NexMetals Mining Corp — Proxy Solicitation & Information Statement 2020

Aug 25, 2020

Suite 2500, 666 Burrard Street Vancouver, BC, V6C 2X8 Phone: (604) 770-4334

NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS

TAKE NOTICE that the annual and special meeting (the "Meeting") of shareholders ("Shareholders") of North American Nickel Inc. (hereinafter called the "Company") will be held via teleconference toll free dial in: 1-888-433-2192 [USA and Canada only] international dial in: 1-778-945-1044 [worldwide] participant passcode: 220 4875, on Monday, September 21, 2020 at 10:00 a.m. (Toronto time) for the following purposes:

• 1. to receive the report of the directors;
• 1. to receive the financial statements of the Company for its fiscal year ended December 31, 2019 and the report of the auditors thereon;
• 1. to determine the number of directors and to elect directors;
• 1. to appoint auditors for the ensuing year and to authorize the directors to fix their remuneration;
• 1. to consider and, if thought fit, to approve the Company's stock option plan, which makes a total of 10% of the issued and outstanding shares of the Company available for issuance thereunder, as described in the accompanying management information circular; and
• 1. to transact such other business as may properly come before the Meeting.

Accompanying this notice is a management information circular and form of proxy. A Shareholder entitled to attend and vote at the Meeting is entitled to appoint a proxy holder to attend and vote in his or her stead. If you are unable to attend the Meeting, or any adjournment thereof in person, please read the notes accompanying the form of proxy enclosed and then complete and return the form of proxy within the time set out in the notes. The enclosed form of proxy is solicited by management of the Company but, as set out in the notes, you may amend it if you so desire by striking out the names listed therein and inserting in the space provided the name of the person you wish to represent you at the Meeting.

DATED at Vancouver, British Columbia as of the 17th day of August, 2020.

BY ORDER OF THE BOARD OF DIRECTORS

"Keith Morrison" Chief Executive Officer North American Nickel Inc.

Suite 2500, 666 Burrard Street Vancouver, BC, V6C 2X8 Phone: (604) 770-4334

INFORMATION CIRCULAR

SOLICITATION OF PROXIES BY MANAGEMENT

This management information circular (this "Circular") is furnished in connection with the solicitation of proxies by or on behalf of the management of North American Nickel Inc. (the "Company") for use at the annual general meeting (the "Meeting") of the shareholders of the Company (the "Shareholders") to be held via teleconference toll free dial in: 1-888-433-2192 [USA and Canada only] international dial in: 1-778-945-1044 [worldwide] participant passcode: 220 4875, on: Monday, September 21, 2020 at 10:00 a.m. (Toronto time) and at any adjournments thereof for the purposes set out in the accompanying Notice of Meeting. Although it is expected that the solicitation of the proxies will be primarily by mail, proxies may also be solicited personally or by telephone by directors or officers of the Company. Arrangements will also be made with clearing agencies, brokerage houses and other financial intermediaries to forward proxy solicitation material to the beneficial owners of common shares of the Company (the "Common Shares") pursuant to the requirements of National Instrument 54-101 Communication with Beneficial Owners of Securities of a Reporting Issuer ("NI 54- 101"). The cost of any such solicitation will be borne by the Company.

Unless otherwise stated, the information contained in this Circular is given as at August 17th, 2020. Unless otherwise indicated, all references in this Circular to "\$" refer to Canadian dollars.

APPOINTMENT OF PROXY HOLDERS AND COMPLETION AND REVOCATION OF PROXIES

The purpose of a proxy is to designate persons who will vote the proxy on a Shareholder's behalf in accordance with the instructions given by the Shareholder in the proxy on any ballot that may be called for and that, if the Shareholder specifies a choice with respect to any matter to be acted upon, the securities will be voted accordingly. The persons (the "Management Designees") named in the enclosed form of proxy have been selected by the directors of the Company.

A Shareholder has the right to designate a person (who need not be a Shareholder), other than the Management Designees to represent the Shareholder at the Meeting. Such right may be exercised by inserting in the space provided for that purpose on the proxy the name of the person to be designated, and by deleting from the proxy the names of the Management Designees, or by completing another proper form of proxy and delivering the same to the transfer agent of the Company. Such Shareholder should notify the nominee of the appointment, obtain the nominee's consent to act as proxy holder and attend the Meeting, and provide instructions on how the Shareholder's shares are to be voted. The nominee should bring personal identification with them to the Meeting.

To be valid, the proxy must be dated and executed by the Shareholder or an attorney authorized in writing, with proof of such authorization attached (where an attorney executed the proxy). The proxy must then be delivered to the Company's registrar and transfer agent, Computershare Investor Services Inc., Proxy Department, 100 University Avenue, 8th Floor, Toronto, Ontario, M5J 2Y1, or by fax within North America to 1-866-249-7775, and outside North America to (416) 263-9524, at least 48 hours, excluding Saturdays, Sundays and holidays, before the time of the Meeting or any adjournment thereof. Proxies received after that time may be accepted by the Chairman of the Meeting at the Chairman's discretion, but the Chairman is under no obligation to accept late proxies.

Any registered Shareholder who has returned a proxy may revoke it at any time before it has been exercised. A proxy may be revoked by a registered Shareholder personally attending at the Meeting and voting their shares. A Shareholder may also revoke their proxy in respect of any matter upon which a vote has not already been cast by depositing an instrument in writing, including a proxy bearing a later date executed by the registered Shareholder or by their authorized attorney in writing, or, if the Shareholder is a corporation, under its corporate seal by an officer or attorney thereof duly authorized, either at the office of the Company's registrar and transfer agent at the foregoing address or the head office of the Company at Suite 2500, 666 Burrard Street, Vancouver, BC, V6C 2X8, Phone: (604) 770-4334, at any time up to and including the last business day preceding the date of the Meeting, or any adjournment thereof at which the proxy is to be used, or by depositing the instrument in writing with the Chairman of such Meeting, or any adjournment thereof. Only registered Shareholders have the right to revoke a proxy. Non-registered Shareholders who wish to change their vote must, at least seven days before the Meeting, arrange for their respective nominees to revoke the proxy on their behalf.

VOTING OF PROXIES

Voting at the Meeting will be by a show of hands, each registered Shareholder and each proxy holder (representing a registered or unregistered Shareholder) having one vote, unless a poll is required or requested, whereupon each such Shareholder and proxy holder is entitled to one vote for each Common Share held or represented, respectively. Each Shareholder may instruct their proxy holder how to vote their Common Shares by completing the blanks on the proxy. All Common Shares represented at the Meeting by properly executed proxies will be voted or withheld from voting when a poll is required or requested and, where a choice with respect to any matter to be acted upon has been specified in the form of proxy, the Common Shares represented by the proxy will be voted in accordance with such specification. In the absence of any such specification as to voting on the proxy, the Management Designees, if named as proxy holder, will vote in favour of the matters set out therein.

The enclosed proxy confers discretionary authority upon the Management Designees, or other person named as proxy holder, with respect to amendments to or variations of matters identified in the Notice of Meeting and any other matters which may properly come before the Meeting. As of the date hereof, the Company is not aware of any amendments to, variations of or other matters which may come before the Meeting. If other matters properly come before the Meeting, then the Management Designees intend to vote in a manner which in their judgment is in the best interests of the Company.

