ARRANGEMENT AGREEMENT AURYN RESOURCES INC. - and - HOMESTAKE RESOURCE CORPORATION July 8, 2016

Definitions

any take-over bid, issuer bid, amalgamation, plan of arrangement, business combination, merger, tender offer, exchange offer, consolidation, recapitalization, reorganization, liquidation, dissolution or winding-up in respect of the Company;

any sale of assets (or any lease, long-term supply arrangement, licence or other arrangement having the same economic effect as a sale) of the Company representing 20% or more of the consolidated assets, revenues or earnings of the Company;

any sale or issuance of shares or other equity interests (or securities convertible into or exercisable for such shares or interests) in the Company representing 20% or more of the issued and outstanding equity or voting interests of the Company;

any similar transaction or series of transactions involving the Company;

any arrangement whereby effective operating control of the Company is granted to another party; or

any inquiry, proposal, offer or public announcement of an intention to do any of the foregoing;

relating to the Canadian economy, political conditions or securities markets in general;

affecting the gold and silver mining industry in general;

relating to a change in the market trading price of shares of that person, either:

related to this Agreement and the Arrangement or the announcement thereof, or

related to such a change in the market trading price primarily resulting from a change, effect, event or occurrence excluded from this definition of Material Adverse Effect referred to in clause (a), (b) or (d); or

relating to any generally applicable change in applicable Law (other than orders, judgments or decrees against such person, or any of its subsidiaries) or in accounting principles or standards applicable to that person;

any multinational or supranational body or organization, nation, government, state, province, country, territory, municipality, quasi-government, administrative, judicial or regulatory authority, agency, board, body, bureau, commission, instrumentality, court or tribunal or any political subdivision thereof, or any central bank (or similar monetary or regulatory authority) thereof, any taxing authority, any ministry or department or agency of any of the foregoing;

any self-regulatory organization or stock exchange, including the TSXV;

any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government; and

any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of such entities or other bodies pursuant to the foregoing;

is made in writing after the date hereof;

was not solicited after the date hereof in contravention of Section 7.1(a) and did not result from the breach of either Part 5 of the Letter Agreement or Article 7 of this Agreement by the Company or its Representatives;

is made for all or substantially all of the consolidated assets of the Company or all of the Common Shares not owned by the person making such Alternative Proposal;

in the good faith determination of the Board and in the proper discharge of its fiduciary duties, after consultation with its legal counsel and financial advisors:

(i)

would, if consummated in accordance with its terms (but not assuming away any risk of non-completion), result in a transaction more favourable to the Shareholders from a financial point of view than the Arrangement taking into account the form and amount of consideration, the likelihood and timing of completion and the other terms thereof (after due consideration of the legal, financial, regulatory and other aspects of such proposal and other factors deemed relevant by the Board);

(ii)

complies with applicable Law;

(iii)

is not subject to a due diligence condition;

(iv)

offers the same consideration on a per share basis to all Shareholders (but for greater certainty, does not restrict the provision of payments described in paragraphs (b) or (c) of the definition of collateral benefits in MI 61- 101);

(v)

is reasonably capable of being completed in accordance with its terms without undue delay or uncertainty, taking into account all legal, financial, regulatory and other aspects of such proposal and the party making such proposal and taking into account that shareholder approval might be required; and

(vi)

in respect of which the financing is then committed or confirmation is provided from the sources of financing to be used to complete the transaction contemplated by such Alternative Proposal that such financing is available subject to customary conditions; and

that the taking of action in respect of such Alternative Proposal is necessary for the Board in the discharge of its duties under applicable Law;

references to "Agreement", "this Agreement", "hereto", "herein", "hereby", "hereunder", "hereof" and similar expressions are references to this Agreement and not to any particular Section of or Schedule to this Agreement;

references to an "Article", "Section" or "Schedule" followed by a number or letter refer to the specified Article or Section of or Schedule to this Agreement;

words importing the singular shall include the plural and vice versa, and words importing gender shall include the masculine, feminine and neuter genders;

the use of headings is for convenience of reference only and shall not affect the construction or interpretation hereof;

if the date on which any action is required to be taken hereunder by any of the parties is not a Business Day, such action shall be required to be taken on the next succeeding day that is a Business Day;

a period of Business Days is to be computed as beginning on the day following the event that began the period and ending at 4:30 p.m. (Vancouver time) on the last day of the period if the period is a Business Day or at 4:30 p.m. (Vancouver time) on the next Business Day if the last day of the period does not fall on a Business Day;

the terms "material" and "materially" shall, when used in this Agreement, be construed, measured or assessed on the basis of whether the matter would materially affect a party and its subsidiaries, taken as a whole;

references to any legislation or to any provision of any legislation shall include any modification or re-enactment thereof, any legislation provision substituted therefor and all regulations, rules and interpretations issued thereunder or pursuant thereto;

references to any agreement or document shall be to such agreement or document (together with the schedules and exhibits attached thereto), as it may have been or may hereafter be amended, modified, supplemented, waived or restated from time to time; and

wherever the term "includes" or "including" is used, it shall be deemed to mean "includes, without limitation" or "including, without limitation", respectively.

for the class of persons to whom notice is to be provided in respect of the Arrangement and the Meeting and for the manner in which notice is to be provided;

that the securities of the Company for which holders shall be entitled to vote on the Arrangement Resolution shall be Common Shares;

that Shareholders shall be entitled to vote on the Arrangement Resolution, with each Shareholder being entitled to one vote for each Common Share;

that the requisite approval for the Arrangement Resolution shall be: (i) at least 66*****% of the votes cast by the Shareholders, present in person or represented by proxy at a Meeting, voting as a single class; and (ii) if required, a simple majority of the votes cast on the Arrangement Resolution by Shareholders present or in person or represented by proxy at the Meeting (excluding any votes attached to Common Shares held by persons described in section 8.1(2) of MI 61-101) (collectively the "Shareholder Approval");

that, in all other respects, the terms, restrictions and conditions of the Company Governing Documents, including quorum requirements and all other matters, shall apply in respect of the Meeting;

that the Acquiror intends to rely upon the exemption from registration provided by section 3(a)(10) of the U.S. Securities Act in connection with the issuance of Acquiror Shares to be issued in exchange for securities as contemplated by the Arrangement, subject to and conditioned upon the Court's determination following a hearing that the Arrangement is fair and reasonable to the Shareholders;

for the grant of Dissent Rights as contemplated in the Plan of Arrangement;

for the notice requirements with respect to the presentation of the application to the Court for the Final Order;

that the Meeting may be adjourned or postponed from time to time by the Company subject to the terms of this Agreement without the need for additional approval of the Court;

that the record date for the Shareholders entitled to notice of, and to vote at, the Meeting shall not change in respect of any adjournment(s) or postponement(s) of the Meeting; and

for such other matters as the Acquiror may reasonably require, subject to obtaining the prior consent of the Company, such consent not to be unreasonably withheld or delayed.

As soon as is practicable after the date hereof, the Company shall prepare, in consultation with the Acquiror, the Circular which, together with any other documents required by applicable Law in connection with the Meeting, shall be prepared in accordance with applicable Law. The Circular shall, subject to Article 7, reflect the Board Approval, a statement that the Locked-Up Securityholders have agreed to vote all of the Common Shares held by such persons in favour of the Arrangement Resolution, subject to the terms of the applicable Support Agreements, and include a written copy of the Fairness Opinion dated the date of the Circular, which shall be in a form satisfactory to the Acquiror, acting reasonably. The Circular shall also include any disclosure required to be made under MI 61-101.

Prior to the printing of the Circular and during the course of its preparation, the Company shall provide the Acquiror with timely opportunity to review and comment on it, and the Company shall in good faith consider incorporating therein all reasonable comments made by the Acquiror and shall consult in good faith with the Acquiror regarding any comments it proposes not to incorporate. The Company shall have the Circular printed by a printer selected by the Acquiror at the expense of the Acquiror.

The Company shall ensure that the Circular complies in all material respects with all applicable Law (including by preparing a version in the French language if required by applicable Law) and, without limiting the generality of the foregoing, that the Circular does not contain any Misrepresentation (other than with respect to any information relating to and provided by the Acquiror). The Company shall ensure that the Circular complies in all material respects with National Instrument 51-102 – Continuous Disclosure Requirements and Form 51-102F5 thereunder adopted by the Canadian Securities Administrators.

The Acquiror shall provide to the Company for inclusion in the Circular such information regarding the Acquiror as is required by applicable Law to be included in the Circular. The Acquiror represents, warrants and covenants that any information it provides to the Company for inclusion in the Circular shall be accurate and complete in all material respects as of the relevant date of such information and shall not contain any Misrepresentation. The Acquiror shall indemnify and save harmless the Company and its directors and officers from and against any and all liabilities, losses, damages, claims, costs, expenses, interest awards, judgments and penalties suffered or incurred by any of them in connection with or as a result of any Misrepresentation contained in any information that was provided by the Acquiror to the Company for inclusion in the Circular.

As soon as practicable after the issuance of the Interim Order, the Company shall cause the Circular, together with other documents required by applicable Law in connection with the Meeting, to be sent to the Shareholders and filed as required by the Interim Order and applicable Law, and the Company shall call and hold the Meeting in accordance with the Interim Order, the Company Governing Documents and applicable Law.

The Company and the Acquiror shall diligently do all such reasonable acts and things as may be necessary to comply in all material respects with National Instrument 54-101 – Communication with Beneficial Owners of Securities of a Reporting Issuer in connection with the Meeting and, without limiting the generality of the foregoing, use all reasonable efforts to call and hold the Meeting as soon as practicable under the accelerated timing contemplated by such instrument and in any event by no later than August 30, 2016.

Subject to Article 7, the Company shall use its commercially reasonable efforts to secure the approval of the Arrangement Resolution by Shareholders and solicit proxies for the approval of the Arrangement Resolution in accordance with applicable Law. If requested by the Acquiror, the Company shall employ, at the Acquiror's cost, the services of dealers and proxy solicitation agents selected by the Acquiror. The Company shall instruct any such proxy solicitation agents: (i) to report to the Acquiror and its designated Representatives concurrently with their reports to the Company and to advise the Acquiror as the Acquiror may reasonably request, and on a daily basis on each of the last seven Business Days prior to the Meeting, as to the aggregate tally of the proxies received by the Company in respect of the Arrangement Resolution and any other matters to be considered at the Meeting; and (ii) to cooperate with the Acquiror and any solicitation agents or other Representative of the Acquiror hired by the Acquiror to assist in the solicitation of proxies in respect of the Meeting.

The Company shall provide the Acquiror with a copy of any purported exercise of Dissent Rights and written communications with any Shareholder purportedly exercising such Dissent Rights and shall not, except as required by the BCBCA, settle or compromise any action brought by any present, former or purported holder of any of its securities in connection with the Arrangement or the other transactions contemplated by this Agreement, without the prior consent of the Acquiror, acting reasonably.

The Meeting shall be held in Vancouver, British Columbia on a Business Day to be agreed upon by the parties, acting reasonably. Subject to Article 7, the Company shall not adjourn, postpone or cancel (or propose to adjourn, postpone or cancel) the Meeting, except with the Acquiror's prior written consent or as required by applicable Law or the Company Governing Documents. The Company shall provide notice to the Acquiror of the Meeting and allow the Acquiror's Representatives to attend the Meeting.

