as Trustee TRUST INDENTURE PROVIDING FOR THE ISSUE OF U.S. $50 MILLION 15% DEMAND BONDS JUNE 22, 1998

ROYAL OAK MINES INC.

as Corporation

and

MONTREAL TRUST COMPANY OF CANADA

as Trustee

--------------------------------------------------------------------------------

TRUST INDENTURE
PROVIDING FOR THE ISSUE OF
U.S. $50 MILLION 15% DEMAND BONDS

JUNE 22, 1998

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TABLE OF CONTENTS

ARTICLE 1
INTERPRETATION

Section 1.1. Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Meaning of "outstanding" for Certain Purposes. . . . . . . . 11
Section 1.3. Headings, etc. . . . . . . . . . . . . . . . . . . . . . . . 11
Section 1.4. Deemed Notice of Indenture . . . . . . . . . . . . . . . . . 12
Section 1.5. Judgment Currency. . . . . . . . . . . . . . . . . . . . . . 12
Section 1.6. Applicable Law . . . . . . . . . . . . . . . . . . . . . . . 12

ARTICLE 2
THE BONDS

Section 2.1. Terms, Form and Denomination of Bonds. . . . . . . . . . . . 13
Section 2.2. Issue of Bonds . . . . . . . . . . . . . . . . . . . . . . . 13
Section 2.3. Signing of Bonds . . . . . . . . . . . . . . . . . . . . . . 14
Section 2.4. Certification. . . . . . . . . . . . . . . . . . . . . . . . 14
Section 2.5. Replacement of Bonds . . . . . . . . . . . . . . . . . . . . 15
Section 2.6. Ownership of Bonds . . . . . . . . . . . . . . . . . . . . . 15
Section 2.7. Payment of Principal and Interest. . . . . . . . . . . . . . 15
Section 2.8. Taxes and Other Taxes. . . . . . . . . . . . . . . . . . . . 16
Section 2.9. Exchange of Bonds. . . . . . . . . . . . . . . . . . . . . . 17
Section 2.10. Registration . . . . . . . . . . . . . . . . . . . . . . . . 17

ARTICLE 3
REPLEDGING OF BONDS

Section 3.1. Repledging of Bonds. . . . . . . . . . . . . . . . . . . . . 18
Section 3.2. Outstanding. . . . . . . . . . . . . . . . . . . . . . . . . 18

ARTICLE 4
SECURITY

Section 4.1. Security . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 4.2. Effect of Liens. . . . . . . . . . . . . . . . . . . . . . . 20
Section 4.3. Security Effective Notwithstanding Date of Advance . . . . . 20
Section 4.4. Title to Collateral. . . . . . . . . . . . . . . . . . . . . 20
Section 4.5. Further Assurances . . . . . . . . . . . . . . . . . . . . . 20
Section 4.6. Registration . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 4.7. Release from Charge. . . . . . . . . . . . . . . . . . . . . 22
Section 4.8. Application of Insurance Proceeds. . . . . . . . . . . . . . 22
Section 4.9. Expropriation. . . . . . . . . . . . . . . . . . . . . . . . 22
Section 4.10. Priority of Liens. . . . . . . . . . . . . . . . . . . . . . 23
Section 4.11. Disposition of Assets. . . . . . . . . . . . . . . . . . . . 23

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Section 4.12. Royalty Interest . . . . . . . . . . . . . . . . . . . . . . 24
Section 4.13. Restricted Payments. . . . . . . . . . . . . . . . . . . . . 24
Section 4.14. Security . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 4.15. Conflicts. . . . . . . . . . . . . . . . . . . . . . . . . . 24

ARTICLE 5
COVENANTS OF THE CORPORATION

Section 5.1. Payment of Principal and Interest. . . . . . . . . . . . . . 25
Section 5.2. Trustee's Remuneration and Expenses. . . . . . . . . . . . . 25
Section 5.3. Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 5.4. Reorganization . . . . . . . . . . . . . . . . . . . . . . . 26
Section 5.5. Limitation on Liens. . . . . . . . . . . . . . . . . . . . . 26
Section 5.6. Performance of Covenants by Trustee. . . . . . . . . . . . . 26

ARTICLE 6
DEFAULT AND ENFORCEMENT

Section 6.1. Events of Default. . . . . . . . . . . . . . . . . . . . . . 28
Section 6.2. Acceleration on Default. . . . . . . . . . . . . . . . . . . 28
Section 6.3. Enforcement by Trustee . . . . . . . . . . . . . . . . . . . 29
Section 6.4. Enforcement by Bondholders . . . . . . . . . . . . . . . . . 29
Section 6.5. Entry by Trustee . . . . . . . . . . . . . . . . . . . . . . 29
Section 6.6. Appointment of Receiver. . . . . . . . . . . . . . . . . . . 30
Section 6.7. Sale by Trustee. . . . . . . . . . . . . . . . . . . . . . . 31
Section 6.8. Applying Bonds in Payment. . . . . . . . . . . . . . . . . . 31
Section 6.9. Application of Proceeds of Sale or Realization . . . . . . . 32
Section 6.10. Distribution of Proceeds. . . . . . . . . . . . . . . . . . 32
Section 6.11. Persons Dealing with Trustee. . . . . . . . . . . . . . . . 33
Section 6.12. Trustee Appointed Attorney. . . . . . . . . . . . . . . . . 33

ARTICLE 7
SATISFACTION AND DISCHARGE

Section 7.1. Cancellation and Destruction . . . . . . . . . . . . . . . . 34
Section 7.2. Release from Covenants . . . . . . . . . . . . . . . . . . . 34

ARTICLE 8
SUCCESSOR CORPORATIONS

Section 8.1. Certain Requirements in Respect of Merger, etc . . . . . . . 35
Section 8.2. Vesting of Powers in Successor . . . . . . . . . . . . . . . 35
Section 8.3. Opinion of Counsel to be Given to Trustee. . . . . . . . . . 35

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ARTICLE 9
EXTRAORDINARY RESOLUTIONS

Section 9.1. Powers Exercisable by Extraordinary Resolution . . . . . . . 36
Section 9.2. Meaning of "Extraordinary Resolution". . . . . . . . . . . . 37
Section 9.3. Powers Cumulative. . . . . . . . . . . . . . . . . . . . . . 37
Section 9.4. Binding Effect of Resolutions. . . . . . . . . . . . . . . . 37

ARTICLE 10
SUPPLEMENTAL INDENTURES

Section 10.1. Execution of Supplemental Indentures. . . . . . . . . . . . 38

ARTICLE 11
CONCERNING THE TRUSTEE

Section 11.1. Conditions Precedent to Trustee's Obligation to Act . . . . 39
Section 11.2. Evidence. . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 11.3. Experts and Advisers. . . . . . . . . . . . . . . . . . . . 40
Section 11.4. Action by Trustee to Protect Interests. . . . . . . . . . . 40
Section 11.5. Trustee Not Required to Give Security . . . . . . . . . . . 40
Section 11.6. Protection of Trustee . . . . . . . . . . . . . . . . . . . 40
Section 11.7. Replacement of Trustee. . . . . . . . . . . . . . . . . . . 41
Section 11.8. Conflict of Interest. . . . . . . . . . . . . . . . . . . . 41
Section 11.9. Cash Collateral Held by the Trustee . . . . . . . . . . . . 42
Section 11.10. Certificate of Compliance . . . . . . . . . . . . . . . . . 42
Section 11.11. Legislation Relating to Indentures. . . . . . . . . . . . . 42
Section 11.12. Acceptance of Trust . . . . . . . . . . . . . . . . . . . . 42

ARTICLE 12
MISCELLANEOUS

Section 12.1 Communications . . . . . . . . . . . . . . . . . . . . . . . 43
Section 12.2. Address of Record. . . . . . . . . . . . . . . . . . . . . . 43
Section 12.3. Indemnification of Trustee . . . . . . . . . . . . . . . . . 43
Section 12.4. Deposit of Securities. . . . . . . . . . . . . . . . . . . . 44
Section 12.5. Change of Name . . . . . . . . . . . . . . . . . . . . . . . 44

ARTICLE 13
FORM OF BONDS

Section 13.1. Form of Bonds . . . . . . . . . . . . . . . . . . . . . . . 46

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ARTICLE 14
EXECUTION

Section 14.1. Notarial Trust Deed . . . . . . . . . . . . . . . . . . . . 49
Section 14.2. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . 49
Section 14.3. Formal Date . . . . . . . . . . . . . . . . . . . . . . . . 49

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TRUST INDENTURE

TRUST INDENTURE dated June 22, 1998 between ROYAL OAK MINES INC.
(the "CORPORATION") and MONTREAL TRUST COMPANY OF CANADA (the "TRUSTEE").

WHEREAS the Corporation deems it necessary for its corporate
purposes to deliver security to certain parties who have or may in future
enter into hedging transactions with the Corporation;

AND WHEREAS it is desirable to grant such security through a
trustee acting under a trust indenture;

AND WHEREAS in order to give effect to such security the
Corporation proposes to issue bonds under the trust indenture;

AND WHEREAS the Corporation under the laws relating to it is duly
authorized to create, issue and secure the Bonds to be issued as provided in
this Indenture;

AND WHEREAS all things necessary have been done and performed to
make the Bonds, when issued by the Corporation and certified by the Trustee,
valid, binding and legal obligations of the Corporation with the benefits and
subject to the terms of this Indenture and to make this Indenture a valid and
binding indenture in accordance with its terms;

AND WHEREAS the foregoing recitals and any statements contained in
this Indenture or in the Bonds (except the representations in the certificate
of the Trustee on the Bonds) are and shall be deemed to be made as
representations and statements of fact by the Corporation;

NOW THEREFORE, in consideration of the foregoing, the sum of $10.00
and other good and valuable consideration, the receipt and sufficiency of
which are acknowledged by the Corporation, the Corporation agrees as follows:

ARTICLE 1
INTERPRETATION

SECTION 1.1. DEFINED TERMS. (1) As used in this Indenture and
the Bonds, the following terms have the following meanings:

"APM" means Arctic Precious Metals, Inc., a Nevada corporation.

"AFFILIATE" has the meaning specified in the BUSINESS CORPORATIONS
ACT (Ontario).

"BONDS" means the bonds of the Corporation issued and certified
under this Indenture and for the time being outstanding.

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"BONDHOLDERS" means the holders of the Bonds for the time being and
from time to time.

"BUSINESS DAY" means any day of the year, other than a Saturday,
Sunday or other day on which banks are required or authorized to close in
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇.

"CANADIAN DOLLARS" and "CDN. $" each mean lawful money of Canada.

"CAPITAL LEASE OBLIGATIONS" means, as to any Person, the
obligations of such Person to pay rent or other amounts under a lease that
are required to be classified and accounted for as capital lease obligations
in accordance with GAAP.

"CERTIFICATE OF THE CORPORATION", "ORDER OF THE CORPORATION" and
"REQUEST OF THE CORPORATION" mean, respectively, a written certificate, order
and request signed in the name of the Corporation by any one of its Chairman,
President, Chief Financial Officer or Secretary.

"CERTIFIED RESOLUTION" means a copy of a resolution certified by
the Secretary or any Assistant Secretary of the Corporation to have been duly
passed by the Directors and to be in full force and effect on the date of the
certification.

"COLLATERAL" means the property, assets and undertaking of the
Corporation and its Restricted Subsidiaries charged or in which the Trustee
is granted a Lien pursuant to the Security and all replacements,
substitutions and additions thereto and all income, gains and distributions
thereon and proceeds thereof, of whatsoever nature and kind.

"CORPORATION" means Royal Oak Mines Inc. and every Successor
Corporation which has complied with the provisions of Article 8.

"COUNSEL" means an attorney, barrister or solicitor or a firm of
attorneys or barristers and solicitors retained by the Trustee or retained by
the Corporation and acceptable to the Trustee.

"DEBT" of any Person means all indebtedness including, without
limitation (i) all indebtedness of such Person for and in respect of borrowed
money, including obligations with respect to bankers' acceptances, letters of
credit and letters of guarantee or indemnity; (ii) all indebtedness of such
Person for the deferred purchase price of property or services represented by
a note or other evidence of indebtedness or other security; (iii) all
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement
in the event of default are limited to the possession or sale of such
property); (iv) all obligations under leases which, in accordance with GAAP
(or accounting principles generally accepted in the jurisdiction of
incorporation or organization of such Person), are recorded as capital
leases, in respect of which such Person is liable as lessee; (v) all
indebtedness or obligations of such Person pursuant to any interest rate
swaps, currency swaps, commodity agreements and similar hedging agreements;
and (vi) all Debt Guaranteed by

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such Person.

"DEBT GUARANTEED" by any Person means Debt of the kinds referred to
in (i) through (v) of the definition of Debt which is directly or indirectly
guaranteed by such Person or which such Person has agreed (contingently or
otherwise) with the creditor to purchase or otherwise acquire or assume, or
in respect of which such Person has otherwise assured a credit against loss
by means of an indemnity, security or bond.

"DIRECTOR" means a director of the Corporation for the time being,
and reference without more to action by the Directors means action by the
directors of the Corporation as a board or, whenever duly empowered, action
by a committee of the board.

"DOCUMENTS" means the Security Documents and any other document
delivered to the Bondholders by the Corporation or any Subsidiary pursuant to
or in connection therewith.

"ELIGIBLE CAPITAL LEASE OBLIGATIONS AND PURCHASE MONEY SECURITY
INTERESTS" means (a) Capital Lease Obligations and Purchase Money Security
Interests existing as at the date hereof or any renewals or replacements
thereof on materially the same terms and in amounts not materially exceeding
those existing as at the date hereof; and (b) Capital Lease Obligations and
Purchase Money Security Interests incurred following the date hereof if the
claims of the lessor or creditor thereunder are limited to recovery or
repossession of the leased or financed property in question and if such
leased or financed property is newly acquired by the Corporation.

"ELIGIBLE HEDGING INDEBTEDNESS" means (i) Existing Hedging
Indebtedness; and (ii) Indebtedness which is Permitted Indebtedness described
in clauses (iii) or (iv) of the definition of "Permitted Indebtedness" in the
Subordinated Indenture, as in effect on the date hereof.

"EQUIVALENT CDN. $ AMOUNT" means, with respect to any amount of any
currency other than Canadian Dollars, the amount of Canadian Dollars
determined by using the quoted spot rate at which The Bank of Nova Scotia's
principal office in Toronto, Ontario offers to provide Canadian Dollars in
exchange for such other currency at 12:00 noon (Toronto time) on the date
which such Equivalent Cdn. $ Amount is to be determined.

"EVENT OF DEFAULT" has the meaning specified in Section 6.1.

"EXCLUDED ASSETS" means the Windy Craggy Property.

"EXISTING HEDGING INDEBTEDNESS" has the meaning ascribed to that
term in the Subordinated Indenture, as in effect on the date hereof.

"EXTRAORDINARY RESOLUTION" has the meaning specified in Section 9.2.

"FISCAL YEAR" means a fiscal year of the Corporation commencing on

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January 1 of each calendar year and ending on December 31 of the same
calendar year.

"GAAP" means at any time, accounting principles generally accepted
in Canada as recommended in the Handbook of the Canadian Institute of
Chartered Accountants at the relevant time applied on a consistent basis.

