SILVER SPRUCE RESOURCES INC. — M&A Activity 2021

Sep 20, 2021

OPTION AND PURCHASE AGREEMENT

THIS OPTION AND PURCHASE AGREEMENT is dated September 7, 2021,

BETWEEN:

Eddie Quinlan 382 Main Street Birchy Bay, NL

("Eddie")

and

Roland Quinlan P.O. Box 18 Birchy Bay, NL A0G 1E0

("Roland" and together with Eddie, the "Vendors")

and

SILVER SPRUCE RESOURCES, INC., a corporation with headquarters in the Province of Nova Scotia, and listed on the TSX Venture Exchange under the symbol "SSE" Suite 440 – 1600 Bedford Highway, Halifax, NS, B4A 1E8

(the "Purchaser" or "Silver Spruce")

WHEREAS:

A. The Vendors are the registered, legal and beneficial owners of a 100% title and interest in the Mystery, Marilyn and Till Properties located in Newfoundland and Labrador, Canada comprising 360 claims and totaling approximately 8,750 hectares, as more particularly described in Schedule "A" to this Agreement (the "Property"); and

B. The Vendors have agreed to grant the exclusive right and option to the Purchaser to purchase the Property, and the Purchaser has agreed to purchase from the Vendors, the Vendors' interests in the Property on the terms described herein.

THEREFORE, in consideration of the mutual covenants and agreements in this Agreement, the parties agree as follows:

1. Definitions and Interpretation

1.1 For the purposes of this Agreement:

(a) "Affiliate" means any person, partnership, joint venture, corporation or other form of enterprise which directly or indirectly controls, is controlled by, or is under common control with, a party to this Agreement. For purposes of the preceding sentence, "control" means possession, directly or indirectly, of the power to direct or cause direction of management and policies through ownership of voting securities, contract, voting trust or otherwise;

• (b) "Conditional Acceptance of the Exchange" means the conditional acceptance by the Exchange of the acquisition of the Property by the Purchaser;
• (c) "Effective Date" means the date this Agreement is accepted for filing by a Final Exchange Bulletin;
• (d) "Exchange" means the TSX Venture Exchange;
• (a) "Expenditures" means the aggregate amount of all direct costs, outlays and expenses reasonably spent or incurred by the Purchaser as operator in accordance with good mineral industry practice in connection with the evaluation, exploration and development of the Property, including, without limitation, moneys expended in maintaining the Property in good standing and costs incurred in connection with complying with environmental laws, all costs relating to the securing of good relations with communities in the area surrounding the Property, including, without limitation, all costs associated with the negotiation and implementation of any impact and benefit agreement or access agreement and any services provided in aid of consultation between aboriginal people and governmental authorities relating to operations on the Property, all insurance costs, moneys expended in doing and filing assessment work, expenses paid for or incurred in connection with any program of surface or underground prospecting, exploring, geophysical, geochemical and geological surveying, drilling, drifting, raising and other underground work, assaying and engineering, bulk sampling, environmental studies, data preparation and analysis, submissions to governmental authorities, all associated, non-recoverable sales taxes, paying the fees, wages, salaries, travelling expenses and fringe benefits of all persons engaged in work with respect to and for the benefit of the Property;
• (e) "Final Exchange Bulletin" means the bulletin issued by the Exchange confirming final acceptance by the Exchange of the acquisition of the Property by the Purchaser;
• (f) "Payment Period" means the period commencing on the Effective Date and ending on the earlier of the date that this Agreement is terminated pursuant to section 10 and the date that is one day after the day on which all of the Shares issuable to the Vendors have been issued and all cash payments payable to the Vendors have been made in accordance with sections 3.1 (a) and (b), as may be accelerated by the Purchaser in accordance with section 3.4;
• (g) "Property" has the meaning ascribed in recital A of this Agreement and further described in Schedule "A" attached hereto;

• (h) "Royalty" has the meaning given to that term in section 4.1 to be calculated and paid in accordance with the provisions of the Royalty Agreement;

• (i) "Royalty Agreement" means the royalty agreement in the form set forth in Schedule "B";

• (j) "Shares" means fully paid and non-assessable common shares in the capital of the Purchaser; and
• (k) "Title Transfer" has the meaning ascribed to it in section 3.2 hereof.
• 1.2 For the purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:
• (a) "this Agreement" means this agreement and all Schedules attached hereto;
• (b) any reference in this Agreement to a designated "Section", "Schedule", "paragraph" or other subdivision refers to the designated section, schedule, paragraph or other subdivision of this Agreement;
• (c) the words "herein" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Section or other subdivision of this Agreement;
• (d) the word "including", when following any general statement, term or matter, is not to be construed to limit such general statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as "without limitation" or "but not limited to" or words of similar import) is used with reference thereto but rather refers to all other items or matters that could reasonably fall within the broadest possible scope of such general statement, term or matter;
• (e) any reference to a statute includes and, unless otherwise specified herein, is a reference to such statute and to the regulations made pursuant thereto, with all amendments made thereto and in force from time to time, and to any statute or regulations that may be passed which has the effect of supplementing or superseding such statute or such regulation;
• (f) any reference to "party" or "parties" means the Vendors (collectively), the Purchaser, or both, as the context requires;
• (g) the headings in this Agreement are for convenience of reference only and do not affect the interpretation of this Agreement;
• (h) words importing the masculine gender include the feminine or neuter gender and words in the singular include the plural, and vice versa; and
• (i) all references to currency refer to Canadian dollars.
• 1.3 The Schedules "A" and "B" attached to this Agreement are fully incorporated into this Agreement by reference as follows:

• (a) Schedule "A": The Property

• (b) Schedule "B": The Royalty Agreement

• 1.4 Wherever any term or condition, expressed or implied, in any of the Schedules conflicts or is at variance with any term or conditions of this Agreement, the terms or conditions of this Agreement will prevail.