The Company and the Acquiror shall each promptly notify the other party if at any time before the Meeting it becomes aware (in the case of the Company only with respect to the Company and in the case of the Acquiror only with respect to the Acquiror) that the Circular contains a Misrepresentation, or otherwise requires an amendment or supplement to the Circular, and the parties shall co-operate in the preparation of any amendment or supplement to the Circular, as required or appropriate, and the Company shall promptly mail or otherwise publicly disseminate any amendment or supplement to the Circular as required by the Court or applicable Law.

prior to the issuance of the Interim Order, the Court shall be advised of the intention of the parties to rely on the exemption from registration provided by Section 3(a)(10) of the U.S. Securities Act with respect to the issuance of the Acquiror Shares pursuant to the Arrangement, based on the Court's approval of the Arrangement;

the Court shall be required to satisfy itself that the Arrangement is fair and reasonable;

the Company shall ensure that each Shareholder entitled to receive Acquiror Shares under the Arrangement shall be given adequate notice advising them of their right to attend the hearing of the Court to give approval of the Arrangement and providing them with sufficient information necessary for them to exercise that right;

the Shareholders shall be advised that the Acquiror Shares, to be issued in the Arrangement, have not been registered under the U.S. Securities Act and shall be issued in reliance on the exemption from registration provided by Section 3(a)(10) of the U.S. Securities Act;

the Interim Order shall specify that each Shareholder shall have the right to appear before the Court at the hearing so long as it enters an appearance within a reasonable time; and

the Final Order shall expressly state that the Arrangement is approved by the Court as being fair and reasonable to Shareholders.

the Fairness Advisor has delivered an opinion (orally or in writing) to the Special Committee and the Board to the effect that the consideration to be received under the Arrangement is fair from a financial point of view to the Shareholders (the "Fairness Opinion");

the Board, after consultation with its financial advisors and legal counsel and following receipt of a unanimous recommendation of the Special Committee, has unanimously determined that the Arrangement is fair to the Shareholders and is in the best interests of the Company, and accordingly has unanimously approved the entering into of this Agreement and the making of a recommendation that Shareholders vote in favour of the Arrangement Resolution (collectively, the "Board Approval"); and

each director and officer has advised the Company that he or she intends to vote all Common Shares held by such director and officer in favour of the Arrangement Resolution.

conduct its businesses only in, not take any action except in, and maintain its facilities in, the usual, ordinary and regular course of business consistent with past practice and use commercially reasonable efforts to: (i) preserve intact its present business organization, assets (including intellectual property) and goodwill; (ii) maintain its real property interests (including title to, and leasehold interests in respect of, any real property) in good standing; (iii) keep available the services of its officers and employees as a group; and (iv) preserve the current relationships with suppliers, distributors, employees, consultants, customers and others having business relationships with it;

(i) consult with the Acquiror (A) with respect to decisions and expenditures in respect of the exploration, development and maintenance of all of the properties and assets owned and controlled by the Company, and (B) prior to making any payments or incurring any expenses that are not included in the Company Officer’s Certificate, and (ii) make available to the Acquiror on a weekly basis (at a time designated by the Acquiror, acting reasonably) members of senior management of the Company designated by the Acquiror to discuss the business, affairs, finances and operations of the Company;

not:

(i)

issue, sell, pledge, lease, dispose of, encumber or agree to issue, sell, pledge, lease, dispose of or encumber: (A) any additional shares of, or any options, warrants, calls, conversion privileges or rights of any kind to acquire any shares or other securities of, the Company (other than the issuance of Common Shares pursuant to the exercise in accordance with their terms of Options or Warrants currently outstanding); or (B) except in the ordinary course of business, any assets of the Company;

(ii)

amend or agree to amend any of the terms of any of the Options or the Warrants, or amend, extend, terminate or otherwise alter (or agree to do any of the foregoing in respect of) any other contractual arrangement of the Company;

(iii)

amend or propose to amend the notice of articles, articles, by-laws or other constating documents of the Company;

(iv)

split, combine or reclassify any outstanding Common Shares or declare, set aside or pay any dividend or other distribution payable in cash, stock, property or otherwise with respect to the Common Shares;

(v)

redeem, purchase or offer to purchase any Common Shares or other securities of the Company;

(vi)

reorganize, amalgamate or merge by plan of arrangement or otherwise the Company with any other person;

(vii)

reduce the stated capital of the Company;

(viii)

acquire or agree to acquire (by merger, amalgamation, plan of arrangement, acquisition of shares or assets or otherwise) any company, partnership or other business organization or division, or incorporate or form any company, partnership or other business organization or make any investment either by purchase of shares or securities, contributions of capital, property transfer or purchase of any property or assets of any other person;

(ix)

enter into or agree to the terms of any joint venture or similar agreement, arrangement or relationship;

(x)

sell, transfer or assign any interest in any of the Company Properties;

(xi)

incur or commit to incur any indebtedness for borrowed money, capital expenditures other than the Credit Facility, or any other material liability, contractual commitment or obligation or issue any debt securities;

(xii)

enter into any agreement with, or make any payments to, any Related Party of the Company;

(xiii)

endorse, or otherwise as an accommodation become responsible for, the obligations of any other person, company, partnership or other business organization, or make any loans or advances;

(xiv)

adopt a plan of liquidation or resolutions providing for the liquidation or dissolution of the Company;

(xv)

take any action or enter into any transaction that would preclude the Acquiror from obtaining the tax "bump", determined under paragraph 88(1)(d) of the Tax Act, in respect of the non-depreciable capital property of the Company upon a wind-up, or amalgamation with, the Company;

(xvi)

pay, discharge or satisfy any material claims, liabilities or obligations other than as reflected in the Company’s Officer’s Certificate;

(xvii)

authorize, recommend, propose or agree to any release or relinquishment of any material contractual right or other material right under any licence or permit or material contract;

(xviii)

abandon or fail to diligently pursue any application for any material licence, permit, order, authorization, consent, approval or registration which is currently pending or contemplated to be sought or required;

(xix)

waive, release, grant or transfer any rights of value or modify or change in any material respect any existing licence, lease, permit, material contract or other material document, other than in the ordinary course of business consistent with past practice; or

(xx)

enter into new commitments of a capital expenditure nature or incur any new contingent liabilities;

not enter into or modify any employment, consulting, severance, change of control or similar agreements or arrangements with, or grant any bonuses, salary or fee increases, severance or termination pay to, any officers or directors or, in the case of employees or consultants who are not officers or directors, take any action other than as disclosed in the Company Officer’s Certificate with respect to the grant of any bonuses, salary or fee increases, severance or termination pay or with respect to any increase of benefits payable in effect on the date hereof and shall not pay or agree to pay any bonuses, salary or fee increases, severance or termination pay to any director, officer, employee or consultant in connection with the transactions contemplated by this Agreement;

not adopt or amend any bonus, profit sharing, incentive, compensation, stock option, pension, retirement, deferred compensation, employment or other employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare of any employee;

use commercially reasonable efforts to cause its current insurance (or re- insurance) policies not to be cancelled or terminated or any of the coverage thereunder to lapse unless, simultaneously with such cancellation, termination or lapse, replacement policies underwritten by insurance and re-insurance companies of nationally recognized standing providing coverage equal to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in full force and effect;

not take any action, which would render, or which reasonably may be expected to render, any representation or warranty made by it in this Agreement untrue in any material respect at any time prior to the Effective Time if then made, and promptly notify the Acquiror first immediately orally and then promptly in writing of the occurrence of any event or condition that has, or is reasonably likely to have, a Material Adverse Effect in respect of the Company in the course of its business or in the operation of its properties and of any material governmental or third party complaints, investigations or hearings (or communications indicating that the same may be contemplated);

not authorize or propose or enter into or modify any contract, agreement, commitment or arrangement to do any of the matters prohibited by the other paragraphs of this Section 5.1;

not enter into or adopt any shareholder rights plan or similar agreement or arrangement;

(i) duly and timely file all Tax Returns required to be filed by it on or after the date hereof and all such Tax Returns shall be true, complete and correct in all material respects, (ii) timely pay all Taxes which are due and payable, (iii) not make or rescind any material express or deemed election relating to Taxes, (iv) not make a request for a Tax ruling or enter into a closing agreement with any taxing authorities, (v) not settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, and (vi) not change in any material respect any of its methods of reporting losses, deductions or accounting for income tax purposes from those employed in the preparation of its Tax Return for the most recent taxation year, except as may be required by applicable Law;

not engage in any business, enterprise or other activity different from that carried on by it at the date of this Agreement that would reasonably be expected to have a Material Adverse Effect on the Company; and

make or cooperate as necessary in the making of all necessary filings and applications under all applicable Law required in connection with the transactions contemplated herein and take all reasonable action necessary to be in compliance with such Laws.

the Acquiror shall conduct its business only in, not take any action except in, and maintain its facilities in, the usual, ordinary and regular course of business consistent with past practice and use commercially reasonable efforts to: (i) preserve intact its present business organization, assets (including intellectual property) and goodwill; (ii) maintain its real property interests (including title to, and leasehold interests in respect of, any real property) in good standing; (iii) keep available the services of its officers and employees as a group; and (iv) preserve the current relationships with suppliers, distributors, employees, consultants, customers and others having business relationships with it;

the Acquiror shall not, directly or indirectly, do or permit to occur any of the following without the prior consent of the Company, such consent not to be unreasonably withheld, delayed or conditioned:

(i)

issue, sell, pledge, lease, dispose of, encumber or agree to issue, sell, pledge, lease, dispose of or encumber: (A) any additional shares of, or any options, warrants, calls, conversion privileges or rights of any kind to acquire any shares or other securities of, the Acquiror (other than the issuance of Acquiror Shares pursuant to the exercise in accordance with their terms of stock options or share purchase warrants currently outstanding) that, in the aggregate, would result in the issuance of Acquiror Shares greater than 19.9% of the currently issued and outstanding Acquiror Shares; or (B) except in the ordinary course of business, any assets of the Acquiror;

(ii)

amend its articles or by-laws or the terms of its shares in a manner that could have a material adverse effect on the market price or value of the Acquiror Shares to be issued pursuant to the Arrangement;

(iii)

split, consolidate or reclassify any of its shares nor undertake any other capital reorganization;

(iv)

reduce capital in respect of its shares;

(v)

take any action that could reasonably be expected to interfere with or be inconsistent with the consummation of the Arrangement or the transactions contemplated in this Agreement;

(vi)

reorganize, amalgamate or merge by plan of arrangement or otherwise the Acquiror with any other person, other than in connection with the reorganization of any subsidiary of the Acquiror; or

(vii)

acquire or agree to acquire (by merger, amalgamation, plan of arrangement, acquisition of shares or assets or otherwise) any company, partnership or other business organization or division, or make any investment either by purchase of shares or securities, contributions of capital, property transfer or purchase of any property or assets of any other person that, in the aggregate, would result in the issuance of Acquiror Shares greater than 19.9% of the currently issued and outstanding Acquiror Shares;

the Acquiror shall not, directly or indirectly, do or permit to occur any of the following without the prior consent of the Company, such consent not to be unreasonably withheld, delayed or conditioned:

create, assume or suffer to exist (i) any liens upon or with respect to any of the equity interests in any subsidiary, whether now owned or hereafter acquired, or (ii) create or assume any liens or security interest upon or with respect to any of its assets, property or undertaking, or (iii) endorse, or otherwise as an accommodation become responsible for, the obligations of any other person, or make any loans or advances, or (iv) enter into new commitments of a capital expenditure nature or incur any new contingent liabilities, or (v) adopt a plan of liquidation or resolutions providing for the liquidation or dissolution of the Acquiror;

sell, pledge, lease, transfer or otherwise dispose of or agree to sell, pledge, lease, transfer or otherwise dispose of any material assets, authorize, recommend, propose or agree to any release or relinquishment of any material or contractual right or other material right under any licence or permit or material contract, abandon or fail to diligently pursue any application for any material licence, permit, order, authorization, consent, approval or registration which is currently pending or contemplated to be sought or required, or waive, release, grant or transfer any rights of value or modify or change in any material respect any existing licence, lease, permit, material contract or other material document, other than in the ordinary course of business consistent with past practice;

acquire or invest in any securities issued by any person or participate in any partnership or joint venture or the acquisition of any business assets or unincorporated business operations that, in the aggregate, would result in the issuance of Acquiror Shares greater than 19.9% of the currently issued and outstanding Acquiror Shares;

declare, set aside or pay any dividends, purchase, redeem, retire, defease or otherwise acquire for value any of its equity interests now or hereafter outstanding, return any capital to its stockholders, directors or officers (or the equivalent persons thereof), make any distribution of assets, equity interests, obligations or securities to its stockholders, directors or officers (or the equivalent persons thereof) or pay or agree to pay any bonus, directors fees, consulting fees or other similar fees to any stockholders, directors or officers (or the equivalent persons thereof) other than director and officer fees or bonuses previously approved by the Acquiror’s board of directors, or amend any existing service agreement, provided however, that the foregoing will not restrict the Acquiror from making routine payments of salaries or benefits to any salaried or hourly employees who are not directors or officers in accordance with the terms of employment or consulting arrangements in place as at the date hereof) and the Acquiror shall have the right to implement change of control payment agreements with its senior executives on terms acceptable to the TSXV; and

other than as herein provided, enter into any contract, agreement or transaction whatsoever, including for the sale, purchase, lease or other dealing in any property or the provision of any services (other than office and administration services provided in the ordinary course of business), with any non-arm’s length party. Notwithstanding the foregoing, the Acquiror may upon notice to the Company, enter into a non-arm’s length transaction which does not involve any remuneration, is not material and is made upon fair and reasonable terms, which terms are not less favorable to that party, as the case may be, than it would obtain in an arm’s length transaction and, if applicable, for consideration which equals the fair market value of such property or the fair market rental as regards to leased property.

