Valencia Capital Inc.

Execution Version

AMALGAMATION AGREEMENT

AMONG:

AND:

1314152 B.C. LTD.

AND:

TERRA BALCANICA RESOURCES CORP.

PART 1 INTERPRETATION .................................................................................................................................... 2 DEFINITIONS .............................................................................................................................................................. 2 INTERPRETATION ....................................................................................................................................................... 7 EXHIBITS .................................................................................................................................................................... 9 PART 2 THE AMALGAMATION ............................................................................................................................ 9 AGREEMENT TO AMALGAMATE ................................................................................................................................. 9 EFFECT OF AMALGAMATION ...................................................................................................................................... 9 NAME ......................................................................................................................................................................... 9 REGISTERED OFFICE ................................................................................................................................................ 10 AUTHORIZED CAPITAL AND RESTRICTIONS ON SHARE TRANSFERS ......................................................................... 10 FISCAL YEAR ........................................................................................................................................................... 10 BUSINESS ................................................................................................................................................................. 10 INITIAL DIRECTORS .................................................................................................................................................. 10 INITIAL OFFICERS .................................................................................................................................................... 10 EXCHANGE OF VALENCIASUB SHARES AND TERRA BALCANICA SHARES................................................................ 11 DISSENTING SHAREHOLDERS ................................................................................................................................... 11 COMPLETION OF THE AMALGAMATION AND EFFECTIVE DATE ................................................................................ 11 ACKNOWLEDGMENT OF ESCROW AND RESALE RESTRICTIONS ................................................................................ 12 VALENCIA GUARANTEE ........................................................................................................................................... 12 PART 3 COVENANTS ............................................................................................................................................. 13 MUTUAL COVENANTS .............................................................................................................................................. 13 ADDITIONAL COVENANTS OF VALENCIA AND VALENCIASUB ................................................................................. 15 ADDITIONAL COVENANTS OF TERRA BALCANICA ................................................................................................... 17 PART 4 REPRESENTATIONS AND WARRANTIES ......................................................................................... 17 REPRESENTATIONS AND WARRANTIES OF VALENCIA AND VALENCIASUB .............................................................. 17 REPRESENTATIONS AND WARRANTIES OF TERRA BALCANICA ................................................................................ 20 SURVIVAL OF REPRESENTATION AND WARRANTIES ................................................................................................ 28 PART 5 AGREEMENTS .......................................................................................................................................... 28 TERRA BALCANICA MEETING AND MEETING MATERIALS ....................................................................................... 28 RTO ......................................................................................................................................................................... 29 FILING STATEMENT .................................................................................................................................................. 30 PREPARATION OF FILINGS ........................................................................................................................................ 30 CONSOLIDATION ...................................................................................................................................................... 30 NAME CHANGE ........................................................................................................................................................ 30 PART 6 INDEMNIFICATION ................................................................................................................................ 31 MUTUAL INDEMNIFICATIONS FOR BREACHES OF WARRANTY ................................................................................. 31 LIMITATION ON MUTUAL INDEMNIFICATION ........................................................................................................... 32 PROCEDURE FOR INDEMNIFICATION ......................................................................................................................... 32 PART 7 CONDITIONS PRECEDENT ................................................................................................................... 33 MUTUAL CONDITIONS PRECEDENT .......................................................................................................................... 33 ADDITIONAL CONDITIONS TO OBLIGATIONS OF VALENCIA ..................................................................................... 34

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ADDITIONAL CONDITIONS TO OBLIGATIONS OF TERRA BALCANICA ....................................................................... 36 NOTICE AND EFFECT OF FAILURE TO COMPLY WITH CONDITIONS ........................................................................... 38 SATISFACTION OF CONDITIONS ................................................................................................................................ 38

PART 8 AMENDMENT ........................................................................................................................................... 39 AMENDMENT ........................................................................................................................................................... 39 PART 9 TERMINATION ......................................................................................................................................... 39 TERMINATION .......................................................................................................................................................... 39 PART 10 GENERAL ................................................................................................................................................. 40 NOTICES ................................................................................................................................................................... 40 BINDING EFFECT ...................................................................................................................................................... 41 ASSIGNMENT............................................................................................................................................................ 41 ENTIRE AGREEMENT ................................................................................................................................................ 41 PUBLIC COMMUNICATIONS ...................................................................................................................................... 41 NO SHOP .................................................................................................................................................................. 42 COSTS ...................................................................................................................................................................... 42 CONFIDENTIALITY ................................................................................................................................................... 42 SEVERABILITY ......................................................................................................................................................... 43 FURTHER ASSURANCES ............................................................................................................................................ 43 TIME OF ESSENCE .................................................................................................................................................... 43 APPLICABLE LAW AND ENFORCEMENT .................................................................................................................... 44 WAIVER ................................................................................................................................................................... 44 COUNTERPARTS ....................................................................................................................................................... 44

EXHIBIT “A” – FORM OF ARTICLES OF AMALCO EXHIBIT “B” – FORM OF AMALGAMATION APPLICATION EXHIBIT “C” – DESCRIPTION OF LICENSES

EXHIBIT “D” – TERRA BALCANICA MATERIAL CONTRACTS

SCHEDULE 4.2(d) – RIGHTS TO ASSETS OF TERRA BALCANICA

SCHEDULE 4.2(e) – SHARE ISSUANCE OBLIGATIONS OF TERRA BALCANICA SCHEDULE 4.1(g) – SECURITIES OF VALENCIA

SCHEDULE 4.1(m) – CONTINUING MATERIAL OBLIGATIONS OF VALENCIA SCHEDULE 4.2(kk) – INTERESTS OF TERRA BALCANICA IN THE PROPERTIES

AMALGAMATION AGREEMENT

THIS AMALGAMATION AGREEMENT is dated as of the 7th day of July,

AMONG:

VALENCIA CAPITAL INC. , a corporation incorporated under the laws of the Province of British Columbia

(“ Valencia ”);

AND:

1314152 B.C. LTD. , a corporation existing under the laws of the Province of British Columbia

(“ ValenciaSub ”);

AND:

TERRA BALCANICA RESOURCES CORP. , a corporation existing under the laws of the Province of British Columbia

(“ Terra Balcanica ”);

WHEREAS:

(A) It is intended that Terra Balcanica and ValenciaSub, a wholly owned subsidiary of Valencia, will amalgamate and form one corporation under the provisions of the BCBCA (the “ Amalgamation ”); and

(B) The Amalgamation will result in a reverse takeover of Valencia (the “ RTO ”) pursuant to Policy 5.2 of the Exchange (as herein defined); and

(C) Upon the Amalgamation taking effect, shareholders of Terra Balcanica will receive common shares of Valencia in the proportion and to the extent set out herein;

NOW THEREFORE , in consideration of the covenants and agreements herein contained and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the Parties hereto do hereby covenant and agree as follows:

PART 1 INTERPRETATION

Definitions

1.1 In this Agreement, the following defined terms have the meanings hereinafter set forth:

(a) “ Action ” means, with respect to any Person, any litigation, legal action, lawsuit, claim, audit, arbitration or other proceeding (whether civil, administrative, quasicriminal or criminal) before any Governmental Authority against such Person or its business or affecting any of its assets;
(b) “ Affiliate ” has the meaning ascribed thereto in the BCBCA;
(c) “ Agreement ” means this Amalgamation Agreement (including the exhibits hereto) as supplemented, modified or amended, and not to any particular article, section, schedule, exhibit or other portion hereof;
(d) “ Amalco ” means the corporation continuing from the Amalgamation;
(e) “ Amalco Shares ” means the common shares in the capital of Amalco;
(f) “ Amalgamation ” means the amalgamation of ValenciaSub and Terra Balcanica under the provisions of the BCBCA on the terms and conditions set forth in this Agreement;
(g) “ Amalgamation Application ” means the amalgamation application as contemplated by the BCBCA and in substantially the form set out in Exhibit “B” hereto;
(h) “ Amalgamation Resolution ” means the special resolution in respect of the Amalgamation to be considered by the Terra Balcanica Shareholders at the Terra Balcanica Meeting;
(i) “ Applicable Canadian Securities Laws ” means, collectively, and as the context may require, the applicable securities legislation of each of the provinces and territories of Canada, and the rules, regulations, instruments, orders and policies published and/or promulgated thereunder, as such may be amended from time to time prior to the Effective Date;
(j) “ Applicable Laws ”, in the context that refers to one or more Persons, means any domestic or federal, state, provincial or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a Governmental Authority, and any terms and conditions of any grant of approval, permission, authority or license of any Governmental Authority, that is binding upon or applicable to such Person or
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Persons or its or their business, undertaking, property or securities and emanate from a Person having jurisdiction over the Person or Persons or its or their business, undertaking, property or securities;

(k) “ Articles ” means the Articles of Amalco which will be in substantially the form set out in Exhibit “A” to this Agreement;
(l) “ BCBCA ” means the Business Corporations Act (British Columbia), as amended, including the regulations promulgated thereunder;
(m) “ Bridge Financing ” means a financing to be conducted by Terra Balcanica in order to finance working capital requirements, the repayment of the Outstanding Loans, and transaction costs associated with the transactions contemplated herein, which may be on any of the following terms:

(i) an offering of Terra Balcanica Shares, on a private placement basis, at an issue price of $0.10 per Terra Balcanica Share for gross aggregate proceeds of up to $500,000; or

(ii) an offering of unsecured convertible debentures bearing interest at 10% per annum, convertible into Terra Balcanica Shares at $0.15 of principal amount of the debentures, or a 25% discount to the listing price for the common shares of the resulting issuer on completion of the RTO, whichever is less, for gross aggregate proceeds of up to $500,000, with mandatory conversion into Terra Balcanica Shares concurrently with completion of the RTO.

(n) “ Business ” means the business and activities carried on by Terra Balcanica and its Subsidiaries, including the exploration, evaluation, and related activities on the Properties;
(o) “ Business Day ” means a day other than a Saturday, Sunday or other day when banks in the City of Vancouver, British Columbia, are not generally open for business;
(p)
“ Claims ” has the meaning set forth under §6.1;
(q)
“ Concurrent Financing ” has the meaning set forth under §3.2(c);
(r) “ Consolidation ” means the consolidation of Valencia Shares on the basis of one (1) post-consolidation Valencia Share for every one and one half (1.5) preconsolidation Valencia Shares;
(s) “ Constating Documents ” means as to each of the Parties, its certificate of incorporation, notice of articles and articles as in effect as of the date of this Agreement;
(t) “ Corporate Records ” means the corporate records of Terra Balcanica including the Constating Documents, share registers, registers of directors, list of bank
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accounts and signing authorities and minutes of shareholders’ and directors’ meetings;

(u) “ Disclosure Schedule ” means the disclosure schedule arranged in section and subsection corresponding to the numbered and lettered sections and subsections contained in this Agreement, as applicable;
(v) “ Dissent Rights ” means the rights of dissent available under the BCBCA in respect of the Amalgamation;
(w) “ Dissenting Shareholders ” means any Terra Balcanica Shareholder who exercises Dissent Rights;
(x) “ Effective Date ” means the effective date of the Amalgamation as set forth in the Certificate of Amalgamation issued to Amalco;
(y) “ Effective Time ” means the effective time of the Amalgamation as set forth in the Certificate of Amalgamation issued to Amalco;
(z) “ Encumbrances ” means any encumbrance of any kind whatsoever and includes any pledge, lien, charge, security interest, lease, title retention agreement, mortgage, hypothec, restriction, royalty, right of first refusal, development or similar agreement, option or adverse claim or encumbrance of any kind or character whatsoever or howsoever arising, and any right or privilege capable of becoming any of the foregoing;
(aa) “ Equity Securities ” has the meaning set forth under §3.2(c);
(bb) “ Exchange ” means the TSX Venture Exchange;
(cc) “ Exploration Expenditures ” means the expenditures of Terra Balcanica in connection with the exploration and maintenance of the Properties;
(dd) “ Filing Statement ” means the filing statement or information circular, as applicable, to be filed by Valencia in respect of the RTO pursuant to the policies of the Exchange;
(ee) “ Governmental Authority ” means any federal, state, provincial and municipal government, regulatory authority, governmental department, ministry, agency, commission, bureau, official, minister, crown corporation, court, board, tribunal, stock exchange, dispute settlement panel or body or other law, rule or regulation-making entity having jurisdiction;
(ff) “ IFRS ” means International Financial Reporting Standards applicable as of the date of the financial statements, document or event in question;
(gg) “ Licenses ” has the meaning set forth under §4.2(w);
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(hh) “ Material Adverse Change ” means, with respect to a Person, any matter or action that has an effect or change that is, or would reasonably be expected to be, material and adverse to the business, results of operations, assets, capitalization, financial condition, rights, liabilities or prospects, contractual or otherwise, of such Person and its subsidiaries, if applicable, taken as a whole, other than any matter, action, effect or change relating to or resulting from: (i) a matter that has been publicly disclosed prior to the date of this Agreement or otherwise disclosed in writing by a Party to the other Party prior to the date of this Agreement; (ii) any action or inaction taken by such Person to which the other Person had consented in writing; (iii) the announcement of the transactions contemplated by the Amalgamation or this Agreement; or (iv) general economic, financial, currency exchange, securities, banking or commodity market conditions in the United States, Canada or worldwide;
(ii) “ Material Change ” and “ Material Fact ” has the meanings ascribed thereto under the Applicable Canadian Securities Laws;
(jj) “ Material Contract ” means those contracts, agreements, understandings or arrangements entered into by Terra Balcanica or the Subsidiaries which have individual payment obligations on the part of Terra Balcanica or the Subsidiaries that exceed $50,000, or have been entered into outside of the ordinary course of business, or are otherwise material to the Business;
(kk) “ Material Property ” means the Viogor-Zanik described in the Technical Report;
(ll) “ Meeting Materials ” means the materials of Terra Balcanica to be mailed to the Terra Balcanica Shareholders in connection with the Terra Balcanica Meeting;
(mm) “ misrepresentation ” has the meaning ascribed thereto in the Securities Act;
(nn) “ Outside Date ” means August 15, 2021;
(oo) “ Outstanding Loans ” means an aggregate of $70,000 of loans advanced to Terra Balcanica by Kim Oishi and Carl Desjardins, which are unsecured, non-interest bearing and repayable on demand;
(pp) “ Parties ” means, collectively, the parties to this Agreement, and “ Party ” means any one of them;
(qq) “ Permit ” means any and all permits, licences, agreements, concessions, approvals, certificates, consents, certificates of approval, rights, privileges or franchises, registrations (including any required export/import approvals) and exemptions of any nature and other authorizations, conferred or otherwise granted by any Governmental Authority;
(rr) “ Person ” is to be broadly interpreted and means any individual, partnership, limited partnership, limited liability partnership, joint venture, syndicate, sole proprietorship, company or corporation with or without share capital,
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unincorporated association, trust, trustee, executor, administrator or other legal personal representative, regulatory body or agency, government or governmental agency, authority or entity however designated or constituted;

(ss) “ Properties ” means the mineral exploration properties of Terra Balcanica set forth in Exhibit “C”;
(tt) “ Public Record ” means all information filed by Valencia with any securities commission or similar regulatory authority which are available through the SEDAR website as of the date hereof;
(uu) “ Registrar ” means the Registrar of Companies or a Deputy Registrar of Companies for the Province of British Columbia duly appointed under the BCBCA;
(vv) “ RTO ” has the meaning ascribed thereto in the recitals to this Agreement;
(ww) “ Securities Act ” means the Securities Act (British Columbia), as amended, including the regulations promulgated thereunder;
(xx) “ Subsidiaries ” means collectively Tera Balkanika and the Tera Balkanika Subsidiaries, and a “ Subsidiary ” means any thereof;
(yy) “ subsidiary ” has the meaning ascribed thereto in the Securities Act;
(zz) “ Technical Report ” means the technical report titled “NI 43-101 Technical Report, Viogor-Zanik Project, Eastern Bosnia” and prepared by Bissig Geoscience Consulting in accordance with the requirements of National Instrument 43-101 – Standards of Disclosure for Mineral Projects ;
(aaa) “ Tera Balkanika ” means Tera Balkanika D.O.O. Beograd – Novi Beograd., a wholly-owned subsidiary of Terra Balcanica, organized under the laws of Serbia;
(bbb) “Tera Balkanika Subsidiary ” means Drina Resources d.o.o. – Banja Luka, a company incorporated under the laws of Bosnia and Herzegovina and Republic of Srpska therein, of which Tera Balkanika holds 90% interest,
(ccc) “ Terra Balcanica ” means Terra Balcanica Resources Corp., a corporation organized under the laws of British Columbia;
(ddd) “ Terra Balcanica Financial Statements ” means the audited consolidated financial statements of Terra Balcanica and its Subsidiaries for the period from incorporation to January 31, 2021 and the interim consolidated financial statements of Terra Balcanica for the three months ended April 30, 2021;
(eee) “ Terra Balcanica Meeting ” means the special meeting of Terra Balcanica Shareholders to be called to consider and, if thought fit, authorize, approve and
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adopt the Amalgamation Resolution and related matters, and includes any adjournments thereof;

(fff) “ Terra Balcanica Shareholders ” means the holders of Terra Balcanica Shares;
(ggg) “ Terra Balcanica Shares ” means common shares in the capital of Terra Balcanica;
(hhh) “ Transfer Agent ” means Computershare Trust Company of Canada, the transfer agent for the Valencia Shares;
(iii) “ U.S. Securities Act ” means the United States Securities Act of 1933, as amended, and the rules, regulations and orders promulgated thereunder;
(jjj) “ Valencia ” means Valencia Capital Inc., a corporation organized under the laws of the Province of British Columbia;
(kkk) “ Valencia Agent’s Options ” means unexercised agent’s options to acquire Valencia Shares;
(lll) “ Valencia Options ” means unexercised incentive stock options to acquire Valencia Shares;
(mmm)“ Valencia Shares ” means the common shares in the capital of Valencia;
(nnn) “ ValenciaSub ” means SubCo, a wholly-owned subsidiary of Valencia;
(ooo) “ ValenciaSub Shares ” means common shares in the capital of ValenciaSub.