2. Representations and Warranties of the Vendors and the Purchaser

• 2.1 Each of the Vendors represents and warrants to the Purchaser that:
• (a) the Vendors are the sole beneficial and legal owners of the Property and the Vendors have the full right, power, capacity and authority to enter into, execute and deliver this Agreement;
• (b) the Property is held by the Vendors and is free and clear of, and from, all liens, claims, charges and encumbrances and all taxes, rates or other levies of every nature and kind heretofore levied against the Property have been fully paid and satisfied;
• (c) the Vendors hold all permits, licences, consents and authorities issued by any government or governmental authority which are necessary in connection with the ownership and operation of its business and the ownership of the Property;
• (d) the claims comprising the Property have been duly and validly located and recorded and are in good standing with the Mineral Rights Registry, Newfoundland and Labrador on the effective date hereof and until the date set opposite the claim name in Schedule "A";
• (e) there is no adverse claim or challenge against or to the ownership of or title to any part of the Property and, to the best of each of the Vendors knowledge and belief, there is no basis for such adverse claim or challenge which may affect the Property;
• (f) there is no outstanding directive or order or similar notice issued by any regulatory agency, including agencies responsible for environmental matters, affecting the Property nor to the knowledge of each of the Vendors after due inquiry is there any reason to believe that such an order, directive or similar notice is pending or threatened nor is there any basis therefor. The Vendors also covenant that all work carried out on the Property by or under it, or the Vendors' direction has been done in full compliance with all applicable laws and regulations including environmental laws;
• (g) to the best of each of the Vendors' knowledge, after due inquiry, all lands covered by the Property are free and clear of any substance, combination of substances or by-product of any substance which is or may become hazardous, toxic, injurious or dangerous to any person, property, air, land, water, flora, fauna or wildlife including, but not limited to, contaminants, pollutants, wastes and dangerous, toxic, deleterious or designated substances as defined in or pursuant to applicable environmental laws and all environmental approvals required with respect to activities carried out by the Vendors on any part of the lands covered by the Property, have been obtained, are valid and in full force and effect, have been

complied with and there have been and are no proceedings commenced or threatened to revoke or amend any such environmental approvals;

• (h) to the best of each of the Vendors' knowledge, there has been no known spill, discharge, deposit, leak, emission or other release of any contaminant, pollutant, dangerous or toxic substance, or hazardous waste on, into, under or affecting the Property and no such contaminant, pollutant, dangerous or toxic substance, or hazardous waste is stored in any type of container on, in or under the Property;
• (i) to the best of each of the Vendors' knowledge, no reclamation, rehabilitation, restoration or abandonment obligations exist with respect to the Property;
• (j) the Vendors have not received from any governmental or regulatory agency or board, any notice of or communication relating to any actual or alleged environmental claims, and, to the best of its knowledge, there are no outstanding work orders or actions required to be taken relating to environmental matters respecting the Property or any operations carried out on the Property;
• (k) to the best of each of the Vendors' knowledge, no part of the Property lies within any protected area, rescued area, reserve, reservation or reserved area or other designated area, that would impair the development of a mining project thereon;
• (l) no aboriginal communities have approached it claiming any ancestral rights to the Property or any part of the Property or the lands in the immediate vicinity of the Property;
• (m) the Vendors have duly and timely satisfied all of the obligations required to be satisfied, performed and observed by it under, and there exists no default or event of default or event, occurrence, condition or act which, with the giving of notice, the lapse of time or the happening of any other event or condition, would become a default or event of default by the Vendors under any agreement pertaining to the Properties and each such lease, contract or other agreement is enforceable and in full force and effect;
• (n) other than acceptance from the Exchange, no other third party approvals, consents, permits, waivers, exemptions and orders or any filing with or notice to or authorization of any Governmental Entity, including any filings with any Governmental Entity, are required on the part of the Vendors as a condition to the lawful completion of the transactions contemplated under this Agreement;
• (o) the Vendors have provided to the Purchaser, or will provide to the Purchaser on or before the Closing Date, all data, reports, permits, title documents and other information in the Vendors' possession pertaining to the Property;
• (p) the consummation of the transactions contemplated by this Agreement does not and will not conflict with, constitute a default under, result in a breach of, entitle any person or either of the Vendors to a right of termination under, or result in the creation or imposition of any lien, encumbrance or restriction of any nature whatsoever upon or against the Property or any contract, agreement, indenture or other instrument to which the Vendors are a party or by which they are bound, any

law, judgment, order, writ, injunction or decree of any court, administrative agency or other tribunal or any regulation of any governmental authority and