use commercially reasonable efforts to obtain as soon as practicable following execution of this Agreement all third party consents, approvals and notices required under any material Contract;

use commercially reasonable efforts to defend all lawsuits or other legal, regulatory or other proceedings against the Company challenging or affecting this Agreement or the consummation of the transactions contemplated hereby and use commercially reasonable efforts to have lifted or rescinded any injunction or restraining order or other order relating to the Company which may materially adversely affect the ability of the parties to consummate the Arrangement; and

use commercially reasonable efforts to satisfy all conditions precedent in this Agreement and take all steps set forth in the Interim Order and Final Order applicable to it and comply promptly with all requirements which applicable Law may impose on the Company with respect to the transactions contemplated by this Agreement.

use commercially reasonable efforts to defend all lawsuits or other legal, regulatory or other proceedings against the Acquiror challenging or affecting this Agreement or the consummation of the transactions contemplated hereby and use commercially reasonable efforts to have lifted or rescinded any injunction or restraining order or other order relating to the Acquiror which may materially adversely affect the ability of the parties to consummate the Arrangement;

use commercially reasonable efforts to satisfy all conditions precedent in this Agreement and take all steps set forth in the Interim Order and Final Order applicable to it and comply promptly with all requirements which applicable Law may impose on the Acquiror with respect to the transactions contemplated by this Agreement; and

prepare and file with the applicable Regulatory Authorities, including the TSXV, all necessary applications and forms required in order to permit the valid issue and listing on such exchange of the Acquiror Shares issued pursuant to the Arrangement.

the Arrangement Resolution shall have been approved and adopted by the Shareholders at the Meeting in accordance with the Interim Order;

the Interim Order and the Final Order shall each have been obtained on terms consistent with this Agreement and shall not have been set aside or modified in a manner unacceptable to the Company or the Acquiror, acting reasonably, on appeal or otherwise;

no Regulatory Authority shall have enacted, issued, promulgated, enforced or entered any Law which is then in effect and has the effect of making the Arrangement illegal or otherwise preventing or prohibiting consummation of the Arrangement;

the Regulatory Approvals shall have been obtained on terms satisfactory to the Acquiror and there shall be no appeal, stop-order, stay or revocation or proceeding seeking an appeal, stop-order, stay or revocation of the Regulatory Approvals;

the issuance of Acquiror Shares issuable pursuant to the Arrangement shall be exempt from registration requirements under the U.S. Securities Act pursuant to section 3(a)(10) thereof and the registration and qualification requirements of all applicable state securities laws;

the TSXV shall have approved the listing of the Acquiror Shares issuable to the Shareholders and the Acquiror Shares issuable to Optionholders and Warrantholders upon the exercise of Options and Warrants; and

this Agreement shall not have been terminated in accordance with its terms.

the representations and warranties made by the Company in this Agreement that are qualified by Material Adverse Effect shall be true and correct in all respects and the representations and warranties that are made by the Company in this Agreement that are not so qualified shall be true and correct in all material respects, in each case as of the Effective Date as if made on and as of such date (except to the extent that any such representation or warranty speaks as of an earlier date or except as affected by transactions contemplated or permitted by this Agreement), except where any failures or breaches of representations and warranties would not, either individually or in the aggregate, have a Material Adverse Effect on the Company or prevent, or materially delay the consummation of the Arrangement and the Company shall have provided to the Acquiror a certificate of two senior officers of the Company certifying such accuracy on the Effective Date;

subject to Section 6.4, the Company shall have complied in all material respects with its covenants herein and provided to the Acquiror a certificate of two senior officers of the Company certifying that it has so complied with its covenants herein;

from the date hereof and up to and including the Effective Date, there shall have been no change, effect, event, circumstance, fact or occurrence that, individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect on the Company and the Company shall have provided to the Acquiror a certificate of two senior officers of the Company to such effect;

Shareholders holding no more than 10% of the outstanding Common Shares shall have validly exercised their Dissent Rights (and not withdrawn such exercise) and the Acquiror shall have received a certificate dated the day immediately preceding the Effective Date of two officers of the Company to such effect;

the Support Agreements shall have been entered into and not terminated prior to the Meeting;

the Board shall (i) have adopted all necessary resolutions, and all other necessary corporate action shall have been taken by the Company, to permit the consummation of the Arrangement, and (ii) the Board shall not have withdrawn any recommendation made by it that Shareholders vote in favour of the Arrangement Resolution or changed any such recommendation in a manner that has substantially the same effect or issued a recommendation that Shareholders not vote in favour of the Arrangement Resolution;

there shall not be threatened in writing or pending any suit, action or proceeding by any Regulatory Authority challenging this Agreement or the transactions contemplated hereby, that would reasonably be expected to result in a judgment, order or decree delaying, restraining or prohibiting the Arrangement (or the Acquiror's direct or indirect ownership of the Company on or following the Effective Date) or compelling the Acquiror to dispose of or hold separate any material portion of the business or assets of the Company (or any equity interest in the Company); and

the Acquiror shall not have become aware of any Misrepresentation (after giving effect to all subsequent filings in relation to all matters covered in earlier filings) in any document filed or released by or on behalf of the Company with any securities regulatory authority in Canada or elsewhere having jurisdiction over the Company, including any annual report, financial statements, material change report, press release or management information circular, that the Acquiror shall have determined, acting reasonably, constitutes a Material Adverse Effect in respect of the Company.

the representations and warranties made by the Acquiror in this Agreement that are qualified by Material Adverse Effect shall be true and correct in all respects and the representations and warranties that are made by the Acquiror in this Agreement that are not so qualified shall be true and correct in all material respects, in each case as of the Effective Date as if made on and as of such date (except to the extent that any such representation or warranty speaks as of an earlier date or except as affected by transactions contemplated or permitted by this Agreement), except where any failures or breaches of representations and warranties would not, either individually or in the aggregate, have a Material Adverse Effect on the Acquiror or prevent, or materially delay the consummation of the Arrangement and the Acquiror shall have provided to the Company a certificate of two senior officers of the Acquiror certifying such accuracy on the Effective Date;

subject to Section 6.4, the Acquiror shall have complied in all material respects with its covenants herein, except those in Section 2.9, in which case it shall have complied in all respects, and the Acquiror shall have provided to the Company a certificate of two senior officers of the Acquiror certifying that the Acquiror has so complied with its covenants herein;

from the date hereof and up to and including the Effective Date, there shall have been no change, effect, event, circumstance, fact or occurrence that, individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect on the Acquiror and the Acquiror shall have provided to the Company a certificate of two senior officers of the Acquiror to such effect;

there shall not be any suit, action or proceeding by any person, including, without limitation, any Regulatory Authority, challenging this Agreement or the transactions contemplated hereby, that would reasonably be expected to result in a judgment, order or decree delaying, restraining or prohibiting the Arrangement (or the Acquiror's direct or indirect ownership of the Company on or following the Effective Date) or compelling the Acquiror to dispose of or hold separate any material portion of the business or assets of the Company (or any equity interest in the Company;

the Company shall not have become aware of any Misrepresentation (after giving effect to all subsequent filings in relation to all matters covered in earlier filings) in any document filed or released by or on behalf of the Acquiror with any securities regulatory authority in Canada or elsewhere having jurisdiction over the Acquiror, including any annual report, financial statement, material change report, press release or management information circular, that the Company shall have determined, acting reasonably, constitutes a Material Adverse Effect in respect of the Acquiror; and

the Company shall have received the Fairness Opinion from the Fairness Advisor indicating that the Arrangement is fair from a financial point of view to Shareholders.

cause any of the representations or warranties of either party contained herein to be untrue or inaccurate in any material respect on the date hereof or at the Effective Date;

result in the failure to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by either party prior to or at the Effective Date; or

result in the failure to satisfy any of the conditions precedent in its favour contained in Sections 6.1, 6.2 or 6.3, as the case may be.

Except as otherwise provided in this Agreement, the Company shall not, directly or indirectly through any Representative of the Company:

(i)

solicit, assist, initiate, encourage or facilitate (including by way of discussion, negotiation, furnishing information, permitting any visit to any facilities or properties of the Company or entering into any form of written or oral agreement, arrangement or understanding) any inquiries, proposals or offers regarding, or that may reasonably be expected to lead to, any Alternative Proposal;

(ii)

engage or participate in any discussions or negotiations regarding, or provide any information with respect to or otherwise cooperate in any way with any person (other than the Acquiror and its Representatives) regarding, any Alternative Proposal or potential Alternative Proposal;

(iii)

withdraw, modify or qualify, or propose publicly to withdraw, modify or qualify, in any manner adverse to the Acquiror, the approval or recommendation of this Agreement or the Arrangement by the Board or any of its committees;

(iv)

approve or recommend, or remain neutral with respect to, or propose publicly to approve or recommend, any Alternative Proposal, provided that remaining neutral with respect to an Alternative Proposal and/or failing to reaffirm its recommendation of this Agreement until the earlier of (i) five calendar days following the public announcement of such Alternative Proposal, and (ii) three Business Days prior to the Meeting, shall not constitute a breach of this Section 7.1(a)(iv);

accept or enter into, or publicly propose to accept or enter into, any letter of intent, agreement in principle, agreement, arrangement or undertaking related to any Alternative Proposal; or

release any person from or waive or otherwise forebear in the enforcement of any confidentiality or standstill agreement or any other agreement with such person that would facilitate the making or implementation of any Alternative Proposal (it being acknowledged and agreed that the automatic termination or automatic release of any standstill provisions of any such agreement as the result of the entering into or announcement of this Agreement pursuant to the terms of any such agreement shall not be a breach of this Section 7.1(a)(vi)).

The Company shall immediately cease and cause to be terminated any existing solicitation, discussion, negotiation, encouragement or activity with any person (other than the Acquiror or any of its Representatives) by the Company or any of its Representatives with respect to any Alternative Proposal or any potential Alternative Proposal. The Company shall immediately cease to provide any person (other than the Acquiror or any of its Representatives) with access to information concerning the Company in respect of any Alternative Proposal or any potential Alternative Proposal, and shall request the return or destruction of all confidential information provided to any person (other than the Acquiror or any of its Representatives) that has entered into a confidentiality agreement with the Company relating to any Alternative Proposal or potential Alternative Proposal to the extent provided for in such confidentiality agreement and shall use all commercially reasonable efforts to ensure that such requests are honoured.

