Radius Gold Inc. — Proxy Solicitation & Information Statement 2023

Nov 7, 2023

INFORMATION CIRCULAR as at October 27, 2023

This Information Circular is furnished in connection with the solicitation by the management of Radius Gold Inc. (the "Company") of votes with respect to the Annual General and Special Meeting of the holders of common shares ("Common Shares") of the Company to be held on Thursday, December 14, 2023 (the "Meeting") and any adjournment thereof, at the time and place and for the purposes set forth in the accompanying notice of the Meeting (the "Notice of the Meeting").

In this Information Circular, references to "Non-Registered Holders" means shareholders who do not hold Common Shares in their own name and "Intermediaries" refers to brokers, investment firms, clearing houses and similar entities that own securities on behalf of Non-Registered Holders.

PROXIES

Notice-and-Access Process

The Company has elected to use the notice-and-access provisions ("Notice-and-Access") of National Instrument 54-101, Communication with Beneficial Owners of Securities of a Reporting Issuer ("NI 54-101"), for distribution of this Information Circular, form of proxy ("Proxy") and other meeting materials (the "Meeting Materials") to registered shareholders and Non-Registered Holders of the Company.

Under Notice-and-Access, rather than the Company mailing paper copies of the Meeting Materials to shareholders, the Meeting Materials can be accessed online on the Company's SEDAR+ profile at www.sedarplus.ca or on the Company's website at https://radiusgold.com/investors/agm-documents. The Company has adopted this alternative means of delivery for the Meeting Materials in order to reduce paper use and the printing and mailing costs.

Shareholders will receive a "notice package" (the "Notice-and-Access Notification") by prepaid mail, with details regarding the Meeting date, location and purpose, and information on how to access the Meeting Materials online or request a paper copy.

Shareholders will not receive a paper copy of the Meeting Materials unless they contact the Company at the toll free number as set out in the Notice of the Meeting. Provided the request is made prior to the Meeting, the Company will mail the requested materials within three business days. Requests for paper copies of the Meeting Materials should be made by November 30, 2023 in order to receive the Meeting Materials in time to vote before the Meeting.

Shareholders with questions about Notice-and-Access may contact the Company toll-free at 1-888-627-9378.

Non-Registered Holders

Only registered holders of Common Shares or the persons they appoint as their proxyholders are permitted to vote at the Meeting. In many cases, however, Common Shares beneficially owned by a Non-Registered Holder are registered either:

• (a) in the name of an Intermediary that the Non-Registered Holder deals with in respect of the shares. Intermediaries include banks, trust companies, securities dealers or brokers, and trustees or administrators of self-administered RRSPs, RRIFs, RESPs and similar plans, 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 will distribute the Notice-and-Access Notification to Intermediaries and clearing agencies for onward distribution to Non-Registered Holders. The Company does not intend to pay Intermediaries to forward the Notice-and-Access Notification if the Non-Registered Holders have provided instructions to their Intermediary that they object to the Intermediary disclosing ownership information about the Non-Registered Holders. In this case, such Non-Registered Holder will not receive the Meeting Materials if the Intermediary does not assume the cost of delivery.

Intermediaries are required to forward the Notice-and-Access Notification to Non-Registered Holders unless a Non-Registered Holder has waived the right to receive Meeting Materials. Intermediaries often use service companies to forward the Meeting Materials to Non-Registered Holders. Generally, Non-Registered Holders who have not waived the right to receive Meeting Materials will be sent a voting instruction form ("VIF"), rather than a Proxy, which must be completed, signed and returned by the Non-Registered Holder in accordance with the directions in the VIF. In some cases, Non-Registered Holders will instead be given a Proxy which has already been signed by the Intermediary (typically by a facsimile, stamped signature) which is restricted as to the number of Common Shares beneficially owned by the Non-Registered Holder but which is otherwise not completed. This form of proxy does not need to be signed by the Non-Registered Holder, but, to be used at the Meeting, needs to be properly completed and deposited with Computershare Trust Company as described under "Solicitation and Deposit of Proxies and VIFs" below.

The purpose of these procedures is to permit Non-Registered Holders to direct the voting of the Common Shares that they beneficially own. Should a Non-Registered Holder wish to attend and vote at the Meeting in person (or have another person attend and vote on behalf of the Non-Registered Holder), the Non-Registered Holder should strike out the names of the persons named in the Proxy and insert the Non-Registered Holder's (or such other person's) name in the blank space provided or, in the case of a VIF, follow the corresponding instructions on the form.

Non-Registered Holders should carefully follow the instructions in their Proxy or VIF, including instructions regarding when and where the Proxy or VIF is to be delivered.

Solicitation and Deposit of Proxies and VIFs

While it is expected that the solicitation will be primarily by Notice-and-Access and mail, votes may be solicited personally or by telephone by the directors and regular employees of the Company. All costs of solicitation will be borne by the Company. The Company has arranged for Intermediaries to forward the Notice-and-Access Notification to Non-Registered Holders of Common Shares held as of record by those Intermediaries and the Company may reimburse the Intermediaries for their reasonable fees and disbursements in that regard.

The individuals named in the Proxy and VIF are directors or officers of the Company. A shareholder wishing to appoint some other person (who need not be a shareholder) to represent the shareholder at the Meeting has the right to do so, either by inserting such person's name in the blank space provided in the Proxy or VIF and striking out the printed names, or by completing another form of proxy or VIF. The Proxy or VIF will not be valid unless the completed, dated and signed Proxy or VIF is received by Computershare Trust Company of Canada, 8th Floor, 100 University Avenue, Toronto, ON M5J 2Y1, not less than 48 hours (excluding Saturdays, Sundays and holidays) before the time for holding the Meeting or any adjournment thereof, or is delivered to the Chair of the Meeting prior to commencement of the Meeting or any adjournment thereof.

Voting of Proxies and VIFs

Voting at the Meeting will be by way of a show of hands, with each registered shareholder and proxyholder having one vote, unless a ballot vote is required or requested. Common Shares represented by any properly executed and delivered Proxy or VIF will be voted or withheld from voting only on a ballot, in accordance with the instructions given by the shareholder. In the absence of such direction, such Common Shares will be voted in favour of the matters set forth herein.

The Proxy or VIF, when properly completed and delivered and not revoked, confers discretionary authority upon the person appointed proxy thereunder to vote with respect to amendments or variations of matters identified in the Notice of the Meeting, and with respect to other matters which may properly come before the Meeting. In the event that amendments or variations to matters identified in the Notice of Meeting are properly brought before the Meeting or any further or other business is properly brought before the Meeting, it is the intention of the persons designated in the Proxy or VIF to vote in accordance with their best judgment on such matters or business. As at the date hereof, the management of the Company knows of no such amendment, variation or other matter that may be come before the Meeting.

Revocation of Proxies and VIFs

A shareholder who has given a Proxy or VIF may revoke it by an instrument in writing executed by the shareholder or by his attorney authorized in writing or, where the shareholder is a corporation, by a duly authorized officer or attorney of the corporation, and delivered either to the registered office of the Company, 200 Burrard Street, Suite 650, Vancouver, British Columbia, V6C 3L6, at any time up to and including the last business day preceding the day of the Meeting, or if adjourned, any reconvening thereof, or to the Chair of the Meeting on the day of the Meeting or, if adjourned, any reconvening thereof or in any other manner provided by law. A revocation of a Proxy or VIF does not affect any matter on which a vote has been taken prior to the revocation.

VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

As at the date hereof, the Company has issued and outstanding 99,118,533 fully paid and non-assessable common shares, each share carrying the right to one vote. THE COMPANY HAS NO OTHER CLASSES OF VOTING SECURITIES.

Holders of Common Shares as at the Record Date of October 31, 2023 who either personally attend the Meeting or who have completed and delivered a Proxy or VIF in the manner and subject to the provisions described above shall be entitled to vote or to have their shares voted at the Meeting.

To the knowledge of the directors and senior officers of the Company, the only person or company who beneficially owns, directly or indirectly, or exercises control or direction over shares carrying more than 10% of the voting rights attached to all outstanding shares of the Company is as follows:

Name	No. of Shares	Percentage
Sprott Entities and their fully
managed accounts, as a group (1)	11,330,651	11.4%

Note:

(1) As at June 30, 2023. Shares are held by certain managed accounts of Resource Capital Investment Corp. and Sprott Asset Management USA, Inc. ("Sprott Entities"), each of whom may be deemed to be acting jointly or in concert with the Sprott Entities and is ultimately controlled by Sprott Inc.

PARTICULARS OF MATTERS TO BE ACTED UPON

To the knowledge of the Board of Directors of the Company (the "Board"), the only matters to be brought before the Meeting are those matters set forth in the accompanying Notice, as more particularly described as follows:

Appointment and Remuneration of Auditors

The management of the Company will recommend to the Meeting to appoint Smythe LLP as auditors of the Company for the ensuing year, and to authorize the directors to fix their remuneration. Smythe LLP were first appointed auditors of the Company on November 20, 2017.

Election of Directors

The Board presently consists of four directors and it is intended to determine the number of Directors at four and to elect four Directors at the Meeting. The persons named below will be presented for election at the Meeting as management's nominees and the persons named in the accompanying form of proxy intend to vote for the election of these nominees. Management does not contemplate that any of these nominees will be unable to serve as a director. Each director elected will hold office until the next annual general meeting of the Company or until his successor is elected or appointed, unless his office is earlier vacated in accordance with the Articles of the Company, or with the provisions of the British Columbia Business Corporations Act.

The following table sets out the names of the nominees for election as directors, where each is ordinarily resident, all offices of the Company now held by them, their principal occupations, the period of time for which each has been a director of the Company, and the number of Common shares of the Company or any of its subsidiaries beneficially owned by each, directly or indirectly, or over which control or direction is exercised, as at the date hereof.

Name, Position and Residency (1)	Principal Occupation (1)	Period as a Director (since amalgamation of the Company)	No. of Common Shares (1)
Simon Ridgway (2) (3) Director and Chairman of the Board British Columbia, Canada	CEO of Rackla Metals Inc. and Volcanic Gold Mines Inc. (mineral exploration).	July 1, 2004 to present	8,371,452
Bruce Smith CEO, President & Director Cooks Beach, New Zealand	President and CEO of the Company.	January 4, 2021 to present	525,000
Mario Szotlender (2) (3) Director Venezuela	Independent Consultant; Director of several public mineral exploration or mining companies.	July 1, 2004 to present	3,034,782
William Katzin (2) (3) Director British Columbia, Canada	Chartered Accountant; Partner of Campbell Saunders & Co.	July 27, 2011 to present	Nil

Notes:

• (1) The information as to residency, principal occupation, and shares beneficially owned is not within the knowledge of the management of the Company and has been furnished by the respective nominees.
• (2) Member of the Audit Committee.
• (3) Member of the Compensation Committee.

Simon Ridgway and Mario Szotlender were directors of a corporation when a management cease trade order was issued by the British Columbia Securities Commission (the "BCSC") on April 3, 2017 against the CEO and CFO of the corporation in connection with the corporation's failure to timely file financial statements, related management discussion and analysis and an annual information form for its financial year ended December 31, 2016. The delay in the filing of these documents was due to pending resolution of a regulatory review of certain of the corporation's filings by the United States Securities and Exchange Commission. On May 25, 2017, the BCSC revoked the management cease trade order after the corporation filed the required records.

Stock Option Plan

The TSX Venture Exchange (the "Exchange") requires that the Company obtain shareholder approval to its stock option plan ("Stock Option Plan") yearly at the annual general meeting. The material terms of the Stock Option Plan are as follows:

• (a) Persons eligible to be granted a stock option under the Stock Option Plan are Directors, Officers, Employees, Management Company Employees, and Consultants, and an entity all the voting securities of which are owned by such persons;
• (b) the Stock Option Plan reserves for issue pursuant to stock options and any other share compensation arrangement of the Company, a maximum number of Common Shares equal to 10% of the outstanding Common Shares of the Company from time to time;
• (c) unless Disinterested Shareholder Approval is obtained:
• i. the aggregate number of Common Shares reserved for issue to Insiders under the Stock Option Plan and any other share compensation arrangement of the Company may not exceed 10% of the outstanding Common Shares at any point in time;
• ii. the aggregate number of Common Shares reserved for issue to Insiders under the Stock Option Plan and any other share compensation arrangement of the Company in any 12-month period may not exceed 10% of the outstanding Common shares as at the time of grant;
• iii. the number of Common Shares reserved for issue to any one person in any 12 month period under the Stock Option Plan may not exceed 5% of the outstanding Common Shares at the time of grant; and
• iv. the number of Common Shares issued to any person within a 12 month period pursuant to the exercise of stock options granted under the Stock Option Plan and any other share compensation arrangement of the Company shall not exceed 5% of the outstanding Common Shares at the time of the exercise;
• (d) the number of Common Shares reserved for issue to any Consultant in any 12 month period under the Stock Option Plan may not exceed 2% of the outstanding Common Shares at the time of grant;
• (e) the aggregate number of Common Shares reserved for issue to any person providing Investor Relations Activities in any 12 month period may not exceed 2% of the outstanding Common Shares at the time of grant;
• (f) the Board may determine the manner in which a stock option may vest and become exercisable (apart from stock options granted to persons performing Investor Relations Activities which shall vest as prescribed by the Exchange's policies);
• (g) the exercise price per Common Share for a stock option may not be less than the Market Price of the Common Shares at the time of the grant;
• (h) stock options may have a term not exceeding ten years;
• (i) stock options are non-assignable and non-transferable;
• (j) the Stock Option Plan contains provisions for adjustment in the number of Common Shares issuable on exercise of a stock option in the event of a share consolidation, split, reclassification or other capital reorganization, or a stock dividend, amalgamation, merger or other relevant corporate transaction, or any other relevant change in or event affecting the Common Shares;
• (k) unless Disinterested Shareholder Approval is obtained, the Board may not reduce the exercise price of a stock option or extend the term of a stock option if such option is held by an Insider at the time of the proposed amendment;
• (l) the Board may, subject to the approval of any regulatory authority whose approval is required, amend, suspend or terminate the Stock Option Plan or any portion thereof; provided, however, that, except as otherwise provided in the Stock Option Plan, the Board may not, without limitation, amend the following provisions of the Stock Option Plan without obtaining, within 12 months either before or after the Board's adoption of a resolution authorizing such action, approval of the shareholders of the Company:
• i. persons eligible to be granted or issued stock options;
• ii. the maximum number of Common Shares that may be issuable under the Stock Option Plan;
• iii. the limits on the number of stock options that may be granted or issued to any one person or any category of persons;
• iv. the method for determining the exercise price of stock options;
• v. the maximum term of a stock option;
• vi. the expiry and termination provisions applicable to a stock option; and
• vii. the addition of any net exercise provisions; and
• (m) notwithstanding (l) above, the Board may amend the terms of the Stock Option Plan to: (i) fix typographical errors; (ii) comply with the requirements of any applicable regulatory authority, or as a result in the changes in the policies of the Exchange relating to incentive stock options, or (iii) clarify existing provisions of the Stock Option Plan that do not have the effect of altering the scope, nature and intent of such provisions, without obtaining the approval of the Company's shareholders.