Interpretation

1.2 For the purposes of this Agreement, except as otherwise expressly provided:
(a) the division of this Agreement into articles, sections and subsections is for convenience of reference only and does not affect the construction or interpretation of this Agreement. The terms “this Agreement”, “hereto”, “herein” and “hereunder” and similar expressions refer to this Agreement (including exhibits hereto) and not to any particular article, section or other portion hereof and include any agreement or instrument supplementary or ancillary hereto;
(b) words importing the singular number include the plural and vice versa, and words importing the use of any gender include all genders;
(c) the word “including”, when following any general statement or term, is not to be construed as limiting the general statement or term to the specific items or matters set forth or to similar items or matters, but rather as permitting the general
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statement or term to refer to all other items or matters that could reasonably fall within its broadest possible scope;

(d) if any date on which any action is required to be taken hereunder by any of the Parties is not a Business Day and a business day in the place where an action is required to be taken, such action is required to be taken on the next succeeding day which is a Business Day and a business day, as applicable, in such place;
(e) any reference in this Agreement to any statute or any section thereof shall, unless otherwise expressly stated, be deemed to be a reference to such statute or section as amended, restated or re-enacted from time to time, and to any regulations promulgated thereunder. References to any agreement or document shall be to such agreement or document (together with all schedules and exhibits thereto), as it may have been or may hereafter be amended, supplemented, replaced or restated from time to time;
(f) all sums of money that are referred to in this Agreement are expressed in lawful money of Canada unless otherwise noted;
(g) unless otherwise stated, all accounting terms used in this Agreement shall have the meanings attributable thereto under IFRS and all determinations of an accounting nature are required to be made shall be made in a manner consistent with IFRS;
(h) all representations, warranties, covenants and opinions in or contemplated by this Agreement as to the enforceability of any covenant, agreement or document are subject to enforceability being limited by applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws relating to or affecting creditors’ rights generally, and the discretionary nature of certain remedies (including specific performance and injunctive relief and general principals of equity);
(i) capitalized terms in the Disclosure Schedule will have the same definition as in the body of this Agreement unless otherwise defined;
(j) an item disclosed in one section or subsection of the Disclosure Schedule will apply only with respect to the indicated section or subsection, except to the extent that it is reasonably apparent on the face of the disclosure that such disclosure is also applicable to another section or subsection of the Disclosure Schedule;
(k) where any representation or warranty contained in this Agreement is expressly qualified by reference to the knowledge of a Party, it refers to the actual knowledge of the senior officers of the Party after due inquiry; and
(l) the Parties hereto acknowledge that their respective legal counsel have reviewed and participated in settling the terms of this Agreement, and the Parties agree that any rule of construction to the effect that any ambiguity is to be resolved against the drafting Party will not be applicable in the interpretation of this Agreement.
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Exhibits

1.3 The following exhibits attached hereto are incorporated into and form an integral part of this Agreement:

Exhibit “A” – Form of Articles of Amalco

Exhibit “B” – Form of Amalgamation Application

Exhibit “C” – Description of Licenses

Exhibit “D” – Terra Balcanica Material Contracts

PART 2 THE AMALGAMATION

Agreement to Amalgamate

2.1 The Parties agree that ValenciaSub and Terra Balcanica shall amalgamate pursuant to the provisions of the BCBCA as of the Effective Date and continue as one corporation on the terms and conditions set out in this Agreement.

Effect of Amalgamation

2.2 Upon the terms and subject to the conditions set forth in this Agreement, at the Effective Time:

(a) Terra Balcanica and ValenciaSub shall be amalgamated and continue as one corporation;
(b) each of Terra Balcanica and ValenciaSub shall cease to exist as entities separate from Amalco;
(c) the property of each of ValenciaSub and Terra Balcanica shall continue to be the property of Amalco;
(d) Amalco shall continue to be liable for the obligations of each of ValenciaSub and Terra Balcanica; and
(e) the Articles attached hereto as Exhibit “A” shall be the articles of Amalco.

Name

2.3 The name of Amalco shall be “TB Resources Corp” or such other name as mutually agreed upon between the Parties.

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Registered Office

2.4 The registered office of Amalco shall be 1055 W. Georgia Street, Suite 1500, Vancouver, BC V6E 4N7 or such other address in British Columbia as agreed between Terra Balcanica and Valencia.

Authorized Capital and Restrictions on Share Transfers

2.5 The authorized capital of Amalco shall consist of an unlimited number of common shares without par value, which shall have the rights, privileges, restrictions and conditions set out in the Articles. No shares of Amalco may be transferred except in compliance with the restrictions set out in the Articles.

Fiscal Year

2.6 The fiscal year end of Amalco shall be January 31 of each calendar year.

Business

2.7 There shall be no restriction on the business which Amalco is authorized to carry on.

Initial Directors

2.8 The first directors of Amalco shall be the persons whose name and address appear below:

Name Aleksandar Miskovic Aleksandar Ilic Brandon Bonifacio Brock Daem Kim Oishi	Address
	#619 – 4599 Clanranald Avenue, Montréal, QC H3X 0B1, Canada 2b Drinićka Street, 11040 Belgrade, Serbia 2797 Alamein Avenue, Vancouver, BC, V6L 1S1 317 West 22nd Avenue, Vancouver, BC, V5Y 2G 1600 Hornby St., Suite 607 - Vancouver, BC V6Z 2S4

Such directors shall hold office until the first annual meeting of shareholders of Amalco or until their successors are elected or appointed.

Initial Officers

2.9 The first officers of Amalco shall be the persons whose name and position appear

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Name Aleksandar Miskovic Stephen Brohman Catherine Cox	Position
	President and Chief Executive Officer Chief Financial Officer Corporate Secretary

Exchange of ValenciaSub Shares and Terra Balcanica Shares

2.10 Upon the terms and subject to the conditions set forth in this Agreement, at the Effective Time:

(a) each Terra Balcanica Shareholder will receive one post-Consolidation Valencia Share in exchange for each Terra Balcanica Share held by such holder and the Terra Balcanica Shares will be cancelled;
(b) each holder of ValenciaSub Shares will receive one Amalco Share in exchange for each ValenciaSub Share held by such holder and the ValenciaSub Shares will be cancelled; and
(c) in consideration for Valencia’s issuance of post-Consolidation Valencia Shares referenced in §2.10(a), Amalco shall issue to Valencia one Amalco Share for each Valencia Share issued by Valencia under §2.10(a).

Dissenting Shareholders

2.11 Registered Terra Balcanica Shareholders entitled to vote at the Terra Balcanica Meeting will be entitled to exercise dissent rights with respect to their Terra Balcanica Shares in connection with the Amalgamation pursuant to and in the manner set forth in the Meeting Materials. Terra Balcanica shall give Valencia notice of any written notice of a dissent, withdrawal of such notice, and any other instruments served pursuant to such dissent rights and received by Terra Balcanica and shall provide Valencia with copies of such notices and written objections. Terra Balcanica Shares which are held by a Dissenting Shareholder shall not be exchanged for Valencia Shares pursuant to the Amalgamation. However, if a Dissenting Shareholder fails to perfect or effectively withdraws such Dissenting Shareholder’s claim under the BCBCA or forfeits such Dissenting Shareholder’s right to make a claim under the BCBCA, or if such Dissenting Shareholder’s rights as a Terra Balcanica Shareholder are otherwise reinstated, such Terra Balcanica Shareholder’s Terra Balcanica Shares shall thereupon be deemed to have been exchanged for Valencia Shares as of the Effective Time as prescribed herein.

Completion of the Amalgamation and Effective Date

2.12 Upon the satisfaction or waiver of the conditions herein contained in favour of each Party, Terra Balcanica and ValenciaSub shall immediately deliver to the Registrar the Amalgamation Application and such other documents as may be required to give effect to the Amalgamation. The Amalgamation shall become effective at the Effective Time.

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Acknowledgment of Escrow and Resale Restrictions

2.13 Terra Balcanica acknowledges and agrees that in accordance with the policies of the Exchange, the Valencia Shares issued to certain Terra Balcanica Shareholders will be subject to escrow and/or seed share resale restrictions under the policies of the Exchange and Applicable Laws. For greater certainty, all Valencia Shares issued in exchange for Terra Balcanica Shares originally acquired at a price of less then $0.05 per Terra Balcanica Share will be subject to a Tier 2 Value Security Escrow Agreement or Surplus Security Escrow Agreement (as defined in the policies of the Exchange) which provides for the staged release of such Valencia Shares over a period of three years.

2.14 In addition to any other resale restrictions that may be imposed, any Terra Balcanica Shareholder who is a US Person as defined in Rule 902K of Regulation S of the United States Securities Act of 1933, as amended, will receive Valencia Shares in exchange for such Terra Balcanica Shareholder’s Terra Balcanica Shares which will bear a legend substantially in the following form:

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY; (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT; (C) IN ACCORDANCE WITH THE EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY (I) RULE 144 OR (II) RULE 144A THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS; OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, AND, IN THE CASE OF PARAGRAPH (C) OR (D), THE SELLER FURNISHES TO THE COMPANY AN OPINION OF COUNSEL OF RECOGNIZED STANDING IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY TO SUCH EFFECT.

THE PRESENCE OF THIS LEGEND MAY IMPAIR THE ABILITY OF THE HOLDER HEREOF TO EFFECT “GOOD DELIVERY” OF THE SECURITIES REPRESENTED HEREBY ON A CANADIAN STOCK EXCHANGE.”

Valencia Guarantee

2.15 Valencia hereby unconditionally and irrevocably guarantees the due and punctual performance by ValenciaSub of each and every covenant and obligation of ValenciaSub arising

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under the Amalgamation. Valencia hereby agrees that Terra Balcanica shall not have to proceed first against ValenciaSub before exercising its rights under this guarantee against Valencia.

PART 3 COVENANTS

Mutual Covenants

3.1 From the date of this Agreement until the earlier of the Effective Date and the termination of this Agreement in accordance with Part 9, except as otherwise expressly permitted or specifically contemplated by this Agreement or required by Applicable Laws, each of the Parties shall:

(a) carry on its business in the usual, regular and ordinary course of business consistent with its past practice and not enter into or terminate any material contracts or transactions, other than as may be required by Terra Balcanica to complete the distributions contemplated pursuant to each of the Bridge Financing or the Concurrent Financing;
(b) other than the completion of the Bridge Financing, not incur any indebtedness other than in the ordinary course of business consistent with its past practice, or as required in connection with the RTO and generally not incur any debts or liabilities in excess of $25,000 in connection with its business other than the Exploration Expenditures without first obtaining the prior written consent of the other Party;
(c) not alter or amend its Constating Documents as the same exist at the date of this Agreement, except as contemplated by this Agreement;
(d) take, or cause to be taken, all action and to do, or cause to be done, all other things necessary, proper or advisable under Applicable Laws to complete the Amalgamation, including using reasonable commercial efforts:
(i) to obtain all necessary consents, assignments, waivers and amendments to or terminations of any agreements and take such measures as may be appropriate to fulfill its obligations hereunder and to carry out the transactions contemplated hereby;
(ii) to effect all necessary registrations, filings and submissions of information requested by Governmental Authorities required to be effected by it in connection with the Amalgamation;
(iii) to use commercially reasonable efforts to obtain conditional approval of the Exchange, or such other acceptance as the Exchange may determine necessary, and complete all conditions required by the Exchange, in respect of the Amalgamation and the listing of the post-Consolidation
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Valencia Shares, which shall include the filing of the Filing Statement and all ancillary documents with the Exchange;

(iv) to oppose, lift or rescind any injunction or restraining or other order seeking to stop, or otherwise adversely affecting its ability to consummate, the Amalgamation and to defend, or cause to be defended, any proceedings to which it is a party or brought against it or its directors or officers challenging this Agreement or the consummation of the transactions contemplated hereby; and
(v) to reasonably cooperate with the other Parties and their tax advisors in structuring the Amalgamation and other transactions contemplated to occur in conjunction with the Amalgamation in a tax effective manner and assist the other Parties and their tax advisors in making such investigations and enquiries with respect to such Parties in that regard, as the other Parties and its tax advisors shall consider necessary, acting reasonably;
(e) not take any action that would render, or may reasonably be expected to render, any representation or warranty made by such Party in this Agreement untrue in any material respect;
(f) use reasonable commercial efforts to obtain and maintain the third-party approvals applicable to them and provide the same to the other Parties on or prior to the Effective Date;
(g) use reasonable commercial efforts to complete the RTO by the Outside Date;
(h) except as provided in this Agreement, not amalgamate or consolidate with, or enter into any other corporate reorganization with, any other corporation or person or perform any act or enter into any transaction or negotiation which, in the opinion of Terra Balcanica or Valencia acting reasonably, interferes or is inconsistent with the completion of the transactions contemplated hereby. Without limiting the foregoing, except as provided in this Agreement, none of the Parties shall (i) make any distribution by way of dividend, return of capital or otherwise to or for the benefit of its shareholders or (ii) issue any of its shares or other securities convertible into shares or enter into any commitment or agreement (other than on the exercise of convertible securities) except with the prior written consent of the other Party or pursuant to the Bridge Financing or the Concurrent Financing;
(i) furnish to the other Parties such information, in addition to the information contained in this Agreement, relating to its financial condition, business, properties and affairs as may reasonably be requested by another Party, which information shall be true and complete in all material respects and shall not contain an untrue statement of any Material Fact or omit to state any Material Fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances in which they are made, not misleading and will
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notify the other Parties of any significant development or Material Change relating to it promptly after becoming aware of any such development or change;

(j) promptly notify the other Parties in writing of any change in any representation or warranty provided in this Agreement which change is or may be of such a nature as to render any representation or warranty misleading or untrue in any material respect and the Parties shall in good faith discuss with the other Parties such change in circumstances (actual, anticipated, contemplated, or to its knowledge, threatened) which is of such a nature that there may be a reasonable question as to whether notice need to be given to the other Parties pursuant to this §3.1(j);
(k) promptly notify the other Parties in writing of any material breach by such Party of any covenant, obligation or agreement contained in this Agreement;
(l) use commercially reasonable efforts to complete the Concurrent Financing; and
(m) not, directly or indirectly, solicit, initiate, assist, facilitate, promote or knowingly encourage the initiation of proposals or offers from, entertain or enter into discussions or negotiations with any person other than the other Parties hereto, with respect to any amalgamation, merger, consolidation, arrangement, restructuring, sale of any material assets or part thereof of such Party, unless such action, matter or transaction is part of the transactions contemplated in this Agreement or is required as a result of the duties of directors and officers of the applicable Party in compliance with Applicable Laws.

Additional Covenants of Valencia and ValenciaSub

3.2 From the date of this Agreement until the earlier of the Effective Date and the termination of this Agreement in accordance with Part 9, except as expressly permitted or specifically contemplated by this Agreement or required by Applicable Laws, each of Valencia and ValenciaSub covenant and agree that:

(a) Valencia and ValenciaSub shall use their reasonable commercial efforts to satisfy or cause the satisfaction of the conditions set forth in §7.1 and §7.3 as soon as reasonably practicable, to the extent the fulfillment of the same is within the control of Valencia or ValenciaSub, as the case may be;
(b) Valencia shall, as the sole shareholder of ValenciaSub, approve by special resolution the Amalgamation, together with such matters as are required to effect the Amalgamation;
(c) Valencia shall use commercially reasonable efforts to assist Terra Balcanica to complete on a private placement basis a financing of equity securities, which may be in the form of special warrants, subscription receipts, common shares, or units consisting of common shares and warrants or other convertible securities, (the “ Equity Securities ” and each an “ Equity Security ”) at a price per Equity Security to be agreed in writing by each of Valencia and Terra Balcanica, each acting reasonably, for minimum gross proceeds of $2,500,000 (the “ Concurren t
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Financing ”), and such efforts may include entering into an agency agreement on reasonable terms with a reputable registered broker dealer or investment bank in respect of the Concurrent Financing. For greater certainty, should Valencia be required to enter into an agency agreement, it shall have full ability to negotiate the terms thereof, acting in good faith, with any such broker dealer or investment bank proposed to be retained by Terra Balcanica.

(d) Valencia shall have at least $500,000 in available working capital as at the Effective Date;
(e) Valencia shall use reasonable commercial efforts to seek shareholder approval of the Consolidation, name change and election of new directors, if required by the Exchange, together with the approval of any other matters as are required to effect the Amalgamation, prior to the Effective Date;
(f) Valencia shall, subject to the approval of the Exchange, use commercially reasonable efforts to cause, as of the Effective Time, its officers to resign, without payment by or any liability to Valencia or Terra Balcanica except as disclosed in §4.1(m), including any change in control or bonus payments and commitments, and the Valencia Board of Directors to consist of five (5) directors, with four of such directors to have been selected by Terra Balcanica, expected to be Aleksandar Miskovic, Aleksandar Ilic, Brandon Bonifacio, and Kim Oishi and one (1) such director to be have been selected by Valencia, expected to be Brock Daem, provided that Valencia shall as of the Effective Time continue to have an audit committee consisting of three (3) directors, two (2) of whom shall be independent (as defined by Applicable Canadian Securities Laws) and all of whom shall be required to have the qualifications prescribed by Applicable Canadian Securities Laws;
(g) Valencia and Terra Balcanica shall enter into mutual releases with all former directors and officers of Valencia, in a form acceptable to Valencia and Terra Balcanica, acting reasonably, at the Effective Time;
(h) The newly appointed Valencia Board of Directors as of the Effective Time shall, subject to the approval of the Exchange, appoint the following individuals as the senior management team of Valencia as of the Effective Time: (i) Aleksandar Miskovic shall be appointed as the Chief Executive Officer of Valencia; (ii) Stephen Brohman shall be appointed as Chief Financial Officer and (iii) Catherine Cox shall be appointed as the Corporate Secretary; and
(i) Valencia shall, on the Effective Date, provide to the Transfer Agent a direction authorizing and directing the Transfer Agent to issue the Valencia Shares issuable under the Amalgamation to holders of the Terra Balcanica Shares and shall direct the Transfer Agent to distribute the Valencia Shares to the holders of the Terra Balcanica Shares in accordance with the terms of the Amalgamation.
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Additional Covenants of Terra Balcanica

3.3 From the date of this Agreement until the earlier of the Effective Date and the termination of this Agreement in accordance with Part 9, except as expressly permitted or specifically contemplated by this Agreement or required by Applicable Laws, Terra Balcanica covenants and agrees that:

(a) Terra Balcanica will use its reasonable commercial efforts to satisfy or cause the satisfaction of the conditions set forth in §7.1 and §7.2 as soon as reasonably practicable, to the extent the fulfillment of the same is within the control of Terra Balcanica;
(b) prior to the Effective Date, Terra Balcanica will convene the Terra Balcanica Meeting for the purpose of approving the Amalgamation and to solicit proxies to be voted at the Terra Balcanica Meeting in favour of the approval of the Amalgamation;
(c) except for proxies and other non-substantive communications with security holders, Terra Balcanica will provide promptly to Valencia a copy of each notice, report, schedule or other document delivered, filed or received by it in connection with: (i) the Amalgamation; (ii) any filings under Applicable Laws; and (iii) any dealings with regulatory agencies in connection with the transactions contemplated herein;
(d) Terra Balcanica shall use reasonable commercial efforts to seek approval of the Amalgamation Resolution at the Terra Balcanica Meeting, together with the approval of such matters as are required to effect the Amalgamation;
(e) Terra Balcanica shall promptly advise Valencia of the number of Terra Balcanica Shares for which Terra Balcanica receives notices of dissent or written objections to the Amalgamation; and
(f) Terra Balcanica shall make all necessary filings and applications under applicable federal and provincial laws and regulations required on its part in connection with the transactions contemplated in this Agreement, and take all reasonable action necessary to be in compliance with such laws and regulations.