The Company shall ensure that its Representatives are aware of the prohibitions in this Section 7.1 and the Company shall be responsible for any breach of this Section 7.1 by its Representatives.

Notwithstanding Section 7.1(a) or any other provision of this Agreement, if at any time following the date of this Agreement and prior to the Meeting the Company receives a bona fide written Alternative Proposal (that was not solicited, assisted, initiated, encouraged or facilitated in contravention of Section 5 of the Letter Agreement or, after the date hereof, in contravention of Section 7.1(a)), the Company and its Representatives may:

contact the person making such Alternative Proposal and its Representatives solely for the purpose of clarifying the terms and conditions of such Alternative Proposal and the likelihood of its consummation so as to determine whether such Alternative Proposal is, or is reasonably likely to lead to, a Superior Proposal; and

if the Board determines, after consultation with its legal counsel and financial advisors, that such Alternative Proposal is, or is reasonably likely to lead to, a Superior Proposal and that the failure to take the relevant action would be inconsistent with its fiduciary duties:

furnish information with respect to the Company to the person making such Alternative Proposal and its Representatives only if such person has entered into a confidentiality and standstill agreement that contains provisions that are not less favourable to the Company than those contained in the Confidentiality Agreement (except that it shall permit the disclosure to the Acquiror required by this Section 7.3(a)(ii)(A)), provided that the Company sends a copy of such confidentiality and standstill agreement to the Acquiror promptly following its execution and the Acquiror is promptly provided with a list of, and access to (to the extent not previously provided to the Acquiror), the information provided to such person; and

engage in discussions and negotiations with the person making such Alternative Proposal and its Representatives, provided that all such discussions and negotiations shall cease during the Match Period.

Notwithstanding Section 7.1(a) or any other provision of this Agreement, the Company may at any time prior to the Meeting (x) enter into an agreement (other than a confidentiality and standstill agreement contemplated by Section 7.3(a)(ii)(A)) with respect to an Alternative Proposal that is a Superior Proposal and/or (y) and the Board may withdraw, modify or qualify its approval or recommendation of the Arrangement and recommend or approve an Alternative Proposal that is a Superior Proposal, provided:

(i)

the Company shall have complied with its obligations under this Article 7;

(ii)

the Board has determined, after consultation with its legal counsel and financial advisors, that such Alternative Proposal is a Superior Proposal and that the failure to take the relevant action would be inconsistent with its fiduciary duties;

(iii)

the Company has delivered written notice to the Acquiror (A) of the determination of the Board that the Alternative Proposal is a Superior Proposal, (B) of the intention of the Board to approve or recommend such Superior Proposal and/or of the Company to enter into an agreement with respect to such Superior Proposal, together with a copy of such agreement executed by the person making such Superior Proposal that is capable of acceptance by the Company, and (C) providing a summary of the valuation analysis attributed by the Board in good faith to any non-cash consideration included in such Alternative Proposal after consultation with its financial advisors (the "Superior Proposal Notice");

(iv)

at least five Business Days have elapsed since the date the Superior Proposal Notice was received by the Acquiror, which five Business Day period is referred to as the "Match Period" (for greater certainty, the Match Period shall expire at 5:00 p.m. (Vancouver time) on the fifth Business Day following the day that the Superior Proposal Notice was delivered to the Acquiror);

(v)

if the Acquiror has offered to amend the terms of the Arrangement and this Agreement during the Match Period pursuant to Section 7.3(c), such Alternative Proposal continues to be a Superior Proposal compared to the amendment to the terms of the Arrangement and this Agreement offered by the Acquiror at the termination of the Match Period; and

(vi)

the Company terminates this Agreement pursuant to Section 9.2(h) and the Company has previously paid or, concurrently with termination pays, the Termination Payment to the Acquiror.

During the Match Period, the Acquiror shall have the opportunity, but not the obligation, to offer to amend the terms of the Arrangement and this Agreement and the Company shall cooperate with the Acquiror with respect thereto, including negotiating in good faith with the Acquiror to enable the Acquiror to make such amendments to the Arrangement and this Agreement as the Acquiror deems appropriate as would enable the Acquiror to proceed with the Arrangement on such adjusted provisions. The Board shall review any such offer by the Acquiror to amend the terms of the Arrangement and this Agreement in order to determine, in the good faith exercise of its fiduciary duties, whether the Acquiror's offer to amend the Arrangement and this Agreement, upon its acceptance, would result in the Alternative Proposal ceasing to be a Superior Proposal compared to the amendment to the terms of the Arrangement and this Agreement offered by the Acquiror. If the Board determines that the Alternative Proposal would cease to be a Superior Proposal, the Acquiror shall amend the Arrangement and the Company and the Acquiror shall enter into an amendment to this Agreement reflecting the offer by the Acquiror to amend the terms of the Arrangement and this Agreement.

(d)

The Board shall promptly reaffirm its recommendation of the Arrangement by press release after: (i) any Alternative Proposal (which is determined not to be a Superior Proposal) is publicly announced or made; (ii) the Board determines that a proposed amendment to the terms of the Arrangement and this Agreement would result in the Alternative Proposal not being a Superior Proposal, and the Acquiror has so amended the terms of the Arrangement; or (iii) the written request of the Acquiror. The Acquiror shall be given a reasonable opportunity to review and comment on the form and content of any such press release and the Company shall consider in good faith any comments made by the Acquiror.

(e)

Nothing in this Agreement shall prevent the Board from: (i) responding through a directors' circular or otherwise as required by applicable Law to an Alternative Proposal that it determines is not a Superior Proposal; (ii) complying with any requirement to hold a meeting of shareholders of the Company requisitioned under the BCBCA; or (iii) taking all actions as may be mandated by a court or Regulatory Authority having jurisdiction. The Acquiror shall be given a reasonable opportunity to review and comment on the form and content of any such response prior to its printing, publication or announcement and the Company shall in good faith consider incorporating therein all reasonable comments made by the Acquiror.

(f)

Each successive material modification of any Alternative Proposal shall constitute a new Alternative Proposal for purposes of Section 7.3(b).

The Acquiror shall, or shall cause the Company to, maintain in effect without any reduction in scope or coverage for six years from the Effective Date customary policies of directors’ and officers’ liability insurance providing protection no less favourable to the protection provided by the policies maintained by the Company which are in effect immediately prior to the Effective Date and providing protection in respect of claims arising from facts or events which occurred on or prior to the Effective Date, provided, however, that prior to the Effective Date, the Company may, in the alternative, purchase customary run off directors’ and officers’ liability insurance at the Acquiror’s cost for a period of up to six years from the Effective Date with the prior written consent of the Acquiror, such consent not to be unreasonably withheld, conditioned or delayed.

The Acquiror covenants and agrees that following the Effective Date it shall cause the Company to honour all rights to indemnification or exculpation now existing in favour of present and former officers and directors of the Company and acknowledges that such rights shall survive the completion of the Plan of Arrangement and shall continue in full force and effect.

The provisions of this Section 8.5 are intended for the benefit of, and shall be enforceable by, each insured or indemnified person, his or her heirs and his or her legal representatives and, for such purpose, the Company hereby confirms that it is acting as agent and trustee on their behalf.

As soon as reasonably practicable after the date hereof, each party shall make all necessary filings, applications and submissions with Regulatory Authorities under all applicable Law in respect of the transactions contemplated herein.

Each party shall use its reasonable best efforts to obtain all Regulatory Approvals.

Subject to applicable Law, each party shall provide the other party (or its legal counsel in respect of competitively-sensitive, privileged or confidential matters) with reasonable opportunity to review and comment on all filings, applications and submissions with Regulatory Authorities to be made by it and the other party shall use its commercially reasonable efforts to cooperate with and assist such party in the preparation and making of all such filings, applications and submissions and the obtaining of all Regulatory Approvals required to be obtained by such party (including participating and appearing in any proceedings before Regulatory Authorities).

Each party shall promptly notify the other party of any material communication to such party from any Regulatory Authority in respect of the transactions contemplated herein (and provide a copy thereof if such communication is in writing) and, subject to applicable Law, provide the other party (or its legal counsel in respect of competitively-sensitive, privileged or confidential matters) with reasonable opportunity to review and comment on any proposed written material communication to any such Regulatory Authority. Each party shall consult with the other party (or its legal counsel in respect of competitively- sensitive, privileged or confidential matters) prior to participating in any substantive meeting or discussion with any Regulatory Authority in respect of the transactions contemplated herein and give the other party (or its legal counsel in respect of competitively-sensitive, privileged or confidential matters) the opportunity to attend and participate thereat.

In the event that the Acquiror concludes that it is necessary or desirable to proceed with another form of transaction (such as a take-over bid or amalgamation) whereby the Acquiror or its Affiliates would effectively acquire all of the Common Shares or the assets of the Company within approximately the same time periods and on economic terms and other terms and conditions (including tax treatment) and having consequences to the Company and its Shareholders that are equivalent to or better than those contemplated by this Agreement (an "Alternative Transaction"), the Company agrees to support the completion of such Alternative Transaction in the same manner as the Arrangement and shall otherwise fulfill its covenants contained in this Agreement in respect of such Alternative Transaction.

In the event of any proposed Alternative Transaction, any reference in this Agreement to the Arrangement shall refer to the Alternative Transaction to the extent applicable, all terms, covenants, representations and warranties of this Agreement shall be and shall be deemed to have been made in the context of the Alternative Transaction and all references to time periods regarding the Arrangement, including the Effective Time, herein shall refer to the date of closing of the transactions contemplated by the Alternative Transaction (as such date may be extended from time to time).

by mutual written agreement of the Acquiror and the Company;

by the Acquiror, if the Shareholders do not approve the Arrangement Resolution at the Meeting in the manner required by the Interim Order;

by the Acquiror or the Company, if the Effective Date has not occurred on or prior to the Outside Date, other than as a result of the breach by such party of any covenant or obligation under this Agreement or as a result of any representation or warranty of such party in this Agreement being untrue or incorrect; provided, however, that if the Effective Date is delayed by (i) an injunction or order made by a Regulatory Authority of competent jurisdiction, or (ii) the Acquiror or the Company not having obtained the Regulatory Approval or any regulatory waiver, consent or approval which is necessary to permit the Effective Date to occur, then, provided that such injunction or order is being contested or appealed in good faith or such regulatory waiver, consent or approval is being actively sought in good faith, as applicable, this Agreement shall not be terminated by the Company or the Acquiror pursuant to this Section 9.2 until the fifth Business Day following the earlier of the date on which such injunction or order ceases to be in effect or such waiver, consent or approval is obtained, as applicable, and December 31, 2016;

by the Acquiror or the Company, if any Regulatory Authority shall have enacted any law or issued an order, decree or ruling permanently restraining or enjoining or otherwise prohibiting any of the transactions contemplated herein (unless such law, order, decree or ruling has been withdrawn, reversed or otherwise made inapplicable) which order, decree or ruling is final and non-appealable;

by either the Acquiror or the Company, subject to Section 6.4, if:

any representation or warranty of the other party under this Agreement is untrue or incorrect or shall have become untrue or incorrect such that the condition contained in Section 6.2(a) or 6.3(a) would be incapable of satisfaction; or

the other party is in default of a material covenant or obligation hereunder such that the condition contained in Section 6.2(b) or 6.3(b), as applicable, would be incapable of satisfaction;

by the Acquiror, if:

the Board or the Special Committee withdraws, modifies, changes or qualifies its approval or recommendation of this Agreement or the Arrangement Resolution in any manner adverse to the Acquiror;

the Board fails to reaffirm its recommendation of the Arrangement within three Business Days (or such longer period as may be provided hereunder) of any written request to do so by the Acquiror;

(iii)

the Board or the Special Committee recommends or approves an Alternative Proposal;

(iv)

the Board or Special Committee has resolved to do either (i) or (iii) above;

(v)

the Company is in material default of any covenant or obligation under Article 7; and

(vi)

the Acquiror, at its sole discretion, is not satisfied with the results of its due diligence review of the Company.

by the Acquiror, if the Meeting has not been held by August 30, 2016, subject to any adjournment or postponement thereof, unless the failure to hold the Meeting is the result of the Acquiror failing to provide the information set out in Section 2.3(d);

by the Company, if the Company proposes to enter into a definitive agreement with respect to a Superior Proposal in compliance with the provisions of Section 7.3, provided the Company has paid to the Acquiror the applicable Termination Payment in compliance with Section 9.3 and provided the Company is not in breach of any of its covenants or obligations under this Agreement; or

by the Acquiror or the Company, if the Acquiror elects not to match a Superior Proposal in accordance with the terms of Section 7.3(b), provided the Company has paid to the Acquiror the applicable Termination Payment in compliance with Section 9.3.

