (other than Dissenting McFarlane Common Shareholders) and Subco Shareholders by delivering such certificates, or DRS advices, to the address set out in the minute books of McFarlane in exchange for certificates (if issued, representing such McFarlane Common Shares). Certificates formerly representing McFarlane Common Shares and Subco Shares shall cease to represent any claim upon or interest in McFarlane or Subco, respectively, other than the right of the registered holder to receive the number of 128 Shares to which it is entitled pursuant to the terms hereof.

7. Lost Certificates

In the event any certificate which immediately prior to the Effective Date represented one or more outstanding McFarlane Common Shares or Subco Shares, as the case may be, that are to be exchanged pursuant to Section 5 hereof shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the holder thereof, as applicable, claiming such certificate to be lost, stolen or destroyed, the Transfer Agent will issue in exchange for such lost, stolen or destroyed certificate, one or more certificates representing one or more of 128 Shares to which they are entitled and, in each case, deliverable pursuant to Section 6 hereof. In exchange for any lost, stolen or destroyed certificate, the holder to whom such certificates representing such securities are to be issued shall, as a condition precedent to the issuance thereof, give a bond or fee,satisfactory to the Transfer Agent in such sum as 128 may direct or otherwise indemnify 128 in a manner satisfactory to 128 against any claim that may be made against 128 with respect to the certificate alleged to have been lost, stolen or destroyed.

8. Extinguishment of Rights

Any certificate which immediately prior to the Effective Time represented outstanding McFarlane Common Shares that are not held by a Dissenting McFarlane Common Shareholder who is ultimately entitled to be paid fair value of the McFarlane Common Shares held by such Dissenting McFarlane Common Shareholder but was exchanged or was deemed to have been exchange pursuant to Section 5 hereof, that has not been deposited with all other instruments required by the Transfer Agent on or prior to the second anniversary of the Effective Date shall cease to represent a claim or interest of any kind or nature as a holder of 128 Shares. On such date, 128 Shares (and any dividends or distributions with respect thereto) to which the former holder of the certificate referred to in the preceding sentence was ultimately entitled shall be deemed to have been surrendered for no consideration to 128, together with all entitlements to dividends, distributions and interest in respect thereof held for such former holder. None of McFarlane, 128 or the Transfer Agent shall be liable to any Person in respect of any 128 Shares (or dividends or distributions) delivered to a public official pursuant to and in compliance with any applicable abandoned property, escheat or similar applicable law.

9. Dissent Rights

Registered McFarlane Common Shareholders may exercise rights of dissent ("Dissent Rights") from the special resolution adopting this Agreement pursuant to and in the manner set forth in Section 185 of the OBCA, provided that holders who exercise such rights of dissent and who:

• (a) are ultimately entitled to be paid fair value for their McFarlane Common Shares, which fair value shall be the fair value of such shares as at the date specified in Section 185 of the OBCA; and
• (b) are ultimately not entitled, for any reason, to be paid fair value for their McFarlaneCommon Shares shall be deemed to have participated in the Amalgamation, as of the Effective Time, on the same basis as a non-dissenting holder of McFarlane Common Shares and shall be entitled to receive only the consideration contemplated in Section 5 hereof that such holder would have received pursuant to the Amalgamation if such holder had not exercised dissent rights,

but in no case shall 128, McFarlane or Subco or any other Person be required to recognize holders of McFarlane Common Shares who exercise Dissent Rights as holders of 128 Shares after the time specified in the OBCA, and the names of such holders of McFarlane Common Shares who exercise Dissent Rights shall be deleted from the register of McFarlane Common Shareholders at the Effective Time.

10. Fractional Shares

No fractional 128 Shares will be issuable to McFarlane Common Shareholders or Subco Shareholders pursuant to the Amalgamation, and no cash payment or other form of consideration will be payable in lieu thereof. In the event that the former holder of McFarlane Common Shares or Subco Shareholder is entitled to receive a fractional 128 Share, any such fractional 128 Share interest to which a McFarlane Common Shareholder or Subco Shareholder would otherwise be entitled pursuant to the Amalgamation will be rounded down to the nearest whole 128 Share.

11. Filing of Articles of Amalgamation

If this Agreement is adopted by each Amalgamating Corporation as required by the OBCA, the Amalgamating Corporations agree that they will, jointly and together, file with the Director, agreed upon Articles of Amalgamation in the form prescribed under the OBCA.

12. Effective Time

The Amalgamation shall take effect and go into operation at 12:01 a.m. on the Effective Date, if this Agreement has been adopted as required by law and all necessary filings have been made with the Director before that time, or at such later time, or time and date, as may be determined by the directors or by special resolutions of the Amalgamating Corporations when this Agreement shall have been adopted as required by law; provided, however, that if this Agreement isterminated under Section 20 hereof, the Amalgamation shall not take place notwithstanding the fact that this Agreement may have been adopted by the shareholders of the Amalgamating Corporations.

13. Amalco Name

The name of Amalco shall be "McFarlane Lake Mining Incorporated".

14. Registered Office

The registered office of Amalco shall be in the City of Sudbury in the Province of Ontario. The address of the first registered office of Amalco shall be: 15 Kincora Court, Sudbury, Ontario, P3E 2B9.

15. Activities

• (a) Restrictions on Share Transfer. The right to transfer shares of Amalco shall be restricted in that no shareholder shall be entitled to transfer any share or shares without either:

  • (i) the approval of the directors of Amalco expressed by a resolution passed at a meeting of the board of directors or by a resolution in writing signed by all of the directors entitled to vote on that resolution at a meeting of directors; or
  • (ii) the approval of the holders of shares of Amalco carrying at least a majority of the votes entitled to be cast at a meeting of shareholders, expressed by a resolution passed at a meeting of the holders of such shares or by an instrument or instruments in writing signed by the holders of a majority of such shares.

• (b) Restrictions on Business. There shall be no restrictions on the business that Amalco may carry on.

• (c) Fiscal Year. The fiscal year end of Amalco shall be December 31 of each year.

• (d) By-laws. The by-laws of Amalco shall be in the form of the by-laws of Subco.

• (e) Special Provisions. Subject to the provisions of the OBCA, the following provisions shall apply to Amalco:

• A. borrow money upon the credit of Amalco;

• B. issue, re-issue, sell or pledge debt obligations of Amalco;

• C. subject to the provisions of the OBCA, as now enacted or as the same may from time to time be amended, re-enacted or replaced, give a guarantee on behalf of Amalco to secure performance of an obligation of any Person; and

• D. mortgage, hypothecate, pledge or otherwise create a security interest in all or any property of Amalco owned or subsequently acquired, to secure any obligation of Amalco; and

• (ii) The board of directors may from time to time delegate to a director, a committee of directors or an officer of Amalco any or all of the powers conferred on the board as set out above, to such extent and in such manner as the board shall determine at the time of such delegation.

16. Authorized Capital

The authorized capital of Amalco shall consist of an unlimited number of common shares without nominal or par value.

17. Capital

The amount to be added to the stated capital in respect of the Amalco Shares issuable by Amalco pursuant to Sections 4(e) and 4(f) of this Agreement shall be the aggregate of: (i) the paid-up capital for purposes of the Income Tax Act (Canada), determined before the Effective Time, of the Subco Shares converted into Amalco Shares pursuant to Section 4(e); and (ii) the paid-up capital for purposes of the Income Tax Act (Canada), determined before the Effective Time, of all of the issued and outstanding McFarlane Common Shares immediately before the Effective Time (other than any McFarlane Common Shares held by Subco, if any).

18. Number of Directors

The board of directors of Amalco shall consist of a minimum of 1 director and a maximum of 10 directors, until changed in accordance with the OBCA. Until changed by special resolution of the shareholders of Amalco, or if the directors of Amalco are so authorized by special resolution of the shareholders of Amalco, by resolution of the said directors, the board of directors of Amalco shall consist of one director.

19. Initial Directors

The first director of Amalco shall be the person whose names and residential addresses appear below:

Name	Prescribed Address
Mark Trevisiol	15 Kincora Court, Sudbury, Ontario, P3E 2B9

The above director will hold office from the Effective Date until the first annual meeting of shareholders of Amalco or until his successor is elected or appointed.

20. Termination

This Agreement may be terminated by the board of directors of each of the Amalgamating Corporations, notwithstanding the approval of this Agreement by the shareholders of the Amalgamating Corporations, at any time prior to the issuance of the Certificate of Amalgamation and following the termination of the Business Combination Agreement, without, except as provided in the Business Combination Agreement, any recourse by any Party hereto or any of their shareholders or other Persons.

21. Governing Law

This Agreement shall be governed by, and construed in accordance with, the laws of the Province of Ontario and the federal laws of Canada applicable therein. Each Party hereby irrevocably attorns to the jurisdiction of the courts of the Province of Ontario in respect of all matters arising under or in relation to this Agreement.

22. Further Assurances

Each of the Parties agrees to execute and deliver such further instruments and to do such further reasonable acts and things as may be necessary or appropriate to carry out the intent of this Agreement.

23. Time of the Essence

Time shall be of the essence of this Agreement.

24. Amendments

This Agreement may only be amended or otherwise modified by written agreement executed by the Parties.

25. Counterparts

This Agreement may be signed in counterparts (including counterparts by facsimile, PDF or other electronic means), and all such signed counterparts, when taken together, shall constitute one and the same agreement, effective on this date.

IN WITNESS WHEREOF the parties have executed this Agreement as of the date first written above.

1287401 B.C. LTD.

By: (signed) James Ward Name: James Ward Title: Chief Executive Officer

1000034047 ONTARIO INC.

By: (signed) James Ward Name: James Ward Title: President

MCARLANE LAKE MINING INCOPORPRATED

By: (signed) Mark Trevisiol Name: Mark Trevisiol Title: Chief Executive Officer and President

SCHEDULE B MCFARLANE DISCLOSURE SCHEDULE

Section 1.01: McFarlane Warrants

• Warrants underlying Units: 3,977,500
• Warrants underlying Broker and Advisory Warrants: 548,537
• Warrant underlying corporate finance fee: 195,906

Total = 4,721,943 Warrants I/O

Section 3.02: Encumbrances

The Mineral Properties are subject to certain existing royalties, as follows:

Date ofRoyaltyAgreement	SubjectClaims	Term	OriginalPayor	OriginalHolder	CurrentHolder	Royalty %andDetails	BuydownProvisions(Y/N)	Notes
May 12,2019	AllMcMillanMineClaims	Inperpetuity	Canadian StarMinerals Ltd.	QMX GoldCorporation	QMX GoldCorporation	2% NSR	No
June 15,2006	High LakeClaims	Inperpetuity	InternationalMillenniumMining Corp.	CeylnnAlcock	CeylnnAlcock	2% NSR	Yes – right topurchase 50%of the NSRfor a one timepayment of$1,250,000.	Ifcommercialproductionhas notcommencedby June 14,2010, theRoyaltyHolder isentitled to a$10,000payment onJune 15 ofevery year

Section 3.15(a):

Pursuant to the Definitive Property Purchase Agreement, McFarlane has purchased and acquired all of CSM's right, title and interest in and to the McFarlane Mineral Properties. McFarlane has agreed to, among other thing, pay $2,750,000 in cash and issue the Consideration Sharesto CSM in consideration for the McFarlane Mineral Properties, of which McFarlane has paid $750,000 upon transfer of the claims representing the McMillan Mine Property. The remainder of the cash consideration and the issuance of the Consideration Shares will occur upon transfer of legal title to the leases comprising the High Lake Property and the West Hawk Lake Property to McFarlane in the relevant land titles or similar office.

McFarlane material properties

McMillan Mine, Ontario, Canada (all Unpatented Mining Claims)

Claim#	Type	Status	Issue	Anniversary	Owner Client#	Area /# of	Due Date
			Date	Date		Cells
106636	Claim	Active	2018-04-	2021-09-02	(405870) CANADIAN	1	2021-09-
			10		STARMINERALS		02
					LTD.
144179	Claim	Active	2018-04-	2021-06-03	(405870) CANADIAN	1	2021-06-
			10		STARMINERALS		03
					LTD.
148095	Claim	Active	2018-04-	2021-09-02	(405870) CANADIAN	1	2021-09-
			10		STARMINERALS		02
					LTD.
165931	Claim	Active	2018-04-	2021-09-02	(405870) CANADIAN	1	2021-09-
			10		STARMINERALS		02
					LTD.
181970	Claim	Active	2018-04-	2021-09-02	(405870) CANADIAN	1	2021-09-
			10		STARMINERALS		02
					LTD.
184120	Claim	Active	2018-04-	2021-06-03	(405870) CANADIAN	1	2021-06-
			10		STARMINERALS		03
					LTD.
237414	Claim	Active	2018-04-	2021-09-02	(405870) CANADIAN	1	2021-09-
			10		STARMINERALSLTD.		02
246043	Claim	Active	2018-04-	2021-09-02	(405870) CANADIAN	1	2021-09-
			10		STARMINERALS		02
					LTD.
246044	Claim	Active	2018-04-	2021-06-03	(405870) CANADIAN	1	2021-06-
			10		STARMINERALS		03
					LTD.
289949	Claim	Active	2018-04-	2021-06-03	(405870) CANADIAN	1	2021-06-
			10		STARMINERALS		03
					LTD.
301403	Claim	Active	2018-04-	2021-09-02	(405870)CANADIAN	1	2021-09-
			10		STARMINERALS		02
					LTD.
306223	Claim	Active	2018-04-	2021-09-02	(405870) CANADIAN	1	2021-09-
			10		STARMINERALS		02
					LTD.

High Lake, Ontario, Canada

Lease #	Township	UnderlyingClaims	Parcel #	Lease ExpiryDate	Hectares	LeaseTerm	PIN	Title Holder
107822(original LeaseNo. 2476)	Ewart	K20694	2402LK	31-Dec-2026	12.3	21 year	42149-0060(LT)	Celynn Kathleen Roberta AlcockNote:there is an assignment of Leasehold Interest toCanadian Star Minerals Ltd. registered on title – LR'sOrder should be registered to reflect new owner as"Canadian Star Minerals Ltd."
107823(original LeaseNo. 2477)	Ewart	K20695	2403DKL	31-Dec-2026	16.2	21year	42149-0054(LT)	Celynn Kathleen Roberta AlcockNote:there is an assignment of Leasehold Interest toCanadian Star Minerals Ltd. registered on title – LR'sOrder should be registered to reflect new owner as"Canadian Star Minerals Ltd."
107819(original LeaseNo. 2478)	Ewart	K20696	2404DKL	31-Dec-2026	13.6	21 year	42149-0049(LT)	Celynn Kathleen Roberta AlcockNote: there is an assignment of Leasehold Interest toCanadian Star Minerals Ltd.registered on title – LR'sOrder shouldbe registered to reflect new owneras"Canadian Star Minerals Ltd."
107820(original LeaseNo. 2479)	Ewart	K20697	2405DKL	31-Dec-2026	19.8	21 year	42149-0050(LT)	Celynn Kathleen Roberta AlcockNote:there is an assignment of Leasehold Interest toCanadianStar MineralsLtd. registered on title – LR'sOrder should be registered to reflect new owner as"Canadian Star Minerals Ltd."
107821(original LeaseNo. 2480)	Ewart	K21479	2406DKL	31-Dec-2026	21.0	21 year	42149-0048(LT)	Celynn Kathleen Roberta AlcockNote:there is an assignment of Leasehold Interest toCanadian Star Minerals Ltd. registered on title – LR'sOrder shouldbe registered to reflect new owner as"Canadian Star Minerals Ltd."
108321(original LeaseNo. 2733)	Ewart	K23980	2426DKL	30-Sep-2029	16.5	21 year	42149-0061(LT)	Canadian Star Minerals Ltd.

-	13	-
---	----	---

108320(original LeaseNo. 2732)	Ewart	K24136	2425DKL	30-Sep-2029	19.3	21 year	42149-0062(LT)	Canadian Star Minerals Ltd.
108328(original LeaseNo. 2731)	Ewart	K24137	2424DKL	30-Sep-2029	17.7	21year	42149-0068(LT)	Canadian Star Minerals Ltd.
108018(original LeaseNo. 2514)	Ewart	K25128	2411DKL	29-Feb-2028	13.6	21 year	42149-0075(LT)	Celynn Kathleen Roberta AlcockNote:there is an assignment of Leasehold Interest toCanadian Star Minerals Ltd. registered on title –LR'sOrder should be registered to reflect new owner as"Canadian Star Minerals Ltd."
108019(original LeaseNo. 2513)	Ewart	K25129	2410DKL	29-Feb-2028	22.2	21 year	42149-0076(LT)	Celynn Kathleen Roberta AlcockNote:there is an assignment of Leasehold Interest toCanadian Star Minerals Ltd. registered on title –LR'sOrder should be registered toreflect new owner as"Canadian Star Minerals Ltd."
107824(original LeaseNo. 2472)	Ewart	K25130	2398DKL	31-Dec-2026	18.0	21 year	42149-0124(LT)	Celynn Kathleen Roberta AlcockNote:there is an assignment of Leasehold Interest toCanadian Star Minerals Ltd. registered on title –LR'sOrder should be registered to reflect new owner as"Canadian Star Minerals Ltd."
107825(originalLeaseNo. 2473)	Ewart	K25131	2399DKL	31-Dec-2026	15.1	21 year	42149-0125(LT)	Celynn Kathleen Roberta AlcockNote:thereis an assignment of Leasehold Interest toCanadian Star Minerals Ltd. registered on title–LR'sOrder should be registered to reflect new owner as"Canadian Star Minerals Ltd."
108314(original LeaseNo. 2754)	Ewart	K25132	2427DKL	30-Nov-2029	16.9	21year	42149-0070(LT)	Celynn Kathleen Roberta AlcockNote:there is an assignment of Leasehold Interest toCanadian Star Minerals Ltd. registered on title –LR'sOrder should be registered to reflect new owner as"Canadian Star Minerals Ltd."

108316(original LeaseNo. 2755)	Ewart	K25133	2428DKL	30-Nov-2029	8.7	21 year	42149-0071(LT)	Celynn Kathleen Roberta Alcockthere is an assignment of Leasehold Interest toNote:Canadian Star Minerals Ltd. registered on title – LR'sOrder should be registered to reflect new owner as"Canadian Star Minerals Ltd."
108315(original LeaseNo. 2755)	Ewart	K25134	2429DKL	30-Nov-2029	18.3	21 year	42149-0069(LT)	Celynn Kathleen Roberta AlcockNote:there is an assignment of Leasehold Interest toCanadian Star Minerals Ltd. registered ontitle – LR'sOrder should be registered to reflect new owner as"CanadianStar Minerals Ltd."
108318(original LeaseNo. 2728)	Ewart	K28661	2421DKL	30-Sep-2029	18.2	21 year	42149-0064(LT)	Canadian Star Minerals Ltd.
108322(original LeaseNo. 2729)	Ewart	K28663	2422DKL	30-Sep-2029	24.7	21 year	42149-0047(LT)	Canadian Star Minerals Ltd.
108317(originalLease No.2727)	Ewart	K32306	2420DKL	30-Sep-2029	20.3	21 year	42149-0055(LT)	Canadian Star Minerals Ltd.
108324(original LeaseNo. 2730)	Ewart	K32307	2423DKL	30-Sep-2029	16.1	21 year	42149-0059(LT)	Canadian Star Minerals Ltd.
108319(original LeaseNo. 2726)	Ewart	K32574	2419DKL	30-Sep-2029	12.2	21 year	42149-0056(LT)	Canadian Star Minerals Ltd.
	Total	20 Leases			340.7

Map of High Lake Property:

West Hawk Lake, Manitoba, Canada

LeaseNumber	Township	Parcel #	LeaseExpiryDate	Hectares	Lease Term	PIN	Title Holder
ML-018	WestHawkLake(FalconLakeDistrict)	Lots 152 to 158 and Lots 217 to 232 in Group74, which lots are shown on Director ofSurveys Plans 3566 to 3572, 4843, 4851,4855, 4845, 4841, 4842, 4846, 4853, 4852,4849, 4848, 4850, 4854, 4844, 4847 and4846.	April 1,2034	318.68	21 yearscommencingApril 1,2034		Canadian StarMinerals Ltd.

Map of West Hawk Lake Property

commissions, royalties, licence fees or similar payments

-$10,000 annual payment due to International Millennium Mining Corp. on June 15 of each year until commercial production begins.

Section 3.20: McFarlane material contracts

-Definitive Property Purchase Agreement

-North Consulting Agreement

-CSM Right of First Refusal Agreement

-Business Combination Agreement

-Agency Agreement

-Transition Metals Option Agreement

-Michaud Option Agreement

-Warrant Indenture

Section 3.27(b): employment agreements and contracts for services

-none

Section 3.27(c): Employee Plans

-none

SCHEDULE C 128 DISCLOSURE SCHEDULE

Section 4.16: Contracts

• the Service Agreement with TSX Trust Company dated March 22, 2021, providing for the appointment of TSX Trust Company as the registrar and transfer agent for the 128 Shares; and
• the Business Combination Agreement.

SCHEDULE C 401 FINANCIAL STATEMENTS AND MD&A as of September 30, 2021

1287401 B.C. LTD.

INTERIM FINANCIAL STATEMENTS

FOR THE PERIOD FROM THE DATE OF INCORPORATION ON February 3, 2021 to September 30, 2021

(Expressed in Canadian Dollars)

Notice of No Auditor Review

These unaudited interim financial statements have not been reviewed by the auditors of the Corporation. This notice is being provided in accordance with Section 4.3 (3) (a) of National Instrument 51-102 - Continuous Disclosure Obligations.

1287401 BC LTD. INTERIM STATEMENT OF FINANCIAL POSITION As of September 30, 2021 (Unaudited - Expressed in Canadian Dollars)

	Note	September30, 2021
ASSETS
Current assets
Amounts receivable		$2,284
Due from related company		-
Total assets		$2,284
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities		$37,991
Due to related parties	3	18,078
		56,069
SHAREHOLDER'S DEFICIT
Share capital	4	300
Deficit		(54,085)
		(53,785)
Total liabilities and shareholder's deficit		$2,284

Nature of operations and going concern (Note 1)

Approved and authorized on behalf of the Board of Directors on November 19, 2021

Director ____ James Ward (signed)______ Director_____ Stephen Sandusky (signed)_______

1287401 BC LTD.

INTERIM STATEMENT OF LOSS AND COMPREHENSIVE LOSS For the period from the date of incorporation on February 3, 2021 to September 30, 2021

(Unaudited - Expressed in Canadian Dollars)

	Three monthsendedSeptember30, 2021	From February 3, 2021(date of incorporation)to September30, 2021
EXPENSES
Accounting and corporate secretarial feesProfessional feesRegulatory and filing fees	$2,50026,7053,118	$7,50041,4985,087
NET LOSS AND COMPREHENSIVE LOSS FOR THEPERIOD	$(32,323)	$(54,085)
NET LOSS PER SHARE –BASIC AND DILUTED	$(0.010)	$(0.027)
WEIGHTED AVERAGE NUMBER OF SHARESOUTSTANDING	5,282,610	2,033,474

The accompanying notes are an integral part of these interim financial statements.

1287401 BC LTD. INTERIM STATEMENT OF SHAREHOLDERS DEFICIT For the period from the date of incorporation on February 3, 2021 to September 30, 2021

(Unaudited - Expressed in Canadian Dollars)

	Number ofShares#	ShareCapital$	Deficit$	Total$
Issued at incorporation on February 3, 2021	1	-	-	-
Plan of arrangementNet loss and comprehensive loss for the period	3,000,000-	300-	-(54,085)	300(54,085)
Balance, September 30, 2021	3,000,001	300	(54,085)	(53,785)

The accompanying notes are an integral part of these interim financial statements.

1287401 BC LTD. INTERIM STATEMENT OF CASH FLOWS For the period from the date of incorporation on February 3, 2021 to September 30, 2021 (Unaudited - Expressed in Canadian Dollars)

	For the period fromincorporation on February 3,2020 to September30, 2021
Operating activities:
Net loss for the period	$(54,085)
Changes in non-cash working capital:
Amounts receivable	(2,284)
Accounts payable and accrued liabilities	37,991
Due to/from related parties (Note 3)	18,378
Net cash used in operating activities	-
Change in cash during the period	-
Cash – beginning of the period	-
Cash – end of the period	$-

The accompanying notes are an integral part of these interim financial statement.

1. NATURE OF OPERATIONS AND GOING CONCERN

1287401 B.C. Ltd. (the "Company" or "401 BC") was incorporated under the Business Corporations Act of British Columbia on February 3, 2021. The Company is engaged in the exploration and development of mineral properties in Canada. The Company's head office is located at 1200 Waterfront Centre, 200 Burrard Street, Vancouver, BC, V6C 3L6.