• (q) all claims comprising the Property are properly registered with the government, fully paid up, and current. After Closing, Vendors will designate Purchaser as the agent of record for keeping claims current, and upon notification by Vendors to Purchaser that this has occurred, Purchaser will be responsible for paying up all claims (at Vendors' cost) comprising the Property to ensure they are current, effective, and valid under law for the remainder of the Agreement. For the avoidance of doubt, ownership of claims will remain with the Vendors and will not transfer to Purchaser until Purchaser earns in 100% ownership of the Property upon fulfilling the requirements of section 3 hereof.
• 2.2 The representations and warranties contained in paragraph 2.1 are provided for the exclusive benefit of the Purchaser, and a breach of any one or more representations or warranties may be waived by the Purchaser in whole or in part at any time without prejudice to its rights in respect of any other breach of the same or any other representation or warranty, and the representations and warranties contained in paragraph 2.1 will survive the execution and delivery of this Agreement.
• 2.3 The Purchaser represents, warrants and covenants to the Vendors and hereby acknowledges that the Vendors are relying upon such representations and warranties in connection with entering into this Agreement and agreeing to complete the purchase of the Property, as follows:
• (a) the Purchaser is a valid and subsisting corporation duly incorporated and in good standing, with its headquarters in the Province of Nova Scotia;
• (b) the Purchaser has the full right, power, capacity and authority to enter into, execute and deliver this Agreement and to be bound by its terms;
• (c) the consummation of the transactions contemplated by this Agreement will not conflict with nor result in any breach of the Purchaser's constating documents or any covenants or agreements contained in or constitute a default under any agreement or other instrument whatever to which the Purchaser is a party or by which the Purchaser is bound or to which the Purchaser may be subject;
• (d) no proceedings are pending for, and the Purchaser is unaware of any basis for, the institution of any proceedings leading to the placing of the Purchaser in bankruptcy or subject to any other laws governing the affairs of insolvent parties; and
• (e) the Purchaser is publicly listed on the Exchange under the symbol "SSE".
• 2.4 The representations and warranties contained in paragraph 2.3 are provided for the exclusive benefit of the Vendors, and a breach of any one or more representations or warranties may be waived by the Vendors in whole or in part at any time without prejudice to its rights in respect of any other breach of the same or any other representation or warranty; and the representations and warranties contained in paragraph 2.3 will survive the execution and delivery of this Agreement.

3. Option Exercise Requirements

• 3.1 The Vendors hereby grants to the Purchaser the exclusive right and option to acquire, subject to the reservation of Royalty, a 100% interest in the Property, free and clear of all liens, charges and encumbrances, and all benefits to be derived therefrom and in consideration therefore, the Purchaser agrees to make the following cash payments the Vendors or their nominee(s):
• (a)
• I. \$40,000 collectively upon receipt by the Purchaser of the Conditional Acceptance of the Exchange of this Agreement;
• II. \$50,000 collectively upon the first anniversary of the date of the Final Exchange Bulletin;
• III. \$75,000 collectively upon the second anniversary of the date of the Final Exchange Bulletin;
• IV. \$100,000 collectively upon the third anniversary of the date of the Final Exchange Bulletin;
• V. \$150,000 collectively upon the fourth anniversary of the date of the Final Exchange Bulletin; and
• VI. \$200,000 collectively upon the fifth anniversary of the date of Final Exchange Bulletin.
• (b) In addition to cash payments set out in section 3.1(a) above, in order for the Purchaser to acquire the Property, the Purchaser agrees to issue to the Vendors or their nominee(s) from treasury the following Shares:
• I. 1,000,000 Shares collectively upon receipt by the Purchaser of the Conditional Acceptance of the Exchange of this Agreement;
• II. 1,000,000 Shares collectively upon the first anniversary of the date of the Final Exchange Bulletin;
• III. 1,250,000 Shares collectively upon the second anniversary of the date of the Final Exchange Bulletin;
• IV. 1,500,000 Shares collectively upon the third anniversary of the date of the Final Exchange Bulletin;
• V. 2,000,000 Shares collectively upon the fourth anniversary of the date of the Final Exchange Bulletin; and
• VI. 3,250,000 Shares collectively upon the fifth anniversary of the date the Final Exchange Bulletin.

• (c) In addition to the cash payments and issuance of the Shares in accordance with subsections 3.1(a) and (b), in order to acquire 100% interest in the Property the Purchaser must incur a minimum of \$1,500,000 in Expenditures on the Property as follows:

  • I. \$150,000 in Expenditures by the first anniversary of the date of the Conditional Acceptance of the Exchange of this Agreement; and

• II. \$200,000 in Expenditures by the second anniversary of the date of the Final Exchange Bulletin; and

• III. \$250,000 in Expenditures by the third anniversary of the date of the Final Exchange Bulletin; and
• IV. \$300,000 in Expenditures by the fourth anniversary of the date of the Final Exchange Bulletin; and
• V. \$600,000 in Expenditures by the fifth anniversary of the date of the Final Exchange Bulletin.
• 3.2 Upon the Purchaser satisfying all of the obligations in Section 3.1, the Purchaser will be deemed to have acquired the 100% interest in the Property in accordance with the provisions of this Agreement, subject to the Royalty and the Vendors shall deliver to the Purchaser duly executed transfer of the Property in the form required under the laws of the Province of Newfoundland and Labrador (the "Title Transfer").
• 3.3 The Vendors will inform the Purchaser in writing seven (7) days prior to the time of cash payments and Share issuances set out in subsections 3.1(a) and (b), the ratio of cash payment and Share issuance to each of the Vendors or their respective nominee. The Vendors agree that all Shares issued to the Vendors will be voted by the Vendors as directed by management of the Purchaser.
• 3.4 The Purchaser may, in its sole direction, accelerate at any time the cash payments, the Share issuances to the Vendors and the Expenditures on the Property required in order to earn a 100% interest in the Property.

4. Royalty and Buyback Right

• 4.1 Upon the Title Transfer, the Vendors will reserve, retain and hold a 2% net smelter return royalty as described in the Royalty Agreement (the "Royalty"). An advance payment against the Royalty payable by the Purchaser to the Vendors in the amount of \$15,000 will be made on an annual basis starting on the 6th anniversary of the date of the Final Exchange Bulletin.
• 4.2 The Purchaser shall be entitled, at any time in its sole discretion, upon written notice to the Vendors, to buy back 1% of the Royalty for \$2,000,000. Furthermore, the Purchaser shall have the right to buy back the remaining 1% of the Royalty from the Vendors at any time at a prevailing market price to be determined at the time of the exercise of the buyback right by the Purchaser and as agreed by the parties in good faith.