The Acquiror shall be entitled to a payment of $200,000 (the "Termination Payment") upon the occurrence of any of the following events (each a "Termination Payment Event") which shall be paid by the Company within the time specified in respect of such Termination Payment Event:

this Agreement is terminated by the Company pursuant to Section 9.2(h) or by the Acquiror or the Company Section 9.2(i), in which case the Termination Payment shall be paid to the Acquiror prior to or concurrently with such termination; and

this Agreement is terminated by the Company for any reason other than a breach of this Agreement by the Acquiror and, within six (6) months of such termination, the Company announces and subsequently completes any transaction that would have been an Alternative Proposal hereunder, whether made to the Company before or after the date of termination of this Agreement, in which case the Termination Payment shall be made to the Acquiror prior to or concurrently with the completion of such transaction.

The Termination Payment shall be by wire transfer in immediately available funds to an account specified by the Acquiror.

Subject to the provisions of the Interim Order, the Plan of Arrangement and applicable Law, this Agreement and the Plan of Arrangement may, at any time and from time to time before or after the holding of the Meeting but not later than the Effective Date, be amended by mutual written agreement of the parties, without further notice to or authorization on the part of the Securityholders, and any such amendment may without limitation:

change the time for performance of any of the obligations or acts of the parties;

waive any inaccuracies or modify any representation or warranty contained herein or in any document delivered pursuant hereto;

waive compliance with or modify any of the covenants herein contained and waive or modify performance of any of the obligations of the parties; and

waive compliance with or modify any conditions precedent herein contained.

Notwithstanding the foregoing, the Plan of Arrangement may only be supplemented or amended in accordance with the provisions thereof.

The parties agree that all costs and expenses of the parties relating to the transactions contemplated herein, including legal fees, accounting fees, financial advisory fees (including those of the Fairness Advisor), regulatory filing fees, stock exchange fees, all disbursements of advisors and printing and mailing costs, shall be paid by the party incurring such expenses.

The Company represents and warrants to the Acquiror that, with the exception of the Fairness Advisor, no Securityholder, director, officer, employee, consultant, advisor, counsel, broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission, or to the reimbursement of any of its expenses (other than directors, officers, employees, advisors, counsel and consultants not acting as a broker, finder or investment banker), in connection with the transactions contemplated herein based upon arrangements made by or on behalf of the Company.

if to the Company:

if to the Acquiror:

This Agreement shall enure to the benefit of and be binding upon the parties and their respective successors and permitted assigns. This Agreement may not be assigned by either party without the prior written consent of the other party.

The Company acknowledges that the Acquiror may wish to have a direct or indirect wholly-owned subsidiary of the Acquiror acquire all of the Common Shares of the Company as contemplated by the Plan of Arrangement. The Company agrees that the Acquiror may assign all or any part of its rights under this Agreement to, and its obligations under this Agreement may be assumed by, a wholly-owned direct or indirect subsidiary of the Acquiror, provided that the Acquiror shall continue to be jointly and severally liable with such subsidiary for all obligations hereunder.

Currency

Time

Arrangement Agreement

Binding Effect

Arrangement

such Dissenting Shareholder shall cease to be the holder of such Common Shares so transferred and to have any rights as holder of such Common Shares other than the right to be paid fair value for such Common Shares by the Acquiror as set out in Section 3.1;

such Dissenting Shareholder's name shall be removed as the holder of such Common Shares from the central securities register of holders of Common Shares maintained by or on behalf of the Company; and

the Acquiror shall become the sole legal and beneficial holder of such Common Shares so transferred (free and clear of all Encumbrances) and shall be entered in the central securities register of holders of Common Shares maintained by or on behalf of the Company; and

each such holder shall cease to be a holder of the Common Shares so transferred and cease to have any rights as a holder of such Common Shares other than the right to be paid the Transaction Consideration for such Common Shares and the name of such holder shall be removed as the holder of such Common Shares from the central securities register of holders of Common Shares maintained by or on behalf of the Company; and

the Acquiror shall become the sole legal and beneficial holder of the Common Shares so transferred (free and clear of all Encumbrances) and shall be entered in the central securities register of holders of Common Shares maintained by or on behalf of the Company.

No Fractional Shares

Obligation to Issue Common Shares after Effective Date

Rights of Dissent

Shareholders who vote, or who have instructed a proxyholder to vote, in favour of the Arrangement Resolution; nor

persons identified in Section 2.5;

Payment of Consideration

deliver or cause to be delivered to such former holder of Common Shares at the address specified in the Letter of Transmittal;

if requested by such former holder of Common Shares in the Letter of Transmittal, make available at the offices of the Depositary specified in the Letter of Transmittal for pick-up by such former holder of Common Shares; or

if the Letter of Transmittal neither specifies an address as described in Section 4.1(d)(i) nor contains a request as described in Section 4.1(d)(ii), deliver or cause to be delivered to such former holder of Common Shares at the address of such former holder as shown on the securities register of the Company maintained by or on behalf of the Company immediately prior to the Effective Time;

Lost Certificates

Extinction of Rights

Dividends or Other Distributions

Withholding Rights

Amendments to Plan of Arrangement

Termination

Further Assurances

The authorized equity capital of the Company consists of an unlimited number of Common Shares. As at the date hereof, 64,206,430 Common Shares (and no other shares) are issued and outstanding and all such shares are fully-paid and non-assessable shares. In addition, as of the date hereof, there are outstanding 2,013,500 Options and 9,745,000 Warrants providing for the issuance of an aggregate of 11,758,500 Common Shares upon the exercise thereof, the details of which are set out in Section 4(a) of the Disclosure Letter (all of such Warrants have an exercise price of $0.05, and all of such Options have exercise prices that are between $0.13 and $1.30 and are governed by the 2014 Option Plan).

Except as described in Section 4(a) of this Schedule C or in Section 4(b) of the Disclosure Letter, there are no options, warrants, conversion privileges, calls or other rights, agreements, arrangements, commitments or obligations of the Company to issue or sell any shares of any capital stock of the Company or securities or obligations of any kind convertible into or exchangeable for any shares or other securities of the Company or any other person, nor are there outstanding any stock appreciation rights, phantom equity or similar rights, agreements, arrangements or commitments based upon the book value, income or any other attribute of the Company. The holders of outstanding Common Shares are not entitled to pre-emptive or other similar rights.

result (with or without notice or the passage of time) in a violation, conflict or breach of, or constitute a default under, in respect of or require any consent to be obtained under or give rise to any third party right of termination, amendment, first refusal, shot-gun, cancellation, acceleration, penalty or payment obligation or right of purchase or sale under any provision of:

(i)

the Company Governing Documents;

(ii)

any applicable Law to which the Company is subject or by which the Company is bound; or

(iii)

any Contract;

give rise to any right of termination, amendment, acceleration or cancellation of indebtedness of the Company, or cause any such indebtedness to come due before its stated maturity, under any Contract or cause any available credit to cease to be available;

give rise to any rights of first refusal or change in control payment or similar obligation or any restriction or limitation under any such Contract or result in the imposition of any encumbrance, charge or lien upon (i) any of the Company's assets, or (ii) the Company Properties; or

result in any payment (including severance, unemployment compensation, "golden parachute", bonus or otherwise) becoming due to any Related Party of the Company, other than the payments set out in Section 16(a) of the Disclosure Letter.

the Interim Order and any filings required in order to obtain, and approvals required under, the Interim Order;

the Final Order, and any filings required in order to obtain the Final Order; and

such filings and other actions required under applicable Securities Laws and the rules and policies of the TSXV as are contemplated by this Agreement.

All Contracts material to the business or assets or the equity value of the Company are set out in Section 7(a) of the Disclosure Letter, and the Company has made available to the Acquiror for inspection true and complete copies of all such Contracts.

All such Contracts are in full force and effect, and the Company as a party thereto is entitled to all rights and benefits thereunder in accordance with the terms thereof. The Company has complied in all material respects with all terms of such Contracts, has paid all amounts due thereunder, has not waived any material rights thereunder and no material default or breach exists in respect thereof on the part of the Company.

Except as disclosed in Section 7(c) of the Disclosure Letter, no Contract is subject to any termination fees, cancellation costs or other similar penalties that would be or become payable by the Company upon termination of such Contract or agreement following a change of control of the Company or upon completion of the transactions contemplated by this Agreement.

Except as disclosed in Section 7(d) of the Disclosure Letter, no approval or consent of any person is needed in order that such Contracts continue in full force and effect following consummation of the transactions contemplated hereby and the Company is not a party to any such Contract that contains any non- competition obligation or otherwise restricts in any material way the business of the Company.

The Company is in compliance with the terms of the Letter Agreement.

The Company is a reporting issuer in British Columbia and Alberta (and in no other jurisdiction in Canada). The Company is not subject to reporting requirements under the Exchange Act or of any jurisdiction outside Canada and the United States. The Company is not in default in the performance of any of its obligations under legislation of such provinces and is in compliance with the applicable rules and regulations of the TSXV.

Documents or information filed by the Company under applicable Law, including: (i) the Company's management information circular dated September 14, 2014 in respect of the annual meeting of shareholders held October 22, 2014; (ii) the Company's audited consolidated financial statements for the years ended July 31, 2015 and 2014 and the related management discussion and analysis; (iii) the Company's interim unaudited consolidated financial statements for the three and six months ended January 31, 2016 and 2015 and the related management discussion and analysis; (iv) any material change reports that have been filed by the Company between July 31, 2015 and the date hereof; (v) the Homestake Technical Report; (vi) all press releases filed by the Company on SEDAR after July 31, 2015; and (ix) any such documents or information filed by the Company after the date hereof and before the Effective Time (collectively items (i) through (ix) above, the "Company Public Documents"), are or shall be, as of their respective dates, in compliance in all material respects with applicable Law and do not contain any Misrepresentation as of the respective dates.

There is no material change which has occurred with respect to which the requisite material change report has not been filed by the Company with the securities regulatory authorities in the applicable provinces of Canada. The Company has not filed any confidential material change reports that remain confidential. All material agreements required to be filed by the Company with the securities regulatory authorities, in the applicable provinces of Canada have been filed.

The Company has filed all technical reports as required under NI 43-101. As at the date hereof, the Company has not made any disclosure of scientific or technical information that is not supported by a technical report that the Company has filed under NI 41-103 or requires the filing of a technical report under NI 41- 103.

The Homestake Technical Report complied in all material respects with the requirements of NI 43-101 at the time of filing thereof and the Company believes that the Homestake Technical Report reasonably presented the quantity of mineral resources attributable to the applicable Homestake Property as at the date stated therein based upon information available at the time the Homestake Technical Report was prepared.

The Company made available to the authors of the Homestake Technical Report, prior to the issuance thereof, for the purpose of preparing such reports, all information requested by them, which information, to the knowledge of the Company, did not contain any material misrepresentation at the time such information was so provided.