Plan of arrangement

On April 21, 2021, 1289625 B.C. Ltd. ("625 BC") announced that it has completed the plan of arrangement previously announced by 625 BC in its March 25, 2021 management information circular whereby 625 BC would spin off each of its subsidiaries including 401 BC.

Under the statutory plan of arrangement ("Plan of Arrangement"), each 625 BC Shareholder received one hundred thousand (100,000) 401 BC common shares in exchange for each existing common share of 625 BC (the "Distributed Securities").

As a result of completing the Plan of Arrangement, 1287401 B.C. Ltd. became a separate reporting issuer and 625 BC holds no interest in the company.

Going concern

These financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. At September 30, 2021, the Company had accumulated a loss of $54,085 since its inception. The continuation of the Company is dependent upon obtaining necessary financing to meet its ongoing operational levels of corporate overhead. These factors indicate material uncertainties that may cast significant doubt upon the Company's ability to continue as a going concern and, therefore, that it may be unable to discharge its liabilities in the normal course of business. Additional funds will be required to enable the Company to continue its operations and there can be no assurance that financing will be available on terms which are acceptable to the Company. These financial statements do not give effect to any adjustments to the amounts and classifications of assets and liabilities which might be necessary should the Company be unable to continue its operations as a going concern.

In addition, the Company began operations after the World Health Organization categorized COVID-19 as a pandemic. Financial markets around the world have been extremely volatile due to events and conditions resulting from this pandemic and as a result, the volatility could also impact the Company's ability to continue its operations as a going concern.

2. SIGNIFICANT ACCOUNTING POLICIES

a) Statement of compliance

These financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") and related IFRS Interpretations Committee ("IFRIC's") as issued by the International Accounting Standards Board ("IASB"). These financial statements were approved by the board of directors for issue on November 19, 2021.

b) Basis of presentation

These financial statements have been prepared on a historical cost basis, except for certain financial instruments which are measured at fair value. In addition, these financial statements are prepared using the accrual basis of accounting, aside from cash flow information.

c) Foreign currencies

These financial statements are presented in Canadian dollars, which is also the functional currency of the Company. Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the dates of the transactions. At the end of each reporting period, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at that date. Non-monetary assets and liabilities are translated using the historical rate on the date of the transaction. All gains and losses on translation of these foreign currency transactions are charged to profit or loss.

d) Financial instruments

Recognition and classification

The Company recognizes a financial asset or financial liability on the statement of financial position when it becomes party to the contractual provisions of the financial instrument.

The Company classifies its financial instruments in the following categories: at fair value through profit and loss ("FVTPL"), at fair value through other comprehensive income (loss) ("FVTOCI") or at amortized cost. The Company determines the classification of financial assets at initial recognition. The classification of financial asset debt instruments is driven by the Company's business model for managing the financial assets and their contractual cash flow characteristics.

Equity instruments that are held for trading are classified as FVTPL. For other equity instruments, on the day of acquisition the Company can make an irrevocable election (on an instrument-by-instrument basis) to designate them as at FVTOCI. Financial liabilities are measured at amortized cost, unless they are required to be measured at FVTPL (such as instruments held for trading or derivatives) or if the Company has opted to measure them at FVTPL.

Measurement

Financial assets and liabilities at FVTPL

Financial assets and liabilities carried at FVTPL are initially recorded at fair value and transaction costs are expensed in profit or loss. Realized and unrealized gains and losses arising from changes in the fair value of the financial assets and liabilities held at FVTPL are included in profit or loss in the period in which they arise. Where management has opted to recognize a financial liability at FVTPL, any changes associated with the Company's own credit risk will be recognized in other comprehensive income (loss).

Financial assets at FVTOCI

Elected investments in equity instruments at FVTOCI are initially recognized at fair value plus transaction costs. Subsequently they are measured at fair value, with gains and losses recognized in other comprehensive income (loss).

Financial assets and liabilities at amortized cost

Financial assets and liabilities at amortized cost are initially recognized at fair value plus or minus transaction costs, respectively, and subsequently carried at amortized cost less any impairment.

Impairment of financial assets at amortized cost

The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. At each reporting date, the Company measures the loss allowance for the financial asset at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the financial asset has not increased significantly since initial recognition, the Company measures the loss allowance for the financial asset at an amount equal to the twelve month expected credit losses. The Company shall recognize in profit or loss, as an impairment gain or loss, the amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized.

Derecognition

Financial assets

The Company derecognizes financial assets only when the contractual rights to cash flows from the financial assets expire, or when it transfers the financial assets and substantially all of the associated risks and rewards of ownership to another entity. Gains and losses on derecognition are generally recognized in profit or loss. However, gains and losses on derecognition of financial assets classified as FVTOCI remain within accumulated other comprehensive income (loss).

Financial liabilities

The Company derecognizes financial liabilities only when its obligations under the financial liabilities are discharged, cancelled or expired. Generally, the difference between the carrying amount of the financial liability derecognized and the consideration paid and payable, including any non-cash assets, is recognized in profit or loss.

e) Share capital

Equity instruments are contracts that give a residual interest in the net assets of the Company. The Company's common shares and warrants are classified as equity instruments.

Costs directly identifiable with the raising of share capital financing are charged against share capital. Share issuance costs incurred in advance of share subscriptions are recorded as deferred assets. Share issuance costs related to uncompleted share subscriptions are charged to operations.

Equity financing transactions may involve the issuance of units. Units comprise common shares and share purchase warrants. The Company accounts for unit offering proceeds between common shares and share purchase warrants using the residual value method, wherein the fair value of the common shares is based on the value ascribed to the shares issued and the balance, if any, is allocated to the attached warrants.

f) Loss per share

Basic loss per share represents the loss for the period, divided by the weighted average number of common shares outstanding during the period. Diluted loss per share represents the loss for the period, divided by the weighted average number of common shares outstanding during the period plus the weighted average number of dilutive shares resulting from the exercise of stock options, warrants and other similar instruments where the inclusion of these would not be anti-dilutive. Contingently releasable escrow common shares are excluded from the calculation of weighted average number of common shares outstanding.

3. RELATED PARTY TRANSACTIONS

As at September 30, 2021, the Company has $18,078 in related party liabilities owing to 625 BC for reimbursable expenses incurred on behalf of the Company.

4. SHARE CAPITAL

• a) Authorized Unlimited common shares without par value.
• b) Issued and outstanding 3,000,001 common shares

On April 21, 2021, the Company issued 3,000,000 common shares pursuant to the plan of arrangement. The fair value of the common shares issued was $300.

Stock Options

On April 28, 2021, the Company granted 100,000 stock options to its CEO. The stock options vest immediately, exercisable at $0.10 per common share and will expire 5 years from the date of grant.

As at September 30, 2021, the Company has the following stock options granted and outstanding:

Number of Options	Expiry Date	Exercise Price	Remaining Life (in Years)
100,000	April 28, 2026	$0.10	4.58

5. MANAGEMENT OF CAPITAL

The Company's objectives when managing capital are to safeguard its ability to continue as a going concern and to maintain a flexible capital structure which optimizes the cost of capital within a framework of acceptable risk. In the management of capital, the Company includes the components of shareholders' equity.

The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust its capital structure, the Company may issue new shares, issue debt, acquire or dispose of assets or adjust the amount of cash. The Company is currently dependent on its parent as its primary source of operating capital.

6. FINANCIAL INSTRUMENTS

For financial instruments held by the Company, management classifies cash as FVTPL, amounts receivable, accounts payable and accrued liabilities, and due to related parties as amortized cost.

a) Fair value of financial instruments

Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and Level 3 – Inputs that are not based on observable market data.

As at September 30, 2021, the Company believes that the carrying values of accounts payable and accrued liabilities approximate their fair values because of their nature and relatively short maturity dates or durations. The fair value of cash is based on level 1 inputs of the fair value hierarchy.

b) Management of risks arising from financial instruments

Discussions of risks associated with financial assets and liabilities are detailed below:

Credit risk

Credit risk arises from cash held with banks and financial institutions. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The Company's cash is held with a reputable Canadian bank. The credit risk related to cash is considered minimal.

Interest rate risk

Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The risk that the Company will realize such a loss is limited because the Company has no interest-bearing financial instruments.

Liquidity risk

The Company manages liquidity risk by maintaining sufficient cash to enable settlement of transactions as they come due. Management monitors the Company's contractual obligations and other expenses to ensure adequate liquidity is maintained.

1287401 BC Ltd. Management Discussion and Analysis

For the period from the date of incorporation on February 3, 2021 to September 30, 2021

(Expressed in Canadian Dollars)

INTRODUCTION

The Management Discussion & Analysis has been prepared by management and reviewed and approved by the Board of Directors on November 19, 2021, the date of issue of this MD&A. The following discussion of performance, financial condition and future prospects should be read in conjunction with the interim financial statements and the related notes for the period from incorporation on February 3, 2021 to September 30, 2021. The information provided herein supplements but does not form part of the financial statements. Monetary amounts in the following discussion are in Canadian dollars unless otherwise noted.

Additional information regarding the Company can be found on the Company's page at www.sedar.com.

FORWARD LOOKING STATEMENTS

This MD&A contains certain forward-looking statements or forward-looking information within the meaning of applicable Canadian securities laws. All statements and information, other than statements of historical fact, included in or incorporated by reference into this MD&A are forward-looking statements and forward-looking information, including, without limitation, statements regarding activities, events or developments that we expect or anticipate may occur in the future. Such forward-looking statements and information can be identified by the use of forward-looking words such as "will", "expect", "intend", "plan", "estimate", "anticipate", "believe" or "continue" or similar words and expressions or the negative thereof. There can be no assurance that the plans, intentions or expectations upon which such forward-looking statements and information are based will occur or, even if they do occur, will result in the performance, events or results expected.

The forward-looking statements and forward-looking information reflect the current beliefs of the Company, and are based on currently available information. Accordingly, these statements are subject to known and unknown risks, uncertainties and other factors which could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed in or implied by the forward-looking statements. This forward-looking information includes estimates, forecasts, plans, priorities, strategies and statements as to the Company's current expectations and assumptions concerning, among other things, ability to access sufficient funds to carry on operations, compliance with current or future regulatory regimes, particularly in the case of ambiguities, financial and operational performance and prospects, collection of receivables, anticipated conclusions of negotiations to acquire projects or investments, our ability to attract and retain skilled staff and consultants, expectations of market prices and costs, expansion plans and objectives, requirements for additional capital, the availability of financing, and the future development and costs and outcomes of the Company's projects or investments. The foregoing list of assumptions is not exhaustive. Events or circumstances could cause actual results to vary materially.

We caution readers of this MD&A not to place undue reliance on forward-looking statements and information contained herein, which are not a guarantee of performance, events or results and are subject to a number of risks, uncertainties and other factors that could cause actual performance, events or results to differ materially from those expressed or implied by such forward-looking statements and information. These factors include: unanticipated future operational difficulties (including cost escalation, unavailability of materials and equipment, industrial disturbances or other job action and unanticipated events related to health, safety and environmental matters); social unrest; failure of counterparties to perform their contractual obligations; changes in priorities, plans, strategies and prospects; general economic, industry, business and market conditions; disruptions or changes in the credit or securities markets; changes in law, regulation, or application and interpretation of the same; the ability to implement business plans and strategies, and to pursue business opportunities; rulings by courts or arbitrators, proceedings and investigations; inflationary pressures; and various other events, conditions or circumstances that could disrupt the Company's priorities, plans, strategies and prospects including those detailed from time to time in the Company's reports and public filings with the Canadian securities administrators, filed on SEDAR.

This information speaks only as of the date of this MD&A. The Company undertakes no obligation to revise or update forward-looking information after the date of this document, nor to make revisions to reflect the occurrence of future unanticipated events, except as may be required under applicable securities laws or the policies of the TSX-V exchange.

THE COMPANY

1287401 B.C. Ltd. ("401 BC" or "the Company") was incorporated under the Business Corporations Act of British Columbia on February 3, 2021. The Company is a reporting issuer but does not trade on stock exchange.

The head office and principal address of the Company is 1020-800 West Pender Street, Vancouver, British Columbia, Canada V6C 2V6.

RECENT EVENTS

On April 21, 2021, 1289625 B.C. Ltd. ("625 BC") completed a share capital reorganization by way of statutory plan of arrangement whereby all shares of the Company were distributed to shareholders of 625 BC, as a return of capital (the "Arrangement"). Pursuant to of the Arrangement, existing 625 BC shareholders received one hundred thousand (100,000) common shares of the Company for every one (1) 625 BC common share they held on the effective date of the Arrangement.

SELECTED ANNUAL INFORMATION

As the Company was only incorporated on February 3, 2021, there is no annual information available.

DISCUSSION OF RESULTS AND OPERATIONS

Net loss from February 3 to the period ended September 30, 2021

Net and comprehensive loss was $54,085 due to accounting and corporate secretarial fees, regulatory and filing fees, and professional fees incurred.

Net loss for the three months ended September 30, 2021

Net and comprehensive loss was $32,323 due to accounting and corporate secretarial fees, regulatory and filing fees, and professional fees incurred.

SUMMARY OF QUARTERLY RESULTS

	Revenue	Loss for	Loss per
Quarter ended	(1)	the Quarter	Share
September 30, 2021	$Nil	$(32,323)	$(0.010)
June 30, 2021	$Nil	$(21,762)	$(0.009)
From February 3 to March 31, 2021	$Nil	$Nil	$Nil

(1) This being a corporation without a revenue-generating business, there are no revenues from operations or investments.

LIQUIDITY AND CAPITAL RESOURCES

The Company had a working capital deficit of $53,785 as at September 30, 2021. The Company does not have revenues from operations and relies on outside funding for its continuing financial liquidity. The Company will need additional financing in order to continue operations.

Management cautions that the Company's ability to raise additional funding is not certain. Additional funds will be required in order to pursue the Company's current business plans. An inability to raise additional funds would adversely impact the future assessment of the Company as a going concern.

OFF BALANCE SHEET ARRANGEMENTS

The Company has not entered into any off-balance sheet arrangements.

RELATED PARTY DISCLOSURES

As at September 30, 2021, the Company has $18,078 in related party liabilities owing to 625 BC for reimbursable expenses incurred on behalf of the Company.

PROPOSED TRANSACTION

There is no proposed transaction as of the date of this MD&A.

SIGNIFICANT ACCOUNTING JUDGMENTS AND USE OF ESTIMATES

The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. The financial statements include estimates which, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the financial statements and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and the revision affects both current and future periods.

Significant assumptions that management has made about current unknowns, the future, and other sources of estimated uncertainty, could result in a material adjustment to the carrying amounts of assets and liabilities in the event that actual results differ from assumptions made. Such significant assumptions include, but are not limited to, the following areas: recovery of receivables and going concern.

The Company's significant judgments and estimates are disclosed in Note 2 of the interim financial statements for the period from incorporation on February 3, 2021 to September 30, 2021.

CHANGES IN ACCOUNTING POLICIES

The Company has applied the same accounting policies as set out in Note 2 of the interim financial statements for the period from incorporation on February 3, 2021 to September 30, 2021.

Changes in Internal Controls over Financial Reporting

There have been no changes in the Company's internal controls over financial reporting during the period from incorporation on February 3, 2021 to September 30, 2021, that have materially affected, or are reasonably likely to materially affect, its internal controls over financial reporting.

FINANCIAL INSTRUMENTS

The Company's financial instruments consist of amounts receivable, accounts payable and accrued liabilities and due to related parties. It is management's opinion that the Company is not exposed to significant interest risk arising from the financial instruments. The Company will be exposed to some credit risk in relation to its future amounts receivables balances, however, most amounts receivables will be in relation to sales tax due from the Canadian government. Credit risk is managed for amounts receivables by seeking prompt payment, monitoring the age of receivables, and making follow up inquiries when receivables are not paid in a timely manner. The Company does not engage in any hedging activities. Financial instruments do not generally expose the Company to risk that is significant enough to warrant reducing via purchasing specific insurance or offsetting financial instruments. Further discussion of these risks is presented in Note 6 of the Company's interim financial statements, for the period from incorporation on February 3, 2021 to the period ended September 30, 2021.

RISKS AND UNCERTAINTIES

Risk Factors – General

The Company is focused on gaining exposure to commodity prices by making strategic investments in mining interests, including royalties, streams, debt and equity investments in mining companies. Resource exploration and development is a speculative business, characterized by a number of significant risks including, among other things, unprofitable efforts resulting not only from the failure to discover mineral deposits but also from finding mineral deposits, which, though present, are insufficient in quantity and quality to return a profit from production. The marketability of minerals acquired or discovered may be affected by numerous factors which are beyond the control of the Company and which cannot be accurately predicted, such as market fluctuations of metal prices, the proximity and capacity of milling facilities, mineral markets, processing reagents and equipment, and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals, and environment protection, the combination of which factors may result in the Company not receiving an adequate return on investment.

COVID-19

Since March 2020, a global outbreak of COVID-19 (coronavirus) has had a significant impact on businesses through the restrictions put in place by the Canadian, provincial and municipal governments regarding travel, business operations and isolation/quarantine orders. At this time, it is unknown the extent of the impact the COVID-19 outbreak may have on the Company as this will depend on future developments that are highly uncertain and that cannot be predicted with confidence. These uncertainties arise from the inability to predict the ultimate geographic spread of the disease, and the duration of the outbreak, including the duration of travel restrictions, business closures or disruptions, and quarantine/isolation measures that are currently in place in Canada and other countries to fight the virus.

OUTSTANDING COMMON SHARES DATA

The following section updates the outstanding share data provided in the unaudited interim financial statements for the period from incorporation on February 3, 2021 to September 30, 2021.

	Number of	Exercise
	Shares	Price	Expiry Date
Common Shares outstanding as at November 19, 2021	3,000,001
Stock Options	100,000	$0.10	April 28, 2026
Fully Diluted	3,100,001

SCHEDULE D MCFARLANE FINANCIAL STATEMENTS AND MD&A as of August 31, 2021

Financial Statements

McFarlane Lake Mining Incorporated

For the Years Ended August 31, 2021 and 2020

(Expressed in Canadian dollars)

Independent Auditor's Report

To the Shareholders of McFarlane Lake Mining Incorporated

Opinion

We have audited the financial statements of McFarlane Lake Mining Incorporated (the "Company"), which comprise the statements of financial position as at August 31, 2021 and 2020, and the statements of loss and comprehensive loss, statements of changes in equity and statements of cash flows for the period from August 21, 2020 to August 31, 2020, and for the year ended August 31, 2021, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at August 31, 2021 and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards ("IFRS").

Basis for opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada. We have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Responsibilities of management and those charged with governance for the financial statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risks of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

McGovern Hurley LLP

Chartered Professional Accountants Licensed Public Accountants

Toronto, Ontario November 15, 2021

As at August 31,	Note	2021	2020
		$	$
ASSETS
Current assets
Cash		1,820,454
Other receivable		30,601	320
Total assets		1,851,055	320
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities	9	218,010
Notes payable	6	195,000
Total liabilities		413,010
Shareholders' equity
Share capital	7(b)	2,136,510	320
Options reserve	7(c)	531,968
Deficit		(1, 230, 433)	$\blacksquare$
Total shareholders' equity		1,438,045	320
Total liabilities and shareholders' equity		1,851,055	320
Going concern	$\overline{\mathbf{c}}$
Subsequent events	14
Commitments and contingencies	5, 12

			For the period from
			incorporation (August 21,
For the years ended	Note	August 31, 2021	2020) to August 31, 2020
			$
Operating expenses
Professional fees	9	212,335
Office and general		4.500
Interest and bank charges		11,321
Exploration and evaluation expenditures	9	470,309
Share-based compensation	$7(c)$ , 9	531,968
Total operating expenses		1,230,433
Net loss and comprehensive loss for the year		(1, 230, 433)
Basic and diluted net loss and comprehensive loss per
common share	8	(0.031)
Weighted average number of common shares
outstanding - Basic and diluted		39,853,836

	Note	Common Share Capital		Options reserve	AccumulatedDeficit	TotalShareholders'Equity
		#
Balance, August 21, 2020			$\blacksquare$	$\blacksquare$
Common shares issued to founders	7(b)	32,000,000	320			320
Balance, August 31, 2020		32,000,000	320			320
Issuance of shares re. private placement	7(b)	5,000,000	5.000			5,000
Issuance of shares re private placement	7(b)	22,075,000	2,207,500			2,207,500
Share issuance cost			(76, 310)			(76, 310)
Share based compensation	7(c)			531,968		531,968
Net loss				$\qquad \qquad$	(1,230,433)	(1, 230, 433)
Balance, August 31, 2021		59,075,000	2,136,510	531,968	(1,230,433)	1,438,045

			For the period from
		For the year ended	incorporation (August 21,
	Note	August 31, 2020	2020) to August 31, 2020
			S
Operating activities
Net loss		(1, 230, 433)
Items not affecting cash:
Share-based compensation	7(c)	531,968
Change in non-cash working capital items:
Other receivable		(30, 281)	(320)
Accounts payable and accrued liabilities		218,010
Net cash (used in) provided by operating activities		(510,736)	(320)
Financing activities
Proceeds from promissory notes	6	195,000
Proceeds on issuance of common shares	7(b)	2,212,500	320
Common share issuance costs	7(b)	(76, 310)
Net cash (used in) provided by financing activities		2,331,190	320
Increase (decrease) in cash		1,820,454
Cash, beginning of period
Cash, end of period		1,820,454

1. Nature of Operations

McFarlane Lake Mining Incorporated ( MLM on August 21, 2020 under the provisions of the Canada Business Corporations Act. The Company is engaged in the acquisition and exploration of mineral resource properties in Canada.

registered head office is 15 Kincora Court, Sudbury, Ontario, P3E 2B9.

2. Going Concern

These financial statements have been prepared using accounting policies applicable to a going concern, which contemplate the realization of assets and settlement of liabilities in the normal course of business as they become due. The business of mining and exploring for minerals involves a high degree of risk and there can be no assurance that the planned exploration programs will ultimately result in profitable mining operations.

Although the Company has taken steps to verify title to the properties on which it will conduct exploration and in which it has an interest in accordance with industry standards to the current stage of may be subject to government licensing, requirements, or regulations, unregistered prior agreements, unregistered claims, first nati -compliance with regulatory requirements. The and political uncertainties.

These financial statements have been prepared in accordance with International Financial Reporting Accordingly, they do not give effect to the adjustments that would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge its obligations and commitments in other than the normal course of business. The Company has incurred losses for the year ended August 31, 2021 and as of August 31, 2021, has a deficit.

The business of mining and exploration for minerals involves a high degree of risk and there can be no continued existence is dependent upon the preservation of its interests in the underlying properties, the achievement of profitable operations, or the ability of the Company to raise additional financing as basis.

The Company has raised capital for working capital and the planned exploration and development of results from its planned exploration and evaluation activities, its ability to attain profitable operations to generate funds and its ability to raise equity capital or borrowings sufficient to meet its current and future obligations for the next 12 months. Although the Company has been successful in raising funds to date there is no assurance that it will be able to do so in the future.

The global outbreak of COVID-19 has had a significant impact on businesses through restrictions put in place by the federal and provincial governments regarding travel, gatherings, and other public health restrictions. While these effects are expected to be temporary, the duration of the various disruptions to the Company and the related financial impact cannot be reasonably estimated at the present time. At this time, the Company is yet uncertain the extent to which COVID-19 will impact its operations. However, we anticipate this outbreak may cause supply chain disruptions, staff shortages and financial condition.

3. Basis of Presentation

(a) Statement of compliance

These financial statements have been prepared in accordance with International Financial and interpretations of the International Financial Reporting Interpretatio The policies applied in these financial statements are based on the IFRS issued and outstanding as of November 01, 2021, being the date the Board of Directors approved these financial statements.

(b) Basis of measurement and presentation

These financial statements have been prepared on a historical cost basis, except for certain financial assets which are carried at fair value. In addition, these financials have been prepared using the accrual basis of accounting, except for cash flow information. The financial statements are presented in Canadian dollars, unless otherwise noted.