In order to approve a motion proposed at the Meeting, a majority of greater than 50% of the votes cast will be required (an "ordinary resolution"), unless the motion requires a "special resolution" in which case a majority of 66 2/3% of the votes cast will be required.

BENEFICIAL HOLDERS

Only registered Shareholders or duly appointed proxy holders are permitted to vote at the Meeting. Most Shareholders of the Company are "non-registered" or "beneficial" Shareholders because the shares they own are not registered in their names, but are instead registered in the name of the brokerage firm, bank or trust company through which they purchased the shares. More particularly, a person is not a registered Shareholder in respect of shares which are held on behalf of that person (the "Beneficial Holder") but which are registered either: (a) in the name of an intermediary that the Beneficial Holder deals with in respect of the shares (Intermediaries include, among others, banks, trust companies, securities dealers or brokers and trustees or administrators of self-administered RRSP's, RRIF's, RESP's and similar plans (an "Intermediary")); or (b) in the name of a clearing agency (such as The Canadian Depository for Securities Limited) of which the Intermediary is a participant. In accordance with the requirements of NI 54-101, the Company has distributed copies of the Notice of Meeting, this Circular and the proxy (collectively, the "Meeting Materials") to the clearing agencies and Intermediaries for onward distribution to Beneficial Holders.

Intermediaries are required to forward the Meeting Materials to Beneficial Holders unless a Beneficial Holder has waived the right to receive them. Typically, Intermediaries will use service companies to forward the Meeting Materials to Beneficial Holders. Generally, Beneficial Holders who have not waived the right to receive Meeting Materials will either:

• 1. be given a form of proxy which has already been signed by the Intermediary (typically by a facsimile, stamped signature), which is restricted as to the number of shares beneficially owned by the Beneficial Holder but which is otherwise not completed. Because the Intermediary has already signed the form of proxy, this form of proxy is not required to be signed by the Beneficial Holder when submitting the proxy. In this case, the Beneficial Holder who wishes to submit a proxy should otherwise properly complete the form of proxy and deposit it with the Company's transfer agent as provided above; or
• 1. more typically, be given a voting instruction form which is not signed by the Intermediary, and which, when properly completed and signed by the Beneficial Holder and returned to the Intermediary or its service company, will constitute voting instructions (often called a "proxy authorization form") which the Intermediary must follow. Typically, the proxy authorization form will consist of a one page pre-printed form. Sometimes, instead of the one page pre-printed form, the proxy authorization form will consist of a regular printed proxy form accompanied by a page of instructions which contains a removable label containing a bar-code and other information. In order for the form of proxy to validly constitute a proxy authorization form, the Beneficial Holder must remove the label from the instructions and affix it to the form of proxy, properly complete and sign the form of proxy and return it to the Intermediary or its service company in accordance with the instructions of the Intermediary or its service company.

In either case, the purpose of this procedure is to permit Beneficial Holders to direct the voting of the shares which they beneficially own. Should a Beneficial Holder who receives one of the above forms wish to vote at the Meeting in person, the Beneficial Holder should strike out the names of the Management Designees named in the form and insert the Beneficial Holder's name in the blank space provided. In either case, Beneficial Holders should carefully follow the instructions of their Intermediary, including those regarding when and where the proxy or proxy authorization form is to be delivered.

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

Other than as set forth herein, management of the Company is not aware of any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter to be acted upon at the Meeting, other than the election of directors, the appointment of auditors, and the approval of the related party transaction, of any person or company who has been: (a) if the solicitation is made by or on behalf of management of the Company, a director or executive officer of the Company at any time since the beginning of the Company's last financial year; (b) if the solicitation is made other than by or on behalf of management of the Company, any person or company by whom or on whose behalf, directly or indirectly, the solicitation is made; (c) each proposed nominee for election as a director of the Company; or (d) any associate or affiliate of any of the foregoing persons or companies.

VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

The Company is authorized to issue unlimited Common Shares, without nominal or par value, of which as at the date hereof 104,171,868 Common Shares are issued and outstanding.

The holders of Common Shares of record at the close of business on the record date, set by the directors of the Company to be August 17th, 2020, are entitled to vote such Common Shares at the Meeting on the basis of one vote for each Common Shares held.

The articles of the Company provide that a quorum for the transaction of business at the Meeting is two Shareholders, or one or more proxy holders representing two Shareholders, or one Shareholder and a proxy holder representing another Shareholder.

The directors have determined that all Shareholders of record as of August 17th, 2020 will be entitled to receive notice of and to vote at the Meeting. Those Shareholders so desiring may be represented by proxy at the Meeting.

To the knowledge of the directors and senior officers of the Company, no person or company beneficially owns, directly or indirectly, or exercises control or direction over, voting securities carrying more than 10% of the outstanding voting rights of the Company other than as set out below.

Name of Shareholder	Number of shares	Percentage of issued and outstanding
Sentient Executive GP IV, Limited	36,980,982	35.49%
Contemporary Amperex Technology Co., Limited	22,944,444	22.02%

PARTICULARS OF MATTERS TO BE ACTED UPON

TO THE KNOWLEDGE OF THE COMPANY'S DIRECTORS, THE ONLY MATTERS TO BE PLACED BEFORE THE MEETING ARE THOSE REFERRED TO IN THE NOTICE OF MEETING ACCOMPANYING THIS CIRCULAR. HOWEVER, SHOULD ANY OTHER MATTERS PROPERLY COME BEFORE THE MEETING, THE SHARES REPRESENTED BY THE PROXY SOLICITED HEREBY WILL BE VOTED ON SUCH MATTERS IN ACCORDANCE WITH THE BEST JUDGMENT OF THE PERSONS VOTING THE SHARES REPRESENTED BY THE PROXY.

Additional detail regarding each of the matters to be acted upon at the Meeting is set forth below.

A. Financial Statements

The audited financial statements of the Company for the financial year ended December 31, 2019 (the "Financial Statements"), together with the auditors' report thereon, will be presented to the Shareholders at the Meeting.

B. Election of Directors

The board of directors of the Company (the "Board" or the "Board of Directors") currently consists of six directors, all of whom are elected annually. The term of office for each of the present directors of the Company expires at the Meeting. Six of the current directors of the Company will be standing for reelection. At the Meeting, the Shareholders will be asked to consider and, if thought fit, approve an ordinary resolution fixing the number of directors to be elected at the Meeting at Seven.

It is proposed that the persons named below will be nominated at the Meeting. Each director elected will hold office until the next annual general meeting of the Company or until his successor is duly elected or appointed pursuant to the Articles of the Company unless his office is earlier vacated in accordance with the provisions of the Business Corporations Act (British Columbia) or the Company's Articles.

Unless the Shareholder has specifically instructed in the form of proxy that the Common Shares represented by such proxy are to be withheld or voted otherwise, the persons named in the proxy will vote FOR the election of each of the proposed nominees set forth below as directors of the Company. Management does not contemplate that any of the nominees will be unable to serve as a director.

The following information relating to the nominees for election to the Board of Directors is based on information received by the Company from said nominees.