The Company is in compliance with the provisions of NI 43-101 in all material respects.

The audited balance sheets and related statements of loss and comprehensive loss and deficit and statements of cash flows of the Company as at and for the financial years ended July 31, 2015 and 2014 and the unaudited balance sheet and related statements of loss and comprehensive loss and deficit and statements of cash flows of the Company as at and for the three and six months ended January 31, 2016 and 2015 contained in the Company Public Documents were prepared in accordance with IFRS. Such statements present fairly, in all material respects, the financial condition and results of operations of the Company as of the respective dates thereof and for the respective periods covered thereby applied on a basis consistent with the immediately prior period and throughout the periods indicated (except as may be indicated expressly in the notes thereto). Such financial statements reflect appropriate and adequate reserves in respect of contingent liabilities, if any, of the Company. Since July 31, 2015, the Company has not effected any change in its accounting methods, principles or practices, except as otherwise set out in the Company's financial statements, including the notes thereto.

The Company has (A) designed such disclosure controls and procedures, or caused them to be designed under the supervision of the Chief Executive Officer and Chief Financial Officer of the Company, to provide reasonable assurance that material information relating to the Company, is made known to the Chief Executive Officer and Chief Financial Officer, particularly during the period in which the annual or interim filings are being prepared, and (B) designed such internal control over financial reporting, or caused it to be designed under such Chief Executive Officer's and Chief Financial Officer's supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. The Company has not failed to disclose in the Company Public Documents or to the Acquiror in writing prior to the date of this Agreement, any information regarding any event, circumstance or action taken or failed to be taken since July 31, 2015 within the knowledge of the Company and not within the knowledge of the Acquiror as at the date of this Agreement having an effect which could constitute a Material Adverse Effect. From July 31, 2015 to the date of this Agreement, the Company has received no material complaints from any source regarding accounting, internal accounting controls or auditing matters or expressions of concern from employees, consultants and/or independent contractor of the Company regarding questionable accounting or auditing matters.

As at the date hereof, the obligations or liabilities of the Company (on a consolidated basis), including obligations and liabilities due or to become due for transaction expenses and severance costs are not more than $2,000,000.

The Company owns, exclusively possesses or has obtained, and is in compliance with, all concessions, licences, permits, certificates, orders, grants and other authorizations of or from any Regulatory Authority necessary to conduct its business relating to its properties (including the Company Properties) as it is currently being conducted and as presently contemplated. The Company has a good and marketable right, title and interest, free and clear of any title defect or material Encumbrance: (i) to its permits, concessions, claims, leases, licences or other rights to explore for, exploit, develop, mine or produce minerals on the Company Properties, all of which have been accurately and completely set out in Section 13(a) of the Disclosure Letter, subject to such permits, concessions, claims, leases, licences or other rights being renewed and updated on an ongoing basis in accordance with their terms and, in each case, as are necessary to perform the operation of its business as it is currently being conducted and as it is presently contemplated; (ii) to its real property interests, free and clear of any title defect or material Encumbrance, including fee simple title to owned real property, a valid leasehold interest in leased real property, licences (from landowners and authorities permitting the use of land by the Company), rights of way, occupancy rights, surface rights, easements or other real property interests, all of which have been set out in Section 13(a) of the Disclosure Letter, and, in each case, as are necessary to perform the operation of its respective businesses as it is currently being conducted and as it is presently contemplated; and (iii) to all of its properties and assets (real and personal, tangible and intangible, including leasehold interests) including all the properties and assets reflected in the balance sheet forming part of the Company's audited financial statements for the year ended July 31, 2015, except as set out in Section 13(a) of the Disclosure Letter, and such properties and assets are not subject to any Encumbrance or title defect of any kind except as is set out in Section 13(a) of the Disclosure Letter, except where the failure to have such title, or the existence of such Encumbrance or title defects, individually or in the aggregate, does not constitute a Material Adverse Effect in respect of the Company.

Except as set out in Section 13(a) of the Disclosure Letter: (i) the Company Properties (A) are accurately and completely described in Schedule E, and (B) have been properly located and recorded in compliance with applicable Law and are comprised of valid and subsisting mineral concessions; (ii) there are no mineral concessions or other property rights of the Company other than those set out in Schedule E; (iii) the Company has the exclusive right to deal with the Company Properties; (iv) no person other than the Company has any material interest in the Company Properties or any right to acquire any such interest; (v) there are no earn-in rights, rights of first refusal, royalty rights or similar provisions which would materially affect the Company's interests in the Company Properties; (vi) the Company has not received any notice, whether written or oral, from any Regulatory Authority or any person with jurisdiction or applicable authority of any revocation or intention to revoke its interest in the Company Properties; and (vii) the Company Properties are in good standing under applicable Law and are adequate and suitable for the purposes for which they are currently being used and all work required to be performed has been performed and all taxes, fees, expenditures and other payments in respect thereof have been paid and all filings in respect thereof have been made.

The Company has all necessary surface rights, access rights and other rights and interests relating to the areas of the properties on which the Company conducts business granting the Company the right and ability to explore for minerals, ore and metals for development purposes as are appropriate in view of the rights and interest therein of the Company, with only such exceptions as do not materially interfere with the use made by the Company of the rights or interests so held and each of the proprietary interests or rights and each of the documents, agreements and instruments and obligations relating thereto referred to above is currently in good standing in the name of the Company.

There are no adverse claims, actions, suits or proceedings that have been commenced or, to the knowledge of the Company, that are pending or threatened, affecting or which could affect the title to or right to explore or develop any of the Company Properties, including the title to or ownership by the Company of any of the foregoing, which might involve the possibility of any judgement or liability affecting the Company Properties.

Neither the Company nor any predecessor, subsidiary or Affiliate thereof, has any liability or obligation, or to the knowledge of the Company, potential liability or obligation (pursuant to indemnification obligations or pursuant to any guarantee or otherwise) in respect of or relating to any assets, rights or interests (including any interests in mineral properties) which were previously held or used by the Company and which were sold, assigned or otherwise transferred to any other person or abandoned prior to the date hereof.

None of the current directors or officers of the Company holds any interest in, nor has taken any action to obtain, directly or indirectly, any permit, concession, claim, lease, licence or other rights to explore for, exploit, develop, mine or produce minerals and any other properties located within 50 kilometres of any of the Company Properties.

The Company is not subject to an agreement, arrangement or understanding, whether written or oral, that provides for an area of influence in respect of any of the Company Properties.

Except as set out in Section 16(a) of the Disclosure Letter, the Company has not entered into any written or oral agreement or understanding providing for severance, termination or other payments to any director, officer, employee or consultant in connection with the termination of his or her position or his or her employment following a change in control of the Company or on a change in control of the Company. The details of all such payment requirements, including the amounts and a description of the circumstances in which they must be paid, have been previously provided to the Acquiror and such amounts do not and shall not exceed $144,000 and US$150,000, in the aggregate.

The Company is not a party to any collective bargaining agreement or subject to any application for certification or threatened or apparent union organizing campaigns for employees not covered under a collective bargaining agreement nor are there any current pending or threatened strikes, lock-outs or work slowdowns or stoppages at the Company and there has not been any such strike, lock-out or work slowdown or stoppage in the last five years.

The Company is not subject to any claim for wrongful dismissal, constructive dismissal or any other tort claim, actual or, to the knowledge of the Company, threatened, or any litigation, actual or, to the knowledge of the Company, threatened, relating to employment or termination of employment of employees, consultants or independent contractors.

The Company has operated in accordance, in all material respects, with all applicable Law with respect to employment and labour, including, but not limited to, employment and labour standards, occupational health and safety, employment equity, pay equity, workers' compensation, human rights and labour relations and there are no current, pending or, to the knowledge of the Company, threatened proceedings before any board or tribunal with respect to any of the areas listed herein.

Section 16(e) of the Disclosure Letter sets out a complete and accurate list of the names of all individuals who are full-time or part-time employees or individuals engaged on contract to provide employment services or sales or other agents or representatives of the Company ("Employees") and the position, length of service, location of employment and compensation and benefits of each Employee. Such list includes all Employees as at the date hereof including any on lay-off or leave of absence, who have been absent continually from work for a period in excess of one month.

All independent contractor or consulting Contracts (i) have been summarized in Section 16(f) of the Disclosure Letter, and (ii) are terminable upon 30 days' prior written notice without the provision of severance, termination pay or any other payment obligation following such termination. All independent contractors or consultants of the Company have been properly characterized as such in accordance with applicable Law.

The Company has not made any commitment to provide, or any representation in respect of, any general increase in the compensation of any Employees (including any increase pursuant to a Benefit Plan) or any increase in any such compensation or bonus payable to any Employee, or to make any loan to, or to engage in any transaction with, any Employee, except in the usual, ordinary and regular course of business and consistent with past practice.

All accruals for unpaid vacation pay, premiums for employment insurance, health premiums, Canadian Pension Plan premiums, workers' compensation insurance premiums, accrued wages, salaries and commissions, severance pay and employee benefit plan payments have been reflected in the books and records of the Company. The Company has no material liabilities or obligations whatsoever in respect of any retired or former Employee.

All current assessments under the Workers Compensation Act (British Columbia) or comparable legislation of any jurisdiction in which the Company carries on business have been paid and the Company has not been subject to any special or penalty assessment under such legislation.

The Company has complied in all material respects with all the terms of, and all applicable Law in respect of, employee compensation and benefit obligations of the Company. Other than the 2014 Option Plan, the Company has no pension or retirement income plans or other employee compensation or benefit plans, agreements, policies, programs, arrangements or practices, whether written or oral, ("Benefit Plan") which are maintained by or binding upon the Company. The Company is in compliance with the terms of the 2014 Option Plan and all applicable Law related thereto.

The Company has no stock option plan or similar arrangement other than the 2014 Option Plan. Section 4(a) of the Disclosure Letter sets forth a complete, up- to-date and accurate list of all Optionholders under the 2014 Option Plan, together with the number of Options granted, the exercise price, vesting provisions and the expiry date thereof.

any investigation, proceeding, application, order or directive which relates to environmental, health or safety or closure or other reclamation matters, and which may require any material work, repairs, construction, reclamation, remediation or expenditures; or

any claim, demand or notice, with respect to the breach of or liability under any Environmental Laws, including any regulations respecting the use, storage, handling, release, disposal, remediation, treatment or transportation of any substance (including pollutants, contaminant, waste of any nature, hazardous material, toxic substance, dangerous substance or dangerous good as defined in any applicable Environmental Laws),

The Company has timely filed, or caused to be filed, all Tax Returns required to be filed by it (all of which returns were correct and complete in all material respects) and has paid, collected, withheld or remitted, or caused to be paid, collected, withheld or remitted, all Taxes that are due and payable (including all instalments on account of Taxes for the current year, that are due and payable by the Company whether or not assessed (or reassessed) by the appropriate governmental entity), and the Company has provided adequate accruals in accordance with IFRS in its most recently published consolidated financial statements for any Taxes for the period covered by such financial statements that have not been paid, whether or not shown as being due on any Tax Returns. Since the publication date of such financial statements, no material Tax liability not reflected in such statements or otherwise provided for has been assessed, proposed to be assessed, incurred or accrued other than in the ordinary course of business.

There are no proceedings, investigations, audits or claims now pending or threatened against the Company in respect of any Taxes and there are no matters under discussion, audit or appeal with any governmental entity relating to Taxes.

There are no material proposed (but unassessed) additional Taxes and none has been asserted in writing by the Canada Revenue Agency or any other taxing authority, including any sales tax authority, in connection with any of the Tax Returns referred to above. No Tax liens have been filed in respect of any of the assets or properties of the Company.