4. Summary of Significant Accounting Policies

Significant accounting judgments, estimates and assumptions

The preparation of these financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. These financial statements include estimates that, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the financial statements, and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Information about critical judgements in applying accounting policies that have the most significant risk of causing material adjustment to the carrying amounts of assets and liabilities recognized in the financial statement are discussed below:

a) Title to mineral property interests

Although the Company has taken steps to verify title to mineral properties in which it has an interest, these procedures do not guarantee the Company titles. Such properties may be subject to prior agreement or transfers and titles may be affected by undetected defects.

b) Valuation of share-based payments

The Company values share-based payments granted using market-based generally accepted valuation techniques at the date of grant. Assumptions made for the valuation include volatility of the share price, risk free interest rate and the life of the stock options granted. Such assumptions are highly subjective and changes in these assumptions materially affect the calculated fair value. Assumptions and models used for estimating fair value for share-based payment transactions is disclosed in Note 7. The expected volatility assumptions for MLM option grants are based on comparable companies.

c) Valuation of deferred income tax assets

Each year, the Company evaluates the likelihood of whether some portion of deferred tax assets, if any, will not be realized. This evaluation is based on historic and future expected levels of taxable income, the timing of reversals of taxable temporary timing differences that give rise to deferred tax liabilities, tax planning initiative, and deferred tax rates.

d) Going concern

future funding available for its exploration projects and working capital requirements.

e) Existence of decommissioning and restoration costs and timing of expenditure

Decommissioning, restoration, and similar liabilities are estimated based on the Company's interpretation of current regulatory requirements and constructive obligations and are measured at fair value. Fair value is determined based on the net present value of estimated future cash expenditures for the settlement of decommissioning, restoration, or similar liabilities that may occur upon decommissioning of the mine. Such estimates are subject to change based on changes in laws and regulations with regulatory authorities.

f) Income, value added, withholding and other taxes

The Company is subject to income, value added, withholding and other taxes. Judgment is used in determining provisions for taxes as there are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The determination of the Company's income, value added, withholding and other tax liabilities requires interpretation of complex laws and regulations, which may not coincide with the interpretation of the tax authorities. The Company recognizes liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. All tax related filings are subject to government audit and potential reassessment subsequent to the financial statement reporting period. In case the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the tax related accruals and deferred income tax provisions in the period in which such determination is made.

Use of estimates

The estimates and associated assumptions are based on historical experience and various factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Management believes the estimates are reasonable; however, actual results could differ from those estimates and could impact future results of operations and cash flows. Significant estimates include the valuation of options using the Black-Scholes pricing model.

Financial instruments

Recognition

The Company recognizes a financial asset or financial liability on the statement of financial position when it becomes party to the contractual provisions of the financial instrument. Financial assets are initially measured at fair value, and are derecognized either when the Company has transferred substantially all the risks and rewards of ownership of the financial asset, or when cash flows expire. Financial liabilities are initially measured at fair value and are derecognized when the obligation specified in the contract is discharged, cancelled or expired.

A write-off of a financial asset (or a portion thereof) constitutes a derecognition event. Write-off occurs when the Company has no reasonable expectations of recovering the contractual cash flows on a financial asset.

Classification and measurement

The Company determines the classification of its financial instruments at initial recognition. Financial assets and financial liabilities are classified according to the following measurement categories:

• those to be measured subsequently at amortized cost.

The classification and measurement of financial assets after initial recognition at fair value depends on the business model for managing the financial asset and the contractual terms of the cash flows. Financial assets that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding, are generally measured at amortized cost at each subsequent reporting period. All other financial assets are measured at their fair values at each subsequent reporting period, with any changes recorded through profit or loss or through other comprehensive income (which designation is made is an irrevocable election at the time of recognition).

After initial recognition at fair value, financial liabilities are classified and measured at either:

• amortized cost;
• FVTPL, if the Company has made an irrevocable election at the time of recognition, or when required (for items such as instruments held for trading or derivatives); or,

The Company reclassifies financial assets when and only when its business model for managing those assets changes. Financial liabilities are not reclassified.

Transaction costs that are directly attributable to the acquisition or issuance of a financial asset or financial liability classified as subsequently measured at amortized cost are included in the fair value of the instrument on initial recognition. Transaction costs for financial assets and financial liabilities classified at fair value through profit or loss are expensed in profit or loss.

After initial recognition, financial assets and liabilities measured at amortized cost are subsequently measured at the end of each reporting period at amortized cost calculated by taking into account any discount or premium on acquisition and any fees or costs that are an integral part of the Effective and comprehensive income (loss).

Financial Instrument	Classification
Cash	Amortized cost
Accounts payable and accrued liabilities	Amortized cost
Note payable	Amortized cost

Derecognition

A financial asset is derecognized when the contractual rights to the cash flows from the asset expire, or the Company no longer retains substantially all the risks and rewards of ownership of the asset. Where substantially all the risks and rewards of ownership of the financial asset are neither retained nor transferred, the Company derecognizes the transferred asset only if it no longer controls the asset. Control is represented by the practical ability to sell the transferred asset without the need to impose additional restrictions. If the Company retains control over the asset, it will continue to recognize the asset to the extent of its continuing involvement. When a financial asset is derecognized in full, a gain or loss is recognized in net income for an amount equal to the difference between the carrying amount of the asset and the value of the consideration received, including any new assets and/or liabilities recognized.

A financial liability is derecognized when the obligation under the liability is discharged, cancelled or expires with any associated gain or loss recognized in other income or expense in the consolidated statement of income (loss).

Impairment

The Company assesses all information available, including on a forward-looking basis the expected credit losses associated with any financial assets carried at amortized cost. The impairment methodology applied is the simplified approach which requires the expected lifetime loss to be recognized at the time of initial recognition of the receivable. To measure estimated credit losses, amounts receivable have been grouped based on shared credit risk characteristics, including the number of days past due. An impairment loss is reversed in subsequent periods if the amount of the expected loss decreases and the decrease can be objectively related to an event occurring after the initial impairment was recognized.

Financial instruments recorded at fair value

Financial instruments recorded at fair value on the statements of financial position are classified using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:

• Level 1 quoted prices (unadjusted) in active markets for identical assets or liabilities;
• Level 2 inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. prices) or indirectly (i.e. derived from prices); and
• Level 3 inputs for the assets or liability that are not based on observable market data (unobservable inputs).

The classification of a financial instrument in the fair value hierarchy is based upon the lowest level of input that is significant to the measurement of fair value.

Exploration and Evaluation Expenditures

Exploration and evaluation expenditures are charged to profit or loss in the period incurred until such time as it has been determined that a mineral property has economically recoverable resources, in which case subsequent costs incurred to develop a mineral property are capitalized. Exploration and evaluation expenditures include acquisition costs of mineral exploration properties, property option payments and exploration and evaluation activity. Properties acquired under option agreements, whereby payments are made at the sole discretion of the Company, are recorded in the accounts at the time of payment.

Provisions and contingencies

The Company recognizes liabilities for statutory, contractual, constructive or legal obligations associated with the retirement of long-term assets, when those obligations result from the acquisition, construction, development or normal operation of the assets. The net present value of future restoration cost estimates arising from the decommissioning of plant and other site preparation work is capitalized to exploration and evaluation assets along with a corresponding increase in the restoration provision in the year incurred. Discount rates using a pre-tax risk-free rate that reflect the time value of money are used to calculate the net present value. The restoration asset will be depreciated on the same basis as other exploration and evaluation assets.

requirements, discount rates and assumptions regarding the amount and timing of the future expenditures. These changes are recorded directly to exploration and evaluation assets with a changes in regulatory requirements, discount rates, and effects of inflation.

Decommissioning liabilities

A legal or constructive obligation to incur decommissioning liabilities may arise when environmental disturbance is caused by the exploration, development or mining of a mineral property interest. Such costs arising from the decommissioning of plant and other site work, discounted to their net present value, are provided for and capitalized at the start of each project to the carrying amount of the asset as soon as the obligation to incur such costs arises. Discount rates using a pre-tax rate that reflect the time value of money are used to calculate the net present value. These costs are charged against profit or loss over the economic life of the related asset, through amortization using either a unit-of-production or the straight-line method as appropriate. The related liability is adjusted for each period for the unwinding of the discount and for changes to the current market based discount rate, amount or timing of the underlying cash flows needed to settle the obligation. Costs for restoration of subsequent site damage which is created on an ongoing basis during production are provided for at their net present values and charged against profits as extraction progresses. The Company had no material decommissioning liabilities as at August 31, 2021 and 2020.

Income taxes

Current income tax

Income tax expense consists of current and deferred tax expense. Income tax expense is recognized in the statements of loss, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity.

Current income tax assets and liabilities for the current and prior years are measured at the amount expected to be recovered from or paid to the taxation authorities. Current tax assets and current tax liabilities are only offset if a legally enforceable right exists to set off the amounts, and the Company intends to settle on a net basis, or to realize the asset and settle the liability simultaneously.

Deferred income tax

Deferred tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax liabilities are recognized for all taxable temporary differences and deferred tax assets are recognized for all deductible temporary differences, carry-forward of unused tax credits, and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary difference and the carry forward of unused tax credits and unused tax losses can be utilized.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at end of reporting year. Deferred tax relating to items recognized directly in equity is also recognized in equity and not in the statements of loss.

The carrying amount of deferred tax assets is reviewed at the end of the reporting year and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed at each statement of financial position date and are recognized to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Related party transactions

Parties are considered to be related if one party has the ability to directly or indirectly control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence. Related parties may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. Related party transactions that are in the normal course of business and have commercial substance are measured at the exchange amount.

Earnings (loss) per common share

Basic earnings (loss) per share are computed by dividing the net earnings (loss) applicable by the weighted average number of common shares outstanding during the reporting year. Diluted earnings (loss) per share is computed by dividing the net earnings (loss) by the sum of the weighted average number of common shares issued and outstanding during the reporting year and all additional common shares for the assumed exercise of options outstanding for the reporting year, if dilutive.

The diluted earnings (loss) per share is determined by adjusting the earnings (loss) attributable to common shareholders and the weighted average number of common shares outstanding for the effects of all options outstanding that may add to the total number of common shares. Diluted loss per share does not include the effect of stock options as they are antidilutive.

Equity-based payments

Where equity-settled share options are awarded to employees and consultants, the fair value of the options at the date of grant is charged to the statements of income (loss) over the vesting period. Performance vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognized over the vesting period is based on the number of options that eventually vest. Non- vesting conditions and market vesting conditions are factored into the fair value of the options granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of whether these vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition or where a non-vesting condition is not satisfied.

The fair value determined at the grant date of the equity-settled share-based payments is expensed over th number of forfeitures likely to occur is estimated on the grant date.

Where equity instruments are granted to non-employees, they are recorded at the fair value of the goods or services received in the statements of income (loss) and comprehensive income (loss). When the value of goods or services received in exchange for the share-based payment cannot be reliably estimated, the transaction is measured at the fair value of the equity instrument granted.

All equity-settled share-based payments are reflected in option payment reserve, until exercised. Upon exercise, the shares are issued from treasury and the amount reflected in option reserve is credited to share capital for any consideration paid. If options expire, the grant date value is reclassified to deficit.

Cash and cash equivalents

Cash and cash equivalents comprise cash at banks and on hand, cash held in trust and short term deposits with an original maturity of three months or less or cashable without penalty which are readily convertible into a known amount of cash. As at August 31, 2021, the company had $nil cash equivalents (2020 $nil).

Foreign currency transactions

Monetary assets and liabilities denominated in foreign currencies are translated into Canadian dollars at the current exchange rate. Non-monetary assets and liabilities are translated at historical rates of exchange at the time of the acquisition of assets or obligations incurred. Revenues and expenses are translated at the rate of exchange in effect at the date of the transactions. Foreign exchange translation gains and losses are recorded in operations in the period in which they occur.

New standards not yet adopted and interpretations issued but not yet effective

Certain pronouncements were issued by the IASB or the IFRIC that are mandatory for accounting periods commencing on or after September 1, 2021. Many are not applicable or do not have a significant impact to the Company and have been excluded. The following have not yet been adopted and are being evaluated to determine their impact on the Company.

IAS 1 e a more general approach to the classification of liabilities under IAS 1 based on the contractual arrangements in place at the reporting date. The amendments clarify that the classification of liabilities as current or noncurrent is based solely on a com to be unconditional and must have substance. The amendments also clarify that the transfer of a ults from the exercise of a conversion option meeting the definition of an equity instrument. The amendments are effective for annual periods beginning on January 1, 2023. Earlier adoption is permitted. The Corporation will adopt these amendments as of their effective date, and is currently assessing the impacts on adoption.

IAS 8 anies should distinguish changes in accounting policies from changes in accounting estimates. The amendments are effective for annual periods beginning on January 1, 2023. Earlier adoption is permitted. The Corporation will adopt these amendments as of their effective date, and is currently assessing the impacts on adoption.

IAS 37 amendments clarify that when assessing if a contract is onerous, the cost of fulfilling the contract includes all costs that relate directly to the contract i.e. a full-cost approach. Such costs include both the incremental costs of the contract (i.e. costs a company would avoid if it did not have the contract) and an allocation of other direct costs incurred on activities required to fulfill the contract e.g. contract management and supervision, or depreciation of equipment used in fulfilling the contract. The amendments are effective for annual periods beginning on January 1, 2022. Earlier adoption is permitted. The Company will adopt these amendments as of their effective date, and is currently assessing the impacts on adoption.

5. Exploration and Evaluation Properties

West Hawk Lake, High Lake and McMillan Properties

The Company holds an option to acquire a 100% interest in certain claims, rights and leases in the Northwestern Ontario, Southeastern Manitoba, and Northeastern Ontario regions.

agreement with Canadian certain properties. This agreement was subsequently amended on September 7, 2021. The terms of the option agreement are as follows;

• The Optioner granted the Optionee an exclusive option to purchase the properties for an option term expiring at the end of day on April 30, 2022. As consideration for the granting of the option to purchase, the Company is obligated to pay $250,000 as consideration for the first six months of the option and $50,000 per month to the Optioner beginning the seventh month from the date of the Option Agreement until the option is exercised and the transaction is completed
• The purchase price to be paid by the Optionee if the option is exercised is $5,500,000 which shall be satisfied as follows:
  • o $2,750,000 of cash consideration;
  • o $2,750,000 of common shares of the Company to be reduced by the cumulative amount paid for the option to a maximum of $550,000;
  • o 7,000,000 outstanding common shares of the Company held by certain officers and directors of the Company to be transferred to the Optioner upon closing of the transaction.

Upon exercise of the option, the property is subject to a 2% net smelter return roy QMX Gold Corporation for the McMillian mine claims and a 2% NSR to Ceylnn Alock with the right to purchase 1% for a purchase price of $1,250,000 for the High Lake claims. Ceylnn Alock is also entitled to a $10,000 payment every June 15 until such time as commercial production has commenced on the mining claims or the optionee offers to return the mining claims.

Mongowin Property

The Company has signed a binding letter of intent dated May 25, 2021, with Transition Metals Corp. certain Ontario in the township of Mongowin. The letter of intent grants the Company a period of exclusivity for 5 months (subject to a 3-month extension) to enter into a definitive agreement to purchase the Property subject to the following terms and conditions:

• The Company becomes a publicly traded entity on a Canadian Exchange;
• The Company paid a non-refundable cash payment of $15,000 to the Vendor for the period of exclusivity upon signing;
• The Company can extend the period of exclusivity for an additional 3 months by making nonrefundable cash payments to the Vendor of $15,000 per month;
• The Company provides the Vendor with an $85,000 cash payment upon signing;
• The Company issues $500,000 worth of shares of the publicly traded entity;
• Upon earning a 100% interest in the Property, the Company shall grant the Vendor a 1.5% NSR.
• A portion of the property is subject to an additional existing 1% NSR of which 0.5% may be purchased for $600,000
• Commencing the 5th year following the execution of a definitive agreement, MLM will pay the Vendor advanced royalty payments of $25,000 per year (in cash or stock) to be deducted from future royalty payments following commercial production to a maximum total of $250,000. Any exploration expenditures spent on the Property will offset the payments on a dollar for dollar basis.

If MLM does not pay the advanced royalty payments or spend the required exploration expenditure, the Vendor pay choose to purchase the property for $1.

• The Vendor is entitled to a one-time milestone payment of $2,500,000 at any time commercial production is achieved.

On October 22, 2021 the Company paid an additional $15,000 to extend the period of exclusivity as per the agreement.

Michaud/Munro Properties

The Company has signed a binding letter of intent dated June 28, 2021, with 1929941 Ontario Limited certain Ontario located in the townships of Michaud and Munro located in the Larder Lake Mining. The letter of intent grants the Company a period of exclusivity until October 1, 2021 (subject to a 3-month extension) to enter into a definitive agreement to purchase the Property subject to the following terms and conditions:

• The Company becomes a publicly traded entity on a Canadian Exchange;
• The Company paid a non-refundable cash payment of $20,000 to the Vendor for the period of exclusivity upon signing;
• The Company can extend the period of exclusivity for an additional 3 months by making a nonrefundable cash payment of $15,000 on or before October 1, 2021;
• The Company provides the Vendor with an $30,000 cash payment upon signing;
• The Company issues $550,000 worth of shares of the publicly traded entity;
• Upon earning a 100% interest in the Property the Company shall grant the Vendor a1.5% Net of which 1% can be purchased for $1.5 million.

One of the directors of the Company is a shareholder of the Vendor.

On October 22, 2021 the Vendor agreed to extend the period of exclusivity and the Company paid an additional $15,000 on this date.

6. Notes Payable

During the year the Company was advanced funds totalling $195,000 from companies controlled by certain directors of the Company. These promissory notes payable are secured by general guarantee by the Company, bear interest at 12% per annum and are due on demand. Included in accounts payable and accrued liabilities as of August 31, 2021 is accrued interest owed on these notes payable in the amount of $10,491 (2020 $nil).

7. Share Capital

(a) Authorized

An unlimited number of common shares with no par value.

(b) Issued

On August 21, 2020, the Company issued 32,000,000 shares at $0.00001 per share for gross proceeds of $320. Three directors participated and acquired all 32,000,000 shares.

On April 30, 2021, the Company completed a non-brokered private placement and issued 5,000,000 common shares at $0.001 per share for total proceeds of $5,000.

On May 20, 2021 the Company completed a non-brokered private placement and issued 22,075,000 shares at $0.10 per share for total consideration of $2,207,500. Legal and agent fees of $76,310 were paid in cash. One director participated and acquired 35,000 for gross proceeds of $3,500.

(c) Stock Options

employees under which the Company may grant options to acquire a maximum number of 15% of the total issued and outstanding common shares of the company. These options are nontransferable and are valid for a maximum of 5 years from the issue date. Vesting terms and conditions are determined by the Board of Directors at the time of the grant. The exercise price of the options is fixed by the Board of Directors at the time of the grant at a minimum of the market price of the common shares, subject to regulatory requirements. Expected volatility has been determined using the share price of comparable companies for the period equivalent to the life of the options prior to grant date.

On May 31, 2021, the Company granted 5,500,000 incentive stock options to its directors and officers, exercisable at $0.10 per share for a period of 5 years. The grant date fair value of $0.10 per option was estimated using the Black-Scholes option pricing model based on the following assumptions: expected life of 5 years, expected volatility of 190%, expected dividend yield of 0% and a risk-free interest rate of 1%. The options vested immediately.

At August 31, 2021, the following options were outstanding and available to be exercised:

Grant Date	Number	ExercisePrice	Expiration	RemainingYears	Grant DateFair Value
May 31, 2021	5,500,000	$0.10	May 31, 2026	4.75	$0.10

8. Loss Per Share

For the year ended August 31, 2021, basic and diluted loss per share has been calculated based on the loss attributable to common shareholders of $1,230,433 (2020 $nil) and the weighted average number of common shares outstanding of 39,853,836 (2020 32,000,000).

9. Related Party Transactions and Balances

The following expenses were incurred with key management personnel of the Company. Key management personnel are persons responsible for planning, directing, and controlling the activities of the Company including any directors and officers of the Company.

The remuneration of directors and key management of the Company for the period ended August 31, 2021 was as follows:

Exploration and evaluation expenditures	$201,019
Share based payments	$531,968

Included in accounts payable and accrued liabilities as at August 31, 2021 is $44,125 owing to officers and management of the Company. The amounts are unsecured, non-interest bearing and due on demand.

During the period, the Company incurred professional fees to a law firm and its associated investment company totalling $206,543 (2020 - $nil). One of the directors of the Company is a partner in this law

firm. Included in accounts payable and accrued liabilities as at August 31, 2021 is $137,577 owing to this law firm (2020 - $nil). The amounts are unsecured, non-interest bearing and due on demand.

See also Notes 5, 6 and 7 (exploration property, notes payable and share capital notes)

10. Capital Management

The Company defines capital as consisting of common share capital, options reserve and deficit.

e the exploration and development of its mineral property interests and to maintain a flexible capital structure which will optimize the costs of capital at an acceptable risk.

The Company endeavours to manage its capital structure in a manner that provides sufficient funding for operational activities through funds primarily secured through equity capital obtained in private placements. There can be no assurances that the Company will be able to continue raising capital in this manner.

Although the Company has been successful at raising funds in the past through the issuance of share capital, it is uncertain whether it will be able to continue this form of financing due to the current difficult conditions. The Company makes adjustments to its management of capital in the light of changes in economic conditions and the risk characteristics of its assets, seeking to limit shareholder dilution and optimize its costs of capital while maintaining an acceptable level of risk.

The Company is not subject to any externally imposed capital requirements.

11. Financial Instruments and Risk Management

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or an equity instrument of another entity.

The carrying value of approximates fair value due to the shortterm or demand nature of these financial instruments.

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial and demand advances balances. The Company mitigates its exposure by monitoring the

Liquidity risk

Liquidity risk is the risk that the Company will not have sufficient cash resources to meet its financial rating results may be adversely affected if its access to the capital market is hindered, whether as a result of a downturn in stock market conditions generally or matters specific to the Company. The Company generates cash flow primarily from its financing activities. The Company prepares annual capital expenditure budgets, which are monitored and updated as required. In addition, the Company requires authorization from the Board of Directors for expenditures on projects to assist with the management of capital.

As at August 31, 2021, the Company has working capital of $1,438,045 (2020 - $320).

Interest rate risk

The Company does not currently have any outstanding variable interest bearing loans and, therefore, the Company is not exposed to interest rate risk through fluctuation in the prime interest rate.

12. Commitments and Contingencies

Proposed Business Combination with 1287401 B.C. Ltd.

The Company entered into a non-binding letter of intent dated August 16, 2021 with 1287401 B.C. Ltd s to enter into good faith

The Proposed Transaction will be structured following a review of the applicable tax, securities, corporate law, and other relevant considerations. The issuer resulting from the Proposed Transaction The closing of the Proposed Transaction is subject to, among other customary conditions, entering into a definitive agreement, setting out the terms of the Proposed Transaction, the completion of a concurrent financing (see subsequent events) and the Resulting Issuer receiving conditional approval to have its common shares listed on the Aequitas NEO Exchange .

The Company and 1287401 intend to apply to list the common shares of the Reporting Issuer on the NEO Exchange, but there can be no assurances that the Proposed Transaction will be completed.

Consulting Agreement

The Company entered into a one-year consulting agreement with its Vice President of Geology (the options to the Consultant issued on May 31, 2021 (see note7(c)) and consulting fees of $15,000 per month.

Environmental Contingencies

laws and regulations governing the protection of the environment. These laws and regulations are continually changing and generally becoming more restrictive. The Company has made, and expects to make in the future, expenditures to comply with such laws and regulations. See also Note 5 (exploration and evaluation properties)

13. Income taxes

a) Provision for Income Taxes

The reconciliation of the combined Canadian federal and provincial statutory income tax rate of 26.5% to the effective tax rate is as follows:

	2021	2020
	$	$
Loss before income taxes	(1,230,433)	-
Expected income tax recovery based on statutory rate	(326,000)	-
Adjustment to expected income tax recovery:
Share based compensation	141,000	-
Change in unrecorded deferred tax asset	185,000	-

b) Deferred Income Tax

Deferred taxes are a result of temporary differences that arise due to the differences between the income tax values and the carrying amount of assets and liabilities.

	2021	2020
	$	$
Deferred income tax assets have not been recognized in respect of the following deductibletemporary differences:
Non-capital loss carry-forwards	63,000	-
Share issue costs	11,000	-
Exploration properties	125,000	-
Total	199,000	-

The tax losses expire in 2031.

Deferred tax assets have not been recognized in respect of these items because it is not probable that future taxable profit will be available against which the Company can use the benefits.

14. Subsequent Events

Transaction and reverse acquisition see Note 12.

Cannacord Genuity Corp. Financing

September 20, 2021 whereby the Company engaged Cannacord Genuity to be the lead agent (or if applicable on behalf of a syndicate of agents) to assist the Company in selling up to 15,000,000 units The agreement was amended on October 27, 2021 to introduce a flow-through portion of the Offering for up to 10,000,000 flow-through - -Through Share to

raise maximum gross proceeds of $4,000,000 from the issuance of Flow-Through Shares. The combined size of the Offering will increase to up to $10,000,000.

and one-half of one common share purchase warrant (each w . Each Warrant shall be exercisable to acquire a Common Share at a price of $0.60 per Common Share for a period of 36 months from the closing of the Offering.