"GOVERNMENTAL ENTITY" means any (i) multinational, federal,
provincial, state, municipal, local or other government, governmental or
public department, central bank, court, commission, board, bureau, agency or
instrumentality, domestic or foreign, (ii) any subdivision or authority of
any of the foregoing, or (iii) any quasi-governmental or private body
exercising any regulatory, expropriation or taxing authority under or for the
account of any of the foregoing.

"HEDGING COUNTERPARTY" means Bankers Trust Company, Macquarie Bank
Limited, The Bank of Nova Scotia, and their respective successors and
assigns, and any other Person with whom from time to time the Corporation has
entered, or is proposing to enter into or incur Currency Agreements, Interest
Swap Obligations, Foreign Exchange Obligations or Commodity Agreements, as
such terms are defined in the Subordinated Indenture, as in effect on the
date hereof.

"IN AGREED FORM" means, with respect to any documents to be
delivered by the Corporation or any Restricted Subsidiary to the Trustee
under or pursuant to this Indenture, that such document is in substantially
the same form and substance as the comparable document, if any, previously
delivered or to be delivered contemporaneously by the Corporation or such
Restricted Subsidiary to the Senior Bondholders.

"INDENTURE", "HEREIN", "HEREBY", "HEREOF" and similar expressions
mean and refer to this Indenture as supplemented or amended by any indenture,
deed or instrument supplemental or ancillary hereto; and the expressions
"ARTICLE" and "SECTION" followed by a number mean and refer to the specified
Article or Section of this Indenture.

"INSIDER" has the meaning specified in Section 1(1) of the
SECURITIES ACT (Ontario).

"KEMESS MINE" means the Kemess North Property and Kemess South Mine.

"KEMESS NEWCO" means the wholly owned subsidiary of the Corporation
to which, at the request of the Senior Bondholders, the Corporation will
transfer ownership of the Kemess Mine and related assets.

"KEMESS NEWCO GUARANTEE AND ASSUMPTION" means the guarantee and
assumption to be given by Kemess Newco, in compliance with Section 5.4 of the
Indenture, which guarantee and assumption shall be In Agreed Form and in form
and substance satisfactory to the Trustee, based on the advice of Counsel,
pursuant to which Kemess Newco will guarantee the obligations of the
Corporation pursuant to the Bonds.

"KEMESS NEWCO LIENS" means the present and future fixed and
floating

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Liens to be granted by Kemess Newco to the Trustee in all of its property,
assets and undertaking, including the Kemess Mine and related assets, which
Lien shall be In Agreed Form and in form and substance satisfactory to the
Trustee, based on the advice of Counsel, and which will secure the payment
and performance by Kemess Newco of its obligations under the Kemess Newco
Guarantee and Assumption.

"KEMESS NORTH PROPERTY" means all present and future property,
assets and undertaking comprising or relating to what is generally referred
to as the Kemess North property in British Columbia, Canada, including,
without limitation, all mineral claims and leases referred to in Schedule
"B-1" to the Secured Debenture, all buildings, equipment, fixtures and other
property and assets owned or leased by the Corporation (or in which the
Corporation otherwise has an interest) situated or used at the Kemess North
Property site, all operations, exploration and other activities carried on at
such site and all permits, authorizations, licenses and similar approvals
relating thereto.

"KEMESS SOUTH MINE" means all present and future property, assets
and undertaking comprising or relating to what is generally referred to as
the Kemess South property in British Columbia, Canada, including, without
limitation, all mineral claims and leases referred to in Schedule "B-2" to
the Secured Debenture hereto, all buildings, equipment, fixtures and other
property and assets owned or leased by the Corporation (or in which the
Corporation otherwise has an interest) situated or used at the Kemess South
Mine site, all operations, exploration and other activities carried on at
such site and all permits, authorizations, licenses and similar approvals
relating thereto.

"KEMESS SOUTH RESOURCES LIMITED PARTNERSHIP" means the limited
partnership of that name formed under the laws of the Province of British
Columbia, and its successors and assigns.

"LIEN" means any mortgage, pledge, security interest, encumbrance,
lien, charge or deposit arrangement or other arrangement or condition that in
substance secures payment or performance of an obligation and shall include
the interest of a vendor or lessor under any conditional sale agreement,
capitalized lease or other title retention agreement.

"NIGHTHAWK LAKE MINE" means the property covering approximately
11,726 acres representing 254 claims in both Cody and ▇▇▇▇▇▇▇ Townships,
Ontario, with most of the property held outright by the Corporation as staked
mineral claims and the remaining property held through various agreements and
subsidiary companies.

"ORIGINAL CURRENCY" has the meaning specified in Section 1.5(1).

"OTHER CURRENCY" has the meaning specified in Section 1.5(1).

"OTHER TAXES" has the meaning specified in Section 2.8(2).

"PAMOUR MINE" means the property (exclusive of the ▇▇▇▇▇
properties) located in Whitney Township approximately 15 miles east of
Timmins, Ontario which consisted of 38 patented mining claims and one license
of occupation covering

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approximately 1,531 acres of mining and surface rights.

"PERMITTED LIENS" mean

(a) Liens on the property, assets or undertaking of the Corporation or
of a Restricted Subsidiary that, in each case, secure indebtedness under the
Senior Indentures in a principal amount not in excess of U.S.$120,000,000;

(b) Liens securing indebtedness of a Person existing at the time that
such Person is merged into or consolidated with the Corporation or a
Restricted Subsidiary, provided that such Liens were in existence prior to
the completion of such merger or consolidation and do not extend to any
assets other than those of such Person;

(c) Liens on property acquired by the Corporation or a Restricted
Subsidiary, provided that such Liens were in existence prior to the
contemplation of such acquisition and do not extend to any other property;

(d) Liens on property, assets or undertaking of the Corporation that,
in each case, secure the royalty payments to be made by the Corporation or a
Restricted Subsidiary to Kemess South Resources Limited Partnership or, upon
dissolution to the partners thereof, in respect of copper extracted and
processed from the Kemess South property;

(e) Liens on the property, assets or undertaking of the Corporation or
a Restricted Subsidiary that, in each case, secure Capital Lease Obligations
or Purchase Money Obligations;

(f) Liens incurred, or pledges and deposits in connection with,
workers' compensation, unemployment insurance and other social security
benefits, and leases, appeal bonds and other obligations of like nature
incurred by the Corporation or any Restricted Subsidiary in the ordinary
course of business;

(g) Liens imposed by law, including, without limitation, mechanics',
carriers' warehousemen's, materialmen's, suppliers' and vendors' Liens,
incurred by the Corporation or any Restricted Subsidiary in the ordinary
course of business in a principal amount not in excess of at any time of Cdn.
$15,000,000;

(h) Liens for AD VALOREM, income or property taxes or assessments and
similar charges which either are not delinquent or are being contested in
good faith by appropriate proceedings for which the Corporation has set aside
on its books reserves to the extent required by GAAP;

(i) Liens on the property, assets or undertaking of the Corporation
that, in each case, secure the obligations of the Corporation under the
Royalty Agreement, including pursuant to the Royalty Debenture;

(j) Liens on the property, assets or undertaking of Kemess Newco that
secure indebtedness of the Corporation assumed by Kemess

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Newco on the transfer of Kemess Newco of ownership of the Kemess Mine and
related assets;

(k) Liens granted by the Corporation and its Restricted Subsidiaries to
the Trustee pursuant to the terms hereof and the Security Documents;

(l) the Subordinated Liens;

(m) rights reserved to or vested in any Governmental Entity by the
terms of any lease, licence, franchise, grant or permit, or by any statutory
provision, to terminate the same, to take action which results in an
expropriation, to designate a purchase of any property subject thereto or to
require annual or other payments as a condition to the continuance thereof;

(n) zoning restrictions, easements, rights of way, leases or other
similar encumbrances or privileges in respect of real property which in the
aggregate do not materially impair the use of such property by the
Corporation or any Restricted Subsidiary in the operation of its business;

(o) security given by the Corporation or a Restricted Subsidiary to a
public utility or any Governmental Entity, when required by such utility or
Governmental Entity in connection with the operations of the Corporation or
such Restricted Subsidiary in the ordinary course of its business, which
singly or in the aggregate do not materially detract from the value of the
asset concerned or materially impair its use in the operation of the business
of the Corporation or such Restricted Subsidiary;

(p) the reservation in any original grants from any Governmental Entity
of any land or interest therein and statutory exceptions to title; and

(q) title, defects or irregularities which are of a minor nature and
which do not materially detract from the value of the assets of the
Corporation or its Restricted Subsidiaries encumbered thereby.

"PERSON" means a natural person, partnership, corporation,
joint-stock company, trust, unincorporated association, joint venture or
other entity or Governmental Entity and pronouns which have a similarly
extended meaning.

"PLEDGE AGREEMENT" means an agreement between the Corporation and a
Bondholder, pursuant to which a Bond issued hereunder is pledged to the
Bondholder as security for the obligations specified therein.

"PROPOSED LEASEBACK ASSETS" means one P & H model 2800 x PB
Electric Mining Shovel and one P & H model 100 x P Rotary Blast Hole Drill.

"PURCHASE MONEY OBLIGATIONS" means indebtedness of the Corporation
and its Restricted Subsidiaries incurred in connection with the purchase of
assets; provided that any Lien so created in connection with such incurrence
is limited solely to the property or assets so purchased.

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"PURCHASE MONEY SECURITY INTEREST" means any Lien given, assumed
or arising by operation of law, including capital leases, to provide or
secure, or to provide the obliger with funds to pay, the whole or any part of
the consideration for the acquisition of property where the principal amount
of the obligation secured by such Lien (i) is not in excess of the cost to
the obliger of the property encumbered thereby and (ii) is secured only by
the property being acquired by the obliger, and includes the renewal or
refinancing of any such Lien upon the same property provided that the
indebtedness secured and the security therefor are not increased thereby.

"RECEIVER'S CERTIFICATE" has the meaning specified in Section 6.6.

"RESTRICTED SUBSIDIARY" means any Subsidiary of the Corporation
that is not an Unrestricted Subsidiary.

"ROYALTY AGREEMENT" means the agreement between the Corporation and
Trilon Financial Corporation to be dated the date hereof pursuant to which
Trilon Financial Corporation has been granted a royalty interest in the
Kemess South Mine, as amended from time to time (other than amendments which
violate Section 4.12 hereof).

"ROYALTY DEBENTURE" means the debenture dated June 22, 1998,
securing the obligations of the Corporation under the Royalty Agreement.

"SALE" has the meaning specified in Section 4.11.

"SECURED DEBENTURE" means the secured debenture to be delivered to
the Trustee pursuant to Section 4.1(i) hereof.

"SECURITY" means the security granted pursuant to Section 4.1 and
any other security from time to time held by the Trustee for the benefit of
the Bondholders.

"SECURITY DOCUMENTS" means, collectively, the agreements,
instruments and documents delivered from time to time to the Trustee by the
Corporation, Kemess Newco and APM for the purpose of creating, perfecting,
preserving or protecting the Liens in favour of the Trustee for the benefit
of the Bondholders which secure the payment and performance by the
Corporation and its Restricted Subsidiaries of their respective obligations
under the Indenture, the Bonds and the Security Documents. The Security
Documents as the date hereof are described in Section 4.1(i) to (ix), hereof.

"SENIOR BONDHOLDERS" means the holders of the Senior Security.

"SENIOR INDENTURES" means the senior secured debenture, Series A,
dated as of June 22, 1998 issued by the Corporation to Trilon Financial
Corporation and the senior secured debenture, Series B, dated as of June 22,
1998, issued by the Corporation to Northgate Exploration Limited, as from
time to time amended (other than amendments which increase the principal
amount due thereunder) and any debentures or other agreements which refinance
or renew the amounts outstanding thereunder (provided that the principal
amount outstanding thereunder is not increased).

-9-

"SENIOR SECURITY" means the security from time to time granted by
the Corporation or any of its Subsidiaries to secure the obligations of the
Corporation or such Subsidiaries pursuant to the Senior Indentures.

"SINGLE BONDHOLDER REQUEST" means an instrument signed in one or
more counterparts by a Bondholder or Bondholders holding not less than U.S.
$1 million in aggregate principal amount of the Bonds at the time outstanding.

"SUBORDINATED INDENTURE" means the indenture dated as of August 12,
1996 made by the Corporation as issuer, Kemess Mines Inc., as guarantor, and
Mellon Bank, F.S.B., as trustee, as amended by supplemental indentures dated
December 31, 1997, January 31, 1998 and May 19, 1998 and the date hereof,
between the Corporation and Chase Manhattan Trust Company, National
Association, as successor trustee, as further amended from time to time.

"SUBORDINATED LIENS" means the present and future Liens held by a
trustee or a collateral agent for and on behalf of the Subordinated
Noteholders to secure payment and performance of the obligations of the
Corporation and its Restricted Subsidiaries under the Subordinated Indenture,
the Subordinated Notes and the Subordinated Security.

"SUBORDINATED NOTES" means the notes issued pursuant to the
Subordinated Indenture.

"SUBORDINATED NOTEHOLDERS" means the holders from time to time of
Subordinated Notes pursuant to the Subordinated Indenture.

"SUBORDINATED SECURITY" means the security from time to time
granted by the Corporation or any Subsidiary to secure the obligations of the
Corporation pursuant to the Subordinated Indenture.

"SUCCESSOR CORPORATION" has the meaning specified in Section 8.1.

"SUBSIDIARIES" means all of the corporations listed on Schedule E
to the Senior Indentures and any other corporation or limited liability
company which is or hereafter becomes directly or indirectly controlled by
the Corporation, and for the purposes of this definition, the Corporation
shall be deemed to control a corporation if the Corporation beneficially
owns, directly or indirectly, shares to which are attached more than 50% of
the voting rights ordinarily exercisable at meetings of shareholders of such
corporation, and the Corporation shall be deemed to own beneficially shares
beneficially owned by a corporation controlled by it, and so on indefinitely,
and the Corporation shall be deemed to control a limited liability company
where it owns more than 50% of the equity interests in such limited liability
company.

"TAXES" has the meaning specified in Section 2.8(1).

"TRUSTEE" means Montreal Trust Company of Canada and its successors
for the time being in the trusts hereby created.

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"U.S. DOLLARS" and "U.S. $" each mean lawful money of the United
States of America.

"UNANIMOUS BONDHOLDERS' REQUEST" means an instrument signed in one
or more counterparts by the Bondholders holding not less than 100% in
aggregate principal amount of the Bonds at the time outstanding (excluding
any such held by Affiliates or Insiders of the Corporation) requesting the
Trustee to take some action or proceeding specified therein.