Name, present office held and province or state of residency	Director since	Number of Common Shares beneficially owned, directly or indirectly, or over which control or direction is exercised at the date of this Circular	Principal occupation and if not at present an elected director, occupation during the past five (5) years
Charles Riopel(1)(2)(4) Chairman and Director Quebec, Canada	June 2020	164,613	Founder and managing partner of Latitude 45°; previously, Senior Investment Director at The Sentient Group, one of the largest PE Funds in mining with over US\$2.7 billion under management
Douglas E. Ford (1)(3)(5) Lead Director British Columbia, Canada	Sept. 1992	76,050	General Manager - Dockside Capital Group Inc.; CFO and Director Chemistree Technology Inc.
Keith Morrison (2)(4) CEO and Director Ontario, Canada	Dec. 2014	1,167,950	Former CEO - Gedex Inc.; Former Chairman - Security Devices Inc.
Gilbert Clark(3) (4)(5) Director Le Rouret, France	May 2012	133,605	Geologist, Partner - Sentient Equity Partners, Director - Sentient Asset Management Canada Director CEO - Meridian Mining S.E; Former Director - Mawson Resources
Christopher Messina(1)(3)(5) Director Florida, USA	Oct. 2015	128,143	Former CEO and Co-Founder of RPA Capital, LLC, Managing Partner of Mannahatta Partners LLC
Zhen Janet Huang(3) Director NingDe, China	April. 2019	Nil	Head of Internal Audit for Contemporary Amperex Technology

Notes:

(1) Member of the Audit Committee.

(2) Member of the Disclosure Compliance Committee.

(3) Member of the Corporate Governance Committee.

(4) Member of the Technical Oversight Committee. (5) Member of the Compensation Committee.

Cease Trade Orders, Bankruptcies, Penalties and Sanctions

To the knowledge of the Company,

• 1. none of the nominees for election as a director of the Company is, or was within the ten years prior to the date hereof, a director, Chief Executive Officer or Chief Financial Officer of any company that was subject to a cease trade order, an order similar to a cease trade order or an order that denied such company access to any exemption under securities legislation that was in effect for a period of more than 30 consecutive days and that was issued while that person was acting in such capacity or that was issued after that person ceased to act in such capacity and which resulted from an event that occurred which that person was acting in such capacity;
• 1. none of the nominees for election as a director of the Company is, or was within the ten years prior to the date hereof, a director or executive officer of any company that, while that person was acting in such capacity, or within a year of that person ceasing to act in such capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangements or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets;
• 1. none of the nominees for election as director of the Company has within the ten years prior to the date hereof become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangements or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; and
• 1. none of the nominees for election as a director of the Company has been subject to (a) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority, or (b) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable Shareholder in deciding whether to vote for a proposed director.

C. Appointment of Auditors

Management proposes the reappointment of Dale Matheson Carr-Hilton LaBonte, Chartered Accountants as auditors of the Company at remuneration to be fixed by the Board.

Unless the Shareholder has specifically instructed in the form of proxy that the Common Shares represented by such proxy are to be withheld or voted otherwise, the persons named in the accompanying proxy will vote FOR the re-appointment of Dale Matheson Carr-Hilton LaBonte, Chartered Accountants as auditors of the Company to hold office until the next annual meeting of Shareholders or until a successor is appointed and to authorize the Board to fix the remuneration of the auditors.

D. Approval of Incentive Stock Option Plan

Summary of the Stock Option Plan

The Company has a rolling stock option plan (the "Stock Option Plan"), which was first approved by Shareholders in 2005, authorizing the issuance of incentive stock options to eligible persons for up to an aggregate of 10% of the issued shares of the Company from time to time. The policies of the TSX Venture Exchange (the "TSXV") require the approval of the Stock Option Plan by Shareholders on an annual basis. There are currently 104,171,868 Common Shares issued and outstanding, and as such the current 10% threshold under the Stock Option Plan is 10,417,186 shares available for incentive stock option grants ("Options").

Incentive Options under the Stock Option Plan may be granted by the Board to eligible persons, who are directors, officers, consultants of the Company or its subsidiaries (if any), eligible persons who are employees of a company are providing management services to the Company, or charitable organizations. Options granted under the Stock Option Plan have a maximum exercise period of up to 10 years, as determined by the Board of Directors of the Company.

The Stock Option Plan limits the number of stock options which may be granted to any one individual to not more than 5% of the total Common Shares of the Company in any 12 month period (unless otherwise approved by the "disinterested shareholders" of the Company). A "disinterested shareholder" is a Shareholder who is not a director, officer, promoter, or other insider of the Company, or its associates or affiliates, as such terms are defined under the Securities Act (British Columbia).

The number of Options granted to any one consultant or person employed to provide investor relations activities in any 12-month period must not exceed 2% of the total issued Common Shares of the Company. Any Options granted under the Stock Option Plan will not be subject to any vesting schedule, unless otherwise determined by the Board of Directors of the Company or required by the policies of the TSXV.

Options under the Stock Option Plan may be granted at an exercise price which is at or above the current discounted market price (as defined under the policies of the TSXV) on the date of the grant. In the event of the death or permanent disability of an optionee, any option granted to such optionee will be exercisable upon the earlier of 365 days from the date of death or permanent disability, or the expiry date of the Option. In the event of the resignation, or the termination or removal of an optionee without just cause, any Option granted to such optionee will be exercisable for a period of 90 days thereafter. In the event of termination for cause, any Option granted to such optionee will be cancelled as at the date of termination.

Shareholder Approval

At the Meeting, Shareholders will be asked to consider and vote on the following ordinary resolution (the "Option Plan Resolution") to ratify and approve the continuation of the Stock Option Plan:

"BE IT RESOLVED THAT the Company's stock option plan be and is hereby ratified and approved as the stock option plan of the Company until the next annual general meeting of the Company."

The Stock Option Plan is subject to acceptance of the TSXV. The Board is of the view that the Stock Option Plan provides the Company with the flexibility to attract and maintain the services of executives, employees and other services providers in competition with the other companies the industry. A copy of the Stock Option Plan will be available for inspection at the Meeting. A Shareholder may also obtain a copy of the Stock Option Plan by contacting the Company by telephone at (604) 770-4334.

The Board unanimously recommends that Shareholders vote in favour of the continuation of the Stock Option Plan. Unless otherwise directed, the persons named in the accompanying proxy intend to vote FOR the Option Plan Resolution.

EXECUTIVE COMPENSATION (for the financial year ended December 31, 2019)

For purposes of this Circular, "named executive officer" of the Company means an individual who, at any time during the year, was:

• 1. the Company's Chief Executive Officer ("CEO");
• 1. the Company's Chief Financial Officer ("CFO");
• 1. the Company's three most highly compensated executive officers, other than the CEO and CFO, at the end of the Company's financial year ended December 31, 2019 and whose total compensation was, individually, more than \$150,000 for that financial year; and
• 1. each individual who would be a named executive officer under paragraph (3) but for the fact that the individual was neither an executive officer of the Company, nor acting in a similar capacity, at the end of the Company's financial year ended December 31, 2019;

(each a "Named Executive Officer" or "NEO").

