Power Metallic Mines Inc. — Proxy Solicitation & Information Statement 2020

Dec 9, 2020

CHILEAN METALS INC.

202 – 82 Richmond Street East Toronto, Ontario M5C 1P1

INFORMATION CIRCULAR

as of November 16, 2020 (unless otherwise noted)

MANAGEMENT SOLICITATION OF PROXIES

This Information Circular is furnished to you in connection with the solicitation of proxies by management of Chilean Metals Inc. ("we", "us" or the "Company") for use at the Annual General Meeting (the "Meeting") of shareholders of the Company to be held on Monday December 21, 2020 at 10 a.m. at 202 – 82 Richmond Street East Toronto, Ontario M5C 1P1 and at any adjournment of the Meeting. The Company will conduct its solicitation by mail and our officers, directors and employees may, without receiving special compensation, contact shareholders by telephone, electronic means or other personal contact. We will not specifically engage employees or soliciting agents to solicit proxies. We do not reimburse shareholders, nominees or agents (including brokers holding shares on behalf of clients) for their costs of obtaining authorization from their principals to sign forms of proxy. We will pay the expenses of this solicitation.

Due to the COVID19 Pandemic and given the restrictions on public gatherings and in the best interest of the health of all participants in the Company's Meeting, the Company respectfully asks that all shareholders do not attend the Meeting in person. The Company requests that shareholders who wish to participate by listening to the Meeting, contact the Company by December 17, 2020 at terry@chileanmetals.com to be included in the telephone conference for the Meeting. the Company will arrange for telephone participation for all shareholders who have requested it by December 17, 2020. However, the Company strongly recommends that shareholders vote by Proxy or VIF in advance to ease the voting tabulation at the Meeting by AST Trust Company (Canada). If public health guidelines regarding physical distancing in Ontario have changed by December 21, 2020, the Company will issue a news release advising of permitted Meeting attendance in accordance with such updated guidelines.

APPOINTMENT OF PROXY HOLDER

The persons named as proxy holders in the enclosed form of proxy are the Company's directors or officers. As a shareholder, you have the right to appoint a person (who need not be a shareholder) in place of the persons named in the form of proxy to attend and act on your behalf at the Meeting. To exercise this right, you must either insert the name of your representative in the blank space provided in the form of proxy and strike out the other names or complete and deliver another appropriate form of proxy.

A proxy will not be valid unless it is dated and signed by you or your attorney duly authorized in writing or, if you are a corporation, by an authorized director, officer, or attorney of the corporation.

VOTING BY PROXY

The persons named in the accompanying form of proxy will vote or withhold from voting the shares represented by the proxy in accordance with your instructions, provided your instructions are clear. If you have specified a choice on any matter to be acted on at the Meeting, your shares will be voted or withheld from voting accordingly. If you do not specify a choice or where you specify both choices for any matter to be acted on, your shares will be voted in favour of all matters.

The enclosed form of proxy gives the persons named as proxy holders discretionary authority regarding amendments or variations to matters identified in the Notice of Meeting and any other matter that may properly come before the Meeting. As of the date of this Information Circular, our management is not aware of any such amendment, variation or other matter proposed or likely to come before the Meeting. However, if any amendment, variation or other matter properly comes before the Meeting, the persons named in the form of proxy intend to vote on such other business in accordance with their judgement.

You may indicate the manner in which the persons named in the enclosed proxy are to vote on any matter by marking an "X" in the appropriate space. If you wish to give the persons named in the proxy a discretionary authority on any matter described in the proxy, then you should leave the space blank. In that case, the proxy holders nominated by management will vote the shares represented by your proxy in accordance with their judgment.

RETURN OF PROXY

You must deliver the completed form of proxy to the office of the Company's registrar and transfer agent, AST Trust Company (Canada), PO Box 721 Agincourt, Ontario M1S 0A1, via fax at 1-866-781-3111 (toll free in North America) or 416-368-2505 or via e-mail at proxyvote@astfinancial.com or to the Company's head office at the address listed on the cover page of this Information Circular, not less than 48 hours (excluding Saturdays, Sundays, and holidays) before the scheduled time of the Meeting or any adjournment.

ADVICE TO NON-REGISTERED SHAREHOLDERS

Only shareholders whose names appear on our records or validly appointed proxy holders are permitted to vote at the Meeting. Most of our shareholders are "non-registered" shareholders because their shares are registered in the name of a nominee, such as a brokerage firm, bank, trust company, trustee or administrator of a self-administered RRSP, RRIF, RESP or similar plan or a clearing agency such as CDS Clearing and Depository Services Inc. (a "Nominee"). If you purchased your shares through a broker, you are likely a non-registered shareholder.

Non-registered holders who have not objected to their Nominee disclosing certain ownership information about themselves to us are referred to as "NOBOs". Those non-registered Holders who have objected to their Nominee disclosing ownership information about themselves to us are referred to as "OBOs".

In accordance with the securities regulatory policy, we will have distributed copies of the Meeting materials, being the Notice of Meeting, this Information Circular, and the form of proxy directly to NOBOs and to the Nominees for onward distribution to OBOs. The Company does not intend to pay for a Nominee to deliver to OBOs, therefore an OBO will not receive the materials unless the OBO's Nominee assumes the costs of delivery.

Nominees are required to forward the Meeting materials to each OBO unless the OBO has waived the right to receive them. Shares held by Nominees can only be voted in accordance with the instructions of the non-registered shareholder. Meeting materials sent to non-registered holders who have not waived the right to receive Meeting materials are accompanied by a request for voting instructions (a "VIF"). This form is instead of a proxy. By returning the VIF in accordance with the instructions noted on it, a non-registered holder is able to instruct the registered shareholder (or Nominee) how to vote on behalf of the non-registered shareholder. VIFs, whether provided by the Company or by a Nominee, should be completed and returned in accordance with the specific instructions noted on the VIF.