"UNRESTRICTED SUBSIDIARY" means any Subsidiary of the Corporation
designated as an Unrestricted Subsidiary by the board of directors of the
Corporation; PROVIDED, HOWEVER, that (i) the Subsidiary to be so designated
(x)(I) has total assets with a fair market value at the time of such
designation of U.S. $1,000,000 or less, or (II) is being so designated prior
to the acquisition by the Corporation of such Subsidiary by merger or
consolidation with an Unrestricted Subsidiary, and (y) does not own any
capital stock of the Corporation or any Restricted Subsidiary, (ii) if such
Subsidiary is acquired by the Corporation, such Subsidiary is designated as
an Unrestricted Subsidiary prior to the consummation of such acquisition,
(iii) no Event of Default shall have occurred and be continuing, (iv) no
portion of any Debt or any other obligation (contingent or otherwise) of such
Subsidiary (a) is guaranteed by or is otherwise the subject of credit support
provided by the Corporation or any of its Restricted Subsidiaries, (b) is
recourse to or obligates the Corporation or any of its Restricted
Subsidiaries in any way, or (c) subjects any property or asset of the
Corporation or any of its Restricted Subsidiaries directly or indirectly,
contingently or otherwise, to the satisfaction of such Debt or other
obligation, (v) neither the Corporation nor any of its Restricted
Subsidiaries has any contract, agreement, arrangement or understanding with
such Subsidiary other than on terms as favourable to the Corporation or such
Restricted Subsidiary as those that might be obtained at the time from
Persons that are not Affiliates of the Corporation, and (vi) neither the
Corporation nor any of its Restricted Subsidiaries has any obligations (a) to
subscribe for additional shares of the capital stock of such Subsidiary, or
(b) to maintain or preserve such Subsidiary's financial condition or to cause
such Subsidiary to achieve certain levels of operating results. Any such
designation by the Corporation's board of directors shall be evidenced to the
Trustee by filing with the Trustee a certified certificate stating that such
designation complies with the foregoing conditions. The Corporation's board
of diectors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; PROVIDED, HOWEVER, that immediately after giving effect to such
designation, no event of default shall have occurred and be continuing under
the Senior Indentures or the Subordinated Indenture, assuming the incurrence
by the Corporation and its Restricted Subsidiaries at the time of such
designation of all existing Debt and Liens of the Unrestricted Subsidiary to
be so designated as a Restricted Subsidiary. In the event of any transaction
described in Article 8 involving the Corporation in which the Corporation is
not the Successor Corporation, the board of directors of the Successor
Corporation may (x) prior to such transaction, designate any of its
Subsidiaries, and any of the Corporation's Subsidiaries being acquired
pursuant to such transaction that are not Restricted Subsidiaries, as
Unrestricted Subsidiaries, and (y) after such transaction, designate any of
its direct or indirect Subsidiaries as an Unrestricted Subsidiary under the
same conditions and in the same manner as the Corporation under the terms of
this

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Indenture.

"WINDY CRAGGY PROPERTY" means the mineral claims in and around
Windy Craggy mountain in the Tatshenshini/Alsek region of northwestern
British Columbia.

(2) Reference to any statute shall be deemed to be a reference to
such statute as amended or re-enacted from time to time.

(3) Any references in this Indenture or in a Bond to gender
includes all genders and words importing the singular number only shall
include the plural and vice versa.

SECTION 1.2. MEANING OF "OUTSTANDING" FOR CERTAIN PURPOSES. Every
Bond certified and delivered by the Trustee shall be deemed to be outstanding
until it shall be cancelled or delivered to the Trustee for cancellation,
provided, however, that:

(a) where a new Bond has been issued in substitution for a Bond which
has been lost, destroyed or stolen, only one of them shall be counted for the
purpose of determining the aggregate principal amount of Bonds outstanding;
and

(b) for the purpose of any provision of this Indenture entitling
Bondholders to vote, sign consents, requests or other instruments or take any
other action under this Indenture, Bonds owned by the Corporation or any
Affiliate shall be disregarded, except that (i) for the purpose of
determining whether the Trustee shall be protected in relying on any such
vote, consent, request, instrument or other action, only the Bonds which the
Trustee knows are so owned shall be so disregarded, and (ii) Bonds so owned
which have been pledged in good faith other than to the Corporation or any
Affiliate shall not be so disregarded if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right to vote such Bonds in its
discretion free from the control of the Corporation or any Affiliate.

SECTION 1.3. HEADINGS, ETC. The provision of a Table of Contents,
the division of this Indenture into Articles and Sections and the insertion
of headings are for convenient reference only and are not to affect the
interpretation of this Indenture.

SECTION 1.4. DEEMED NOTICE OF INDENTURE. Bondholders and all
Persons claiming through or under them, respectively, shall be deemed to have
notice of, and shall be bound by, the provisions of this Indenture.

SECTION 1.5. JUDGMENT CURRENCY. (1) If, for the purposes of
obtaining judgment in any court, it is necessary to convert a sum due
hereunder or under a Bond in any currency (the "ORIGINAL CURRENCY") into
another currency (the "OTHER CURRENCY"), the Corporation agrees, to the
fullest extent that it may effectively do so, that the rate of exchange used
shall be that at which, in accordance with normal banking procedures, the
Trustee or the relevant Bondholder, as the case may be, could purchase the
Original Currency with the Other Currency on the Business Day preceding that
on which final judgment is given or, if permitted by applicable laws, on the
day on which such judgment

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is paid or satisfied.

(2) The obligations of the Corporation in respect of any sum due
in the Original Currency from it hereunder or under a Bond shall,
notwithstanding any judgment in any Other Currency, be discharged only to the
extent that on the Business Day following receipt by the Trustee or the
relevant Bondholder of any sum adjudged to be so due in such Other Currency,
the Trustee or such Bondholder may, in accordance with normal banking
procedures, purchase the Original Currency with such Other Currency. If the
amount of the Original Currency so purchased is less than the sum originally
due to the Trustee or such Bondholder in the Original Currency, the
Corporation shall, as a separate obligation and notwithstanding any such
judgment, indemnify the Trustee or such Bondholder, against such loss, and if
the amount of the Original Currency so purchased exceeds the sum originally
due to the Trustee or such Bondholder in the Original Currency, the Trustee
or such Bondholder shall remit such excess to the Corporation.

SECTION 1.6. APPLICABLE LAW. This Indenture and the Bonds shall
be governed by and interpreted and enforced in accordance with the laws of
the Province of Ontario and the federal laws of Canada applicable therein.

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ARTICLE 2
THE BONDS

SECTION 2.1. TERMS, FORM AND DENOMINATION OF BONDS. (1) The Bonds
authorized to be issued pursuant to this Indenture shall consist of and be
limited to an aggregate principal amount of U.S. $50 Million and shall be
designated as the "U.S. $50 MILLION 15% DEMAND BONDS".

(2) The Bonds shall (i) be dated their issue date, (ii) be due and
payable on demand, and (iii) bear interest (both before and after demand and
judgment) from and including their issue date to but excluding the date of
their payment in full at the rate of 15% per annum (including, in case of
default, interest at the same rate on all amounts overdue payable on demand)
calculated and compounded monthly in arrears from the issue date, and shall
be paid in arrears on the last Business Day of each month beginning January
of 1999.

(3) The Bonds shall (i) be issuable in registered form in integral
multiples of U.S. $1 Million, (ii) be substantially in the form set out in
Article 13 with appropriate insertions, and (iii) bear such distinguishing
letters and numbers as the Trustee approves.

(4) Subject to this Indenture, all Bonds shall rank PARI PASSU
among themselves and shall be secured equally and rateably.

SECTION 2.2. ISSUE OF BONDS. (1) Bonds in the aggregate principal
amount of U.S. $50 Million, in definitive form, are hereby created and may
immediately be executed by the Corporation, certified by or on behalf of the
Trustee and delivered by it to or upon the order of the Corporation.

(2) No Bond shall be issued, unless and until the Corporation and
the Bondholder to whom the Bond is to be issued have certified to the Trustee
as follows:

(i) the Bondholder is a Hedging Counterparty; and

(ii) upon issuance, the Bond will be pledged to the Bondholder
pursuant to a Pledge Agreement to be held as security only for
the obligations of the Corporation or its affiliates to the
Bondholder pursuant to Eligible Hedging Indebtedness.

(3) A Bond shall only be obligatory or entitle the Bondholder to
any benefit if, and to the extent, that such Bond is pledged to secure
Eligible Hedging Indebtedness.

(4) Each of the Bondholders acknowledges that the indebtedness
owed to a Hedging Counterparty is separate and unrelated to the indebtedness
owed to any other Hedging Counterparty. In the event that the Security, to
the extent it secures any indebtedness to a Hedging Counterparty or any Bond
pledged to such Hedging

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Counterparty to secure such indebtedness (the "Affected Security"), is for
any reason subordinated to any security for any other indebtedness (the
"Other Security"), to which the Security, to the extent it secures Hedging
Indebtedness to other Hedging Counterparties or the Bond pledged to such
other Hedging Counterparties, (the "Unaffected Security") is not
subordinated, then, notwithstanding subsection 2.1(4) or Section 4.2, the
priority of the Unaffected Security shall not be affected and the Unaffected
Security shall maintain its priority over the Other Security, and the holders
of the Unaffected Security shall be entitled to participate in a distribution
as if the Affected Security had not been subordinated.

(5) Except for the Bonds issued or to be issued to Bankers Trust
Company, Macquarie Bank Limited and The Bank of Nova Scotia on or about the
date hereof, no Bond shall be issued, or, if issued, shall be obligatory,
unless the Trustee shall have received either (i) the consent of the existing
Bondholders to such issuance expressed by way of Extraordinary Resolution; or
(ii) each of the following:

(i) an acknowledgment of the trustee under the Subordinated Indenture,
substantially in the form of the acknowledgment received by the
Trustee and Bankers Trust Company, Macquarie Bank Limited and The Bank
of Nova Scotia on or about the date hereof;

(ii) an opinion of Counsel that new Bonds will rank equally and rateably
with the existing Bonds and will not prejudice the priority of the
existing Bonds; and

(iii) a certificate of The Bank of Nova Scotia or an opinion of counsel
providing evidence that the principal amount of the Bonds outstanding
after the issuance will not exceed U.S. $50 million less 150% of The
Bank of Nova Scotia cash collateral.

SECTION 2.3. SIGNING OF BONDS. The Bonds shall be under the
corporate seal of the Corporation and shall be signed in the name and on
behalf of the Corporation by any one of the Chairman or the President or the
Chief Financial Officer, together with any one of the Secretary or any
Assistant Secretary of the Corporation. Notwithstanding that any of the
individuals whose signature appears on any Bond as one of such officers may
no longer hold office at the date of this Indenture, the date of the Bond or
the date of certification and delivery, any Bond signed as aforesaid shall be
valid and binding upon the Corporation.

SECTION 2.4. CERTIFICATION. (1) No Bond shall be issued, or, if
issued, shall be obligatory or entitle the Bondholder to any benefit, until
it has been certified by or on behalf of the Trustee substantially in the
form of the certificate set out in Article 13, or in some other form approved
by the Trustee, and such certification by the Trustee upon any Bond shall be
conclusive evidence as against the Corporation that the Bond so certified has
been duly issued and is a valid obligation of the Corporation.

(2) The certificate of the Trustee on the Bonds shall not be
construed as a representation or warranty by the Trustee as to the validity of
this Indenture or of the Bonds (except the due certification and any other
warranties implied by law) and the Trustee shall not, in any respect, be liable
or answerable for the use made of the Bonds or any of them or of the proceeds of
the Bond.

-15-

SECTION 2.5. REPLACEMENT OF BONDS. (1) If any of the Bonds are
mutilated, defaced, lost, destroyed or stolen, the Corporation, subject to
applicable law, shall issue and the Trustee, at its principal office in
Toronto, Ontario or its principal office in Vancouver, British Columbia,
shall certify and deliver a new Bond of like date and tenor as the one
mutilated, defaced, lost, destroyed or stolen in exchange for, and in place
of, and upon cancellation of, the mutilated or defaced Bond and in lieu of,
and in substitution for, the lost, destroyed or stolen Bond. The new Bond
shall be entitled to the Security and rank equally in accordance with its
terms with all other Bonds issued under this Indenture.

(2) The applicant for the issue of a new Bond pursuant to this
Section 2.5 shall bear the cost of issue and, in the case of loss,
destruction or theft shall, as a condition precedent to the issue, furnish
the Corporation and the Trustee with such evidence of ownership and of the
loss, destruction or theft as shall be satisfactory to the Corporation and
the Trustee in their discretion. The applicant may also be required to
furnish an indemnity and surety bond in amount and form satisfactory to the
Corporation and the Trustee in their discretion, and shall pay the reasonable
charges of the Corporation and the Trustee.

SECTION 2.6. OWNERSHIP OF BONDS. (1) A Bondholder may not
transfer a Bond.

(2) Unless otherwise required by law, the Corporation and the
Trustee may deem and treat the Bondholder of any Bond as the person entitled
to the benefit thereof and neither the Corporation nor the Trustee shall be
affected by any notice to the contrary, and payment of, or on account of the
principal of, or any interest on, any Bond shall be made only to or upon the
order in writing of the registered Bondholder.

(3) The Bondholder of any Bond shall be entitled to the principal
or interest, or both, evidenced by the Bond, free from all equities or rights
of set-off or counterclaim between the Corporation and the original or any
intermediate Bondholder and all Persons may act accordingly. The receipt of
any Bondholder for any principal or interest shall be a good discharge to the
Corporation and the Trustee for the same and neither the Corporation nor the
Trustee shall be bound to inquire into the title of any Bondholder.

SECTION 2.7. PAYMENT OF PRINCIPAL AND INTEREST. (1) The principal
of the Bonds will be payable at the principal office of the Trustee in
Vancouver, British Columbia on the Business Day after demand for payment has
been made by a Bondholder.

(2) Interest accrued on the principal amount of any Bond, and
interest on overdue interest, will be paid by the Corporation directly to the
Bondholder of such Bond. Upon request, the Corporation shall provide to the
Trustee written confirmation of any amounts so paid.

(3) Interest shall be calculated at the rate mentioned in Section
2.1(2) on the basis of the number of days elapsed in the year (which shall
consist of three hundred and sixty-five (365) or three hundred and sixty-six
(366) days, as the case may be).

-16-

(4) If the day on which interest on the Bonds falls due is not a
Business Day, a Bondholder shall not be entitled to payment until the next
following Business Day or to any interest or other sums in respect of the
postponed payment.

SECTION 2.8. TAXES AND OTHER TAXES. (1) All payments to a
Bondholder under the Bond shall be made free and clear of and without
deduction or withholding for any and all taxes, levies, imposts, deductions,
charges or withholdings and all related liabilities (all such taxes, levies,
imposts, deductions, charges, withholdings and liabilities being referred to
as "Taxes") imposed by Canada (or any political subdivision or taxing
authority of it), unless such Taxes are required by applicable Law to be
deducted or withheld. If the Corporation shall be required by applicable Law
to deduct or withhold any such Taxes from or in respect of any amount payable
under any Bond except, as provided in the next sentence, (i) the amount
payable shall be increased (and for greater certainty, in the case of
interest, the amount of interest shall be increased) as may be necessary so
that after making all required deductions or withholdings (including
deductions or withholdings applicable to any additional amounts paid under
this Section 2.8), the Bondholder receives an amount equal to the amount it
would have received if no such deduction or withholding had been made, (ii)
the Corporation shall make such deductions or withholdings, and (iii) the
Corporation shall immediately pay the full amount deducted or withheld to the
relevant governmental entity in accordance with applicable Law. The
Corporation will not be required to pay any such additional amounts to any
Bondholder by reason of that Bondholder being connected with Canada otherwise
than merely by lending money to the Corporation pursuant to this Indenture.