5. Recording of Agreement

5.1 The Vendors and the Purchaser will execute and deliver such additional documentation as legal counsel for the Vendor and/or the Purchaser determine is necessary in order to duly register and record in the appropriate registration and recording offices notice that the Vendors' interest in and to the Property is subject to and bound by the terms of this Agreement.

6. Conditions Precedent

• 6.1 The obligation of the Purchaser to consummate the transactions contemplated under this Agreement is subject to the following conditions which are to the Purchaser's sole benefit and may be waived in writing by the Purchaser:
• (a) the representations and warranties of the Vendors and the Purchaser as set forth in Sections 2.1 and 2.3, respectively, will be true at and as of the date hereof and as at the Closing Date as if they had made the representations and warranties at and as of that time;
• (b) the Purchaser will have received the requisite regulatory approvals to the transactions contemplated in this Agreement, including receipt of the Conditional Acceptance of the Exchange;
• (c) all of the conditions of the Conditional Acceptance of the Exchange will have been met, and the fulfillment of the Effective Date shall have occurred; and
• (d) the Purchaser will be satisfied, in its sole discretion, as to the title to the Property held by the Vendors.
• 6.2 The Purchaser and the Vendors will use their respective best reasonable efforts to assist each other in obtaining the requisite regulatory approvals to this Agreement, including the Conditional Acceptance of the Exchange.

7. Closing

• 7.1 Subject to the conditions in Section 6 being waived or fulfilled, Closing will take place at a time and location mutually agreed between the parties up to 30 days following the date that all conditions contained in the Conditional Acceptance of the Exchange have been met (the "Closing Date"), including the Share issuance pursuant to section 3.1(a)(I) and the cash payment set out in section 3.1(b)(I) and the Vendor will execute all documents required to effect registration of the Title Transfer of the Vendors' undivided 100% legal and beneficial interest in the Property, free and clear of all liens, charges and encumbrances to the Purchaser. At Closing, the Vendors shall deliver or cause to deliver to the Purchaser a title opinion with respect to the Property satisfactory to the Purchaser.
• 7.2 Each of the Vendors and the Purchaser will do all such further acts and execute all such further documents as may be necessary or desirable to transfer and to effect registration of the Purchaser's interest in the Property with the appropriate government mining claim registries.

8. Obligations During Payment Period

• 8.1 During the Payment Period, the Vendors shall hold the Property in the ordinary course of business and in compliance with all applicable laws and shall not:

• (a) dispose of, grant any interest in or encumber any of the Property;

• (b) enter into any contract or any other transaction that could materially affect the Property or the Vendors' interest therein, except with the prior written consent of the Purchaser;

• (c) terminate, cancel, modify or amend in any respect any contract related to the Property or take or fail to take any action that would entitle any party to a contract related to the Property to terminate, modify, cancel or amend such contract; or
• (d) agree, commit or enter into any understanding to take any action set out in paragraphs (a), (b) or (c) of this section 8.1.

8.2 Right of First Refusal on Work Commitments & Access to Data

During the term of this Agreement, Purchaser will offer a ROFR on specific tasks in the Expenditures to the Vendors commensurate with their expertise and availability after discussion with the Silver Spruce Project Oversight Committee. Notwithstanding the foregoing, Purchaser will be the designated as the operator for all work programs performed on the Property. The Purchaser, as the operator will have full authority to do everything necessary or desirable in accordance with good mining practice in connection with the day-to-day exploration, development or operation of the Property or the applicable part thereof.

The Vendors will have access to all available data from the Property from the Purchaser in a reasonable time frame during the term of this Agreement; and the Vendors will be subject to confidentiality requirements in accordance with section 9 hereof for this data. The Purchaser will be responsible for preparing all reports for assessment and will have the reports available to the Vendors in a timely manner.

9. Confidential Information

• 9.1 During the Payment Period, the terms of this Agreement and all information obtained in connection with the performance of this Agreement will be the exclusive property of the parties hereto and except as provided in paragraph 9.2, will not be disclosed to any third party or the public without the prior written consent of the other party. For greater certainty, after the Payment Period, the Purchaser will not be required to obtain the consent of the Vendor to disclose to any third party or the public the terms of this Agreement and all information obtained in connection with the performance of this Agreement.
• 9.2 The consent required by paragraph 9.1 will not apply to a disclosure:
• (a) to an Affiliate, consultant, attorney, contractor or subcontractor that has a bona fide need to be informed, who is placed under a similar obligation of confidentiality;
• (b) to a governmental agency or to the public which such party believes in good faith is required by pertinent laws or regulation or the rules of any applicable stock exchange; or

(c) to an investment dealer, broker, bank or similar financial institution, in confidence if required as part of a due diligence investigation by such financial institution in connection with a financing required by such party or its shareholders or Affiliates to meet, in part, its obligations under this Agreement.

10. Termination

• 10.1 If at any time during the Payment Period, a party is in default of any requirement of this Agreement (the "Defaulting Party") or is in breach of any provision contained in this Agreement, the party affected by the default (the "Non-Defaulting Party") may terminate this Agreement by giving written notice of termination to the Defaulting Party but only if:
• (a) it will have given to the Defaulting Party written notice of the particular failure, default, or breach; and
• (b) the Defaulting Party has not, within 30 days following delivery of such written notice of default, cured such default.
• 10.2 If the Purchaser deems the Property is no longer viable, it will inform the Vendors, and will discuss with Vendors its findings. Whereupon, the Purchaser may terminate the Agreement in its sole discretion without further cash payments, Share issuance or Expenditure obligations under this Agreement. In the event that the Agreement is terminated prior to the Purchaser acquiring 100% interest in the Property, the Purchaser will ensure that all claims comprising the Property will have a minimum of twelve (12) months assessment credit following the date of the termination.
• 10.3 Notwithstanding any termination of this Agreement, the Purchaser and the Vendors will remain liable for those obligations specified in the Indemnity section.