In either case, the purpose of this procedure is to permit non-registered holders to direct the voting of the Shares which they beneficially own. Should a non-registered holder who receives a VIF wish to attend the Meeting or have someone else attend on his/her behalf, the non-registered holder may request (in writing) to the Company or its Nominee, as applicable, without expense to the non-registered holder, that the non-registered holder or his/her nominee be appointed as proxyholder and have the right to attend and vote at the Meeting. Non-registered holders should carefully follow the instructions set out in the VIF including those regarding when and where the VIF is to be delivered.

REVOCATION OF PROXY

If you are a registered shareholder who has returned a proxy, you may revoke your proxy at any time before it is exercised. In addition to revocation in any other manner permitted by law, a registered shareholder who has given a proxy may revoke it by either:

• (a) signing a proxy bearing a later date; or
• (b) signing a written notice of revocation in the same manner as the form of proxy is required to be signed as set out in the notes to the proxy.

The later proxy or the notice of revocation must be delivered to the office of the Company's registrar and transfer agent or to the Company's head office at any time up to and including the last business day before the scheduled time of the Meeting or any adjournment, or to the Chairman of the Meeting on the day of the Meeting or any adjournment.

If you are a non-registered shareholder who wishes to revoke a VIF or to revoke a waiver of your right to receive Meeting materials and to give voting instructions, you must give written instructions to your Nominee at least seven days before the Meeting.

INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON

None of the directors or executive officers of the Company, nor any person who has held such a position since the beginning of the last completed financial year of the Company, nor any proposed nominee for election as a director of the Company, nor any associate or affiliate of the foregoing persons, has any substantial or material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter to be acted on at the Meeting other than the adoption of the Company's stock option plan and the approval of the creation of a new control person, approval of which will be sought at the Meeting. Directors and executive officers of the Company may participate in the Company's stock option plan, and accordingly have an interest in its approval. Hugh Maddin, the control person of Granby Gold Inc. ("Granby"), is a proposed control person of the Company. See "Particulars of Matters to be Acted Upon".

VOTING SHARES AND PRINCIPAL SHAREHOLDERS

The Company is authorized to issue an unlimited number of common shares without par value, of which 44,337,226 common shares are issued and outstanding as of November 16, 2020. There is only one class of voting shares. The Company is also authorized to issue non-voting Class A preference shares with a par value of $4.00 and Class B preference shares with a par value of $20.00. There are no Class A or Class B preference shares issued and outstanding.

Persons who are registered shareholders at the close of business on November 16, 2020 will be entitled to receive notice of, attend, and vote at the Meeting. On a show of hands, every shareholder and proxy holder will have one vote and, on a poll, every shareholder present in person or represented by proxy will have one vote for each share. In order to approve a motion proposed at the Meeting, a majority of more than 50% of the votes cast will be required to pass an ordinary resolution, and a majority of at least two thirds of the votes cast will be required to pass a special resolution.

To the knowledge of our directors and executive officers, other than as set out below, there are no persons or companies that beneficially own, directly or indirectly, or exercise control or direction over, shares carrying more than 10% of all voting rights as of November 16, 2020.

Name of Shareholder	Number of Shares BeneficiallyOwned, Directly or Indirectly, orover which Control or Directionis Exercised	Percentage of Class
Samuel Stern	2,033,211	4.58%(1)

Note:

(1) Mr. Stern also holds 1,250,000 warrants exercisable into shares of the Company and is proposed to be issued up to 5,000,000 warrants exercisable into shares under a debt restructuring transaction disclosed on October 9, 2020. If Mr. Stern exercised the total amount, he would hold 8,283,211 shares representing, on a partially diluted basis, 16.3% of the outstanding common shares.

ELECTION OF DIRECTORS

Directors of the Company are elected at each annual general meeting and hold office until the next annual general meeting or until that person sooner ceases to be a director. The shareholders will be asked to pass an ordinary resolution to set the number of directors of the Company at four (4) for the next year, subject to any increases permitted by the Company's Articles.

The Board adopted an advance notice policy (the "Advance Notice Policy") on October 4, 2018 with effect as of such date. The Advance Notice Policy provides for advance notice to the Corporation in circumstances where nominations of persons for election to the Board are made by shareholders of the Corporation other than pursuant to (i) a requisition of a meeting made pursuant to the provisions of the Business Corporations Act (British Columbia) ("BCBCA") or (ii) a shareholder proposal made pursuant to the provisions of the "BCBCA".

Among other things, the Advance Notice Policy fixes a deadline by which holders of Common Shares must submit director nominations to the Corporation prior to any annual general or special meeting of shareholders and sets forth the minimum information that a shareholder must include in the notice to the Corporation for the notice to be in proper written form. The Corporation has not received notice of a nomination in compliance with the Advance Notice Policy and, as such, any nominations other than nominations by or at the direction of the Board or an authorized officer of the Corporation will be disregarded at the Meeting.

Unless you provide other instructions, the enclosed proxy will be voted for the nominees listed below. Management does not expect that any of the nominees will be unable to serve as a director. If before the Meeting any vacancies occur in the slate of nominees listed below, the person named in the proxy will exercise his or her discretionary authority to vote the shares represented by the proxy for the election of any other person or persons as directors.