(2) The Corporation agrees to immediately pay any present or
future stamp or documentary taxes or any other excise or property taxes,
charges, financial institutions duties, debits taxes or similar levies (all
such taxes, charges, duties and levies being referred to as "Other Taxes")
which arise from any payment made by the Corporation under any of the Bonds
or from the execution, delivery or registration of, or otherwise with respect
to, this Indenture or any of the Bonds.

(3) The Corporation shall indemnify the Bondholder for the full
amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed by any jurisdiction on amounts payable by the Corporation
under this Section 2.8) paid by the Bondholder and any liability (including
penalties, interest and expenses) arising from or with respect to such Taxes
or Other Taxes, whether or not they were correctly or legally asserted,
excluding, in the case of any Bondholder, taxes imposed on its net income or
capital taxes or receipts and franchise taxes. The Corporation will not be
required to indemnify a Bondholder for any Taxes or Other Taxes imposed by
reason of a Bondholder being connected with Canada otherwise than merely by
lending money to the Corporation pursuant to this Indenture. Payment under
this indemnification shall be made within 30 days from the date the
Bondholder makes written demand for it. A certificate as to the amount of
such Taxes or Other Taxes submitted to the Corporation by the Bondholder
shall be conclusive evidence, absent manifest error, of the amount due from
the Corporation to the Bondholder, as the case may be.

(4) The Corporation shall furnish to the Bondholder the original
or a certified copy of a receipt evidencing payment of Taxes or Other Taxes
made by the Corporation within 30 days after the date of any payment of Taxes
or Other Taxes.

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(5) The provisions of this Section 2.8 shall survive the
termination of the Indenture and the repayment of all amounts secured by this
Indenture.

SECTION 2.9. EXCHANGE OF BONDS. (1) Bonds may be exchanged for
other Bonds of the same aggregate outstanding principal amount as the Bonds
so exchanged.

(2) Bonds may be exchanged only at the principal office of the
Trustee in Toronto, Ontario or the principal office of the Trustee in
Vancouver, British Columbia or at such other place or places (if any) as may
from time to time be designated by the Corporation with the approval of the
Trustee. Any Bond tendered for exchange shall be surrendered to the Trustee.
The Corporation shall execute and the Trustee shall certify all Bonds
necessary to carry out exchanges as aforesaid. All Bonds surrendered for
exchange shall be cancelled.

(3) The Corporation and a Bondholder may agree to reduce the
principal amount of a Bond held by such Bondholder (without payment thereon)
and the Trustee shall adjust the Bond and its records accordingly.

(4) The Trustee shall not charge a Bondholder for its services in
connection with any transfer, exchange or adjustment of a Bond. Payment of
any applicable stamp or transfer tax or other governmental charge shall be
made by the party requesting such exchange, transfer or adjustment as a
condition precedent.

SECTION 2.10. REGISTRATION. (1) The Corporation shall cause to be
kept by and at the principal office of the Trustee in Toronto, Ontario or in
Vancouver, British Columbia a register in which shall be entered the names
and addresses of Bondholders and particulars of the Bonds held by each of
them. Such registration shall be noted on the Bonds by the Trustee or a new
Bond shall have been issued by the Trustee.

(2) No transfer of a Bond shall be valid unless made on the
register by the registered holder, its legal representatives or its attorney
duly appointed by an instrument in writing in form and execution satisfactory
to the Trustee, in compliance with such reasonable requirements as the
Trustee may prescribe, and such transfer shall have been noted on such Bond
by the Trustee or a new Bond shall have been issued by the Trustee.

(3) The transferee of a Bond shall, after the Bond together with
any necessary endorsement on it or on any appropriate form of transfer is
lodged with the Trustee, accompanied by a written designation, in form
reasonably satisfactory to the Trustee, of the telecopy number or mailing
address of the transferee and upon compliance with all other conditions in
that behalf required by this Indenture or by law, be entitled to be entered
on the register as the owner of such Bond.

(4) The register maintained pursuant to this Section 2.10 shall at
all reasonable times be open for inspection by the Corporation, the Trustee
or any Bondholder.

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ARTICLE 3
REPLEDGING OF BONDS

SECTION 3.1. REPLEDGING OF BONDS. Bonds issued by the Corporation
hereunder and acquired by the Corporation upon the release of a pledge may be
cancelled or may be repledged to a Hedging Counterparty pursuant to a Pledge
Agreement to secure Eligible Hedging Indebtedness of the Corporation
provided, in any event, that the requirements of this Indenture are met.

SECTION 3.2. OUTSTANDING. For purposes of determining whether a
Bond can be issued within the limit set out in Section 2.1(1) hereof, (i)
where the principal amount of a Bond has been reduced pursuant to Section
2.9(3), only the reduced principal amount shall be taken into account; and
(ii) the principal amount of a Bond which has been acquired by the
Corporation upon the release of a pledge shall not be taken into account
against the limit set out in Section 2.1(1) hereof, unless and until such
Bond is repledged.

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ARTICLE 4
SECURITY

SECTION 4.1. SECURITY. As security for the due and punctual payment
and performance of all of its obligations to the Trustee and the Bondholders
under and in respect of this Indenture and the Bonds, the Corporation and its
Subsidiaries, as applicable, shall execute and deliver to the Trustee in each
case for the benefit of the Trustee and the Bondholders and in form and
substance satisfactory to the Trustee, valid and enforceable Liens against all
present and after acquired property, assets and undertaking of the Corporation
and the Restricted Subsidiary, except the Excluded Assets, all In Agreed Form,
including without limitation, the following:

(i) a secured debenture by the Corporation creating a fixed and floating
Lien on all of the Corporation's present and after acquired property,
assets and undertaking including, without limitation, fixed and
specific Liens on all property, assets and undertaking comprising the
Kemess Mine, and assignments of the Corporation's interests in all
material mining claims, concessions and leases in any way relating to
the Kemess Mine;

(ii) a general security agreement by the Corporation creating a Lien on all
of the Corporation's present and after acquired property, assets and
undertaking;

(iii) a limited guarantee by APM of the obligations of the Corporation
hereunder to the Bondholders;

(iv) a general security agreement by APM creating a Lien on all of APM's
present and after acquired property, assets and undertaking;

(v) an assignment by the Corporation of its rights and interests in its
right to receive distributions from the Kemess South Resources Limited
Partnership;

(vi) an assignment by the Corporation of its rights and interests in the
Hydro contracts relative to the Kemess Mine;

(vii) a pledge of all the shares in the capital of APM held by the
Corporation;

(viii) a moveable hypothec in form suitable for registration in Quebec; and

(ix) such other agreements and documents as may be necessary or desirable
to grant to the Trustee or the Collateral Agent valid and enforceable
Liens on all of the property, assets and undertaking of the
Corporation other than the Excluded Assets.

Notwithstanding anything to the contrary contained in the foregoing, the
Corporation shall not be obligated to register the Liens against any real
property or mineral claims consisting of: (a) the Pamour Mine, the Nighthawk
Lake Mine and the mines generally

-20-

known as Giant, HopeBrook and Colomac; and (b) the Corporation's currently
existing exploration properties not in any way related to the Kemess Mine.
The Corporation shall register Liens against the Pamour Mine and the
Nighthawk Lake Mine in favour of the Trustee In Agreed Form should the
Corporation grant or register Liens against (either or both) such mines in
favour of the Senior Bondholders. The Corporation shall ensure that all of
the Security Documents are executed and delivered in accordance with this
Section 4.1 such that the Liens created thereby are perfected in all
jurisdictions and at all times required to maintain such perfection by the
Trustee for the benefit of the Bondholders.

SECTION 4.2. EFFECT OF LIENS. The Trustee shall have and hold the
Security Documents and the Collateral and all rights hereby and thereby
conferred unto the Trustee and its successors and assigns forever, but in
trust, nevertheless, for the equal benefit and security of the Bondholders
(subject to Section 2.2(4) hereof) without any preference or priority between
them, subject to this Indenture, and with the powers and authorities and
subject to the terms and conditions set forth in this Indenture and in the
Security Documents. The Corporation shall furnish to the Trustee, promptly
after the execution and delivery of the Security Documents and promptly after
the execution and delivery of any amendment hereto or thereto or any
instrument of further assurance, an opinion of Counsel stating that, in the
opinion of such Counsel, subject to customary exclusions and exceptions
reasonably acceptable to the Trustee, either (i) the Security Documents, any
such amendment and all other instruments of further assurance have been
properly recorded, registered and filed and all such other action has been
taken to the extent necessary to make effective the Liens intended to be
created by the Security Documents and to perfect such Liens, and reciting the
details of such action or referring to prior opinions of Counsel in which
such details are given, or (ii) no such action is necessary to make the Liens
intended to be created by the Security Documents effective.

SECTION 4.3. SECURITY EFFECTIVE NOTWITHSTANDING DATE OF ADVANCE.
The Security shall be effective whether the moneys secured by this Indenture
are advanced before or after or at the same time as the issue of any of the
Bonds intended to be secured or before or after or upon the date of the
execution of this Indenture.

SECTION 4.4. TITLE TO COLLATERAL. The Corporation covenants with
the Trustee and the Bondholders that (i) it lawfully owns and is lawfully
possessed of that part of the Collateral described as the Kemess Mine and,
except for Permitted Liens, will lawfully own and be lawfully possessed of
all other property hereafter subjected to the Security, (ii) it has good
right and lawful authority to mortgage, pledge, charge and grant a security
interest in the same, (iii) such property is and will remain free and clear
of any Lien except Permitted Liens, and (iv) it will warrant and defend its
title to such property against the claims and demands of all Persons.

SECTION 4.5. FURTHER ASSURANCES. The Corporation covenants with
the Trustee that:

(a) it shall from time to time execute all such assurances and do all
such things as, in the opinion of Counsel, are necessary or of advantage for
validly giving to the Trustee (so far as may be possible under applicable
laws) the specific mortgage, pledge and charge intended to be created
pursuant to the Security upon the Collateral, whether

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now owned or hereafter acquired by the Corporation; and

(b) it shall from time to time, after the Security has become
enforceable and the Trustee has determined or become bound to enforce it,
execute and give all such assurances and do all things as the Trustee may
reasonably require for facilitating the realization of the Collateral and for
exercising all the powers, authorities and discretions conferred upon the
Trustee and for confirming to any purchaser of any of the Collateral, whether
sold by the Trustee or by judicial proceedings, title to the assets so sold.

SECTION 4.6. REGISTRATION. The Corporation covenants with the
Trustee that:

(a) immediately after the execution of the Security Documents and each
supplemental instrument, the Corporation shall register, file or record the
same (or a deed in notarial form or a financing statement or such other
document as may be appropriate under applicable law) in all offices where
such registration, filing or recording is necessary or of advantage to
perfect the Security created or intended so to be and the Corporation shall
deliver to the Trustee certificates establishing each such registration,
filing or recording, and shall do, observe and perform all matters and things
necessary or expedient to be done, observed and performed for the purpose of
creating and maintaining the Security as valid and effective security;

(b) notwithstanding anything contained in Section 4.6(a), but subject
to the last paragraph of Section 4.1, the Corporation shall not be required
to register or record the Security Documents or any other instrument against
the title to any real or immoveable property of the Corporation or in which
the Corporation has any interest other than the Kemess Mine unless the
Trustee (upon the request of Bondholders holding a majority in the principal
amount of the Bonds) shall so request, in which event, and provided that the
Corporation has first registered or recorded Liens in favour of the Senior
Bondholders, the Corporation (so far as may be possible under the local laws
of the places where the real or immoveable property is situate) shall
immediately register or record the Security Documents and any supplemental
instrument which may be required for such purpose, against the title to the
real or immoveable property in respect of which the request has been made;

(c) the Corporation shall not register, record or file the security in
favour of the Subordinated Noteholders in any office, or against the title to
any real or immovable property, or register any financing statement in
respect of the security in favour of the Subordinated Noteholders, or consent
to any of such actions, unless the Corporation has registered the Security
Documents in priority to the security in favour of the Subordinated
Noteholders; and

(d) the Corporation shall, within five Business Days of the
registration, recordation or filing of any security in favour of the Senior
Bondholders, notify the Trustee of the particulars of any such registration,
recordation or filing.

SECTION 4.7. RELEASE FROM CHARGE. Until the Security has become
enforceable and the Trustee has determined or become bound to enforce the
same, the

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Trustee shall upon the Request of the Corporation execute and deliver to the
Corporation such documents as, in the opinion of Counsel, may be necessary or
desirable to release from the Security any lands, buildings, plant, machinery
or equipment, whether moveable or immoveable, licenses or rights, or any
interest therein, or any other property or assets sold or disposed of by the
Corporation in accordance with Section 4.11(b), (c), (d) or (e) without
payment to the Trustee of any proceeds. Any Request of the Corporation shall
be accompanied by a Certificate of the Corporation evidencing that the sale
or disposition is not in breach of any provision of this Indenture.

SECTION 4.8. APPLICATION OF INSURANCE PROCEEDS. The Corporation
shall, from time to time until payment in full of the Bonds and the
satisfaction and discharge of this Indenture, within 10 days following the
receipt by the Corporation of any payment of proceeds of any insurance
required to be maintained pursuant to Section 5.3 on account of each separate
loss, damage or injury to any tangible property subject to the Security
(unless such proceeds (or an equivalent amount) have been (i) expended or
committed by the Corporation for the repair or replacement of the damaged
property, with the prior written consent of the Trustee, and the Corporation
has furnished to the Trustee evidence satisfactory to the Trustee of the
expenditure or commitment, or (ii) paid to or for the benefit of the Senior
Bondholders or any other holder of a Permitted Lien in the damaged or lost
property ranking prior to the Security) apply, or to the extent the Trustee
is loss payee under any insurance policy, irrevocably direct the Trustee to
apply, without premium or penalty, the proceeds to the payment of principal
or interest, or both, under the Bonds in the Trustee's sole discretion. No
consent of the Trustee shall be required for the application by the
Corporation of insurance proceeds to the repair or replacement of property
unless (i) the aggregate amount of insurance proceeds on account of loss,
damage or injury in any twelve-month period exceed Can. $5,000,000, or (ii)
an Event of Default (or any circumstance exists which, with the giving of
notice, the lapse of time, or both, would constitute an Event of Default) has
occurred and is continuing.

SECTION 4.9. EXPROPRIATION. In the event of any expropriation or
similar taking of any part of the Collateral or of any sale or conveyance by
the Corporation in lieu of an expropriation or similar taking and in
reasonable anticipation of such event, the Trustee may release the property
so taken, sold or conveyed upon the deposit with the Trustee of a sum equal
to (i) the net proceeds of, or compensation for, the expropriation or similar
taking, or (ii) in case of a sale or conveyance in lieu of and in reasonable
anticipation of such taking, the greater of (y) the net proceeds of the sale
of the property to be released, or (z) the fair market value of the property
as appraised by an independent appraiser acceptable to the Trustee. For
purposes hereof "net proceeds" shall mean proceeds after costs of disposition
and payments to the Senior Bondholders and any other holder of a Permitted
Lien in the subject property ranking prior to the Security. The Trustee
shall be fully protected in giving a release upon being furnished with an
opinion of Counsel to the effect that the property has been lawfully
expropriated or taken or, in the case of an anticipatory sale or conveyance,
sold or conveyed as aforesaid, and in case of any anticipatory sale or
conveyance, upon being furnished with a Certified Resolution stating that, in
the opinion of the Directors, such sale or conveyance was in lieu of and in
reasonable anticipation of expropriation or similar taking and was in the
best interests of the Corporation. In any proceedings for the taking of any
part of the Collateral by expropriation or similar taking the Trustee may be
represented by Counsel.