Based on the foregoing definition, during the Company's financial year ended December 31, 2019, there were three Named Executive Officers, namely, its Chief Executive Officer, Keith Morrison, its President, Mark Fedikow, and its Chief Financial Officer, Sarah Zhu.

Compensation Discussion and Analysis

Prior to establishing the Compensation Committee, the Company did not have in place any formal objectives, criteria or analysis; instead, it relied mainly on Board discussion.

The Company's executive compensation program has three principal components: base salary, incentive bonus plan and stock options.

Base Salary

The Company provides senior officers with base salaries or consulting fees which represent their minimum compensation for services rendered, or expected to be rendered. The NEOs' base compensation depends on the scope of their experience, responsibilities, leadership skills, performance, length of service, general industry trends and practices, competitiveness, and the Company's existing financial resources.

Base salary is a fixed element of compensation that is payable to each NEO for performing the specific duties of his or her position. The amount of base salary is determined through negotiation of employment terms with each NEO and is determined on an individual basis. While base salary is intended to fit into the Company's overall compensation objectives by serving to attract and retain talented executive officers, the size of the Company and the nature and stage of its business also impacts the level of base salary. Compensation is set with informal reference to the market for similar jobs in Canada and internationally.

Incentive Bonuses

Incentive bonuses, in the form of cash payments, are designed to add a variable component of compensation based on corporate and individual performance for executive officers and employees. As the Company grows and develops its projects, it is expected that an annual incentive award program will be formalized that will clearly articulate performance objectives and specific measurable goals that will be linked to individual performance criteria set for the NEOs and other executive officers. No bonuses were paid to executive officers and employees during the Company's financial years ended December 31, 2019 or 2018.

Option-Based Awards

Stock options are granted to provide an incentive to the directors, officers, employees and consultants of the Company to achieve the longer-term objectives of the Company; to give suitable recognition to the ability and industry of such persons who contribute materially to the success of the Company; and to attract and retain persons of experience and ability, by providing them with the opportunity to acquire an increased proprietary interest in the Company. The Company awards stock options to its executive officers based upon the recommendation of the Compensation Committee, which recommendation is based on the Compensation Committee's review of a proposal from the Chief Executive Officer. Previous grants of incentive stock options are taken into account when considering new grants.

Implementation of a new incentive stock option plan and amendments to the existing stock option plan are the responsibility of the Compensation Committee.

Other Compensation

Other than as described below under "Termination and Change of Control Benefits" the Company has no other forms of compensation, although payments may be made from time to time to individuals or companies they control for the provision of consulting services. Such consulting services are paid for by the Company at competitive industry rates for work of a similar nature by reputable arm's length services providers.

Compensation Risks

The Compensation Committee is responsible for considering, establishing and reviewing executive compensation programs, and whether the programs encourage unnecessary or excessive risk taking. The Company believes the programs are balanced and do not motivate unnecessary or excessive risk taking.

Base salaries are fixed in amount and thus do not encourage risk taking. While annual incentive awards and bonuses focus on the achievement of short term or annual goals and short term goals may encourage the taking of short-term risks at the expense of long term results, the Company's annual incentive award program is designed to represent a small percentage of employees' total compensation opportunities. No bonuses were paid to executive officers and employees during the Company's financial years ended December 31, 2019 or 2018.

Option awards are important to further align the NEOs' interests with those of the Shareholders. The ultimate value of the awards is tied to the Company's stock price and, since awards are staggered and subject to long-term vesting schedules, they help ensure that NEOs have significant value tied to long-term stock price performance.

Hedging

The Company has not established any policies related to the purchase by directors or executive officers of the Company of financial instruments (including prepaid variable forward contracts, equity swaps, collars, or units of exchange funds) that are designed to hedge or offset a decrease in market value of equity securities granted as compensation or held, directly or indirectly, by any director or executive officer of the Company.

Summary Compensation Table

The following table sets forth the total compensation paid to or earned by the Named Executive Officers for the Company's three most recently completed financial years:

			Share	Option		Non-equity incentive plan compensation (\$)		All other	Total
Name and principal position	Year ended Dec. 31	Salary (\$)	based awards (\$)	based awards(1) (\$)	Annual incentive plans	Long- term incentive plans	Pension value (\$)	compen sation (\$)	compen sation (\$)
Keith Morrison(2)	2019	362,270	Nil	Nil	Nil	Nil	Nil	Nil	362,270
Chief Executive Officer	2018	366,948	Nil	50,091	Nil	Nil	Nil	Nil	417,039
	2017	358,850	Nil	96,900	Nil	Nil	Nil	Nil	455,750
Mark Fedikow	2019	250,000	Nil	Nil	Nil	Nil	Nil	Nil	250,000
President and former Interim Chief Executive	2018	250,000	Nil	12,523	Nil	Nil	Nil	Nil	262,523
Officer	2017	249,996	Nil	27,686	Nil	Nil	Nil	Nil	277,682
Sarah Zhu	2019	185,250	Nil	Nil	Nil	Nil	Nil	Nil	185,250
Chief Financial Officer	2018	132,513	Nil	21,836	Nil	Nil	Nil	Nil	154,349
	2017	Nil	Nil	Nil	Nil	Nil	Nil	Nil	Nil

Notes:

• (1) The value of the option-based awards was calculated based on the fair value of the options on their grant date using the Black-Scholes option pricing model. The Company chose the Black-Scholes model because it is a widely recognized and utilized model for option pricing. There were no options granted in the year ended December 31, 2019. In calculating the fair value of options for the 2018 option grants, management assumed an average risk-free interest rate of 2.04%-2.17 % an expected dividend yield of 0%, an expected life of five years and an average share price volatility of 96.9%-101%. In calculating the fair value of options for the options granted in 2017, management assumed an average risk-free interest rate of 1.17%-1.80% an expected dividend yield of 0%, an expected life of five years and an average share price volatility of 66.6%-100.6%.
• (2) Keith Morrison was appointed Chief Executive Officer of the Company on December 18, 2014. Effective on June 1, 2018, the Company changed the terms of Keith Morrison employment from direct employment to contracted consultant and the Company entered into a service agreement with Mr. Morrison's company.

Incentive Plan Awards

Outstanding Share -Based Awards and Option -Based Awards

The following table sets forth the options granted to the Named Executive Officers to purchase or acquire securities of the Company outstanding at the end of the Company's financial year ended December 31, 2019.

Name	Number of Securities Underlying Unexercised Options (#)	Option Exercise Price (\$)	Option Expiration Date	Value of Unexercised In-the-Money Options (\$)(1)
Keith Morrison, Chief Executive Officer	100,000 175,000 100,000	\$2.10 \$1.20 \$1.20	January 28, 2021 February 21, 2022 March 1, 2023	Nil
Mark Fedikow, President	30,000 50,000 25,000	\$2.10 \$1.20 \$1.20	January 28, 2021 February 21, 2022 March 1, 2023	Nil
Sarah Zhu, Chief Financial Officer	50,000	\$0.12	May 1, 2023	Nil

Notes:

(1) Calculated based on the difference between the closing market price of the Common Shares on the last trading day of the most recently completed financial year (being \$0.16 on December 31, 2019) and the exercise price of the options on that date.