Management proposes to nominate the persons named in the table below for election as director. The information concerning the proposed nominees has been furnished by each of them:

Name, Province or Stateand Country of Residenceand Present Office Held	Periods servedas Director	Number of SharesBeneficially Owned,Directly or Indirectly,or over which Controlor Direction isExercised(1)	Principal Occupation and,if Not Previously Elected,Principal Occupationduring the Past Five Years
Terry Lynch	June 20, 2012	893,400	Business Executive
Toronto, Ontario
CEO and Director
Peter Kent(2)	October 25, 2012	279,566	Retired Lawyer
Oakville, Ontario
Chairman and Director
Greg McKenzie(2)	November 10,	250,000	Business Executive, Lawyer
Toronto, Ontario	2016
Director
Les Mallard(2)	October 17, 2017	833,523	Business Executive
Hammonds Plains, NovaScotia
Director

Notes:

(1) As at November 16, 2020. Includes common shares beneficially owned or indirectly, over which control or discretion is exercised, as at the date of this Information Circular. This information was obtained directly from the nominees.

(2) Current member of the Company's Audit Committee. [

No proposed director of the Company is or has been, within the past 10 years, a director, chief executive officer or chief financial officer of any company that, while the person was acting in that capacity:

• (a) was subject to an order that was issued while the proposed director was acting in the capacity as director, chief executive officer or chief financial officer; or
• (b) was subject to an order 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.

For the purposes of the above, "order" means (a) a cease trade order; (b) an order similar to a cease trade order; or (c) 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.

No proposed director of the Company has, within the past 10 years, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or was subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the proposed director.

To the knowledge of the Company, no nominee for 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.

Other than as noted below, no proposed director of the Company is or has been, within the past 10 years, a director or executive officer of any company that, while that person was acting in that capacity or within a year of that person ceasing to act in that capacity, become 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.

Terry Lynch served as director and briefly as CEO of Firstgold Corp., a TSX-listed company that ultimately filed for bankruptcy in 2012.

EXECUTIVE COMPENSATION

The Company is a venture issuer and is disclosing its executive compensation in accordance with Form 51-102F6V.

The following persons are considered the "Named Executive Officers" or "NEOs" for the purposes of this disclosure:

• (a) the Company's chief executive officer ("CEO");
• (b) the Company's chief financial officer ("CFO");
• (c) each of the Company's most highly compensated executive officers, 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(5) of Form 51-102F6V, for the December 31, 2019 year end; and
• (d) each individual who would be a Named Executive Officer under paragraph (c) but for the fact the individual was neither an executive officer, nor acting in a similar capacity at December 31, 2019.

Director and Named Executive Officer Compensation, excluding Compensation Securities

The following table provides a summary of compensation paid or accrued, payable, awarded, granted, given, or otherwise provided, directly or indirectly, by the Company or its subsidiaries of the Company to each Named Executive Office and director of the Company during the Company's two most recent financial years ended December 31, 2018 and December 31, 2019.

Name and	Year	Salary,	Bonus	Committee	Value of	Value of all	Total
position		consulting	($)	or meeting	perquisites(1)	other	compensation
		fee, retainer		fees	($)	compensation	($)
		or		($)		($)
		commission
		($)
Terry Lynch(2)	2019	225,000(3)	Nil	Nil	Nil	Nil	200,000
CEO andDirector	2018	144,000(3)	Nil	Nil	Nil	Nil	144,000
Patrick	2019	N/A	N/A	N/A	N/A	N/A	N/A
Cruickshank(2)(6)Former Presidentand CEO andFormer Director	2018	30,000(4)	Nil	Nil	Nil	Nil	30,000
Robert Suttie	2019	46,360(5)	Nil	Nil	Nil	Nil	46,360
CFO	2018	N/A	N/A	N/A	N/A	N/A	N/A
Daniel Crandall	2019	N/A	N/A	N/A	N/A	N/A	N/A
Former CFO	2018	58,042(5)	Nil	Nil	Nil	Nil	58,042
Peter Kent	2019	50,000	Nil	Nil	Nil	Nil	50,000
Chairman andDirector	2018	29,000	Nil	Nil	Nil	Nil	29,000
MichaelSharry(6)	2019	25,000	Nil	Nil	Nil	Nil	25,000
PresidentandDirector	2018	80,000	Nil	Nil	Nil	Nil	80,000
Greg McKenzie	2019	25,000	Nil	Nil	Nil	Nil	25,000
Director	2018	N/A	Nil	Nil	Nil	Nil	N/A
Les Mallard	2019	25,000	Nil	Nil	Nil	Nil	25,000
Director	2018	12,000	Nil	Nil	Nil	Nil	12,000
ThomasComfort(7)	2019	N/A	N/A	N/A	N/A	N/A	N/A
Former Director	2018	N/A	Nil	Nil	Nil	Nil	N/A
Gary Lohman(7)	2019	N/A	N/A	N/A	N/A	N/A	N/A
Former Director	2018	16,000	Nil	Nil	Nil	Nil	16,000

Notes:

(1) The value of perquisites and benefits, if any, was less than $15,000.

(2) Mr. Patrick Cruickshank resigned as President and CEO on March 9, 2018. Mr. Terry Lynch is the current CEO effective March 9, 2018.

(3) This amount, plus applicable HST, was paid to Fission Creative Strategies Inc. for executive services provided to the Company. Fission Creative Strategies Inc. was owned and controlled by Mr. Conor Lynch.

(4) This amount, plus applicable HST, was paid to Royal Stewart Capital Corp. for executive services provided to the Company. Royal Stewart Capital Corp. was owned and controlled by Mr. Patrick Cruickshank.

(5) This amount, plus applicable HST, was paid to Marrelli Support Services Inc. for accounting and CFO services provided to the Company during the applicable financial year. Mr. Dan Crandall was CFO until March 2019 and Mr. Robert Suttie was appointed CFO thereafter, until present. Both were senior members of Marrelli Support Services Inc.

(6) Mr. Michael Sharry was appointed as a director on May 21, 2018.

(7) Messrs. Patrick Cruickshank, Thomas Comfort and Gary Lohman resigned as a directors on November 23, 2018.