"Director", "Disinterested Shareholder Approval", "Employee", "Management Company Employee" "Consultant", "Insiders", "Investor Relations Activities", and "Market Price" have the same definition as in the policies of the Exchange.

In order to approve the Stock Option Plan for the ensuing year, the shareholders will be asked at the Meeting to approve an ordinary resolution as follows:

"RESOLVED that the Stock Option Plan of the Company, with terms substantially as described in the information circular of the Company dated October 27, 2023, be and is hereby ratified, confirmed and approved, and that the directors of the Company are hereby authorized to make any changes to the Stock Option Plan which may be required in order to obtain acceptance for filing by the TSX Venture Exchange."

Adoption of New Articles for the Company

The existing Articles of the Company (the "Existing Articles") were adopted in 2004. On October 27, 2023, the Board approved the proposed adoption of new Articles for the Company (the "New Articles") which include provisions which are more up-to-date with standard practices and current legislation, including the Business Corporations Act (British Columbia) ("BCBCA"), with respect to the management and administration of a reporting issuer.

Notable changes from the Existing Articles are:

Alteration of Authorized Share Structure: The Existing Articles allow for alterations to the authorized share structure of the Company by a Special Resolution of shareholders. The New Articles require a simple majority of votes cast at a shareholder meeting (an "Ordinary Resolution"), to approve most alterations to the authorized share structure of the Company except for the approval of the subdivision or consolidation of unissued or fully paid and issued shares, which may be approved by a resolution of the Board.

Name Changes: The Existing Articles allow for alterations to the name of the Company by a Special Resolution of shareholders. The New Articles require an Ordinary Resolution or a resolution of the directors to approve name changes.

Other Alterations to Articles: The Existing Articles allow for the Company to alter the Articles of the Company by a Special Resolution of the shareholders if the Articles or the BCBCA does not specify the type of resolution needed to make the alteration. The New Articles require that such an alteration may be done by Ordinary Resolution of the shareholders.

Location of Shareholder Meetings: The Existing Articles do not provide for the meeting of shareholders to be held outside of British Columbia. The New Articles allow for a meeting of shareholders to be held in or outside of British Columbia as determined by a resolution of the Board.

Chair of Shareholder Meetings: The Existing Articles allow for only the chair of the Board or the president to preside as chair at a meeting of the shareholders. The New Articles allow the chair of shareholder meetings to be the chair of the Board, any officer of the Company, or such other person as may be elected by the shareholders who are present or represented by proxy and entitled to vote at the meeting.

Quorum for Director Meetings: The Existing Articles provide that the directors may set the quorum necessary for the transaction of business at a meeting of the directors, and if not so set, then the quorum is deemed to be set at two directors. The New Articles provide that the quorum may be set by the directors, and if not so set, is a majority of the directors, or, if the number of directors is set at one, then the quorum is deemed to be set at one director.

The foregoing is a summary of the New Articles and is qualified by the full text of the New Articles attached hereto as Schedule "A". Copies of the Existing Articles and the New Articles are available for viewing during normal business hours up to the date of the Meeting at the Company's offices at 200 Burrard Street, Suite 650, Vancouver, British Columbia V6C 3L6 (tel: 604- 801-5432) and at the Meeting. In addition, a copy of the Existing Articles or the New Articles will be mailed, free of charge, to any holder of Common Shares who requests a copy, in writing, from the Corporate Secretary of the Company. Any such requests should be mailed to the Company at its head office, to the attention of the Corporate Secretary.

In order to approve the adoption of the New Articles for the Company in substitution for the Existing Articles, shareholders will be asked at the Meeting to pass the following special resolutions:

"RESOLVED AS A SPECIAL RESOLUTION THAT:

• 1. the existing Articles of the Company (the "Existing Articles") be terminated;
• 1. the Company adopt the new articles (the "New Articles") attached as Schedule "A" to the management information circular of the Company dated October 27, 2023, in substitution for the Existing Articles.
• 1. any one director or officer of the Company be and is hereby authorized and directed to do all such acts and things and to execute and deliver for and on behalf of the Company, under the corporate seal of the Company or otherwise, all such certificates, instruments, agreements, notices and other documents as in such person's opinion may be necessary or desirable for the purpose of giving effect to the foregoing resolutions.
• 1. the Board of Directors of the Company is hereby authorized to revoke these special resolutions without further approval of the shareholders of the Company at any time prior to when these special resolutions are acted upon."

Amendment of Guatemala Property Option

Status of 2020 Guatemala Property Option

Pursuant to an agreement dated May 17, 2020, as amended November 21, 2022 (the "2020 Option Agreement"), the Company granted to Volcanic Gold Mines Inc. ("Volcanic") the exclusive option to earn a 60% interest in the Company's Holly and Banderas properties in Guatemala by paying \$100,000 to the Company (paid on signing) and the expenditure of US\$7.0 million on exploration of the properties over four years.

As a result of Volcanic's exploration work on the properties, Volcanic filed an NI 43-101 technical report (see news release July 27, 2022) supporting an initial Inferred Mineral Resource of 406,316 oz Au Eq* estimated from the first target, La Peña vein at the Holly property. The high grade La Peña vein remains open to expansion along strike and at depth and several other drill targets remain to be tested at Holly with potential for new discoveries.

* Gold Equivalent (AuEq) values based on US\$1800 Au and US\$22 Ag, using formula: gold g/t + (silver g/t*0.01222)

Results of exploration work conducted at the Banderas property are encouraging; however, Volcanic has to date been unable to obtain all required access agreements and permits required to conduct further drilling on the property.

Motagua Norte Discovery

Pursuant to the 2020 Option Agreement, Volcanic also conducted regional exploration work on the Company's other landholdings in Guatemala, and as a result, identified the Motagua Norte property to be a high-grade orogenic gold system with compelling drill targets. Highlights of the gold discoveries at the high-grade Mila prospect at Motagua Norte are:

• Concentration of bonanza-grade and visible gold in quartz veins over a 250 x 570 m area.
• Continuous line rock chip sampling across mixed outcrop, subcrop, boulder fields of 34 m averaging 42 g/t gold and 24 m averaging 54 g/t gold.
• High-grade gold in both quartz veins and stockwork quartz in the wallrock suggests wide zones of gold mineralization.
• Visible gold in quartz veins identified in new areas to the south and west of Mila.
• Orogenic gold-silver deposit with significant depth potential.

Volcanic's initial prospecting samples returned exceptional gold grades at the Mila prospect. In order to determine whether the very high gold grades (many samples above 1 oz gold / tonne) were the result of selective sampling or widespread across the target zones, a program of continuous 2 metre chip sampling was conducted across mixed terrain of outcrop, subcrop and float boulders. In these areas it is not possible to be sure of true widths, and sampling was conducted to define the distribution of gold mineralization and target trench and drill priorities.

High-grade gold assays and visible gold occur in both quartz veins, and in wallrock quartz stockwork zones. Multiple quartz veins with at least two different orientations are recognized; north-south and northwest-southeast striking. The principal mineralized quartz veins form prominent mounds and ridges of collapsed outcrop boulder piles with quartz boulders up to 2 metres in diameter and outcrops up to 4 metres or more in width. Continuous chip channel sampling across one prominent ridge has returned average grades of up to 95 g/t gold across a 10 metre width of collapsed quartz vein boulders, each sample representing a 2 metre long segment of the line. Significantly wider quartz boulder fields occur where multiple, close-spaced veins reach surface. Continuous lines of 2 metre long chip channel samples of mixed outcrop and colluvium have returned average grades of 42 g/t gold along a 34 metre line, and 54 g/t gold over a 24 metre line from two parallel lines 70 metres apart in one boulder field at the centre of the prospect area.

The distribution of mineralized boulder float, supported by limited outcrop data, suggests that the high-grade gold mineralization in the Mila prospect is concentrated in two north-south structures approximately 200 metres apart, each structure at least 250 metres strike in length. The current interpretation is that one or both structures support multiple quartz veins across a width of at least 25 to 50 metres. Trenching and drilling will be required to look beneath the quartz boulder cover and establish the true geometry, width and grade of the mineralized veins and wallrock stockwork zones in the Mila prospect.

Beyond the Mila prospect, ongoing prospecting and rock chip sampling continues to identify additional mineralized veins within the licence area of the Motagua Norte property:

• 1. Two gold quartz veins have already been identified approximately 500 metres to the south of the Mila prospect with two high-grade rock chip samples of 9.34 g/t and 29.6 g/t gold some 280 metres apart.
• 1. Quartz veins grading up to 60.2 g/t gold have also been identified at a couple of locations further along the regional Motagua Norte trend between 800 and 1700 metres to the west of the Mila prospect.

Exploration potential and way forward

The Mila prospect is a new discovery with a sizeable footprint of abundant high-grade quartz at surface, pointing to a significant gold system. The abundance of high-grade quartz vein and quartz stockwork spread across a 250 x 570 metre area, the identification of multiple cross-cutting gold mineralized quartz veins at surface, and the demonstration that highgrade quartz is not confined to the quartz veins but also occurs in the wallrock, point to a broad, high-grade and extensive gold system. The mineralization is orogenic style, with mineralization at mesothermal depths within a major transform structure. These systems and structures typically support mineralization over significant vertical distances, and so there is potential for mineralization to continue to significant depths.

The Cirilo I exploration licence, covering a 13.5 km² (4.5 x 3 km) area including the Mila prospect area, has been granted by the Ministry of Mines of Guatemala, and is the first of four exploration licence applications at Motagua Norte to be granted. The other three applications cover an additional 72.68 km² of the highly prospective Motagua Norte orogenic gold corridor. Volcanic is working with the permitting authorities and local government to expedite the permitting process.

Trenching and drilling is planned to map out individual veins, vein sets, and stockwork zones, quantify the width and grade of mineralization, and explore the gold mineralization to depth.

Technical Information

Bruce Smith, M.Sc. (Geology), a member of the Australian Institute of Geoscientists, is the Company's Qualified Person as defined by National Instrument 43-101 - Standards of Disclosure for Mineral Projects. Mr. Smith has 30 years of mineral exploration experience and has reviewed and approved the technical information contained in this Information Circular.

Amended Property Option

Due to the uncertainty of being able to conduct further drilling at the Banderas property, the Company and Volcanic have agreed to amend the 2020 Option Agreement to include the Motagua Norte property in substitution for the Banderas property. The original earn-in requirement to spend US\$7.0 million in exploration of the properties remains unchanged. Under the modified option agreement (the "Amended Option Agreement"), Volcanic has an exclusive option to earn a 60% interest in the Company's Holly and Motagua Norte properties by spending US\$7.0 million on exploration of the properties, of which approximately US\$4.29 million has been spent on Holly and US\$1,764,778 is required to be spent on Motagua Norte. Expenditures made by Volcanic on exploration of the Banderas property are credited towards the US\$7.0 million expenditure requirement under the Amended Option Agreement.

Management of the Company looks forward to the advancement of the Motagua Norte property by Volcanic while the Company focuses its exploration work on its properties in Mexico. If Volcanic exercises its option, the Company will retain a 40% interest in the Holly and Motagua Norte properties.

The Amended Option Agreement has been approved by the Board (with Simon Ridgway abstaining from voting due to his being a director of the Company and of Volcanic), and is subject to the Company and Volcanic obtaining approval by the TSX Venture Exchange. As the Company and Volcanic have a common director and three common officers, the Exchange requires that the Company obtain disinterested shareholder approval to the Amended Option Agreement. Accordingly, the shareholders of the Company will be asked at the Meeting to approve an ordinary resolution as follows:

"RESOLVED that the Amended Option Agreement whereby the exclusive option of Volcanic Gold Mines Inc. to earn a 60% interest in the Company's Holly and Banderas properties is amended to substitute the Motagua Norte property for the Banderas property, as more particularly described in the information circular of the Company dated October 27, 2023, be and is hereby ratified, confirmed and approved."

Other Matters

Management of the Company knows of no matters to come before the Meeting other than those referred to in the Notice of Meeting accompanying this Information Circular. However, if any other matters properly come before the Meeting, it is the intention of the persons named in the Proxy and VIF to vote the same in accordance with their best judgment of such matters.

STATEMENT OF EXECUTIVE COMPENSATION

During the fiscal year ended December 31, 2022, two individuals were "named executive officers" of the Company within the meaning of the definition set out in National Instrument Form 51-102F6V, "Statement of Executive Compensation – Venture Issuers" ("Form 51-102F6V"). As required by Form 51-102F6V, the following includes disclosure of the compensation paid or payable by the Company to:

• Bruce Smith, its President and Chief Executive Officer ("CEO"), and
• Kevin Bales, its Chief Financial Officer ("CFO")

(hereinafter together referred to as "NEOs"), and to its directors.