Upon closing of the Offering, the Company shall pay cash commission equal to (i) 7% of the aggregate gross proceeds of the Offering payable in cash or Offered Securities and (ii) warrants exercisable at $0.40 any time prior to the date that is 36 months from the closing of the Offering to acquire that number of Offered Securities which is equal to 7% of the aggregate number of Offered Securities issued pursuant to the Offering.

Upon Closing of the Offering the Company shall pay the Lead Agent a corporate finance fee of 2.5% of the aggregate number of Offered Securities.

There is a condition of clo shareholders to be identified agree prior to closing of the Offering to lock down periods. The length of the lockdown periods and release schedules for the locked-up persons shall vary based on terms agreed to with Cannacord Genuity.

There can be no assurance the offering will be completed as described or at all.

McFarlane Lake Mining Incorporated Management Discussion and Analysis

For the year ended August 31, 2021 and period ended August 31, 2021

Introduction

The following Management Discussion and Analysis ("MD&A") of McFarlane Lake Mining Incorporated (the "Company") is current as of August 31, 2021, unless otherwise indicated, and should be read together with the Company's audited financial statements and related notes for the year ended August 31, 2021 and the period ended August 31, 2020, which have been prepared in accordance with International Financial Reporting Standards ("IFRS").

All dollar figures in this MD&A are stated in Canadian dollars unless otherwise indicated.

Caution Regarding Forward-Looking Information and Statements

This MD&A contains forward-looking statements intended to provide readers with a reasonable basis for assessing the Company's performance. Forward-looking statements can be identified by such words as "plans", "expects", "budgets", "estimates", "intends", "anticipates", "believes", "continues", "may", "could", "would", "should", "might" or "will", or equivalents or variations thereof. Forward-looking statements include those with respect to the Company's future strategy, plans, transactions, objectives and adequacy of working capital, including statements relating to acquiring, exploring, and monetizing current and future mineral exploration properties. Forward-looking statements rely on underlying assumptions, including management's expectations as to transaction opportunities, exploration potential, and precious metals prices, that, if not realized, can result in such forward-looking statements not being achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of the Company to differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, those described under "Risks and Uncertainties" below and among others, the exploration or monetization potential of the Company's mineral properties, transaction execution risk, volatility in financial markets, economic conditions, precious metals prices and unanticipated increases in expenses. Although the Company has attempted to identify important factors that could cause actions, events or results not to be as predicted, there can be no assurance that forward-looking statements will prove to be accurate. Other than as required by applicable Canadian securities laws, the Company does not undertake to update any such forward-looking statements to reflect events or circumstances after the date hereof. Accordingly, readers should not place undue reliance on any forward-looking statements herein.

General Overview

The Company was incorporated under the laws of the Province of Ontario on August 21, 2020. The head office and registered office of the Company is located at 15 Kincora Court, Sudbury, Ontario P3E 2B9. The Company is currently in the process of analyzing and acquiring mineral properties and will ultimately become a mineral property exploration company.

Overall Performance

The Company was incorporated on August 21, 2020 and had no operational activity for the period ended August 31, 2020. During the period from August 21, 2020 to August 31, 2020, the Company issued 32,000,000 common shares for total share consideration of $320.

For the year ended August 31, 2021, the Company did not record any revenues and incurred a net and comprehensive loss of $1,220,433, (2020 – nil). During the period the Company incurred exploration and evaluation expenditures of $470,309, professional fees of $212,335 and other operating expenses of $15,821 and issued share-based compensation of $531,968.

During the period ended August 31, 2021, the Company issued common shares and completed private financing transactions to provide initial funds for the analysis and acquisition of mineral properties.

The funds raised through the issuance of common shares of the Company to August 31, 2021 are as follows:

Date	Number of Common Shares	Gross Share Proceeds
August 21, 2020	32,000,000	$320
April 30, 2021	5,000,000	$5,000
May 20, 2021	22,075,000	$2,207,500
Total	59,075,000	$2,212,820

During the period, the Company was also advanced funds totalling $195,000 from two companies controlled by certain directors of the Company.

Selected Annual Financial Information

The table below sets out certain selected financial information regarding the operations of the Company for the period indicated. The selected financial information has been prepared in accordance with IFRS and should be read in conjunction with the Company's financial statements and related notes.

	August 31, 2021 ($)	August 31, 2020
Total assets	1,851,055	320
Total liabilities	413,010	nil
Shareholder's equity	1,448,045	320
Total revenue	Nil	nil
Net and comprehensive income (loss)	(1,220,433)	nil
Basic and diluted income (loss) per share	(0.031)	nil

Notes Payable and Related Parties

During the fiscal year ended August 31, 2021, the Company was advanced funds in the amount of $195,000 from companies controlled by two directors evidenced by secured, demand promissory notes issued by the Company which bear interest at 12% per annum. As of August 31, 2021 these notes payable totaled $195,000 (August 31 2020 – nil). Accrued interest owed on these notes payable in the amount of $10,491 (August 31, 2020 – nil) is included in the accounts payable and accrued liabilities of the Company as of August 31, 2021.

Discussion of Operations

The Company had no operational activity for the period ended August 31, 2020. For the current fiscal period, the Company is currently in the process of analyzing and acquiring mineral properties and will ultimately become a mineral property exploration company. As of August 31, 2021, the Company has entered into an option agreement and two letters of intent encompassing six properties containing gold mineralization in Manitoba and Ontario (collectively, the "Mineral Properties"). Three of the Mineral Properties have historic mines which were past producers of gold, while two of the Mineral Properties contain NI 43-101 non-compliant gold resources. The details of the Mineral Properties and the related option agreement and letters of intent are as set out below.

Mineral Properties

The West Hawk Lake Property, High Lake Property and the McMillan Property

On February 23, 2021, the Company executed an option agreement with Canadian Star Minerals Ltd. (the "Optioner"), which was amended by an amending agreement dated September 7, 2021 (collectively, as amended, the "Option Agreement"), whereby the Company may acquire up to a 100% interest in 33 mining claims, rights and leases in respect of:

• 1. a property located in Southeastern Manitoba approximately 5 kilometres west of the Ontario-Manitoba board near the community of Hawk Lake, Manitoba (the "West Hawk Lake Property");
• 1. a property located immediately east of the Ontario-Manitoba border approximately 45 kilometres west of the town of Kenora, Ontario (the "High Lake Property"); and
• 1. a property located 70 kilometres southwest of Sudbury, Ontario near the town of Espanola, Ontario (the "McMillan Property" and collectively with the West Lake Property and the High Lake Property, the "Optioned Properties").

Pursuant to the terms of the Option Agreement, the Optioner granted the Company an exclusive option to purchase the Optioned Properties for an option term expiring at the end of day on April 30, 2022. As consideration for the granting of the option to purchase, the Company is obligated to pay $250,000 as consideration for the first six months of the option and $50,000 per month to the Optioner beginning the seventh month from the date of the Option Agreement until the option is exercised and the transaction is completed. The purchase price to be paid by the Company upon exercise of the option is $5,500,000, which shall be satisfied as follows: (a) $2,750,000 of cash consideration; (b) the issuance of common shares in the capital of the Company with a value of $2,750,000 to be reduced by the cumulative amount paid by the Company in option payments up to a maximum of $550,000; and (c) the transfer to the Optioner of 7,000,000 issued and outstanding common shares in the capital of the Company held by certain officers and directors of the Company upon closing of the transaction.

The Mongowin Property

The Company executed a binding letter of intent dated May 25, 2021 (the "Mongowin LOI") with Transition Metals Corp. (the "Mongowin Vendor") in respect of the acquisition by the Company of a 100% interest in 125 mining claims located in Northeastern Ontario in Mongowin Township approximately 70 kilometres southwest of Sudbury, Ontario near the town of Espanola, Ontario (the "Mongowin Property"). Pursuant to the terms of the Mongowin LOI, the Mongowin Vendor granted the Company a period of exclusivity ending October 25, 2021 in which to negotiate and enter into a definitive agreement to purchase the Mongowin Property, subject to the following terms and conditions:

• the Company must become a publicly traded entity on a Canadian exchange;
• the Company must make a non-refundable cash payment of $15,000 to the Mongowin Vendor upon signing of the Mongowin LOI;
• the Company may extend the period of exclusivity for an additional 3 months provided that the Company makes non-refundable cash payments to the Mongowin Vendor of $15,000 per month;
• upon the signing of a definitive agreement, the Company must make a payment to the Mongowin Vendor of $85,000;
• the Mongowin Vendor shall be entitled to common shares in the issuer resulting from a go-public transaction at a value of $500,000 at a deemed price per common share equal to the go public value of the resulting issuer to which the Company will assign the Mongowin Property upon its listing on a Canadian exchange;
• upon earning a 100% interest in the Mongowin Property, the Company shall grant the Mongowin Vendor a 1.5% Net Smelter Return Royalty;
• a portion of the property is subject to an additional existing NSR of which 0.5% may be purchased for $600,000;
• commencing the 5th year following the execution of a definitive agreement, the Company will pay the Mongowin Vendor advanced royalty payments of $25,000 per year (in cash or stock) to be deducted from future royalty payments following commercial production to a maximum total of $250,000. Any exploration expenditures spent on the Mongowin Property will offset the payments on a dollar for dollar basis. If the Company does not pay the advanced royalty payments or spend the required exploration expenditure, the Mongowin Vendor may chose to purchase the property for $1;
• the Mongowin Vendor is entitled to a one-time milestone payment of $2,500,000 at any time commercial production is achieved; and
• on October 22, 2021, the Company paid an additional $15,000 to extend the period of exclusivity as per the agreement.

The Michaud/Munro Properties

The Company executed a binding letter of intent dated June 28, 2021 (the "Michaud/Munro LOI") with 1929941 Ontario Limited (the "Vendor") in respect of the acquisition by the Company of a 100% interest in 17 mining leases located in Northeastern Ontario in the townships of Michaud and Munro in the Larder Lake Mining District near the town of Matheson, Ontario (the "Michaud/Munro Properties"). Pursuant to the terms of the Michaud/Munro LOI, the Vendor granted the Company a period of exclusivity ending October 1, 2021 in which to negotiate and enter into a definitive agreement to purchase the Michaud/Munro Properties, subject to the following terms and conditions:

• the Company must become a publicly traded entity on a Canadian exchange;
• the Company must make a non-refundable cash payment of $20,000 to the Vendor upon signing of the Michaud/Munro LOI;
• the Company may extend the period of exclusivity for an additional 3 months provided that the Company makes a non-refundable cash payment to the Vendor of $15,000 on or before October 1, 2021;
• the Company must make a payment of $30,000 to the Vendor; The Vendor shall be entitled to common shares in the issuer resulting from a go-public transaction at a value of $550,000 at a deemed price per common share equal to the go public value of the resulting issuer to which the Company will assign the Mongowin Property upon its listing on a Canadian exchange;
• upon earning a 100% interest in the Michaud/Munro Properties, the Company shall grant the Vendor a 1.5% Net Smelter Return Royalty of which 1% can be purchased for $1.5 million; and
• on October 22, 2021 the Vendor agreed to extend the period of exclusivity and the Company paid an additional $15,000 on this date.

Proposed Exploration Expenditures

West Hawk Lake Property

Upon completion of the acquisition of the West Hawk Lake Property, the Company intends to commence an exploration program commencing during the fourth quarter of 2021 quarter of 2022. The Company has obtained the mining permit to conduct exploration activity on this property. This initial exploration program is designed to, in part, confirm prior historical results and confirm structural continuity and includes the following activities:

Task	Details
Diamond Drilling	3,000 metres
Line Cutting	25 kilometres
Geophysics	IP Survey
Logging/Sampling	Au, Ag, Cu, Fe, S
Modelling/Mapping
Total Cost	$800,000

Task	Details
Diamond drilling	3,000m
Line cutting	25km
Geophysics	IP survey
Logging/Sampling	Au, Ag, Cu, Fe, S
Modeling / mapping
Total Cost	$800,000

High Lake Property

Upon completion of the acquisition of the High Lake Property, the Company intends to commence an exploration program during the second or third quarter of 2022, subject to obtaining required permits and consultation with local First Nations groups which is expected to take approximately 6 months. Drilling will be completed to confirm and expand known mineralization in the most prospective areas. The details of the proposed exploration program are as follows:

Task	Details
Diamond Drilling	8,200 metres
Line Cutting	25 kilometres
Geophysics	IP Survey
Logging/Sampling	Au, Ag, Cu, Fe, S
Modelling/Mapping
Total Cost	$1,450,000

Task	Details
Diamond drilling	8,200m
Line cutting	25km
Geophysics	IP survey
Logging/Sampling	Au, Ag, Cu, Fe, S
Modeling / mapping
Total Cost	$1,450,000

Summary of Quarterly Results

McFarlane Lake Mining Summary of Quarterly Results

Quarter ended	Net income (loss)	Earnings (loss) per share -
	for the period	basic and diluted
August 31, 2020	Nil	Nil
November 30, 2020	Nil	Nil
February 28, 2021	($11,104)	Nil
May 31, 2021	($821,916)	($0.023)
August 31, 2021	($397,413)	($0.010)

Liquidity and Capital Resources

The Company's cash position as of August 31, 2021 was $1,820,454 (August 31 2020 - $320) with a net working capital of $1,438,045 (August 31 2020 - $320). The company had total assets as of August 31, 2021 of $1,851,055 (August 31 2020 - $320).

The Company believes that the current capital resources are not sufficient to pay overhead expenses and fund its proposed mineral property acquisitions and exploration programs for the next twelve months and consequently has entered into an agreement with Canaccord Genuity Corp. In respect of a proposed equity financing as detailed below. The Company will continue to monitor the current economic and financial market conditions and evaluate their impact on the Company's liquidity and future prospects.

Since the Company may not be able to generate cash flow from its operations for the foreseeable future, the Company will have to rely on the issuance of shares or the exercise of options and warrants to fund ongoing operations and investment. The ability of the Company to raise capital will depend on market conditions and it may not be possible for the Company to issue shares on acceptable terms or at all.

The Company manages its capital structure in order to ensure sufficient resources are available to meet operational requirements and safeguard its ability to continue as a going concern. There are no externally imposed capital requirements on the Company. Management considers the items included in shareholders' equity and working capital as capital. The Company manages the capital structure and adjusts it in response to changes in economic conditions and the risk characteristics of the underlying assets. The Company's primary objective with respect to its capital management is to ensure that it has sufficient capital resources to fund the operation of the Company. To secure additional capital necessary to pursue these objectives, the Company intends to raise additional funds through equity of debt financing.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements requiring disclosure under this section.

Transactions Between Related Parties

Related party transactions are comprised of services rendered by directors and/or officers of the Company or by a company with a director and/or officer in common. Related party transactions are in the normal course of business and are measured at the exchange amount.

Consulting Agreements

The Company entered into a one-year consulting agreement with its Vice President of Geology, (the "Consultant") on June 14, 2021. The terms of the agreement include a grant of 500,000 stock options to the Consultant and consulting fees payable by the Company of $15,000 per month.

Notes Payable

During the year the Company was advanced funds totalling $195,000 from companies controlled by certain directors of the Company. These promissory notes payable are secured by a general guarantee by the Company, bear interest at 12% per annum and are due on demand. Included in accounts payable and accrued liabilities as of August 31, 2021 is accrued interest owed on these notes payable in the amount of $10,491. The monies were advanced to assist in the financing of the Company's operations.

Key Management Compensation

Key management personnel are those having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly and include the Company's executive officers and members of the Board of Directors. During the year ended August 31, 2021, key management compensation consisted of the following:

Name andposition	Year	Salary,consultingfee,retainer orcommission(CDN$)	Bonus(CDN$)	Committeeor meetingfees(CDN$)	Value ofperquisites(CDN$)	Value of allothercompensation(CDN$)	Totalcompensation(CDN$)
Mark	2021	20,000	Nil	Nil	Nil	193,443	213,433
Trevisiol,
Chief
Executive
Officer,
President and
Director

Name andposition	Year	Salary,consultingfee,retainer orcommission(CDN$)	Bonus(CDN$)	Committeeor meetingfees(CDN$)	Value ofperquisites(CDN$)	Value of allothercompensation(CDN$)	Totalcompensation(CDN$)
Chuck Lilly,ChiefFinancialOfficerandDirector	2021	10,000	Nil	Nil	Nil	96,721	106,721
Roger Emdin,VicePresident,ProjectDevelopmentand Director	2021	112,519	Nil	Nil	Nil	96,721	209,352
PerryDellelce,Director	2021	Nil	Nil	Nil	Nil	96,721	96,721
RobertKusins, VicePresidentGeology	2021	58,500	Nil	Nil	Nil	48,361	106,861

Proposed Transactions

Proposed Business Combination with 1287401 B.C. Ltd.

The Company entered into a non-binding letter of intent dated August 16, 2021 with 1287401 B.C. Ltd ("1287401"), a reporting issuer in the provinces of Alberta and British Columbia, whereby the Company and 1287401 have agreed to enter into good faith negotiations in respect of a transaction to combine their respective businesses (the "Proposed Transaction").

The structure of the Proposed Transaction will be determined following a review of the applicable tax, securities, and corporate law, and other relevant considerations. The issuer resulting from the Proposed Transaction (the "Resulting Issuer") will carry on the business currently carried on by the Company. The closing of the Proposed Transaction is subject to, among other customary conditions, entering into a definitive agreement setting out the terms of the Proposed Transaction, the completion of a concurrent financing (see "Subsequent Events" below) and the Resulting Issuer receiving conditional approval to have its common shares listed on the Neo Exchange Inc. (the "NEO"). While the Company and 1287401 intend to apply to list the common shares of the Resulting Issuer on the NEO, there can be no assurances that the Proposed Transaction will be completed or that the listing will be approved.

Changes in Accounting Policies including Initial Adoption

There have been no changes in the existing accounting policies of the Company in the period nor have any new accounting policies been adopted during this period.

Financial Instruments and Other Instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or an equity instrument of another entity.

The Company does not have any outstanding hedging or derivative contracts as of the year end date.

The carrying value of the Company's financial instruments approximate fair value due to the short-term or demand nature of these financial instruments.

Outstanding Share Data

As of the date of this MD&A, the Company had the following equity securities outstanding:

Security Description	August 31, 2021	August 31, 2020
Common shares	59,075,000	32,000,000
Stockoptionstoacquirecommonshares	5,500,000	Nil
Share purchase warrants and otherinstruments	Nil	Nil
Common Shares Fully Diluted	64,575,000	32,000,000

Subsequent Events

Private Placement led by Canaccord Genuity Corp.

The Company entered into an agreement with Canaccord Genuity Corp. ("Canaccord Genuity") on September 20, 2021 pursuant to which the Company engaged Canaccord Genuity to act as the lead agent (or if applicable, on behalf of a syndicate of agents) to assist the Company in the offering for sale of up to 15,000,000 units (the "Offered Securities") of the Company at a price of $0.40 per unit to raise aggregate gross proceeds of up to $6,000,000 (the "Offering") on the terms described below. The agreement was amended on October 27, 2021 to introduce a flow-through portion of the Offering for up to 10,000,000 flow-through shares of the Company (the "Flow-through Shares") at a price of $0.40 per Flow-Through Share to raise maximum gross proceeds of $4,000,000 from the issuance of Flow-Through Shares. The combined size of the Offering will increase to up to $10,000,000.

Each Offered Security shall be comprised of one common share (a "Common Share") of the Company and one-half of one common share purchase warrant (each whole warrant, a "Warrant"). Each Warrant shall be exercisable to acquire a Common Share at a price of $0.60 per Common Share for a period of 36 months from the closing of the Offering.

Upon closing of the Offering, the Company has agreed to pay cash commission equal to (i) 7% of the aggregate gross proceeds of the Offering payable in cash or Offered Securities and (ii) warrants exercisable at any time prior to the date that is 36 months from the closing of the Offering to acquire that number of Offered Securities which is equal to 7% of the aggregate number of Offered Securities issued pursuant to the Offering. Upon Closing of the Offering the Company shall also pay Canaccord Genuity a corporate finance fee in an amount equal to 2.5% of the aggregate number of Offered Securities.

The Offering is subject to certain terms and conditions contained in the agreement, including that each of the Company's officers, directors, and certain key shareholders to be identified agree prior to closing of the Offering to lock down periods. The length of the lockdown periods and release schedules for the locked-up persons shall vary based on terms agreed to with Canaccord Genuity.

Company Forecast - 12 month Operating Expenditures

The Company is forecasting to incur the following expenditures in the upcoming 12 month operating period:

Additional Disclosure for Venture Issuer without Significant Revenue

Risks and Uncertainties

Going Concern

The financial statements have been prepared on the assumption that the Company will continue as a going concern, meaning it will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations. Different bases of measurement may be appropriate if the Company was not expected to continue operations for the foreseeable future. As of August 31, 2021 the Company has not achieved profitable operations, has accumulated losses of $1,220,433 (August 31 2020 – nil) since inception and expects to incur further losses in the development of its business.

No Operating History

The Company was incorporated on August 21, 2020 and has not commenced commercial operations. The Company has no history of earnings or paid any cash dividends, and it is unlikely to produce earnings or pay dividends in the immediate or foreseeable future.

Speculative Nature of Investment Risk

An investment in securities of the Company involves a high degree of risk and must be considered highly speculative due to the nature of the Company's business and the present stage of development of its mineral properties. In addition to information set out or incorporated by reference in this MD&A, prospective investors should carefully consider the risk factors set out below. Any one risk factor could materially affect the Company's financial condition and future operating results and could cause actual events to differ materially from those described in forward looking statements relating to the Company

Exploration and Mining Risks

Resource exploration and development and mining operations are highly speculative and characterized by a number of significant risks which even a combination of careful evaluation, experience and knowledge may not eliminate, including, among other things, unprofitable efforts resulting not only from the failure to discover mineral deposits, but from finding mineral deposits which, though present, are insufficient in quantity and quality to be mined profitability. Few properties that are explored are ultimately developed into producing mines. There is no assurance that the Company's mineral exploration and development programs will result in any discoveries of bodies of commercial mineralization. There is also no assurance that even if commercial quantities of mineralization are discovered, a mineral property will be brought into commercial production. The Company will continue to rely upon the advice and work of consultants and others for exploration, development, construction, and operating expertise.

Substantial expenditures are required to establish and upgrade mineral resources, to establish mineral reserves, to develop metallurgical processes to extract metals from mineral resources and, in the case of new properties, to develop the mining and processing facilities and infrastructure at any site chosen for mining. No assurance can be given that the funds required for development can be obtained on a timely basis. Whether a mineral deposit will be commercially viable depends on a number of factors, some of which are: the particular attributes of the deposit, such as size and grade; metal prices which are highly cyclical; and government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals and environmental protection. Unsuccessful exploration and development programs could have a material adverse impact on the Company's operations and financial condition.

Factors beyond the Company's Control

The mining exploration business is subject to several factors beyond the Company's control including changes in economic conditions, intense industry competition, variability in operating costs, changes in government and in rules and regulations of various regulatory authorities. An adverse change in any one of such factors would have a material adverse effect on the Company, its business and results of operations which might result in the Company not identifying a body of economic mineralization, completing the development of a mine according to specifications in a timely, cost-effective manner or successfully developing mining activities on a profitable basis.

Additional Funding Required

Exploration and development of the Company's mineral properties may require significant additional financing. Accordingly, the continuing development of the Company's properties will depend upon the Company's ability to obtain financing through equity financing, debt financing, the joint venturing of projects or other external sources. Failure to obtain sufficient financing may result in a delay or an indefinite postponement of exploration, development, or production on any or all of the Company's properties, or even a loss of property interest, or have a material adverse impact on the Company's future cash flows, earnings, results of operations and financial condition or result in the substantial dilution of its interests in its properties. There can be no assurance that additional capital or other types of financing will be available if needed or that, if available, the terms of such financing will be favorable to the Company. If the Company was required to arrange for debt financing it could be exposed to the risk of leverage, while equity financing may cause existing shareholders to suffer dilution. There can be no assurance that the Company will be successful in overcoming these risks or any other problems encountered in connection with such financings. Failure to raise capital when needed would have a material adverse effect on the Company's business, financial condition, and results of operations.

The Company has and will continue to have negative operating cash flow until its mineral property commence commercial production should exploration and development efforts demonstrate that commercial production from such mineral properties is feasible.

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its obligations. The Company's credit risk relates to the amounts due from related parties and demand note balances. The Company mitigates its exposure by monitoring the counterparty's ability to repay.

Liquidity risk

Liquidity risk is the risk that the Company will not have sufficient cash resources to meet its financial obligations as they come due. The Company's liquidity and operating results may be adversely affected if its access to the capital market is hindered, whether as a result of a downturn in stock market conditions generally or matters specific to the Company. The Company generates cash flow primarily from its financing activities. The Company prepares annual capital expenditure budgets, which are monitored and updated as required. In addition, the Company requires authorization from the Board of Directors for expenditures on projects to assist with the management of capital. As of August 31, 2021, the Company had a working capital surplus of $1,448,045 (2020 - $nil).