11. Indemnity

• 11.1 Each of the Vendors jointly and severally covenants and agrees with the Purchaser (which covenant and agreement will survive the execution, delivery and termination of this Agreement) to indemnify and save harmless the Purchaser against all liabilities, claims, demands, actions, causes of action, damages, losses, costs, expenses or legal fees suffered or incurred by the Purchaser, directly or indirectly, by reason of or arising out of any warranties or representations on the part of the Vendors herein being untrue or arising out of work done by the Vendors on or with respect to the Property.
• 11.2 The Purchaser covenants and agrees with the Vendors (which covenant and agreement will survive the execution, delivery and termination of this Agreement) to indemnify and save harmless the Vendors against all liabilities, claims, demands, actions, causes of action, damages, losses, costs, expenses or legal fees suffered or incurred by reason of or arising out of any warranties or representations on the part of the Purchaser herein being untrue or arising out of any and all work performed by the Purchaser on or with respect to the Property.

12. Governing Law

12.1 This Agreement will be construed, and in all respects governed, by the laws of the Province of Nova Scotia and the laws of Canada applicable in Nova Scotia.

13. Notices

• 13.1 All notices, payments and other required communications and deliveries to the parties hereto will be in writing, and will be addressed to the parties as follows or at such other address as the parties may specify from time to time:
• (a) to the Vendors:

Eddie Quinlan 382 Main Street Birchy Bay, NL A0G 1E0

and

Roland Quinlan P.O. Box 18 Birchy Bay, NL A0G 1E0

(b) to the Purchaser:

SILVER SPRUCE RESOURCES, INC. Suite 440 – 1600 Bedford Highway Halifax, NS B4A 1E8

Notices must be delivered by registered mail and addressed to the party to which notice is to be given. Notice will be deemed to have been received fifteen business days following the date of the mailing of the notice.

13.2 Either party hereto at any time and from time to time notify the other party in writing of a change of address and the new address to which a notice will be given thereafter until further change.

14. Area of Interest

14.1 If during the term of this Agreement and for a period of six (6) years from the Effective Date, either of the Vendors stakes or causes to have staked any mineral claim ("New Mineral Claim") within five kilometres from the boundary of the Property (the "Area of Interest"), the Vendors must offer the New Mineral Claim to the Purchaser for inclusion under this Agreement as a part of the Property. If the Purchaser elects within thirty days to include the New Mineral Claim as part of the Property, subject to the terms of this Agreement, it will reimburse the Vendors their reasonable mineral recording costs of the New Mineral Claim. If the Purchaser elects not to include the New Mineral Claim as part of the Property subject to this Agreement, the Vendor will hold such New Mineral Claim separate from this Agreement and the Purchaser will have no rights or obligations with respect thereto.

14.2 The Purchaser agrees that if during the term of this Agreement and for a period of six (6) years from the Effective Date, the Purchaser stakes or causes to have staked a New Mineral Claim within the Area of Interest, those New Mineral Claims will be subject to the same conditions under this Agreement.

15. Assignment and Transfer

• 15.1 During the Payment Period, this Agreement and the Purchaser's rights hereunder may be assigned, either in whole or in part, by the Purchaser to an assignee provided that:
• (a) the Vendors give their prior written consent to such assignment, which consent may not be unreasonably withheld by the Vendors;
• (b) the Purchaser at the time of assignment is not in default of any of the obligations, warranties or representations given hereunder or to be performed by it pursuant to this Agreement;
• (c) the Purchaser will not be relieved of any duty or obligation hereunder unless the Purchaser has assigned its entire interest in this Agreement and such assignment has been consented to by the Vendors in accordance with subsection 15.1(a); and
• (d) each assignee prior to the effective date of the assignment agrees in writing with the Vendors to be bound by the terms and conditions of this Agreement.
• 15.2 For greater certainty, after the Purchaser acquires the 100% interest in the Property, it is permitted to transfer or assign the Property to an assignee without the consent of the Vendors.

16. No Partnership

16.1 Nothing contained in this Agreement will be deemed to constitute either party, the partner of the other, nor, except as otherwise herein expressly provided, to constitute either party, the agent, or legal representative of the other, nor to create any fiduciary relationship between them. It is not the intention of the parties to create, nor will this Agreement be construed to create, any mining, commercial or other partnership.

17. Entire Agreement

17.1 This Agreement constitutes the entire agreement among the Vendors and the Purchaser and will supersede and replace any other agreement or arrangement, whether oral or in writing, previously existing between the parties with respect to the subject matter of this Agreement. Each of the Vendors is jointly and severally liable under this Agreement.

18. Consent or Waiver

18.1 No consent or waiver, express or implied, by either party hereto in respect of any breach or default by the other party in the performance by such other party of its obligations under this Agreement will be deemed or construed to be a consent to or a waiver or any other breach or default.

19. Further Assurances

19.1 The parties will promptly execute, or cause to be executed, all bills of sale, transfers, documents, conveyances and other instruments of further assurance which may be reasonably necessary or advisable to carry out fully the intent and purpose of this Agreement or to record wherever appropriate the respective interests from time to time of the parties hereto in and to the Property.

20. Severability

20.1 If any provision of this Agreement is or will become illegal, unenforceable or invalid for any reason whatsoever, such illegal, unenforceable or invalid provisions will be severable from the remainder of this Agreement and will not affect the legality, enforceability or validity of the remaining provisions of this Agreement.

21. Enurement

21.1 This Agreement will enure to the benefit of and be binding upon the parties hereto and their respective successors and assigns.