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SECTION 4.10. PRIORITY OF LIENS. Notwithstanding the time of
grant of Liens, or the time of registering, filing or recording the same (or
a notice or financing statement in respect thereof) (i) the Liens and
beneficial rights of each of the Senior Bondholders in the assets and
properties of the Corporation and its Restricted Subsidiaries and the
proceeds thereof shall be senior and prior to the Liens and beneficial rights
of the Trustee and any Bondholder therein, and (ii) the Liens and beneficial
rights of the Trustee and any Bondholder in the assets and properties of the
Corporation and its Restricted Subsidiaries shall be and are hereby
subordinated and postponed to the Liens and beneficial rights of each of the
Senior Bondholders therein. Each Bondholder, by its acceptance of Bonds
issued hereunder, authorizes and expressly directs the Trustee on its behalf
to take such action as may be necessary or appropriate to effectuate, as
between the Senior Bondholders and the Bondholders, the aforesaid
subordination and postponement of the Liens and beneficial rights of the
Trustee and any Bondholder therein, and appoints the Trustee its
attorney-in-fact for such purposes.

SECTION 4.11. DISPOSITION OF ASSETS. The Corporation shall not
and shall not permit any of its Restricted Subsidiaries to consummate any
sale, lease, consignment or other disposition (collectively a "Sale") of
assets or property other than:

(a) Any Sale of properties or assets of the Corporation or a Restricted
Subsidiary to a direct or indirect wholly-owned Restricted Subsidiary of the
Corporation;

(b) (i) any Sale of machinery, equipment, other personal property or
other similar property that has become worn out, obsolete or unserviceable;
(ii) any Sale or abandonment of any personal property the use of which is no
longer necessary or desirable in or material to the conduct of the business
of the Corporation and its Restricted Subsidiaries; (iii) any Sale of any
real property or an interest therein which is undeveloped and held by the
Corporation or a Restricted Subsidiary for exploration purposes and is not
material to the conduct of the business of the Corporation and its Restricted
Subsidiaries; and (iv) any Sale of any assets and properties of the
Corporation or a Restricted Subsidiary, other than assets and properties
described in clauses (i), (ii) and (iii) above, and other than assets which
comprise or are in any way material to the Kemess South Mine, if the proceeds
from all such Sales in aggregate do not exceed U.S. $15,000,000 in any
calendar year;

(d) any Sale of inventory of the ordinary course of business; and

(e) any Sale of properties or assets not described in Sections 4.14
(a), (b), (c) or (d) above, provided that the Corporation obtains the prior
written consent of the Bondholders expressed by Extraordinary Resolution of
any such Sale.

SECTION 4.12. ROYALTY INTEREST. The Corporation shall not,
without the prior written consent of the Trustee, amend the Royalty Agreement
so as to increase the Initial Royalty Rate (as described therein) or amend
Section 2.2 and 7.2(c) thereof.

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SECTION 4.13. RESTRICTED PAYMENTS. The Corporation and its
Subsidiaries shall not, directly or indirectly, pay principal, interest, fees
or any other amount in respect of any Debt of the Corporation or a Subsidiary
other than on account of the Senior Indentures, the Eligible Hedging
Indebtedness or other Debt secured by Liens ranking prior to the Security on
liquidation, provided that if no Event of Default has occurred and is
continuing, the foregoing shall not prohibit the Corporation, or a Restricted
Subsidiary, from (i) paying interest on the Subordinated Notes in accordance
with the terms and conditions contained in the Subordinated Indenture, (ii)
paying amounts due and payable in the ordinary course in respect of other
Debt other than Debt under the Subordinated Indenture; or (iii) in the case
of a Restricted Subsidiary, from making payment to the Corporation or another
Restricted Subsidiary. The Corporation will not establish, designate or
allow to exist a Restricted Subsidiary unless the property and undertaking of
such Restricted Subsidiary is charged in favour of the Trustee with security
with the same or better priority as the charges granted by the Corporation to
the Trustee.

SECTION 4.14. SECURITY. Each Bondholder, by its acceptance of a
Bond hereunder, represents and warrants that it does not hold security in
respect of Eligible Hedging Indebtedness of the Corporation or of a
Restricted Subsidiary other than (i) pursuant to or in connection with the
Bond or Bonds pledged to such Bondholder, this Indenture and the Security,
and any other security which may now or hereafter be granted hereunder; and
(ii) in the case of The Bank of Nova Scotia, cash collateral which does not
and will not exceed U.S. $3,000,000.

SECTION 4.15. CONFLICTS. In the event of any conflict or
inconsistency between a provision of this Indenture and a provision of the
Security Documents, the provision of this Indenture shall prevail.

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ARTICLE 5
COVENANTS OF THE CORPORATION

SECTION 5.1. PAYMENT OF PRINCIPAL AND INTEREST. The Corporation
covenants that it will punctually pay or cause to be paid the principal of
and interest on each of the Bonds at the place, at the respective times and
in the manner provided in this Indenture and in the Bonds.

SECTION 5.2. TRUSTEE'S REMUNERATION AND EXPENSES. The Corporation
covenants that it will pay to the Trustee from time to time reasonable
remuneration for its services and will pay or reimburse the Trustee upon its
request for all reasonable expenses, disbursements and advances incurred or
made by the Trustee in the administration or execution of these trusts
(including the reasonable compensation and the disbursements of its Counsel
and all other advisors and assistants not regularly in its employ), both
before and after any Event of Default, until all duties of the Trustee shall
be finally and fully performed and paid, except any such expense,
disbursement or advance as may arise from the wilful misconduct or bad faith
of the Trustee. Any amount due under this Section 5.2 and unpaid 30 days
after request for payment shall bear interest from the expiration of such 30
days at a rate per annum equal to the prime rate from time to time reported
by The Bank of Nova Scotia or its successor. After the occurrence and during
the continuance of an Event of Default, all amounts so payable and the
interest on such amounts shall be payable out of any funds coming into the
possession of the Trustee in priority to any payments on the Bonds.

SECTION 5.3. INSURANCE. (1) The Corporation shall (i) keep all of
its properties adequately insured against loss or damage by fire and other
hazards, at all times with responsible insurance carriers, in amounts and on
terms as are customary in the mining industry, (ii) maintain adequate
insurance at all times with responsible insurance carriers, in amounts and on
such terms as are customary in the mining industry against liability on
account of damage to persons and property, and (iii) maintain adequate
insurance covering such other risks as are customary in the mining industry.
All insurance covering tangible property subject to the Security shall
provide that, in the case of each separate loss, the full amount of insurance
proceeds in excess of U.S. $500,000 shall be payable to the Trustee as
secured party or otherwise as its interest may appear and subject to the
rights of any prior encumbrancer, to be applied in accordance with Section
4.8, and shall further (iv) provide for at least 30 days' prior written
notice to the Trustee of its cancellation or substantial modification, (v)
provide that, in respect of the interests of the Trustee, the insurance shall
not be invalidated by any action or inaction of the Corporation or any other
Person, (vi) insure the Trustee's interests regardless of any breach of or
violation by the Corporation or any other person of any warranties,
declarations, or conditions contained in the insurance, and (vii) provide
that the Trustee shall have the right (but not the obligation) to cure any
default by the Corporation under the insurance. Each liability policy
required pursuant to this Section 5.3 shall name the Trustee as an additional
insured and shall be primary without right of contribution from any other
insurance which is carried by the Trustee to the extent that the other
insurance provides it with contingent or excess liability insurance, or both,
with respect to its interest in the Collateral and shall expressly provide
that all of its provisions, except the limits of liability (which shall be
applicable to all insureds as a group) and except liability

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for premiums (which shall be solely a liability of the Corporation), shall
operate in the same manner as if there were a separate policy covering each
insured.

(2) The Corporation shall, from time to time upon request by the
Trustee, promptly furnish or cause to be furnished to the Trustee evidence,
in form and substance satisfactory to the Trustee, of the maintenance of all
insurance required to be maintained by Section 5.3(1), including, but not
limited to, originals or copies as the Trustee may request of policies,
certificates of insurance, riders and endorsements relating to such insurance
and proof of premium payments.

SECTION 5.4. REORGANIZATION. Except as set forth herein, the
Corporation shall not dispose of any interest in the Kemess Mine or the right
to the production or income thereof. The Corporation may transfer Kemess
Mine to Kemess Newco on the terms set out herein. If the Corporation
proposes to transfer all or a material interest in the Kemess Mine and the
rights and benefits associated therewith to Kemess Newco, the Corporation
shall, prior to, or contemporaneously with, any such transfer(s), cause
Kemess Newco to assume and guarantee to the Trustee on behalf of the
Bondholders all of the Corporation's obligations, liabilities and
indebtedness under or pursuant to the Indenture and the Bonds, pledge
(subject to the prior Liens held by the Senior Bondholders) to the Trustee on
behalf of the Bondholders all of the Corporation's shares in the capital of
Kemess Newco and any debt, equity or other consideration received by the
Corporation in respect of such transfer, provide to the Trustee on behalf of
the Bondholders such additional security, agreements and assurances
(including a confirmation from the Trustee under the Subordinated Indenture
that any acknowledgment of subordination and postponement will continue to
apply after such transfer) as it may reasonably request to ensure that the
Liens in favour of the Trustee on such assets are valid, enforceable and
prior ranking to all other Liens, claims and interests in such assets except
for such Liens as are held by the Senior Bondholders or as ranked prior to
the Security immediately prior to the disposition, and obtain and deliver an
opinion of counsel as to the enforceability of the Kemess Newco Guarantee and
Assumption and validity and perfection of the Kemess Newco Liens and such
other consents, certificates and authorizations as the Trustee, on the advice
of Counsel, may require in connection with the foregoing.

SECTION 5.5. LIMITATION ON LIENS. The Corporation shall not, and
shall not cause or permit any of its Restricted Subsidiaries to, directly or
indirectly, create, incur, assume or permit or suffer to exist or remain in
effect any Liens (other than Permitted Liens) upon any properties or assets
of the Corporation or of any of its Restricted Subsidiaries whether owned or
hereafter acquired, or on any income or profits therefrom, or assign or
otherwise convey any right to receive income or profits thereon.

SECTION 5.6. PERFORMANCE OF COVENANTS BY TRUSTEE. If the
Corporation fails to perform any of its covenants in this Indenture, the
Trustee may itself perform any of the covenants capable of being performed by
it, but shall be under no obligation to do so. All sums so expended or
advanced by the Trustee shall be repayable as provided in Section 5.2. No
such performance or advance by the Trustee shall be deemed to relieve the
Corporation of any default.

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ARTICLE 6
DEFAULT AND ENFORCEMENT

SECTION 6.1. EVENTS OF DEFAULT. The Security shall become
enforceable in each and every of the following events (each of which is an
"EVENT OF DEFAULT"):

(a) if the Corporation fails to pay forthwith upon demand the principal
or interest of any Bond;

(b) if the Subordinated Indenture is amended in any way which purports
to have the effect of prejudicing the priority of the Security, or any action
is taken in furtherance of any such amendment;

(c) if any registration, recordation or filing is effected in respect
of the Subordinated Security, in respect of any asset or in any jurisdiction,
and no such registration, recordation or filing has been made in priority to
such in respect of the Security in favour of the Trustee hereunder;

(d) if the Corporation fails to comply with its obligations under
Section 5.4 or 5.5;

(e) if the Corporation fails to observe or perform any other covenant
or condition on its part to be observed or performed and, after notice in
writing has been given by the Trustee to the Corporation specifying the
default and requiring the Corporation to cure it, the Corporation fails to
cure the default within a period of 30 days unless the Trustee has agreed to
a longer period, (having regard to the subject matter of default) and in such
event, within the period agreed to by the Trustee.

SECTION 6.2. ACCELERATION ON DEFAULT. If any Event of Default
shall occur and be continuing, the Trustee may, in its discretion, and shall,
upon receipt of a Single Bondholders Request requiring it to do so, declare
the principal of, and interest on, the Bonds and other monies secured by this
Indenture to be due and payable and the same shall immediately become due and
payable to the Trustee on demand (and without any further demand being
required under any of the Bonds). The Corporation shall on such demand
immediately pay to the Trustee, for the benefit of the Bondholders, the
principal of, and accrued and unpaid interest on, amounts in default, in each
case in accordance with Article 2, on the Bonds and all other moneys secured
by this Indenture, together with subsequent interest at the rates borne by
the Bonds from the date of the declaration until payment is received by the
Trustee, such subsequent interest to be payable at the times and places and
in the moneys mentioned in and according to the tenor of the Bonds. Such
payment when made shall be deemed to have been made in discharge of the
Corporation's obligations under this Indenture and any moneys so received by
the Trustee shall be applied in the same manner as if they were proceeds of
realization of the Collateral.

SECTION 6.3. ENFORCEMENT BY TRUSTEE. Whenever the Security has
become enforceable and so long as the Security remains enforceable, but
subject to the provisions of any Extraordinary Resolution:

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(a) the Trustee, in the exercise of its discretion, may proceed to
realize the Security and enforce the rights of the Trustee and the
Bondholders under the Security by entry as provided in Section 6.5; or by the
appointment of a receiver or receiver and manager under the provisions of
Section 6.6; or by sale under the provisions of Section 6.7; or by
proceedings in any court of competent jurisdiction for the appointment of a
receiver or receiver and manager or for sale of all or any part of the
Collateral or for foreclosure; or by any other action, suit, remedy or
proceedings authorized or permitted by this Indenture or by law or by equity;
and may file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee and the
Bondholders lodged in any bankruptcy, winding-up or other judicial
proceedings relative to the Corporation; and no such remedy for the
realization of the Security or for the enforcement of the rights of the
Trustee or the Bondholders shall be exclusive of or dependent on any other
remedy but any one or more of the remedies may from time to time be exercised
independently or in combination;

(b) all rights of action may be enforced by the Trustee without the
possession of any of the Bonds or their production at any trial or other
related proceedings; and

(c) upon receipt of a Unanimous Bondholders' Request and upon being
indemnified and funded to its satisfaction as provided in Section 11.1, the
Trustee shall exercise or take such one or more of the aforesaid remedies as
the Unanimous Bondholders' Request may direct or, if such Unanimous
Bondholders' Request contains no direction, as the Trustee may deem expedient.