Stock Options and Other Compensation Securities

No compensation securities were issued to Named Executive Officers or directors during the financial year ended December 31, 2019. The following table discloses all compensation securities remaining outstanding as of the end of financial year ended December 31, 2019 to each Named Executive Officer and director for services provided or to be provided, directly or indirectly, to the Company or its subsidiaries.

Compensation Securities
Name and position	Type ofcompensationsecurity	Number ofcompensationsecurities,number ofunderlyingsecurities, andpercentage ofclass	Date ofissue orgrant	Issue,conversionor exerciseprice($)	Closingprice ofsecurity orunderlyingsecurity ondate of grant($)	Closingprice ofsecurity orunderlyingsecurity atyear end($)	Expirydate
Terry Lynch(1)CEO and Director	Stock option	80,000	November16, 2014	1.50	N/A	N/A	November14, 2021
Robert DanielCrandall(2)CFO	Stock option	18,000	November16, 2014	1.50	N/A	N/A	November14, 2021
Peter Kent(3)Chairman andDirector	Stock option	17,000	November16, 2014	1.50	N/A	N/A	November14, 2021
Michael SharryPresident andDirector	N/A	N/A	N/A	N/A	N/A	N/A	N/A
Greg McKenzie(4)Director	Stock option	30,000	November16, 2014	1.50	N/A	N/A	November14, 2021
Les MallardDirector	N/A	N/A	N/A	N/A	N/A	N/A	N/A

Notes:

(1) On December 31, 2019, Mr. Lynch held stock options exercisable as follows: 80,000 at $1.50 until November 14, 2021.

(2) On December 31, 2019, Mr. Crandall held stock options exercisable as follows: 18,000 at $1.50 until November 14, 2021.

(3) On December 31, 2019, Mr. Kent held stock options exercisable as follows: 17,000 at $1.50 until November 14, 2021.

(4) On December 31, 2019, Mr. McKenzie held stock options exercisable as follows: 30,000 at $1.50 until November 14, 2021.

Exercise of Compensation Securities by Directors and NEOs

During the financial year ending December 31, 2019, none of the Named Executive Officers or directors exercised any stock options.

For information about the material terms of the Company's stock option plan, please refer to the heading "Particulars of Matters to be Acted Upon – Shareholder Approval of Stock Option Plan".

Employment, Consulting and Management agreements

None of the management members has a consulting agreement in place. Oversight and Description of Director and Named Executive Officer Compensation

Director compensation

The Company currently does not pay directors who are not employees or officers of the Company for attending directors meetings or for serving on committees. The Company has no arrangements, standard or otherwise, pursuant to which directors were compensated by the Company for their services as directors, for committee participation, or for involvement in special assignments during the most recently completed financial year. None of the Company's directors have received any cash compensation for services provided in their capacity as directors; however, some directors have from time to time been engaged in a consulting capacity to the Company.

The Company has a stock option plan for the granting of incentive stock options to the officers, employees and Directors. The purpose of granting options is to assist the Company in compensating, attracting, retaining and motivating the Directors of the Company and to closely align the personal interests of such persons to that of the shareholders.

The Company did not grant stock options to the Directors during the most recently completed financial year.

Named Executive Officer Compensation

The Board is responsible for ensuring that the Company's compensation strategy is aligned with performance and shareholder interests. The main objectives the Company hopes to achieve through its compensation policies are to attract and retain executives critical to the Company's success, who will be key in helping the Company achieve its corporate objectives and increase shareholder value.

Due to the small size of the Company and the current level of the Company's activity, the Board of Directors is able to closely monitor and consider any risks which may be associated with the Company's compensation policies and practices. Risks, if any, may be identified and mitigated through regular Board meetings during which financial and other information of the Company are reviewed. No risks have been identified arising from the Company's compensation policies and practices that are reasonably likely to have a material adverse effect on the Company.

Executive compensation is comprised of short-term fee compensation and long-term ownership through the Company's Stock Option Plan. This structure ensures that a significant portion of executive compensation (stock options) is both long-term and "at risk" and, accordingly, is directly linked to the achievement of business results and the creation of long term shareholder value.

During the financial year ended December 31, 2019, Mr. Lynch's compensation as CEO consisted of $200,000 and CFO compensation consisted of $46,360. This amount was paid to Marrelli Support Services Inc. and Mr. Suttie, the CFO of the Company, was compensated by Marrelli.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The Company has an incentive stock option plan under which stock options are granted. Stock options have been determined by the Company's directors and are only granted in compliance with applicable laws and regulatory policy. The policies of the Exchange limit the granting of stock options to employees, officers, directors and consultants of the Company and provide limits on the length of term, number and exercise price of such options. The Exchange also requires annual approval of stock option plans by shareholders.

The following table sets out equity compensation plan information as at the end of the financial year ended December 31, 2019.

	Number of securities tobe issued upon exerciseof outstanding options(1)	Weighted-averageexercise price ofoutstanding options	Number of securitiesremaining available forfuture issuance under equitycompensation plans(excluding securitiesreflected in column (a))(2)
Plan Category	(a)	(b)	(c)
Equity compensation plansapproved by securityholders	261,000	1.54	4,433,722
Equity compensation plans notapproved by securityholders	N/A	N/A	N/A
Total	261,000	1.54	4,433,722

Notes:

(1) Assuming outstanding options are fully vested.

(2) Excluding the number of shares issuable on exercise of the outstanding options shown in the second column.

INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS

None of our directors or executive officers, proposed nominees for election as directors, or associates of any of them, is or has been indebted to the Company or our subsidiaries at any time since the beginning of the most recently completed financial year and no indebtedness remains outstanding as at the date of this Information Circular.

INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS

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 these persons, has any material interest, direct or indirect, in any transaction since the commencement of our last financial year or in any proposed transaction, which, in either case, has materially affected or will materially affect the Company or any of our subsidiaries, other than as disclosed under the heading "Particulars of Matters to be Acted On".

An "informed person" means:

• (a) a director or executive officer of the Company;
• (b) a director or executive officer of a person or company that is itself an informed person or subsidiary of the Company;
• (c) any person or company who beneficially owns, directly or indirectly, voting securities of the Company or who exercises control or direction over voting securities of the Company or a combination of both carrying more than 10 percent of the voting rights attached to all outstanding voting securities of the Company other than voting securities held by the person or company as underwriter in the course of a distribution; and
• (d) the Company if it has purchased, redeemed or otherwise acquired any of its securities, so long as it holds any of its securities.

AUDIT COMMITTEE

Under this heading, the Company is including the disclosure required by Form 52-110F2 of National Instrument 52-110 Audit Committees ("NI 52-110").

Audit Committee Charter

The Audit Committee Charter was adopted by the Company's Audit Committee and the Board of Directors. The full text of the Company's Audit Committee Charter was attached as Schedule "A" to the Company's information circular dated September 15, 2016 for a previous annual general meeting of shareholders, and can be viewed under the Company's profile on the SEDAR website at www.sedar.com.

Composition of the Audit Committee

As of the date of this Information Circular, the following are the members of the Audit Committee:

Name of Member	Independent(1)	Financially Literate(1)
Les Mallard	Independent	Yes(1)
Greg McKenzie	Independent	Yes(1)
Peter Kent	Independent	Yes(1)

Notes:

(1) As that term is defined in NI 52-110.

Relevant Education and Experience of Audit Committee Members

The education and experience of each member of the Audit Committee relevant to the performance of his responsibilities as an Audit Committee member and, in particular, any education or experience that would provide the member with:

• 1. an understanding of the accounting principles used by the Company to prepare its financial statements;
• 1. the ability to assess the general application of such accounting principles in connection with the accounting for estimates, accruals and reserves;
• 1. experience preparing, auditing, analyzing or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the Company's financial statements, or experience actively supervising one or more persons engaged in such activities; and
• 1. an understanding of internal controls and procedures for financial reporting, are as follows:

Les Mallard – Les is a graduate from The University of Prince Edward Island with a BA in Economics. He has spent 30+ years in the Canadian Produce Industry employed in various capacities with Chiquita Canada and Chiquita Brands North America. Retiring from Chiquita in 2017, he has started Mallard Produce Solutions, a produce consulting company focused on providing North American and Latin American clients business solutions to expand their market potential. Mr. Mallard is on the Board of Directors for the Canadian Produce Marketing Association.

Greg McKenzie – Greg McKenzie is a senior investment banker with more than 20 years of experience in financing, M&A, financial advisory, valuation, and strategic advice to mid-cap companies. Mr. McKenzie has been involved in transactions valued in excess of $18 billion. Mr. McKenzie has held positions with Morgan Stanley, CIBC World Markets and Haywood Securities. Mr. McKenzie worked on Wall Street and also practiced law with a leading Canadian securities and M&A law firm.

Peter Kent - Fomerly with the TecSyn Group of Companies where he was Vice President general Counsel and Corporate Secretary. Peter brings over 25 years of business experience regarding complex business and legal affairs. In addition to his time at Tecsyn Peter also was a corporate commercial lawyer at Bassel Sullivan a Toronto based boutique law firm.

Audit Committee Oversight

Since the commencement of the Company's most recently completed financial year, there has not been a recommendation of the Audit Committee to nominate or compensate an external auditor which was not adopted by the Board.

Reliance on Exemptions in NI 52-110 regarding De Minimis Non-audit Services or on a Regulatory Order Generally

Since the commencement of the Company's most recently completed financial year, the Company has not relied on the exemption in section 2.4 (De Minimis Non-audit Services) of NI 52-110 (which exempts all non-audit services provided by the Company's auditor from the requirement to be pre-approved by the Audit Committee if such services are less than 5% of the auditor's annual fees charged to the Company, are not recognized as non-audit services at the time of the engagement of the auditor to perform them and are subsequently approved by the Audit Committee prior to the completion of that year's audit), the exemption in subsection 6.1.1(4) (Circumstance Affecting the Business or Operations of the Venture Issuer), the exemption in subsection 6.1.1(5) (Events Outside of Control of Member), the exemption in subsection 6.1.1(6) (Death, Incapacity or Resignation) or an exemption from NI 52-110, in whole or in part, granted by a securities regulator under Part 8 (Exemptions) of NI 52-110.

Pre-Approval Policies and Procedures

The Audit Committee must pre-approve all non-audit services to be provided to the Company by the Company's external auditor. Aside from the above, the Audit Committee has not adopted specific policies and procedures for the engagement of non-audit services.

External Auditor Service Fees (By Category)

The following table discloses the fees billed to the Company by its external auditor during the last two financial years:

Financial YearEnding	Audit Fees	Audit-RelatedFees	Tax Fees	All Other Fees
December 31, 2019	$23,000	Nil	Nil	Nil
December 31, 2018	$23,000	Nil	Nil	Nil

Notes:

• (1) "Audit Fees" include fees necessary to perform the annual audit and if applicable, quarterly reviews of the Company's consolidated financial statements. Audit Fees include fees for review of tax provisions and for accounting consultations on matters reflected in the financial statements. Audit Fees also include audit or other attest services required by legislation or regulation, such as comfort letters, consents, reviews of securities filings and statutory audits.
• (2) "Audit-Related Fees" include services that are traditionally performed by the auditor. These audit-related services include employee benefit audits, due diligence assistance, accounting consultations on proposed transactions, internal control reviews and audit or attest services not required by legislation or regulation.
• (3) "Tax Fees" include fees for all tax services other than those included in "Audit Fees" and "Audit-Related Fees". This category includes fees for tax compliance, tax planning and tax advice. These fees relate to preparing and filing the Company's Canadian tax return and related schedules.
• (4) "All Other Fees" includes all other non-audit services".