Incentive Plan Awards - Value Vested or Earned During the Year

The following table sets forth the value vested or earned during the year of option-based awards, sharebased awards and non-equity incentive plan compensation paid to Named Executive Officers during the Company's financial year ended December 31, 2019. The aggregate value of the option-based awards vested during the year is based on the difference between the Company's share price on the vesting day of any options that vested during the financial year ended December 31, 2019 and the exercise price of the options.

Name	Option-based Awards - Value Vested During the Year (\$)	Non-Equity Incentive Plan Compensation - Value Earned During the Year (\$)
Keith Morrison, Chief Executive Officer	Nil	Nil
Mark Fedikow, President and former Interim Chief Executive Officer	Nil	Nil
Sarah Zhu, Chief Financial Officer	Nil	Nil

Termination and Change of Control Benefits

Keith Morrison Employment Agreement

Effective on June 1, 2018, the Company and Keith Morrison changed the terms of Mr. Morrison's employment from direct employment to contracted consultant and entered into a service agreement with his company Lacnikdon Limited.

Under the service agreement, Mr. Morrison, through his company, is entitled a monthly service fee of \$30,950.88 plus application tax.

If the service agreement is terminated without cause by the Company during a Change of Control Window (6 months following the Change of Control event), or by Mr. Morrison for Good Reason (as defined below) during a Change of Control Window, the Company shall pay to Mr. Morrison in lump sum or in monthly installments cash amount equal to twenty-four months service fees at the date of termination. If the service agreement is terminated without cause by the Company outside the Change of Control Window a following a change of control, or by Mr. Morrison for Good Reason outside of a Change of Control Window, the Company shall pay to Mr. Morrison in lump sum or in monthly installments cash amount equal to eighteen months service fees at the date of termination.

Under the service agreement, "Good Reason" means, without Mr. Morrison's consent, any of the following: (i) a decrease in fees that would result in decline of at least 10% of the amount of the fees Mr. Morrison received in the proceeding twelve-month period (unless such reduction applies to all senior management); (ii) continued failure to pay fees; or (iii) a fundamental change in the service.

Sarah Zhu Employment Agreement

Sarah Zhu and the Company entered into an employment agreement dated April 28, 2018, setting out the terms and conditions of Ms. Zhu's employment as Chief Financial Officer of the Company.

Under the employment agreement Ms. Zhu's employment commenced on May 1, 2018 and she is entitled to a base annual salary of \$190,000.

Under the employment agreement, if Ms. Zhu is terminated without cause, the Company shall pay a lump sum payment or salary continuance at the Company's sole discretion equal to six (6) months plus one (1) month calculated on a pro rata basis for each year of continuous service, to a cumulative maximum period of twelve (12) months.

Mark Fedikow Employment Agreement

Mark Fedikow and the Company entered into an employment agreement dated September 1, 2015, setting out the terms and conditions of Mr. Fedikow's employment as President of the Company.

Under the employment agreement Mr. Fedikow's employment commenced on September 1, 2015, however, for any purpose requiring a calculation involving his start date, his start date is deemed to be May 1, 2010. May 1, 2010 represents the beginning of Mr. Fedikow's relationship with the Company through Mount Morgan Resources Ltd.

Under the employment agreement, Mr. Fedikow is entitled to a base annual salary of \$200,000.

Under the employment agreement, the Company also agreed to grant to Mr. Fedikow \$50,000 per year in restricted share units, each with a duration of three years. However, pending the issuance of the restricted share units, it was agreed that Mr. Fedikow's base salary will be calculated on the basis of an annual amount of \$250,000.

Under the employment agreement, if Mr. Fedikow is terminated without cause, the Company shall pay a lump sum payment or salary continuance at the Company's sole discretion equal to eighteen months pay at Mr. Fedikow's base salary.

In the event of a change of control, if Mr. Fedikow terminates the employment agreement during the six month period following such event, the Company shall pay a lump sum payment or salary continuation at the Company's sole discretion equal to twenty-four months' pay at Mr. Fedikow's base salary.

As of August 1st, 2020 Mark Fedikow transitioned from an employee agreement to a consulting agreement, pursuant to which he is entitled to a daily rate equivalent of \$1,500.

Estimated Termination and Change of Control Payments

The following shows the estimated incremental payments that would be payable to each of the NEOs of the Company in the event of a change of control or termination without cause of such NEOs on December 31, 2019.

Name	Estimated Payment for a Termination without Cause or resignation for Good Reason during a Window Period(1) (\$)	Estimated Payment for a Termination without Cause or resignation for Good Reason outside a Window Period(2) (\$)
Keith Morrison, Chief Executive Officer	742,821	557,100

Notes:

(2) Represents 18 months' salary at \$371,410 per annum, as well as the value of \$nil options that would become vested as a result of such event, based on the closing price of the Common Shares of \$0.16 on December 31, 2019.

Name	Estimated Change of Control Payment (\$)	Estimated Termination Without Cause Payment (\$)
Sarah Zhu, Chief Financial Officer	Nil	118,750

Director Compensation

Director Compensation Table

The following table sets forth the value of all compensation provided to directors, not including those directors who are also Named Executive Officers, for the Company's financial year ended December 31, 2019.

Name	Fees Earned (\$)	Option-Based Awards (\$)	All Other Compensation (\$)	Total (\$)
Gilbert Clark	23,400	Nil	Nil	23,400
Douglas E. Ford(1)	29,250	Nil	Nil	29,250
Christopher Messina	32,250	Nil	Nil	32,250
Charles Riopel	14,250	Nil	Nil	14,250
John Sabine(2)	35,100	Nil	Nil	35,100

Notes:

⁽¹⁾ Represents 24 months' salary at \$371,410 per annum, as well as the value of \$nil options that would become vested as a result of such event, based on the closing price of the Common Shares of \$0.16 on December 31, 2019.

⁽¹⁾ Pursuant to an Amended Management Services Agreement dated as of May 1, 2010, the Company engaged Dockside Capital Group Inc. ("Dockside") for management services. Dockside is a management services company controlled, in part, by Edward D. Ford and Douglas E. Ford, each of whom was a director of the Company during the financial year ended December 31, 2019. The monthly management fee payable under the agreement is \$2,500, plus applicable taxes.

⁽²⁾ John Sabine is not standing for re-election at the Meeting and ceased to be a director on June 17th, 2020.

Outstanding Share -Based Awards and Option -Based Awards

The following table sets forth the options granted to the directors of the Company, not including those directors who are also Named Executive Officers, to purchase or acquire securities of the Company outstanding at the end of the Company's financial year ended December 31, 2019.