Compensation Excluding Compensation Securities

The following summarizes compensation, excluding Compensation Securities (as defined below), paid or payable to NEOs and directors of the Company during the fiscal years ended December 31, 2022 and 2021:

		COMPENSATION EXCLUDING COMPENSATION SECURITIES
Name and Position	Year	Salary, Consulting Fee, Retainer or Commission (\$)	Bonus (\$)	Committee or Meeting Fees (\$)	Value of Perquisites (\$)	Value of All Other Compensation (\$)	Total Compensation (\$)
Simon Ridgway Director & Executive Chairman (2)	2022 2021	42,000 (1) 42,000 (1)	Nil Nil	Nil Nil	Nil Nil	Nil Nil	42,000 42,000
Bruce Smith Director, President & CEO (3)	2022 2021	180,000 180,000	Nil Nil	Nil Nil	Nil Nil	Nil Nil	180,000 180,000
Kevin Bales CFO	2022 2021	31,092 (4) 27,408 (4)	Nil Nil	Nil Nil	Nil Nil	Nil Nil	31,092 27,408
Mario Szotlender Director	2022 2021	Nil Nil	Nil Nil	Nil Nil	Nil Nil	Nil Nil	Nil Nil
William Katzin Director	2022 2021	Nil Nil	Nil Nil	Nil Nil	Nil Nil	Nil Nil	Nil Nil

Notes:

(1) Paid to Mill Street Services Ltd. ("Mill Street") for the corporate development and financial advisory services of Simon Ridgway.

(2) Mr. Ridgway was President and CEO until January 4, 2021, and Chairman of the Board from January 4, 2021 until he was appointed Executive Chairman of the Board on April 24, 2023.

(3) Bruce Smith was appointed as President and CEO on January 4, 2021.

(4) Paid or payable to Gold Group Management Inc. ("Gold Group") for the services of Kevin Bales as CFO of the Company.

Compensation Securities

The Company did not grant or issue any stock options, convertible securities, exchangeable securities or similar instruments including stock appreciation rights, deferred share units or restricted stock units (collectively "Compensation Securities") to its NEOs and directors during the fiscal year ended December 31, 2022.

The total number of Compensation Securities, and underlying securities, held by each NEO and director as at December 31, 2022 are:

Simon Ridgway	450,000 stock options (and underlying common shares)
Bruce Smith	1,000,000 stock options (and underlying common shares)
Kevin Bales	260,000 stock options (and underlying common shares)
Mario Szotlender	275,000 stock options (and underlying common shares)
William Katzin	250,000 stock options (and underlying common shares)

The Company's NEOs and directors did not exercise any Compensation Securities during the fiscal year ended December 31, 2022.

Stock Option Plans and Other Incentive Plans

The Company's only incentive plan is its Stock Option Plan, the material terms of which are described under "Particulars of Matters to be Acted Upon – Stock Option Plan" herein.

Compensation Agreements or Arrangements

On January 4, 2021, Bruce Smith was appointed President and CEO of the Company in the place of Simon Ridgway. Mr. Smith was also appointed to the Board. Pursuant to agreements dated effective January 1, 2021:

• (a) Mr. Smith is paid a monthly fee for his services as President and CEO of the Company. The agreement has no fixed expiry date and contains provisions regarding fees and expenses, and termination of services. The agreement may be terminated by the Company without cause on six months' notice and by Mr. Smith on three months' notice. If, on December 31, 2022, the Company had terminated the agreement without cause, \$90,000 would have been payable to Mr. Smith, and in the event of a change of control of the Company, \$270,000 would have been payable to Mr. Smith.
• (b) the Company agreed to issue to Mr. Smith up to 500,000 common shares of the Company for his services as President and CEO of the Company during 2021 and 2022. The 500,000 common shares were issued to Mr. Smith in September 2023 a deemed price of \$0.24 per share, for a total deemed value of \$120,000.
• (c) the Company agreed to issue to Mr. Smith as a bonus 500,000 common shares of the Company in the event that as a result of exploration work conducted on any property in which the Company has an interest, the Company publishes a mineral resource calculated in accordance with National Instrument 43-101 having an equivalent gross metal value greater than US\$1.0 billion. The share issuance will be subject to Exchange approval, and to Mr. Smith's being engaged or employed by the Company at the time the mineral resource is published.

Pursuant to an agreement dated effective June 1, 2019, as amended effective January 1, 2021, Mill Street is paid a monthly fee for the corporate development and financial advisory consulting services of Simon Ridgway, the Executive Chairman of the Company. The agreement has no fixed expiry date and contains provisions regarding fees and expenses, and termination of services. The agreement may be terminated by the Company without cause on 12 months' notice and by Mill Street on three months' notice. If, on December 31, 2022, the Company had terminated the agreement without cause, \$42,000 would have been payable to Mill Street. Mill Street is owned by Mr. Ridgway.

Pursuant to an agreement dated July 1, 2012, as amended June 1, 2019, Gold Group is reimbursed by the Company on a monthly basis for certain shared business-related expenses paid by Gold Group on behalf of the Company, including the services of the Company's Chief Financial Officer. The agreement may be terminated by the Company on 12 months' notice and by Gold Group on three months' notice. Gold Group is owned by Simon Ridgway, the Executive Chairman of the Company.

Oversight and Description of Director and NEO Compensation

The Compensation Committee of the Company's Board is responsible for ensuring that the Company has appropriate procedures for making recommendations to the Board with respect to the compensation of the Company's executive officers and directors. The Compensation Committee consists of William Katzin, Mario Szotlender and Simon Ridgway, of whom Messrs. Katzin and Szotlender are independent directors.

The general philosophy of the Company's compensation strategy is to: (a) encourage management to achieve a high level of performance and results with a view to increasing long-term shareholder value; (b) align management's interests with the long-term interest of shareholders; (c) provide a compensation package that is designed to attract and retain highly qualified executives and directors; and (d) ensure that total compensation paid takes into account the Company's overall financial position.

Compensation to the Company's NEOs is comprised of cash salaries and/or incentive stock options. The compensation to the Company's NEOs for the fiscal year ended December 31, 2022 consisted solely of cash salaries. The Company granted incentive stock options to its NEOs and directors in June 2023, and may in the future grant stock options to its NEOs and directors.

In establishing levels of cash compensation and the granting of stock options, the individual's performance, level of expertise, and responsibilities are considered. Stock options are generally granted at the time of the individual's appointment and periodically thereafter. Previous grants of options are taken into account by the Board when it considers the granting of new stock options.

Incentive stock options are granted pursuant to the Company's stock option plan which is designed to encourage share ownership on the part of the Company's management, directors, employees and consultants. The Board believes that the stock option plan aligns the interests of the Company's personnel with shareholders by linking compensation to the longer term performance of the Company's shares. The granting of incentive stock options is an important component of executive compensation as it allows the Company to reward an individual's efforts to increase shareholder value without requiring the use of the Company's cash reserves.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The only equity compensation plan which the Company has in place is the stock option plan which was previously approved by the shareholders on December 14, 2022. The Company established a stock option plan to provide incentive to qualified parties to increase their proprietary interest in the Company and thereby encourage their continuing association with the Company. The Company's stock option plan provides that the number of common shares of the Company issuable under the plan, together with any other previously established or proposed share compensation arrangements of the Company, may not exceed 10% of the total number of issued and outstanding common shares. The material terms of the Stock Option Plan are set out above under the heading "Particulars of Matters to be Acted Upon – Stock Option Plan".

	EQUITY COMPENSATION PLAN
	(a)	(b)	(c) No. of Securities Remaining
	No. of Securities to be Issued Upon Exercise of	Weighted Average Exercise Price of	Available for Future Issuance under Equity Compensation
Plan Category	Outstanding Options, Warrants and Rights	Outstanding Options, Warrants and Rights	Plans (excluding Securities Reflected in column (a))
Equity Compensation Plan Approved by Shareholders	4,350,000	\$0.19	4,376,855
Equity Compensation Plans Not Approved by Shareholders	Nil	N/A	N/A
Total:	4,350,000	N/A	4,376,855

The following table sets out information regarding compensation plans under which equity securities of the Company are authorized for issuance, as at December 31, 2022:

AUDIT COMMITTEE

Pursuant to the provisions of National Instrument 52-110, Audit Committees ("NI 52-110"), the Company's Audit Committee has adopted a written charter (the "Charter") that sets out its mandate and responsibilities. The Charter is attached hereto as Schedule "B". As the Company is a "venture issuer" (as defined in NI 52-110), it is relying on the exemption provided to it in Section 6.1 of NI 52-110 with respect to audit committee composition and reporting obligations.

The Audit Committee is presently comprised of William Katzin, Mario Szotlender and Simon Ridgway, a majority of whom are "independent" and all of whom are "financially literate" within the meanings given to those terms in NI 52-110. The education and experience of each audit committee member that is relevant to the performance of his responsibilities as an audit committee member is as follows:

Audit Committee Member	Education and Experience
William Katzin	Mr. Katzin is a graduate of the University of Cape Town, South Africa with a Bachelor of Commerce and Law degree. He is a member of Chartered Professional Accountants of British Columbia. He has been a partner in private practice with a Vancouver firm of Chartered Accountants since 1986 and has experience working with resource and exploration companies. He is an audit committee member of one other publicly-traded resource company.
Mario Szotlender	Mr. Szotlender holds a degree in international relations and has successfully directed Latin American affairs for numerous private and public companies over the past 25 years. He has been involved in various mineral exploration and development joint ventures (precious metals and diamonds) in Central and South America, including heading several mineral operations in Venezuela, including Las Cristinas in the 1980's. Mr. Szotlender is or has been an audit committee member of other publicly-traded resource companies.
Simon Ridgway	Mr. Ridgway is a mining executive, entrepreneur and financier with over 30 years' experience in precious metal exploration, financing and leading teams that have gone from grassroots discoveries through to production. He is currently CEO or Executive Chairman of three publicly traded resource companies. His background has given him the required experience to understand and assess the general application of the accounting principles used by the Company and to understand internal controls and procedures for financial reporting.

During the fiscal year ended December 31, 2022, the Company's auditors performed certain non-audit services. All fees charged by the Company's auditors during the last two fiscal years are as follows:

	2022	2021
Audit Fees	\$44,000	\$39,000
Audit-Related Fees	Nil	Nil
Tax Fees	\$ 3,500	\$ 4,500
All Other Fees	Nil	Nil
	\$47,500	\$43,500

Notes:

"Audit Fees" are the aggregate fees billed for the audit of the Company's consolidated annual financial statements, and review of transactions completed by the Company.

"Audit-Related Fees" are fees charged for assurance and related services that are reasonably related to the performance of the audit or review of the Company's consolidated annual financial statements and are not reported under "Audit Fees".

"Tax Fees" are fees for tax return preparation.

"All Other Fees" are amounts not included in the above categories.

CORPORATE GOVERNANCE

The Board is of the view that the Company's corporate governance practices are appropriate and effective for the Company, given its relatively small size and limited operations. The Company's method of corporate governance allows for the Company to operate efficiently, with simple checks and balances that control and monitor management and corporate functions without excessive administrative burden.

In accordance with National Instrument 58-101, Disclosure of Corporate Governance Practices ("NI 58-101") and National Instrument Form 58-101F2, Corporate Governance Disclosure (Venture Issuers), the Company discloses its corporate governance practices as follows:

Board of Directors

The Board considers William Katzin and Mario Szotlender to be "independent" according to the definition set out in NI 58- 101. Simon Ridgway is not independent as he provides consulting services to the Company, and Bruce Smith is not independent as he is an officer of the Company.

The independent Directors believe that their presence on the Board, their knowledge of the Company's business, and their independence are sufficient to facilitate the functioning of the Board independently of management. The independent Directors have the discretion to meet in private in the absence of the other Directors whenever they believe it is appropriate to do so.

Directorships

The directors of the Company are directors of one or more other reporting issuers, as follows:

Director Simon Ridgway	Other Issuers Rackla Metals Inc. Volcanic Gold Mines Inc.
Bruce Smith	Iris Metals Inc. Rackla Metals Inc.
Mario Szotlender	Atico Mining Corporation Endeavour Silver Corp. Fortuna Silver Mines Inc.
William Katzin	Rackla Metals Inc.

Orientation and Continuing Education

Management will ensure that a new appointee to the Board of Directors is aware of his or her duties and responsibilities of a director of the Company. 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, as well as the continuing education needs of all Board members.

Ethical Business Conduct

The Board expects management to operate the business of the Company in a manner that enhances shareholder value and is consistent with the highest level of integrity. Management is expected to execute the Company's business plan and to meet performance objectives and goals. In addition, the Board must comply with conflict of interest provisions in Canadian corporate law, including relevant securities regulatory instruments, in order 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

Given the Company's current stage of development and size of the Board, the Board is presently of the view that it functions effectively as a committee of the whole with respect to the nomination of directors. The entire Board will assess potential nominees and take responsibility for selecting new directors. The nominees are generally the result of recruitment efforts by the Board members, including both formal and informal discussions among Board members and the President and CEO of the Company.

Compensation Committee

The Company has established a Compensation Charter to assist the Board in discharging its oversight responsibilities relating to compensation, including the compensation of key senior management employees of the Company. The members of the Compensation Committee are William Katzin, Mario Szotlender and Simon Ridgway, a majority of whom are considered to be independent directors.

The Compensation Committee's mandate is to review and make recommendations to the Board on an annual basis with respect to the adequacy and form of compensation and benefits of all executive officers and directors, and with respect to the Company's stock option plan and the granting of options thereunder. To carry out its duties, the Compensation Committee may retain special legal, accounting, financial or other consultants to advise the Compensation Committee at the Company's expense, and it has the sole authority to retain and terminate any executive compensation consulting firm and to approve any such firm's fees and other retention terms.

Assessments

The Company has not determined formal means or methods to regularly assess the Board, its committees or the individual directors with respect to their effectiveness and contributions. The contributions of an individual director are informally monitored by the other Board members, having in mind the business strengths of the individual and the purpose of originally nominating the individual to the Board.

INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS

On May 29, 2023, the Company completed a non-brokered private placement financing. Of the participants in this financing, managed accounts which are ultimately controlled by Sprott Inc. ("Sprott"), of 200 Bay Street, Suite 2600, Toronto, Ontario M5J 2J1, purchased a total of 1,180,476 units at \$0.175 per unit, for proceeds of \$206,583. Each unit consists of one common share of the Company and one warrant, each warrant entitling the holder to purchase one additional common share at \$0.35 until May 28, 2025. Sprott was an informed person of the Company, by virtue of controlling more than 10% of the issued and outstanding Common Shares of the Company, when managed accounts which are ultimately controlled by Sprott participated in the above-noted financing of the Company.

Other than as disclosed in this Information Circular, no insider, proposed nominee for election as a director, or any associate or affiliate of the foregoing, had any material interest, direct or indirect, in any transaction or proposed transaction since January 1, 2022 which has materially affected or would materially affect the Company or its subsidiaries.