Reliance on Independent Contractors

The Company's success depends to an extent on the performance and continued service of certain independent contractors. The Company has or will be contracting the services of professional drillers and others for exploration, environmental, engineering, and other services. Poor performance by such contractors or the loss of such services could have a material and adverse effect on the Company, its business and results of operations and result in the Company failing to meet its business objectives.

COVID-19

The global outbreak of COVID-19 has had a significant impact on businesses through restrictions put in place by the federal and provincial governments regarding travel, gatherings, and other public health restrictions. While these effects are expected to be temporary, the duration of the various disruptions to the Company and the related financial impact cannot be reasonably estimated at the present time. At this time, the Company is yet uncertain the extent to which COVID-19 will impact its operations. However, we anticipate this outbreak may cause supply chain disruptions, staff shortages and increased government regulations, all of which may negatively impact the Company's business and financial condition.

Fluctuating Mineral Prices

The Company's revenues in the future, if any, are expected to be in large part derived from the extraction and sale of precious and base minerals and metals, which in turn depend on the results of the Company's exploration on these properties and whether development will be commercially viable or even possible. Factors beyond the control of the Company may affect the marketability of metals discovered, if any. Metal prices have fluctuated widely, particularly in recent years, partially due to the significant market reaction to COVID-19. Consequently, the economic viability of any of the Company's exploration projects cannot be accurately predicted and may be adversely affected by fluctuations in mineral prices.

Competition

The mining industry is intensely competitive in all its phases. The Company competes for the acquisition of mineral properties, claims, leases and other mineral interests as well as for the recruitment and retention of qualified employees with many companies possessing greater financial resources and technical facilities than the Company. The competition in the mineral exploration and development business could have an adverse effect on the Company's ability to hire or maintain experienced and expert personnel or acquire suitable properties or prospects for mineral exploration in the future.

Resale of Common Shares

The continued operation of the Company will be dependent upon its ability to generate operating revenues and to procure additional financing. There can be no assurance that any such revenues can be generated or that other financing can be obtained. If the Company is unable to generate such revenues or obtain such additional financing, any investment in the Company may be lost. In such event, the probability of resale of the Common Shares by any investor of the Company would be diminished.

Community Groups

There is an ongoing level of public concern relating to the effects of mining on the natural landscape, on communities and on the environment. Certain non-governmental organizations, public interest groups and reporting organizations ("NGOs") who oppose resource development can be vocal critics of the mining industry. Any such actions and the resulting media coverage could have an adverse effect on the reputation and financial condition of the Company or its relationships with the communities in which it operates, which could have a material adverse effect on the Company's business, financial condition, results of operations, cash flows or prospects.

SCHEDULE E PRO FORMA FINANCIAL STATEMENT

McFarlane Lake Mining Limited

Unaudited Pro Forma Consolidated Financial Statement

August 31, 2021

(Expressed in Canadian dollars)

McFarlane Lake Mining Limited

Unaudited Pro Forma Consolidated Statement of Financial Position

(Expressed in Canadian Dollars)

	McFarlane LakeMining Inc.August 31, 2021		1287401 B.C. LTD.NotesAugust 31, 2021		Pro FormaAdjustments		Pro FormaConsolidatedAugust 31, 2021
ASSETS
Current assets
Cash	$	1,820,454	-	4a		6,295,200	$	7,476,824
				4a		(438,830)
				4d		(200,000)
Other receivable		30,601	816			-		31,417
Total current assets		1,851,055	816			5,656,370		7,508,241
Total assets	$	1,851,055	$816		$	5,656,370	$	7,508,241
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities		218,010	9,851			-		227,861
Flow-through share premium liablity		-	-	4a		964,688		964,688
Due to related parties		-	15,393			-		15,393
Notes payable		195,000	-			-		195,000
Total liabilities	$	413,010	$25,244		$	964,688	$	1,402,942
Shareholders' equity
Share capital		2,136,510	300	4a		2,187,625		6,723,810
				4a		2,122,313
				4a		18,013
				4a		107,748
				4e		121,825
				4a		(1,001,473)
				4b		1,031,250
				4c		(300)
Warrant reserve		-	-	4a		994,375		1,051,539
				4a		8,188
				4a		48,977
Other reserve		531,968	-	4a		308,793		937,886
				4a		97,125
Deficit		(1,230,433)	(24,728)	4b		(1,055,678)		(2,607,936)
				4c		24,728
				4d		(200,000)
				4e		(121,825)
Total shareholders' equity	$	1,438,045	$(24,428)		$	4,691,683	$	6,105,300
Total liabilities and shareholders' equity	$	1,851,055	$816		$	5,656,370	$	7,508,241

The accompanying notes are an integral part of these unaudited pro forma consolidated financial statements.

1. Description of transaction

On August 16, 2021 McFarlane Lake Mining Incorporated ("McFarlane") entered into a non-binding letter of intent with 1287401 B.C. Ltd ("1287401"), a reporting issuer in the provinces of Alberta and British Columbia, whereby McFarlane and 1287401 agreed to enter into good faith negotiations in respect of a transaction to combine their respective businesses, (the "Transaction").

The Transaction is expected to be completed by way of "three-cornered" amalgamation pursuant to which McFarlane will amalgamate with 1000034047 Ontario Inc. ("Subco"), a wholly-owned subsidiary of 1287401 and in exchange for their securities of McFarlane and Subco, the securityholders of McFarlane and Subco shall receive securities of 1287401 on a 1:1 basis. The issuer resulting from the Transaction (the "Resulting Issuer") will carry on the business of McFarlane under the name "McFarlane Lake Mining Limited".

2. Basis of preparation

This unaudited pro forma consolidated financial statement has been prepared for illustrative purposes only, to show the effect of the Transaction, and are not intended to reflect the financial position which would have actually resulted if the events reflected herein had been in effect at the dates indicated.

The pro forma financial statement has been prepared as though the transactions described in Note 3 and Note 4 had occurred on August 31, 2021. In preparing this pro forma financial statement, historical information was derived from:

• The statements of financial position of 1287401 as at August 31, 2021; and
• The statements of financial position of McFarlane as at August 31, 2021.

In preparing the unaudited pro forma consolidated financial information consideration was given to identifying accounting policy differences between and McFarlane where the impact was potentially material and could be reasonably estimated. The accounting policy differences had been identified and the adjustments are described in the pro forma statement of financial position. The accounting policies are conformed in all material respects to those of McFarlane.

In the opinion of McFarlane's management, the pro forma financial statement includes all adjustments necessary for a fair presentation of the Transaction applied on a basis consistent with McFarlane's accounting policies. Actual amounts recorded once the Transaction and other adjusting items are completed will likely differ from those recorded in this unaudited pro forma consolidated financial statement. Further, this unaudited consolidated financial statement is not necessarily indicative of the financial position that may be obtained in the future. These differences may be material.

3. Acquisition

The Transaction is expected to be recorded as an asset acquisition, whereby for accounting purposes, McFarlane is presented as acquiring the net assets of 1287401. Upon completion of the Transaction, each outstanding security of McFarlane shall be exchanged on a one for one basis for an equivalent security of the Resulting Issuer, and existing shareholders of 1287401 shall hold the number of security of the Resulting Issuer that when multiplied by the offering price of the concurrent financing equals $1,500,000 (which for greater certainty is 3,750,000 common shares in the Resulting Issuer).

4. Pro forma adjustments

These unaudited pro forma consolidated financial statements reflect the following adjustments as if the Acquisition had occurred August 31, 2021.

a) Concurrent Financing

In connection with the Transaction, on December 9, 2021, McFarlane closed a brokered and nonbrokered private placement offering of securities (together, the "Offering") consisting of an aggregate of 7,955,000 units of McFarlane (the "Units") at a price of $0.40 per unit (the "Issue Price") for gross proceeds of $3,182,000 and an aggregate of 7,717,500 flow-through common shares of McFarlane (the "FT Shares") at the Issue Price for gross proceeds of $3,087,000.

Each Unit consisted of one common share (a "Common Share") of McFarlane and one-half of one common share purchase warrant (each whole warrant, a "Warrant"). Each Warrant shall be exercisable to acquire a Common Share at a price of $0.60 per Common Share for a period of 36 months from the closing of the Offering.

The allocation of the Units between share capital and warrants was done based on the relative fair value of each of the components after applying the Exchange Ratio. The fair value of the warrants was determined using the Black-Scholes Model using the following assumptions:

Exercise price	$0.60
Share price at grant date	$0.275
Expected life of options	3.0 years
Expected annualized volatility	206.96%
Expected dividend rate	0%
Risk-free interest rate	0.53%

The relative fair value of the shares was determined to be $2,187,625 and the relative fair value of the warrant was determined to be $994,375.

The gross proceeds from FT Share portion of the Offering were allocated to common shares and FT Share premium using the residual method, with proceeds being allocated to the common shares first based on the market value of the shares at the time of the issuance. The fair value of the shares was determined to be $2,122,313 and $964,688 was allocated as the value of the Flow-through share premium.

Canaccord Genuity Corp. (the "Agent") acted as lead agent in connection with the brokered portion of the Offering (the "Brokered Offering") and provided advisory services to McFarlane in connection with the non-brokered offering.

As part of the private placement, McFarlane incurred share issuance costs of $1,001,473 made up of the following:

i. Upon closing of the Offering, the Agent received a commission in the amount of $333,830 and an aggregate of 834,575 broker warrants (the "Broker Warrants"). Each Broker Warrant entitles the holder thereof to acquire one Unit at exercise price equal to the Issue Price for a period of 36 months following the closing date of the Offering (being December 9, 2021). The fair value of the Broker Warrants of $308,793 was determined using the Black-Scholes Model using the following assumptions:

Exercise price	$0.40
Unitprice at grant date	$0.40
Expected life of options	3.0 years
Expected annualized volatility	206.96%
Expected dividend rate	0%
Risk-free interest rate	0.53%

ii. Upon closing of the Offering, the Agent received an advisory fee in the amount of $105,000 and an aggregate of 262,500 advisory warrants (the "Advisory Warrants"). Each Advisory Warrant entitles the holder thereof to acquire one Unit at exercise price equal to the Issue Price for a period of 36 months following the closing date of the Offering (being December 9, 2021). The fair value of the warrants of $97,125 was determined using the Black-Scholes Model using the following assumptions:

Exercise price	$0.40
Unitprice at grant date	$0.40
Expected life of options	3.0 years
Expected annualized volatility	206.96%
Expected dividend rate	0%
Risk-free interest rate	0.53%

iii. Upon Closing of the Offering, McFarlane issued 391,813 Units to the Agent in satisfaction of a corporate finance advisory fee. The fair value of the corporate finance advisory fee was determined to be $156,725 based on the fair value of $0.40 per unit. The fair value of the Advisory Warrants of $48,977 was determined using the Black-Scholes Model.

Concurrently with the Offering, Subco completed a non-brokered offering of 65,500 units (the "Subco Units") for gross proceeds of approximately $26,200 (the "Subco Offering"). Each Subco Unit consisted of one common share of Subco (the "Subco Shares") and one-half of one common share purchase warrant of Subco (each whole warrant, a "Subco Warrant"). Each Subco Warrant is exercisable into one Subco share at a price of $0.60 for a period of 36 months from the closing date of the Subco Offering (being December 9, 2021). Upon completion of the Transaction, holders of Subco Shares will be issued Resulting Issuer Shares in exchange for their Subco Shares, and warrants of the Resulting Issuer in exchange for their Subco Warrants with each such warrant exercisable for Resulting Issuer Shares on substantially the same terms as the Subco Warrants.

The allocation of the Subco Units between share capital and warrants was done based on the relative fair value of each of the components after applying the Exchange Ratio. The fair value of the warrants was determined using the Black-Scholes Model using the following assumptions:

Exercise price	$0.60
Share price at grant date	$0.275
Expected life of options	3.0 years
Expected annualized volatility	206.96%
Expected dividend rate	0%
Risk-free interest rate	0.53%

The relative fair value of the shares was determined to be $18,013 and the relative fair value of the warrant was determined to be $8,188.

b) Purchase Consideration

Purchase consideration
Fair value of 3,750,000 shares issued in resulting issuer	$1,031,250
Fair value of consideration	$1,031,250
Identifiable assets acquired
Amounts receivable	$816
Accounts payable and accrued liabilities	(9,851)
Due to related parties	(15,393)
Net assets acquired	(24,428)
Reverse takeover transaction cost	1,055,678
	$1,031,250

The above amounts are estimates, which have been made by management of McFarlane for the acquisition based on information available. There may be amendments to the amounts illustrated above as items subject to estimation are finalized and actual balances at the time of closing are applied.

• i. In the accounting for the reverse takeover, consideration is determined by reference to the fair value of the number of shares the legal subsidiary, being McFarlane, would have issued to the legal parent entity, being 1287401, to obtain the same percentage ownership interest of 4.8% in the Resulting Issuer. The consideration is measured at the fair value of 3,750,000 shares that were deemed to be exchanged.

• ii. The fair value of consideration paid by McFarlane exceeds the fair value of the net assets of 1287401 by $1,055,678 which will be expensed as a cost associated with obtaining a public stock listing.

• c) 1287401's share capital and deficit as at August 31, 2021 of $300 and $(24,728) respectively, were eliminated in the pro forma consolidation.

• d) To record estimated transaction costs of $200,000.

• e) Pursuant to an advisory agreement dated May 18, 2021 between the McFarlane and WD Capital Markets Inc. ("WDC"), McFarlane issued 443,000 Common Shares to WDC in satisfaction of a finder's fee for arranging a suitable shell and certain advisory services. The fair value of the finder's fee was determined to be $121,825 based on the fair value of $0.275 per share.

5. Pro Forma Share Capital

A pro forma continuity of the McFarlane Lake Mining Incorporated issued capital stock and related recorded values after giving effect to the pro forma adjustments described in note 4 above is set out below:

	Note	Number ofshares#	ShareCapital$	Numberofwarrants#	Warrantreserve$	Numberof options#	Otherreserve$	Deficit$	Shareholders'equity(deficiency)$
McFarlane as at August 31, 2021		59,075,000	2,136,510	-	-	5,500,000	531,968	(1,230,433)	1,438,045
Shares issued in private placements	4a	7,955,000	2,187,625	3,977,500	994,375	-	-	-	3,182,000
Shares issued in private placements (Subco)	4a	65,500	18,013	32,750	8,188	-	-	-	26,200
Flow through shares issued in private placements	4a	7,717,500	3,087,000	-	-	-	-	-	3,087,000
Premium on Flow through shares	4a		(964,688)	-	-	-	-	-	(964,688)
Issuance costs	4a	-	(1,001,473)	-	-	-	-	-	(1,001,473)
Issuance of Broker Warrants	4a	-	-	-	-	-	308,793	-	308,793
Issuance of Advisory Warrants	4a	-	-	-	-	-	97,125	-	97,125
Shares issued for services (corporate finance advisory fee)	4a	391,813	107,748	195,906	48,977	-	-	-	156,725
Shares issued for services (finder's fee)	4e	443,000	121,825	-	-	-	-	-	121,825
Shares issued to 1287401 shareholders	4b	3,750,000	1,031,250	-	-	-	-	-	1,031,250
Transaction costs	4b,4d&4e	-	-	-	-	-	-	(1,377,503)	(1,377,503)
Total pro forma shareholders' equity		79,397,813	6,723,810	4,206,156	1,051,539	5,500,000	937,886	(2,607,936)	6,105,300

SCHEDULE "F"

AUDIT COMMITTEE CHARTER

The Audit Committee (the "Committee") is a committee of the board of directors (the "Board") of McFarlane Lake Mining Limited (the "Company"). The role of the Committee, subject to applicable laws and obligations imposed by the Company's constating documents, is to:

• a) provide independent and objective oversight of the Company's financial management and of the design and implementation of an effective system of internal financial controls;
• b) to review and report to the Board on the integrity of the financial statements of the Company, its subsidiaries and associated companies, including:
  • i. helping directors meet their responsibilities;
  • ii. facilitating better communication between directors and the external auditor;
  • iii. enhancing the independence of the external auditor;
  • iv. increasing the credibility and objectivity of financial reports; and
  • v. strengthening the role of the directors by facilitating in-depth discussions among directors, management and the external auditor.
• c) provide a platform for communication among the Company's auditors, financial and senior management, the Committee and the Board.

While the Committee has the responsibilities and powers set forth in this Charter, management is responsible for establishing and maintaining those controls, procedures and processes and the Committee is appointed by the Board to review and monitor them.

1. COMMITTEE STRUCTURE

Membership

The Committee shall be comprised of at least three members of the Board, each of whom the Board shall determine is free from any relationship that could reasonably be expected to interfere with the exercise of his or her judgment as a member of the Committee and is otherwise "independent" as required under applicable securities rules and stock exchange rules, including within the meaning of National Instrument 52-110 – Audit Committees.

Members of the Committee shall be appointed from time to time by the Board and may be removed from office or replaced at any time by the Board. Any member shall cease to be a member upon ceasing to be a director. Each member of the Committee shall hold office until the close of the next annual meeting of shareholders of the Company or until the member ceases to be a director, resigns or is replaced, whichever first occurs.

Where a vacancy occurs at any time in the membership of the Committee, it may be filled by the Board. The Board shall fill any vacancy whenever necessary to maintain a Committee membership of at least three directors.

All members of the Committee must be "financially literate"; for the purposes of this Charter "financially literate" shall mean the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Company's financial statements. Additionally, at least one member of the Committee must be "financially sophisticated" (i.e., have past employment experience in finance or accounting, requisite professional certification in accounting, or any other comparable experience or background which results in the individual's financial sophistication, including but not limited to being or having been a chief executive officer, chief financial officer, other senior officer with financial oversight responsibilities, or otherwise qualifies as an audit committee financial expert).

Procedures

The Board shall appoint one of the directors elected to the Committee as the Chair of the Committee (the "Chair"). In the absence of the appointed Chair from any meeting of the Committee, the members shall elect a Chair from those in attendance to act as Chair of the meeting.

The Chair will appoint a secretary (the "Secretary") who will keep minutes of all meetings. The Secretary does not have to be a member of the Committee or a director and can be changed by simple notice from the Chair. Minutes of each Committee meeting shall be kept and made available to the Board.

No business may be transacted by the Committee except at a meeting of its members at which a quorum of the Committee is present or by resolution in writing signed by all the members of the Committee. A majority of the members of the Committee shall constitute a quorum, provided that if the number of members of the Committee is an even number, one-half of the number of members plus one shall constitute a quorum.

The Committee will meet at least once each fiscal quarter, and as many times as is necessary to carry out its responsibilities. Any member of the Committee or the external auditor may call meetings.

The time and place of the meetings of the Committee, the calling of meetings and the procedure in all respects of such meetings shall be determined by the Committee, unless otherwise provided for in the articles of the Company or otherwise determined by resolution of the Board.

The Company shall provide the Committee with the resources necessary to discharge its duties and responsibilities, including the authority to select, retain, terminate, and approve the fees and other retention terms (including termination) of special counsel, advisors or other experts or consultants, as it deems appropriate.

The Committee shall have unrestricted access to the Company's personnel and documents and shall be provided with the resources necessary to carry out its responsibilities and shall discuss with the CEO or CFO such records and other matters considered appropriate.

The Committee shall have the authority to seek any information it requires from employees – all of whom are directed to cooperate with the Committee's requests.

At the invitation of the Chair, individuals who are not members of the Committee may attend any meeting of the Committee.

2. OPERATION OF THE COMMITTEE

Responsibility for the Company's financial reporting, accounting systems and internal controls is vested in the officers of the Company and is overseen by the Board.

The responsibility of the Committee is to assist the Board in fulfilling its oversight responsibilities. The Committee will have the following duties and responsibilities:

External Auditor

• To recommend to the Board, for shareholder approval, an external auditor to examine the Company's accounts, controls and financial statements on the basis that the external auditor is accountable to the Board and the Committee as representatives of the shareholders of the Company, with the external auditor reporting directly to the Committee.

• To evaluate and recommend to the Board the compensation of the external auditor, which shall be approved by the Board.

• To oversee the work of the external auditor engaged for the purpose of preparing or issuing an auditor's report or performing other audit, review or attest services for the Company, including the resolution of disagreements between management and the external auditor regarding financial reporting.

• To evaluate the audit services provided by the external auditor, pre-approve all audit fees and recommend to the Board, if necessary, the replacement of the external auditor.

• To pre-approve any non-audit services to be provided to the Company by the external auditor and the fees for those services.

• To obtain and review, at least annually, a written report by the external auditor setting out the auditor's internal quality-control procedures, any material issues raised by the auditor's internal quality-control reviews and the steps taken to resolve those issues.

• To review and approve the Company's hiring policies regarding partners, employees and former partners and employees of the present and former external auditor of the Company. The Committee has adopted the following guidelines regarding the hiring of any partner, employee, reviewing tax professional or other person providing audit assurance to the external auditor of the Company on any aspect of its certification of the Company's financial statements:

  • subject to the discretion of the Committee, no member of the audit team that is auditing a business of the Company can be hired into that business or into a position to which that business reports for a period of three years after the audit;
  • subject to the discretion of the Committee, no former partner or employee of the external auditor may be made an officer of the Company or any of its subsidiaries for three years following the end of the individual's association with the external auditor;
  • the CEO must approve all officer hires from the external auditor; and
  • the CEO must report annually to the Committee on any hires within these guidelines during the preceding year.

• To review, at least annually, the relationships between the Company and the external auditor in order to establish the independence of the external auditor, including receipt from the external auditor of a formal written statement delineating all relationships between the Company and the external auditor.

• Review and discuss with the external auditors any disclosed relationships or services that may affect the objectivity and independence of the external auditors.

• To take, or recommend that the Board take, any other appropriate action to oversee the independence of the external auditor.

• To provide the opportunity for open communication between the Company, the external auditor and the Board.

• Review and assist in the resolution of any significant disagreement between management and the external auditors in connection with the preparation of the financial statements and financial reporting generally.

• To discuss the planning of the audit with the external auditor including:

  • the general approach taken in conducting the audit including any areas of particular concern or interest to the Committee or management and any extensions to the audit scope requested by the Committee or management;
  • areas of the financial statements identified as having a high risk of material misstatement and the auditor's response thereto;
  • the materiality and audit risk level on which the audit is based;
  • the extent of audit work related to internal controls;
  • the planned reliance on the work of other auditors, how the expectations shall be communicated to the other auditors and how their findings shall be communicated to the Committee; and

the timing and estimated fees of the audit.

Financial Information and Reporting

• To review the financial statements and related notes of the Company before their submission to the Board, including the annual and interim financial statements, auditors' opinion, management letters, management's discussion and analysis of operations and financial press releases for the purpose of recommending approval by the Board prior to its release. Meet with the external auditor, with and without management present, to review the financial statements and the results of their audit, including:
  • assessing the risk that the financial statements contain material misstatements;
  • assessing the accounting principles used and their application, as well as being aware of new and developing accounting standards that may affect the Company;
  • assessing the significant estimates made by management; and
  • assessing the disclosures in the financial statements.
• Consider the external auditor's judgments about the quality and appropriateness of the Company's accounting principles, practices and internal controls as applied in its financial reporting.
• To review the quality and not just the acceptability of the Company's financial reporting and accounting standards and principles and any proposed material changes to them or their application.
• To disclose annually in the Company's Annual Information Form (and by cross-reference, in the Management Information Circular) information on the carrying out of its responsibilities under this Charter and on other matters as required by applicable securities regulatory authorities.

Oversight

• To review and provide appropriate oversight of any related party or conflicted transactions, whether actual or perceived.
• To review the internal audit staff functions, including:
  • the purpose, authority and organizational reporting lines; and
  • the annual audit plan, budget and staffing.
• To review, with the CEO and the CFO and others, as appropriate, the Company's internal system of audit controls and the results of internal audits.
• To review and monitor the Company's major financial risks and risk management policies, the effectiveness and efficiency of such policies, and the steps taken by management to mitigate those risks.
• To review the Company's disclosure controls and procedures and internal control over financial reporting (the "Controls"), and consider whether the Controls:
  • provide reasonable assurance that material information relating to the Company, including its consolidated subsidiaries, if any, is made known to the Company's CEO and CFO, particularly during the period in which the Company's annual filings are being prepared; and
  • provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the Company's GAAP.
• To meet at least annually with management (including the CEO and CFO), the internal audit staff, and the external auditor in separate executive sessions and review issues and matters of concern respecting audits and financial reporting.
• In connection with the annual audit, review material written matters between the external auditor and management, such as management letters, schedules of unadjusted differences and analyses of alternative assumptions, estimates or generally accepted accounting methods.