SECTION 6.4. ENFORCEMENT BY BONDHOLDERS. A Bondholder who has
requested that the other Bondholders execute and deliver a Unanimous
Bondholders Request, but has failed to obtain the consent of one or more of
the other Bondholders may, acting for the benefit of itself and all the other
Bondholders, take proceedings in any court of competent jurisdiction such as
the Trustee might have taken under Section 6.3, but (subject to the foregoing
right to take proceedings in a court of competent jurisdiction for the
appointment of a receiver or receiver and manager or any other remedy) in no
event shall a Bondholder or combination of Bondholders have any right to take
or exercise any power of sale or appoint a receiver or receiver and manager
or exercise or take any other remedy or proceedings out of court; it being
understood and intended that no one or more Bondholders shall have any right
in any manner whatsoever to affect, disturb or prejudice the Security by its
or their action or enforce any right under this Indenture or under any Bond
except subject to the conditions and in the manner herein provided, and that
all powers and trusts shall be exercised and all proceedings at law which are
instituted and maintained by the Trustee shall be instituted and maintained
for the equal and rateable benefit of all Bondholders.

SECTION 6.5. ENTRY BY TRUSTEE. Whenever the Security has become
enforceable and so long as the Security remains enforceable, the Trustee
shall have the right by its officers, agents or attorneys to enter into and
upon and to take possession of all or any part of the Collateral and possess
and use the same subject to the Security, with full power to carry on and
manage the business operations of the Corporation to receive the rents,
incomes and profits of such property and business, to pay all expenses of

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operating the property and of carrying on the business and all charges
against the property and business ranking in priority to the Bonds or payment
of which may be necessary to preserve or protect the property. The remainder
of the moneys so received and not required for any of the above purposes
shall be applied by the Trustee in the manner provided in Section 6.10. The
foregoing is, however, subject to the condition that the Trustee shall, if
all Events of Default existing to the knowledge of the Trustee have been
cured, restore such property and business to the Corporation, and pay to it
the remainder of the moneys so received after payment of all interest then
due in accordance with Article 2 upon the Bonds. In case of any return of
property to the Corporation, the Security shall no longer be or be deemed to
be enforceable by reason of the Event of Default whereby the right of entry
became vested in the Trustee, and any declaration that may have been made by
the Trustee pursuant to Section 6.2 as a result of such Event of Default
shall be cancelled. Any part of the Collateral which has become subject to a
fixed charge solely by reason of the crystallization of a floating charge
shall be freed from the fixed charge, but shall subsequently be subject to
the floating charge provided for in the Security, as fully and to the same
extent as though no Event of Default had occurred.

SECTION 6.6. APPOINTMENT OF RECEIVER. Whenever the Trustee
determines under the applicable provisions of the Security and the provisions
of Section 6.3 to appoint a receiver (which term shall include a receiver and
manager) the following provisions shall apply:

(a) the appointment shall be made by resolution of the board of
directors of the Trustee or an executive committee of the Trustee and a copy
of the resolution, certified by an officer of the Trustee under its corporate
seal, shall be evidence for all purposes of such appointment; the Trustee may
from time to time in the same manner remove any receiver so appointed and
appoint another in its stead; in making any such appointment the Trustee
shall be deemed to be acting as the attorney of the Corporation;

(b) any appointment may be limited to a part or parts of the Collateral
or may extend to the whole of the Collateral;

(c) every receiver may, in the discretion of the Trustee, be vested
with all or any of the powers and discretions of the Trustee;

(d) the Trustee may from time to time fix the remuneration of every
receiver and direct its payment out of the Collateral;

(e) the Trustee may from time to time require any receiver to give
security for the performance of its duties and may fix the nature and amount
of such security, but shall not be bound to require such security;

(f) every receiver may, with the consent in writing of the Trustee,
borrow money for the purposes of carrying on the business of the Corporation
or for the maintenance, protection or preservation of the Collateral, and the
receiver may issue certificates (the "RECEIVER'S CERTIFICATES") for such sums
as will, in the opinion of the Trustee, be sufficient for obtaining, upon the
security of the Collateral, the amounts from time to time required; the
Receiver's Certificates may be payable either to order or to

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bearer and may be payable at such time or times as to the Trustee may appear
expedient, and shall bear interest as therein provided; the receiver may
sell, pledge or otherwise dispose of the same in such manner as to the
Trustee may seem advisable, and may pay a reasonable commission on a sale;
the amounts from time to time payable pursuant to the Receiver's Certificates
shall form a charge upon the Collateral in priority to the Bonds;

(g) every receiver shall, so far as concerns responsibility for its
acts or omissions, be deemed to be the agent of the Corporation, and in no
event the agent of the Trustee, and the Trustee shall not, in making or
consenting to such appointment, incur any liability to the receiver for its
remuneration or otherwise;

(h) except as may be otherwise directed by the Trustee, all moneys from
time to time received by a receiver shall be paid over to the Trustee to be
held by it on the trusts of these presents; and

(i) the Trustee may pay to a receiver any moneys constituting part of
the Collateral to be applied for the purposes of this Indenture, and the
Trustee may from time to time determine what funds the receiver may keep in
hand with a view to the performance of its duty as a receiver.

SECTION 6.7. SALE BY TRUSTEE. If the Trustee decides to realize
on the Security by sale, the Trustee shall have the right with or without
entry to sell and dispose of all or any part of the Collateral en bloc or in
parcels, at public auction or by tender or by private contract and at such
time or times and on such terms and conditions, which shall, at the Trustees
option, include, in case of sale by auction or tender, a reasonable reserve
bid, as the Trustee shall determine. The Trustee may make any such sale,
whether by auction, tender or private contract, either for cash or upon
credit or partly for one and partly for the other, upon such reasonable
conditions as to terms of payment as it may deem proper; it may also rescind
or vary any contract of sale that may have been entered into and resell with
or under any of the powers conferred herein; it may also stop, suspend or
adjourn any sale from time to time and hold the sale as adjourned without
further notice; also deliver to the purchaser or purchasers of all or any
part the Collateral a good and sufficient deed or deeds for the same.

SECTION 6.8. APPLYING BONDS IN PAYMENT. Upon any sale of all or
any part of the Collateral, whether made under power of sale or pursuant to
foreclosure or other judicial proceedings, the Trustee or any one or more of
the Bondholders or any agent or representative may become purchasers and may,
in paying the purchase price, deliver the Bonds in place of cash to the
amount which would, upon distribution of the net proceeds of such sale, be
payable; and in case the amounts so payable are less than the amount due, the
Bonds shall be returned after being properly marked or stamped to show
partial payment; provided, however, that any such purchaser shall pay in cash
the amount necessary to provide for the payments mentioned in Section 6.9(a).

SECTION 6.9. APPLICATION OF PROCEEDS OF SALE OR REALIZATION.
Except as otherwise expressly provided, the moneys arising from any sale or
other realization of the whole or any part of the Collateral, whether through
a sale by the Trustee or by judicial process or otherwise, shall be held by
the Trustee and applied, together with any other

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moneys in the hands of the Trustee available for such purposes as follows:

(a) firstly, in payment of all charges on the Collateral (except those
subject to which the sale or realization was made), ranking in priority to
the Bonds;

(b) secondly, in payment of the expenses referred to in Section 5.2;

(d) fourthly, in payment of the principal of the Bonds and, after
payment of such principal, any accrued and unpaid interest on the Bonds, in
that order, or in such other order of priority as between principal and
interest as may be directed by Extraordinary Resolution; and

(e) the surplus (if any) shall be paid to the Corporation or its
assigns, unless otherwise provided by law.

SECTION 6.10. DISTRIBUTION OF PROCEEDS. Payments to Bondholders
pursuant to Section 6.9 shall be made as follows:

(a) at least 10 days' notice of each payment shall be given in the
manner provided in Article 12 specifying the time when and the place where
the Bonds are to be presented, the amount of the payment and the application
of the payment as between principal and interest;

(b) payment of any Bond shall be made upon presentation of the Bond at
any one of the places specified in the notice and any Bond paid in full shall
be surrendered, otherwise a memorandum of the payment shall be endorsed on
it; but the Trustee may, in its discretion, dispense with presentation and
surrender or endorsement in any special case upon receipt of an indemnity
acceptable to it;

(c) from and after the date of payment specified in the notice,
interest shall accrue only on the amount owing on each Bond after giving
credit for the amount of the payment specified in such notice unless it is
properly presented on or after the date so specified and payment is not made;

(d) the Trustee shall not be required to make any interim payment to
Bondholders unless the moneys in its hands, after reserving such amount as
the Trustee may think necessary to provide for the payments mentioned in
Section 6.9(a), exceeds 5% of the principal amount of the Bonds;

(e) payments on account of the Bonds shall be made rateably to each
Bondholder based on the lesser of (i) the Eligible Hedging Indebtedness which
is owed to such Bondholder and is secured by a pledge of such Bond pursuant
to the applicable Pledge Agreement; and (ii) the principal amount of the Bond
held by such Bondholder;

(f) if as a result of distributions made in accordance with paragraph
(e), above, (i) the Eligible Hedging Indebtedness of any Hedging Counterparty
has been paid

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in full, (ii) one or more other Hedging Counterparties have received the full
amount of the Bond pledged to such Hedging Counterparty but have not received
payment in full of their Eligible Hedging Indebtedness, and (iii) the Hedging
Counterparties pursuant to a Secondary Pledge Agreement hold a security
interest in the Bond held by the Hedging Counterparty whose claim has been
paid in full, then, distributions shall thereafter be made rateably to the
remaining Bondholders based upon the lesser of their remaining Eligible
Hedging Indebtedness and the amount of the Bond held by them, whether by way
of primary or secondary pledge (provided that a secondary pledge will only be
taken into account where the primary pledge has been fully discharged); and

(g) no Bondholder who is the Corporation or a Subsidiary or an
Affiliate or Insider of the Corporation or a Subsidiary shall be entitled to
participate in any distribution until the claims of all other Bondholders
have been satisfied in full.

SECTION 6.11. PERSONS DEALING WITH TRUSTEE. No person dealing
with the Trustee or its agents shall be concerned to enquire whether the
Security has become enforceable, or whether the powers which the Trustee is
purporting to exercise have become exercisable, or whether any money remains
due, or as to the necessity or expediency of the stipulations and conditions
subject to which any sale has been made, or otherwise as to the propriety or
regularity of any sale or of any other dealing by the Trustee with the
Collateral, or to see to the application of any money paid to the Trustee.

SECTION 6.12. TRUSTEE APPOINTED ATTORNEY. Effective from and
after an Event of Default and so long as such Event of Default is continuing,
the Corporation irrevocably appoints the Trustee to be the attorney of the
Corporation in the name and on behalf of the Corporation to execute and do
any deeds, transfers conveyances, assignments, assurances and things which
the Corporation ought to execute and do, and has not executed or done, under
the covenants and provisions contained in this Indenture and generally to use
the name of the Corporation in the exercise of all or any of the powers
conferred on the Trustee.

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ARTICLE 7
SATISFACTION AND DISCHARGE

SECTION 7.1. CANCELLATION AND DESTRUCTION. All matured Bonds
shall be cancelled and delivered to or to the order of the Trustee
immediately after payment. All Bonds (whether in temporary or definitive
form) cancelled or required to be cancelled under this or any other provision
of this Indenture may be destroyed by or under the direction of the Trustee
(in the presence of a representative of the Corporation, if the Corporation
requests) and the Trustee shall prepare or cause to be prepared and shall
retain a certificate of such destruction and deliver a duplicate copy to the
Corporation.

SECTION 7.2. RELEASE FROM COVENANTS. Upon proof being given to
the reasonable satisfaction of the Trustee that (i) the principal of all the
Bonds and interest thereon and other moneys payable hereunder have been paid
or satisfied, or (ii) all the Bonds have matured or have been called for
redemption, or upon the Trustee having been given irrevocable instructions by
the Corporation to give notice of redemption of all the Bonds, and (iii) such
payment or redemption, or both, has been duly and effectually provided for by
payment to the Trustee or otherwise, and (iv) upon payment of all costs,
charges and expenses properly incurred by the Trustee in relation and the
remuneration of the Trustee has been paid, or upon provision satisfactory to
the Trustee being made for such payment, the Trustee shall, at the request
and at the expense of the Corporation, execute and deliver to the Corporation
such deeds or other instruments as shall be required to (v) evidence the
satisfaction and discharge of the Security in accordance with Section 4.11,
and (vi) release the Corporation from its covenants except pursuant to
Section 2.8 and those relating to the indemnification of the Trustee.

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ARTICLE 8
SUCCESSOR CORPORATIONS

SECTION 8.1. CERTAIN REQUIREMENTS IN RESPECT OF MERGER, ETC. The
Corporation shall not enter into any transaction (whether by way of
reconstruction, reorganization, amalgamation, transfer, sale, lease or
otherwise) whereby all or substantially all of its undertaking, property and
assets would become the property of any other person or, in the case of any
such amalgamation, of the continuing Corporation unless, but may do so if:

(a) such other person or continuing corporation (the "SUCCESSOR
CORPORATION") is a corporation incorporated under the laws of Canada or any
of its provinces;

(b) the Successor Corporation executes, prior to or contemporaneously
with the completion of the transaction, a supplemental indenture and such
other instruments (if any) as are satisfactory to the Trustee and, in the
opinion of Counsel, are necessary or advisable to evidence the assumption by
the Successor Corporation of the Corporation's liability for the due and
punctual payment of all the Bonds and any interest thereon and all other
moneys payable under this Indenture and the covenant of the Successor
Corporation to pay the same and its agreement to observe and perform all the
covenants and obligations of the Corporation under this Indenture;

(c) such transaction shall, to the satisfaction of the Trustee and in
the opinion of Counsel, be upon such terms as preserve and do not impair in
any respect the rights and powers of the Trustee or of the Bondholders; and

(d) no condition or event shall exist in respect of the Successor
Corporation at the time of such transaction and after giving full effect to
the transaction which constitutes or would constitute an Event of Default.

SECTION 8.2. VESTING OF POWERS IN SUCCESSOR. Whenever the
conditions of Section 8.1 have been observed and performed, the Trustee shall
execute and deliver the supplemental indenture provided for in Article 10 and
the Successor Corporation shall possess and from time to time may exercise
each and every right and power of the Corporation under this Indenture in the
name of the Corporation or otherwise and any act or proceeding by any
provision of this Indenture required to be done or performed by any directors
or officers of the Corporation may be done and performed with like force and
effect by the like directors or officers of such Successor Corporation.

SECTION 8.3. OPINION OF COUNSEL TO BE GIVEN TO TRUSTEE. The
Trustee shall receive an opinion of Counsel as conclusive evidence that any
such reorganization, consolidation, amalgamation, sale, conveyance or lease
and any such assumption complies with the provisions of this Article 8.