Reliance on Exemptions in NI 52-110 regarding Audit Committee Composition & Reporting Obligations

Since the Company is a venture issuer, it relies on the exemption contained in section 6.1 of NI 52-110 from the requirements of Part 3 Composition of the Audit Committee (as described in 'Composition of the Audit Committee' above) and Part 5 Reporting Obligations of NI 52-110 (which requires certain prescribed disclosure about the Audit Committee in this Information Circular).

APPOINTMENT OF AUDITOR

Our Audit Committee recommends the re-appointment of UHY McGovern Hurley LLP, Chartered Professional Accountants, of Toronto, Ontario, as our auditor to hold office until the Company's next annual general meeting. UHY McGovern Hurley LLP, Chartered Professional Accountants was first appointed as auditor in March 2015. The Audit Committee proposes that the Board of Directors be authorized to fix the remuneration to be paid to the auditor.

Unless otherwise instructed, the proxies solicited by management will be voted for the appointment of UHY McGovern Hurley LLP, Chartered Professional Accountants, of Toronto, Ontario, as the Company's auditor.

CORPORATE GOVERNANCE

National Instrument 58-101 Disclosure of Corporate Governance Practices of the Canadian securities administrators requires the Company to annually disclose certain information regarding its corporate governance practices. Under this heading, the Company is providing the disclosure required by Form 58-101F2.

Board of Directors

The mandate of the Board, as prescribed by the BCBCA, is to manage or supervise management of our business

and affairs and to act with a view to the best interests of the Company. In doing so, the Board oversees the management of our affairs directly.

The Board has responsibility for the stewardship of the Company including responsibility for strategic planning, identification of the principal risks of the Company's business and implementation of appropriate systems to manage these risks, succession planning (including appointing, training and monitoring senior management), communications with investors and the financial community and the integrity of the Company's internal control and management information systems.

The Board sets long term goals and objectives for the Company and formulates the plans and strategies necessary to achieve those objectives and to supervise senior management in their implementation. The Board delegates the responsibility for managing the day-to-day affairs of the Company to senior management but retains a supervisory role in respect of, and ultimate responsibility for, all matters relating to the Company and its business. The Board is responsible for protecting shareholders' interests and ensuring that the incentives of the shareholders and of management are aligned.

As part of its ongoing review of business operations, the Board reviews, as frequently as required, the principal risks inherent in the Company's business including financial risks, through periodic reports from management of such risks, and assesses the systems established to manage those risks. Directly and through the Audit Committee, the Board also assesses the integrity of internal control over financial reporting and management information systems.

In addition to those matters that must, by law, be approved by the Board, the Board is required to approve any material dispositions, acquisitions and investments outside the ordinary course of business, long-term strategy, and organizational development plans. Management of the Company is authorized to act without board approval, on all ordinary course matters relating to the Company's business.

The Board also monitors the Company's compliance with timely disclosure obligations and reviews material disclosure documents prior to distribution. The Board is responsible for selecting the President and appointing senior management and for monitoring their performance.

The Board considers that the following directors are "independent" in that they are independent and free from any interest and any business or other relationship which could or could reasonably be perceived to, materially interfere with the director's ability to act with the best interests of the Company, other than interests and relationships arising from shareholding: Peter Kent, Les Mallard and Greg McKenzie. The Board considers that Terry Lynch (CEO) is not independent because he is a member of management.

Directorships

Certain of the directors are presently a director of one or more other reporting issuers (or equivalent) in a Canadian or foreign jurisdiction, as follows:

Name of Director	Other reporting issuer (or equivalent in a foreign jurisdiction)
Terry Lynch	N/A
Peter Kent	N/A
Greg McKenzie	Golden Tag Resources (TSXV: GOG)
Les Mallard	N/A

Orientation and Continuing Education

The Board is responsible for providing orientation for all new recruits to the Board. Each new director brings a different skill set and professional background, and with this information, the Board is able to determine what orientation to the nature and operations of the Company's business will be necessary and relevant to each new director. The Company provides continuing education for its directors as the need arises and encourages open discussion at all meetings, which format encourages learning by the directors.

Ethical Business Conduct

The Board relies on the fiduciary duties placed on individual directors by the Company's governing corporate legislation and the common law to ensure the Board operates independently of management and in the best interests of the Company. The Board has found that these, combined with the conflict of interest provisions of the BCBCA, as well as the relevant securities regulatory instruments, to ensure that directors exercise independent judgment in considering transactions and agreements in respect of which a director or executive officer has a material interest.

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. The Board takes into account the number required to carry out the Board's duties effectively and to maintain a diversity of views and experience.

The Board does not have a nominating committee. The board is responsible for recruiting new members to the Board and planning for the succession of Board members.

Compensation

The Board is responsible for determining all forms of compensation, including long-term incentive in the form of stock options, to be granted to the CEO and the directors, and for reviewing the CEO's recommendations respecting compensation of the other officers of the Company, to ensure such arrangements reflect the responsibilities and risks associated with each position. Please see above under "Executive Compensation for further information.

Other Board Committees

The Board has no other committees other than the Audit Committee.

Assessments

The Board annually reviews its own performance and effectiveness as well as reviews the Audit Committee Charter and recommends revisions as necessary. Neither the Company nor the Board has adopted formal procedures to regularly assess the Board, the Audit committee or the individual directors as to their effectiveness and contribution. Effectiveness is subjectively measured by comparing actual corporate results in prevailing industry and market climate conditions with stated objectives. The contributions of individual directors are informally monitored by the other Board members, bearing in mind the business strengths of the individual and the purpose of originally nominating the individual to the Board.