ADDITIONAL INFORMATION

Additional information relating to the Company is available for viewing at www.sedarplus.ca. Financial information is provided in the Company's financial statements and accompanying management's discussion and analysis for the fiscal year ended December 31, 2022. Copies of financial statements and accompanying MD&A may be obtained by contacting the Company, attention Corporate Secretary, at 200 Burrard Street, Suite 650, Vancouver, BC V6C 3L6 (Tel: 604-801-5432; Fax: 604-662-8829).

BY ORDER OF THE BOARD

Bruce Smith, President and Chief Executive Officer

1.2	Business Corporations Act and Interpretation Act Definitions Applicable 1

2.1	Authorized Share Structure1
2.2	Form of Share Certificate 1
2.3	Shareholder Entitled to Certificate or Acknowledgement1
2.4	Delivery by Mail2
2.5	Replacement of Worn Out or Defaced Certificate or Acknowledgement2
2.6	Replacement of Lost, Stolen or Destroyed Certificate or Acknowledgement 2
2.7	Splitting Share Certificates2
2.8	Certificate Fee 2
2.9	Recognition of Trusts 2

3.1	Directors Authorized 2
3.2	Commissions and Discounts3
3.3	Brokerage3
3.4	Conditions of Issue3
3.5	Share Purchase Warrants and Rights3

4.1	Central Securities Register 3

5.1	Registering Transfers3
5.2	Form of Instrument of Transfer 4

6.1	Legal Personal Representative Recognized on Death 4

7.1	Company Authorized to Purchase Shares5
7.2	Purchase When Insolvent 5
7.3	Sale and Voting of Purchased Shares5

$^{\circ}$ 1	Borrowing Powers

9.1	Alteration of Authorized Share Structure 5
9.2	Special Rights and Restrictions6
9.3	Change of Name6
9.4	Other Alterations 6

10.1	Annual General Meetings 6
10.2	Resolution Instead of Annual General Meeting 6
10.3	Calling of Meetings of Shareholders7
10.4	Notice for Meetings of Shareholders7
10.5	Record Date for Notice7
10.6	Record Date for Voting7
10.7	Failure to Give Notice and Waiver of Notice7
10.8	Notice of Special Business at Meetings of Shareholders 7
10.9	Location of Meetings of Shareholders. 8

11.1	Special Business 8
11.2	Special Majority8
11.3	Quorum8
11.4	One Shareholder May Constitute Quorum 8

11.5	Other Persons May Attend8
11.6	Requirement of Quorum9
11.7	Lack of Quorum9
11.8	Lack of Quorum at Succeeding Meeting 9
11.9	Chair9
11.10	Selection of Alternate Chair9
11.11	Adjournments 9
11.12	Notice of Adjourned Meeting 9
11.13	Decision by Show of Hands or Poll9
11.14	Declaration of Result9
11.15	Motion Need Not be Seconded10
11.16	Casting Vote 10
11.17	Manner of Taking Poll 10
11.18	Demand for Poll on Adjournment10
11.19	Chair Must Resolve Dispute 10
11.20	Casting of Votes 10
11.21	Demand for Poll 10
11.22	Demand for Poll Not to Prevent Continuance of Meeting10
11.23	Retention of Ballots and Proxies10
11.24	Meeting by Telephone or Other Communications Medium10

12.1	Number of Votes by Shareholder or by Shares11
12.2	Votes of Persons in Representative Capacity11
12.3	Votes by Joint Holders11
12.4	Legal Personal Representatives as Joint Shareholders 11
12.5	Representative of a Corporate Shareholder 11
12.6	Proxy Provisions Do Not Apply to All Companies12
12.7	Appointment of Proxy Holders12
12.8	Alternate Proxy Holders12
12.9	When Proxy Holder Need Not Be Shareholder12
12.10	Deposit of Proxy 12
12.11	Validity of Proxy Vote13
12.12	Form of Proxy13
12.13	Revocation of Proxy 13
12.14	Revocation of Proxy Must Be Signed 13
12.15	Production of Evidence of Authority to Vote14

13.1	First Directors; Number of Directors14
13.2	Change in Number of Directors14
13.3	Directors' Acts Valid Despite Vacancy14
13.4	Qualifications of Directors 14
13.5	Remuneration of Directors 14
13.6	Reimbursement of Expenses of Directors14
13.7	Special Remuneration for Directors15
13.8	Gratuity, Pension or Allowance on Retirement of Director 15

14.1	Election at Annual General Meeting 15
14.2	Consent to be a Director15
14.3	Failure to Elect or Appoint Directors15
14.4	Places of Retiring Directors Not Filled16
14.5	Directors May Fill Casual Vacancies16
14.6	Remaining Directors Power to Act16
14.7	Shareholders May Fill Vacancies16
14.8	Additional Directors 16
14.9	Ceasing to be a Director16
14.10	Removal of Director by Shareholders 16
14.11	Removal of Director by Directors17

15.1	Powers of Management17
15.2	Appointment of Attorney of Company 17

16.1	Obligation to Account for Profits 17
16.2	Restrictions on Voting by Reason of Interest17
16.3	Interested Director Counted in Quorum17
16.4	Disclosure of Conflict of Interest or Property 17
16.5	Director Holding Other Office in the Company17
16.6	No Disqualification 18
16.7	Professional Services by Director or Officer18
16.8	Director or Officer in Other Corporations18

17.1	Meetings of Directors18
17.2	Voting at Meetings18
17.3	Chair of Meetings18
17.4	Meetings by Telephone or Other Communications Medium 18
17.5	Calling of Meetings18
17.6	Notice of Meetings19
17.7	When Notice Not Required19
17.8	Meeting Valid Despite Failure to Give Notice 19
17.9	Waiver of Notice of Meetings19
17.10	Quorum19
17.11	Validity of Acts Where Appointment Defective 19
17.12	Consent Resolutions in Writing19

18.1	Appointment and Powers of Executive Committee19
18.2	Appointment and Powers of Other Committees 20
18.3	Obligations of Committees 20
18.4	Powers of Board20
18.5	Committee Meetings 20

19.1	Directors May Appoint Officers 21
19.2	Functions, Duties and Powers of Officers 21
19.3	Qualifications 21
19.4	Remuneration and Terms of Appointment21

20.1	Definitions21
20.2	Mandatory Indemnification of Directors and Former Directors22
20.3	Indemnification of Other Persons22
20.4	Non-Compliance with Business Corporations Act22
20.5	Company May Purchase Insurance 22

21.1	Payment of Dividends Subject to Special Rights22
21.2	Declaration of Dividends22
21.3	No Notice Required22

Record Date22
Manner of Paying Dividend22
Settlement of Difficulties 23
When Dividend Payable 23
Dividends to be Paid in Accordance with Number of Shares23

21.9	Receipt by Joint Shareholders23
21.10	Dividend Bears No Interest 23
21.11	Fractional Dividends23
21.12	Payment of Dividends 23

22.1	Recording of Financial Affairs23
22.2	Inspection of Accounting Records23

23.1	Method of Giving Notice24
23.2	Deemed Receipt of Mailing24
23.3	Certificate of Sending24
23.4	Notice to Joint Shareholders24
23.5	Notice to Trustees25

24.1	Who May Attest Seal25
24.2	Sealing Copies 25
24.3	Mechanical Reproduction of Seal 25
24.4	Execution of Documents Generally25

25.1	Definitions26
25.2	Application 26
25.3	Consent Required for Transfer of Shares or Designated Securities26

BUSINESS CORPORATIONS ACT

ARTICLES

of

RADIUS GOLD INC.

ARTICLE 1 INTERPRETATION

1.1 Definitions. In these Articles, unless the context otherwise requires:

"board of directors", "directors" and "board" mean the directors or sole director of the Company for the time being;

"Business Corporations Act" means the Business Corporations Act (British Columbia) from time to time in force and all amendments thereto and includes all regulations and amendments thereto made pursuant to that Act;

"legal personal representative" means the personal or other legal representative of the shareholder;

"registered address" of a shareholder means the shareholder's address as recorded in the central securities register;

"seal" means the seal of the Company, if any.

1.2 Business Corporations Act and Interpretation Act Definitions Applicable. The definitions in the Business Corporations Act and the definitions and rules of construction in the Interpretation Act, with the necessary changes, so far as applicable, and unless the context requires otherwise, apply to these Articles as if they were an enactment. If there is a conflict between a definition in the Business Corporations Act and a definition or rule in the Interpretation Act relating to a term used in these Articles, the definition in the Business Corporations Act will prevail in relation to the use of the term in these Articles. If there is a conflict between these Articles and the Business Corporations Act, the Business Corporations Act will prevail.

ARTICLE 2 SHARES AND SHARE CERTIFICATES

2.1 Authorized Share Structure. The authorized share structure of the Company consists of shares of the class or classes and series, if any, described in the Notice of Articles of the Company.

2.2 Form of Share Certificate. Each share certificate issued by the Company must comply with, and be signed as required by, the Business Corporations Act.

2.3 Shareholder Entitled to Certificate or Acknowledgement. Each shareholder is entitled, without charge, to (a) one share certificate representing the shares of each class or series of shares registered in the shareholder's name or (b) a non-transferable written acknowledgement of the shareholder's right to obtain such a share certificate, provided that in respect of a share held jointly by several persons, the Company is not bound to

issue more than one share certificate and delivery of a share certificate for a share to one of several joint shareholders or to one of the shareholders' duly authorized agents will be sufficient delivery to all.

2.4 Delivery by Mail. Any share certificate or non-transferable written acknowledgement of a shareholder's right to obtain a share certificate may be sent to the shareholder by mail at the shareholder's registered address and neither the Company nor any director, officer or agent of the Company is liable for any loss to the shareholder because the share certificate or acknowledgement is lost in the mail or stolen.

2.5 Replacement of Worn Out or Defaced Certificate or Acknowledgement. If the directors are satisfied that a share certificate or a non-transferable written acknowledgement of the shareholder's right to obtain a share certificate is worn out or defaced, they must, on production to them of the share certificate or acknowledgement, as the case may be, and on such other terms, if any, as they think fit:

• (a) order the share certificate or acknowledgement, as the case may be, to be cancelled; and
• (b) issue a replacement share certificate or acknowledgement, as the case may be.

2.6 Replacement of Lost, Stolen or Destroyed Certificate or Acknowledgement. If a share certificate or a non-transferable written acknowledgement of a shareholder's right to obtain a share certificate is lost, stolen or destroyed, a replacement share certificate or acknowledgement, as the case may be, must be issued to the person entitled to that share certificate or acknowledgement, as the case may be, if the directors receive:

• (a) proof satisfactory to them that the share certificate or acknowledgement is lost, stolen or destroyed; and
• (b) any indemnity the directors consider adequate.

2.7 Splitting Share Certificates. If a shareholder surrenders a share certificate to the Company with a written request that the Company issue in the shareholder's name two or more share certificates, each representing a specified number of shares and in the aggregate representing the same number of shares as the share certificate so surrendered, the Company must cancel the surrendered share certificate and issue replacement share certificates in accordance with that request.

2.8 Certificate Fee. There must be paid to the Company, in relation to the issue of any share certificate under Articles 2.5, 2.6 or 2.7, the amount, if any and which must not exceed the amount prescribed under the Business Corporations Act, determined by the directors.

2.9 Recognition of Trusts. Except as required by law or statute or these Articles, no person will be recognized by the Company as holding any share upon any trust, and the Company is not bound by or compelled in any way to recognize (even when having notice thereof) any equitable, contingent, future or partial interest in any share or fraction of a share or (except as by law or statute or these Articles provided or as ordered by a court of competent jurisdiction) any other rights in respect of any share except an absolute right to the entirety thereof in the shareholder.

ARTICLE 3 ISSUE OF SHARES

3.1 Directors Authorized. Subject to the Business Corporations Act and the rights of the holders of issued shares of the Company, the Company may issue, allot, sell or otherwise dispose of the unissued shares, and issued shares held by the Company, at the times, to the persons, including directors, in the manner, on the terms and conditions and for the issue prices (including any premium at which shares with par value may be issued) that the directors may determine. The issue price for a share with par value must be equal to or greater than the par value of the share.

3.2 Commissions and Discounts. The Company may at any time, pay a reasonable commission or allow a reasonable discount to any person in consideration of that person purchasing or agreeing to purchase shares of the Company from the Company or any other person or procuring or agreeing to procure purchasers for shares of the Company.

3.3 Brokerage. The Company may pay such brokerage fee or other consideration as may be lawful for or in connection with the sale or placement of its securities.

3.4 Conditions of Issue. Except as provided for by the Business Corporations Act, no share may be issued until it is fully paid. A share is fully paid when:

• (a) consideration is provided to the Company for the issue of the share by one or more of the following:
• (i) past services performed for the Company;
• (ii) property;
• (iii) money; and
• (b) the value of the consideration received by the Company equals or exceeds the issue price set for the share under Article 3.1.

3.5 Share Purchase Warrants and Rights. Subject to the Business Corporations Act, the Company may issue share purchase warrants, options and rights upon such terms and conditions as the directors determine, which share purchase warrants, options and rights may be issued alone or in conjunction with debentures, debenture stock, bonds, shares or any other securities issued or created by the Company from time to time.

ARTICLE 4 SHARE REGISTERS

4.1 Central Securities Register. As required by and subject to the Business Corporations Act, the Company must maintain in British Columbia a central securities register. The directors may, subject to the Business Corporations Act, appoint an agent to maintain the central securities register. The directors may also appoint one or more agents, including the agent which keeps the central securities register, as transfer agent for its shares or any class or series of its shares, as the case may be, and the same or another agent as registrar for its shares or such class or series of its shares, as the case may be. The directors may terminate such appointment of any agent at any time and may appoint another agent in its place.

4.2 Closing Register. The Company must not at any time close its central securities register.

ARTICLE 5 SHARE TRANSFERS

• 5.1 Registering Transfers. A transfer of a share of the Company must not be registered unless:
• (a) a duly signed instrument of transfer in respect of the share has been received by the Company;
• (b) if a share certificate has been issued by the Company in respect of the share to be transferred, that share certificate has been surrendered to the Company; and

(c) if a non-transferable written acknowledgement of the shareholder's right to obtain a share certificate has been issued by the Company in respect of the share to be transferred, that acknowledgement has been surrendered to the Company.