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ARTICLE 9
EXTRAORDINARY RESOLUTIONS

SECTION 9.1. POWERS EXERCISABLE BY EXTRAORDINARY RESOLUTION. In
addition to all other powers stated in this Indenture to be exercisable by
Extraordinary Resolution, the Bondholders shall have the following powers
exercisable from time to time by Extraordinary Resolution:

(a) the power to agree to any modification, abrogation or compromise or
arrangement of the rights of the Bondholders or the Trustee against the
Corporation or against the undertaking, property and assets of the
Corporation, whether such rights arise under this Indenture, the Bonds or
otherwise;

(b) the power to direct or authorize the Trustee to exercise any power,
right, remedy or authority given to it by this Indenture or the Bonds in any
manner specified in such Extraordinary Resolution or to refrain from
exercising any such power, right, remedy or authority;

(c) the power to assent to any modification or change in, or omission
from, these provisions or any supplemental instrument which shall be agreed
to by the Corporation and to authorize the Trustee to concur in or execute
any deed or supplemental instrument embodying the modification, change or
omission;

(d) the power, with the approval of the Corporation, to sanction the
exchange of the whole or any part of the Bonds for other obligations of the
Corporation or another corporation;

(e) the power to waive and direct the Trustee to waive any default of
the Corporation either unconditionally or upon any conditions specified in
such Extraordinary Resolution whether or not the Security has become
enforceable, and where a Bondholder has commenced a proceeding to enforce the
Security by reason of such default, to restrain the Bondholder from
continuing the proceeding and to stay or discontinue the same, upon payment
of the costs, charges or expenses reasonably and properly incurred by the
Bondholder in that connection;

(f) the power to restrain any Bondholder from taking or instituting any
suit, action or proceeding for the purpose of enforcing payment of the
principal of or interest on the Bonds, or for the appointment of a liquidator
or a receiver or a trustee in bankruptcy or to have the Corporation wound-up
or for any other remedy under this Indenture;

(g) the power to sanction any scheme for the reorganization of the
Corporation or for the consolidation, amalgamation or merger of the
Corporation with any other corporation and for the selling or leasing of all
or substantially all of the undertaking, property and assets of the
Corporation;

(h) the power to approve the form and content of any document to be
delivered to or by the Trustee, including the form of any Security to be
delivered to the

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Trustee pursuant to Section 4.1 or otherwise;

(i) the power to direct the Trustee as to the adequacy of the insurance
maintained by the Corporation;

(j) the power to authorize and direct the Trustee to execute and
deliver such subordinations, priorities agreements, inter-creditor agreements
and acknowledgments as the Extraordinary Resolution may specify; and

(k) the power to amend, alter and repeal any Extraordinary Resolution
previously adopted by the Bondholders.

SECTION 9.2. MEANING OF "EXTRAORDINARY RESOLUTION". The expression
"EXTRAORDINARY RESOLUTION" when used in this Indenture means an instrument in
writing signed in one or more counterparts by both (a) the Bondholders of a
principal amount of the Bonds of not less than 75% of the Bonds which are
outstanding at such time, excluding any of such as are then held by
Affiliates or Insiders of the Corporation, and (b) each of Bankers Trust
Company, Macquarie Bank Limited and The Bank of Nova Scotia, if they are then
Bondholders.

SECTION 9.3. POWERS CUMULATIVE. Any one or more of the powers or
any combination of the powers in this Indenture stated to be exercisable by
the Bondholders by Extraordinary Resolution or otherwise may be exercised
from time to time and the exercise of any one or more of such powers or any
combination of powers from time to time shall not be deemed to exhaust the
right of the Bondholders to exercise such power or powers or combination of
powers then or any power or powers or combination of powers thereafter from
time to time.

SECTION 9.4. BINDING EFFECT OF RESOLUTIONS. Every Extraordinary
Resolution adopted in accordance with Section 9.2 shall be binding upon all
the Bondholders, whether they are signatories or not, and each and every
Bondholder and the Trustee (subject to any provisions for its indemnity)
shall be bound to give effect accordingly to every such Extraordinary
Resolution.

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ARTICLE 10
SUPPLEMENTAL INDENTURES

SECTION 10.1. EXECUTION OF SUPPLEMENTAL INDENTURES. From time to
time the Corporation (when authorized by a resolution of its Directors) and
the Trustee may, subject to the provisions of this Indenture, and the
Corporation and the Trustee shall, when so directed by or pursuant to this
Indenture, execute and deliver indentures or other supplemental instruments,
which shall form a part of this Indenture, for any one or more or all of the
following purposes:

(a) evidencing the succession of Successor Corporations to the
Corporation and the covenants of and obligations assumed by such Successor
Corporations in accordance with the provisions of Article 8;

(b) giving effect to any Extraordinary Resolution;

(c) providing for the issue of Bonds in forms or denominations other
than those herein provided for and for the exchange of Bonds of different
forms and denominations, and making modifications in the form of the Bonds
which, in the opinion of the Trustee, does not affect their substance;

(d) making any additions to, deletions from or alterations in the
provisions of this Indenture which, in the opinion of Counsel, may from time
to time be necessary or advisable to conform the same to legislation or to
the requirements of any stock exchange;

(e) adding such additional covenants, enforcement provisions, release
provisions and other provisions as, in the opinion of Counsel, are necessary
or advisable, provided that, in the opinion of the Trustee, the rights of the
Trustee and of the Bondholders are not materially prejudiced;

(f) correcting or rectifying any ambiguities, defective provisions,
errors or omissions, provided that, in the opinion of the Trustee, the rights
of the Trustee and of the Bondholders are not materially prejudiced; and

(g) any other purpose not inconsistent with the terms of this
Indenture, provided that, in the opinion of the Trustee, the rights of the
Trustee and of the Bondholders are not materially prejudiced.

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ARTICLE 11
CONCERNING THE TRUSTEE

SECTION 11.1. CONDITIONS PRECEDENT TO TRUSTEE'S OBLIGATION TO ACT.
(1) The Trustee is not bound to give any notice or do or take any act, action
or proceeding by virtue of the powers conferred on it unless and until it is
required so to do under the terms of this Indenture; nor shall the Trustee be
required to take notice of any default other than in payment of any moneys
required to be paid to it, unless and until notified in writing of such
default. In the absence of any such notice, the Trustee may, for all purposes
of this Indenture, conclusively assume that the Corporation is not in default
with respect to the payment of principal of, or interest on, the Bonds or in
the observance or performance of any of its covenants, agreements or
conditions. Any such notice shall in no way limit any discretion given to the
Trustee to determine whether or not it shall take any action with respect to
any default.

(2) The obligation of the Trustee to commence or continue any
action or proceeding for the purpose of enforcing its or the Bondholders'
rights shall be conditional upon the Bondholders providing, when required by
notice in writing from the Trustee, (i) sufficient funds to commence or
continue the action or proceeding, and (ii) an indemnity satisfactory to the
Trustee to protect and hold harmless the Trustee against the cost, charges,
expenses and liabilities to be incurred and any loss and damage it may suffer.

(3) None of the provisions contained in this Indenture shall
require the Trustee to spend or risk its own funds or otherwise incur
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers unless indemnified and funded
pursuant to Section 11.1(2).

(4) The Trustee may, before commencing or at any time during the
continuance of any such action or proceeding, require the Bondholders at
whose instance it is acting to deposit with the Trustee the Bonds held by
them provided the Trustee issues receipts to the relevant Bondholders.

SECTION 11.2. EVIDENCE. (1) Whenever it is provided in this
Indenture, with reference to any application to the Trustee for the
certification and delivery of Bonds or other action, that the Corporation
deposit with the Trustee resolutions, certificates, opinions, requests,
orders or other documents, it is intended that the truth, accuracy and good
faith at the time of the granting of such application (or on the effective
date of any such certificate or report, as the case may be) of the facts and
opinions stated in all documents so deposited shall, in each and every such
case, be conditions precedent to the right of the Corporation to have such
application granted. The Trustee may rely and shall be protected in acting
upon documents deposited with it in purported compliance with any such
provision or for any other purpose, but may in its discretion require further
evidence before acting or relying on them.

(2) The Trustee may rely and shall be protected in acting upon any
Certified Resolution, Certificate of the Corporation, Order of the
Corporation, Request of the Corporation or any other resolution, certificate,
order, request, statement, instrument,

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opinion, report, notice, consent, letter, telecopy or other paper or document
believed by it to be genuine and to have been signed, sent or presented by or
on behalf of the proper party or parties.

SECTION 11.3. EXPERTS AND ADVISERS. (1) The Trustee may employ or
retain such Counsel, accountants, appraisers or other experts or advisers as
it may reasonably require for the purpose of discharging its duties and shall
not be responsible for any misconduct on the part of any of them.

(2) The Trustee may act and shall be protected in acting in good
faith on the advice of, or information obtained from, any Counsel,
accountant, appraiser or other expert or adviser, whether retained or
employed by the Corporation or by the Trustee, in relation to any moneys held
by the Trustee, which under the trusts of this Indenture may be placed in the
deposit vaults of the Trustee or of any Canadian chartered bank or deposited
for safekeeping with any such bank. Unless otherwise expressly provided, any
moneys so held, pending its application or withdrawal under any provisions of
this Indenture, may be deposited in the name of the Trustee in any Canadian
chartered bank, at the rate of interest (if any) then current on similar
deposits or, with the consent of the Corporation, may be (i) deposited in the
deposit department of the Trustee or any other loan or trust company
authorized to accept deposits under the laws of Canada or a province thereof,
or (ii) invested in securities issued or guaranteed by the Government of
Canada or any province thereof or any Canadian chartered bank or loan or
trust company, maturing not more than one year from the date of investment.
Unless an Event of Default shall have occurred and be continuing, all
interest or other income received by the Trustee in respect of the deposits
and investments shall belong to the Corporation.

SECTION 11.4. ACTION BY TRUSTEE TO PROTECT INTERESTS. The Trustee
shall have power to institute and to maintain such actions and proceedings as
it may consider necessary or expedient to preserve, protect or enforce its
interests and the interests of the Bondholders.

SECTION 11.5. TRUSTEE NOT REQUIRED TO GIVE SECURITY. The Trustee
shall not be required to give any bond or security in respect of the
execution of the trusts and powers of this Indenture or otherwise.

SECTION 11.6. PROTECTION OF TRUSTEE. By way of supplement to the
provisions of any law for the time being relating to trustees:

(a) the Trustee shall not be liable for or by reason of any statements
of fact or recitals in this Indenture or in the Bonds (except the
representation contained in Section 11.10 and in the certificate of the
Trustee on the Bonds) or required to verify the same, but all such statements
or recitals are and shall be deemed to be made by the Corporation;

(b) the Trustee shall have no obligation to see to or to require
evidence of the registration or filing (or renewal) of this Indenture or any
supplemental or ancillary instrument;

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(d) the Trustee shall have no liability or responsibility whatsoever or
be in any way responsible for the consequence of any breach on the part of
the Corporation of any of the covenants or of any other acts of the agents or
servants of the Corporation.

SECTION 11.7. REPLACEMENT OF TRUSTEE. The Trustee may resign its
trust and be discharged from all further duties and liabilities under this
Indenture by giving the Corporation not less than 90 days' notice in writing
or such shorter notice as may be acceptable to the Corporation. The
Bondholders, by Extraordinary Resolution, may at any time remove the Trustee
and appoint a new Trustee. In the event of the Trustee resigning or being
removed or being dissolved, becoming bankrupt, going into liquidation or
otherwise becoming incapable of acting, the Corporation shall immediately
appoint a new Trustee unless a new Trustee has already been appointed by the
Bondholders by Extraordinary Resolution; failing such appointment by the
Corporation, the retiring Trustee or any Bondholder may apply to a Judge of
the Ontario Court of Justice (General Division), for the appointment of a new
Trustee. Any new Trustee appointed by the Corporation or by the Court shall
be subject to removal as aforesaid by the Bondholders. Any new Trustee shall
be a corporation authorized to carry on the business of a trust company in
the Province of Ontario. On any new appointment, the new Trustee shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Trustee without any further assurance, conveyance,
act or deed, but there shall be immediately executed, at the expense of the
Corporation, all such conveyances or other instruments as, in the opinion of
Counsel, may be necessary or advisable for the purpose of assuring the same
to the new Trustee. At the request of the Corporation or the new Trustee,
the retiring Trustee, upon payment of the amounts, if any, due to it pursuant
to Section 5.2, shall assign, transfer and deliver to the new Trustee all
property and money held and all records kept by the retiring Trustee in
connection with this Indenture.

SECTION 11.8. CONFLICT OF INTEREST. (1) The Trustee represents to
the Corporation that, at this date, no material conflict of interest exists
in the Trustee's role as a fiduciary under this Indenture and agrees that in
the event of a material conflict of interest arising it will, within 90 days
after ascertaining that it has such material conflict of interest, either
eliminate the conflict or resign these trusts.

(2) Subject to Section 11.8(1), the Trustee, in its personal or
any other capacity, may buy, lend upon and deal in securities of the
Corporation or any of its Affiliates and generally may contract and enter
into financial transactions with the Corporation or any of its Affiliates
without being liable to account for any profit.

(3) The Bondholders acknowledge that the Trustee is a wholly-owned
subsidiary of The Bank of Nova Scotia and agree that such fact is not, in and
of itself, a conflict of interest.

SECTION 11.9. CASH COLLATERAL HELD BY THE TRUSTEE. The Trustee,
the Corporation and by its acceptance of a Bond hereunder, each Bondholder
acknowledge that (i) the Trustee is holding in safekeeping cash or cash
equivalents equal to

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Cdn. $12,000,000 (the "Cash Collateral") on behalf of Her Majesty the Queen
in Right of the Province of British Columbia (the "Province"), as represented
by the Minister of Finance and Corporate Relations, as security for certain
obligations of the Corporation under Permit M-206, issued to the Corporation
under the MINES ACT (British Columbia) in connection with the Kemess Mine;
(ii) the Trustee, both in its personal capacity and its capacity as the
holder of the Cash Collateral on behalf of the Province, does not have any
lien, charge, or right of set-off against the Cash Collateral or the proceeds
thereof from the sale or redemption of the Cash Collateral (the foregoing
does not however apply to or limit any existing lien, charge or right of
set-off held by the province against the Cash Collateral or the proceeds
thereof); (iii) any residual right, title or interest of the Corporation in
the Cash Collateral is subject to the Senior Security, the Security, the
Subordinated Security and any other security interests granted by the
Corporation therein from time to time; (iv) the priority of any of the
aforesaid security will be determined in accordance with inter-creditor
agreements entered into between the holders of such security from time to
time and applicable law; (v) the Trustee, the Corporation and each Bondholder
hereby acknowledge that the Trustee will not be in conflict or breach of its
duties and obligations hereunder by virtue of holding the Cash Collateral on
behalf of the Province; and (vi) the Trustee may, upon receipt of a valid
direction or instruction from the Province, deliver the Cash Collateral to
the Province free and clear of any Lien created by the Security.

SECTION 11.10. CERTIFICATE OF COMPLIANCE. At least once in each
twelve-month period beginning on the date of this Indenture and at any other
time upon the demand of the Trustee, the Corporation shall furnish the
Trustee with a certificate that the Corporation has complied with all
requirements contained in the Indenture that, if not complied with, would,
with the giving of notice, lapse of time or otherwise, constitute an Event of
Default, or, if there has been failure to comply, giving particulars of such
failure.

SECTION 11.11. LEGISLATION RELATING TO INDENTURES. The provisions
of this Indenture are subject to the BUSINESS CORPORATIONS ACT (Ontario) and
any other legislation applicable from time to time relating to trust
indentures and to the rights, duties and obligations of trustees under trust
indentures and of corporations issuing debt obligations under trust
indentures. In the event of any conflict between the provisions of this
Indenture and the provisions of the BUSINESS CORPORATIONS ACT (Ontario) or
any other such legislation, such legislation shall govern.