The Board monitors the adequacy of information given to directors, communication between the Board and management and the strategic direction and processes of the Board.

The Board believes its corporate governance practices are appropriate and effective for the Company, given its size and operations. The Company's corporate governance practice allows the Company to operate efficiently, with checks and balances that control and monitor management and corporate functions without excessive administrative burden.

MANAGEMENT CONTRACTS

The management functions of the Company are not to any substantial degree performed by any person other than the executive officers and directors of the Company.

The Company has a contract with Marrelli Support Services Inc. to provide accounting and CFO services.

PARTICULARS OF MATTERS TO BE ACTED ON

Shareholder Approval of Stock Option Plan

Exchange policy requires that all companies listed on the Exchange adopt a stock option plan if a company wishes to grant stock options and that all stock option plans that reserve a maximum of 10% of the issued and outstanding share capital of the Company at the time of grant (called a "rolling plan" under Exchange policies), must be approved and ratified by shareholders on an annual basis in accordance with Policy 4.4 of the Exchange ("Policy 4.4"). The Company established its existing Stock Option Plan (the "Plan") October 25, 2012. The Company last received shareholder approval for its Stock Option Plan on October 22, 2018. The Company is therefore seeking shareholder approval of the Company's Plan.

The purpose of the Plan is to provide incentives to employees, directors, officers, and consultants who provide services to the Company and to influence the cash compensation the Company would otherwise have to pay.

The Plan complies with the current policies of the Exchange. Under the Plan, a maximum of 10% of the issued and outstanding common shares of the Company are proposed to be reserved at any time for issuance on the exercise of stock options. Since the number of common shares reserved for issuance under the Plan increases with the issue of additional common shares of the Company, the Plan is considered to be a "Rolling Plan".

Management seeks shareholder approval for renewal of the Plan in accordance with and subject to the rules and policies of the Exchange.

Terms of the Plan

Shareholders may also obtain copies of the Plan from the Company prior to the meeting on written request. The following is a summary of the material terms of Plan.

The Plan provides that the Company's Board of Directors may from time to time, in its discretion, and in accordance with the Exchange's requirements, grant to directors, officers and consultants to the Company, non-transferable options to purchase common shares, provided that the number of common shares reserved for issuance does not exceed 10% of the common shares of the Company at the time of the stock option grant. Individual stock option grants must comply with the terms of the Plan and the policies of the Exchange as they relate to the minimum exercise price, hold periods, vesting and filing requirements.

The Plan provides that:

• (a) options will be non-assignable and non-transferable except that they will be exercisable by the personal representative of the option holder in the event of the option holder's death, if exercised within one year of the optionee's death;

• (b) options may be exercisable for a maximum of 10 years from the date of grant;

• (c) options to acquire no more than 5% of the issued common shares of the Company may be granted to any one individual in any 12 month period;

• (d) options to acquire no more than 2% of the issued common shares of the Company may be granted to any one consultant in any 12 month period;

• (e) options to acquire no more than an aggregate of 2% of the issued common shares of the Company may be granted to persons retained to conduct Investor Relations Activities (as defined in Exchange Policy 1.1), in any 12 month period;

• (f) disinterested shareholder approval must be obtained for any reduction in the exercise price if the optionee is an insider of the Company at the time of the proposed amendment;

• (g) for stock options granted to Employees, Consultants or Management Company Employees (as defined in Exchange Policy 4.4), the Company represents that the optionee is a bona fide Employee, Consultant or Management Company Employee, as the case may be; and

• (h) for stock options granted to any optionee who is a Director, Employee, Consultant or Management Company Employee, the option must expire within a reasonable period following the date the option holder ceases to be a Director, Employee, Consultant or Management Company Employee.

The Company may grant options provided that the number of common shares reserved for issuance does not exceed 10% of the common shares of the Company at the time of the stock option grant.

Shareholders will be asked to pass the following, ordinary resolution, approving the Plan:

"IT IS RESOLVED, AS AN ORDINARY RESOLUTION, THAT:

• 1. The Company adopt and confirm its existing stock option plan (the "Plan"), including the reserving for issuance under the Plan at any time of a maximum of 10% of the issued common shares of the Company;
• 1. The Company is authorized to grant stock options under the Plan, in accordance with its terms;
• 1. The Company is authorized to prepare such disclosure documents and make such submissions and filings as the Company may be required to make with the Exchange to obtain Exchange acceptance of the Plan; and
• 1. Authority is granted to the Board of Directors of the Company to make such amendments to the Plan as are required by the Exchange to obtain Exchange acceptance of the Plan."

Recommendation of the Company's Directors

The directors have reviewed and considered all facts respecting the approval of the Plan. The Company's directors unanimously recommend that the shareholders vote in favour of ratifying and approving the Plan.

An ordinary resolution requires the approval of a simple majority (50% + one vote) of the votes cast at the Meeting, in person or by proxy. It is the intention of the persons named in the accompanying Proxy, if not expressly directed to the contrary in such Proxy, to vote such proxies FOR the ordinary resolution authorizing the approval of the Plan.

Creation of New Control Person

At the Meeting, the shareholders of the Company will be asked to consider and, if deemed advisable, to pass, with or without variation, an ordinary resolution, of disinterested shareholders, in the form set out below (the "Control Person Resolution"), subject to such amendments, variations or additions as may be approved at the Meeting, approving Hugh Maddin, the control person of Granby, becoming a "Control Person" (as such term is defined in the TSX Venture Exchange Corporate Finance Manual) of the Company.