5.2 Form of Instrument of Transfer. The instrument of transfer in respect of any share of the Company must be either in the form, if any, on the back of the Company's share certificates or in any other form that may be approved by the directors from time to time.

5.3 Transferor Remains Shareholder. Except to the extent that the Business Corporations Act otherwise provides, the transferor of shares is deemed to remain the holder of the shares until the name of the transferee is entered in a securities register of the Company in respect of the transfer.

5.4 Signing of Instrument of Transfer. If a shareholder, or his or her duly authorized attorney, signs an instrument of transfer in respect of shares registered in the name of the shareholder, the signed instrument of transfer constitutes a complete and sufficient authority to the Company and its directors, officers and agents to register the number of shares specified in the instrument of transfer or specified in any other manner, or, if no number is specified, all the shares represented by the share certificates or set out in the written acknowledgements deposited with the instrument of transfer:

• (a) in the name of the person named as transferee in that instrument of transfer; or
• (b) if no person is named as transferee in that instrument of transfer, in the name of the person on whose behalf the instrument is deposited for the purpose of having the transfer registered.

5.5 Enquiry as to Title Not Required. Neither the Company nor any director, officer or agent of the Company is bound to inquire into the title of the person named in the instrument of transfer as transferee or, if no person is named as transferee in the instrument of transfer, of the person on whose behalf the instrument is deposited for the purpose of having the transfer registered or is liable for any claim related to registering the transfer by the shareholder or by any intermediate owner or holder of the shares, of any interest in the shares, of any share certificate representing such shares or of any written acknowledgement of a right to obtain a share certificate for such shares.

5.6 Transfer Fee. There must be paid to the Company, in relation to the registration of any transfer, the amount, if any, determined by the directors.

ARTICLE 6 TRANSMISSION OF SHARES

6.1 Legal Personal Representative Recognized on Death. In case of the death of a shareholder, the legal personal representative, or if the shareholder was a joint holder, the surviving joint holder, will be the only person recognized by the Company as having any title to the shareholder's interest in the shares. Before recognizing a person as a legal personal representative, the directors may require proof of appointment by a court of competent jurisdiction, a grant of letters probate, letters of administration or such other evidence or documents as the directors consider appropriate.

6.2 Rights of Legal Personal Representative. The legal personal representative has the same rights, privileges and obligations that attach to the shares held by the shareholder, including the right to transfer the shares in accordance with these Articles, provided the documents required by the Business Corporations Act and the directors have been deposited with the Company.

ARTICLE 7 PURCHASE OF SHARES

7.1 Company Authorized to Purchase Shares. Subject to Article 7.2, the special rights and restrictions attached to the shares of any class or series and the Business Corporations Act, the Company may, if authorized by the directors, purchase or otherwise acquire any of its shares at the price and upon the terms specified in such resolution.

7.2 Purchase When Insolvent. The Company must not make a payment or provide any other consideration to purchase or otherwise acquire any of its shares if there are reasonable grounds for believing that:

• (a) the Company is insolvent; or
• (b) making the payment or providing the consideration would render the Company insolvent.

7.3 Sale and Voting of Purchased Shares. If the Company retains a share redeemed, purchased or otherwise acquired by it, the Company may sell, gift or otherwise dispose of the share, but, while such share is held by the Company, it:

• (a) is not entitled to vote the share at a meeting of its shareholders;
• (b) must not pay a dividend in respect of the share; and
• (c) must not make any other distribution in respect of the share.

ARTICLE 8 BORROWING POWERS

• 8.1 Borrowing Powers. The Company, if authorized by the directors, may:
• (a) borrow money in the manner and amount, on the security, from the sources and on the terms and conditions that they consider appropriate;
• (b) issue bonds, debentures and other debt obligations either outright or as security for any liability or obligation of the Company or any other person and at such discounts or premiums and on such other terms as they consider appropriate;
• (c) guarantee the repayment of money by any other person or the performance of any obligation of any other person; and
• (d) mortgage, charge, whether by way of specific or floating charge, grant a security interest in, or give other security on, the whole or any part of the present and future assets and undertaking of the Company.

ARTICLE 9 ALTERATIONS

9.1 Alteration of Authorized Share Structure. Subject to Article 9.2 and the Business Corporations Act, the Company may by resolution of the directors:

(a) create one or more classes or series of shares or, if none of the shares of a class or series of shares are allotted or issued, eliminate that class or series of shares;

• (b) increase, reduce or eliminate the maximum number of shares that the Company is authorized to issue out of any class or series of shares or establish a maximum number of shares that the Company is authorized to issue out of any class or series of shares for which no maximum is established;
• (c) subdivide or consolidate all or any of its unissued, or fully paid issued, shares;
• (d) if the Company is authorized to issue shares of a class of shares with par value:
• (i) decrease the par value of those shares; or
• (ii) if none of the shares of that class of shares are allotted or issued, increase the par value of those shares;
• (e) change all or any of its unissued, or fully paid issued, shares with par value into shares without par value or any of its unissued shares without par value into shares with par value;
• (f) alter the identifying name of any of its shares; or
• (g) otherwise alter its shares or authorized share structure when required or permitted to do so by the Business Corporations Act.

9.2 Special Rights and Restrictions. Subject to the Business Corporations Act, the Company may by ordinary resolution:

• (a) create special rights or restrictions for, and attach those special rights or restrictions to, the shares of any class or series of shares, whether or not any or all of those shares have been issued; or
• (b) vary or delete any special rights or restrictions attached to the shares of any class or series of shares, whether or not any or all of those shares have been issued.

9.3 Change of Name. The Company may by ordinary resolution or by a resolution of the directors authorize an alteration of its Notice of Articles in order to change its name.

9.4 Other Alterations. If the Business Corporations Act does not specify the type of resolution and these Articles do not specify another type of resolution, the Company may by ordinary resolution alter these Articles.

ARTICLE 10 MEETINGS OF SHAREHOLDERS

10.1 Annual General Meetings. Unless an annual general meeting is deferred or waived in accordance with the Business Corporations Act, the Company must hold its first annual general meeting within 18 months after the date on which it was incorporated or otherwise recognized, and after that must hold an annual general meeting at least once in each calendar year and not more than 15 months after the last annual reference date at such time and place as may be determined by the directors.

10.2 Resolution Instead of Annual General Meeting. If all the shareholders who are entitled to vote at an annual general meeting consent by a unanimous resolution under the Business Corporations Act to all of the business that is required to be transacted at that annual general meeting, the annual general meeting is deemed to have been held on the date of the unanimous resolution. The shareholders must, in any unanimous resolution passed under this Article 10.2, select as the Company's annual reference date a date that would be appropriate for the holding of the applicable annual general meeting.

10.3 Calling of Meetings of Shareholders. The directors may, whenever they think fit, call a meeting of shareholders.

10.4 Notice for Meetings of Shareholders. The Company must send notice of the date, time and location of any meeting of shareholders, in the manner provided in these Articles, or in such other manner, if any, as may be prescribed by ordinary resolution (whether previous notice of the resolution has been given or not), to each shareholder entitled to attend the meeting, to each director and to the auditor of the Company, unless these Articles otherwise provide, at least the following number of days before the meeting:

• (a) if and for so long as the Company is a public company, 21 days;
• (b) otherwise, 10 days.

10.5 Record Date for Notice. The directors may set a date as the record date for the purpose of determining shareholders entitled to notice of any meeting of shareholders. The record date must not precede the date on which the meeting is to be held by more than two months or, in the case of a general meeting requisitioned by shareholders under the Business Corporations Act, by more than four months. The record date must not precede the date on which the meeting is held by fewer than:

• (a) if and for so long as the Company is a public company, 21 days;
• (b) otherwise, 10 days.

If no record date is set, the record date is 5 p.m. on the day immediately preceding the first date on which the notice is sent or, if no notice is sent, the beginning of the meeting.

10.6 Record Date for Voting. The directors may set a date as the record date for the purpose of determining shareholders entitled to vote at any meeting of shareholders. The record date must not precede the date on which the meeting is to be held by more than two months or, in the case of a general meeting requisitioned by shareholders under the Business Corporations Act, by more than four months. If no record date is set, the record date is 5 p.m. on the day immediately preceding the first date on which the notice is sent or, if no notice is sent, the beginning of the meeting.

10.7 Failure to Give Notice and Waiver of Notice. The accidental omission to send notice of any meeting to, or the non-receipt of any notice by, any of the persons entitled to notice does not invalidate any proceedings at that meeting. Any person entitled to notice of a meeting of shareholders may, in writing or otherwise, waive or reduce the period of notice of such meeting.

10.8 Notice of Special Business at Meetings of Shareholders. If a meeting of shareholders is to consider special business within the meaning of Article 11.1, the notice of meeting must:

• (a) state the general nature of the special business; and
• (b) if the special business includes considering, approving, ratifying, adopting or authorizing any document or the signing of or giving of effect to any document, have attached to it a copy of the document or state that a copy of the document will be available for inspection by shareholders:
• (i) at the Company's records office, or at such other reasonably accessible location in British Columbia as is specified in the notice; and
• (ii) during statutory business hours on any one or more specified days before the day set for the holding of the meeting.

10.9 Location of Meetings of Shareholders. Meetings of shareholders of the Company may be held in British Columbia or at such other location outside of British Columbia that the board of directors, by resolution, may determine.

ARTICLE 11 PROCEEDINGS AT MEETINGS OF SHAREHOLDERS

• 11.1 Special Business. At a meeting of shareholders, the following business is special business:
• (a) at a meeting of shareholders that is not an annual general meeting, all business is special business except business relating to the conduct of or voting at the meeting;
• (b) at an annual general meeting, all business is special business except for the following:
  • (i) business relating to the conduct of or voting at the meeting;
  • (ii) consideration of any financial statements of the Company presented to the meeting;
  • (iii) consideration of any reports of the directors or auditor;
  • (iv) the setting or changing of the number of directors;
  • (v) the election or appointment of directors;
  • (vi) the appointment of an auditor;
  • (vii) the setting of the remuneration of an auditor;
  • (viii) business arising out of a report of the directors not requiring the passing of a special resolution or an exceptional resolution;
  • (ix) any other business which, under these Articles or the Business Corporations Act, may be transacted at a meeting of shareholders without prior notice of the business being given to the shareholders.

11.2 Special Majority. The majority of votes required for the Company to pass a special resolution at a meeting of shareholders is two-thirds of the votes cast on the resolution.

11.3 Quorum. Subject to the special rights and restrictions attached to the shares of any class or series of shares, the quorum for the transaction of business at a meeting of shareholders is two persons who are, or who represent by proxy, shareholders who, in the aggregate, hold at least 5% of the issued shares entitled to be voted at the meeting.

11.4 One Shareholder May Constitute Quorum. If there is only one shareholder entitled to vote at a meeting of shareholders:

• (a) the quorum is one person who is, or who represents by proxy, that shareholder, and
• (b) that shareholder, present in person or by proxy, may constitute the meeting.

11.5 Other Persons May Attend. The directors, the president (if any), the secretary (if any), the assistant secretary (if any), any lawyer for the Company, the auditor of the Company and any other persons invited by the directors are entitled to attend any meeting of shareholders, but if any of those persons does attend a meeting of shareholders, that person is not to be counted in the quorum and is not entitled to vote at the meeting unless that person is a shareholder or proxy holder entitled to vote at the meeting.

11.6 Requirement of Quorum. No business, other than the election of a chair of the meeting and the adjournment of the meeting, may be transacted at any meeting of shareholders unless a quorum of shareholders entitled to vote is present at the commencement of the meeting, but such quorum need not be present throughout the meeting.

11.7 Lack of Quorum. If, within one-half hour from the time set for the holding of a meeting of shareholders, a quorum is not present:

• (a) in the case of a general meeting requisitioned by shareholders, the meeting is dissolved, and
• (b) in the case of any other meeting of shareholders, the meeting stands adjourned to the same day in the next week at the same time and place.

11.8 Lack of Quorum at Succeeding Meeting. If, at the meeting to which the meeting referred to in Article 11.7(b) was adjourned, a quorum is not present within one-half hour from the time set for the holding of the meeting, the person or persons present and being, or representing by proxy, one or more shareholders entitled to attend and vote at the meeting constitute a quorum.

• 11.9 Chair. The following individual is entitled to preside as chair at a meeting of shareholders:
• (a) the chair of the board, if any; or
• (b) if the chair of the board is absent or unwilling to act as chair of the meeting, any officer of the Company, or such other person as may be elected by the shareholders who are present personally or by proxy, and are entitled to vote, at the meeting.

11.10 Selection of Alternate Chair. If, at any meeting of shareholders, there is no chair of the board or president present within 15 minutes after the time set for holding the meeting, or if the chair of the board and the president are unwilling to act as chair of the meeting, or if the chair of the board and the president have advised the secretary, if any, or any director present at the meeting, that they will not be present at the meeting, the directors present must choose one of their number to be chair of the meeting or if all of the directors present decline to take the chair or fail to so choose or if no director is present, the shareholders entitled to vote at the meeting who are present in person or by proxy may choose any person present at the meeting to chair the meeting.

11.11 Adjournments. The chair of a meeting of shareholders may, and if so directed by the meeting must, adjourn the meeting from time to time and from place to place, but no business may be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.

11.12 Notice of Adjourned Meeting. It is not necessary to give any notice of an adjourned meeting or of the business to be transacted at an adjourned meeting of shareholders except that, when a meeting is adjourned for 30 days or more, notice of the adjourned meeting must be given as in the case of the original meeting.

11.13 Decision by Show of Hands or Poll. Subject to the Business Corporations Act, every motion put to a vote at a meeting of shareholders will be decided on a show of hands unless a poll, before or on the declaration of the result of the vote by show of hands, is directed by the chair or demanded by at least one shareholder entitled to vote who is present in person or by proxy.

11.14 Declaration of Result. The chair of a meeting of shareholders must declare to the meeting the decision on every question in accordance with the result of the show of hands or the poll, as the case may be, and that decision must be entered in the minutes of the meeting. A declaration of the chair that a resolution is carried by the necessary majority or is defeated is, unless a poll is directed by the chair or demanded under Article 11.13, conclusive evidence without proof of the number or proportion of the votes recorded in favour of or against the resolution.