The Company is not nor has been a member of any consolidated group for Tax purposes. The Company is not a party to nor is bound by any tax allocation or sharing agreement, tax indemnity obligation or similar agreement, arrangement or practice with respect to Taxes, other than any agreement or arrangement solely between the Company.

The Company has not requested, or entered into any agreement or other arrangement, or executed any waiver providing for, any extension of time within which:

(i)

to file any Tax Return (which has not since been filed) in respect of any Taxes for which the Company is or may be liable;

(ii)

to file any elections, designations or similar filings relating to Taxes (which have not since been filed) for which the Company is or may be liable;

(iii)

the Company is required to pay or remit any Taxes or amounts on account of Taxes (which have not since been paid or remitted); or

(iv)

any governmental authority may assess or collect Taxes for which the Company is liable.

The Company has duly and timely deducted, collected or withheld from any amount paid or credited by it to or for the account or benefit of any person and has duly and timely remitted the same (or is properly holding for such remittance) to the appropriate governmental authority all income taxes, employment insurance premiums, pension plan contributions, employer health tax remittances, sales taxes, use taxes, goods and services taxes, non-resident withholding taxes and other Taxes and amounts it is required by applicable Law to so deduct, or collect or withhold and remit.

The Company has not acquired property or services from, or disposed of property or provided services to, any person with whom it does not deal at arm's length for an amount that is other than the fair market value of such property or services.

The Company has complied in all material respects with the intercompany transfer pricing provisions of each applicable Law relating to Taxes, including the contemporaneous documentation and disclosure requirements thereunder.

No circumstances exist or could reasonably be expected to arise as a result of matters existing before the Effective Date that may result in the Company being subject to the application of Section 159 or 160 of the Tax Act or comparable provisions of any other legislation or otherwise cause the Company to be liable for Taxes of any other person.

No facts, circumstances or events exist or have existed that have resulted or may result in the application to the Company of any debt forgiveness, debt parking or property seizure provisions under any applicable Tax Law.

No claim has ever been made by any governmental authority in a jurisdiction where the Company does not file Tax Returns that the Company is or may be subject to Taxes or is required to file Tax Returns in that jurisdiction.

Any corporate reorganizations of the Company have been completed in accordance with applicable Tax requirements, including the filing of all necessary documents, and no Tax liabilities are pending in relation to any such corporate reorganizations.

There are no rulings or closing agreements relating to the Company which could affect the Company's liability for Taxes for any taxable period after the Effective Date. The Company has not requested a private letter ruling from the United States Internal Revenue Service or comparable rulings from other taxing authorities.

The aggregate value of the Company's assets in Canada and the annual gross revenues from sales in or from Canada generated by those assets, all as determined as of the time and in the manner that are prescribed in Part IX of the Competition Act and the Notifiable Transactions Regulations thereunder, do not exceed the amount determined under Subsection 110(8) of the Competition Act.

The principal offices of the Company are not located in the United States. The Company, including all entities "controlled" by the Company for purposes of the United States ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended, does not hold assets located in the United States with a fair market value in excess of U.S. $75.9 million in the aggregate and, during the 12 month period ended July 31, 2015, did not make sales in or into the United States in excess of U.S. $75.9 million in the aggregate.

The Company is a "foreign private issuer" within the meaning of Rule 3b-4 under the Exchange Act.

No securities of the Company are registered or required to be registered under Section 12 of the Exchange Act, the Company is not required to file reports under Section 13 or Section 15(d) of the Exchange Act, and the Company is not subject to any proceedings under or any order issued pursuant to section 12(j) of the Exchange Act.

The Company is not registered, and is not required to be registered, as an "investment company" under the United States Investment Company Act of 1940, as amended.

The operations of the Company are, and have been conducted at all times in compliance with the financial record-keeping and reporting requirements of anti-money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental entity to which the Company is subject, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) (collectively, the "Money Laundering Laws"), and no action, suit or proceeding by or before any governmental entity or body or arbitrator involving the Company with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.

There are no proceedings under any corruption Laws pending against the Company or, to the knowledge of the Company, threatened against or affecting the Company.

Neither the Company, nor to the Company's knowledge, any of its affiliates, is in violation of Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 and relating to Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (the "Executive Order") and/or to the Company's knowledge, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the "Patriot Act").

Neither the Company, nor to the Company's knowledge, any of its affiliates, is a "Prohibited Person" which is defined as follows: (i) a person or entity that is listed in the Annex to, or is otherwise subject to the provisions of, the Executive Order; (ii) a person or entity owned or controlled by, or acting for or on behalf of, any person or entity that is listed in the Annex to, or is otherwise subject to the provisions of, the Executive Order; (iii) a person or entity with whom the Acquiror or its successor or assignee is prohibited from dealing or otherwise engaging in any transaction by the Executive Order or the Patriot Act; (iv) a person or entity who commits, threatens or conspires to commit or supports "terrorism" as defined in the Executive Order; (v) a person or entity that is named as a "specially designated national and blocked person" on the most current list published by the U.S. Treasury Department Office of Foreign Assets Control at its official website, http:/▇▇▇.▇▇▇▇▇.▇▇▇/▇▇▇▇/▇▇▇▇▇▇.▇▇▇, or at any replacement website or other replacement official publication of such list; and (vi) a person or entity who is affiliated with a person or entity listed above.

Neither the Company nor, to the Company's knowledge, any of its affiliates, has: (i) conducted any business or engaged in any transaction or dealing with any Prohibited Person, including the making or receiving of any contribution of funds, goods or services to or for the benefit of any Prohibited Person; (ii) dealt in or otherwise engaged in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order; or (iii) engaged in or conspired to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in the Executive Order or the Patriot Act.

the notice of articles or by-laws of the Acquiror;

any applicable Law to which the Acquiror is subject or by which the Acquiror is bound; or

any agreement, contract, indenture, deed of trust, mortgage, bond, note, instrument, licence, franchise, grant or permit to which the Acquiror is a party or by which it is bound,

Documents or information filed by the Acquiror under applicable Law since and including December 31, 2015, including the Acquiror's (a) annual information form dated ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇) audited consolidated financial statements as at and for the six months ended December 31, 2015 and the twelve months ended June 30, 2015 and related management discussion and analysis, (c) unaudited consolidated financial statements as at and for the three months ended March 31, 2016 and related management discussion and analysis, (d) management information circular dated May 5, 2016 in respect of the Acquiror's annual general meeting of shareholders held June 16, 2016, and (e) any material change reports that have been filed by the Acquiror between December 31, 2015 and the date hereof are, and any such documents or information filed by the Acquiror after the date hereof and before the Arrangement is completed (collectively, the "Acquiror Public Documents") shall be, as of their respective dates, in compliance in all material respects with applicable Law and do not contain any Misrepresentation as of their respective dates. The Acquiror has not filed any confidential material change reports that remain confidential.

There is no material change which has occurred with respect to which the requisite material change report has not been filed by the Acquiror with the securities regulatory authorities in the applicable provinces of Canada All material agreements required to be filed by the Acquiror with the securities regulatory authorities, in the applicable provinces of Canada have been filed.

The Acquiror has filed all technical reports as required under NI 43-101. As at the date hereof, the Acquiror has not made any disclosure of scientific or technical information that is not supported by a technical report that the Acquiror has filed under NI 41-103 or requires the filing of a technical report under NI 41-103.

The Technical Report on the Three Bluffs Project, Nunavut Territory, Canada” dated August 17, 2015 (the “Auryn Technical Report”) prepared for the Acquiror complied in all material respects with the requirements of NI 43-101 at the time of filing thereof and the Acquiror believes that the Auryn Technical Report reasonably presented the quantity of mineral resources attributable to the applicable the Three Bluffs project of the Acquiror as at the date stated therein based upon information available at the time the Auryn Report was prepared.

The Acquiror is in compliance with the provisions of NI 43-101 in all material respects.

The audited consolidated financial statements of the Acquiror as at and for the six months ended December 31, 2015 and the twelve months ended June 30, 2015 and the unaudited consolidated financial statements of the Acquiror as at and for the period ended March 31, 2016 contained in the Acquiror Public Documents were prepared in accordance with IFRS (the “Acquiror Financial Statements”).

Such statements present fairly, in all material respects, the consolidated financial condition and results of operations of the Acquiror as of the respective dates thereof and for the respective periods covered thereby applied on a basis consistent with the immediately prior period and throughout the periods indicated (except as may be indicated expressly in the notes thereto). Such statements reflect appropriate and adequate reserves in respect of contingent liabilities, if any, of the Acquiror on a consolidated basis. Since December 31, 2015, the Acquiror has not effected any change in its accounting methods, principles or practices, except as otherwise set out in the Acquiror Financial Statements, including the notes thereto.

The Acquiror has (A) designed such disclosure controls and procedures, or caused them to be designed under the supervision of the Chief Executive Officer and Chief Financial Officer of the Acquiror, to provide reasonable assurance that material information relating to the Acquiror, is made known to the Chief Executive Officer and Chief Financial Officer, particularly during the period in which the annual or interim filings are being prepared, and (B) designed such internal control over financial reporting, or caused it to be designed under such Chief Executive Officer's and Chief Financial Officer's supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. The Acquiror has not failed to disclose in the Acquiror Public Documents or to the Company in writing prior to the date of this Agreement, any information regarding any event, circumstance or action taken or failed to be taken since December 31, 2015 within the knowledge of the Acquiror and not within the knowledge of the Company as at the date of this Agreement having an effect which could constitute a Material Adverse Effect. From December 31, 2015 to the date of this Agreement, the Acquiror has received no material complaints from any source regarding accounting, internal accounting controls or auditing matters or expressions of concern from employees, consultants and/or independent contractor of the Acquiror regarding questionable accounting or auditing matters.

All Tax Returns required to be filed by or on behalf of the Acquiror have been duly filed on a timely basis and such Tax Returns are true, complete and correct in all material respects. All Taxes shown to be payable on such Tax Returns or on subsequent assessments or reassessments with respect thereto have been paid in full and on a timely basis.

There are no assessments or reassessments of any Taxes that have been issued and are outstanding against the Acquiror or any Acquiror Subsidiary, or pursuant to which there are any amounts owing. No Regulatory Authority has challenged, disputed or questioned the Acquiror or any Acquiror Subsidiary in respect of Taxes or of any returns, filings or other reports filed under any statute providing for Taxes. Neither the Acquiror nor any Acquiror Subsidiary is negotiating any draft assessment or reassessment with any Regulatory Authority. The Acquiror is not aware of any contingent liabilities for a material amount of Taxes or any grounds relating to the Acquiror or any Acquiror Subsidiary for an assessment or reassessment with respect thereto including, without limitation, aggressive treatment of income, expenses, credits or other claims for deduction under any return or notice other than as disclosed in the its financial statements as at and for the six months ended December 31, 2015 and the twelve months ended June 30, 2015. Neither the Acquiror nor any Acquiror Subsidiary has received any indication from any Regulatory Authority that an assessment or reassessment is proposed in respect of any Taxes, regardless of its merits. Neither the Acquiror nor any Acquiror Subsidiary has executed or filed with any Regulatory Authority any agreement extending the period for the filing of any Tax Returns or for the assessment, reassessment or collection of any Taxes. Neither the Acquiror nor any Acquiror Subsidiary has requested, or entered into any agreement or other arrangement, or executed any waiver providing for, any extension of time within which: (i) to file any Tax Return for which it is or may be liable, respectively; (ii) to file any elections, designations or similar documents or instruments relating to Taxes for which it is or may be liable, respectively; (iii) it is respectively required to pay or remit any Taxes or amounts on account thereof; or (iv) any Regulatory Authority may assess, reassess or collect Taxes for which either it is or may be liable, respectively.