On October 13, 2020 the Company announced that it entered into an option agreement (the "Option Agreement") with Granby whereby the Company was granted the option to acquire 100% thirteen (13) mineral claims for a total hectares of approximately 797 hectares (the "Golden Ivan Property") located approximately 3 km east of Stewart, British Columbia in the heart of the Golden Triangle. In order to earn 100% interest in the Golden Ivan Property, the Company is required, pursuant to the Option Agreement, to pay an aggregate of $150,000 in cash, issue an aggregate of 11,400,000 common shares in the capital of the Company and spend an aggregate of $1,800,00 in exploration expenditures on the Golden Ivan Property, as set forth in more detail below:

	Cash	Securities	Exploration WorkCommitments
Within 5 business ofreceipt of Exchangeapproval of theOption Agreement	NIL	3,900,000 common sharesof the Company	NIL
On or beforeSeptember 30, 2021	$50,000	2,500,000 common sharesof the Company	$450,000 on a phase 1program including mapping,geological and geochemicalsurveys
On or beforeSeptember 30, 2022	$50,000	2,500,000 common sharesof the Company	$450,000 on a phase 2program including drilltesting upon targetsidentified in the phase 1program
On or beforeSeptember 30, 2023	$50,000	2,500,000 common sharesof the Company	$450,000 on a phase 3program including follow-updiamond drill onprospective area asoutlined in phase 2 drilling
On or beforeSeptember 30, 2024	NIL	NIL	$450,000 on a phase 4program that includesfollow-up diamond drilltesting on prospective areaoutlined in phase 3 drilling
TOTAL:	$150,000	11,400,000 commonshares of the Company	$1,800,000

Pursuant to the Option Agreement, the Company has the option to accelerate the above cash payments and common share issuances in advance of the above dates.

The Exchange's policies require that shareholder approval be obtained where securities issued pursuant to a transaction results, or could result in the creation of a new "Control Person". A Control Person is any person that holds or is one of a combination of persons that holds a sufficient number of any of the securities of the Company so as to affect materially the control of the Company, or that holds more than 20% of the outstanding voting shares of the Company, except where there is evidence showing that the holder of those securities does not materially affect the control of the Company.

As of the date hereof, Mr. Maddin (directly and indirectly) and Granby hold 1,000,000 common shares of the Company. However, as the Company has the option to accelerate the above issuance of 11,400,000 common shares of the Company to Granby to a date in advance of the dates set forth above, there is a possibility that Mr. Maddin could become a "Control Person" of the Company immediately after approval of the Exchange for the Golden Ivan Property transaction.

The Board believes that the issuance to Granby, and thereby to Mr. Maddin, of common shares of the Company to create a "Control Person", will be in the best interests of the Company and the shareholders at the time of such issuance, as it allows for the Company to acquire the Golden Ivan Property, and recommends to shareholders that they vote in favour of approval of the Control Person Resolution. To be effective, the Control Person Resolution must be approved by not less than a majority of the votes cast by shareholders present in person, or represented by proxy, at the Meeting, excluding the 1,000,000 common shares held by Granby or Mr. Maddin.

Unless otherwise indicated, the persons designated as proxyholders in the accompanying form of proxy will vote the common shares represented by such form of proxy, properly executed, FOR the Control Person Resolution. The text of the Control Person Resolution to be submitted to disinterested shareholders at the Meeting is set forth below:

"IT IS RESOLVED THAT (as an ordinary resolution of disinterested shareholders):

• 1. the creation of Hugh Maddin as a new "Control Person" of the Company (as such term is defined in the TSX Venture Exchange Corporate Finance Policy) as a result of the issuance of securities by the Company to Hugh Maddin or entities owned and/or controlled by him, including but not limited to Granby Gold Inc. ("Granby"), as more particularly described in the management information circular of the Company dated November 16, 2020 is authorized and approved and, for greater certainty, the issuance of securities by the Company pursuant to the Option Agreement to Hugh Maddin and entities owned and/or controlled by him (including but not limited to Granby) is hereby authorized and approved, notwithstanding that such issuance would, or could possibly, increase their ownership of Common Shares to 20% or more of the then issued and outstanding Common Shares; and
• 1. any one or more directors or officers of the Company are authorized and directed, on behalf of the Company, to take all necessary steps and proceedings and to execute, deliver and file any and all declarations, agreements, documents and other instruments and do all such other acts and things that may be necessary or desirable to give effect to the foregoing resolutions."

If shareholder approval of the Control Person Resolution is not obtained at the Meeting, the Company will be precluded from issuing additional common shares to Hugh Maddin or entities owned and/or controlled by him (including but not limited to Granby) at any time when such issuance would cause Hugh Maddin to become a Control Person.

It is the intention of the persons named in the accompanying Proxy, if not expressly directed to the contrary in such Proxy, to vote such proxies FOR the ordinary resolution authorizing the approval of the Control Person Resolution.

ADDITIONAL INFORMATION

Additional information about the Company is located on SEDAR at www.sedar.com. Financial information is provided in the Company's comparative financial statements and Management's Discussion and Analysis are also available on SEDAR for its most recently completed financial year ended December 31, 2019. Shareholders may contact the Company to request copies of the financial statements and Management's Discussion and Analysis by writing to the Chief Financial Officer, Mr. Rob Suttie at the address below or by e-mail at rsuttie@marrellisuport.ca.

CHILEAN METALS INC.

202 – 82 Richmond Street East Toronto, Ontario M5C 1P1

OTHER MATERIAL FACTS

Management knows of no other matters to come before the Meeting other than those referred to in the Notice of Meeting. Should any other matters properly come before the Meeting, the shares represented by the Proxy solicited hereby will be voted on such matter in accordance with the best judgment of the persons voting by proxy.

DATED at Toronto, Ontario, on the 16th day of November, 2020.

BY ORDER OF THE BOARD

CHILEAN METALS INC.

(signed) "Terry Lynch"

Terry Lynch Chief Executive Officer and Director