PART 4 REPRESENTATIONS AND WARRANTIES

Representations and Warranties of Valencia and ValenciaSub

4.1 Valencia and ValenciaSub represent and warrant, jointly and severally, to Terra Balcanica as follows, and acknowledge that Terra Balcanica is relying upon such representations and warranties in connection with the matters contemplated by this Agreement:

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(a) each of Valencia and ValenciaSub has good and sufficient right and authority to enter into this Agreement and carry out its intentions hereunder;

(b) each of Valencia and Valencia Sub is duly incorporated or continued, as the case may be, under its applicable jurisdiction of incorporation, is currently in good standing, and is not subject to any regulatory decision or order prohibiting or restricting trading in its shares;

(d) Valencia is a “reporting issuer” in the provinces of British Columbia, Alberta, and Ontario and is listed on the Exchange;

(e) Valencia is authorized to issue an unlimited number of common shares, of which 11,383,900 common shares are outstanding, and Valencia has 883,390 Valencia Agent’s Options and 1,138,390 Valencia Options outstanding as at the date hereof;

(f) ValenciaSub is authorized to issue an unlimited number of common shares, of which one (1) common share is outstanding as at the date hereof, which is held by Valencia;

(g) other than as disclosed in Schedule 4.1(g), there are no other shares, options, warrants, convertible notes or debentures, agreements, documents, instruments or other writings of any kind whatsoever which constitute a “security” of Valencia or ValenciaSub (as that term is defined in the Securities Act) and, except as provided in this Agreement, Valencia has no agreements or commitments of any character whatsoever convertible into, or exchangeable or exercisable for or otherwise requiring the issuance, sale or transfer by Valencia of any Valencia Shares or any securities convertible into, or exchangeable or exercisable for, or otherwise evidencing a right to acquire, any Valencia Shares;

(h) there are no outstanding Actions, suits, judgments, investigations or proceedings of any kind whatsoever against or affecting Valencia or the Valencia Sub at law or in equity or before or by any Governmental Authority, nor are there, to their knowledge, any pending or threatened;

(i) this Agreement is a binding agreement on Valencia and ValenciaSub, enforceable against each of them in accordance with its terms and conditions (subject to such limitations and prohibitions as may exist or may be enacted in Applicable Laws relating to bankruptcy, insolvency, liquidation, moratorium, reorganization, arrangement or winding-up and other laws, rules and regulations of general application affecting the rights, powers, privileges, remedies and/or interests of creditors generally, and except as limited by the application of equitable principles when equitable remedies are sought and by the fact that rights to waiver, indemnity and contribution, and the ability to sever unenforceable terms, may be limited by applicable law);

(j) neither the execution and delivery of this Agreement, nor the consummation of the Amalgamation, will conflict with or result in any breach of any of the terms or

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provisions of, or constitute a default under, the material contracts and the Constating Documents of Valencia, director or shareholder minutes of Valencia, any agreement or instrument to which Valencia is a party or by which Valencia is bound, or any order, decree, statute, regulation, covenant or restriction applicable to Valencia;

(k) the documents and materials comprising the Public Record of Valencia are in all material respects accurate and up to date and contain no misrepresentation, nor omit any facts, the omission of which makes the Public Record or any particulars therein, materially misleading or incorrect;

(l) neither Valencia nor the Valencia Sub has any liabilities, obligations or indebtedness (whether accrued, absolute, contingent or otherwise) of any kind whatsoever, and, there is no basis for assertion against Valencia nor the Valencia Sub of any liabilities, obligations or indebtedness (whether accrued, absolute, contingent or otherwise) of any kind, other than liabilities disclosed or reflected in the financial statements of Valencia as disclosed in the Public Record or incurred in the ordinary course of business following the dates of the most recent financial statements of Valencia;

(m) other than as disclosed in Schedule 4.1(m),Valencia shall not, as of the Effective Time, have any continuing obligations in respect of office or equipment leases or any other material obligations;

(n) the information in the Filing Statement relating to Valencia and the Valencia Sub will be true, correct and complete in all material respects and not contain any untrue statement of any material fact, nor omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading in light of the context in which they are to be made;

(o) neither Valencia nor the Valencia Sub has made any tax filings and no such tax filings are currently outstanding, and no taxes are due or payable;

(p) Valencia is up to date and current with all filings required by the Securities Commissions of British Columbia, Alberta, and Ontario;

(q) as of the date hereof, neither Valencia nor the Valencia Sub has any debts or obligations other than those disclosed in its accounts or for professional fees accrued but not yet invoiced and has granted no general security over its assets or security in any particular asset;

(r) as at the date hereof, there are no reasonable grounds for believing that any creditor of Valencia or the Valencia Sub will be prejudiced by the Amalgamation;

(s) as at the date hereof, Valencia has no subsidiaries, except for the Valencia Sub, and Valencia legally and, except as disclosed in the Public Record, Valencia beneficially owns 100% of the issued share capital of the Valencia Sub;

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(t) there are no agreements, covenants, undertakings, rights of first refusal or other commitments of either Valencia or the Valencia Sub or any instruments binding on it or its assets:

(i) which would preclude it from entering into this Agreement;

(ii) under which the Amalgamation would have the effect of imposing restrictions or obligations on Amalco greater than those imposed upon Valencia or the Valencia Sub;

(iii) which would give a third party, as a result of the transactions contemplated in this Agreement, the right to terminate any material agreement to which Valencia or the Valencia Sub is a party or to purchase any of Valencia’s, the Valencia Sub’s or Amalco’s assets; or

(iv) which would impose restrictions on the ability of Amalco:

(A) to carry on any business which it might choose to carry on within any geographical area;

(B) to acquire property or dispose of its property and assets as an entirety;

(D) to borrow money or to mortgage and pledge its property as security therefore; or

(E) to change its corporate status;

(u) all information supplied by Valencia or its representatives to Terra Balcanica in the course of Terra Balcanica’s due diligence review in respect of the transactions contemplated by this Agreement, is accurate and correct in all material respects; and

(v) the representations, warranties or statements of fact made in this section do not contain any untrue statement of a material fact or omit to state any material fact necessary to make any such warranty or representation not misleading to Terra Balcanica in seeking full information as to Valencia and the Valencia Subsidiaries and their assets, liabilities and business.

Representations and Warranties of Terra Balcanica

4.2 Terra Balcanica represents and warrants to Valencia and ValenciaSub as follows, and acknowledges that Valencia and ValenciaSub are relying upon such representations and warranties in connection with the matters contemplated by this Agreement:

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(a) it has good and sufficient right and authority to enter into this Agreement and carry out its intentions hereunder;

(b) is duly incorporated under the BCBCA and is currently in good standing, has all corporate powers required to carry on its Business as now conducted and is not subject to any regulatory decision or order prohibiting or restricting trading in its shares;

(c) each of Terra Balcanica, Tera Balkanika and Tera Balkanika Subsidiary has good and marketable legal and beneficial title to its assets set forth in Exhibit “C”, free and clear of all Encumbrances, and these assets constitute all of the property and assets used and held for use in connection with the Business, and other than as disclosed in Schedule 4.2(d), there is no agreement, option or other right or privilege outstanding in favour of any Person other than Valencia and ValenciaSub for the purchase of the Business or any part thereof or of any of the assets of Terra Balcanica, Tera Balkanika, and Tera Balkanika Subsidiary;

(d) it is authorized to issue an unlimited number of common shares, of which 53,794,723 common shares are outstanding as at the date hereof. All Terra Balcanica Shares outstanding as at the date of this Agreement have been duly issued as fully paid and non-assessable common shares, free and clear of any and all Encumbrances, liens, charges and demands of whatsoever nature, and have been issued in compliance with all Applicable Laws in Canada including, without limitation, Applicable Canadian Securities Laws;

(e) the share capital of Tera Balkanika is 100 RSD and all issued and outstanding securities as of the date hereof are held by Terra Balcanica in compliance with all Applicable Laws as fully paid and non-assessable securities, free and clear of any and all Encumbrances, liens, charges, and demands of whatsoever nature;

(f) The share capital of Tera Balkanika Subsidiary is 369,086.69 BAM, of which 332,178.03 BAM have been issued as of the date hereof as held by Tera Balkanika in compliance with all Applicable Laws as fully paid and non-assessable securities, free and clear of any and all Encumbrances, liens, charges, and demands of whatsoever nature;

(g) other than the securities referred to in §4.2(c), the securities which may be issued in connection with the Concurrent Financing or the Bridge Financing, and as disclosed in Schedule 4.2(d), there are no other shares, options, warrants, convertible notes or debentures, agreements, documents, instruments or other writings of any kind whatsoever which constitute a “security” of Terra Balcanica, Tera Balkanika, or Tera Balkanika Subsidiary (as that term is defined in the Securities Act );

(h) other than the agreements listed as Terra Balcanica Material Contracts in Exhibit “D” hereof or pursuant to the Bridge Financing or Concurrent Financing, Terra Balcanica has no agreements or commitments of any character whatsoever convertible into, or exchangeable or exercisable for or otherwise requiring the issuance, sale or transfer by Terra Balcanica of any Terra Balcanica Shares or any securities convertible into, or

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exchangeable or exercisable for, or otherwise evidencing a right to acquire, any Terra Balcanica Shares;

(i) other than the agreements listed as Terra Balcanica Material Contracts in Exhibit “D” hereof, Tera Balkanika has no agreements or commitments of any character whatsoever convertible into, or exchangeable or exercisable for or otherwise requiring the issuance, sale or transfer by Tera Balkanika of any Tera Balkanika shares or any securities convertible into, or exchangeable or exercisable for, or otherwise evidencing a right to acquire, any Tera Balkanika shares;

(j) other than the agreements listed as Terra Balcanica Material Contracts in Exhibit “D” hereof, Tera Balkanika Subsidiary has no agreements or commitments of any character whatsoever convertible into, or exchangeable or exercisable for or otherwise requiring the issuance, sale or transfer by Tera Balkanika Subsidiary of any Tera Balkanika Subsidiary shares or any securities convertible into, or exchangeable or exercisable for, or otherwise evidencing a right to acquire, any Tera Balkanika Subsidiary shares;

(k) except for Valencia’s right under this Agreement, in connection with the Concurrent Financing, in connection with the Bridge Financing, or pursuant to the agreements listed as Terra Balcanica Material Contracts in Exhibit “D” hereof, no Person has any written or oral agreement, option or warrant or any right or privilege (whether by law, pre-emptive or contractual) capable of becoming such for (A) the purchase or acquisition of any of the Terra Balcanica Shares or any of the shares of any of its Subsidiaries, or (B) the purchase, subscription, allotment or issuance of any unissued shares or other securities in the capital of Terra Balcanica or any of its Subsidiaries;

(l) Terra Balcanica legally and beneficially owns 100% of the issued share capital of Tera Balkanika, and such shares are fully paid and non-assessable shares, free and clear of all Encumbrances, liens, charges, and demands of whatsoever nature, and are validly issued under the laws of the jurisdiction of incorporation;

(m) Tera Balkanika legally and beneficially owns 90% of the issued share capital of the Tera Balkanika Subsidiary, and such shares are fully paid and non-assessable shares, free and clear of all Encumbrances, liens, charges, and demands of whatsoever nature, and are validly issued under the laws of the jurisdiction of incorporation;

(n) Terra Balcanica has no subsidiaries other than the Subsidiaries;

(o) Terra Balcanica is not a “reporting issuer” nor an associate of a “reporting issuer” (as such term is defined in the Securities Act) and the Terra Balcanica Shares do not trade on any exchange;

(p) each of the Subsidiaries is duly incorporated in its respective jurisdiction and is currently in good standing, has all corporate powers required to carry on its Business as now conducted and is not subject to any regulatory decision or order prohibiting or restricting trading in its shares;

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(q) there are no outstanding Actions, suits, judgments, investigations or proceedings of any kind whatsoever against or affecting Terra Balcanica or any Subsidiary at law or in equity or before or by any federal, provincial, state, municipal or other governmental department, commission, board, bureau or agency of any kind whatsoever nor are there, to its knowledge, any pending or threatened;

(r) this Agreement is a binding agreement on Terra Balcanica, enforceable against it in accordance with its terms and conditions (subject to such limitations and prohibitions as may exist or may be enacted in Applicable Laws relating to bankruptcy, insolvency, liquidation, moratorium, reorganization, arrangement or winding-up and other laws, rules and regulations of general application affecting the rights, powers, privileges, remedies and/or interests of creditors generally, and except as limited by the application of equitable principles when equitable remedies are sought and by the fact that rights to waiver, indemnity and contribution, and the ability to sever unenforceable terms, may be limited by applicable law);

(s) Exhibit “D” provides a complete and accurate list of all Material Contracts of Terra Balcanica and the Subsidiaries. Each of the Material Contracts constitutes the valid and legally binding obligation of Terra Balcanica and its Subsidiaries, enforceable in accordance with its terms;

(t) all registrations (or applications for registrations), if any, and filings that are considered necessary to preserve the rights of Terra Balcanica or any Subsidiary in its Properties have been made and are in good standing. Terra Balcanica and its Subsidiaries do not have any pending action or proceeding, nor, to the knowledge of Terra Balcanica, any threatened action or proceeding, against any person with respect to the use of its Properties, and there are no circumstances which cast reasonable doubt on the validity or enforceability of its rights to the Properties;

(u) neither the execution and delivery of this Agreement, nor the consummation of the Amalgamation, will conflict with or result in any breach of any of the terms or provisions of, or constitute a default under, the Material Contracts, the Constating Documents of Terra Balcanica or the Subsidiaries, director or shareholder minutes of Terra Balcanica or of any Subsidiary, any agreement or instrument to which Terra Balcanica or a Subsidiary is a party or by which Terra Balcanica or a Subsidiary is bound, or any order, decree, statute, regulation, covenant or restriction applicable to Terra Balcanica or a Subsidiary;

(v) neither Terra Balcanica nor any Subsidiary is in material default under any Material Contract to which it is a party and there has not occurred any event which, with the lapse of time or giving of notice or both, would constitute a default under any Material Contract by Terra Balcanica or any Subsidiary, as applicable. Each Material Contract is in full force and effect, unamended by written or oral agreement, and either Terra Balcanica or a Subsidiary, as applicable, is entitled to the full benefit and advantage of each Material Contract in accordance with its terms. Neither Terra Balcanica nor any Subsidiary has received any notice of a default by Terra Balcanica or its Subsidiaries, as applicable, or a dispute between Terra Balcanica or a Subsidiary and any other party in

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respect of any Material Contract. Complete and correct copies of each of the Material Contracts have been provided or made available to Valencia prior to the date hereof;

(w) other than the Outstanding Loans and the Bridge Financing, neither Terra Balcanica nor any Subsidiary has any liabilities, obligations or indebtedness (whether accrued, absolute, contingent or otherwise) of any kind whatsoever, including outstanding liabilities, obligations or indebtedness under any of the agreements listed as Terra Balcanica Material Contracts in Exhibit “D” hereof and, there is no basis for assertion against Terra Balcanica or any Subsidiary of any liabilities, obligations or indebtedness (whether accrued, absolute, contingent or otherwise) of any kind, other than liabilities disclosed or reflected in or provided for in the Terra Balcanica Financial Statements or incurred in the ordinary course of business following the dates of the Terra Balcanica Financial Statements, or obligations to issue securities pursuant to the terms of the Bridge Financing or the Concurrent Financing;

(x) other than the Outstanding Loans, payroll obligations and similar salary and fee payments incurred in the ordinary course of business, neither Terra Balcanica nor any Subsidiary has any debts or amounts owing by either of Terra Balcanica or any Subsidiary to any of its or their officers, former officers, directors, former directors, shareholders, former shareholders, employees or former employees or any family member thereof, or any person with whom Terra Balcanica or the Subsidiary does not deal at arm’s length within the meaning of the Tax Act;

(y) the Terra Balcanica Financial Statements will be prepared in accordance with IFRS and will present fairly, in all material respects, the financial position of Terra Balcanica and its Subsidiaries as at such date, and will not omit to state any material fact that is required by Applicable Laws to be stated or reflected therein or which is necessary to make the statements contained therein not misleading;

(z) since the date of the most recent Terra Balcanica Financial Statements, each of Terra Balcanica and its Subsidiaries has carried on its Business and conducted its operations and affairs only in the ordinary course;

(aa) neither Terra Balcanica nor any Subsidiary is aware of any legislation, or proposed legislation published by a legislative body as at the date of this Agreement, which it anticipates will materially and adversely affect the Business, Properties, affairs, operations, assets, liabilities (contingent or otherwise) or prospects of Terra Balcanica or any Subsidiary;

(bb) the information in the Filing Statement relating to Terra Balcanica and its Subsidiaries will be true, correct and complete in all material respects and will not contain any untrue statement of any material fact, nor omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading in light of the context in which they are to be made;

(cc) immediately prior to the Amalgamation, no non-resident of Canada (as such term is defined in the Income Tax Act) nor any group of non-resident persons, each member of

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which does not deal at arm’s length with the other members, either individually or collectively, will hold over 50% of the voting shares of Terra Balcanica;

(dd) neither Terra Balcanica nor any Subsidiary has any outstanding taxes due and payable and there exist no facts or circumstances which may reasonably be expected to result in the issuance of assessment or reassessment of tax;

(ee) each of Terra Balcanica and its Subsidiaries has duly and on a timely basis prepared and filed all tax returns required to be filed by it prior to the date hereof and such returns and documents are complete and correct and to the knowledge of Terra Balcanica no such tax filings are currently outstanding. Terra Balcanica has no knowledge of any contingent tax liabilities or any ground which would prompt an assessment or reassessment of any of such returns or reports, including aggressive treatment of income and expenses in filing any tax returns. Complete and correct copies of all such returns and other documents filed in respect of the last three fiscal years ending prior to the date hereof have been provided to Valencia prior to the date hereof;

(ff) the Corporate Records of Terra Balcanica and its Subsidiaries are complete and accurate in all material respects and all corporate proceedings and actions reflected in the Corporate Records have been conducted or taken in compliance with all Applicable Laws and with the Constating Documents of Terra Balcanica and each Subsidiary, as applicable. Without limiting the generality of the foregoing, in respect of the Corporate Records of Terra Balcanica (i) the minute books contain complete and accurate minutes of all meetings of the directors and shareholders held since incorporation and all such meetings were properly called and held, (ii) the minute books contain all resolutions passed by the directors and shareholders (and committees, if any) and all such resolutions were properly passed, (iii) the share certificate books, register of shareholders and register of transfers are complete and accurate, all transfers have been properly completed and approved and any tax payable in connection with the transfer of any securities has been paid, and (iv) the registers of directors and officers are complete and accurate and all former and present directors and officers were properly elected or appointed, as the case may be;