Name	Option-Based Awards Number of Securities Underlying Unexercised Options (#)	Option Exercise Price (\$)	Option Expiration Date	Value of Unexercised In-the-Money Options(1) (\$)
Gilbert Clark	26,000	\$2.10	January 28, 2021	Nil
	32,500	\$1.20	February 21, 2022	Nil
	35,000	\$1.20	March 1, 2023	Nil
Douglas E. Ford	33,100	\$2.10	January 28, 2021	Nil
	40,625	\$1.20	February 21, 2022	Nil
	35,000	\$1.20	March 1, 2023	Nil
Christopher Messina	25,000	\$2.00	October 5, 2020	Nil
	26,500	\$2.10	January 28, 2021	Nil
	32,500	\$1.20	February 21, 2022	Nil
	35,000	\$1.20	March 1, 2023	Nil
John Sabine(2)	45,000	\$2.10	January 28, 2021	Nil
	50,000	\$1.20	February 21, 2022	Nil
	50,000	\$1.20	March 1, 2023	Nil

Notes:

(1) Calculated based on the difference between the closing market price of the Common Shares on the last trading day of the most recently completed financial year (being \$0.16 on December 31, 2019) and the exercise price of the options on that date.

(2) John Sabine is not standing for re-election at the Meeting and ceased to be a director on June 17th, 2020.

Incentive Plan Awards - Value Vested or Earned During the Year

The following table sets forth the value vested or earned during the year of option-based awards and nonequity incentive plan compensation paid to the directors of the Company, not including those directors who are also Named Executive Officers, during the financial year ended December 31, 2019. The aggregate value of the option-based awards vested during the year is based on the difference between the Company's share price on the vesting day of any options that vested during the financial year ended December 31, 2019 and the exercise price of the options.

	Option-Based Awards - Value Vested During the Year	Non-Equity Incentive Plan Compensation - Value Earned During the Year
Name	(\$)	(\$)
Gilbert Clark	Nil	Nil
Douglas E. Ford	Nil	Nil
Christopher Messina	Nil	Nil
John Sabine(1)	Nil	Nil

Notes:

(1) John Sabine is not nominated for re-election at the Meeting and ceased to be a director on June 17th, 2020

EQUITY COMPENSATION PLAN INFORMATION

The following table sets forth certain information pertaining to the Company's equity compensation plan as at the end of the Company's financial year ended December 31, 2019:

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (A)	Weighted-average exercise price of outstanding options, warrants and rights (B)	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (A))(1) (C)
Equity compensation plans approved by security holders	Options: 2,130,550 Warrants: 15,651,397	\$0.15 \$0.96	6,738,529 Nil
Total	17,781,947	\$0.86	6,738,529

Note:

(1) Based on a total of 8,869,079 options issuable pursuant to the Stock Option Plan, representing 10% of the Company's issued and outstanding share capital of 88,690,791 Common Shares as at December 31, 2019.

INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS

None of the directors or executive officers of the Company, no proposed nominee for election as a director of the Company, and no associates or affiliates of any of them, is or has been indebted to the Company, its subsidiaries or another entity at any time since the beginning of the Company's last completed financial year.

INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS

Other than as otherwise described in this Circular, no informed person of the Company, no proposed nominee for election as a director of the Company and no associate or affiliate of any of the foregoing, has any material interest, direct or indirect, in any transaction since the commencement of the Company's last financial year or in any proposed transaction, which, in either case, has materially affected or will materially affect the Company or any of its subsidiaries.

MANAGEMENT CONTRACTS

Management functions of the Company and its subsidiaries are substantially performed by the Company's directors and executive officers. Other than as described above under "Termination and Change of Control Benefits" the Company has not entered into any contracts, agreements or arrangements with parties other than its directors and executive officers for the provision of such management functions.

CORPORATE GOVERNANCE

General

The Board believes that good corporate governance improves corporate performance and benefits all Shareholders. National Policy 58-201 – Corporate Governance Guidelines provides non-prescriptive guidelines on corporate governance practices for reporting issuers such as the Company. In addition, National Instrument 58-101 – Disclosure of Corporate Governance Practices ("NI 58-101") prescribes certain disclosure by the Company of its corporate governance practices. This disclosure is presented below.

Board of Directors

The Board facilitates its exercise of independent supervision over the Company's management through frequent meetings of the Board.

The Board will, assuming the election of management's nominees for appointment to the Board as described in this Circular, be comprised of five directors, four of whom will be independent for the purposes of NI 58-101. Keith Morrison is not independent as he is Chief Executive Officer of the Company.

Directorships

Certain directors and proposed directors are also directors of other reporting issuers, as follows:

Director	Other Reporting Issuers
Douglas E. Ford	Chemistree Technology Inc.
Gilbert Clark	Meridian Mining SE
Charles Riopel	Meridian Mining SE

Orientation and Continuing Education

New Board members receive an orientation package which includes reports on operations and results, and public disclosure filings by the Company. Board meetings are sometimes held at the Company's offices and, from time to time, are combined with presentations by the Company's management to give the directors additional insight into the Company's business. In addition, management of the Company makes itself available for discussion with all Board members.

Ethical Business Conduct

The Board has found that the fiduciary duties placed on individual directors by the Company's governing corporate legislation and the common law and the restrictions placed by applicable corporate legislation on an individual director's participation in decisions of the Board in which the director has an interest have been sufficient to ensure that the Board operates independently of management and in the best interests of the Company.

Nomination of Directors

The Board considers its size each year when it considers the number of directors to recommend to the Shareholders for election at the annual meeting of Shareholders, taking into account the number required to carry out the Board's duties effectively and to maintain a diversity of view and experience.

The Board does not have a nominating committee, and these functions are currently performed by the Board as a whole. However, if there is a change in the number of directors required by the Company, this policy will be reviewed.

Compensation Committee

Prior to March 27, 2014, the Company did not have a separate Compensation Committee and compensation matters were dealt with by the entire Board.

Effective March 27, 2014, a Compensation Committee was created. The Compensation Committee is responsible for, among other things, evaluating the performance of the Company's executive officers, determining or making recommendations to the Board with respect to the compensation of the Company's executive officers, making recommendations to the Board with respect to director compensation, incentive compensation plans and equity-based plans, making recommendations to the Board with respect to the compensation policy for the employees of the Company or its subsidiaries and ensuring that the Company is in compliance with all legal requirements with respect to compensation disclosure. In performing its duties, the Compensation Committee has the authority to engage such advisors, including executive compensation consultants, as it considers necessary.

The Compensation Committee is currently composed of Christopher Messina (Chair), Gilbert Clark and Douglas E. Ford. Messrs. Messina, Clark and Ford are independent directors within the meaning set out in NI 58-101. Each of the members of the Compensation Committee are experienced participants in business or finance, and have sat on the boards of directors of other companies, charities or business associations, in addition to the Board of the Company.

The recommendations of the Compensation Committee are based primarily on analysis which compares the Company's pay levels and compensation practices with other reporting issuers of the same size as and which are active in the industry and/or market in which the Company competes for talent. This analysis provides valuable information that will allow the Company to make adjustments, if necessary, to attract and retain the best individuals to meet the Company's needs and provide value to the Company's Shareholders.