The Acquiror and each Acquiror Subsidiary has paid or has withheld and remitted to the appropriate taxing authority all Taxes, including any instalments or prepayments of Taxes, that are due and payable whether or not shown as being due on any Tax Return, or, where payment is not yet due, the Acquiror has established adequate accruals in conformity with IFRS in the Acquiror Financial Statements for the period covered by such financial statements for any Taxes, including income taxes and related future taxes, if applicable, that have not been paid, whether or not shown as being due on any Tax Return; and the Acquiror has made adequate provision or disclosure in its books and records for any Taxes accruing in respect of any period subsequent to the period covered by such financial statements, whether or not shown as being due on any Tax Return.

The Acquiror and the Acquiror Subsidiaries have withheld from each payment made to any of their present or former employees, officers and directors, and to all persons who are non-residents of Canada for the purposes of the Tax Act, all amounts required by applicable Law and will continue to do so until the Effective Date and has remitted such withheld amounts within the prescribed periods to the appropriate Regulatory Authority. The Acquiror and the Acquiror Subsidiaries have remitted all Canada Pension Plan contributions, employment insurance premiums, and other Taxes payable by them in respect of their employees and have or will have remitted such amounts to the proper governmental authority within the time required by applicable Law. The Acquiror and the Acquiror Subsidiaries have charged, collected and remitted on a timely basis all Taxes as required by applicable Law on any sale, supply or delivery whatsoever, made by them.

The Acquiror has made available to Homestake true and complete copies of: (A) income tax audit reports, statement of deficiencies, closing or other agreements received by the Acquiror and the Acquiror Subsidiaries or on behalf of the Acquiror and the Acquiror Subsidiaries relating to the Taxes for any taxable period, if any; and (B) all Tax Returns for the Acquiror and the Acquiror Subsidiaries for all taxable periods.

No material deficiencies exist or have been asserted by any Regulatory Authority with respect to Taxes of the Acquiror or any Acquiror Subsidiaries that have not yet been settled.

Neither the Acquiror nor any Acquiror Subsidiaries is a party to any Tax sharing, Tax indemnity or Tax allocation agreement or arrangement and the Acquiror and each Acquiror Subsidiary does not have, nor could they have, any material liabilities or obligations in respect of Taxes under any such Tax sharing, Tax indemnity or Tax allocation agreement. No material liability (or reasonable claim of material liability) relating to the Acquiror or any Acquiror Subsidiary shall arise under any Tax sharing, Tax indemnity or Tax allocation agreement or arrangement.

Neither the Acquiror nor any Acquiror Subsidiary has claimed or will claim in any Tax Return for any taxation year ending or deemed to end on or before the Effective Date any reserve (including, without limitation, any reserve under paragraph 20(1)(m) or 20(1)(n) or subparagraph 40(1)(a)(iii) of the Tax Act or any analogous provision under the legislation of any province or other jurisdiction) of any amount which could be included in the income of the Acquiror or any Acquiror Subsidiary for any period ending after the Effective Date.

No facts, circumstances or events exist or have existed that have resulted in or may result in the application to the Acquiror or any Acquiror Subsidiary of any of sections 80 to 80.04 of the Tax Act or any equivalent provisions of any applicable legislation.

Neither the Acquiror nor any Acquiror Subsidiary has acquired property from a non-arm’s length person, within the meaning of the Tax Act, for consideration, which was less than the parties’ reasonable determination of fair market value of the property acquired in circumstances which would subject it to a liability under section 160 of the Tax Act or under any equivalent provisions of any applicable legislation.

The Acquiror and each Acquiror Subsidiary has complied with all registration, reporting, collection and remittance requirements in respect of all federal and provincial sales tax legislation including but not limited to the Excise Tax Act (Canada). The Acquiror has made available to Homestake all invoices, purchase orders, and all such other documents as are necessary to report any claim for income tax credits or refunds claimed or to be claimed pursuant to the Exercise Tax Act (Canada) or under any equivalent provisions of any applicable legislation.

The Acquiror and the Acquiror Subsidiaries do not have and will not have any obligation to file on or prior to the Effective Date, any Tax Return required to be made, prepared or filed under any applicable Law of any jurisdiction other than Canada in respect of any Taxes, and the Acquiror and the Acquiror Subsidiaries do not have any outstanding liability on account of any failure to comply with any such obligation.

Neither the Acquiror nor any Acquiror Subsidiary has made any payment, or is obligated to make any payment, and is not a party to any agreement under which it could be obligated to make any payment that may not be deductible by virtue of section 67 or 78 of the Tax Act or under any equivalent provisions of any applicable legislation.

The liability for Taxes of the Acquiror and each Acquiror Subsidiary under the Tax Act, and any other applicable Law has been assessed by the relevant authority for all taxation years to and including its taxation year ended on December 31, 2015.

The Acquiror is a taxable Canadian corporation within the meaning of the Tax Act.

each of the Acquiror and the Acquiror Subsidiaries has conducted its business only in the ordinary course of business substantially consistent with past practice;

no liability or obligation of any nature (whether absolute, accrued, contingent or otherwise) of the Acquiror has been incurred, other than in the ordinary course of business, which could reasonably be expected to have a Material Adverse Effect on the Acquiror;

there has been no Material Adverse Change in respect of the Acquiror; and

The Acquiror, and to the knowledge of the Acquiror, any director, officer, employee or auditor of the Acquiror or any Acquiror Subsidiary, has not received or otherwise had or obtained knowledge of any fraud or material complaint, allegation, assertion or claim, whether written or oral, regarding fraud or the accounting or auditing practices, procedures, methodologies or methods of the Acquiror or any Acquiror Subsidiary or their respective internal accounting controls.

those set forth or adequately provided for in the most recent balance sheet and associated notes thereto included in the Acquiror Financial Statements (for the purposes of this Section, the “Acquiror Balance Sheet”);

those incurred subsequent to the date of the Acquiror Balance Sheet in the ordinary course of business; and

those incurred in connection with the execution of this Agreement and the completion of the Arrangement.

any investigation, proceeding, application, order or directive which relates to environmental, health or safety or closure or other reclamation matters, and which may require any material work, repairs, construction, reclamation, remediation or expenditures; or

any claim, demand or notice, with respect to the breach of or liability under any Environmental Laws, including any regulations respecting the use, storage, handling, release, disposal, remediation, treatment or transportation of any substance (including pollutants, contaminant, waste of any nature, hazardous material, toxic substance, dangerous substance or dangerous good as defined in any applicable Environmental Laws),

Other than contracts and agreements in the ordinary course of business, contracts and agreements included in the Acquiror Public Record and this Agreement, there are no material contracts or agreements to which Acquiror or any Acquiror Subsidiary is a party or by which it is bound.

All such material contracts included in the Acquiror Public Record are in full force and effect, and the Acquiror as a party thereto is entitled to all rights and benefits thereunder in accordance with the terms thereof. The Acquiror has complied in all material respects with all terms of such contracts, has paid all amounts due thereunder, has not waived any material rights thereunder and no material default or breach exists in respect thereof on the part of the Acquiror.

no material contract included in the Acquiror Public Record is subject to any termination fees, cancellation costs or other similar penalties that would be or become payable by the Acquiror upon completion of the transactions contemplated by this Agreement.

no approval or consent of any person is needed in order that such contracts continue in full force and effect following consummation of the transactions contemplated hereby and the Acquiror is not a party to any such contract that contains any non-competition obligation or otherwise restricts in any material way the business of the Acquiror.

The Acquiror is in compliance with the terms of the Letter Agreement.

each Acquiror Plan has been maintained and administered in material compliance with its terms and is, to the extent required by applicable Law or contract, fully funded without having any deficit or unfunded actuarial liability or adequate provision has been made therefor;

all required employer contributions under any such plans have been made and the applicable funds have been funded in accordance with the terms thereof;

each Acquiror Plan that is required or intended to be qualified under applicable Law or registered or approved by a Regulatory Authority has been so qualified, registered or approved by the appropriate Regulatory Authority, and to the knowledge of the Acquiror, nothing has occurred since the date of the last qualification, registration or approval that would reasonably be expected to adversely affect, or cause, the appropriate Regulatory Authority to revoke such qualification, registration or approval;

to the knowledge of the Acquiror, there are no pending or anticipated claims against or otherwise involving any of the Acquiror Plans and no suit, action or other litigation (excluding claims for benefits incurred in the ordinary course of Acquiror Plan activities) has been brought against or with respect to any Acquiror Plan;

all contributions, reserves or premium payments required to be made to the Acquiror Plans have been made or provided for; and

the Acquiror does not have any obligations for retiree health and life benefits under any Acquiror Plan.

The Acquiror confirms that there are no severance, termination, change of control, bonus or retention payments payable to any employees, directors and consultants of the Acquiror or any Acquiror Subsidiary as a result of the transactions contemplated by this Agreement.

no trade union, council of trade unions, employee bargaining agency or affiliated bargaining agent holds bargaining rights with respect to any employees of the Acquiror or any Acquiror Subsidiary by way of certification, interim certification, voluntary recognition, designation or successor rights or has applied to have the Acquiror declared a related employer or successor employer pursuant to applicable labour legislation. Neither the Acquiror nor any Acquiror Subsidiary has engaged in any unfair labour practices and, no strike, lock-out, work stoppage, or other labour dispute is occurring. To the knowledge of the Acquiror, there are no threatened or pending strikes, work stoppages, picketing, lock-outs, handbillings, boycotts, slowdowns or similar labour related disputes pertaining to the Acquiror or any Acquiror Subsidiary. Neither the Acquiror nor any Acquiror Subsidiary has engaged in any closing or lay-off activities within the past two years that would materially violate or in any way subject the Acquiror or any Acquiror Subsidiary to the group termination or lay-off requirements of the applicable Laws; and

neither the Acquiror nor any Acquiror Subsidiary has recognized any trade union or has any staff association, staff council, works council or other organisation formed for or arrangements having a similar purpose and no notification to any trade union, staff association, staff council, works council or other organisation formed for or in respect of any arrangements having a similar purpose is required by the Acquiror or any Acquiror Subsidiary for the purpose of consummating the transactions contemplated by this Agreement.

The operations of the Acquiror are, and have been conducted at all times in compliance with the financial record-keeping and reporting requirements of the Money Laundering Laws, and no action, suit or proceeding by or before any governmental entity or body or arbitrator involving the Acquiror with respect to the Money Laundering Laws is pending or, to the knowledge of the Acquiror, threatened.

There are no proceedings under any corruption Laws pending against the Acquiror or, to the knowledge of the Acquiror, threatened against or affecting the Acquiror.

Neither the Acquiror, nor to the Acquiror 's knowledge, any of its affiliates, is in violation of the Executive Order and/or to the Acquiror 's knowledge, the Patriot Act.

Neither the Acquiror, nor to the Acquiror 's knowledge, any of its affiliates, is a Prohibited Person.

Neither the Acquiror nor, to the Acquiror 's knowledge, any of its affiliates, has: (i) conducted any business or engaged in any transaction or dealing with any Prohibited Person, including the making or receiving of any contribution of funds, goods or services to or for the benefit of any Prohibited Person; (ii) dealt in or otherwise engaged in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order; or (iii) engaged in or conspired to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in the Executive Order or the Patriot Act.

The Acquiror and each Acquiror Subsidiary owns, or is validly licensed or otherwise have the right to use, all patents, patent rights, trademarks, trade names, service marks, industrial designs, design patents, copyrights, know how and other proprietary industrial or intellectual property industrial or rights that are used in its respective businesses;

the use by the Acquiror or any Acquiror Subsidiary of its trademarks, trade names, service marks, copyrights, industrial designs, patents, design patents, know-how and other industrial or intellectual property and all applications therefor (the “Acquiror Applicable IP”) does not infringe upon or breach the industrial or intellectual property rights of any other person; and

neither the Acquiror nor any Acquiror Subsidiary has commenced legal proceedings against any person relating to an infringement by such person of any Acquiror Applicable IP, except in each case to the extent that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Acquiror.