• In connection with its review of the annual audited financial statements and interim financial statements, the Committee will also review the process for the CEO and CFO certifications (if required by law or regulation) with respect to the financial statements and the Company's disclosure and internal controls, including any material deficiencies or changes in those controls.

Other Responsibilities

• Review with management the Company's financial fraud risk assessment, including an annual review of the top fraud risks identified by management, and the policies and practices adopted by the Company to mitigate those risks.
• Establish procedures for:
  • the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters; and
  • the confidential anonymous submission by employees of the Company of concerns regarding potential fraud or questionable accounting or auditing matters, as may be set out in the Company's Whistleblower Policy;

and review periodically with management and the internal auditors these procedures and any significant complaints received.

3. REPORTS

The Committee shall produce the following reports and provide them to the Board:

• (a) an annual performance evaluation of the Committee. The performance evaluation by the Committee shall be conducted in such manner as the Committee deems appropriate however shall consider this Charter. The report to the Board may take the form of an oral report by the Chair or any other member of the Committee designated by the Committee to make this report; and
• (b) a summary of the actions taken at each Committee meeting, which shall be presented to the Board at the next Board meeting.

4. REVIEW OF CHARTER, AMENDMENT, MODIFICATION AND WAIVER

The Committee shall review and reassess the adequacy of this Charter at least annually and otherwise as it deems appropriate and recommend changes to the Board.

This Charter may be amended or modified by the Board, subject to disclosure and other policies and guidelines of relevant securities regulators and applicable securities laws and stock exchange rules.

Approved by the Board of Directors on [•].

SCHEDULE G DDSU PLAN

DIRECTORS' DEFERRED SHARE UNIT PLAN EFFECTIVE AS OF JANUARY 14, 2022

ARTICLE I DEFINITIONS

• 1. When used herein, the following terms shall have the following meanings:

• (a) "Associated Company" means any subsidiary or affiliate of the Company.

• (b) "Administrator" means the Board or, if so delegated by the Board to administer the Plan, the Compensation Committee, or any one or more directors, officers or employees of the Company and/or its subsidiaries designated by the Board or the Compensation Committee to administer the Plan pursuant to Section 2.2.

• (c) "Annual Meeting" means the annual meeting of the shareholders of the Company.

• (d) "Beneficiary" means the person designated by the Participant in writing, as filed with the Company, to receive the Participant's interest in the Plan in the event of the Participant's death or, failing any such designation, the Participant's estate.

• (e) "Board" means the board of directors of the Company.

• (f) "Board Compensation" means all compensation paid by the Company in a calendar year to a Director for service on the Board.

• (g) "Business Day" means any day, other than a Saturday or a Sunday, on which the Exchange is open for trading.

• (h) "Change of Control" means, the occurrence of any of the following, in one transaction or a series of related transactions:

  • (i) the acquisition by any person or persons acting jointly or in concert (as determined by the Securities Act (Ontario)), whether directly or indirectly, of voting securities of the Company that, together with all other voting securities of the Company held by such person or persons, constitute in the aggregate more than 50% of the voting power attached to all outstanding voting securities of the Company;
  • (ii) an amalgamation, arrangement, consolidation, share exchange or other form of business combination of the Company with another entity that results in the holders of voting securities of that other entity holding, in the aggregate, more than 50% of the voting power attached to all outstanding voting securities of the entity resulting from the business combination;

• (iii) the sale, lease or exchange of all or substantially all of the property of the Company or any of its subsidiaries to another person, other than in the ordinary course of business of the Company and other than such sale, lease or exchange to a whollyowned subsidiary of the Company;

• (iv) the liquidation or dissolution of the Company; or

• (v) any other transaction that is deemed by the Administrator(s) in its sole discretion to be a "Change in Control" for the purposes of the Plan.

• (j) "Code" means the U.S. Internal Revenue Code of 1986, as amended and the Treasury Regulations ("Regulations") promulgated thereunder.

• (k) "Common Share" means a common share in the capital of the Company.

• (l) "Company" means McFarlane Lake Mining Limited. (formerly "1287401 B.C. Ltd.") and any Successor thereto.

• (m) "Compensation Committee" means the Compensation Committee of the Board.

• (n) "Directors' Deferred Share Unit" or "DDSU" means a right of a Participant, in accordance with the terms and conditions of the Plan, to receive the cash equivalent of the Fair Market Value (determined in accordance with this Plan) of one Common Share.

• (o) "Directors' Deferred Share Unit Account" or "DDSU Account" means a bookkeeping account established by the Company in the name of each Participant holding DDSUs, setting out the number of DDSUs to which the Participant is entitled at any particular time.

• (p) "Director" means a person who is elected, appointed or otherwise lawfully serves as a member of the Board.

• (q) "Distribution" means, with respect to the Common Shares, a dividend or other distribution of money or property to all or substantially all holders of Common Shares.

• (r) "Dividend Reinvestment" means the notional acquisition, as of the payment or distribution date for any Distribution, of any additional Common Shares so distributed, or in the case of a Distribution of any other property, means the notional purchase of additional Common Shares, at Fair Market Value determined as of the applicable payment or distribution date, with the notional payment or distribution proceeds (valued, in the case of proceeds paid or distributed in property other than money, at fair market value as determined by the Administrator(s) in its discretion).

• (s) "Effective Date" means January 14, 2022, being the effective date for commencement of the Plan.

• (t) "Exchange" means the Neo Exchange Inc., or if the Common Shares are not listed on the Neo Exchange Inc., such other stock exchange on which the Common Shares are listed, or if the Common Shares are not listed on any stock exchange, then on the over-thecounter market.

• (u) "Fair Market Value" means the fair market value of a Common Share which shall be equal to the volume weighted average trading price of a Common Share on the Exchange for the five Business Days on which Common Shares traded on such exchange immediately preceding the applicable date; provided that in the event that Common Shares are not listed and posted for trading on any stock exchange, the Fair Market Value of a Common Share shall be the fair market value of a Common Share as determined by the Administrator(s) in its sole discretion, which will take into account conformity with U.S. Treasury Regulations Section 1.409A-1(b)(5)(iv)(B).

• (v) "Final Redemption Date" means with reference to a Participant, the last Trading Day of the Redemption Period applicable to the Participant.

• (w) "Grant Date" means the date on which a DDSU is granted to a Participant.

• (x) "Non-Executive Director" means a Director who is not an employee or executive of the Company or an Associated Company.

• (y) "Participant" means a Non-Executive Director who is eligible to participate in the Plan in accordance with Article III.

• (z) "Plan" means this DDSU Plan and "Article", "Section", and "Subsection" refer to the corresponding article, section or subsection of this Plan.

• (aa) "Redemption Date" means the date during the Redemption Period as of which a Participant elects in writing pursuant to Section 5.1 of this Plan to redeem his or her DDSUs, which date shall not be earlier than the date of the notice in writing nor later than the Final Redemption Date. In the event a Participant fails to provide the Company with notice in writing redeeming his or her DDSUs prior to the end of the Redemption Period, the Redemption Date shall be deemed to be the Final Redemption Date. Notwithstanding the foregoing, with respect to a Participant who is a U.S. Participant, "Redemption Date" means the ninetieth (90th) day following the date such Participant ceases to be a Director, including on account of death.

• (bb) "Redemption Period" has the meaning as set out in Section 5.1 of this Plan.

• (cc) "Successor" means any person formed by the merger, amalgamation, consolidation or statutory arrangement of the Company with or into any other person.

• (dd) "Tax Act" means the Income Tax Act (Canada) as amended from time to time.

• (ee) "Trading Day" means any date on which the Exchange is open for the trading of shares.

(ff) "U.S. Participant" means a Participant who, at any time during the period from the Grant Date of the DDSUs until the date the DDSUs are settled, is subject to income taxation in the United States on the income received for his or her services as a Director of the Company and who is not otherwise exempt from U.S. income taxation under the relevant provisions of the Code or the Canada-U.S. Income Tax Convention, as amended from time to time.

ARTICLE II GENERAL

2.1 Purpose

The purpose of the Plan is to enhance the Company's ability to attract and retain talented individuals to serve as Directors and to promote a greater alignment of interests between Directors and the shareholders of the Company through the holding by Directors of instruments that reflect the market value of the Company.

2.2 Administration

The Plan shall be administered by the Board, which shall have sole and complete authority to interpret the Plan, to adopt, amend and rescind administrative guidelines and other rules and regulations relating to the Plan, and to make all other determinations and take all other actions necessary or advisable for the implementation and administration of the Plan. The Board may, in its discretion, delegate such of its powers, rights and duties under the Plan, in whole or in part, to the Compensation Committee or any one or more directors, officers or employees of the Company and/or its subsidiaries as the Board (or, if delegated by the Board to administer the Plan, the Compensation Committee) may determine from time to time, on terms and conditions as it may determine, except the Board and the Compensation Committee shall not, and shall not be permitted to, delegate any such powers, rights or duties to the extent such delegation is not consistent with applicable law. Where the term "Administrator" appears in this Plan, it shall be deemed to mean the Board, or the Compensation Committee or such director(s), officer(s), or employee(s) to whom the powers of the Board have been so delegated. Any decision made or action taken by the Board or any delegate arising out of or in connection with the administration or interpretation of the Plan in this context shall be final and conclusive and binding upon the Board, the Participants and all other persons.

2.3 Interpretation

• (a) Whenever the Administrator(s) is to exercise discretion in the administration of terms and conditions of this Plan, the term discretion shall mean their sole and absolute discretion.

• (b) For the purposes of determining the effective date of the occurrence of any event referred to in this Plan, the term "date" or "effective date" shall refer to the date which may be fixed by the Administrator(s).

• (c) Unless otherwise noted, all dollar amounts in this Plan are in Canadian funds. The Administrator(s) shall, in its discretion, convert, on such basis as it deems appropriate, any amount expressed in any other currency into Canadian currency.

• (d) Upon any payout of the value of any DDSUs pursuant to the terms of the Plan, in particular pursuant to Article V hereof, such DDSUs shall be cancelled without further compensation or payment in any manner whatsoever and upon such cancellation shall be null, void and of no further force or effect.

2.4 DDSU Account Statement

At such times as the Administrator(s) shall determine, but not less than once annually, the Company shall furnish each Participant with a statement setting forth the details of the DDSUs credited to each Participant in his or her DDSU Account.

ARTICLE III ELIGIBILITY

3.1 Participants

• (a) Every person who is a Non-Executive Director as of the Effective Date shall become a Participant as of that date.
• (b) Subject to Subsection 3.1(c) below, every person who becomes a Director after the Effective Date through election at an Annual Meeting, or who is appointed or elected as a Director other than at an Annual Meeting, shall become a Participant as of the date of election or appointment, as the case may be, provided they are a Non-Executive Director of the Company.
• (c) Every person who is re-elected as a Director at an Annual Meeting and who immediately prior to such re-election was a Participant shall continue to be a Participant.

3.2 Cessation of Participation

A person ceases to be a Participant at such time as such person ceases to be a Director for any reason.

ARTICLE IV GRANTS OF DDSUs AND DDSU ACCOUNTS

4.1 Grant of DDSUs

(a) DDSUs form an important component of the annual Board Compensation for eligible Participants.

(b) The Administrator(s) shall have the right to grant, in its sole and absolute discretion, DDSUs to any Participants, subject to the terms of this Plan and with such provisions and restrictions as the Administrator(s) may determine, including, but not limited to, provisions and restrictions regarding the number of DDSUs awarded, the vesting conditions of such DDSUs, the conditions, if any, upon which vesting of any DDSUs will be waived or accelerated without further action by the Administrator(s), and the circumstances in which a DDSU will be forfeited, cancelled or expire. Notwithstanding the foregoing, in accordance with Section 5.1, the redemption of DDSUs shall be payable in cash.

4.2 Grant Confirmation

Each grant of a DDSU shall be confirmed in writing in the form set out on Schedule A or such other form as the Administrator(s) may determine from time to time. Failure to provide a confirmation shall not invalidate the grant of any DDSUs which are reflected in a Participant's DDSU Account.

4.3 DDSU Accounts

The Company shall establish and maintain a DDSU Account for each Participant. The number of DDSUs held by a Participant at any particular time shall be adjusted from time to time in accordance with Article VI of this Plan or as otherwise provided herein.

ARTICLE V REDEMPTION OF DDSUs

5.1 Ceasing to be a Director

When a Participant ceases to be a Director for any reason other than death, each DDSU held by the Participant that has vested in accordance with the terms of such DDSUs will be eligible for redemption for (i) a period of up to 90 days after the date such Participant ceases to be a Director or (ii) such other "reasonable" period as may be determined by the Administrator(s) at the time such DDSUs are granted, which reasonable period cannot be less than 90 days without the agreement of the Participant and cannot be later than December 1st of the calendar year following the year in which the Participant ceased to be a Director (the "Redemption Period"). During the Redemption Period, the Participant may redeem all or any part of his or her vested DDSUs on one or more occasions by providing notice in writing to the Company, which notice shall state the Redemption Date and the number of DDSUs to be redeemed. Except as provided in Section 5.2, the value of the vested DDSUs credited to a Participant's DDSU Account shall be determined in accordance with Section 5.4 as of the Redemption Date and shall be payable, net of any applicable withholdings, in cash to the Participant as soon as practicable after the Redemption Date.

Notwithstanding the above, for U.S. Participants, the redemption notice described above will not be available, and the U.S. Participant's vested DDSUs will be automatically redeemed, without the need for action by the U.S. Participant, and paid, net of applicable withholdings, in cash to the U.S. Participant on the Redemption Date.

5.2 Death

When a Participant ceases to be a Director due to his or her death, the notice contemplated by Section 5.1 of this Plan may be delivered by the Beneficiary. The value of the Participant's vested DDSUs shall be determined in accordance with Section 5.4 as of the Redemption Date and shall be payable to the Beneficiary, net of any applicable withholdings, as soon as practicable after the Redemption Date.

Notwithstanding the above, for Beneficiaries of U.S. Participants, the redemption notice described above will not be available, and the Beneficiary's vested DDSUs will be automatically redeemed, and shall be payable, net of applicable withholdings, in cash to the Beneficiary on the Redemption Date.

5.3 Effect of Change of Control

Notwithstanding any other provision of this Plan, in the event of a Change of Control of the Company, for the purposes of Section 5.1, all DDSUs that have been granted shall be deemed to be vested as of the date of the Change of Control.

5.4 Valuation

For purposes of determining the value of DDSUs for payment, under Sections 5.1 and 5.2, to a Participant or where the Participant has died, his or her Beneficiary, in each case, the Participant or Beneficiary shall receive a payment in cash, net of any applicable withholdings, equal to the Fair Market Value of a Common Share multiplied by the number of vested DDSUs (including the value of any fractional DDSUs) credited to a Participant's DDSU Account. The Fair Market Value of a Common Share for such calculation will be determined for purposes of Sections 5.1 and 5.2 as of the Redemption Date.

ARTICLE VI ADJUSTMENTS

6.1 General

The existence of any DDSUs shall not affect in any way the right or power of the Company or its shareholders:

• (i) to make or authorize any adjustment, recapitalization, reorganization or any other change in the Company's capital structure or its business, or any amalgamation, combination, merger or consolidation involving the Company;

• (ii) to create or issue any bonds, debentures, shares or other securities of the Company or the rights and conditions attaching thereto;

• (iii) to effect the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business; or

• (iv) to undertake any other corporate act or proceeding, whether of similar character or otherwise.

6.2 Reorganization

Should the Company effect a subdivision or consolidation of Common Shares, the number of DDSUs held by a Participant shall be automatically adjusted, as of the record date for such subdivision or consolidation, in the same proportions as the number of Common Shares is adjusted pursuant to such subdivision or consolidation. Should any other change be made to the Common Shares of the Company which, in the opinion of the Administrator(s), would warrant the replacement of or an adjustment to any existing DDSUs in order to preserve proportionately the rights and obligations of Participants, the Company shall authorize such steps to be taken as may be equitable and appropriate to that end, and upon the Company notifying a Participant of any such action by the Company, the Participant's DDSUs shall be deemed to be adjusted accordingly.

6.3 Distributions

Should the Company fix a record date for a Distribution to holders of Common Shares, the number of DDSUs held by a Participant holding such DDSUs as of such record date shall be automatically adjusted on the applicable payment or distribution date, as if each DDSU held by the Participant immediately prior to the record date was a Common Share, and as if on the payment or distribution date, the additional Common Shares that would have been received in the Distribution (assuming notional Dividend Reinvestment) were converted back into DDSUs, on a one for one basis.

6.4 Other Events Affecting the Company

In the event of an amalgamation, combination, merger, Change of Control (actual or, in the opinion of the Administrator(s), pending) or other reorganization involving the Company, by take-over bid, plan of arrangement, exchange of shares, sale or lease of assets, or otherwise, which in the opinion of the Administrator(s) warrants the replacement or modification of any existing DDSUs in order to adjust:

• (i) the number thereof;
• (ii) the manner in which the value of DDSUs shall be calculated; or
• (iii) any other attribute of a DDSU,

in order to preserve the rights and obligations of Participants, the Administrator(s) shall authorize such steps to be taken as may be equitable and appropriate to that end, provided that no alteration pursuant to this paragraph shall be made to the terms of the DDSUs which, in the opinion of the Company's professional advisors, would disqualify this Plan or an entitlement hereunder from being a prescribed plan for the purposes of the definition of "salary deferral arrangement" pursuant to the Tax Act and regulations thereunder, and provided further that no such modification affecting a Participant shall be made after a Change of Control without the written consent of the affected Participant.

6.5 Issue by Company of Additional Shares

Except as expressly provided in this Plan, the issue by the Company of shares of any class, or securities convertible into shares of any class, for money, services or property either upon direct sale or upon the exercise of rights or warrants to subscribe therefore, or upon conversion of obligations of the Company convertible into such shares or securities, shall not affect, and no adjustment by reason thereof shall be made with respect to:

• (i) the number of DDSUs outstanding at any time;
• (ii) the manner in which the value of DDSUs shall be calculated; or
• (iii) any other attribute of a DDSU.

6.6 Limitation

Notwithstanding anything herein, a decision of the Administrator(s) in respect of any and all matters falling within the scope of this Article VI shall be final, binding and conclusive and without recourse on the part of any Participant and his or her heirs, legal representatives or Beneficiaries.

ARTICLE VII MISCELLANEOUS PROVISIONS

7.1 Legal Requirements

The Company shall not be obligated to make any payments or take any other action under the Plan if, in the opinion of the Administrator(s) exercising its discretion, such action would constitute a violation by a Participant or the Company of any provision of any applicable statutory, regulatory or policy enactment of any government or government agency, stock exchange or other regulatory authority having jurisdiction over the Company or a Participant. Each Participant agrees, as a condition to receiving DDSUs under the Plan, to comply with all such statutory and regulatory requirements and to furnish the Company with all information and undertakings as may be required to permit such compliance.

7.2 Employment or Other Relationship.

The granting of DDSUs to a Participant shall not impose upon the Company any obligation to retain the Participant in its employ in any capacity or otherwise commence, extend, continue or modify any engagement between the Company and the Participant. For greater certainty, the granting of DDSUs to a Participant shall not impose any obligation on the Company to grant any DDSUs in the future nor shall it entitle the Participant to receive future grants.

7.3 Withholding Taxes

Notwithstanding any other provision contained herein, the Company shall be entitled to withhold from any amount payable to a Participant, either under this Plan or otherwise, such amounts as may be necessary so as to ensure that the Company is in compliance with the applicable provisions of the Income Tax Act (Canada) or any other federal, provincial or local law relating to the withholding of tax or other required deductions relating to the settlement of such DDSU. It is the responsibility of the Participant to complete and file any tax returns which may be required within the periods specified in applicable laws as a result of the Participant's participation in the Plan. The Company shall not be held responsible for any tax consequences to a Participant as a result of the Participant's participation in the Plan and the Participant shall indemnify and save harmless the Company from and against any and all loss, liability, damage, penalty or expense (including legal expense), which may be asserted against the Company or which the Company may suffer or incur arising out of, resulting from, or relating in any manner whatsoever to any tax liability in connection therewith.

7.4 Rights of Participants

No Participant or Director shall have any claim or right to be granted DDSUs except in accordance with this Plan, and the granting of same shall not be construed as giving any person a right to be retained as a Director. No Participant shall have any rights as a shareholder of the Company in respect of DDSUs. Subject only to Section 6.3, under no circumstances shall DDSUs be considered Common Shares, nor shall DDSUs entitle any Participant to the exercise of voting rights, the receipt of dividends or the exercise of any other rights attaching to the ownership of Common Shares.

7.5 Non-Transferability

DDSUs granted under this Plan are non-transferable and no assignment, encumbrance or transfer thereof, whether voluntary, involuntary, by operation of law or otherwise, shall vest any interest or right in such DDSUs whatsoever in any assignee or transferee, but immediately upon any purported assignment or transfer, such DDSUs shall terminate and be of no further effect. Notwithstanding the foregoing, DDSUs may pass to a Beneficiary on death as provided for in Article 5.

7.6 Amendment or Discontinuance

Subject to receipt of any necessary regulatory or other approval, the Administrator(s) may, at any time or from time to time, amend, suspend or terminate the Plan or any provisions thereof in such respects as it, in its sole discretion, may determine appropriate; provided, however, that no amendment, suspension or termination of the Plan shall, without the written consent of any Participant or the Participant's Beneficiary, as applicable, alter or impair any rights or obligations arising from any DDSUs held by a Participant under the Plan; and provided further that no alteration pursuant to this Section 7.6 shall be made to the terms of the DDSUs or this Plan which, in the opinion of the Company's professional advisors, would disqualify the Plan and an entitlement to DDSUs hereunder from being a prescribed plan for the purposes of the definition of "salary deferral arrangement" pursuant to the Income Tax Act (Canada) and the regulations thereunder.

7.7 Indemnification

Every Administrator (herein, an "Indemnified Person") shall at all times be indemnified and saved harmless by the Company from and against all costs, charges and expenses whatsoever including any income tax liability arising from any such indemnification, which such Indemnified Person may sustain or incur by reason of any action, suit or proceeding, proceeded or threatened against the Indemnified Person, otherwise than by the Company, for or in respect of any act done or omitted by the Indemnified Person in good faith in respect of the Plan, such costs, charges and expenses to include any amount paid to settle such action, suit or proceeding or in satisfaction of any judgment rendered therein.

7.8 Miscellaneous

The Administrator(s) may adopt and apply rules that, in its opinion, will ensure that the Company will be able to comply with the applicable provisions of any federal, provincial or local law relating to taxes.

7.9 Code Section 409A for U.S. Participants

It is intended that DDSUs granted under the Plan to U.S. Participants shall comply with Code section 409A, and all provisions of this Plan shall be construed and interpreted in a manner consistent with the requirements for avoiding taxes, penalties or interest under Code section 409A. Notwithstanding anything in the Plan to the contrary, the following will apply with respect to the rights and benefits of U.S. Participants under the Plan:

• (i) Except as permitted under Code section 409A, any deferred compensation (within the meaning of Code section 409A) payable to or for the benefit of a U.S. Participant under the Plan may not be reduced by, or offset against, any amount owing by the U.S. Participant to the Company or any Associated Company.
• (ii) Each U.S. Participant, any Beneficiary of a U.S. Participant or the U.S. Participant's estate, as the case may be, is solely responsible and liable for the satisfaction of all taxes, penalties and interest that may be imposed on or for the account of such U.S. Participant in connection with this Plan (including any taxes, penalties and interest under Code section 409A), and neither the Company nor any Associated Company shall have any obligation to indemnify such U.S. Participant or Beneficiary or the U.S. Participant's estate for any or all of such taxes, penalties or interest.
• (iii) In the event that the Administrator(s) determines that any amounts payable hereunder will be taxable to a Participant under Code section 409A prior to payment to such Participant of such amount, the Administrator(s) may (a) adopt such amendments to the Plan and DDSUs and appropriate policies and procedures, including amendments and policies with retroactive effect, that the

Administrator(s) determines necessary or appropriate to preserve the intended tax treatment of the benefits provided by the Plan and DDSUs hereunder and/or (b) take such other actions as the Administrator(s) determines necessary or appropriate to avoid or limit the imposition of any additional tax, penalty or interest under Code section 409A.

(iv) In the event the Administrator(s) terminates the Plan in accordance with Section 6, the time and manner of payment of amounts that are subject to Code section 409A will be made in accordance with the rules under Code section 409A.

7.10 Effective Date

This Plan shall become effective on January 14, 2022.

7.11 Governing Law

This Plan is created under and shall be governed, construed and administered in accordance with the laws of the Province of Ontario and the laws of Canada as applicable therein.

* * * * *

Adopted by and pursuant to a resolution of the disinterested holders of Common Shares of McFarlane Lake Mining Limited (formerly 1287401 B.C. Ltd.) on December 7, 2021.