Other Board Committees

In addition to the Audit Committee and the Compensation Committee, effective March 27, 2014, the Board formed the following committees with the members indicated:

Committee	Director/Officer Members	Description of Function of Committee
Disclosure Compliance Committee	Charles Riopel (Chair), Keith Morrison	The Disclosure Committee shall assist the Company's officers and directors in fulfilling the Company's and their responsibilities regarding (i) the identification and disclosure of material information about the Company and (ii) the accuracy, completeness and timeliness of the company's financial reports.
Corporate Governance Committee	Douglas E. Ford (Chair), Gilbert Clark, Zhen Janet Huang	Maintain the system of rules, practices and processes by which the Company is directed and controlled.
Technical Oversight Committee	Gilbert Clark (Chair), Keith Morrison, Charles Riopel	Discussing, developing and applying specialist geotechnical knowledge related to the Company's materials and disclosure.

Assessments

Due to the minimal size of the Company's Board of Directors, no formal policy has been established to monitor the effectiveness of the directors, the Board and its committees.

AUDIT COMMITTEE

Under National Instrument 52-110 – Audit Committees ("NI 52-110"), reporting issuers are required to provide disclosure with respect to their Audit Committee including the text of the Audit Committee's Charter, composition of the Audit Committee, and the fees paid to the external auditor. The Board adopted an audit committee charter on May 2, 2006. The Company provides the following disclosure with respect to its Audit Committee:

Audit Committee Charter

The Audit Committee has adopted an audit committee charter, a copy of which is attached as Schedule A to this Circular.

Composition of Audit Committee

The following are the members of the Audit Committee:

Name	Whether Independent(1)	Whether Financially Literate(2)
Douglas E. Ford	Independent	Financially Literate
Charles Riopel	Independent Financially Literate
Christopher Messina	Independent	Financially Literate

Notes:

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

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

Relevant Education and Experience

The relevant education and/or experience of each member of the Audit Committee is as follows:

Mr. Douglas E. Ford holds a BA in Political Science from the University of British Columbia in 1986. Mr. Ford is also directly responsible for the financial reporting of several public and private companies and has over 30 years' experience in financial reporting.

Mr. Riopel is a senior-level executive with 20+ years domestic/international investment experience in mining. He has managed both private and public investment funds. He is the founder and managing partner at Latitude 45, a private equity fund specialized in mining. Prior thereto, he was Senior Investment Director at The Sentient Group, one of the largest PE Funds in mining with over US\$2.7 billion under management.

Mr. Messina is an experienced investment banker with over 20 years' experience in the capital markets. He has advised multiple global exchanges, commodity producers and traders, private equity firms, corporations and sovereign wealth funds. He is currently an advisor to artificial intelligence and big data software companies focused on applying advanced computational techniques to the global capital and cyber security markets. He has a BA in Anthropology from the University of Chicago, where he was a National Merit Scholar, and an MBA in Finance from the Australian Graduate School of Management.

Audit Committee Oversight

At no time since the commencement of the Company's financial year ended December 31, 2019 was a recommendation of the Audit Committee to nominate or compensate an external auditor not adopted by the Board of Directors.

Reliance on Certain Exemptions

At no time since the commencement of the Company's financial year ended December 31, 2019 has the Company relied on the exemption in Section 2.4 of NI 52-110 (De Minimis Non-Audit Services), or an exemption from NI 52-110, in whole or in part, granted under Part 8 of National Instrument 52-110.

Pre-Approval Policies and Procedures

The Audit Committee is authorized by the Board to review the performance of the Company's external auditors and approve in advance provision of services other than auditing and to consider the independence of the external auditors, including a review of the range of services provided in the context of all consulting services bought by the Company. The Audit Committee is authorized to approve in writing any non-audit services or additional work which the Chairman of the Audit Committee deems is necessary, and the Chairman of the Audit Committee will notify the other members of the Audit Committee of such non-audit or additional work and the reasons for such non-audit work for the Audit Committee's consideration and, if thought fit, approval in writing.

External Auditor Service Fees

The fees billed by the Company's external auditors in each of the last two financial years for audit and nonaudit related services provided to the Company or its subsidiaries are as follows:

Financial Year Ending Dec 31	Audit Fees	Audit-Related Fees	Tax Fees	All Other Fees
2019	\$35,427	Nil	\$1,350	Nil
2018	\$33,150	Nil	\$1,250	Nil

Exemption

The Company is a "venture issuer" as defined in NI 52-110 and as such is exempt from the requirements of Part 3 Composition of the Audit Committee and Part 5 Reporting Obligations of NI 52-110.

ADDITIONAL INFORMATION

Financial information is provided in the Company's audited annual financial statements and accompanying management's discussion and analysis ("MD&A") for the year ended December 31, 2018. Any person or company who wishes to receive interim financial statements from the Company may deliver a written request for such material to the Company or the Company's agent, together with a signed statement that the persons or company is the owner of securities of the Company. Shareholders who wish to receive interim financial statements are encouraged to send the enclosed mail card, together with the completed form of proxy, in the addressed envelope provided, to the Company's registrar and transfer agent, Computershare Investor Services Inc., Suite 300, 510 Burrard Street, Vancouver, British Columbia, V6C 3B9. The Company will maintain a supplemental mailing list of persons or companies wishing to receive interim financial statements.

Shareholders wishing to obtain copies of the Company's financial statements and related MD&A can do so by contacting the Company at Suite 2500, 666 Burrard Street, Vancouver, BC, V6C 2X8 Phone: (604) 770- 4334. Additional information relating to the Company is available on SEDAR under the Company's issuer profile at www.sedar.com.

GENERAL

Unless otherwise specified, all matters referred to herein for approval by the Shareholders require a simple majority of the Shareholders voting, in person or by proxy, at the Meeting. Where information contained in this Circular rests specifically within the knowledge of a person other than the Company, the Company has relied upon information furnished by such person.

The contents of this Circular have been approved and this mailing has been authorized by the Board of Directors of the Company.

DATED at Vancouver, British Columbia as of the 17th day of August, 2020.

BY ORDER OF THE BOARD OF DIRECTORS "Keith Morrison" Chief Executive Officer North American Nickel Inc.

SCHEDULE "A"

AUDIT COMMITTEE CHARTER

The Audit Committee (the "Committee") is a committee of the Board of Directors (the "Board") to which the Board delegates its responsibility for oversight of the financial reporting process.

The Audit Committee shall assist the Board in fulfilling its responsibilities by:

• reviewing the financial reporting process in place to ensure the integrity of North American Nickel Inc. (the "Corporation") financial statements,
• evaluating the independent auditor's qualifications, performance and independence,
• enhance the independence of the independent auditor;
• assessing the processes relating to the determination and mitigation of risks and the maintenance of an effective control environment; and
• reviewing the processes to monitor compliance with laws and regulations.

The Audit Committee will provide an open avenue of communication among the independent auditor, financial and senior management of the Corporation and the Board. The Audit Committee has the sole authority to approve any non-audit engagement by the Corporation's independent auditors and to approve all audit engagement fees and terms.

Duties and Responsibilities of the Audit Committee:

1) Financial Reporting

• a) Review, with management and the independent auditor, the Corporation's annual financial statements, independent auditor reports, and disclosures under "Management's Discussion and Analysis" before they are reviewed by the Board. Review interim financial information before it is released to the public. Review all public disclosure documents containing audited or unaudited financial information before release, including any prospectus, the annual report, the annual information form and management's discussion and analysis.
• b) The Audit Committee Chair, as a representative of the Committee, shall consult directly with the independent auditor to obtain their comments with respect to interim reports including related "Management's Discussion and Analysis" (as a result of their limited scope review of the interim reports).
• c) Conduct an investigation sufficient to provide reasonable grounds for believing that the financial statements and reports referred to in a) above are complete in all material respects and consistent with the information known to Committee members, and assess whether the financial statements reflect appropriate accounting principles.