(gg) no proceedings have been taken, are pending or authorized by Terra Balcanica or a Subsidiary or by any other Person, in respect of the bankruptcy, insolvency, liquidation or winding up of Terra Balcanica or any Subsidiary;

(hh) as at the date hereof there are no reasonable grounds for believing that any creditor of Terra Balcanica or any Subsidiary will be prejudiced by the Amalgamation;

(ii) there are no outstanding labour disputes, (whether filed or lodged with Terra Balcanica, any Subsidiary, or any other Person or organization), and to the knowledge of Terra Balcanica and each Subsidiary there are no pending labour disruptions or pending unionization with respect to Terra Balcanica or any Subsidiary;

(jj) other than as required by Applicable Law, including with respect to employment law obligations in the jurisdictions of the Republic of Serbia and Bosnia and

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Herzegovina, in which Tera Balkanika and Tera Balkanika Subsidiary respectively operate, neither Terra Balcanica nor any Subsidiary is a party to any agreement or understanding (written or oral, by contract or at common law) providing for severance, termination or change of control payments to, or any employment agreement or understanding (written or oral, by contract or at common law) with any current or former officer, director or employee of Terra Balcanica or any Subsidiary;

(kk) each of Terra Balcanica and its Subsidiaries is not bound by or a party to any collective bargaining agreement;

(ll) each of Terra Balcanica and its Subsidiaries has been and is being operated in compliance, in all material respects, with Applicable Laws relating to employment, including employment standards, occupational health and safety, human rights, labour relations, workers compensation, pay equity and employment equity and neither Terra Balcanica nor any Subsidiary has received notice of any outstanding assessments, penalties, fines, liens, charges, surcharges, or other amounts due or owing pursuant to any workers’ compensation legislation and Terra Balcanica and each Subsidiary has not been reassessed in any material respect under such legislation;

(mm) neither Terra Balcanica nor any of the Subsidiaries is a party to any agreement, nor is Terra Balcanica aware of any agreement, including any unanimous shareholder agreement or other shareholder agreement, which in any manner affects the voting control of any of the Terra Balcanica Shares or other securities of Terra Balcanica or the Subsidiaries;

(nn) there are no agreements, covenants, undertakings, rights of first refusal or other commitments of Terra Balcanica or Tera Balkanika or the Tera Balkanika Subsidiary or any instruments binding on their assets:

(i) which would preclude Terra Balcanica from entering into this Agreement;

(ii) under which the Amalgamation would have the effect of imposing restrictions or obligations on Amalco greater than those imposed upon Terra Balcanica;

(iii) which would give a third party, as a result of the transactions contemplated in this Agreement, the right to terminate any material agreement to which Terra Balcanica is a party or to purchase any of Terra Balcanica’s or Amalco’s assets; or

(iv) which would impose restrictions on the ability of Amalco:

(A) to carry on any business which it might choose to carry on within any geographical area;

(B) to acquire property (including the Properties) or dispose of its property (including the Properties) and assets as an entirety;

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(D) to borrow money or to mortgage and pledge its property as security therefor; or

(E) to change its corporate status;

(oo) Tera Balkanika Subsidiary has good and valid Licenses to the property comprising the Viogor-Zanik project and to all material real estate and personal property owned or leased by it, free and clear of any Encumbrances;

(pp) Tera Balkanika has an option to acquire the Kaludra License, and each of the option and the Kaludra License remain in good standing;

(qq) the licenses relating to the Properties are as set out in Exhibit “C” hereto (together, the “ Licenses ”), which Licenses are valid, effective, enforceable, in good standing and to the knowledge of Terra Balcanica there are no grounds for its revocation and/or suspension, other than the Ceovishte License which has been applied for but has not been granted by regulatory authorities;

(rr) each of Terra Balcanica and its Subsidiaries is conducting and has always conducted its business in compliance with all Applicable Laws, including laws relating to bribery of the foreign public officials (including the Corruption of Foreign Public Officials Act ) and anti-money laundering and proceeds of crime legislation (including the Proceeds of Crime (Money Laundering) Act ), other than acts of non-compliance which, individually or in aggregate, are not material, Terra Balcanica is not aware of and neither Terra Balcanica nor any of its Subsidiaries has received any order or directive relating to any breach of any applicable environmental or health and safety law by Terra Balcanica or a Subsidiary;

(ss) other than the Licenses, Terra Balcanica is not required to obtain or hold any Permits in order to conduct the Business;

(tt) other than as disclosed in Schedule 4.2(kk) and Exhibit “D” hereof, there are no outstanding agreements or options to acquire or purchase any interests in the Properties and no person has any royalty or other interest whatsoever in production or profits from the Properties;

(uu) to Terra Balcanica’s knowledge, there are no adverse claims or challenges to interests in the Licenses or the Properties, including under any of the agreements listed as Terra Balcanica Material Contracts in Exhibit “D” hereof, and for clarity, the rights granted over the assets of Terra Balcanica as disclosed in Schedule 4.2(d) shall not for the purpose of this Section 4.2(uu) constitute adverse claims or challenges;

(vv) Terra Balcanica has made available to the author of the Technical Report prior to the issuance of the Technical Report all material information relating to the Material Property within the knowledge of Terra Balcanica, including all information requested by

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the author of the Technical Report for the purposes of preparing such report, which report was prepared based on the assumptions contained therein and in all other respects in compliance with National Instrument 43-101. All information made available by Terra Balcanica to the author of the Technical Report was accurate and correct in all material respects and did not omit any information necessary to make any information provided not misleading, and there has been no Material Adverse Change in any of the information provided since the date provided. The Technical Report is accurate and correct in all material respects;

(ww) neither Terra Balcanica nor its Subsidiaries are subject to any obligation to make any investment in or to provide funds by way of loan, capital contribution or otherwise to any Person;

(xx) all information supplied by Terra Balcanica or its representatives to Valencia in the course of Valencia’s due diligence review in respect of the transactions contemplated by this Agreement, is accurate and correct in all material respects; and

(yy) the representations, warranties or statements of fact made in this section do not contain any untrue statement of a material fact or omit to state any material fact necessary to make any such warranty or representation not misleading to Valencia or ValenciaSub in seeking full information as to Terra Balcanica, its Subsidiaries, and its Properties, Licenses, assets, liabilities and Business.

Survival of Representation and Warranties

4.3 The representations and warranties herein shall survive the performance of the Parties respective obligations hereunder and the termination of this Agreement but shall expire one year after the Effective Date.

PART 5 AGREEMENTS

Terra Balcanica Meeting and Meeting Materials

5.1 Prior to the Effective Date and in compliance with Applicable Laws (including Applicable Canadian Securities Laws):

(a) Terra Balcanica shall prepare the Meeting Materials and Terra Balcanica shall ensure that the Meeting Materials provides Terra Balcanica Shareholders with information in sufficient detail to permit them to form a reasoned judgment concerning the matters before them;
(b) Terra Balcanica shall cause the Meeting Materials to be provided to applicable Terra Balcanica Shareholders in accordance with the constating documents of Terra Balcanica;
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(c) take all commercially reasonable lawful action to solicit proxies in favour of the Amalgamation and to obtain the approval of the Terra Balcanica Shareholders on the Amalgamation Resolution; and
(d) promptly advise Valencia of any material communication (written or oral) from or claims brought by (or threatened to be brought by) any Dissenting Shareholders in opposition to the Amalgamation.

RTO

5.2 Subject to the completion of satisfactory due diligence on Terra Balcanica, Tera Balkanika, Tera Balkanika Subsidiary, the Licenses, the Properties, and the Technical Report, Valencia shall:

(a) as soon as practicable apply to the Exchange and diligently seek the conditional acceptance of the Exchange to the RTO;
(b) if shareholder approval of Valencia is required for the RTO, Consolidation, name change and election of new directors, diligently seek the approval of the Valencia Shareholders for the RTO, Consolidation, name change and election of new directors;
(c) as soon as practicable deliver to the Exchange the Filing Statement as contemplated by this Agreement;
(d) use its reasonable commercial efforts to consummate the transactions contemplated by this Agreement as part of the RTO under the rules and policies of the Exchange;
(e) in the event that the Exchange requires Valencia to obtain approval of the transactions contemplated by this Agreement from securityholders of Valencia, to use its commercially reasonable efforts to obtain such approval; and
(f) in the event that Valencia is not able to obtain an exemption from the sponsorship requirements of the Exchange, engage a sponsor that is mutually acceptable to Valencia and Terra Balcanica for the RTO.

Terra Balcanica and the Subsidiaries shall use all commercially reasonable best efforts to assist Valencia in obtaining the conditional approval of the Exchange to the RTO and the listing of the post-Consolidation Valencia Shares issuable to Terra Balcanica Shareholders, which shall include the filing of the Filing Statement and all ancillary documents with the Exchange including any information required by the Exchange with respect to its Licenses, Properties and Technical Report.

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Filing Statement

5.3 As promptly as practical following the execution of this Agreement, and in compliance with Applicable Laws (including Applicable Canadian Securities Laws) and the policies of the Exchange:

(a) Valencia and Terra Balcanica shall cooperate in the preparation of the Filing Statement and Terra Balcanica shall provide to Valencia the necessary information in respect of Terra Balcanica to ensure that the Filing Statement provides information in compliance in all material respects with Exchange policies on the date of filing thereof; and
(b) Valencia shall cause the Filing Statement to be filed with applicable regulatory authorities in all jurisdictions where the same is required to be filed.

Preparation of Filings

5.4 (a) Valencia and Terra Balcanica shall cooperate in the taking of all such action as may be required under the BCBCA, Applicable Canadian Securities Laws, and other Applicable Laws in connection with the transactions contemplated by this Agreement and the Amalgamation, including structuring the Amalgamation as a plan of arrangement, if determined necessary in order to comply with the U.S. Securities Act.
(b) Each of Valencia and Terra Balcanica shall promptly furnish to the other all information concerning it as may be required for the effectuation of the actions described in this Agreement and the provisions of this §5.4.

Consolidation

5.5 Prior to the Effective Time, Valencia shall effect the Consolidation. All outstanding securities of Valencia will be adjusted accordingly.

Name Change

5.6 On or prior to the Effective Date, Valencia shall change its name to “Terra Balcanica Resources Corp.” or such other name as may be agreed by the Parties, subject to the approval of the Exchange and as may be accepted by the Registrar.

Bridge Financing

5.7 Should Terra Balcanica choose to complete the Bridge Financing, it shall do so prior to the Effective Date, and may issue up to 5,000,000 Terra Balcanica Shares at an issue price of $0.10 per Terra Balcanica Share for gross aggregate proceeds of up to $500,000 or convertible debentures, convertible into Terra Balcanica Shares as described in this Agreement, in the principal amount of $500,000. Any increase in the number of Terra Balcanica Shares or the amount of principal of convertible debentures to be issued pursuant to the Bridge Financing must be approved by Valencia in writing. Notwithstanding the foregoing, Terra Balcanica is

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under no obligation to complete the Bridge Financing, in whole or in part. Terra Balcanica may distribute any number of Terra Balcanica Shares pursuant to the Bridge Financing provided it is below 5,000,000 Terra Balcanica Shares, or any amount outstanding as principal for convertible debentures of Terra Balcanica on the terms described herein, without any approval being required by Valencia pursuant to this Section 5.7 or otherwise. In connection with the Bridge Financing, Terra Balcanica may pay cash fees or fees in the form of securities, to persons pursuant to an agency agreement or a finder’s fee agreement.

Concurrent Financing

5.8 Terra Balcanica shall complete the Concurrent Financing prior to the Effective Date. The Concurrent Financing will consist of the issuance of Equity Securities for minimum gross proceeds of $2.5 million. Valencia confirms that the determination of the form of Equity Security; the price per Equity Security and exercise price of any convertible securities that may be issued as part of the Equity Security, the aggregate gross proceeds of the Concurrent Financing in excess of the minimum hereunder, and the decision to enter into any agency agreements or finder’s fee agreements in connection with the Concurrent Financing, shall be made exclusively by Terra Balcanica, notwithstanding that Valencia may provide input into any such terms. In connection with the Concurrent Financing, Terra Balcanica may pay cash fees or fees in the form of securities, to persons pursuant to an agency agreement or a finder’s fee agreement.

PART 6 INDEMNIFICATION

Mutual Indemnifications for Breaches of Warranty

6.1 Subject to §6.2, Terra Balcanica hereby covenants and agrees with each of Valencia and ValenciaSub, and their respective directors, officers, employees, agents, advisors and representatives, and each of Valencia and ValenciaSub hereby covenants and agrees with Terra Balcanica, and its directors, officers, employees, agents, advisors and representatives (the Parties covenanting and agreeing to indemnify another person under this section are hereinafter individually referred to as the “ Indemnifying Party ” and the persons being indemnified by a Party are hereinafter individually referred to as the “ Indemnified Party ”), to indemnify and save harmless the Indemnified Party from and against any and all liabilities, losses, damages, claims, costs, expenses, interest awards, judgments and penalties (collectively “ Claims ”) which may be suffered or incurred by the Indemnified Party as a result of, or arising out of:

(a) any non-fulfillment of any covenant or agreement on the part of the Indemnifying Party under this Agreement, or
(b) any incorrectness in or breach of any representation or warranty of the Indemnifying Party contained in this Agreement,

except that the Indemnifying Party shall not be liable in any such case to the extent that any such Claims arise out of or are based upon the negligence of an Indemnified Party or the non-

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compliance by an Indemnified Party with any requirement of Applicable Laws in connection with the transactions contemplated by this Agreement.

Limitation on Mutual Indemnification

6.2 The indemnification obligations of each of the Parties pursuant to §6.1 shall be subject to the following:

(a) the Claim shall have been made in writing in accordance with §6.3 within two years of the Effective Date; and
(b) an Indemnifying Party shall not be required to indemnify an Indemnified Party until the aggregate Claims sustained by that Indemnified Party exceeds a value of $5,000, in which case, the Indemnifying Party shall be obligated to the Indemnified Party for all Claims.

Procedure for Indemnification

6.3 The following provisions shall apply to any Claims for which an Indemnifying Party may be obligated to indemnify an Indemnified Party pursuant to this Agreement:

(a) upon receipt from a third party by the Indemnified Party of notice of a Claim or the Indemnified Party becoming aware of any Claims in respect of which the Indemnified Party proposes to demand indemnification from the Indemnifying Party, the Indemnified Party shall give notice to that effect to the Indemnifying Party with reasonable promptness, provided that failure to give such notice shall not relieve the Indemnifying Party from any liability it may have to the Indemnified Party except to the extent that the Indemnifying Party is prejudiced thereby;
(b) in the case of Claims arising from third parties, the Indemnifying Party shall have the right by notice to the Indemnified Party not later than 30 days after receipt of the notice described in §6.3(a) above to assume the control of the defense, compromise or settlement of the Claims, provided that such assumption shall, by its terms, be without costs to the Indemnified Party and the Indemnifying Party shall at the Indemnified Party’s request furnish it with reasonable security against any costs or other liabilities to which it may be or become exposed by reason of such defense, compromise or settlement;
(c) upon the assumption of control by the Indemnifying Party as aforesaid, the Indemnifying Party shall diligently proceed with the defense, compromise or settlement of the Claims at its sole expense, including employment of counsel reasonably satisfactory to the Indemnified Party and, in connection therewith, the Indemnified Party shall co-operate fully, but at the expense of the Indemnifying Party, to make available to the Indemnifying Party all pertinent information and witnesses under the Indemnified Party’s control, make such assignments and take such other steps as in the opinion of counsel for the Indemnifying Party are necessary to enable the Indemnifying Party to conduct such defense; provided
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always that the Indemnified Party shall be entitled to reasonable security from the Indemnifying Party for any expense, costs or other liabilities to which it may be or may become exposed by reason of such co-operation;

(d) the final determination of any such Claims arising from third parties, including all related costs and expenses, will be binding and conclusive upon the Parties as to the validity or invalidity, as the case may be, of such Claims against the Indemnifying Party hereunder; and
(e) should the Indemnifying Party fail to give notice to the Indemnified Party as provided in §6.3(b) above, the Indemnified Party shall be entitled to make such settlement of the Claims as in its sole discretion may appear reasonably advisable, and such settlement or any other final determination of the Claims shall be binding upon the Indemnifying Party.

Sole Remedy

6.4 No Party may make any Claim against any other Party except by making a Claim pursuant to and in accordance with the provisions of this Part 6; provided, however, that if the provisions of this Article 6 shall be invalid or unenforceable, the Parties shall have any other rights and remedies available to them under law or in equity.

PART 7 CONDITIONS PRECEDENT

Mutual Conditions Precedent

7.1 The respective obligations of the Parties to consummate the transactions contemplated hereby, and in particular the completion of the Amalgamation, are subject to the satisfaction, on or before the Effective Date or such other time specified, of the following conditions:

(a) the Amalgamation Resolution shall have been passed by a special majority of Terra Balcanica Shareholders;
(b) if required by the Exchange, the RTO (including the Consolidation, name change and election of new directors) shall have been approved by a majority of Valencia Shareholders;
(c) the Amalgamation shall have become effective on or prior to the Outside Date;
(d) the Exchange shall have conditionally accepted the RTO under the rules and policies of the Exchange, subject only to customary conditions of closing, provided that if the Amalgamation is rejected by the Exchange as the reverse takeover of Valencia, (i) all recourse or rights of appeal to complete the RTO as contemplated hereby will have been exhausted, and (ii) the Party wishing to terminate this Agreement on this basis will have first used commercially
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reasonable efforts to negotiate the terms of the RTO objectionable to the Exchange on terms acceptable to the Parties, acting reasonably;

(e)
the Concurrent Financing shall have been completed;
(f) all other consents, orders and approvals, including regulatory approvals and orders, necessary or desirable for the completion of the transactions provided for in this Agreement and the Amalgamation shall have been obtained or received from the Persons, authorities or bodies having jurisdiction in the circumstances;
(g)
this Agreement shall not have been terminated under Part 9;
(h) dissent rights shall not have been exercised with respect to the Amalgamation by Terra Balcanica Shareholders which will in the aggregate represent 5% or more of the Terra Balcanica Shares outstanding on the record date for the Terra Balcanica Meeting;
(i) the availability of prospectus exemptions for the Amalgamation under Applicable Canadian Securities Laws and the availability of registration exemptions for the Amalgamation under applicable securities laws of the United States in respect of Valencia Shares to be issued in the United States;
(j) the Exchange shall have granted an exemption or waiver from the sponsorship requirement or a sponsor shall have filed an acceptable sponsor’s report with the Exchange;
(k) the Exchange escrow agreement shall be duly executed and delivered by all Parties thereto; and
(l) there shall not be in force any order or decree restraining or enjoining the consummation of the transactions contemplated by this Agreement and the Amalgamation.