22. Amendments

22.1 This Agreement may only be amended in writing with the mutual consent of all parties.

23. Time

23.1 Time will be the essence of this Agreement and will be calculated in accordance with the Interpretation Act (Nova Scotia).

24. Counterparts

24.1 This Agreement may be executed in any number of counterparts and by email transmission with the same effect as if all parties hereto had signed the same document, and pdf signatures will have the same effect as their original. All counterparts will be construed together and constitute one and the same agreement.

25. Arbitration

• 25.1 The parties agree that all questions or matters in dispute with respect to the accounting of monies expended by the Purchaser as provided for herein, or with respect to any other matter of a financial nature hereunder, shall be submitted to arbitration pursuant to the terms hereof.
• 25.2 It shall be a condition precedent to the right of any party to submit any matter to arbitration pursuant to the provisions hereof that any party intending to refer any matter to arbitration shall have given not less than thirty (30) days' prior written notice of its intention so to do to the other party together with particulars of the matter in dispute. On the expiration of

such thirty (30) days, the party who gave such notice may proceed to refer the dispute to arbitration as provided for in paragraph 25.3 hereof.

• 25.3 The party desiring arbitration shall appoint one arbitrator, and shall notify the other party of such appointment, and the other party shall, within fifteen (15) days after receiving such notice, appoint an arbitrator, and the two arbitrators so named, before proceeding to act, shall, within fifteen (15) days of the appointment of the last appointed arbitrator, unanimously agree on the appointment of a third arbitrator to act with them and be chairman of the arbitration herein provided for. If the other party shall fail to appoint an arbitrator within fifteen (15) days after receiving notice of the appointment of the first arbitrator, and if the two arbitrators appointed by the parties shall be unable to agree on the appointment of the chairman, the chairman shall be appointed under the provision of the Commercial Arbitration Act (Nova Scotia). Except as specifically otherwise provided in this paragraph; the arbitration herein provided for shall be conducted in accordance with such Act. The chairman, or in the case where only one arbitrator is appointed, the single arbitrator, shall fix a time and place in Halifax, Nova Scotia, for the purpose of hearing the evidence and representations of the parties, and he shall preside over the arbitration and determine all questions of procedure not provided for under such Act or this paragraph. After hearing any evidence and representations that the parties may submit, the single arbitrator, or the arbitrators, as the case may be, shall make an award and reduce the same to writing, and deliver one copy thereof to each of the parties. The expense of the arbitration shall be paid as specified in the award.
• 25.4 The parties may agree that the award of a majority of the arbitrators, or in the case of a single arbitrator, of such arbitrator, shall be final and binding upon each of them.

26. Force Majeure

26.1 If either party is at any time during the Payment Period prevented or delayed in complying with any of the provisions of this Agreement (the "Affected Party") by reason of strikes, lockouts, labour, power or fuel shortages, fires, weather conditions, wars, acts of God, civil disturbances, governmental regulations restricting normal operations, shipping delays or any other reason or reasons beyond the reasonable control of the Affected Party, then the time limited for the performance by the Affected Party of its obligations hereunder will be extended by a period of time equal in length to the period of each such prevention or delay. Nothing in this paragraph 26.1 or this Agreement will relieve either Party from its obligation to maintain the claims comprising the Property in good standing and to comply with all applicable laws and regulations including, without limitation, those governing safety, pollution and environmental matters.

The Affected Party will give notice to the other party of each event of force majeure under paragraph 26.1 within 7 days of such event commencing and upon cessation of such event will furnish the other party with written notice to that effect together with particulars of the number of days by which the time for performing the obligations of the Affected Party under this Agreement has been extended by virtue of such event of force majeure and all preceding events of force majeure.

26.2 The Affected Party will give notice to the other party of each event of force majeure under paragraph 26.1 within 7 days of such event commencing and upon cessation of such event will furnish the other party with written notice to that effect together with particulars of the number of days by which the time for performing the obligations of the Affected Party under this Agreement has been extended by virtue of such event of force majeure and all preceding events of force majeure.

27. Provisions

27.1 The provisions attached hereto as Schedules "A" and "B" shall form part of this Agreement, as if fully incorporated herein.

[signature sheet follows]

IN WITNESS WHEREOF the parties hereto have executed this Agreement the day and year first above written.

SIGNED, SEALED AND DELIVERED by Eddie Quinlan in the presence of:	) ) ) )
Witness Signature Address	) ) Eddie Quinlan ) )
	) ) )
Occupation	)
SIGNED, SEALED AND DELIVERED by Roland Quinlan in the presence of:	) ) ) )
Witness Signature	) ) Roland Quinlan )
Address	) ) )
Occupation	) )
THE CORPORATE SEAL of Silver Spruce	SILVER SPRUCE RESOURCES INC.

Resources Inc. was hereunto affixed

in the presence of:

Greg Davison, P.Geo. VP Exploration and Director

Michael Kinley CEO and Director

SCHEDULE "A"

to the Option and Purchase Agreement dated September ●, 2021, between Eddie Quinlan and Roland Quinlan, as the Vendors and Silver Spruce Resources, Inc. as the Purchaser.

The Vendors represent and warrant that the following 12 claims covering 360 units (8,750 ha) are exclusively owned by them, that Vendors have sole right and authority to grant full ownership of claims to Silver Spruce as described in this Agreement, and are hereby included in this Agreement: Mystery 026410M, 024889M, 024888M and 026340M; Marilyn 026359M, 022573M, 026414M: and Till 026341M, 026342M, 026361M, and 026363M.