11.15 Motion Need Not be Seconded. No motion proposed at a meeting of shareholders need be seconded unless the chair of the meeting rules otherwise, and the chair of any meeting of shareholders is entitled to propose or second a motion.

11.16 Casting Vote. In case of an equality of votes, the chair of a meeting of shareholders does not, either on a show of hands or on a poll, have a second or casting vote in addition to the vote or votes to which the chair may be entitled as a shareholder.

11.17 Manner of Taking Poll. Subject to Article 11.18, if a poll is duly demanded at a meeting of shareholders:

• (a) the poll must be taken:
• (i) at the meeting, or within seven days after the date of the meeting, as the chair of the meeting directs; and
• (ii) in the manner, at the time and at the place that the chair of the meeting directs;
• (b) the result of the poll is deemed to be the decision of the meeting at which the poll is demanded; and
• (c) the demand for the poll may be withdrawn by the person who demanded it.

11.18 Demand for Poll on Adjournment. A poll demanded at a meeting of shareholders on a question of adjournment must be taken immediately at the meeting.

11.19 Chair Must Resolve Dispute. In the case of any dispute as to the admission or rejection of a vote given on a poll, the chair of the meeting must determine the dispute, and his or her determination made in good faith is final and conclusive.

11.20 Casting of Votes. On a poll, a shareholder entitled to more than one vote need not cast all the votes in the same way.

11.21 Demand for Poll. No poll may be demanded in respect of the vote by which a chair of a meeting of shareholders is elected.

11.22 Demand for Poll Not to Prevent Continuance of Meeting. The demand for a poll at a meeting of shareholders does not, unless the chair of the meeting so rules, prevent the continuation of a meeting for the transaction of any business other than the question on which a poll has been demanded.

11.23 Retention of Ballots and Proxies. The Company must, for at least three months after a meeting of shareholders, keep each ballot cast on a poll and each proxy voted at the meeting, and, during that period, make them available for inspection during normal business hours by any shareholder or proxy holder entitled to vote at the meeting. At the end of such three month period, the Company may destroy such ballots and proxies.

11.24 Meeting by Telephone or Other Communications Medium. A shareholder or proxy holder may participate in a meeting of the shareholders in person or by telephone if all shareholders or proxy holders participating in the meeting, whether in person or by telephone or other communications medium, are able to communicate with each other. A shareholder or proxy holder may participate in a meeting of the shareholders by a

communications medium other than telephone if all shareholders or proxy holders participating in the meeting, whether in person or by telephone or other communications medium, are able to communicate with each other and if all shareholders or proxy holders who wish to participate in the meeting agree to such participation. A shareholder or proxy holder who participates in a meeting in a manner contemplated by this Article 11.24 is deemed for all purposes of the Business Corporations Act and these Articles to be present at the meeting and to have agreed to participate in that manner.

ARTICLE 12 VOTES OF SHAREHOLDERS

12.1 Number of Votes by Shareholder or by Shares. Subject to any special rights or restrictions attached to any shares and to the restrictions imposed on joint shareholders under Article 12.3:

• (a) on a vote by show of hands, every person present who is a shareholder or proxy holder and entitled to vote on the matter has one vote; and
• (b) on a poll, every shareholder entitled to vote on the matter has one vote in respect of each share entitled to be voted on the matter and held by that shareholder and may exercise that vote either in person or by proxy.

12.2 Votes of Persons in Representative Capacity. A person who is not a shareholder may vote at a meeting of shareholders, whether on a show of hands or on a poll, and may appoint a proxy holder to act at the meeting, if, before doing so, the person satisfies the chair of the meeting, or the directors, that the person is a legal personal representative or a trustee in bankruptcy for a shareholder who is entitled to vote at the meeting.

• 12.3 Votes by Joint Holders. If there are joint shareholders registered in respect of any share:
• (a) any one of the joint shareholders may vote at any meeting, either personally or by proxy, in respect of the share as if that joint shareholder were solely entitled to it; or
• (b) if more than one of the joint shareholders is present at any meeting, personally or by proxy, and more than one of them votes in respect of that share, then only the vote of the joint shareholder present whose name stands first on the central securities register in respect of the share will be counted.

12.4 Legal Personal Representatives as Joint Shareholders. Two or more legal personal representatives of a shareholder in whose sole name any share is registered are, for the purposes of Article 12.3, deemed to be joint shareholders.

12.5 Representative of a Corporate Shareholder. If a corporation, that is not a subsidiary of the Company, is a shareholder, that corporation may appoint a person to act as its representative at any meeting of shareholders of the Company, and:

• (a) for that purpose, the instrument appointing a representative must:
• (i) be received at the registered office of the Company or at any other place specified, in the notice calling the meeting, for the receipt of proxies, at least the number of business days specified in the notice for the receipt of proxies, or if no number of days is specified, two business days before the day set for the holding of the meeting; or

• (ii) be provided, at the meeting, to the chair of the meeting or to a person designated by the chair of the meeting;

• (b) if a representative is appointed under this Article 12.5:

• (i) the representative is entitled to exercise in respect of and at that meeting the same rights on behalf of the corporation that the representative represents as that corporation could exercise if it were a shareholder who is an individual, including, without limitation, the right to appoint a proxy holder; and
• (ii) the representative, if present at the meeting, is to be counted for the purpose of forming a quorum and is deemed to be a shareholder present in person at the meeting.

Evidence of the appointment of any such representative may be sent to the Company by written instrument, fax or any other method of transmitting legibly recorded messages.

12.6 Proxy Provisions Do Not Apply to All Companies. Articles 12.7 to 12.15 do not apply to the Company if and for so long as it is a public company or a pre-existing reporting company which has the Statutory Reporting Company Provisions as part of its Articles or to which the Statutory Reporting Company Provisions apply.

12.7 Appointment of Proxy Holders. Every shareholder of the Company, including a corporation that is a shareholder but not a subsidiary of the Company, entitled to vote at a meeting of shareholders of the Company may, by proxy, appoint one or more (but not more than five) proxy holders to attend and act at the meeting in the manner, to the extent and with the powers conferred by the proxy.

12.8 Alternate Proxy Holders. A shareholder may appoint one or more alternate proxy holders to act in the place of an absent proxy holder.

12.9 When Proxy Holder Need Not Be Shareholder. A person must not be appointed as a proxy holder unless the person is a shareholder, although a person who is not a shareholder may be appointed as a proxy holder if:

• (a) the person appointing the proxy holder is a corporation or a representative of a corporation appointed under Article 12.5;
• (b) the Company has at the time of the meeting for which the proxy holder is to be appointed only one shareholder entitled to vote at the meeting; or
• (c) the shareholders present in person or by proxy at and entitled to vote at the meeting for which the proxy holder is to be appointed, by a resolution on which the proxy holder is not entitled to vote but in respect of which the proxy holder is to be counted in the quorum, permit the proxy holder to attend and vote at the meeting.
• 12.10 Deposit of Proxy. A proxy for a meeting of shareholders must:
• (a) be received at the registered office of the Company or at any other place specified, in the notice calling the meeting, for the receipt of proxies, at least the number of business days specified in the notice, or if no number of days is specified, two business days before the day set for the holding of the meeting; or
• (b) unless the notice provides otherwise, be provided, at the meeting, to the chair of the meeting or to a person designated by the chair of the meeting.

A proxy may be sent to the Company by written instrument, fax or any other method of transmitting legibly recorded messages.

12.11 Validity of Proxy Vote. A vote given in accordance with the terms of a proxy is valid notwithstanding the death or incapacity of the shareholder giving the proxy and despite the revocation of the proxy or the revocation of the authority under which the proxy is given, unless notice in writing of that death, incapacity or revocation is received:

• (a) at the registered office of the Company, at any time up to and including the last business day before the day set for the holding of the meeting at which the proxy is to be used; or
• (b) by the chair of the meeting, before the vote is taken.

12.12 Form of Proxy. A proxy, whether for a specified meeting or otherwise, must be either in the following form or in any other form approved by the directors or the chair of the meeting:

[Name of Company] (the "Company")

The undersigned, being a shareholder of the Company, hereby appoints [name] or, failing that person, [name], as proxy holder for the undersigned to attend, act and vote for and on behalf of the undersigned at the meeting of shareholders of the Company to be held on [month, day, year] and at any adjournment of that meeting.

Number of shares in respect of which this proxy is given (if no number is specified, then this proxy if given in respect of all shares registered in the name of the shareholder): _______________.

Signed this ______ day of __________, _____.

(Signature of shareholder)

(Name of shareholder - printed)

12.13 Revocation of Proxy. Subject to Article 12.14, every proxy may be revoked by an instrument in writing that is:

• (a) received at the registered office of the Company at any time up to and including the last business day before the day set for the holding of the meeting at which the proxy is to be used; or
• (b) provided, at the meeting, to the chair of the meeting.

12.14 Revocation of Proxy Must Be Signed. An instrument referred to in Article 12.13 must be signed as follows:

• (a) if the shareholder for whom the proxy holder is appointed is an individual, the instrument must be signed by the shareholder or his or her legal personal representative or trustee in bankruptcy;
• (b) if the shareholder for whom the proxy holder is appointed is a corporation, the instrument must be signed by the corporation or by a representative appointed for the corporation under Article 12.5.

12.15 Production of Evidence of Authority to Vote. The chair of any meeting of shareholders may, but need not, inquire into the authority of any person to vote at the meeting and may, but need not, demand from that person production of evidence as to the existence of the authority to vote.

ARTICLE 13 DIRECTORS

13.1 First Directors; Number of Directors. The first directors are the persons designated as directors of the Company in the Notice of Articles that applies to the Company when it is recognized under the Business Corporations Act. The number of directors, excluding additional directors appointed under Article 14.8, is set at:

• (a) subject to paragraphs (b) and (c), the number of directors that is equal to the number of the Company's first directors;
• (b) if the Company is a public company, the greater of three and the most recently set of:
• (i) the number of directors set by ordinary resolution (whether or not previous notice of the resolution was given); and
• (ii) the number of directors set under Article 14.4;
• (c) if the Company is not a public company, the most recently set of:
• (i) the number of directors set by ordinary resolution (whether or not previous notice of the resolution was given); and
• (ii) the number of directors set under Article 14.4.

13.2 Change in Number of Directors. If the number of directors is set under Articles 13.1(b)(i) or 13.1(c)(i):

• (a) the shareholders may elect or appoint the directors needed to fill any vacancies in the board of directors up to that number;
• (b) if the shareholders do not elect or appoint the directors needed to fill any vacancies in the board of directors up to that number contemporaneously with the setting of that number, then the directors may appoint, or the shareholders may elect or appoint, directors to fill those vacancies.

13.3 Directors' Acts Valid Despite Vacancy. An act or proceeding of the directors is not invalid merely because fewer than the number of directors set or otherwise required under these Articles is in office.

13.4 Qualifications of Directors. A director is not required to hold a share in the capital of the Company as qualification for his or her office but must be qualified as required by the Business Corporations Act to become, act or continue to act as a director.

13.5 Remuneration of Directors. The directors are entitled to the remuneration for acting as directors, if any, as the directors may from time to time determine. If the directors so decide, the remuneration of the directors, if any, will be determined by the shareholders. That remuneration may be in addition to any salary or other remuneration paid to any officer or employee of the Company as such, who is also a director.

13.6 Reimbursement of Expenses of Directors. The Company must reimburse each director for the reasonable expenses that he or she may incur in and about the business of the Company.

13.7 Special Remuneration for Directors. If any director performs any professional or other services for the Company that in the opinion of the directors are outside the ordinary duties of a director, or if any director is otherwise specially occupied in or about the Company's business, he or she may be paid remuneration fixed by the directors, or, at the option of that director, fixed by ordinary resolution, and such remuneration may be either in addition to, or in substitution for, any other remuneration that he or she may be entitled to receive.

13.8 Gratuity, Pension or Allowance on Retirement of Director. Unless otherwise determined by ordinary resolution, the directors on behalf of the Company may pay a gratuity or pension or allowance on retirement to any director who has held any salaried office or place of profit with the Company or to his or her spouse or dependents and may make contributions to any fund and pay premiums for the purchase or provision of any such gratuity, pension or allowance.

ARTICLE 14 ELECTION AND REMOVAL OF DIRECTORS

14.1 Election at Annual General Meeting. At every annual general meeting and in every unanimous resolution contemplated by Article 10.2:

• (a) the shareholders entitled to vote at the annual general meeting for the election of directors must elect, or in the unanimous resolution appoint, a board of directors consisting of the number of directors for the time being set under these Articles; and
• (b) all the directors cease to hold office immediately before the election or appointment of directors under paragraph (a), but are eligible for re-election or re-appointment.

14.2 Consent to be a Director. No election, appointment or designation of an individual as a director is valid unless:

• (a) that individual consents to be a director in the manner provided for in the Business Corporations Act;
• (b) that individual is elected or appointed at a meeting at which the individual is present and the individual does not refuse, at the meeting, to be a director; or
• (c) with respect to first directors, the designation is otherwise valid under the Business Corporations Act.

14.3 Failure to Elect or Appoint Directors. If:

• (a) the Company fails to hold an annual general meeting, and all the shareholders who are entitled to vote at an annual general meeting fail to pass the unanimous resolution contemplated by Article 10.2, on or before the date by which the annual general meeting is required to be held under the Business Corporations Act; or
• (b) the shareholders fail, at the annual general meeting or in the unanimous resolution contemplated by Article 10.2, to elect or appoint any directors;

then each director then in office continues to hold office until the earlier of:

• (c) the date on which his or her successor is elected or appointed; and
• (d) the date on which he or she otherwise ceases to hold office under the Business Corporations Act or these Articles.

14.4 Places of Retiring Directors Not Filled. If, at any meeting of shareholders at which there should be an election of directors, the places of any of the retiring directors are not filled by that election, those retiring directors who are not re-elected and who are asked by the newly elected directors to continue in office will, if willing to do so, continue in office to complete the number of directors for the time being set pursuant to these Articles until further new directors are elected at a meeting of shareholders convened for that purpose. If any such election or continuance of directors does not result in the election or continuance of the number of directors for the time being set pursuant to these Articles, the number of directors of the Company is deemed to be set at the number of directors actually elected or continued in office.