SECTION 11.12. ACCEPTANCE OF TRUST. Montreal Trust Company of
Canada accepts the trusts of this Indenture declared and provided for and
agrees to perform the same upon the terms and conditions herein set forth.

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ARTICLE 12
MISCELLANEOUS

SECTION 12.1 COMMUNICATIONS. Any notice, direction or other
communication required or permitted to be given under this Indenture shall,
except as otherwise permitted, be in writing and given by delivering it or
sending it by telecopy or other similar form of recorded communication
addressed, if to the Corporation, to it at: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: President, Telephone: (▇▇▇) ▇▇▇-▇▇▇▇,
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇, if to the Trustee, to it at: ▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Telephone: (604)
▇▇▇-▇▇▇▇, Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇, and, if to the Bondholders, at the
addresses shown in the records of the Trustee. Any communication shall be
deemed to have been validly and effectively given (i) if personally
delivered, on the date of such delivery if such date is a Business Day and
such delivery was made prior to 4:00 p.m. (Toronto time), otherwise on the
next Business Day, (ii) if transmitted by facsimile or similar means of
recorded communication on the Business Day following the date of transmission.

SECTION 12.2. ADDRESS OF RECORD. The Corporation and each
Bondholder shall notify the Trustee of their respective telecopy number and
mailing address and the Trustee shall furnish the same information with
respect to itself to the Corporation and each of the Bondholders at the date
of issue of the Bonds. From time to time, the Corporation and any Bondholder
may notify the Trustee and the Trustee may notify the Corporation and each
Bondholder of a change in its telecopy number or mailing address, as the case
may be, in the manner set forth in subsection 12.1. Such number or address,
until changed by a similar notice, shall be the address of record of such
party for all purposes of this Indenture.

SECTION 12.3. INDEMNIFICATION OF TRUSTEE. (1) The Corporation
will at all times keep the Trustee indemnified and save the Trustee harmless
from and against all claims, demands, losses, actions, causes of action,
costs, charges, expenses, damages and liabilities whatsoever arising in
connection with this Indenture including, without limitation, those arising
out of or related to actions taken or omitted to be taken by the Trustee
contemplated hereby, legal fees and disbursements of counsel engaged by the
Trustee on a solicitor and client basis and costs and expenses incurred in
connection with the enforcement of this indemnity (unless such enforcement is
unsuccessful), which the Trustee may suffer or incur, whether at law or in
equity, in any way caused by or arising, directly or indirectly, in respect
of any act, deed, matter or thing whatsoever made, done, acquiesced in or
omitted in or about or in relation to the execution of its duties as trustee
and including any deed, matter or thing in relation to the registration,
perfection, release or discharge of security. The foregoing provisions of
this Section 12.3(1) do not apply to the extent that the Trustee or its
employees have acted fraudulently or negligently.

(2) The Corporation hereby agrees to indemnify the Trustee, its
directors, officers, employees, and agents, and all of their successors and
assigns (collectively the "Indemnified Parties") against any loss, expenses,
claim, liability or asserted liability (including strict liability and
including costs and expenses of abatement and remediation of spills or
releases of contaminants and including liabilities of the Indemnified Parties
to third parties (including governmental agencies) in respect of bodily

-43-

injuries, property damage, damage to or impairment of the environment or any
other injury or damage and including liabilities of the Indemnified Parties
to third parties for the third parties' foreseeable and unforeseeable
consequential damages) incurred as a result of:

(a) the administration of the trust created hereby; or

(b) the exercise by the Trustee of any rights hereunder or under the
Security; which result from or relate, directly or indirectly, to:

(i) the presence or release of any contaminants, by any means or
for any reason, on the property subject to the Security,
whether or not release or presence of the contaminants was
under the control, care or management of the Corporation or of
a previous owner, or of a tenant;

(ii) any contaminant present on or released from any contiguous
property to the property subject to the Security; or

(iii) the breach or alleged breach of any environmental laws by the
Corporation.

For purposes of this Section 12.3(2), "liability" shall include (i)
liability of an Indemnified Party for costs and expenses of abatement and
remediation of spills and releases of contaminants, (ii) liability of an
Indemnified Party to a third party to reimburse the third party for bodily
injuries, property damages and other injuries or damages which the third
party suffers, including (to the extent, if any, that the Indemnified Party
is liable therefor) foreseeable and unforeseeable consequential damages
suffered by the third party and (iii) liability of the Indemnified Party for
damage to or impairment of the environment.

SECTION 12.4. DEPOSIT OF SECURITIES. The Trustee shall not be
responsible or liable in any manner whatsoever for the sufficiency,
correctness, genuineness or validity of any security deposited with it.

SECTION 12.5. CHANGE OF NAME. The Corporation shall not change
its name or amalgamate with another corporation under a different name
without giving at least 10 day's prior notice to the Trustee of the new name
and the date upon which such change of name or amalgamation is to take effect
and, within five Business Days of the change of name or amalgamation, the
Corporation shall proved the Trustee with:

(a) a notarial or certified copy of the articles of amendment or
articles of amalgamation effecting the change of name; and

(b) an opinion from legal counsel satisfactory to the Trustee as to the
correct name of the Corporation and confirming that all appropriate
registrations, filings or recordings have been made on behalf of the Trustee
to fully and effectively maintain the perfection and priority of the Security
created hereby.

-44-

-45-

ARTICLE 13
FORM OF BONDS

SECTION 13.1. FORM OF BONDS. The form of the Bonds and the
related certificate of the Trustee, registration panel and panel for the
notation of payments on account of principal shall be substantially as
follows:

No. ........ U.S. $................

ROYAL OAK MINES INC.

(incorporated under the laws of the Province of Ontario)

15% DEMAND BONDS

Royal Oak Mines Inc. (the "CORPORATION"), for value received,
acknowledges itself indebted and promises to pay to the registered holder on
demand, or on such earlier date as the principal amount may become due in
accordance with the Indenture hereinafter mentioned, the sum of - UNITED
STATES DOLLARS (U.S. $-) and to pay interest on principal sum from this date
in like money calculated and compounded monthly in arrears and payable on the
last Business Day of January of 1999 and thereafter on the last Business Day
of each month in each year at the rate of FIFTEEN (15%) PER CENT PER ANNUM,
with interest on amounts overdue payable on demand at the same rate and in
like currency.

This Bond is one of the U.S. $50 Million 15% Demand Bond of the
Corporation issued under an Indenture made June 22, 1998 between the
Corporation and Montreal Trust Company of Canada, as Trustee (which,
together, with all supplementary instruments is referred to as the
"INDENTURE"). Terms used in this Bond which are defined in the Indenture
have the meanings specified in the Indenture. The Bonds issuable under the
Indenture are limited to an aggregate principal amount of U.S. $50 million
outstanding at any time.

The principal amount of this Bond shall be payable at the principal
office of Montreal Trust Company of Canada, as Trustee under the Indenture,
in Vancouver, British Columbia. Interest on the Bonds and on overdue
interest shall be paid directly by the Corporation to the registered holder.

-46-

Subject to the terms of the Indenture, This Bond and all other
Bonds now or hereafter certified and issued under the Indenture rank PARI
PASSU and are secured equally and rateably by the Indenture. This Bond shall
not become obligatory for any purpose until certified by or on behalf of the
Trustee.

IN WITNESS WHEREOF the Corporation has caused this Bond to be
executed by its duly authorized officers.

ROYAL OAK MINES INC.

Per:
---------------------------
Authorized Signing Officer

c/s
Per:
---------------------------
Authorized Signing Officer

(FORM OF TRUSTEE'S CERTIFICATE)

This is one of the U.S. $50 Million 15% Demand Bonds referred to in the
Indenture within mentioned.

MONTREAL TRUST COMPANY OF
CANADA

Per:
---------------------------
Authorized Signing Officer

(FORM OF REGISTRATION PANEL)

(No writing here except by the Trustee)

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
DATE OF NAME AND ADDRESS OF AUTHORIZED
REGISTRATION REGISTERED BONDHOLDER SIGNATURES
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

-47-

(FORM OF PANEL FOR NOTATION OF PAYMENTS ON
ACCOUNT OF PRINCIPAL OR REDUCTIONS OF PRINCIPAL)

Payments on Account of Principal

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
AUTHORIZED AMOUNT PAID BALANCE OF PRINCIPAL SIGNATURE
DATE OR REDUCED AMOUNT UNPAID
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

-48-

ARTICLE 14
EXECUTION

SECTION 14.1. NOTARIAL TRUST DEED. The Corporation, in conformity
with the laws of the Province of Quebec in which part of the Collateral may at
any time be situate, will execute, in notarial form, a Trust Deed of Hypothec,
Mortgage and Pledge hypothecating, mortgaging, pledging, charging, ceding and
transferring all its undertaking, property and assets situate in the Province of
Quebec as security for the Bonds, such Trust Deed being substantially of the
same tenor and to the same effect as this Indenture, such Trust Deed and this
Indenture constituting and to be read as one and the same instrument.

SECTION 14.2. COUNTERPARTS. This Indenture may be executed in any
number of counterparts and all such counterparts together shall be deemed to
constitute one and the same instrument.

SECTION 14.3. FORMAL DATE. This Indenture may be referred to as
bearing formal date of June 22, 1998 notwithstanding its actual date of
execution.

IN WITNESS WHEREOF the parties have caused this Indenture to be
executed by their respective duly authorized officers.

ROYAL OAK MINES INC.

Per: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Authorized Signing Officer

c/s

Per:
-----------------------------
Authorized Signing Officer

MONTREAL TRUST COMPANY OF
CANADA

Per: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Corporate Trust Officer

Per: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
▇▇▇▇ ▇▇▇▇▇▇
Senior Trust Officer
Corporate Trust Services

ROYAL OAK MINES INC.

NOTICE OF ADDRESS

TO: MONTREAL TRUST COMPANY OF CANADA, as Trustee

-------------------------------------------------------------------------------

The undersigned, Royal Oak Mines Inc. (the "CORPORATION") gives notice
to Montreal Trust Company of Canada, pursuant to Section 12.2 of the trust
indenture dated June 22, 1998 (the "INDENTURE") between the Corporation and the
Trustee of its address of record for communications under the Indenture as
follows:

▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇

Attention: President
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇

DATED at Toronto this 22nd day of June, 1998.

ROYAL OAK MINES INC.

Per: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------
Authorized Signing Officer

Per:
----------------------------
Authorized Signing Officer

ROYAL OAK MINES INC.

ORDER OF THE CORPORATION

TO: MONTREAL TRUST COMPANY OF CANADA, as Trustee

--------------------------------------------------------------------------------

Royal Oak Mines Inc. (the "CORPORATION"), pursuant to the provisions
of Section 2.2 of the trust indenture dated June 22, 1998 between the
Corporation and you, as trustee, orders you to certify and issue a 15% Demand
Bond in the principal amount of U.S. $15,000,000, to Macquarie Bank Limited of
▇▇▇▇▇ ▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇.▇.▇. ▇▇▇▇▇▇▇▇▇ and to deliver the same on
this date to the representative of Macquarie Bank Limited at the offices of
Stikeman, Elliott, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, without
receiving any consideration for such certification, issuance and delivery.

DATED at Toronto this 22nd day of June, 1998.

ROYAL OAK MINES INC.

Per: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------
Authorized Signing Officer

Per:
----------------------------
Authorized Signing Officer

ROYAL OAK MINES INC.

ORDER OF THE CORPORATION

TO: MONTREAL TRUST COMPANY OF CANADA, as Trustee

--------------------------------------------------------------------------------

Royal Oak Mines Inc. (the "CORPORATION"), pursuant to the provisions
of Section 2.2 of the trust indenture dated June 22, 1998 between the
Corporation and you, as trustee, orders you to certify and issue a 15% Demand
Bond in the principal amount of U.S. $21,000,000, to Bankers Trust Company of
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and to deliver the same on this
date to the representative of Bankers Trust Company at the offices of Stikeman,
Elliott, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, without receiving
any consideration for such certification, issuance and delivery.

DATED at Toronto this 22nd day of June, 1998.

ROYAL OAK MINES INC.

Per: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------
Authorized Signing Officer

Per:
----------------------------
Authorized Signing Officer

ROYAL OAK MINES INC.

ORDER OF THE CORPORATION

TO: MONTREAL TRUST COMPANY OF CANADA, as Trustee

--------------------------------------------------------------------------------

Royal Oak Mines Inc. (the "CORPORATION"), pursuant to the provisions
of Section 2.2 of the trust indenture dated June 22, 1998 between the
Corporation and you, as trustee, orders you to certify and issue a 15% Demand
Bond in the principal amount of U.S. $5,000,000, to The Bank of Nova Scotia of
One Financial Place, ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and to
deliver the same on this date to the representative of The Bank of Nova Scotia
at the offices of Stikeman, Elliott, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, without receiving any consideration for such certification, issuance
and delivery.

DATED at Toronto this 22nd day of June, 1998.

ROYAL OAK MINES INC.

Per: ▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------
Authorized Signing Officer

Per:
----------------------------
Authorized Signing Officer

ROYAL OAK MINES INC.

CERTIFICATE OF COMPLIANCE

TO: MONTREAL TRUST COMPANY OF CANADA, as Trustee

--------------------------------------------------------------------------------

Pursuant to the provisions of Article 1 and Section 2.2 of the
Indenture (as hereinafter defined) the undersigned, ▇▇▇▇▇ ▇. ▇▇▇▇, duly
appointed Chief Financial Officer of Royal Oak Mines Inc. (the "CORPORATION"),
certifies for and on behalf of the Corporation and not in my personal capacity,
intending that the same may be relied upon by you without further enquiry, that:

(a) I have read and understand the provisions of the trust indenture dated
June 22, 1998 (the "INDENTURE") between the Corporation and Montreal Trust
Company of Canada (the "TRUSTEE"), as trustee, relating to the issue,
certification and delivery of 15% Demand Bonds (the "BONDS") (defined terms used
herein have the respective meanings ascribed thereto in the Indenture);

(b) I have examined the order of the Corporation dated June 22, 1998 (the
"ORDER") ordering the Trustee to issue, certify, and deliver Bonds to Bankers
Trust Company, Macquarie Bank Limited and The Bank of Nova Scotia in accordance
with Section 2.2 of the Indenture;

(c) to the best of my knowledge, after such examination and investigation
as I have deemed necessary with regard to such actions, no further or other
actions are required to be taken by the Corporation or by any other person in
order to enable the Trustee to act in accordance with the Order;

(d) each of Bankers Trust Company, Macquarie Bank Limited and The Bank of
Nova Scotia is a Hedging Counterparty within the meaning of the Indenture; and

(e) the Bonds are to be pledged to Bankers Trust Company, Macquarie Bank
Limited and The Bank of Nova Scotia, respectively, to be held as security for
the obligations of the Corporation or an affiliate pursuant to Eligible Hedging
Indebtedness.

DATED at Toronto this 22nd day of June, 1998.

/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇

as Trustee TRUST INDENTURE PROVIDING FOR THE ISSUE OF U.S. $50 MILLION 15% DEMAND BONDS JUNE 22, 1998

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