• d) Review with senior management of the Corporation and the independent auditor, management's handling of any proposed audit adjustments identified by the independent auditors.

• e) Meet with the independent auditor to review the results of the annual audit, their judgments about the quality and appropriateness of the Corporation's accounting principles, and any audit problems or difficulties and management's response.

• f) Review and resolve any significant disagreement among the Corporation's management and the independent auditors in the financial reporting process.
• g) Review the integrity of the Corporation's internal and external financial reporting process, in consultation with the independent auditors.
• h) Consider, evaluate and recommend to the Board such changes as are appropriate to the Corporation's auditing and accounting principles and practices as suggested by the independent auditors or the Corporation's senior management.
• i) Review with independent auditors and the Corporation senior management the extent to which changes and improvements in financial and accounting practices, as approved by the Audit Committee, have been implemented.

2) Independent Auditor

• a) Approve the independent auditors' proposed audit scope, approach and fees
• b) At least annually, obtain and review a report by the independent auditor describing:
• i) the firm's internal quality-control procedures, and
• ii) any material issues raised by the most recent internal quality-control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the firm, and any steps taken to deal with any such issues.
• c) Confirm the independence of the independent auditor by discussing and reviewing all significant relationships that the independent auditors have with the Corporation and obtaining their assertion of independence in accordance with professional standards.
• d) Review the performance of the independent auditor.
• e) Engage the Corporation's independent auditor and present recommendations on the appointment or discharge of the independent auditor to the Board for presentation to the shareholders.
• f) Approve in advance of the Corporation's final commitment all consulting arrangements and any other non-audit service with the Corporation's independent auditors other than services related to limited scope reviews of interim reports and Canadian and US tax services.
• g) Approve all audit fees and terms.
• h) When there is to be a change in the auditor, review all issues relating to the change including any reportable events.

i) Review any engagements for non-audit services to be provided by the independent auditor's firm or affiliates, together with estimated fees and consider the independence of the auditor.

3) Risk Assessment and Risk Management

• a) Discuss with Corporation management guidelines and policies governing the risk assessment and risk management processes.
• b) Review with Corporation management, the independent auditors, significant risks and exposures. Review management's plans and processes to minimize such risks, including insurance coverage.
• c) Evaluate whether Corporation management is adequately communicating the importance of internal control to all relevant personnel.
• d) Periodically privately consult with the independent auditor about internal controls and the completeness and accuracy of the Corporation's financial statements.
• e) Review whether the internal control recommendations made by the internal auditors and the independent auditor are being implemented by Corporation management and, if not, why not.

4) Compliance with Relevant Laws and Regulations

a) Periodically obtain updates from the Corporation's senior management regarding procedures and processes to ensure compliance with applicable laws and regulations (including but not limited to, securities, tax and environmental matters).

5) Other Responsibilities

• a) Meet at least five times annually (for review of Q1, Q2 and Q3 interim reports as well as pre and post audit) with Corporation management and the independent auditors in separate sessions.
• b) Review President and Chief Executive Officers' expenses and perquisites at least once a year.
• c) Review all consulting fees paid by the Corporation to any organization where such fees exceed \$20,000 annually.
• d) Institute special investigations, if necessary, and hire special counsel or experts to assist, if appropriate.
• e) Review and update this Charter at least annually, and obtain approval of changes from the Board.
• f) Set clear hiring policies for employees or former employees of the independent auditors.
• g) Review the procedures established for the receipt, retention, and treatment of complaints received by the Corporation regarding accounting, internal accounting controls, or auditing matters.

6) Governance Duties

• a) Review the procedures established allowing the confidential, anonymous submission by Corporation employees of concerns regarding questionable accounting or auditing matters and resolution of such concerns, if any.
• b) Review with the Board, any issues that arise with respect to the quality or integrity of the Corporation's financial statements, the Corporation's compliance with legal or regulatory requirements and the performance and independence of the Corporation's independent auditors.
• c) Perform other oversight functions as requested by the Board.
• d) As considered necessary in the course of fulfilling Audit Committee duties, obtain advice and assistance from outside legal, accounting or other advisors.
• e) Report after each meeting to the Board regarding actions taken and matters discussed by the Committee.

Organization of the Audit Committee

The Audit Committee shall be comprised of a minimum of 3 Directors including a Committee Chair, the majority of which, in the opinion of the Board, are unrelated directors. Each member of the Committee shall have a working knowledge of basic finance and accounting practices. The Chair of the Committee must have accounting or related financial management experience. The members of the Committee and its Chair shall be appointed by the Board. Appointments shall be made in accordance with procedures established by the Governance Committee of the Board of Directors from time to time.

The Corporation will adequately fund the budget of the Audit Committee. The budget will include, at a minimum, payments to the independent auditors for audit services and, if necessary, other professionals retained by the Audit Committee from time to time.

The Committee shall meet at five times annually (for review of Q1, Q2 and Q3 interim reports as well as pre and post audit), or more frequently as circumstances dictate. On an annual basis, the Committee shall report to the Board on the Committee's performance against its charter and the goals established annually by the Committee for itself.

Procedure Governing Errors or Misstatements in Financial Statements

In the event a director or an officer of the Corporation has reason to believe, after discussion with management, that a material error or misstatement exists in financial statements of the Corporation, that director or officer shall forthwith notify the Audit Committee and the auditor of the error or misstatement of which the director or officer becomes aware in a financial statement that the auditor or a former auditor has reported on.

If the auditor or a former auditor of the Corporation is notified or becomes aware of an error or misstatement in a financial statement on which the auditor or former auditor has reported, and if in the auditor's or former auditor's opinion the error or misstatement is material, the auditor or former auditor shall inform each director accordingly

When the Audit Committee or the Board is made aware of an error or misstatement in a financial statement the Board shall prepare and issue revised financial statements or otherwise inform the shareholders and file such revised financial statements as required.

Limitation on Audit Committee Members' Duties

Nothing in this Charter is intended, or may be construed, to impose on any member of the Audit Committee a standard of care or diligence that is in any way more onerous or extensive than the standard required by law.

The Audit Committee is a committee of the Board of Directors (the "Board") to which the Board delegates its responsibility for oversight of the financial reporting process.

The Audit Committee shall assist the Board in fulfilling its responsibilities by:

• Reviewing the financial reporting process in place to ensure the integrity of the Corporation's financial statements,
• Evaluating the independent auditor's qualifications, performance and independence,
• Enhance the independence of the independent auditor;
• Assessing the processes relating to the determination and mitigation of risks and the maintenance of an effective control environment; and
• Reviewing the processes to monitor compliance with laws and regulations.

The Audit Committee will provide an open avenue of communication among the independent auditor, financial and senior management of the Corporation and the Board. The Audit Committee has the sole authority to approve any non-audit engagement by the Corporation's independent auditors and to approve all audit engagement fees and terms.