The foregoing conditions are for the mutual benefit of Valencia and ValenciaSub on the one hand and Terra Balcanica on the other hand and may be waived, in whole or in part, jointly by the Parties at any time. If any of the foregoing conditions are not satisfied or waived on or before the Effective Date then a Party may terminate this Agreement by written notice to the other Parties in circumstances where the failure to satisfy any such condition is not the result, directly or indirectly, of such terminating Party’s breach of this Agreement.

Additional Conditions to Obligations of Valencia

7.2 The obligations of Valencia and ValenciaSub to consummate the transactions contemplated hereby, and in particular to complete the Amalgamation, are subject to the satisfaction, on or before the Effective Date or such other time specified, of the following conditions:

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(a) Terra Balcanica shall have performed, satisfied and complied with all obligations, covenants and agreements to be performed and complied with by it on or before the Effective Date pursuant to the terms of this Agreement and that, except as affected by the transactions contemplated by this Agreement, the representations and warranties of Terra Balcanica made in this Agreement shall be true and correct in all material respects as at the Effective Date with the same force and effect as if such representations and warranties had been made on and as of such date, other than with respect to the representation made in Section 4.2(d) hereof indicating the number of issued and outstanding Terra Balcanica Shares which shall be materially adjusted after giving effect to each of the Bridge Financing and the Concurrent Financing;
(b) Terra Balcanica shall have furnished Valencia with:
(i) certified copies of the resolutions duly passed by the board of directors of Terra Balcanica approving this Agreement and the consummation of the transactions contemplated hereby;
(ii) certified copies of the Amalgamation Resolutions approved by the shareholders of Terra Balcanica;
(iii) certified copies of Terra Balcanica’s Constating Documents;
(iv) a certificate of good standing of Terra Balcanica and its Subsidiaries dated within one day of the Effective Date;
(v) duly executed investment agreements, including accredited investor certifications, for any shareholders of Terra Balcanica resident in the United States, in a form satisfactory to Valencia and its counsel, acting reasonably;
(vi) a legal opinion, as is customarily provided in transactions similar to the Amalgamation, from legal counsel for Terra Balcanica dated the Effective Date and in a form satisfactory to Valencia and its counsel, acting reasonably;
(vii) legal opinions from Serbian and Bosnian legal counsel dated the Effective Date, or such earlier date as consented to by Valencia, with respect to the corporate status and shareholdings of the Subsidiaries of Terra Balcanica, as well as with respect to ownership and status of mineral exploration licenses held in connection with the Properties, including an assessment of ownership rights as they relate to mineral assets and real property in the local jurisdiction, in a form satisfactory to Valencia and its counsel, acting reasonably;
(viii) a certificate of Terra Balcanica addressed to Valencia and dated the Effective Date, signed on behalf of Terra Balcanica by a senior officer of Terra Balcanica, confirming that the conditions in §7.2(a), (c), (d) and (e)
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have been satisfied, and confirming the number of Terra Balcanica Shares issued and outstanding after giving effect to each of the Bridge Financing and the Concurrent Financing; and

(ix) such other closing documents as may be requested by Valencia, acting reasonably;
(c) no act, Action, suit, proceeding, objection or opposition shall have been taken against or affecting Terra Balcanica or any Subsidiary before or by any domestic or foreign court, tribunal or Governmental Authority or other regulatory or administrative agency or commission by any elected or appointed public official or private person in Canada or elsewhere, whether or not having the force of law and no law, regulation, policy, judgment, decision, order, ruling or directive (whether or not having the force of law) shall have been enacted, promulgated, amended or applied, which in the sole judgment of Valencia, acting reasonably, in either case has had or, if the Amalgamation was consummated, would result in a Material Adverse Change respecting Terra Balcanica or any Subsidiary or would materially impede the ability of the Parties to complete the Amalgamation;
(d) there shall not have occurred any Material Adverse Change of Terra Balcanica or any Subsidiary;
(e) Valencia shall have received consents from the Terra Balcanica nominees to act as directors of Valencia with effect as of the Effective Date; and
(f) the holders of the issued and outstanding Terra Balcanica Shares holding marketable title thereto, free and clear of any and all Encumbrances, liens, charges and demands of whatsoever nature.

The conditions in this §7.2 are for the exclusive benefit of Valencia and may be asserted by Valencia regardless of the circumstances or may be waived by Valencia in its sole discretion, in whole or in part, at any time and from time to time without prejudice to any other rights which Valencia may have. If any of the foregoing conditions in this §7.2 are not satisfied or waived on or before the Outside Date, then Valencia may terminate this Agreement by written notice to Terra Balcanica in circumstances where the failure to satisfy any such condition is not the result, directly or indirectly, of Valencia’s breach of this Agreement (except that no cure period shall be provided for a breach which by its nature cannot be cured).

Additional Conditions to Obligations of Terra Balcanica

7.3 The obligations of Terra Balcanica to consummate the transactions contemplated hereby, and in particular to complete the Amalgamation, is subject to the satisfaction, on or before the Effective Date or such other time specified, of the following conditions:

(a) Valencia and ValenciaSub shall have performed, satisfied and complied with all obligations, covenants and agreements to be performed and complied with by them on or before the Effective Date pursuant to the terms of this Agreement and that, except as affected by the transactions contemplated by this Agreement, the
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representations and warranties of Valencia and ValenciaSub made in this Agreement shall be true and correct in all material respects as at the Effective Date with the same force and effect as if such representations and warranties had been made on and as of such date;

(b) Valencia shall have completed the Consolidation;
(c) the shares of Valencia to be issued to the Terra Balcanica Shareholders shall be issued as fully paid and non-assessable common shares in the capital of Valencia, free and clear of any and all Encumbrances, liens, charges, demands of whatsoever nature, except those pursuant to any relevant Exchange policies or Applicable Canadian Securities Laws;
(d) Valencia shall have furnished Terra Balcanica with;
(i) certified copies of the resolutions duly passed by the boards of directors of Valencia and ValenciaSub approving this Agreement and the consummation of the transactions contemplated hereby;
(ii) certified copies of the resolutions of Valencia, as the sole shareholder of ValenciaSub, approving this Amalgamation Agreement and the consummation of the transactions contemplated hereby;
(iii) certified copies of Valencia and ValenciaSub’s Constating Documents;
(iv) certificates of good standing of Valencia and ValenciaSub dated within one day of the Effective Date;
(v) a legal opinion, as is customarily provided in transactions similar to the Amalgamation, from legal counsel for Valencia dated the Effective Date and in a form satisfactory to Terra Balcanica and its counsel, acting reasonably;
(vi) a certificate of Valencia addressed to Terra Balcanica and dated the Effective Date, signed on behalf of Valencia by a senior officer of Valencia, confirming that the conditions in §7.3(a), (e), and (f) have been satisfied; and
(vii) such other closing documents as may be requested by Terra Balcanica, acting reasonably;
(e) no act, Action, suit, proceeding, objection or opposition shall have been taken against or affecting Valencia before or by any domestic or foreign court, tribunal or Governmental Authority or other regulatory or administrative agency or commission by any elected or appointed public official or private person in Canada or elsewhere, whether or not having the force of law and no law, regulation, policy, judgment, decision, order, ruling or directive (whether or not having the force of law) shall have been enacted, promulgated, amended or
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applied, which in the sole judgment of Terra Balcanica, acting reasonably, in either case has had or, if the Amalgamation was consummated, would result in a Material Adverse Change respecting Valencia or would materially impede the ability of the Parties to complete the Amalgamation;

(f) there shall not have occurred any Material Adverse Change of Valencia or ValenciaSub; and
(g) at the time of the closing of the Amalgamation, the Board of Directors of Valencia will be reconstituted as provided in Section 3.2(f) and each of the current directors and officers of Valencia that will not remain as a director or officer of Valencia after the Effective Time, shall have provided a resignation and mutual release in form and substance satisfactory to Terra Balcanica, acting reasonably.

The conditions in this §7.3 are for the exclusive benefit of Terra Balcanica and may be asserted by Terra Balcanica regardless of the circumstances or may be waived by Terra Balcanica in its sole discretion, in whole or in part, at any time and from time to time without prejudice to any other rights which Terra Balcanica may have. If any of the foregoing conditions in this §7.3 are not satisfied or waived on or before the Outside Date, then Terra Balcanica may terminate this Agreement by written notice to Valencia in circumstances where the failure to satisfy any such condition is not the result, directly or indirectly, of Terra Balcanica’s breach of this Agreement (except that no cure period shall be provided for a breach which by its nature cannot be cured).

Notice and Effect of Failure to Comply with Conditions

7.4 Each of Valencia and Terra Balcanica shall give prompt notice to the other of the occurrence, or failure to occur, at any time from the date hereof to the Effective Date of any event or state of facts which occurrence or failure would, or would be likely to: (i) cause any of the representations or warranties of such Party contained herein to be untrue or inaccurate in any material respect; or (ii) result in the failure to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by any Party hereunder; provided, however, that no such notification will affect the representations or warranties of the Parties or the conditions to the obligations of the Parties hereunder.

Satisfaction of Conditions

7.5 The conditions set out in this Part 7 are conclusively deemed to have been satisfied, waived or released when, with the agreement of the Parties, the Amalgamation Application and Articles are filed under the BCBCA to give effect to the Amalgamation.

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PART 8 AMENDMENT

Amendment

8.1 This Agreement may at any time and from time to time before or after the holding of the Terra Balcanica Meeting be amended by written agreement of the Parties hereto without, subject to Applicable Laws, further notice to or authorization on the part of their respective securityholders and any such amendment may, without limitation:

(a) change the time for performance of any of the obligations or acts of the Parties;
(b) waive any inaccuracies or modify any representation or warranty contained herein or in any document delivered pursuant hereto;
(c) waive compliance with or modify any of the covenants herein contained and waive or modify performance of any of the obligations of the Parties; or
(d) waive compliance with or modify any other conditions precedent contained herein;

provided that no such amendment reduces or materially adversely affects the consideration to be received by Terra Balcanica Shareholders without approval by the affected Terra Balcanica Shareholders given in the same manner as required for the approval of the Amalgamation.

PART 9 TERMINATION

Termination

9.1 (a) This Agreement may be terminated at any time in each of the following circumstances:

(i) by written agreement executed and delivered by Valencia and Terra Balcanica;

(ii) by any Party if the Effective Date shall not have occurred by the Outside Date;

(iii) by Valencia if there has been a material breach by Terra Balcanica of any representation, warrant, covenant or agreement set forth in this Agreement or any of the documents contemplated hereby, which breach Terra Balcanica fails to cure within ten (10) Business Days after written notice thereof is given by Valencia; or

(iv) by Terra Balcanica if there has been a material breach by Valencia or ValenciaSub of any representation, warrant, covenant or agreement set forth in this Agreement or any of the documents contemplated hereby, which breach

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Valencia or ValenciaSub, as applicable, fails to cure within ten (10) Business Days after written notice thereof is given by Terra Balcanica.

(b) If this Agreement is terminated in accordance with the foregoing provisions of this §9.1, this Agreement shall forthwith become void and no Party shall have any liability or further obligation to the other Parties hereunder except for each Party’s obligations under §10.7 and §10.8 hereunder, which shall survive such termination, and provided that neither the termination of this Agreement nor anything contained in this §9.1(b) shall relieve any Party from any liability for any breach by it of this Agreement, including from any inaccuracy in any of its representations and warranties and any non-performance by it of its covenants made herein, prior to the date of such termination.

PART 10 GENERAL

Notices

10.1 All notices that may be or are required to be given pursuant to any provision of this Agreement are to be given or made in writing and served personally, delivered by courier or sent by facsimile or other electronic transmission:

(a) in the case of Valencia or ValenciaSub, to:

Valencia Capital Inc. Suite 1510 - 789 West Pender Street Vancouver, B.C. V6C 1H2 Attention: Adam Garvin Email: [email protected]

with a copy to:

Buttonwood Law Corporation Suite 1510 - 789 West Pender Street Vancouver, B.C. V6C 1H2 Attention: Mouane Sengsavang Email: [email protected]

(b) in the case of Terra Balcanica, to:

Terra Balcanica Resources Corp. 910-800 West Pender Street Vancouver, BC, V6C 2V6 Attention: Catherine Cox Email: [email protected]

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with a copy to:

McMillan LLP Suite 1500, 1055 West Georgia Street Vancouver, BC, V6E 4N7 Attention: Desmond Balakrishnan Email: [email protected]

or such other address as the Parties may, from time to time, advise the other Parties hereto by notice in writing. The date or time of receipt of any such notice will be deemed to be the date of delivery or the time such facsimile or other electronic transmission is received.

Binding Effect

10.2 This Agreement shall be binding upon and enure to the benefit of the Parties hereto and their respective successors and permitted assigns.

Assignment

10.3 Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the Parties hereto without the prior written consent of the other Parties hereto.

Entire Agreement

10.4 This Agreement, together with the agreements and documents referred to herein, constitute the entire agreement among the Parties pertaining to the subject matter hereof and supersede all prior agreements, understandings, negotiations and discussions, whether oral or written, among the Parties with respect to the subject matter hereof.

Public Communications

10.5 Each of Valencia and Terra Balcanica agree to consult with each other prior to issuing any press releases or otherwise making public statements with respect to this Agreement or the Amalgamation or making any filing with any Governmental Authority with respect thereto. Without limiting the generality of the foregoing, no Party shall issue any press release regarding the Amalgamation, this Agreement or any transaction relating to this Agreement without first providing a draft of such press release to the other Party and reasonable opportunity for comment and for such comments to be incorporated into such press release; provided, however, that the foregoing shall be subject to each Party’s overriding obligation to make any such disclosure required in accordance with Applicable Laws. If such disclosure is required and the other Party has not reviewed or commented on the disclosure, the Party making such disclosure shall use all commercially reasonable efforts to give prior oral or written notice to the other Party, and if such prior notice is not possible, to give such notice promptly following such disclosure.

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No Shop

10.6 Each of the Parties will not, nor will it permit any of its respective directors, officers, Affiliates, employees, representatives or agents (including and without limitation, investment bankers, attorneys and accountants) directly or indirectly to, solicit, discuss, encourage or accept any offer for the purchase of such party or the business or the assets of such party, whether as a primary or backup offer, or take any other action with the intention or reasonable foreseeable effect of leading to any commitment or agreement to sell such party or business or the assets of such party (an “ alternative transaction ”). In addition, each of the Parties will conduct its respective operations according to its ordinary and usual course of business consistent with past practices and will not enter into any material transactions or incur any material liabilities (including without limitation, issuing or agreeing to issue any securities other than as expressly contemplated in this Agreement) without obtaining the consent of the other party hereto, which consent will not be unreasonably withheld or delayed. Notwithstanding the foregoing, nothing herein will restrict the parties hereto from taking such actions as may be required in order to discharge their obligations pursuant to applicable corporate laws.

Each Party represents and warrants to the other that it is not currently in any discussions or negotiations with any other person with respect to any alternative transaction. Each Party will promptly notify the other Parties of any alternative transaction of which any director, senior officer or agent of the Party is or becomes aware of, any amendment to any of the foregoing or any request for non-public information relating to the Party. Such notice will include a description of the material terms and conditions of any such proposal and the identity of the person making such proposal, inquiry, request or contact.

Costs

10.7 Each of the parties will be responsible for their respective expenses and costs in connection with the RTO and the Concurrent Financing. For greater certainty, the costs associated with the completion of (i) the Technical Report and (ii) the audited financial statements of Terra Balcanica, as required pursuant to the policies of the Exchange, are the exclusive responsibility to Terra Balcanica. Except as provided above, all fees, costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the Party incurring such cost or expense, whether or not the Amalgamation is completed.

Confidentiality

10.8 (a) The Parties acknowledge that each will and has provided to the other information that is non-public, confidential, and proprietary in nature. Each of the Parties (and their respective directors, officers, Affiliates, representatives, agents and employees) will keep such information confidential and will not disclose such information or use such information for any purpose other than for the purposes of consummating the Amalgamation and the other transactions contemplated by this Agreement, except disclosure to: (a) comply with any Applicable Laws, stock exchange rules or a regulatory authority having jurisdiction; (b) a director, officer
43 -

or employee of a party; and (c) a consultant, contractor or subcontractor of a party that has a bona fide need to be informed and is under an obligation of confidentiality. The foregoing will not apply to information that:

(i) becomes generally available to the public absent any breach of the foregoing;
(ii) was available on a non-confidential basis to a Party prior to its disclosure; or
(iii) becomes available on a non-confidential basis from a third party who is not bound to keep such information confidential.
(b) Each of the Parties agrees that immediately upon termination of this Agreement, each Party will return to the other all confidential information.

Severability

10.9 If any one or more of the provisions or parts thereof contained in this Agreement should be or become invalid, illegal or unenforceable in any respect, the remaining provisions or parts thereof contained herein shall be and shall be conclusively deemed to be severable therefrom and the validity, legality or enforceability of such remaining provisions or parts thereof shall not in any way be affected or impaired by the severance of the provisions or parts thereof severed. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent possible.

Further Assurances

10.10 Each Party hereto shall, from time to time and at all times hereafter, at the request of the other Parties hereto, but without further consideration, do all such further acts, and execute and deliver all such further documents and instruments and provide all such further assurances as may be reasonably required in order to fully perform and carry out the terms and intent hereof.

10.11 The Parties acknowledge that the Filing Statement and the listing of the PostConsolidation Valencia Shares will require the acceptance of the Exchange and the Parties intend, at the appropriate time, to use reasonable commercial efforts to obtain such acceptance. Terra Balcanica and Valencia will fully cooperate in the compilation and drafting of the Filing Statement, to be submitted by Valencia to the Exchange to list the Post-Consolidation Valencia Shares on the Exchange upon completion of the RTO.

Time of Essence

10.12 Time shall be of the essence of this Agreement.

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Applicable Law and Enforcement

10.13 This Agreement shall be governed, including as to validity, interpretation and effect, by the laws of the Province of British Columbia and the laws of Canada applicable therein. The Parties hereby irrevocably submit and attorn to the non-exclusive jurisdiction of the courts of the Province of British Columbia, sitting in the City of Vancouver.