Claim list (8,750 ha) and map of the Mystery, Marilyn and Till Claims

MYSTERY

TILL

MARILYN

SCHEDULE "B"

to the Option and Purchase Agreement dated September ●, 2021, between Eddie Quinlan and Roland Quinlan, as the Vendors and Silver Spruce Resources, Inc. as the Purchaser

B.01 For the purposes of this Schedule "B":

"net smelter return" means the amount of money actually received from the sale of ores mined from the Property (except such ores, minerals and metals as are removed for the purpose of making assays or tests) after the date on which the Property comes into commercial production or from the sale of the concentrates or other products derived therefrom less, to the extent that they were not deducted by the purchaser in determining the purchase price therefor: all treatment charges or penalties incurred with respect thereto; all costs or expenses incurred with respect to insurance, freight, trucking, handling and/or sampling and assaying (including, without limitation, umpire assays) of ores, concentrates or other products ex headframe in the case of ores and ex mill or other treatment facility in the case of concentrates or other products; any federal, provincial or municipal tax or levy of a sales or value-added nature assessed against or payable by the vendor thereof; and, if applicable, any applicable costs or expenses (including, without limitation, penalties) incurred with respect to custom smelting, refining or similar treatment of such ores, minerals or metals;

"Operator" shall mean the party responsible for the carrying on of the operations relating to the Property;

"Property" means the Property as defined in the Agreement;

• "Property Owner" means the person or persons that own an interest in the Property as at the relevant time, including, without limitation, the Purchaser, the Operator, if the Operator has such an interest;
• "Recipient" shall mean the party or parties that are from time to time entitled to be paid the Royalty hereunder;
• "year" means calendar year and a reference to a subdivision of a year shall mean a reference to the relevant subdivision of a calendar year;
• those terms defined in the agreement of which this Schedule "B" is part shall have the same meaning as so defined (save as otherwise provided in this Schedule "B").

B.02 All calculations and computations relating to the Royalty shall be carried out in accordance with generally accepted accounting principles to the extent that such principles are not inconsistent with the provisions of this Schedule "B" and the agreement attached hereto.

B.03 Subject to the provisions hereof, the amount of Royalty payable to the Recipient hereunder shall be calculated by the Operator as at the end of each year, commencing with the year in which the Property is brought into commercial production (as contemplated in paragraph B.08 hereof), and shall be payable to the Recipient on or before the last day of the first quarter of the next following year.

B.04 With each payment of the Royalty the Operator shall on or before the last day of the first

quarter of each year after the Property has been brought into commercial production, deliver to the Recipient a statement indicating the nature of the payment being made, if any, and the manner in which it was determined.

B.05 Any payment of Royalty shall be considered final and in full satisfaction of all obligations of the Operator hereunder if such payment or the calculation thereof is not disputed by the Recipient within one hundred eight (180) days after receipt of the statement referred to in paragraph B.04 hereof.

B.06 The Operator shall keep separate accounts relating to its operations hereunder and, upon the prior written request of the Recipient, duly authorized representatives of the Recipient may have access to such accounts for the purpose of confirming any information contained in a statement delivered to the Recipient pursuant to the provisions of paragraph B.04 hereof, provided, always, that such access shall not interfere with the affairs or operations of the Operator. The Recipient shall have the right to make copies of or take extracts from such accounts, but at the cost of and only for the use of the Recipient, all such information being confidential.

B.07 For the purposes of calculating the amount of Royalty payable to the Recipient hereunder only, if, after the Property has been brought into commercial production, any ore or product derived from ore mined from the Property is sold to a company associated with the Operator and if the sale price of such product is not negotiated on an arms length basis, the Operator shall, for the purposes of calculating net smelter return available to pay the Royalty hereunder only and notwithstanding the actual amount of such sale price, add to any moneys actually received with respect to such sale an amount which the Operator considers sufficient to make the same represent a reasonable net sale price for such product as if negotiated at arms length and after taking into account all pertinent circumstances (including, without limitation, then current market conditions relating to products similar to such product; terms of agreements between arms length parties for the purchase and sale of similar products in similar quantities for delivery over similar periods of time; physical and/or chemical characteristics of such products).

The Operator shall by notice inform the Recipient of the quantum of such reasonable net sale price and if the Recipient does not object thereto within forty-five (45) days after receipt of such notice, said quantum shall be final and binding upon the Recipient.

If the Recipient objects to such quantum by notice delivered to the Operator within said forty-five (45) days, then the quantum of such reasonable net sale price shall be decided by arbitration as follows: the Recipient shall nominate one (1) arbitrator and shall notify the Operator of such nomination and the Operator shall within forty-five (45) days after receiving such notice nominate an arbitrator, and the two (2) arbitrators shall select an chairman to act jointly with them as a third arbitrator. If said arbitrators shall be unable to agree in the selection of such chairman, the chairman shall be a person designated by the President or any Vice-President of the Canadian Institute of Mining and Metallurgy provided that such person is not an employee of a Recipient or a Property Owner or any company affiliated with a Recipient or a Property Owner. The chairman shall fix the time and place for the purpose of hearing such evidence and representations as either of the parties hereto may present and, subject to the provisions hereof, the decision of the arbitrators and chairman, or any two of them, in writing shall be binding upon the parties hereto. Said arbitrators and chairman shall, after hearing any evidence and representations that the parties may submit, make their award and reduce the same to writing and deliver one copy thereof to each of the parties hereto. The majority of the chairman and arbitrators may determine any matters of procedure for the arbitration not specified herein. If the Operator fails within said forty-five (45) days to nominate an arbitrator, then the arbitrator nominated by the Recipient may proceed alone

to determine the dispute in such manner and at such time as he shall think fit and his decision shall, subject to the provisions hereof, be binding upon the parties hereto. The expense of the arbitration shall be paid by the Recipient if the decision reached hereunder does not increase such quantum by more than five percent (5%) of the quantum set forth in the notice hereinbefore referred to and otherwise by the Operator. Insofar as they do not conflict with the provisions hereof, the Rules for the Conduct of Arbitrations of the Arbitrators Institute of Canada Inc., as amended or replaced from time to time, shall be applicable. Appeal from the decision of the arbitrators shall be in accordance with the provisions of the said Rules. Notwithstanding anything to the contrary in the foregoing, any arbitration hereunder may be held and decided upon by a single arbitrator acceptable to the Recipient and the Operator.