14.5 Directors May Fill Casual Vacancies. Any casual vacancy occurring in the board of directors may be filled by the directors.

14.6 Remaining Directors Power to Act. The directors may act notwithstanding any vacancy in the board of directors, but if the Company has fewer directors in office than the number set pursuant to these Articles as the quorum of directors, the directors may only act for the purpose of appointing directors up to that number or of summoning a meeting of shareholders for the purpose of filling any vacancies on the board of directors or, subject to the Business Corporations Act, for any other purpose.

14.7 Shareholders May Fill Vacancies. If the Company has no directors or fewer directors in office than the number set pursuant to these Articles as the quorum of directors, the shareholders may elect or appoint directors to fill any vacancies on the board of directors.

14.8 Additional Directors. Notwithstanding Articles 13.1 and 13.2, between annual general meetings or unanimous resolutions contemplated by Article 10.2, the directors may appoint one or more additional directors, but the number of additional directors appointed under this Article 14.8 must not at any time exceed:

• (a) one-third of the number of first directors, if, at the time of the appointments, one or more of the first directors have not yet completed their first term of office; or
• (b) in any other case, one-third of the number of the current directors who were elected or appointed as directors other than under this Article 14.8.

Any director so appointed ceases to hold office immediately before the next election or appointment of directors under Article 14.1(a), but is eligible for re-election or re-appointment.

• 14.9 Ceasing to be a Director. A director ceases to be a director when:
• (a) the term of office of the director expires;
• (b) the director dies;
• (c) the director resigns as a director by notice in writing provided to the Company or a lawyer for the Company; or
• (d) the director is removed from office pursuant to Articles 14.10 or 14.11.

14.10 Removal of Director by Shareholders. The Company may remove any director before the expiration of his or her term of office by special resolution. In that event, the shareholders may elect, or appoint by ordinary resolution, a director to fill the resulting vacancy. If the shareholders do not elect or appoint a director to fill the resulting vacancy contemporaneously with the removal, then the directors may appoint or the shareholders may elect, or appoint by ordinary resolution, a director to fill that vacancy.

14.11 Removal of Director by Directors. The directors may remove any director before the expiration of his or her term of office if the director is convicted of an indictable offence, or if the director ceases to be qualified to act as a director of a company and does not promptly resign, and the directors may appoint a director to fill the resulting vacancy.

ARTICLE 15 POWERS AND DUTIES OF DIRECTORS

15.1 Powers of Management. The directors must, subject to the Business Corporations Act and these Articles, manage or supervise the management of the business and affairs of the Company and have the authority to exercise all such powers of the Company as are not, by the Business Corporations Act or by these Articles, required to be exercised by the shareholders of the Company.

15.2 Appointment of Attorney of Company. The directors may from time to time, by power of attorney or other instrument, under seal if so required by law, appoint any person to be the attorney of the Company for such purposes, and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the directors under these Articles and excepting the power to fill vacancies in the board of directors, to remove a director, to change the membership of, or fill vacancies in, any committee of the directors, to appoint or remove officers appointed by the directors and to declare dividends) and for such period, and with such remuneration and subject to such conditions as the directors may think fit. Any such power of attorney may contain such provisions for the protection or convenience of persons dealing with such attorney as the directors think fit. Any such attorney may be authorized by the directors to sub-delegate all or any of the powers, authorities and discretions for the time being vested in him or her.

ARTICLE 16 DISCLOSURE OF INTEREST OF DIRECTORS

16.1 Obligation to Account for Profits. A director or senior officer who holds a disclosable interest (as that term is used in the Business Corporations Act) in a contract or transaction into which the Company has entered or proposes to enter is liable to account to the Company for any profit that accrues to the director or senior officer under or as a result of the contract or transaction only if and to the extent provided in the Business Corporations Act.

16.2 Restrictions on Voting by Reason of Interest. A director who holds a disclosable interest in a contract or transaction into which the Company has entered or proposes to enter is not entitled to vote on any directors' resolution to approve that contract or transaction, unless all the directors have a disclosable interest in that contract or transaction, in which case any or all of those directors may vote on such resolution.

16.3 Interested Director Counted in Quorum. A director who holds a disclosable interest in a contract or transaction into which the Company has entered or proposes to enter and who is present at the meeting of directors at which the contract or transaction is considered for approval may be counted in the quorum at the meeting whether or not the director votes on any or all of the resolutions considered at the meeting.

16.4 Disclosure of Conflict of Interest or Property. A director or senior officer who holds any office or possesses any property, right or interest that could result, directly or indirectly, in the creation of a duty or interest that materially conflicts with that individual's duty or interest as a director or senior officer, must disclose the nature and extent of the conflict as required by the Business Corporations Act.

16.5 Director Holding Other Office in the Company. A director may hold any office or place of profit with the Company, other than the office of auditor of the Company, in addition to his or her office of director for the period and on the terms (as to remuneration or otherwise) that the directors may determine.

16.6 No Disqualification. No director or intended director is disqualified by his or her office from contracting with the Company either with regard to the holding of any office or place of profit the director holds with the Company or as vendor, purchaser or otherwise, and no contract or transaction entered into by or on behalf of the Company in which a director is in any way interested is liable to be voided for that reason.

16.7 Professional Services by Director or Officer. Subject to the Business Corporations Act, a director or officer, or any person in which a director or officer has an interest, may act in a professional capacity for the Company, except as auditor of the Company, and the director or officer or such person is entitled to remuneration for professional services as if that director or officer were not a director or officer.

16.8 Director or Officer in Other Corporations. A director or officer may be or become a director, officer or employee of, or otherwise interested in, any person in which the Company may be interested as a shareholder or otherwise, and, subject to the Business Corporations Act, the director or officer is not accountable to the Company for any remuneration or other benefits received by him or her as director, officer or employee of, or from his or her interest in, such other person.

ARTICLE 17 PROCEEDINGS OF DIRECTORS

17.1 Meetings of Directors. The directors may meet together for the conduct of business, adjourn and otherwise regulate their meetings as they think fit, and meetings of the directors held at regular intervals may be held at the place, at the time and on the notice, if any, as the directors may from time to time determine.

17.2 Voting at Meetings. Questions arising at any meeting of directors are to be decided by a majority of votes and, in the case of an equality of votes, the chair of the meeting does not have a second or casting vote.

• 17.3 Chair of Meetings. The following individual is entitled to preside as chair at a meeting of directors:
• (a) the chair of the board, if any;
• (b) in the absence of the chair of the board, the president, if any, if the president is a director; or
• (c) any other director chosen by the directors if:
  • (i) neither the chair of the board nor the president, if a director, is present at the meeting within 15 minutes after the time set for holding the meeting;
  • (ii) neither the chair of the board nor the president, if a director, is willing to chair the meeting; or
  • (iii) the chair of the board and the president, if a director, have advised the secretary, if any, or any other director, that they will not be present at the meeting.

17.4 Meetings by Telephone or Other Communications Medium. A director may participate in a meeting of the directors or of any committee of the directors in person or by telephone or other communications medium if all directors participating in the meeting, whether in person or by telephone or other communications medium, are able to communicate with each other, if all directors who wish to participate in the meeting agree to such participation. A director who participates in a meeting in a manner contemplated by this Article 17.4 is deemed for all purposes of the Business Corporations Act and these Articles to be present at the meeting and to have agreed to participate in that manner.

17.5 Calling of Meetings. A director may, and the secretary or an assistant secretary of the Company, if any, on the request of a director must, call a meeting of the directors at any time.

17.6 Notice of Meetings. Other than for meetings held at regular intervals as determined by the directors pursuant to Article 17.1, reasonable notice of each meeting of the directors, specifying the place, day and time of that meeting must be given to each of the directors by any method set out in Article 23.1 or orally or by telephone.

17.7 When Notice Not Required. It is not necessary to give notice of a meeting of the directors to a director if:

• (a) the meeting is to be held immediately following a meeting of shareholders at which that director was elected or appointed, or is the meeting of the directors at which that director is appointed; or
• (b) the director has waived notice of the meeting.

17.8 Meeting Valid Despite Failure to Receive Notice. The non-receipt by any director of a notice of any meeting of the directors does not invalidate any proceedings at that meeting.

17.9 Waiver of Notice of Meetings. Any director may send to the Company a document signed by him or her waiving notice of any past, present or future meeting or meetings of the directors and may at any time withdraw that waiver with respect to meetings held after that withdrawal. After sending a waiver with respect to all future meetings and until that waiver is withdrawn, no notice of any meeting of the directors need be given to such director and all meetings of the directors so held are deemed not to be improperly called or constituted by reason of notice not having been given to such director.

17.10 Quorum. The quorum necessary for the transaction of the business at a meeting of the directors may be set by the directors and, if not so set, is a majority of the directors or, if the number of directors is set at one, is deemed to be set at one director, and that director may constitute a meeting.

17.11 Validity of Acts Where Appointment Defective. Subject to the Business Corporations Act, an act of a director or officer is not invalid merely because of an irregularity in the election or appointment or a defect in the qualification of that director or officer.

17.12 Consent Resolutions in Writing. A resolution of the directors or of any committee of the directors consented to in writing by all of the directors entitled to vote on it, whether by signed document, fax, email or any other method of transmitting legibly recorded messages, is as valid and effective as if it had been passed at a meeting of the directors or of the committee of the directors duly called and held. Such resolution may be in two or more counterparts which together are deemed to constitute one resolution in writing. A resolution passed in that manner is effective on the date stated in the resolution or on the latest date stated on any counterpart. A resolution of the directors or of any committee of the directors passed in accordance with this Article 17.12 is deemed to be a proceeding at a meeting of directors or of the committee of the directors and to be as valid and effective as if it had been passed at a meeting of the directors or of the committee of the directors that satisfies all the requirements of the Business Corporations Act and all the requirements of these Articles relating to meetings of the directors or of a committee of the directors.

ARTICLE 18 EXECUTIVE AND OTHER COMMITTEES

18.1 Appointment and Powers of Executive Committee. The directors may, by resolution, appoint an executive committee consisting of the director or directors that they consider appropriate, and this committee has, during the intervals between meetings of the board of directors, all of the directors' powers, except:

• (a) the power to fill vacancies in the board of directors;

• (b) the power to remove a director;

• (c) the power to change the membership of, or fill vacancies in, any committee of the directors; and

• (d) such other powers, if any, as may be set out in the resolution or any subsequent directors' resolution.
• 18.2 Appointment and Powers of Other Committees. The directors may, by resolution:
• (a) appoint one or more committees (other than the executive committee) consisting of the director or directors that they consider appropriate;
• (b) delegate to a committee appointed under paragraph (a) any of the directors' powers, except:
  • (i) the power to fill vacancies in the board of directors;
  • (ii) the power to remove a director;
  • (iii) the power to change the membership of, or fill vacancies in, any committee of the directors; and
  • (iv) the power to appoint or remove officers appointed by the directors; and
• (c) make any delegation referred to in paragraph (b)subject to the conditions set out in the resolution or any subsequent directors' resolution.

18.3 Obligations of Committees. Any committee appointed under Articles 18.1 or 18.2, in the exercise of the powers delegated to it, must:

• (a) conform to any rules that may from time to time be imposed on it by the directors; and
• (b) report every act or thing done in exercise of those powers at such times as the directors may require.

18.4 Powers of Board. The directors may, at any time, with respect to a committee appointed under Articles 18.1 or 18.2:

• (a) revoke or alter the authority given to the committee, or override a decision made by the committee, except as to acts done before such revocation, alteration or overriding;
• (b) terminate the appointment of, or change the membership of, the committee; and
• (c) fill vacancies in the committee.

18.5 Committee Meetings. Subject to Article 18.3(a) and unless the directors otherwise provide in the resolution appointing the committee or in any subsequent resolution, with respect to a committee appointed under Articles 18.1 or 18.2:

• (a) the committee may meet and adjourn as it thinks proper;

• (b) the committee may elect a chair of its meetings but, if no chair of a meeting is elected, or if at a meeting the chair of the meeting is not present within 15 minutes after the time set for holding the meeting, the directors present who are members of the committee may choose one of their number to chair the meeting;

• (c) a majority of the members of the committee constitutes a quorum of the committee; and

• (d) questions arising at any meeting of the committee are determined by a majority of votes of the members present, and in case of an equality of votes, the chair of the meeting does not have a second or casting vote.

ARTICLE 19 OFFICERS

19.1 Directors May Appoint Officers. The directors may, from time to time, appoint such officers, if any, as the directors determine and the directors may, at any time, terminate any such appointment.

• 19.2 Functions, Duties and Powers of Officers. The directors may, for each officer:
• (a) determine the functions and duties of the officer;
• (b) entrust to and confer on the officer any of the powers exercisable by the directors on such terms and conditions and with such restrictions as the directors think fit; and
• (c) revoke, withdraw, alter or vary all or any of the functions, duties and powers of the officer.

19.3 Qualifications. No officer may be appointed unless that officer is qualified in accordance with the Business Corporations Act. One person may hold more than one position as an officer of the Company. Any person appointed as the chair of the board or as the managing director must be a director. Any other officer need not be a director.

19.4 Remuneration and Terms of Appointment. All appointments of officers are to be made on the terms and conditions and at the remuneration (whether by way of salary, fee, commission, participation in profits or otherwise) that the directors thinks fit and are subject to termination at the pleasure of the directors, and an officer may in addition to such remuneration be entitled to receive, after he or she ceases to hold such office or leaves the employment of the Company, a pension or gratuity.

ARTICLE 20 INDEMNIFICATION

• 20.1 Definitions. In this Article 20:
• (a) "eligible penalty" means a judgment, penalty or fine awarded or imposed in, or an amount paid in settlement of, an eligible proceeding;
• (b) "eligible proceeding" means a legal proceeding or investigative action, whether current, threatened, pending or completed, in which a director or former director of the Company (an "eligible party") or any of the heirs and legal personal representatives of the eligible party, by reason of the eligible party being or having been a director of the Company:
  • (i) is or may be joined as a party; or
  • (ii) is or may be liable for or in respect of a judgment, penalty or fine in, or expenses related to, the proceeding;
• (c) "expenses" has the meaning set out in the Business Corporations Act.