Waiver

10.14 Any Party may, on its own behalf only, (i) extend the time for the performance of any of the obligations or acts of the other Parties, (ii) waive compliance with the other Parties’ agreements or the fulfillment of any conditions to its own obligations contained herein, or (iii) waive inaccuracies in the other Parties’ representations or warranties contained herein or in any document delivered by the other Parties; provided, however, that any such extension or waiver shall be valid only if set forth in an instrument in writing and, unless otherwise provided in the written waiver, will be limited to the specific breach or condition waived.

Counterparts

10.15 This Agreement and any amendments thereto (and any other agreements, notices or documents contemplated thereby) may be executed and delivered by facsimile transmission or other form of electronic recorded transmission (including via electronic mail via the Internet) and in any number of counterparts and all such facsimile or other electronically transmitted copies and counterparts shall be deemed to be an original hereof and for all purposes constitute one agreement, be binding on the Parties, provided each Party has executed and delivered at least one counterpart to the other Parties, and each may be relied upon by each Party as such for any and all purposes.

[signature page follows]

DocuSign Envelope ID: 686E8621-5770-411D-8C27-53C451AE926C

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IN WITNESS WHEREOF the Parties have executed this Agreement as of the date first above written.

VALENCIA CAPITAL INC.

Per:

==> picture [97 x 37] intentionally omitted <==

Authorized Signatory

1314152 B.C. LTD.

Per: Authorized Signatory

TERRA BALCANICA RESOURCES CORP.

Per: Authorized Signatory

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IN WITNESS WHEREOF the Parties have executed this Agreement as of the date first above written.

VALENCIA CAPITAL INC.

Per:

Authorized Signatory

1314152 B.C. LTD.

Per: Authorized Signatory

TERRA BALCANICA RESOURCES CORP.

Per:

==> picture [173 x 46] intentionally omitted <==

Authorized Signatory

EXHIBIT “A”

FORM OF ARTICLES OF AMALCO

Number:

BUSINESS CORPORATIONS ACT

ARTICLES

of

TB RESOURCES CORP.

PART 1 INTERPRETATION .................................................................................................................................... 1 PART 2 SHARES AND SHARE CERTIFICATES ................................................................................................. 2 PART 3 ISSUE OF SHARES ..................................................................................................................................... 4 PART 4 SHARE REGISTERS ................................................................................................................................... 5 PART 5 SHARE TRANSFERS .................................................................................................................................. 5 PART 6 TRANSMISSION OF SHARES .................................................................................................................. 6 PART 7 PURCHASE, REDEEM OR OTHERWISE ACQUIRE SHARES .......................................................... 7 PART 8 BORROWING POWERS ............................................................................................................................ 8 PART 9 ALTERATIONS ........................................................................................................................................... 8 PART 10 MEETINGS OF SHAREHOLDERS ...................................................................................................... 10 PART 11 PROCEEDINGS AT MEETINGS OF SHAREHOLDERS .................................................................. 12 PART 12 VOTES OF SHAREHOLDERS .............................................................................................................. 16 PART 13 DIRECTORS ............................................................................................................................................. 21 PART 14 ELECTION AND REMOVAL OF DIRECTORS ................................................................................. 22 PART 15 POWERS AND DUTIES OF DIRECTORS ........................................................................................... 25 PART 16 INTERESTS OF DIRECTORS AND OFFICERS ................................................................................ 26 PART 17 PROCEEDINGS OF DIRECTORS ........................................................................................................ 27 PART 18 EXECUTIVE AND OTHER COMMITTEES ....................................................................................... 30 PART 19 OFFICERS ................................................................................................................................................ 31 PART 20 INDEMNIFICATION .............................................................................................................................. 32 PART 21 DIVIDENDS .............................................................................................................................................. 34 PART 22 ACCOUNTING RECORDS AND AUDITOR ....................................................................................... 36 PART 23 NOTICES .................................................................................................................................................. 36 PART 24 SEAL .......................................................................................................................................................... 38 PART 25 PROHIBITIONS ....................................................................................................................................... 39

Number:

BUSINESS CORPORATIONS ACT

ARTICLES

of

TB RESOURCES CORP. (the “Company”)

PART 1 INTERPRETATION

Definitions

1.1 In these Articles, unless the context otherwise requires:

(a) “ 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;

(b) “ board of directors ”, “ directors ” and “ board ” mean the directors or sole director of the Company for the time being;

(c) “ Interpretation Act ” means the Interpretation 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;

(d) “ legal personal representative ” means the personal or other legal representative of the shareholder;

(e) “ registered address ” of a shareholder means the shareholder’s address as recorded in the central securities register;

(f) “ seal ” means the seal of the Company, if any;
(g) “ share ” means a share in the share structure of the Company; and

(h) “ special majority ” means the majority of votes described in §11.2 which is required to pass a special resolution.

Act and Interpretation Act Definitions Applicable

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

PART 2 SHARES AND SHARE CERTIFICATES

Authorized Share Structure

2.1 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.

Form of Share Certificate

2.2 Each share certificate issued by the Company must comply with, and be signed as required by, the Act.

Shareholder Entitled to Certificate, Acknowledgment or Written Notice

2.3 Unless the shares of which the shareholder is the registered owner are uncertificated shares, 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 acknowledgment 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. If a shareholder is the registered owner of uncertificated shares, the Company must send to a holder of an uncertificated share a written notice containing the information required by the Act within a reasonable time after the issue or transfer of such share.

Delivery by Mail

2.4 Any share certificate or non-transferable written acknowledgment 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.

Replacement of Worn Out or Defaced Certificate or Acknowledgement

2.5 If a share certificate or a non-transferable written acknowledgment of the shareholder’s right to obtain a share certificate is worn out or defaced, the Company must, on

production of the share certificate or acknowledgment, as the case may be, and on such other terms, if any, as are deemed fit:

(a) cancel the share certificate or acknowledgment; and
(b) issue a replacement share certificate or acknowledgment.

Replacement of Lost, Stolen or Destroyed Certificate or Acknowledgment

2.6 If a share certificate or a non-transferable written acknowledgment of a shareholder’s right to obtain a share certificate is lost, stolen or destroyed, the Company must issue a replacement share certificate or acknowledgment, as the case may be, to the person entitled to that share certificate or acknowledgment, if it receives:

(a) proof satisfactory to it of the loss, theft or destruction; and
(b) any indemnity the directors consider adequate.

Splitting Share Certificates

2.7 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.

Certificate Fee

2.8 There must be paid to the Company, in relation to the issue of any share certificate under §2.5, §2.6 or §2.7, the amount, if any, not exceeding the amount prescribed under the Act, determined by the directors.

Recognition of Trusts

2.9 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 required by law or statute or these Articles 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.

PART 3 ISSUE OF SHARES

Directors Authorized

3.1 Subject to the Act and the rights, if any, of the holders of issued shares of the Company, the Company may allot, issue, 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 consideration (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.

Commissions and Discounts

3.2 The Company may at any time pay a reasonable commission or allow a reasonable discount to any person in consideration of that person’s purchase or agreement to purchase shares of the Company from the Company or any other person’s procurement or agreement to procure purchasers for shares of the Company.

Brokerage

3.3 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.

Conditions of Issue

3.4 Except as provided for by the 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 §3.1.

Share Purchase Warrants and Rights

3.5 Subject to the 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.

PART 4 SHARE REGISTERS

Central Securities Register

4.1 As required by and subject to the Act, the Company must maintain in British Columbia a central securities register and may appoint an agent to maintain such register. The directors may appoint one or more agents, including the agent appointed to keep the central securities register, as transfer agent for shares or any class or series of shares and the same or another agent as registrar for shares or such class or series of 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.

PART 5 SHARE TRANSFERS

Registering Transfers

5.1 A transfer of a share must not be registered unless the Company or the transfer agent or registrar for the class or series of shares to be transferred has received:

(a) except as exempted by the Act, a duly signed proper instrument of transfer in respect of the share;

(b) if a share certificate has been issued by the Company in respect of the share to be transferred, that share certificate;

(c) if a non-transferable written acknowledgment 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 acknowledgment; and

(d) such other evidence, if any, as the Company or the transfer agent or registrar for the class or series of share to be transferred may require to prove the title of the transferor or the transferor’s right to transfer the share, the due signing of the instrument of transfer and the right of the transferee to have the transfer registered.

Form of Instrument of Transfer

5.2 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 of that class or series or in some other form that may be approved by the directors.

Transferor Remains Shareholder

5.3 Except to the extent that the Act otherwise provides, the transferor of a share is deemed to remain the holder of it until the name of the transferee is entered in a securities register of the Company in respect of the transfer.

Signing of Instrument of Transfer

5.4 If a shareholder, or the shareholder’s 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 acknowledgments 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.

Enquiry as to Title Not Required

5.5 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 transferred, of any interest in such shares, of any share certificate representing such shares or of any written acknowledgment of a right to obtain a share certificate for such shares.

Transfer Fee

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

PART 6 TRANSMISSION OF SHARES

Legal Personal Representative Recognized on Death

6.1 In case of the death of a shareholder, the legal personal representative of the shareholder, or in the case of shares registered in the shareholder’s name and the name of another person in joint tenancy, 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 of a shareholder, the Company shall receive the documentation required by the Act.

Rights of Legal Personal Representative

6.2 The legal personal representative of a shareholder 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 Act and the directors have been deposited with the Company. This §6.2 does not apply in the case of the death of a shareholder with respect to shares registered in the name of the shareholder and the name of another person in joint tenancy.

PART 7 PURCHASE, REDEEM OR OTHERWISE ACQUIRE SHARES

Company Authorized to Purchase, Redeem or Otherwise Acquire Shares

7.1 Subject to §7.2, the special rights or restrictions attached to the shares of any class or series and the Act, the Company may, if authorized by the directors, purchase, redeem or otherwise acquire any of its shares at the price and upon the terms determined by the directors.

Purchase When Insolvent

7.2 The Company must not make a payment or provide any other consideration to purchase, redeem 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.

Sale and Voting of Purchased, Redeemed or Otherwise Acquired Shares

7.3 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.
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Company Entitled to Purchase, Redeem or Otherwise Acquire Share Fractions

7.4 The Company may, without prior notice to the holders, purchase, redeem or otherwise acquire for fair value any and all outstanding share fractions of any class or kind of shares in its authorized share structure as may exist at any time and from time to time. Upon the Company delivering the purchase funds and confirmation of purchase or redemption of the share fractions to the holders’ registered or last known address, or if the Company has a transfer agent then to such agent for the benefit of and forwarding to such holders, the Company shall thereupon amend its central securities register to reflect the purchase or redemption of such share fractions and if the Company has a transfer agent, shall direct the transfer agent to amend the central securities register accordingly. Any holder of a share fraction, who upon receipt of the funds and confirmation of purchase or redemption of same, disputes the fair value paid for the fraction, shall have the right to apply to the court to request that it set the price and terms of payment and make consequential orders and give directions the court considers appropriate, as if the Company were the “acquiring person” as contemplated by Division 6, Compulsory Acquisitions, Section 300 under the Act and the holder were an “offeree” subject to the provisions contained in such Division, mutatis mutandis .

PART 8 BORROWING POWERS

8.1

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 the directors consider appropriate;

(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.

PART 9 ALTERATIONS

Alteration of Authorized Share Structure

9.1 Subject to §9.2 and the Act, the Company may by special resolution:

(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 Act,

and, if applicable, alter its Notice of Articles and Articles accordingly.

Special Rights or Restrictions

9.2 Subject to the Act and in particular those provisions of the Act relating to the rights of holders of outstanding shares to vote if their rights are prejudiced or interfered with, the Company may by special 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,

and alter its Notice of Articles and Articles accordingly.

Change of Name

9.3 The Company may

(a) if the Company is a public company, by directors’ resolution, authorize an alteration to its Notice of Articles, in order to change its name;

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(b) if the Company is not a public company, by special resolution, authorize an alteration to its Notice of Articles, in order to change its name, and

(c) by ordinary or directors’ resolution, authorize an alteration to its Notice of Articles, in order to adopt or change any translation of that name.

Other Alterations

9.4 If the Act does not specify the type of resolution and these Articles do not specify another type of resolution, the Company may by special resolution alter these Articles.

PART 10 MEETINGS OF SHAREHOLDERS

Annual General Meetings

10.1 Unless an annual general meeting is deferred or waived in accordance with the 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.

Resolution Instead of Annual General Meeting

10.2 If all the shareholders who are entitled to vote at an annual general meeting consent in writing by a unanimous resolution 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 §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.

Calling of Meetings of Shareholders

10.3 The directors may, at any time, call a meeting of shareholders.

Notice for Meetings of Shareholders

10.4 The Company must send notice of the date, time and location of any meeting of shareholders (including, without limitation, any notice specifying the intention to propose a resolution as an exceptional resolution, a special resolution or a special separate resolution, and any notice to consider approving an amalgamation into a foreign jurisdiction, an arrangement or the adoption of an amalgamation agreement, and any notice of a general meeting, class meeting or series meeting), 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:

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(a) if the Company is a public company, 21 days;
(b) otherwise, 10 days.

Record Date for Notice

10.5 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 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 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.

Record Date for Voting

10.6 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 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.

Failure to Give Notice and Waiver of Notice

10.7 The accidental omission to send notice of any meeting of shareholders 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 that entitlement or may agree to reduce the period of that notice. Attendance of a person at a meeting of shareholders is a waiver of entitlement to notice of the meeting unless that person attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called.

Notice of Special Business at Meetings of Shareholders

10.8 If a meeting of shareholders is to consider special business within the meaning of §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
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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.

Place of Meetings

10.9 In addition to any location in British Columbia, any general meeting may be held in any location outside British Columbia approved by a resolution of the directors.

PART 11 PROCEEDINGS AT MEETINGS OF SHAREHOLDERS

Special Business

11.1 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;

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(ix) any other business which, under these Articles or the Act, may be transacted at a meeting of shareholders without prior notice of the business being given to the shareholders.

Special Majority

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

Quorum

11.3 Subject to the special rights or restrictions attached to the shares of any class or series of shares, and to §11.4, the quorum for the transaction of business at a meeting of shareholders is at least one person who is, or who represents by proxy, one or more shareholders who, in the aggregate, holds at least 5% of the issued shares entitled to be voted at the meeting.

One Shareholder May Constitute Quorum

11.4 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.

Persons Entitled to Attend Meeting

11.5 In addition to those persons who are entitled to vote at a meeting of shareholders, the only other persons entitled to be present at the meeting are 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, any persons invited to be present at the meeting by the directors or by the chair of the meeting and any persons entitled or required under the Act or these Articles to be present at the meeting; but if any of those persons does attend the meeting, 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.

Requirement of Quorum

11.6 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.

Lack of Quorum

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

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(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.

Lack of Quorum at Succeeding Meeting

11.8 If, at the meeting to which the meeting referred to in §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 shall be deemed to constitute a quorum.

Chair

11.9 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, the president, if any.

Selection of Alternate Chair

11.10 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 may choose either one of their number or the lawyer of the Company to be chair of the meeting. If all of the directors present decline to take the chair or fail to so choose or if no director is present or the lawyer of the Company declines to take the chair, 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.

Adjournments

11.11 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.

Notice of Adjourned Meeting

11.12 It is not necessary to give any notice of an adjourned meeting of shareholders 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.

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Decisions by Show of Hands or Poll

11.13 Subject to the 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 any shareholder entitled to vote who is present in person or by proxy.

Declaration of Result

11.14 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 §11.13, conclusive evidence without proof of the number or proportion of the votes recorded in favour of or against the resolution.

Motion Need Not be Seconded

11.15 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.

Casting Vote

11.16 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.

Manner of Taking Poll

11.17 Subject to §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

Demand for Poll on Adjournment

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

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Chair Must Resolve Dispute

11.19 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 the determination of the chair made in good faith is final and conclusive.

Casting of Votes

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

No Demand for Poll on Election of Chair

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

Demand for Poll Not to Prevent Continuance of Meeting

11.22 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.

Retention of Ballots and Proxies

11.23 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.

PART 12 VOTES OF SHAREHOLDERS

Number of Votes by Shareholder or by Shares

12.1 Subject to any special rights or restrictions attached to any shares and to the restrictions imposed on joint shareholders under §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.

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Votes of Persons in Representative Capacity

12.2 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.

Votes by Joint Holders

12.3 If there are joint shareholders registered in respect of any share:

(a) any one of the joint shareholders may vote at any meeting of shareholders, 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 of shareholders, 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.

Legal Personal Representatives as Joint Shareholders

12.4 Two or more legal personal representatives of a shareholder in whose sole name any share is registered are, for the purposes of §12.3, deemed to be joint shareholders registered in respect of that share.

Representative of a Corporate Shareholder

12.5 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 be received:

(i) 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 any adjourned meeting; or

(ii) at the meeting or any adjourned meeting, by the chair of the meeting or adjourned meeting or by a person designated by the chair of the meeting or adjourned meeting;

(b) if a representative is appointed under this §12.5:
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(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.

Proxy Provisions Do Not Apply to All Companies

12.6 If and for so long as the Company 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, then §12.7 to §12.15 are not mandatory, however the directors of the Company are authorized to apply all or part of such sections or to adopt alternative procedures for proxy form, deposit and revocation procedures to the extent that the directors deem necessary in order to comply with securities laws applicable to the Company.

Appointment of Proxy Holders

12.7 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 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.

Alternate Proxy Holders

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

Proxy Holder Need Not Be Shareholder

12.9 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 §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

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(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.

Deposit of Proxy

12.10 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 any adjourned meeting; or

(b) unless the notice provides otherwise, be received, at the meeting or any adjourned meeting, by the chair of the meeting or adjourned meeting or by a person designated by the chair of the meeting or adjourned meeting.

A proxy may be sent to the Company by written instrument, fax or any other method of transmitting legibly recorded messages, including through Internet or telephone voting or by email, if permitted by the notice calling the meeting or the information circular for the meeting.

Validity of Proxy Vote

12.11 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 or any adjourned meeting at which the proxy is to be used; or

(b) at the meeting or any adjourned meeting by the chair of the meeting or adjourned meeting, before any vote in respect of which the proxy has been given has been taken.

Form of Proxy

12.12 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:

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[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 is given in respect of all shares registered in the name of the undersigned): ___

Signed [month, day, year]

[Signature of shareholder]

[Name of shareholder—printed]

Revocation of Proxy

12.13 Subject to §12.14, every proxy may be revoked by an instrument in writing that 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 or any adjourned meeting at which the proxy is to be used; or

(b) at the meeting or any adjourned meeting, by the chair of the meeting or adjourned meeting, before any vote in respect of which the proxy has been given has been taken.

Revocation of Proxy Must Be Signed

12.14 An instrument referred to in §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 the shareholder’s 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 §12.5.

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Production of Evidence of Authority to Vote

12.15 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.

PART 13 DIRECTORS

First Directors; Number of Directors

13.1 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 Act. The number of directors, excluding additional directors appointed under §14.8, is set at:

(a) subject to §(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 in office pursuant to §14.4;

(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 in office pursuant to §14.4.