B.08 For the purposes of this agreement, the Property shall come into commercial production on the date upon which ores mined from the Property (except such ores, minerals and metals as are removed for the purpose of making assays or tests) or concentrates or other products derived therefrom are first delivered to a purchaser on a commercial basis, it being agreed that deliveries of such ores, concentrates or other products resulting from pilot or test operations shall not be considered as deliveries on a commercial basis for the purposes of this paragraph. The Operator shall deliver to the Recipient notice indicating said date as soon as practicable after the occurrence thereof.

B.09 In the event that the Property is brought into commercial production, it may be operated as a single operation with other mining properties owned by the Operator or any Property Owner or in which the Operator or any Property Owner has an interest, in which event, the Recipient agrees that (notwithstanding separate ownership thereof) ores mined therefrom may be blended at the time of mining or at any time thereafter and the Royalty shall be paid hereunder only with respect to ores mined from the Property, or concentrates or other products derived therefrom, all as herein provided. In determining the amount of such Royalty so payable, effect shall be given to the tonnages and metal content of ore removed from, and insofar as they may be relevant, to any special charges or treatment relating particularly to ore, concentrates or other products derived from the Property or from any of such other mining properties and the records of the Operator shall be prima facie evidence of the information therein contained.

B.10 Notwithstanding anything to the contrary herein contained, if any part of the right to receive the Royalty is assigned it shall be a condition of such assignment that the assignee agree with the Operator and all other parties entitled to receive any part of the Royalty as follows:

• (a) the amount of any Royalty payable hereunder shall be settled only with original Recipient hereunder or a duly authorized nominee (hereinafter collectively referred to as the "Nominee") as set forth by notice to the Operator (such notice to be executed by all parties entitled to receive any part of the Royalty), and such settlement shall be final and binding upon all interested parties and the Operator shall not be required to make any accounting to any person save such Nominee;
• (b) payment of Royalty shall be made only to or to the benefit of the Nominee and such payment by cheque payable to the Nominee "In Trust" and made in accordance with the provisions of this agreement shall constitute full and complete discharge to the Operator of its obligations to make such payment hereunder and there shall be no obligation to see to the distribution of any such payment;
• (c) the Operator may settle disputes arising hereunder with the Nominee and such settlement shall be final and binding upon all interested parties;
• (d) the Operator may rely upon any direction, advice or authorization signed by the

Nominee and may act thereon as if the same was signed by all interested parties;

(e) the Operator shall not be required to deal with any person except the Nominee and each of the said interested parties shall exercise any of their respective rights only through the Nominee and shall require any of their respective assignees to agree in writing to be bound by the provisions hereof.

B.11 Payment of the Royalty to the Recipient may be made by cheque payable to the Recipient, or, if there is more than one Recipient, to the Nominee. If such cheque is delivered personally to the payee thereof, or, is sent by registered letter addressed to the payee thereof, at the last address of the payee known to the Operator, such payment shall be deemed to have been made upon the date of such personal delivery or upon the third business day following the date of mailing of such registered letter, as the case may be, provided, only, that if such cheque is lost, destroyed or mutilated the Operator shall, upon receipt of such reasonable evidence and/or security relating thereto as the Operator may require, replace such cheque. Under no circumstances will the Operator be required to see to, or be responsible for, the distribution of any payment.

B.12 Any Property Owner may at any time and from time to time either before after the exercise of the Option contained in the agreement attached hereto, without obtaining any prior consents or approvals sell, assign, transfer or otherwise dispose of all or part of any right, title or interest in and to the Property and/or hereunder, upon such terms as it considers advisable, provided only, that:

• (a) such sale, assignment, transfer or other disposition shall not be completed unless and until the assignee has agreed in writing to be bound by the provisions hereof as fully as if it was a signatory hereto to the extent of the interest so assigned, transferred, sold or otherwise disposed of; and
• (b) upon completion of such transaction the assignor shall be relieved of that portion of the Royalty equal to the portion of its interest which was so sold, assigned, transferred or otherwise disposed of, it being agreed that the obligation to pay the Royalty shall thereafter be the several, and not joint, obligation and liability of the Property Owners and shall be borne by them pro rata to their respective rights, title and interest in and to the Property. Any proceeds received by a Property Owner upon any sale, assignment, transfer or other disposition, as aforesaid, shall not, for the purposes of determining net smelter return hereunder, be considered to be revenues received by such Property Owner.

IN WITNESS WHEREOF the parties hereto have executed this Schedule B the day and year first above written.

SIGNED, SEALED AND DELIVERED by Eddie Quinlan in the presence of:	) ) ) )
Witness Signature	) ) Eddie Quinlan
Address	) ) )
Occupation	) ) )
SIGNED, SEALED AND DELIVERED by Roland Quinlan in the presence of:	) ) ) )
Witness Signature	) ) Roland Quinlan
Address	) ) ) )
Occupation	) )
THE CORPORATE SEAL of Silver Spruce Resources Inc. was hereunto affixed in the presence of:	SILVER SPRUCE RESOURCES INC.

Greg Davison, P.Geo. VP Exploration and Director

Michael Kinley CEO and Director