20.2 Mandatory Indemnification of Directors and Former Directors. Subject to the Business Corporations Act, the Company must indemnify a director or former director of the Company and his or her heirs and legal personal representatives against all eligible penalties to which such person is or may be liable, and the Company must, after the final disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by such person in respect of that proceeding. Each director is deemed to have contracted with the Company on the terms of the indemnity contained in this Article 20.2.

20.3 Indemnification of Other Persons. Subject to any restrictions in the Business Corporations Act, the Company may indemnify any person.

20.4 Non-Compliance with Business Corporations Act. The failure of a director or officer of the Company to comply with the Business Corporations Act or these Articles does not invalidate any indemnity to which he or she is entitled under this Article 20.

20.5 Company May Purchase Insurance. The Company may purchase and maintain insurance for the benefit of any person (or his or her heirs or legal personal representatives) who:

• (a) is or was a director, officer, employee or agent of the Company;
• (b) is or was a director, officer, employee or agent of a corporation at a time when the corporation is or was an affiliate of the Company;
• (c) at the request of the Company, is or was a director, officer, employee or agent of a corporation or of a partnership, trust, joint venture or other unincorporated entity;
• (d) at the request of the Company, holds or held a position equivalent to that of a director or officer of a partnership, trust, joint venture or other unincorporated entity;

against any liability incurred by him or her as such director, officer, employee or agent or person who holds or held such equivalent position.

ARTICLE 21 DIVIDENDS

21.1 Payment of Dividends Subject to Special Rights. The provisions of this Article 21 are subject to the rights, if any, of shareholders holding shares with special rights as to dividends.

21.2 Declaration of Dividends. Subject to the Business Corporations Act and the rights of the holders of issued shares of the Company, the directors may from time to time declare and authorize payment of such dividends as they may deem advisable.

21.3 No Notice Required. The directors need not give notice to any shareholder of any declaration under Article 21.2.

21.4 Record Date. The directors may set a date as the record date for the purpose of determining shareholders entitled to receive payment of a dividend. The record date must not precede the date on which the dividend is to be paid by more than two months. If no record date is set, the record date is 5 p.m. on the date on which the directors pass the resolution declaring the dividend.

21.5 Manner of Paying Dividend. A resolution declaring a dividend may direct payment of the dividend wholly or partly by the distribution of specific assets or of fully paid shares or of bonds, debentures or other securities of the Company, or in any one or more of those ways.

21.6 Settlement of Difficulties. If any difficulty arises in regard to a distribution under Article 21.5, the directors may settle the difficulty as they deem advisable, and, in particular, may:

• (a) set the value for distribution of specific assets;
• (b) determine that cash payments in substitution for all or any part of the specific assets to which any shareholders are entitled may be made to any shareholders on the basis of the value so fixed in order to adjust the rights of all parties; and
• (c) vest any such specific assets in trustees for the persons entitled to the dividend.

21.7 When Dividend Payable. Any dividend may be made payable on such date as is fixed by the directors.

21.8 Dividends to be Paid in Accordance with Number of Shares. All dividends on shares of any class or series of shares must be declared and paid according to the number of such shares held.

21.9 Receipt by Joint Shareholders. If several persons are joint shareholders of any share, any one of them may give an effective receipt for any dividend, bonus or other money payable in respect of the share.

21.10 Dividend Bears No Interest. No dividend bears interest against the Company.

21.11 Fractional Dividends. If a dividend to which a shareholder is entitled includes a fraction of the smallest monetary unit of the currency of the dividend, that fraction may be disregarded in making payment of the dividend and that payment represents full payment of the dividend.

21.12 Payment of Dividends. Any dividend or other distribution payable in cash in respect of shares may be paid by cheque, made payable to the order of the person to whom it is sent, and mailed to the address of the shareholder, or in the case of joint shareholders, to the address of the joint shareholder who is first named on the central securities register, or to the person and to the address the shareholder or joint shareholders may direct in writing. The mailing of such cheque will, to the extent of the sum represented by the cheque (plus the amount of the tax required by law to be deducted), discharge all liability for the dividend unless such cheque is not paid on presentation or the amount of tax so deducted is not paid to the appropriate taxing authority.

21.13 Capitalization of Surplus. Notwithstanding anything contained in these Articles, the directors may from time to time capitalize any surplus of the Company and may from time to time issue, as fully paid, shares or any bonds, debentures or other securities of the Company as a dividend representing the surplus or any part of the surplus.

ARTICLE 22 DOCUMENTS, RECORDS AND REPORTS

22.1 Recording of Financial Affairs. The directors must cause adequate accounting records to be kept to record properly the financial affairs and condition of the Company and to comply with the Business Corporations Act.

22.2 Inspection of Accounting Records. Unless the directors determine otherwise, or unless otherwise determined by ordinary resolution, no shareholder of the Company is entitled to inspect or obtain a copy of any accounting records of the Company.

ARTICLE 23 NOTICES

23.1 Method of Giving Notice. Unless the Business Corporations Act or these Articles provides otherwise, a notice, statement, report or other record required or permitted by the Business Corporations Act or these Articles to be sent by or to a person may be sent by any one of the following methods:

• (a) mail addressed to the person at the applicable address for that person as follows:
• (i) for a record mailed to a shareholder, the shareholder's registered address;
• (ii) for a record mailed to a director or officer, the prescribed address for mailing shown for the director or officer in the records kept by the Company or the mailing address provided by the recipient for the sending of that record or records of that class;
• (iii) in any other case, the mailing address of the intended recipient;
• (b) delivery at the applicable address for that person as follows, addressed to the person:
• (i) for a record delivered to a shareholder, the shareholder's registered address;
• (ii) for a record delivered to a director or officer, the prescribed address for delivery shown for the director or officer in the records kept by the Company or the delivery address provided by the recipient for the sending of that record or records of that class;
• (iii) in any other case, the delivery address of the intended recipient;
• (c) sending the record by fax to the fax number provided by the intended recipient for the sending of that record or records of that class;
• (d) sending the record by email to the email address provided by the intended recipient for the sending of that record or records of that class;
• (e) physical delivery to the intended recipient;
• (f) as otherwise permitted by any securities legislation (together with all regulations and rules made and promulgated thereunder and all administrative policy statements, blanket orders, and rulings, notices, and other administrative directions issued by securities commissions or similar authorities appointed thereunder) in any province or territory of Canada or in the federal jurisdiction of the United States or in any state of the United States that is applicable to the Company.

23.2 Deemed Receipt of Mailing. A record that is mailed to a person by ordinary mail to the applicable address for that person referred to in Article 23.1 is deemed to be received by the person to whom it was mailed on the day, Saturdays, Sundays and holidays excepted, following the date of mailing.

23.3 Certificate of Sending. A certificate signed by the secretary, if any, or other officer of the Company or of any other corporation acting in that behalf for the Company stating that a notice, statement, report or other record was addressed as required by Article 23.1, prepaid and mailed or otherwise sent as permitted by Article 23.1 is conclusive evidence of that fact.

23.4 Notice to Joint Shareholders. A notice, statement, report or other record may be provided by the Company to the joint shareholders of a share by providing the notice to the joint shareholder first named in the central securities register in respect of the share.

23.5 Notice to Trustees. A notice, statement, report or other record may be provided by the Company to the persons entitled to a share in consequence of the death, bankruptcy or incapacity of a shareholder by:

• (a) mailing the record, addressed to them:
• (i) by name, by the title of the legal personal representative of the deceased or incapacitated shareholder, by the title of trustee of the bankrupt shareholder or by any similar description; and
• (ii) at the address, if any, supplied to the Company for that purpose by the persons claiming to be so entitled; or
• (b) if an address referred to in paragraph (a)(ii) has not been supplied to the Company, by giving the notice in a manner in which it might have been given if the death, bankruptcy or incapacity had not occurred.

ARTICLE 24 SEAL AND EXECUTION OF DOCUMENTS

24.1 Who May Attest Seal. Except as provided in Articles 24.2 and 24.3, the Company's seal, if any, must not be impressed on any record except when that impression is attested by the signatures of:

• (a) any two directors;
• (b) any officer, together with any director;
• (c) if the Company only has one director, that director; or
• (d) any one or more directors or officers or persons as may be determined by the directors.

24.2 Sealing Copies. For the purpose of certifying under seal a certificate of incumbency of the directors or officers of the Company or a true copy of any resolution or other document, despite Article 24.1, the impression of the seal may be attested by the signature of any director or officer.

24.3 Mechanical Reproduction of Seal. The directors may authorize the seal to be impressed by third parties on share certificates or bonds, debentures or other securities of the Company as they may determine appropriate from time to time. To enable the seal to be impressed on any share certificates or bonds, debentures or other securities of the Company, whether in definitive or interim form, on which facsimiles of any of the signatures of the directors or officers of the Company are, in accordance with the Business Corporations Act or these Articles, printed or otherwise mechanically reproduced, there may be delivered to the person employed to engrave, lithograph or print such definitive or interim share certificates or bonds, debentures or other securities one or more unmounted dies reproducing the seal and the chair of the board or any senior officer together with the secretary, treasurer, secretary-treasurer, an assistant secretary, an assistant treasurer or an assistant secretary-treasurer may in writing authorize such person to cause the seal to be impressed on such definitive or interim share certificates or bonds, debentures or other securities by the use of such dies. Share certificates or bonds, debentures or other securities to which the seal has been so impressed are for all purposes deemed to be under and to bear the seal impressed on them.

24.4 Execution of Documents Generally. The directors may from time to time by resolution appoint any one or more persons, officers or Directors for the purpose of executing any instrument, document or agreement in the name of and on behalf of the Company for which the seal need not be affixed, and if no such person, officer or director is appointed, then any one officer or director of the Company may execute such instrument, document or agreement.

ARTICLE 25 PROHIBITIONS

• 25.1 Definitions. In this Article 25:
• (a) "designated security" means:
  • (i) a voting security of the Company;
  • (ii) a security of the Company that is not a debt security and that carries a residual right to participate in the earnings of the Company or, on the liquidation or winding up of the Company, in its assets; or
  • (iii) a security of the Company convertible, directly or indirectly, into a security described in paragraph (i) or (ii);
• (b) "security" has the meaning assigned in the Securities Act (British Columbia);
• (c) "voting security" means a security of the Company that:
  • (i) is not a debt security, and
  • (ii) carries a voting right either under all circumstances or under some circumstances that have occurred and are continuing.

25.2 Application. Article 25.3 does not apply to the Company if and for so long as it is a public company or a pre-existing reporting company which has the Statutory Reporting Company Provisions as part of its Articles or to which the Statutory Reporting Company Provisions apply.

25.3 Consent Required for Transfer of Shares or Designated Securities. No share or designated security may be sold, transferred or otherwise disposed of without the consent of the directors and the directors are not required to give any reason for refusing to consent to any such sale, transfer or other disposition.

AUDIT COMMITTEE CHARTER

General

The primary function of the Audit Committee is to assist the Board of Directors of the Company (the "Board") in fulfilling its oversight responsibilities by reviewing the financial information to be provided to the shareholders and others, the systems of internal controls and management information systems established by management and the Company's external audit process and monitoring compliance with the Company's legal and regulatory requirements with respect to its financial statements.

The Audit Committee is accountable to the Board. In the course of fulfilling its specific responsibilities hereunder, the Audit Committee is expected to maintain an open communication between the Company's external auditors and the Board.

The responsibilities of a member of the Audit Committee are in addition to such member's duties as a member of the Board.

The Audit Committee does not plan or perform audits or warrant the accuracy or completeness of the Company's financial statements or financial disclosure or compliance with generally accepted accounting procedures as these are the responsibility of management and the external auditors.

Effective Date

This Charter was implemented by the Board on May 3, 2005.

Composition of Audit Committee

The Committee membership shall satisfy the laws and policies governing the Company and the independence, financial literacy and experience requirements under securities law, stock exchange and any other regulatory requirements as are applicable to the Company.

Relationship with External Auditors

The external auditor is required to report directly to the Audit Committee. Opportunities shall be afforded periodically to the external auditor and to members of senior management to meet separately with the Audit Committee.

Responsibilities

• 1. The Audit Committee shall be responsible for making the following recommendations to the Board:
• (a) the external auditor to be nominated for the purpose of preparing or issuing an auditor's report or performing other audit, review or attest services for the Company; and
• (b) the compensation of the external auditor.
• 1. The Audit Committee shall be directly responsible for overseeing the work of the external auditor, including the resolution of disagreements between management and the external auditor regarding financial reporting. This responsibility shall include:

• (a) reviewing with management and the external auditor any proposed changes in major accounting policies, the presentation and impact of significant risks and uncertainties, and key estimates and judgments of management that may be material to financial reporting;

• (b) questioning management and the external auditor regarding significant financial reporting issues discussed during the fiscal period and the method of resolution;

• (c) reviewing audited annual financial statements, in conjunction with the report of the external auditor;
• (d) reviewing any problems experienced by the external auditor in performing the audit, including any restrictions imposed by management or significant accounting issues on which there was a disagreement with management; and
• (e) reviewing the evaluation of internal controls by the external auditor, together with management's response.
• 1. The Audit Committee shall review interim unaudited financial statements before release to the public.
• 1. The Audit Committee shall review all public disclosures of audited or unaudited financial information before release, including any prospectus, annual report, annual information form, and management's discussion and analysis.
• 1. The Audit Committee shall review the appointments of the chief financial officer and any other key financial executives involved in the financial reporting process, as applicable.
• 1. Except as exempted by securities regulatory policies, the Audit Committee shall pre-approve all non-audit services to be provided to the Company or its subsidiary entities by the external auditor.
• 1. The Audit Committee shall ensure that adequate procedures are in place for the review of the Company's public disclosure of financial information extracted or derived from the Company's financial statements, and shall periodically assess the adequacy of those procedures.
• 1. The Audit Committee shall establish procedures for:
• (a) the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters; and
• (b) the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.
• 1. The Audit Committee shall periodically review and approve the Company's hiring policies, if any, regarding partners, employees and former partners and employees of the present and former external auditor of the Company.
• 1. Meetings of the Audit Committee shall be scheduled to take place at regular intervals and, in any event, not less frequently than quarterly.

Authority

The Audit Committee shall have the authority to:

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