Change in Number of Directors

13.2 If the number of directors is set under §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; or

(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 then the directors, subject to §14.8, may appoint directors to fill those vacancies.

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Directors’ Acts Valid Despite Vacancy

13.3 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.

Qualifications of Directors

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

Remuneration of Directors

13.5 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.

Reimbursement of Expenses of Directors

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

Special Remuneration for Directors

13.7 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, he or she may be paid remuneration fixed by the directors, or at the option of the directors, fixed by ordinary resolution, and such remuneration will be in addition to any other remuneration that he or she may be entitled to receive.

Gratuity, Pension or Allowance on Retirement of Director

13.8 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 dependants and may make contributions to any fund and pay premiums for the purchase or provision of any such gratuity, pension or allowance.

PART 14 ELECTION AND REMOVAL OF DIRECTORS

Election at Annual General Meeting

14.1 At every annual general meeting and in every unanimous resolution contemplated by §10.2:

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(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 §(a), but are eligible for re-election or re-appointment.

Consent to be a Director

14.2 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 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

Failure to Elect or Appoint Directors

14.3 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 §10.2, on or before the date by which the annual general meeting is required to be held under the Act; or

(b) the shareholders fail, at the annual general meeting or in the unanimous resolution contemplated by §10.2, to elect or appoint any directors;

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

(c) when his or her successor is elected or appointed; and
(d) when he or she otherwise ceases to hold office under the Act or these Articles.

Places of Retiring Directors Not Filled

14.4 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 but their term of office shall expire when 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.

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Directors May Fill Casual Vacancies

14.5 Any casual vacancy occurring in the board of directors may be filled by the directors.

Remaining Directors Power to Act

14.6 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 calling a meeting of shareholders for the purpose of filling any vacancies on the board of directors or, subject to the Act, for any other purpose.

Shareholders May Fill Vacancies

14.7 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.

Additional Directors

14.8 Notwithstanding §13.1 and §13.2, between annual general meetings or by unanimous resolutions contemplated by §10.2, the directors may appoint one or more additional directors, but the number of additional directors appointed under this §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 §14.8.

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

Ceasing to be a Director

14.9 A director ceases to be a director when:

(a) the term of office of the director expires;
(b) the director dies;

(d) the director is removed from office pursuant to §14.10 or §14.11.
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Removal of Director by Shareholders

14.10 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.

Removal of Director by Directors

14.11 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.

PART 15 POWERS AND DUTIES OF DIRECTORS

Powers of Management

15.1 The directors must, subject to the 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 Act or by these Articles, required to be exercised by the shareholders of the Company.

Appointment of Attorney of Company

15.2 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.

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PART 16 INTERESTS OF DIRECTORS AND OFFICERS

Obligation to Account for Profits

16.1 A director or senior officer who holds a disclosable interest (as that term is used in the 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 Act.

Restrictions on Voting by Reason of Interest

16.2 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.

Interested Director Counted in Quorum

16.3 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.

Disclosure of Conflict of Interest or Property

16.4 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 Act.

Director Holding Other Office in the Company

16.5 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.

No Disqualification

16.6 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.

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Professional Services by Director or Officer

16.7 Subject to the 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.

Director or Officer in Other Corporations

16.8 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 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.

PART 17 PROCEEDINGS OF DIRECTORS

Meetings of Directors

17.1 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.

Voting at Meetings

17.2 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.

Chair of Meetings

17.3 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

(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

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(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.

Meetings by Telephone or Other Communications Medium

17.4 A director may participate in a meeting of the directors or of any committee of the directors:

(a) in person; or

(b) by telephone or by 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.

A director who participates in a meeting in a manner contemplated by this §17.4 is deemed for all purposes of the Act and these Articles to be present at the meeting and to have agreed to participate in that manner.

Calling of Meetings

17.5 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.

Notice of Meetings

17.6 Other than for meetings held at regular intervals as determined by the directors pursuant to §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 and the alternate directors by any method set out in §23.1 or orally or by telephone.

When Notice Not Required

17.7 It is not necessary to give notice of a meeting of the directors to a director or an alternate 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 or alternate director has waived notice of the meeting.

Meeting Valid Despite Failure to Give Notice

17.8 The accidental omission to give notice of any meeting of directors to, or the nonreceipt of any notice by, any director or alternate director, does not invalidate any proceedings at that meeting.

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Waiver of Notice of Meetings

17.9 Any director or alternate 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 that 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. Attendance of a director or alternate director at a meeting of the directors is a waiver of notice of the meeting unless that director or alternate director attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called.

Quorum

17.10 The quorum necessary for the transaction of the business of the directors may be set by the directors and, if not so set, is deemed to be 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.

Validity of Acts Where Appointment Defective

17.11 Subject to the 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.

Consent Resolutions in Writing

17.12 A resolution of the directors or of any committee of the directors may be passed without a meeting:

(a) in all cases, if each of the directors entitled to vote on the resolution consents to it in writing; or

(b) in the case of a resolution to approve a contract or transaction in respect of which a director has disclosed that he or she has or may have a disclosable interest, if each of the other directors who have not made such a disclosure consents in writing to the resolution.

A consent in writing under this §17.12 may be by signed document, fax, email or any other method of transmitting legibly recorded messages. A consent in writing may be in two or more counterparts which together are deemed to constitute one consent in writing. A resolution of the directors or of any committee of the directors passed in accordance with this §17.12 is effective on the date stated in the consent in writing or on the latest date stated on any counterpart and 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 Act and all the requirements of these Articles relating to meetings of the directors or of a committee of the directors.

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PART 18 EXECUTIVE AND OTHER COMMITTEES

Appointment and Powers of Executive Committee

18.1 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.

Appointment and Powers of Other Committees

18.2 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 §(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 §(b) subject to the conditions set out in the resolution or any subsequent directors’ resolution.

Obligations of Committees

18.3 Any committee appointed under §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
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(b) report every act or thing done in exercise of those powers at such times as the directors may require.

Powers of Board

18.4 The directors may, at any time, with respect to a committee appointed under §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.

Committee Meetings

18.5 Subject to §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 §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;

(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.

PART 19 OFFICERS

Directors May Appoint Officers

19.1 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.

Functions, Duties and Powers of Officers

19.2 The directors may, for each officer:

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(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

Qualifications

19.3 No person may be appointed as an officer unless that person is qualified in accordance with the 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 a managing director must be a director. Any other officer need not be a director.

Remuneration and Terms of Appointment

19.4 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.

PART 20 INDEMNIFICATION

Definitions

20.1 In this Part 20:

(a) “ eligible party ”, in relation to a company, means an individual who: (i) is or was a director, alternate director or officer of the Company; (ii) is or was a director, alternate director or officer of another corporation (A) at a time when the corporation is or was an affiliate of the Company, or (B) at the request of the Company; or

(iii) at the request of the Company, is or was, or holds or held a position equivalent to that of, a director, alternate director or officer of a partnership, trust, joint venture or other unincorporated entity,

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and includes, except in the definition of “eligible proceeding” and Sections 163(1)(c) and (d) and 165 of the Act, the heirs and personal or other legal representatives of that individual;

(b) “ eligible penalty ” means a judgment, penalty or fine awarded or imposed in, or an amount paid in settlement of, an eligible proceeding;

(c) “ eligible proceeding ” means a proceeding in which an eligible party or any of the heirs and personal or other legal representatives of the eligible party, by reason of the eligible party being or having been a director, alternate director or officer of, or holding or having held a position equivalent to that of a director or officer of, the Company or an associated corporation

(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;

(d) “ expenses ” has the meaning set out in the Act and includes costs, charges and expenses, including legal and other fees, but does not include judgments, penalties, fines or amounts paid in settlement of a proceeding; and

(e) “ proceeding ” includes any legal proceeding or investigative action, whether current, threatened, pending or completed.

Mandatory Indemnification of Eligible Parties

20.2 Subject to the Act, the Company must indemnify each eligible party 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 eligible party is deemed to have contracted with the Company on the terms of the indemnity contained in this §20.2.

Indemnification of Other Persons

20.3 Subject to any restrictions in the Act, the Company may agree to indemnify and may indemnify any person (including an eligible party) against eligible penalties and pay expenses incurred in connection with the performance of services by that person for the Company.

Authority to Advance Expenses

20.4 The Company may advance expenses to an eligible party to the extent permitted by and in accordance with the Act.

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Non-Compliance with Act

20.5 Subject to the Act, the failure of an eligible party of the Company to comply with the Act or these Articles or, if applicable, any former Companies Act or former Articles does not, of itself, invalidate any indemnity to which he or she is entitled under this Part 20.

Company May Purchase Insurance

20.6 The Company may purchase and maintain insurance for the benefit of any eligible party (or the heirs or legal personal representatives of any eligible party) against any liability incurred by any eligible party.

PART 21 DIVIDENDS

Payment of Dividends Subject to Special Rights

21.1 The provisions of this Part 21 are subject to the rights, if any, of shareholders holding shares with special rights as to dividends.

Declaration of Dividends

21.2 Subject to the Act, the directors may from time to time declare and authorize payment of such dividends as they may deem advisable.

No Notice Required

21.3 The directors need not give notice to any shareholder of any declaration under §21.2.

Record Date

21.4 The directors must 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.

Manner of Paying Dividend

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

Settlement of Difficulties

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

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(a) set the value for distribution of specific assets;

(b) determine that money in substitution for all or any part of the specific assets to which any shareholders are entitled may be paid to any shareholders on the basis of the value so fixed in order to adjust the rights of all parties; and

When Dividend Payable

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

Dividends to be Paid in Accordance with Number of Shares

21.8 All dividends on shares of any class or series of shares must be declared and paid according to the number of such shares held.

Receipt by Joint Shareholders

21.9 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.

Dividend Bears No Interest

21.10 No dividend bears interest against the Company.

Fractional Dividends

21.11 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.

Payment of Dividends

21.12 Any dividend or other distribution payable in money 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 registered address of the shareholder, or in the case of joint shareholders, to the registered 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.

Capitalization of Retained Earnings or Surplus

21.13 Notwithstanding anything contained in these Articles, the directors may from time to time capitalize any retained earnings or surplus of the Company and may from time to time

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issue, as fully paid, shares or any bonds, debentures or other securities of the Company as a dividend representing the retained earnings or surplus so capitalized or any part thereof.

PART 22 ACCOUNTING RECORDS AND AUDITOR

Recording of Financial Affairs

22.1 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 Act.

Inspection of Accounting Records

22.2 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.

Remuneration of Auditor

22.3 The directors may set the remuneration of the auditor of the Company.

PART 23 NOTICES

Method of Giving Notice

23.1 Unless the Act or these Articles provide otherwise, a notice, statement, report or other record required or permitted by the Act or these Articles to be sent by or to a person may be sent by:

(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;

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(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.

Deemed Receipt of Mailing

23.2

A notice, statement, report or other record that is:

(a) mailed to a person by ordinary mail to the applicable address for that person referred to in §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;

(b) faxed to a person to the fax number provided by that person under §23.1 is deemed to be received by the person to whom it was faxed on the day it was faxed; and

(c) emailed to a person to the e-mail address provided by that person under §23.1 is deemed to be received by the person to whom it was e-mailed on the day that it was emailed.

Certificate of Sending

23.3 A certificate signed by the secretary, if any, or other officer of the Company or of any other corporation acting in that capacity on behalf of the Company stating that a notice, statement, report or other record was sent in accordance with §23.1 is conclusive evidence of that fact.

Notice to Joint Shareholders

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

Notice to Legal Personal Representatives and Trustees

23.5 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:

38 -
(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 §(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.

Undelivered Notices

23.6 If on two consecutive occasions, a notice, statement, report or other record is sent to a shareholder pursuant to §23.1 and on each of those occasions any such record is returned because the shareholder cannot be located, the Company shall not be required to send any further records to the shareholder until the shareholder informs the Company in writing of his or her new address.

PART 24 SEAL

Who May Attest Seal

24.1 Except as provided in §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.

Sealing Copies

24.2 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 §24.1, the impression of the seal may be attested by the signature of any director or officer or the signature of any other person as may be determined by the directors.

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Mechanical Reproduction of Seal

24.3 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 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 such persons as are authorized under §24.1 to attest the Company’s seal 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.

PART 25 PROHIBITIONS

Definitions

25.1 In this Part 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 §(a) or §(b);

(b) “ security ” has the meaning assigned in the Securities Act (British Columbia); and
(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.
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Application

25.2 §25.3 does not apply to the Company if and for so long as it is a public company, a private company which is no longer eligible to use the private issuer exemption under the Securities Act (British Columbia) or a pre-existing reporting company which has the Statutory Reporting Company Provisions as part of its Articles or a company to which the Statutory Reporting Company Provisions apply.

Consent Required for Transfer of Shares or Designated Securities

25.3 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.

Full name and signature of Director	Date of signing
_________ Print Name: Director

EXHIBIT “B”

FORM OF AMALGAMATION APPLICATION

BC Limited Company

==> picture [162 x 48] intentionally omitted <==

Telephone: 1 877 526-1526 www.bcreg.ca

AMALGAMATION APPLICATION

BUSINESS CORPORATIONS ACT , section 275

Mailing Address: PO Box 9431 Stn Prov Govt Courier Address: 200 – 940 Blanshard Street Victoria BC V8W 9V3 Victoria BC V8W 3E6

DO NOT MAIL THIS FORM to BC Registry Services unless you are instructed to do so by registry staff. The Regulation under the Business Corporations Act requires the electronic version of this form to be filed on the Internet at www.corporateonline.gov.bc.ca

Freedom of Information and Protection of Privacy Act (FOIPPA): Personal information provided on this form is collected, used and disclosed under the authority of the FOIPPA and the Business Corporations Act for the purposes of assessment. Questions regarding the collection, use and disclosure of personal information can be directed to the Manager of Registries Operations at 1 877 526-1526, PO Box 9431 Stn Prov Govt, Victoria BC V8W 9V3.

A INITIAL INFORMATION – When the amalgamation is complete, your company will be a BC limited company.

What kind of company(ies) will be involved in this amalgamation?

(Check all applicable boxes.)

BC company BC unlimited liability company B NAME OF COMPANY – Choose one of the following:

TB Resources Corp. The name

is the name ,

reserved for the amalgamated company. The name reservation number is: , OR The company is to be amalgamated with a name created by adding “B.C. Ltd.” after the incorporation number, OR The amalgamated company is to adopt, as its name, the name of one of the amalgamating companies. The name of the amalgamating company being adopted is: The incorporation number of that company is: Please note: If you want the name of an amalgamating corporation that is a foreign corporation, you must obtain a name approval before completing this amalgamation application. C AMALGAMATION STATEMENT – Please indicate the statement applicable to this amalgamation. With Court Approval: This amalgamation has been approved by the court and a copy of the entered court order approving the amalgamation has been obtained and has been deposited in the records office of each of the amalgamating companies.

OR

Without Court Approval:

This amalgamation has been effected without court approval. A copy of all of the required affidavits under section 277(1) have been obtained and the affidavit obtained from each amalgamating company has been deposited in that company’s records office.

Page 1

FORM 13 LTD (SEP 2017)

D AMALGAMATION EFFECTIVE DATE – Choose one of the following:

The amalgamation is to take effect at the time that this application is filed with the registrar. YYYY / MM / DD The amalgamation is to take effect at 12:01a.m. Pacific Time on being a date that is not more than ten days after the date of the filing of this application. YYYY / MM / DD The amalgamation is to take effect at a.m. or p.m. Pacific Time on being a date and time that is not more than ten days after the date of the filing of this application. E AMALGAMATING CORPORATIONS Enter the name of each amalgamating corporation below. For each company, enter the incorporation number. If the amalgamating corporation is a foreign corporation, enter the foreign corporation’s jurisdiction and if registered in BC as an extraprovincial company, enter the extraprovincial company’s registration number. Attach an additional sheet if more space is required. BC INCORPORATION NUMBER, OR FOREIGN NAME OF AMALGAMATING CORPORATION EXTRAPROVINCIAL REGISTRATION CORPORATION’S NUMBER IN BC JURISDICTION 1. Terra Balcanica Resources Corp. BC1250598 2. 1314152 B.C. Ltd. BC1314152 3. 4. 5. F FORMALITIES TO AMALGAMATION If any amalgamating corporation is a foreign corporation, section 275 (1)(b) requires an authorization for the amalgamation from the foreign corporation’s jurisdiction to be filed. This is to confirm that each authorization for the amalgamation required under section 275(1)(b) is being submitted for filing concurrently with this application. G CERTIFIED CORRECT – I have read this form and found it to be correct.

This form must be signed by an authorized signing authority for each of the amalgamating companies as set out in Item E.


NAME OF AUTHORIZED SIGNING AUTHORITY FOR THE AMALGAMATING CORPORATION 1.	SIGNATURE OF AUTHORIZED SIGNING AUTHORITY FOR THE AMALGAMATING CORPORATION X Terra Balcanica Resources Corp.	DATE SIGNED YYYY / MM / DD
NAME OF AUTHORIZED SIGNING AUTHORITY FOR THE AMALGAMATING CORPORATION 2.	SIGNATURE OF AUTHORIZED SIGNING AUTHORITY FOR THE AMALGAMATING CORPORATION X 1314152 B.C. Ltd.	DATE SIGNED YYYY / MM / DD
NAME OF AUTHORIZED SIGNING AUTHORITY FOR THE AMALGAMATING CORPORATION 3.	SIGNATURE OF AUTHORIZED SIGNING AUTHORITY FOR THE AMALGAMATING CORPORATION X	DATE SIGNED YYYY / MM / DD
NAME OF AUTHORIZED SIGNING AUTHORITY FOR THE AMALGAMATING CORPORATION 4.	SIGNATURE OF AUTHORIZED SIGNING AUTHORITY FOR THE AMALGAMATING CORPORATION X	DATE SIGNED YYYY / MM / DD
NAME OF AUTHORIZED SIGNING AUTHORITY FOR THE AMALGAMATING CORPORATION 5.	SIGNATURE OF AUTHORIZED SIGNING AUTHORITY FOR THE AMALGAMATING CORPORATION X	DATE SIGNED YYYY / MM / DD

Page 2

FORM 13 LTD (SEP 2017)

NOTICE OF ARTICLES

A NAME OF COMPANY

Set out the name of the company as set out in Item B of the Amalgamation Application.

TB Resources Corp.

B TRANSLATION OF COMPANY NAME

Set out every translation of the company name that the company intends to use outside of Canada.

C DIRECTOR NAME(S) AND ADDRESS(ES)

Set out the full name, delivery address and mailing address (if different) of every director of the company. The director may select to provide either (a) the delivery address and, if different, the mailing address for the office at which the individual can usually be served with records between 9 a.m. and 4 p.m. on business days or (b) the delivery address and, if different, the mailing address of the individual’s residence. The delivery address must not be a post office box. Attach an additional sheet if more space is required.