SCHEDULE A

GRANT CONFIRMATION

TO: (the "Participant")

Pursuant to the Directors' Deferred Share Unit Plan (the "Plan") of McFarlane Lake Mining Limited. (the "Company") dated January 14, 2022, the Company confirms that following grant of DDSUs to the Participant. All capitalized terms used in this Grant Confirmation have the meanings given to them in the Plan.

____________ Director DSUs

Grant Date: ___________ , ________________

Vesting and other conditions: _____________________________________________

The granting and redemption of the DDSUs are subject to the terms and conditions of the Plan. The undersigned Participant acknowledges having received (or accessed electronically) a copy of the Plan and agrees to be subject to the terms and conditions of the Plan.

Each U.S. Participant is solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on or for the account of such U.S. Participant in connection with the Plan (including any taxes and penalties under Section 409A), and neither the Company nor any Affiliate shall have any obligation to indemnify or otherwise hold such U.S. Participant or beneficiary or the U.S. Participant's estate harmless from any or all such taxes or penalties.

DATED this _______ day of _________________ , _________ .

Per:

Authorized Signatory

The undersigned Participant hereby acknowledges and agrees to the foregoing this this _________ day of _______________________ , _________ .

Beneficiary Designation

In the event of my death while I am still a Participant in the Plan, I hereby designate _________________________ my Beneficiary for all Director DSUs outstanding.

The effect of this designation shall be to cancel all previous designations made by me in respect of this Plan.

Witness Participant name:

SCHEDULE H RESULTING ISSUER PR PLAN

MCFARLANE LAKE MINING LIMITED

(formerly "1287401 B.C. Ltd.")

PERFORMANCE AND RESTRICTED SHARE UNIT PLAN

1. PREAMBLE AND DEFINITIONS

1.1 Title and Conflict.

The Plan described in this document shall be called the "Performance and Restricted Share Unit Plan".

In the event of any conflict or inconsistency between the Plan described in this document and the Award Agreement (as defined below), the terms and conditions of the Award Agreement shall prevail.

The Plan shall be governed and interpreted in accordance with the laws of the Province of Ontario.

1.2 Purpose of the Plan.

The purposes of the Plan are:

• (i) to promote a significant alignment between employees and directors of the Corporation and its Subsidiaries and the growth objectives of the Corporation and its Subsidiaries;
• (ii) to associate a portion of participating employees' and directors' compensation with the performance of the Corporation and its Subsidiaries over the long term; and
• (iii) to attract and retain critical personnel to drive the business success of the Corporation and its participating Subsidiaries.

1.3 Definitions.

• 1.3.1 "Account" has the meaning set out in Section 5.1.

• 1.3.2 "Applicable Law" means any applicable provision of law, domestic or foreign, including, without limitation, applicable securities and tax legislation, together with all regulations, rules, policy statements, rulings, notices, orders or other instruments promulgated thereunder, and Stock Exchange Rules.

• 1.3.3 "Award Agreement" means the written or electronic agreement between the Corporation and a Participant under which the terms of an award are established, as contemplated by Section 4.1, together with such schedules, amendments, deletions or changes thereto as are permitted under the Plan.

• 1.3.4 "Award Date" means the effective date of a grant of PSUs or RSUs, as applicable, to a Participant as stated in the applicable Award Agreement.

• 1.3.5 "Award PSUs" means the number of PSUs awarded to a Participant in respect of a Performance Period and as stated in the applicable Award Agreement.

• 1.3.6 "Award RSUs" means the number of RSUs awarded to a Participant as stated in the applicable Award Agreement.

• 1.3.7 "Award Value" means the value, in dollars, of an award made to a Participant and as stated in the applicable Award Agreement, which is provided under the Plan in the form of PSUs or RSUs, as the case may be.

• 1.3.8 "Board" means the Board of Directors of the Corporation.

• 1.3.9 "Change in Control" means, the occurrence of any of the following, in one transaction or a series of related transactions:

  • (i) the acquisition by any person or persons acting jointly or in concert (as determined by the Securities Act (Ontario)), whether directly or indirectly, of voting securities of the Corporation that, together with all other voting securities of the Corporation held by such person or persons, constitute in the aggregate more than 50% of the voting power attached to all outstanding voting securities of the Corporation;
  • (ii) an amalgamation, arrangement, consolidation, share exchange or other form of business combination of the Corporation with another entity that results in the holders of voting securities of that other entity holding, in the aggregate, more than 50% of the voting power attached to all outstanding voting securities of the entity resulting from the business combination;
  • (iii) the sale, lease or exchange of all or substantially all of the property of the Corporation or any of its Subsidiaries to another person, other than in the ordinary course of business of the Corporation and other than such sale, lease or exchange to a wholly-owned subsidiary of the Corporation;
  • (iv) the liquidation or dissolution of the Corporation; or
  • (v) any other transaction that is deemed by the Board in its sole discretion to be a "Change in Control" for the purposes of the Plan.

• 1.3.10 "Corporation" means McFarlane Lake Mining Limited and any successor corporation whether by amalgamation, merger or otherwise.

• 1.3.11 "Disability" means a physical or mental incapacity of the Participant that has prevented the Participant from performing the duties customarily assigned to the Participant for 180 calendar days, whether or not consecutive, out of any 12 consecutive months and that in the opinion of the Corporation, acting on the basis of advice from a duly qualified medical practitioner, is likely to continue to a similar degree.

• 1.3.12 "Dividend Equivalent Units" has the meaning set out in Section 5.2.

• 1.3.13 "Insider" means a Participant who is (a) an insider of the Corporation as defined in the Securities Act (Ontario) and (b) an associate (as defined in the Securities Act (Ontario)) of any person who is an insider by virtue of (a).

• 1.3.14 "Market Value" at any date in respect of the Shares means the volume weighted average trading price of such Shares on the NEO Exchange (or, if such Shares are not then listed and posted for trading on the NEO Exchange, on such stock exchange on which such Shares are listed and posted for trading as may be selected for such purpose by the Board) for the five consecutive trading days immediately preceding such date, provided that in the event that such Shares did not trade on any of such trading days, the Market Value shall be the average of the bid and ask prices in respect of such Shares at the close of trading on all of such trading days on which Shares did not trade and provided that in the event that such Shares are not listed and posted for trading on any stock exchange, the Market Value shall be the fair market value of such Shares as determined by the Board in its sole discretion.

• 1.3.15 "NEO Exchange" means Neo Exchange Inc.

• 1.3.16 "Participant" means such directors, officers and employees of the Corporation or any Subsidiary as the Board may designate to receive a grant of PSUs or RSUs under the Plan pursuant to an Award Agreement.

• 1.3.17 "Performance Adjustment Factor" means the performance adjustment factor (either upwards or downwards) calculated following the end of the Performance Period in accordance with the Award Agreement.

• 1.3.18 "Performance Criteria" means, in respect of a grant of a PSU, such financial and/or personal performance criteria as may be determined by the Board in respect of a grant of PSUs to any Participant and set out in an Award Agreement. Performance Criteria may apply to the Corporation, a Subsidiary, the Corporation and its Subsidiaries as a whole, a business unit of the Corporation or group comprised of the Corporation and one or more Subsidiaries, either individually, alternatively or in any combination, and measured either in total, incrementally or cumulatively over a specified Performance Period, on an absolute basis or relative to a pre-established target, to previous years' results or to a designated comparator group.

• 1.3.19 "Performance Period" means, in respect of a grant of a PSU, the particular designated time period(s) in respect of which the Performance Criteria are assessed and determined to be satisfied by the Board in order for such PSU to become a Vested PSU as set forth in the Award Agreement applicable to such grant.

• 1.3.20 "Period of Absence" means, with respect to a Participant, a period of time that lasts for at least 90 days throughout which the Participant is: (i) on a leave of absence from the Corporation or a Subsidiary that has been approved by the Corporation or Subsidiary, as applicable; (ii) on a Statutory Leave; or (ii) experiencing a Disability.

• 1.3.21 "Plan" means this Performance and Restricted Share Unit Plan, including any schedules or appendices hereto, as such may be amended from time to time and as attached to an Award Agreement.

• 1.3.22 "PSU Balance" in respect of any particular date means the number of PSUs recorded in a Participant's Account in respect of a particular Performance Period, which shall include the PSU Award plus all Dividend Equivalent Units in respect of such PSUs.

• 1.3.23 "PSU" means a Performance Share Unit granted to a Participant that is represented by a bookkeeping entry on the books of the Corporation, the value of which on any particular date shall be equal to the Market Value and which generally becomes Vested, if at all, subject to the attainment of certain Performance Criteria and satisfaction of such other conditions to Vesting, if any, as may be determined by the Board.

• 1.3.24 "RSU" means a Restricted Share Unit granted to a Participant that is represented by a bookkeeping entry on the books of the Corporation, the value of which on any particular date shall be equal to the Market Value and which generally becomes Vested, if at all, following a period of continuous employment of the Participant with the Corporation or a Subsidiary or service as a director.

• 1.3.25 "RSU Balance" in respect of any particular date means the number of RSUs recorded in a Participant's Account in respect of a particular Vesting Period, which shall include the RSU Award plus all Dividend Equivalent Units in respect of such RSUs.

• 1.3.26 "Service Provider" means a person or company engaged to provide ongoing management or consulting services for the Corporation or for any entity controlled by the Corporation.

• 1.3.27 "Share" means the common shares of the Corporation.

• 1.3.28 "Share Compensation Arrangement" means, in respect of the Corporation, a stock option, stock option plan, employee stock purchase plan, performance share unit plan, restricted share unit plan or any other compensation or incentive mechanism involving the issuance or potential issuance of Shares to directors, officers or employees of the Corporation or its Subsidiaries or to Service Providers.

• 1.3.29 "Statutory Leave" means, with respect to a Participant, a period of time throughout which the Participant is on a leave of absence to which he or she is entitled under applicable legislation and following which he or she has the right, pursuant to such legislation, to return to active employment with the Corporation or a Subsidiary.

• 1.3.30 "Stock Exchange" means the NEO Exchange, or if the Shares are not listed on the NEO Exchange, such other stock exchange on which the Shares are listed, or if the Shares are not listed on any stock exchange, then on the over-the-counter market.

• 1.3.31 "Stock Exchange Rules" means the applicable rules of the Stock Exchange.

• 1.3.32 "Subsidiary" has the meaning assigned therein in the Securities Act (Ontario) and "Subsidiaries" has a corresponding meaning but including unincorporated entities.

• 1.3.33 "United States" or "U.S." means the United States of America, its territories and possessions, any state of the United States and the District of Columbia.

• 1.3.34 "U.S. Award Holder" shall mean any holder of Award PSUs or Award RSUs who is a "U.S. person" (as defined in Rule 902(k) of Regulation S under the U.S. Securities Act) or who is holding or exercising Award PSUs or Award RSUs in the United States.

• 1.3.35 "U.S. Securities Act" means the United States Securities Act of 1933, as amended and the rules and regulations promulgated thereunder.

• 1.3.36 "Vested" means the applicable conditions for payment or other settlement in relation to a whole number, or a percentage (which may be more or less than 100%) of the number of Award PSUs or Award RSUs determined by the Board, which (i) have been met; or (ii) have been waived or deemed to be met pursuant to the terms of the Plan or the applicable Award Agreement, and "Vest" or "Vesting" have a corresponding meaning

• 1.3.37 "Vesting Date" means, with respect to a PSU or RSU, the date, as set forth in the Award Agreement, on which the applicable conditions for payment or other settlement of such PSU or RSU are met, deemed to have been met or waived as contemplated in Section 1.3.37.

2. CONSTRUCTION AND INTERPRETATION

• 2.1 Gender, Singular, Plural. In the Plan, references to the masculine include the feminine; and references to the-singular shall include the plural and vice versa, as the context shall require.
• 2.2 Governing Law. The Plan shall be governed and interpreted in accordance with the laws of the Province of Ontario and any actions, proceedings or claims in any way pertaining to the Plan shall be commenced in the courts of the Province of Ontario.
• 2.3 Severability. If any provision or part of the Plan is determined to be void or unenforceable in whole or in part, such determination shall not affect the validity or enforcement of any other provision or part thereof.
• 2.4 Headings, Sections. Headings wherever used herein are for reference purposes only and do not limit or extend the meaning of the provisions herein contained. A reference to a section or schedule shall, except where expressly stated otherwise, mean a section or schedule of the Plan, as applicable.

3. EFFECTIVE DATE AND EMPLOYMENT RIGHTS

3.1 Effective Date. The Plan is adopted subject to the approval of the NEO Exchange, any other required regulatory approval and the approval of the shareholders of the Corporation in accordance with the polices of the NEO Exchange. To the extent a provision of the Plan requires regulatory approval which is not received, such provision shall be severed from the remainder of the Plan until the approval is received and the remainder of the Plan shall remain in effect. The Plan shall become effective upon the later of the date of acceptance for filing of the Plan by the NEO Exchange and the date of approval of the Plan by the shareholders of the Corporation.

3.2 No Employment Rights. Nothing contained in the Plan shall be deemed to give any person the right to be retained as an employee of the Corporation or of a Subsidiary. For greater certainty, a period of notice, if any, or payment in lieu thereof, upon termination of employment, wrongful or otherwise, shall not be considered as extending the period of employment for the purposes of the Plan.

4. PSU AND RSU GRANTS AND PERFORMANCE PERIODS

• 4.1 Awards of PSUs and RSUs. The Plan shall be administered by the Board. The Board shall have the authority in its sole and absolute discretion to administer the Plan and to exercise all the powers and authorities either specifically granted to it under the Plan or necessary or advisable in the administration of the Plan, subject to and not inconsistent with the express provisions of this Plan, including, without limitation, the authority to:

  • 4.1.1 determine the Award Value and/or the number of PSUs or RSUs to be awarded for each award under an Award Agreement;
  • 4.1.2 make grants of PSUs and RSUs in respect of any award under an Award Agreement, provided that: (i) no Award will be granted during a blackout period or other trading restriction imposed by the Corporation or at any other time when the Board or the Corporation has any undisclosed material information; and (ii) PSUs shall not be awarded to non-employee directors of the Corporation.
  • 4.1.3 determine the Award Date for grants of PSUs and RSUs, if not the date on which the Board determines to make such grants under an Award Agreement;
  • 4.1.4 determine the Participants to whom, and the time or times at which, awards shall be made and PSUs and RSUs shall be granted under an Award Agreement;
  • 4.1.5 approve or authorize the applicable form and terms of the related Award Agreements;
  • 4.1.6 determine the terms and conditions of awards, and grants of PSUs and RSUs in respect thereof, to any Participant, including, without limitation the following, (A) the number of PSUs and RSUs to be granted; (B) the Performance Period(s) applicable to PSUs; (C) the Performance Criteria applicable to PSUs and any other conditions to the Vesting of any PSUs and RSUs granted hereunder; (D) the conditions, if any, upon which Vesting of any PSUs or RSUs will be waived or accelerated without any further action by the Board; (E) the extent to which the Performance Criteria must be achieved in order for any PSUs to become Vested PSUs and the Performance Adjustment Factor or other multiplier, if any, that will be applied to determine the number of PSUs that become Vested PSUs having regard to the achievement of the Performance Criteria; (F) the circumstances in which a PSU or RSU shall be forfeited, cancelled or expire; (G) the consequences of a termination of employment or service with respect to a PSU or RSU; (H) the manner of settlement of Vested PSUs and Vested RSUs, including whether particular Vested PSUs or Vested RSUs will be settled in cash or Shares issued from treasury; and (I) whether and the terms upon which any Shares delivered upon settlement of a PSU or RSU must continue to be held by a Participant for any specified period;

• 4.1.7 determine whether, and the extent to which, any Performance Criteria applicable to the Vesting of a PSU or other conditions applicable to the Vesting of a PSU or RSU have been satisfied or shall be waived or modified;

• 4.1.8 amend the terms of any outstanding Award Agreement provided, however, that no such amendment, shall be made at any time to the extent such action would materially adversely affect the existing rights of a Participant with respect to any then outstanding PSU or RSU related to such Award Agreement without his or her consent in writing and provided further, however, that the Board may amend the terms of an Award Agreement without the consent of the Participant if complying with Applicable Law;

• 4.1.9 determine whether, and the extent to which, adjustments shall be made pursuant to Section 5.3 and the terms of any such adjustments;

• 4.1.10 interpret the Plan and Award Agreements;

• 4.1.11 prescribe, amend and rescind such rules and regulations and make all determinations necessary or desirable for the administration and interpretation of the Plan and Award Agreements;

• 4.1.12 determine the terms and provisions of Award Agreements (which need not be identical) entered into in respect of awards hereunder;

• 4.1.13 in the event there is any question as to whether a Change in Control has occurred in any circumstances, determine whether a Change in Control has occurred; and

• 4.1.14 make all other determinations deemed necessary or advisable for the administration of the Plan.

4.2 Eligibility and Award Determination.

• 4.2.1 In determining the Participants to whom awards may be made and the Award Value (and accordingly the number of PSUs and RSUs to be granted) for each award, or the specific number of PSUs or RSUs to be awarded (subject, in the case of PSUs, to adjustment based on achievement of Performance Criteria), the Board may take into account such factors as it shall determine in its sole and absolute discretion.

• 4.2.2 Unless the Board determines to grant a Participant a specific number of PSUs without specifying an Award Value, the PSUs granted to a Participant for a Performance Period shall be determined by dividing the Award Value determined for the Participant for such Performance Period by the Market Value (with currency conversion if necessary) as at the end of the calendar quarter immediately preceding the Award Date, rounded down to the next whole number.

• 4.2.3 Unless the Board determines to grant a Participant a specific number of RSUs without specifying an Award Value, the RSUs granted to a Participant shall be determined by dividing the Award Value of an award to be provided to the Participant in the form of RSUs by the Market Value (with currency conversion if necessary) as at the end of the calendar quarter immediately preceding the Award Date, rounded down to the next whole number.

• 4.2.4 For greater certainty and without limiting the discretion conferred on the Board pursuant to this Section, the Board's decision to approve a grant of PSUs in any Performance Period, or any grant of RSUs, shall not entitle any Participant to an award of PSUs in respect of any other Performance Period or any future grant of RSUs; nor shall the Board's decision with respect to the size or terms and conditions of an award require it to approve an award of the same or similar size or with the same or similar terms and conditions to any Participant at any other time. No Participant has any claim or right to receive an award or any PSUs or RSUs.

• 4.2.5 An Award Agreement shall set forth, among other things, the following: the Award Date of the award evidenced thereby; the number of PSUs or RSUs, as applicable, granted in respect of such award; the Performance Criteria and the Performance Adjustment Factor applicable to PSUs and any other conditions to the Vesting of the PSUs or RSUs, as applicable; in the case of PSUs, the applicable Performance Period; and may specify such other terms and conditions as the Board shall determine or as shall be required under any other provision of the Plan. The Board may include in an Award Agreement terms or conditions pertaining to confidentiality of information relating to the Corporation's operations or businesses which must be complied with by a Participant including as a condition of the grant or Vesting of PSUs or RSUs, provided that failure to include such confidentiality provision in an Award Agreement shall not excuse a Participant's confidentiality obligations pursuant to any employment contract, corporate policy or statutory obligation applicable to such Participant.

• 4.2.6 The Board shall not grant Award PSUs and Award RSUs to residents of the United States unless such awards and the Shares issuable upon settlement thereof are registered under the U.S. Securities Act or are issued in compliance with an available exemption from the registration requirements of the U.S. Securities Act.

• 4.3 PSUs and RSUs. Each whole PSU and RSU will give a Participant the right to receive either a Share or a cash payment, as determined by the Board, in an amount determined in accordance with the terms of the Plan and the applicable Award Agreement. For greater certainty, a Participant shall have no right to receive Shares or a cash payment with respect to any PSUs or RSUs that do not become Vested PSUs or Vested RSUs, as the case may be, under Article 7.

5. ACCOUNTS, DIVIDEND EQUIVALENTS AND REORGANIZATION

• 5.1 Account. An account ("Account") shall be maintained by the Corporation for each award made to each Participant pursuant to an Award Agreement and which will be credited with an opening balance equal to the Award PSUs and/or Award RSUs granted pursuant to such Award Agreement. PSUs or RSUs that fail to vest pursuant to Article 7, or that are paid out to the Participant or his legal representative, shall be cancelled and shall cease to be recorded in the Participant's Account as of the date on which such PSUs or RSUs, as applicable, are forfeited or cancelled under the Plan or are paid out, as the case may be.
• 5.2 Dividend Equivalent Units. When and if cash dividends are paid on the Shares during the period from the Award Date under the Award Agreement to the date of settlement of the PSUs or RSUs granted thereunder, additional PSUs or RSUs, as applicable, will be credited to the Participant's Account in accordance with this Section 5.2 ("Dividend Equivalent Units"). The number of such additional PSUs or RSUs to be credited to the Participant's

Account in respect of any particular dividend paid on the Shares will be calculated by dividing (i) the amount of the cash dividend that would have been paid to the Participant if each of the PSUs and RSUs recorded in the Participant's Account (but for greater certainty not including any previous Dividend Equivalent Units received and recorded) as at the record date for the cash dividend had been Shares by (ii) the Market Value (with currency conversion if necessary) on the date on which the dividend is paid on the Shares, rounded down to the next whole number. Dividend Equivalent Units shall be subject to the same Vesting conditions and shall Vest and be paid at the same time as the PSUs or RSUs, as applicable, to which they relate.

5.3 Adjustments. In the event of any stock dividend, stock split, combination or exchange of shares, capital reorganization, consolidation, spin-off or other distribution (other than normal cash dividends) of the Corporation's assets to shareholders, or any other similar changes affecting the Shares, proportionate adjustments to reflect such change or changes shall be made with respect to the number of PSUs and RSUs outstanding under the Plan, or securities into which the Shares are changed or are convertible or exchangeable and as may be substituted for Shares under this Plan, on a basis proportionate to the number of PSUs and RSUs in the Participant's Account or some other appropriate basis, all as determined by the Board in its sole discretion.

6. PAYMENT OF AWARDS BY TREASURY ISSUANCES

• 6.1 Maximum Number of Shares Issuable from Treasury. The aggregate number of Shares that are issuable under the Plan to pay awards which have been granted and are outstanding under the Plan, together with Shares that are issuable pursuant to outstanding awards or grants under any other Share Compensation Arrangement, shall not at any time exceed 15% of the Shares then issued and outstanding, subject to adjustment as provided in Section 5.3 above to give effect to any relevant changes in the capitalization of the Corporation, and provided that for the purpose of such calculation, the number of Shares then issued and outstanding shall include the number of Shares issuable upon conversion of the then issued and outstanding Shares. Shares in respect of which Awards have been granted but which are: (i) vested and redeemed; or (ii) forfeited, surrendered, cancelled or otherwise terminated or expire without the delivery of Shares shall be available for subsequent Awards. In addition, the number of Shares subject to an Award (or portion thereof) that the Corporation permits to be settled in cash in lieu of settlement in Shares shall be available for subsequent Awards.
• 6.2 Issuances of Shares from Treasury. All issuances of Shares from treasury to pay awards as contemplated by Section 7.4 shall be deemed to be issued at a price per Share equal to the Market Value on the date of issuance.
• 6.3 Participation Limits. Awards under the Plan shall be limited as follows:
  • 6.3.1 the total number of Shares reserved for issuance to Insiders (as a group) under the Plan, together with Shares reserved for issuance to Insiders under any other Share Compensation Arrangement, shall not at any time exceed 15% of the issued and outstanding Shares, provided that for the purpose of such calculation, the number of Shares issued and outstanding shall include the number of Shares issuable upon conversion of the issued and outstanding Shares;
  • 6.3.2 within any one-year period the aggregate number of Shares issued to Insiders (as a group) pursuant to the Plan and any other Share Compensation Arrangement

shall not exceed 15% of the issued and outstanding Shares, provided that for the purpose of such calculation, the number of Shares issued and outstanding shall include the number of Shares issuable upon conversion of the issued and outstanding Shares;

• 6.3.3 the maximum aggregate grant date fair value using the Black-Scholes-Merton valuation model of awards under the Plan, together with awards or grants under any other Share Compensation Arrangement, to any non-employee director of the Corporation in any fiscal year of the Corporation shall not exceed $150,000; and
• 6.3.4 no award under the Plan may be made to any non-employee director if such award could result, together with awards or grants then outstanding under the Plan and any other Share Compensation Arrangement, in the issuance to non-employee directors as a group of a number of Shares exceeding 1% of the Shares issued and outstanding immediately prior to any such Share issuance, provided that for the purpose of such calculation, the number of Shares issued and outstanding shall include the number of Shares issuable upon conversion of the issued and outstanding Shares.