Set out the full name, delivery address and mailing address (if different) of every director of the company. The director may select to provide either (a) the delivery address and, if different, the mailing address for the office at which the individual can usually be served with records between 9 a.m. and 4 p.m. on business days or (b) the delivery address and, if different, the mailing address of the individual’s residence. The delivery address must not be a post office box. Attach an additional sheet if more space is required.	Set out the full name, delivery address and mailing address (if different) of every director of the company. The director may select to provide either (a) the delivery address and, if different, the mailing address for the office at which the individual can usually be served with records between 9 a.m. and 4 p.m. on business days or (b) the delivery address and, if different, the mailing address of the individual’s residence. The delivery address must not be a post office box. Attach an additional sheet if more space is required.	Set out the full name, delivery address and mailing address (if different) of every director of the company. The director may select to provide either (a) the delivery address and, if different, the mailing address for the office at which the individual can usually be served with records between 9 a.m. and 4 p.m. on business days or (b) the delivery address and, if different, the mailing address of the individual’s residence. The delivery address must not be a post office box. Attach an additional sheet if more space is required.	Set out the full name, delivery address and mailing address (if different) of every director of the company. The director may select to provide either (a) the delivery address and, if different, the mailing address for the office at which the individual can usually be served with records between 9 a.m. and 4 p.m. on business days or (b) the delivery address and, if different, the mailing address of the individual’s residence. The delivery address must not be a post office box. Attach an additional sheet if more space is required.
LAST NAME FIRST NAME MIDDLE NAME Miskovic Aleksandar
DELIVERY ADDRESS POSTAL CODE/ZIP CODE COUNTRY PROVINCE/STATE
#619 – 4599 Clanranald Avenue, Montreal	Quebec	Canada	H3X 0B1
MAILING ADDRESS POSTAL CODE/ZIP CODE COUNTRY PROVINCE/STATE
Same as delivery
LAST NAME FIRST NAME MIDDLE NAME Ilic Aleksandar
DELIVERY ADDRESS POSTAL CODE/ZIP CODE COUNTRY PROVINCE/STATE
2b Drinicka Street, 11040 Belgrade		Serbia
MAILING ADDRESS POSTAL CODE/ZIP CODE COUNTRY PROVINCE/STATE
Same as delivery
LAST NAME FIRST NAME MIDDLE NAME Bonifacio Brandon
DELIVERY ADDRESS POSTAL CODE/ZIP CODE COUNTRY PROVINCE/STATE 2797 Alamein Avenue, Vancouver BC Canada V6L 1S1
MAILING ADDRESS POSTAL CODE/ZIP CODE COUNTRY PROVINCE/STATE Same as delivery
LAST NAME FIRST NAME MIDDLE NAME Daem Brock
DELIVERY ADDRESS POSTAL CODE/ZIP CODE COUNTRY PROVINCE/STATE
317 West 22nd Avenue, Vancouver	BC	Canada	V5Y 2G3
MAILING ADDRESS POSTAL CODE/ZIP CODE COUNTRY PROVINCE/STATE
Same as delivery

Page 3

FORM 13 LTD (SEP 2017)

D DIRECTOR NAME(S) AND ADDRESSE(S)

LAST NAME FIRST NAME MIDDLE NAME Oishi Kim	LAST NAME FIRST NAME MIDDLE NAME Oishi Kim	LAST NAME FIRST NAME MIDDLE NAME Oishi Kim	LAST NAME FIRST NAME MIDDLE NAME Oishi Kim
DELIVERY ADDRESS POSTAL CODE/ZIP CODE COUNTRY PROVINCE/STATE 1600 Hornby Street, Suite 607, Vancouver BC Canada V6Z 2S4
MAILING ADDRESS POSTAL CODE/ZIP CODE COUNTRY PROVINCE/STATE Same as delivery
LAST NAME FIRST NAME MIDDLE NAME
DELIVERY ADDRESS POSTAL CODE/ZIP CODE COUNTRY PROVINCE/STATE
MAILING ADDRESS POSTAL CODE/ZIP CODE COUNTRY PROVINCE/STATE
LAST NAME FIRST NAME MIDDLE NAME
DELIVERY ADDRESS POSTAL CODE/ZIP CODE COUNTRY PROVINCE/STATE
MAILING ADDRESS POSTAL CODE/ZIP CODE COUNTRY PROVINCE/STATE
LAST NAME FIRST NAME MIDDLE NAME
DELIVERY ADDRESS POSTAL CODE/ZIP CODE COUNTRY PROVINCE/STATE

MAILING ADDRESS POSTAL CODE/ZIP CODE COUNTRY PROVINCE/STATE
LAST NAME FIRST NAME MIDDLE NAME
DELIVERY ADDRESS POSTAL CODE/ZIP CODE COUNTRY PROVINCE/STATE

MAILING ADDRESS POSTAL CODE/ZIP CODE COUNTRY PROVINCE/STATE
LAST NAME FIRST NAME MIDDLE NAME
DELIVERY ADDRESS POSTAL CODE/ZIP CODE COUNTRY PROVINCE/STATE

MAILING ADDRESS POSTAL CODE/ZIP CODE COUNTRY PROVINCE/STATE

Maximum number of shares of this Are there special rights class or series of shares that the company Kind of shares of this class or restrictions attached is authorized to issue, or indicate there is or series of shares. to the shares of this class or no maximum number. series of shares? Identifying name of classor series of shares THERE IS NO MAXIMUM(✔) MAXIMUM NUMBER AUTHORIZEDOF SHARES PAR VALUEWITHOUT(✔) WITH A PARVALUE OF($) currencyType of YES(✔) (NO✔) Common FORM 13 LTD (SEP 2017) Page 4

D REGISTERED OFFICE ADDRESSES

D	REGISTERED OFFICE ADDRESSES
	DELIVERY ADDRESS OF THE COMPANY’S REGISTERED OFFICE	PROVINCE	POSTAL CODE
	1500 Royal Centre, P.O. Box 11117, 1055 West Georgia Street, Vancouver	BC	V6E 4N7
	MAILING ADDRESS OF THE COMPANY’S REGISTERED OFFICE	PROVINCE	POSTAL CODE
	1500 Royal Centre, P.O. Box 11117, 1055 West Georgia Street, Vancouver	BC	V6E 4N7
E	RECORDS OFFICE ADDRESSES
	DELIVERY ADDRESS OF THE COMPANY’S RECORDS OFFICE	PROVINCE	POSTAL CODE
	1500 Royal Centre, P.O. Box 11117, 1055 West Georgia Street, Vancouver	BC	V6E 4N7
	MAILING ADDRESS OF THE COMPANY’S RECORDS OFFICE	PROVINCE	POSTAL CODE
	1500 Royal Centre, P.O. Box 11117, 1055 West Georgia Street, Vancouver	BC	V6E 4N7

F AUTHORIZED SHARE STRUCTURE

FORM 13 LTD (SEP 2017)

EXHIBIT “C”

DESCRIPTION OF LICENSES

The Kaludra License is a mineral exploration license granted to Rockstone Group d.o.o. Kać a company incorporated under the laws of the Republic of Serbia and wholly held by Aleksandar Ilic, by the Ministry of Mines and Energy of the Republic of Serbia decision number 310-02-0085/2017-02, dated September 28, 2017. The license permits Rockstone Group d.o.o. Kać to explore for lead, zinc, copper, gold, antimony and any accompanying metals over the “Kaludra” license area, in the municipality of Novi Pazar. The Kaludra License is optioned to 1250598 pursuant to an Option Agreement among 1250598 BC, Tera Balkanika, and Rockstone Group d.o.o. Kać dated January the 25[th] , 2021.

The Ceovishte License is a pending license grant from the Ministry of Mines and Energy of the Republic of Serbia in respect of applied geological research of lead, zinc, silver, copper, gold and any accompanying metals applied for by Tera Balkanika on March 2, 2020.

The Tera Balkanika Subsidiary in Bosnia and Herzegovina holds the following concessions:

The Čumavići License is an exploration area issued by the Ministry of Mines and Energy of the Republic of Srpska, Bosnia and Herzegovina (decision number 05.07 /310-539-1/19) to Drina Resources d.o.o. Banja Luka dated August 5th, 2019. The license permits Drina Resources d.o.o. Banja Luka to explore for lead, zinc, copper and any accompanying metals over the license area, in the municipality of Srebrenica, Bratunac, and Milici.
The Olovine License is an exploration area issued by the Ministry of Mines and Energy of the Republic of Srpska, Bosnia and Herzegovina (decision number 05.07 /310-319-1/19) to Drina Resources d.o.o. Banja Luka dated April 2nd, 2019. The license permits Drina Resources d.o.o. Banja Luka to explore for lead, zinc, copper and any accompanying metals over the license area, in the municipality of Srebrenica and Bratunac.
The Čauš License is an exploration area issued by the Ministry of Mines and Energy of the Republic of Srpska, Bosnia and Herzegovina (decision number 05.04/310-166-3/21) to Drina Resources d.o.o. Banja Luka dated March 26th, 2021. The license permits Drina Resources d.o.o. Banja Luka to explore for lead, zinc, copper and any accompanying metals over the license area, in the municipality of Srebrenica and Bratunac.

EXHIBIT “D”

TERRA BALCANICA MATERIAL CONTRACTS

The Share Transfer Agreement of the Limited Liability Company “Drina Resources” D.O.O. Zvornik dated September 14, 2020 among Tera Balkanika D.O.O., Zvornik, Boban Jolović, Nenad Toholk, and Aleksandar Ilić.

The Share Exchange Agreement dated January 25, 2021, among Terra Balcanica Resources Corp. (then, 1250598 B.C. Ltd.), Tera Balkanika D.O.O., Aleksandar Mišković and Aleksandar Ilić.

The Option Agreement for the Kaludra License dated January 25, 2021, among Rockstone Group D.O.O., Tera Balkanika D.O.O., and Terra Balcanica Resources Corp. (then 1250598 B.C. Ltd.), including the NSR Royalty Agreement attached as Schedule “B” thereto.

Ceovishte Pledge Agreement and Finders Fee dated January 25, 2021 among Tera Balkanika D.O.O., Rockstone Group D.O.O., and Terra Balcanica Resources Corp. (then 1250598 B.C. Ltd.), including the NSR Royalty Agreement attached as Schedule “B” thereto.

Right of First Refusal Agreement dated January 25, 2021 among Rockstone Group D.O.O., Aleksandar Ilić, Tera Balkanika D.O.O., and Terra Balcanica Resources Corp. (then, 1250598 B.C. Ltd.).

SCHEDULE 4.2(d) - RIGHTS TO ASSETS OF TERRA BALCANICA

Pursuant to the Ceovishte Pledge Agreement and Finder’s Fee dated January 25, 2021 among Tera Balkanika D.O.O., Rockstone Group D.O.O., and Terra Balcanica Resources Corp. (then 1250598 B.C. Ltd.), the Ceovishte Property is pledged to Rockstone Group D.O.O., a company controlled by Aleksandar Ilić, in the circumstance where applicable fees fail to be paid to Rockstone Group D.O.O. In such circumstance, Tera Balkanika must apply to the Ministry of Mines and Energy of the Republic of Serbia to transfer the underlying license to Rockstone Group D.O.O.

Pursuant to the Option Agreement for the Kaludra License dated January 25, 2021, among Rockstone Group D.O.O., Tera Balkanika D.O.O., and Terra Balcanica Resources Corp. (then 1250598 B.C. Ltd.), certain rights related to the abandonment of the option exist in favour of Rockstone Group D.O.O, which allow Rockstone D.O.O to reacquire the option.

Terra Balcanica and Tera Balkanika are parties to a NSR Royalty Agreement in favour of Rockstone Group D.O.O., a company controlled by Aleksandar Ilić, over the Ceovishte Property, which provides royalty rights to Rockstone Group D.O.O.

Terra Balcanica and Tera Balkanika are parties to a NSR Royalty Agreement in favour of Rockstone Group D.O.O., a company controlled by Aleksandar Ilić, over the Kaludra Property, which provides royalty rights to Rockstone Group D.O.O.

SCHEDULE 4.2(e) – SHARE ISSUANCE OBLIGATIONS OF TERRA BALCANICA

The Ceovishte Pledge Agreement and Finder’s Fee (the “ Pledge Agreement ”) dated the 25[th] day of January, 2021 was entered into among 1250598 BC Ltd., Tera Balkanika, and Rockstone Group d.o.o. Kać (“ Rockstone ”). Pursuant to the Pledge Agreement, 1250598 BC Ltd. shall issue to Rockstone an aggregate of 2,000,000 common shares in the capital of 1250598 BC Ltd. (the “ Finder’s Shares ”) pursuant to the terms of the Pledge Agreement. Accordingly, 1250598 BC Ltd. shall reserve or set aside sufficient shares in its treasury to issue the Finder’s Shares. Upon issuance, the Finder’s Shares are subject to a hold period under applicable securities laws and shall be duly and validly issued as fully paid and non-assessable.

The Kaludra License is optioned to 1250598 BC Ltd. pursuant to an Option Agreement dated the 25[th] day of January, 2021, (the “ Option Agreement ”) among 1250598 BC, Tera Balkanika, and Rockstone. Pursuant to the Option Agreement, 1250598 BC Ltd. is entitled to acquire from Rockstone, the underlying license and any future acquired rights free and clear of all encumbrances (the “ Option ”). As part of the option exercise consideration, 1250598 BC Ltd. shall issue an aggregate of 2,000,000 common shares in the capital of 12505098 BC Ltd. (the “ Option Exercise Shares ”) to Rockstone. 1,000,000 Option Exercise Shares shall be subject to a voluntary escrow and terms and conditions applicable thereto under the Option Agreement. Accordingly, 1250598 BC Ltd. shall reserve or set aside sufficient shares in its treasury to issue the Option Exercise Shares. Upon issuance, the Finder’s Shares are subject to a hold period under applicable securities laws and shall be duly authorized and validly allotted and issued as fully paid and non-assessable free of any liens, charges or encumbrances.

SCHEDULE 4.1(g) – SECURITIES OF VALENCIA

Common shares	11,383,900	No expiry
Stock options	605,000	Expiry2025-08-14
Stock options	533,390	Expiry2026-05-05
Agent’s options	883,390	Expiry2022-08-14

SCHEDULE 4.1(m) – CONTINUING MATERIAL OBLIGATIONS OF VALENCIA

Valencia has agreed to issue 150,000 (post-consolidation) shares of the resulting issuer on completion of the Qualifying Transaction to its CFO.

SCHEDULE 4.2(kk) – INTERESTS OF TERRA BALCANICA IN THE PROPERTIES

The Ceovishte Pledge Agreement and Finder’s Fee (the “ Pledge Agreement ”) dated the 25[th] day of January, 2021 was entered into among 1250598 BC Ltd., Tera Balkanika, and Rockstone Group d.o.o. Kać (“ Rockstone ”). Pursuant to the Pledge Agreement, Rockstone is entitled to a finder’s fee (the “ Finder’s Fee ”) in consideration for the services provided by Rockstone for introducing the Ceovishte Project to Tera Balkanika. The Finder’s Fee consists of a $50,000 cash payment and the issuance of an aggregate of 2,000,000 common shares in the capital of 1250598 BC Ltd. In addition to the Finder’s Fee, Tera Balkanika granted the NSR Royalty over the Ceovishte Project to Rockstone in the NSR Royalty Agreement attached to the Pledge Agreement.

The Kaludra License is optioned to 1250598 BC Ltd. pursuant to an Option Agreement dated the 25[th] day of January, 2021, (the “ Option Agreement ”) among 1250598 BC, Tera Balkanika, and Rockstone. Pursuant to the Option Agreement, 1250598 BC Ltd. is entitled to acquire from Rockstone, the underlying license and any future acquired rights free and clear of all encumbrances (the “ Option ”), by making a cash payment in the amount of $50,000, issuing an aggregate of 2,000,000 common shares in the capital of 1250598 BC Ltd., and granting the NSR Royalty as set out in the NSR Royalty Agreement attached thereto (collective, the “ Consideration ”). In addition to the Consideration, Rockstone is eligible to receive bonus payments in the aggregate amount of $2,250,000 upon the occurrence of certain milestones relating to the underlying licensed area after the exercise of the Option.

AI assistant

Valencia Capital Inc. — M&A Activity 2021

47890_rns_2021-07-23_4d1998db-25da-43b7-9ee4-ae455e62ff09.pdf

AMALGAMATION AGREEMENT

AMONG:

VALENCIA CAPITAL INC.

AND:

1314152 B.C. LTD.

AND:

TERRA BALCANICA RESOURCES CORP.

TABLE OF CONTENTS

SCHEDULE 4.2(d) – RIGHTS TO ASSETS OF TERRA BALCANICA

AMALGAMATION AGREEMENT

AMONG:

AND:

AND:

WHEREAS:

PART 1 INTERPRETATION

Definitions

Interpretation

Exhibits

PART 2 THE AMALGAMATION

Agreement to Amalgamate

Effect of Amalgamation

Name

Registered Office

Authorized Capital and Restrictions on Share Transfers

Fiscal Year

Business

Initial Directors

Initial Officers

Exchange of ValenciaSub Shares and Terra Balcanica Shares

Dissenting Shareholders

Completion of the Amalgamation and Effective Date

Acknowledgment of Escrow and Resale Restrictions

Valencia Guarantee

PART 3 COVENANTS

Mutual Covenants

Additional Covenants of Valencia and ValenciaSub

Additional Covenants of Terra Balcanica

PART 4 REPRESENTATIONS AND WARRANTIES

Representations and Warranties of Valencia and ValenciaSub

Representations and Warranties of Terra Balcanica

Survival of Representation and Warranties

PART 5 AGREEMENTS

Terra Balcanica Meeting and Meeting Materials

RTO

Filing Statement

Preparation of Filings

Consolidation

Name Change

Bridge Financing

Concurrent Financing

PART 6 INDEMNIFICATION

Mutual Indemnifications for Breaches of Warranty

Limitation on Mutual Indemnification

Procedure for Indemnification

Sole Remedy

PART 7 CONDITIONS PRECEDENT

Mutual Conditions Precedent

Additional Conditions to Obligations of Valencia

Additional Conditions to Obligations of Terra Balcanica

Notice and Effect of Failure to Comply with Conditions

Satisfaction of Conditions

PART 8 AMENDMENT

Amendment

PART 9 TERMINATION

Termination

PART 10 GENERAL

Notices

Binding Effect

Assignment

Entire Agreement

Public Communications

No Shop

Costs

Confidentiality

Severability

Further Assurances

Time of Essence

Valencia Capital Inc. M&A Activity 2021