7. VESTING AND PAYMENT OF AWARDS

• 7.1 Vesting of PSUs. Upon the first day immediately following the end of the Performance Period, PSUs represented by the PSU Balance as at such date shall Vest subject to the terms hereof, with the number of Vested PSUs being equal to the PSU Balance as at such date multiplied by the Performance Adjustment Factor as determined by the Board in accordance with the Award Agreement. For certainty, in the event the Performance Adjustment Factor is equal to zero, no PSUs will vest. Except where the context requires otherwise, each PSU which vests pursuant to Article 7 and each Dividend Equivalent Unit credited in respect of such PSUs after the Performance Period and prior to the date of settlement shall be referred to herein as a Vested PSU. PSUs which do not become Vested PSUs in accordance with this Article 7 shall be forfeited by the Participant and the Participant will have no further right, title or interest in such PSUs. The Participant waives any and all right to compensation or damages in consequence of the termination of employment (whether lawfully or unlawfully) or otherwise for any reason whatsoever insofar as those rights arise or may arise from the Participant ceasing to have rights or be entitled to receive any Shares or cash payment under the Plan pursuant to this Section 7.1.
• 7.2 Performance Criteria. The PSUs granted to a Participant under an Award Agreement and Section 4.1 (and the related Dividend Equivalent Units credited in respect of such PSUs) shall become Vested PSUs only upon the Board's determination with respect to the Performance Adjustment Factor in accordance with the Award Agreement applicable to such PSUs or have been waived in accordance with Section 4.1.7.
• 7.3 Vesting of RSUs. Upon the Vesting Date(s) specified in the applicable Award Agreement the RSUs comprising a Participant's RSU Balance shall Vest in such proportion as may be determined in accordance with such Award Agreement. Except where the context requires otherwise, each RSU which vests pursuant to Article 7 and each Dividend Equivalent Unit credited in respect of such RSU after its Vesting Date and prior to the date of settlement shall be referred to herein as a Vested RSU. RSUs which do not become Vested RSUs in accordance with this Article 7 shall be forfeited by the Participant and the Participant will have no further right, title or interest in such RSUs. The Participant waives any and all right to compensation or damages in consequence of the termination of employment (whether

lawfully or unlawfully) or otherwise for any reason whatsoever insofar as those rights arise or may arise from the Participant ceasing to have rights or be entitled to receive any Shares or cash payment under the Plan pursuant to this Section 7.3.

• 7.4 Payment in Shares. In the event that a Participant's Vested PSUs or Vested RSUs have been designated by the Board for settlement in Shares issued from treasury, the Participant or his legal representative, as applicable, shall receive a number of Shares equal to the number of Vested PSUs or Vested RSUs, as the case may be, credited to the Participant's Account (rounded down to the nearest whole number of Shares). In such event, such Shares shall be distributed to the Participant or his legal representative, as applicable, as soon as practicable following the applicable Vesting Date. For purposes of clarity of the intent to comply with certain Canadian tax rules, in no event shall the payment be made later than December 31 of the third calendar year following the year in which the services giving rise to the award of PSUs or RSUs were rendered. No Participant who is resident in the United States may receive Shares upon settlement of Vested PSUs or Vested RSUs unless the Shares to be issued upon such settlement are registered under the U.S. Securities Act or are issued in compliance with an available exemption from the registration requirements of the U.S. Securities Act.
• 7.5 Payment in Cash. In the event that a Participant's Vested PSUs or Vested RSUs have not been designated by the Board for settlement in Shares issued from treasury, the Participant or his legal representative, as applicable, shall receive a cash payment equal to: (i) in the case of PSUs, the Market Value determined as of the last day of the Performance Period multiplied by the number of Vested PSUs credited to his PSU Account as determined in accordance with Section 7.1 (rounded down to the nearest whole number of PSUs); and (ii) in the case of RSUs, the Market Value determined as of the Vesting Date of such RSUs multiplied by the number of Vested RSUs credited to his RSU Account as determined in accordance with Section 7.3 (rounded down to the nearest whole number of RSUs). Subject to Section 10.9, the cash payment shall be made to the Participant or his legal representative, as applicable, in a single lump sum as soon as practicable following the applicable Vesting Date. For purposes of clarity of the intent to comply with certain Canadian tax rules, in no event shall the payment be made later than December 31 of the third calendar year following the year in which the services giving rise to the award of PSUs or RSUs were rendered.

7.6 Death. Period of Absence.

7.6.1 Death. Where the employment or service as a director of a Participant terminates during a Performance Period in the case of PSUs or prior to a Vesting Date in the case of RSUs by reason of the Participant's death: (i) the PSUs credited to the Participant's Account as at December 31 of the year immediately preceding the Participant's date of death shall continue to be eligible to become Vested PSUs in accordance with Sections 7.1 and 7.2; and (ii) the RSUs credited to the Participant's Account as at December 31 of the year immediately preceding the Participant's date of death shall Vest as of the Participant's date of death. The estate of the Participant shall be entitled to receive cash or Shares (or a combination thereof) as specified by the Board determined in accordance with Sections 7.4 or 7.5. For greater clarity, the number of Vested PSUs used to calculate the value of the payment shall equal the number of Vested PSUs determined in accordance with Sections 7.1 and 7.2 as at December 31 of the year immediately preceding the Participant's date of death.

• 7.6.2 Period of Absence. In the event of a Participant's Period of Absence during a Performance Period for PSUs or prior to a Vesting Date for RSUs and subject to this Section 7.6.2 and Section 7.6.4, PSUs and RSUs credited to the Participant's Account immediately prior to the commencement of such Period of Absence (and any related Dividend Equivalent PSUs and RSUs) shall continue to be eligible to become Vested in accordance with the provisions of Sections 7.1 and 7.3 and the Participant shall be entitled to receive cash or Shares (or a combination thereof) as specified by the Board in respect of such Vested PSUs and Vested RSUs determined in accordance with Sections 7.4 or 7.5, as applicable, except that the number of Vested PSUs and Vested RSUs used to calculate the value of the payment shall equal the number of Vested PSUs or Vested RSUs, as applicable determined in accordance with Section 7.1 and 7.3 multiplied by a fraction, (i) in the case of PSUs, the numerator of which equals the number of whole and partial months in the Performance Period for which the Participant actively performed services for the Corporation or a Subsidiary and the denominator of which equals the number of whole and partial months in the Performance Period; and (ii) in the case of RSUs, the numerator of which equals the number of whole and partial months in the period from the Award Date to the Vesting Date of such RSUs for which the Participant actively performed services for the Corporation or a Subsidiary and the denominator of which equals the number of whole and partial months in the period from the Award Date to the Vesting Date of such RSUs.
• 7.6.3 No Additional Grants. For greater clarity, no additional PSUs or RSUs (whether pursuant to Section 4.1 or in the form of Dividend Equivalent Units) shall be granted to a Participant following his or her date of death or during his or her Period of Absence, including following his or her date of Disability.
• 7.6.4 Failure to Return. Notwithstanding Section 7.6.2, where a Participant experiences a Period of Absence that extends beyond the end of a Performance Period for PSUs or a Vesting Date for RSUs and fails to return to active full-time employment with the Corporation or a Subsidiary within 180 days following the end of such Performance Period or such Vesting Date, no portion of the PSUs subject to such Performance Period or RSUs that would otherwise Vest on such Vesting Date shall Vest and the Participant shall receive no payment or other compensation in respect of such PSUs or RSUs or loss thereof, on account of damages or otherwise.
• 7.7 Other Terminations of Employment. Except as otherwise provided in the Award Agreement governing the grant of PSUs or RSUs to a Participant or a written employment or other agreement between the Participant and the Corporation or any Subsidiary, in the event that, during a Performance Period with respect to PSUs or prior to a Vesting Date with respect to RSUs, (i) the Participant's employment or service as a director is terminated by the Corporation or a Subsidiary of the Corporation for any reason, or (ii) a Participant voluntarily terminates his employment with the Corporation or a Subsidiary of the Corporation or service as a director, including due to retirement, no portion of the PSUs subject to such Performance Period or RSUs that would otherwise Vest on such Vesting Date shall Vest and the Participant shall receive no payment or other compensation in respect of such PSUs or RSUs or loss thereof, on account of damages or otherwise; provided that any Vested PSUs and Vested RSUs will be settled in accordance with Sections 7.4 and 7.5.

7.8 Change in Control. Notwithstanding any other provision of the Plan, but subject to the terms of any Award Agreement or any employment agreement between the Participant and the Corporation or any Subsidiary, in the event of a Change in Control, all PSUs and RSUs credited to each Account (including for greater certainty Dividend Equivalent Units) which have not become Vested PSUs or Vested RSUs, shall become Vested PSUs and Vested RSUs on the basis of one PSU becoming one Vested PSU and one RSU becoming one Vested RSU, as at the time of Change in Control (unless otherwise determined by the Board). As soon as practicable following a Change in Control each Participant shall, at the discretion of the Board, receive in cash or in Shares (or a combination thereof) a payment equal to the number of such Vested PSUs and Vested RSUs (as determined pursuant to this Section 7.8) credited to the Participant's Account at the time of the Change in Control (rounded down to the nearest whole number of Vested PSUs and Vested RSUs) multiplied by the price at which the Shares are valued for the purpose of the transaction or series of transactions giving rise to the Change in Control, or if there is no such transaction or transactions at the Market Value on the date of the Change in Control, less any statutory withholdings or deductions. Notwithstanding the foregoing, where a Change in Control occurs and no Shares are distributed and no cash payments are made to a Participant within 30 days following the Change in Control, the Corporation shall cease to have the discretion to provide the Participant with Shares and shall be required to pay (or cause a Subsidiary to pay) to the Participant in respect of his Vested PSUs and Vested RSUs and Dividend Equivalent Units in cash the amount determined in accordance with the payment formula set out above.

8. COMPLIANCE WITH U.S. LAWS

• 8.1 Neither the awards granted hereunder nor the securities which may be acquired pursuant to the settlement of such awards have been registered under the U.S. Securities Act or under any securities law of any state of the United States and are considered "restricted securities" (as such term is defined in Rule 144(a)(3) under the U.S. Securities Act) and any Shares issued to U.S. Award Holder shall be affixed with an applicable restrictive legend as set forth in the Award Agreement. The awards may not be offered, sold pledged or otherwise transferred, directly or indirectly, in the United States except pursuant to registration under the U.S. Securities Act and the securities laws of all applicable states or pursuant to available exemptions therefrom, and the Corporation has no obligation or present intention of filing a registration statement under the U.S. Securities Act in respect of any of the awards granted hereunder or the securities underlying such awards, which could result in such U.S. Award Holder not being able to dispose of any Shares issued upon settlement of Awards for a considerable length of time. Each U.S. Award Holder or anyone who becomes a U.S. Award Holder, who is granted an award pursuant to this Plan in the United States, who is a resident of the United States or who is otherwise subject to the U.S. Securities Act or the securities laws of any state of the United States will be required to complete an Award Agreement which sets out the applicable United States restrictions.
• 8.2 Notwithstanding any provisions contained in the Plan to the contrary and to the extent required by applicable U.S. state corporate laws, U.S. federal and state securities laws, the Internal Revenue Code of 1986, as amended (the "Code"), and the applicable laws of any jurisdiction in which awards are granted under the Plan, the following terms shall apply to all such awards granted to residents of the State of California, until such time as the Board amends this Section 8.2 or the Board otherwise provides:
  • (A) Unless determined otherwise by the Board, awards may not be sold, pledged, assigned, hypothecated, or otherwise transferred in any manner

other than by will or by the laws of descent and distribution. If the Board makes an award transferable, such award may only be transferred (i) by will, (ii) by the laws of descent and distribution, (iii) to a revocable trust, or (iv) as permitted by Rule 701 of the U.S. Securities Act.

• (B) All Shares issuable under the Plan must be issued within ten years from the date of adoption of the Plan or the date the Plan is approved by the shareholders of the Corporation, whichever is earlier.
• (C) In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spinoff, combination, repurchase, or exchange of Shares or other securities of the Corporation, or other change in the corporate structure of the Corporation affecting the Shares occurs, the Board, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under the Plan, will adjust the number and class of Shares that may be delivered under the Plan and/or the number, class, and price of Shares covered by each outstanding Vested award.
• (D) The Corporation shall furnish summary financial information (audited or unaudited) of the Corporation's financial condition and results of operations, consistent with the requirements of applicable law, at least annually to each Participant in California during the period such Participant has one or more award outstanding, and in the case of an individual who acquired Shares pursuant to the Plan, during the period such Participant owns such Shares; provided, however, the Corporation shall not be required to provide such information if (i) the issuance is limited to key persons whose duties in connection with the Corporation assure their access to equivalent information or (ii) the Plan or any agreement complies with all conditions of Rule 701 of the U.S. Securities Act; provided that for purposes of determining such compliance, any registered domestic partner shall be considered a "family member" as that term is defined in Rule 701 of the U.S. Securities Act.
• (E) The Plan or any increase in the maximum aggregate number of Shares issuable thereunder as provided in Section 6.1 (the "Authorized Shares") shall be approved by a majority of the outstanding securities of the Corporation entitled to vote by the later of (i) within twelve (12) months before or after the date of adoption of the Plan by the Board or (ii) prior to or within 12 months of the first issuance of any security pursuant to the Plan in the State of California. Any Shares issued pursuant to this Plan prior to shareholder approval of the Plan or in excess of the Authorized Shares previously approved by the shareholders shall be rescinded if such shareholder approval is not received in the manner described in the preceding sentence. Notwithstanding the foregoing, a "foreign private issuer", as defined by Rule 3b-4 of the United States Securities Exchange Act of 1934, as amended shall not be required to comply with this paragraph provided that the aggregate number of persons in California granted options under all Share Compensation Arrangements and issued securities under all purchase and bonus plans and agreements does not exceed 35.

9. CURRENCY

9.1 Currency. All references in the Plan to currency refer to Canadian dollars.

10. SHAREHOLDER RIGHTS

10.1 No Rights to Shares. PSUs and RSUs are not Shares and neither the grant of PSUs or RSUs nor the fact that Shares may be acquired by, or provided from, the Corporation in satisfaction of Vested PSUs or Vested RSUs will entitle a Participant to any shareholder rights, including, without limitation, voting rights, dividend entitlement or rights on liquidation.

11. ADMINISTRATION

• 11.1 Delegation and Administration. The Board may, in its discretion, delegate such of its powers, rights and duties under the Plan, in whole or in part, to any committee of the Board or any one or more directors, officers or employees of the Corporation and/or its Subsidiaries as it may determine from time to time, on terms and conditions as it may determine, except the Board shall not, and shall not be permitted to, delegate any such powers, rights or duties to the extent such delegation is not consistent with Applicable Law.

• 11.2 Effects of Board's Decision. Any interpretation, rule, regulation, determination or other act of the Board hereunder shall be made in its sole discretion and shall be conclusively binding upon all persons.

• 11.3 Liability Limitation. No member of the Board or any officer, director or employee of the Corporation or any Subsidiary shall be liable for any action or determination made in good faith pursuant to the Plan or any Award Agreement under the Plan. To the fullest extent permitted by law, the Corporation and its Subsidiaries shall indemnify and save harmless each person made, or threatened to be made, a party to any action or proceeding in respect of the Plan by reason of the fact that such person is or was a member of the Board or is or was an officer, director or employee of the Corporation or a Subsidiary.

• 11.4 Compliance with Laws and Policies. The Corporation's issuance of any PSUs and RSUs and its obligation to make any payments or discretion to provide any Shares hereunder is subject to compliance with Applicable Law. Each Participant shall acknowledge and agree (and shall be conclusively deemed to have so acknowledged and agreed by participating in the Plan) that the Participant will, at all times, act in strict compliance with Applicable Law and all other laws and any policies of the Corporation applicable to the Participant in connection with the Plan including, without limitation, furnishing to the Corporation all information and undertakings as may be required to permit compliance with Applicable Law. Such laws, regulations, rules and policies shall include, without limitation, those governing "insiders" or "reporting issuers" as those terms are construed for the purposes of Applicable Laws.

• 11.5 Withholdings. So as to ensure that the Corporation or a Subsidiary, as applicable, will be able to comply with the applicable provisions of any federal, provincial, state or local law relating to the withholding of tax or other required deductions, the Corporation, or a Subsidiary may withhold or cause to be withheld from any amount payable to a Participant, either under this Plan, or otherwise, such amount, or may require the sale of such number of Shares, as may be necessary to permit the Corporation or the Subsidiary, as applicable, to so comply.

• 11.6 No Additional Rights. Neither designation of an employee as a Participant nor the establishment of an Award Value for or grant of any PSUs or RSUs to any Participant entitles any person to the establishment of an Award Value, grant, or any additional grant, as the case may be, of any PSUs or RSUs under the Plan.

• 11.7 Amendment, Termination. The Plan may be amended or terminated at any time by the Board in whole or in part, provided that:

  • 11.7.1 no amendment of the Plan shall, without the consent of the Participants affected by the amendment, or unless required by Applicable Law, adversely affect the rights accrued to such Participants with respect to PSUs or RSUs granted prior to the date of the amendment;
  • 11.7.2 no amendment of the Plan shall be effective unless such amendment is approved by the Stock Exchange whose approval is required under Stock Exchange Rules; and
  • 11.7.3 approval by a majority of the votes cast by shareholders present and voting in person or by proxy at a meeting of shareholders of the Corporation shall be obtained for any:
    • 11.7.3.1 amendment for which, under the requirements of the Stock Exchange or any applicable law, shareholder approval is required;
    • 11.7.3.2 a reduction in pricing of an award under the Plan (other than an adjustment pursuant to Section 5.3) or the cancellation and reissuance of awards under the Plan;
    • 11.7.3.3 extension of the term of an award under the Plan beyond the original expiry date of the award;
    • 11.7.3.4 any amendment to remove or exceed the Insider participation limits set out in Sections 6.3.1 or 6.3.2;
    • 11.7.3.5 any amendment to remove or exceed the limits on participation in the Plan by non-employee directors as set out in Sections 6.3.3 or 6.3.4;
    • 11.7.3.6 an increase to the maximum number of Shares which may be issuable under the Plan, other than an adjustment pursuant to Section 5.3;
    • 11.7.3.7 the addition of additional categories of Participants that may permit the introduction or re-introduction of non-employee directors on a discretionary basis; or
    • 11.7.3.8
    • 11.7.3.9 amendment to this Section 11.7.

• 11.8 Administration Costs. The Corporation will be responsible for all costs relating to the administration of the Plan. For greater certainty and unless otherwise determined by the Board, a Participant shall be responsible for brokerage fees and other administration or transaction costs relating to the transfer, sale or other disposition of Shares on behalf of the

Participant that have been previously distributed to or provided to the Participant pursuant to the Plan.

• 11.9 Compliance with Section 409A of the U.S. Internal Revenue Code. Notwithstanding any provision in this Plan or an Award Agreement to the contrary, to the extent a Participant is subject to taxation under the U.S. Internal Revenue Code of 1986, as amended (the "U.S. Tax Code"), then any PSUs and RSUs awarded to such Participant shall be interpreted and administered so that any amount payable with respect to such awards shall be paid in a manner that is either exempt from or compliant with the requirements of Section 409A of the U.S. Tax Code and the applicable regulatory and other guidance issued thereunder ("Section 409A"). In furtherance of the foregoing, the Addendum attached hereto shall apply to U.S. Participants (as defined therein).
• 11.10 Compensation Recoupment Policy. Any awarding of PSUs or RSUs under the Plan, the Vesting thereof and the settlement of Awards pursuant thereto are subject to the Compensation Recoupment Policy of the Corporation.

12. NO FINANCIAL ASSISTANCE

12.1 No Financial Assistance. The Corporation shall not provide financial assistance to Participants in connection with the Plan.

13. ASSIGNMENT

13.1 Assignment. The assignment or transfer of the PSUs or RSUs, or any other benefits under this Plan, shall not be permitted, other than by operation of law or normal estate settlement purposes.

ADDENDUM

TO THE

MCFARLANE LAKE MINING LIMITED.

PERFORMANCE AND RESTRICTED SHARE UNIT PLAN

SPECIAL PROVISIONS FOR U.S. PARTICIPANTS

The provisions of this Addendum apply only to U.S. citizens, U.S. permanent residents or any other persons whose Award PSUs or Award RSUs are subject to U.S. Federal Income Tax ("U.S. Participants") at the relevant time.

This Addendum modifies the Plan for U.S. Participants and where there is any conflict between the Plan and the terms of this Addendum, the terms of this Addendum shall prevail.

1.	Title and Conflict	All Award PSUs and Award RSUs issued under the Plan toU.S. Participants are intended to be exempt from and avoidthe penalties imposed by Section 409A, or any successorthereto,andallprovisionshereundershallberead,interpreted, and applied with that purpose in mind.Theprovisions ofthe Award Agreement applicable to any U.S.Participant shall reflectthis intention.
2.	Definitions
	"Change inControl"	"Change inControl"means a transaction described inSection 1.3.9 of the Plan, but only to the extent that such atransaction constitutes a "change in the ownership ofacorporation,a change in the effective control of acorporation,ora change in the ownership of a substantial portion of acorporation'sassets, as defined in U.S. Treasury RegulationSection 1.409A-3(i)(5) under Section 409A.
	"Market Value"	"Market Value" shall have the meaning as to U.S.Participants as specified in Section 1.3.14 of the Plan.
	"Section 409A"	"Section 409A" means section 409A of the U.S. Tax Code.
	"Separation from Service"	"Separation from Service"means a "separation fromservice" for purposes of Section 409A(a)(2)(A)(i) of the U.S.Tax Code.
	"Specified Employee"	"Specified Employee" means a "specified employee" asdeterminedina mannerthatcomplieswithSection409A(2)(B)(i) of the U.S. Tax Code.
	"U.S. Tax Code"	"U.S. Tax Code" means the United States Internal RevenueCode of 1986, as amended, and the regulations and guidanceissued under it from time to time.

3. Payment The Award Agreement shall state the Vesting Date. It is intended that the vesting conditions for the award shall constitute a "substantial risk of forfeiture" within the meaning of Section 409A and that PSUs and RSUs will be exempt from Section 409A under U.S. Treasury Regulation section 1.409A -1(b)(4). Sections 7.4 and 7.5 and all other provisions of the Plan shall be interpreted and administered such that RSUs and PSUs will be settled and paid out by March 15th of the calendar year following the calendar year in which such RSUs and PSUs are not, or are no longer, subject to a substantial risk of forfeiture. Further, for greater certainty, where a U.S. Participant experiences a Period of Absence as described in Section 7.6.4 of the Plan, PSUs and RSUs will be subject to forfeiture until the date that the U.S. Participant returns to active full -time employment within 180 days following the end of the Performance Period, or the Vesting Date for RSUs, as applicable.

However, to the extent that any PSU or RSU awarded would constitute "non -qualified deferred compensation" that is subject to Section 409A, then the following terms shall apply to such award:

Notwithstanding Sections 7.4 or 7.5 to the contrary, payment of Vested PSUs or Vested RSUs shall be made to the U.S. Participant or his legal representative, as applicable, in a single lump sum, less any applicable statutory withholdings or deductions , during the calendar year immediately following the calendar year in which the Performance Period ends or the Vesting Date occurs (or, in the event of the Participant's death, payment of Vested RSUs shall be made in the calendar year following the calendar year of the Participant's death). Neither the Board, the Corporation nor its directors, officers or employees make any representations or warranties regarding the tax treatment of any payments under the Plan and none of them shall be held liable for any taxes, interest, penalties or other monetary amounts owed by a U.S. Participant as a result of the application of Section 409A. Notwithstanding any contrary provision set forth in the Plan (and, in particular, in Section 7 of the Plan) , the payment of any amounts due under the Plan subject to Section 409A shall be made in compliance with Section 409A and shall not be accelerated except as otherwise permitted under Section 409A. Where applicable to avoid violation of Section 409A, any reference to or requirement relating to the termination or cessation of a U.S. Participant's employment shall instead refer to or require such U.S. Participant's Separation from Service. If required for Award PSUs or Award RSUs subject to Section 409A, if any Award Agreement requires payment upon Separation from Service, then a Specified Employee's payment shall be delayed until a date that is six months following the date of the U.S. Participant's Separation from

service (or, if earlier, the date of death of the U.S. Participant).

4. Change in Control Section 7.8 of the Plan ("Change in Control") shall apply to Award PSUs and Award RSUs that constitute deferred compensation under Section 409A held by a U.S. Participant only if the Change in Control constitutes a Change in Control as defined in this Addendum. With respect to a transaction that constitutes a Change in Control under Section 7.8 of the Plan but does not constitute a Change in Control as defined in this Addendum, to the extent so provided by the Plan, unless otherwise determined not to become vested by the Board, all unvested PSUs and RSUs shall become fully vested (shall become Vested PSUs and Vested RSUs), but the payment of such rights shall be in the Award Agreement.