TIMMINS GOLD CORP. as Borrower and THE LENDERS LISTED ON THE SIGNATURE PAGES as Lenders and SPROTT RESOURCE LENDING PARTNERSHIP as Administrative Agent

Execution Copy

TIMMINS GOLD CORP.

as Borrower

and

THE LENDERS LISTED
ON THE SIGNATURE PAGES

as Lenders

and

SPROTT RESOURCE LENDING PARTNERSHIP

as Administrative Agent

AMENDED AND RESTATED CREDIT AGREEMENT

DATED January 26, 2016

XXXXX & XXXXXXXX LLP

TABLE OF CONTENTS

ARTICLE 1 INTERPRETATION		4
SECTION 1.1	DEFINED TERMS.	4
SECTION 1.2	OTHER USAGES.	19
SECTION 1.3	GENDER AND NUMBER.	20
SECTION 1.4	HEADINGS, ETC	20
SECTION 1.5	CURRENCY.	20
SECTION 1.6	CERTAIN PHRASES, ETC.	20
SECTION 1.7	MEANING OF CERTAIN TERMS	20
SECTION 1.8	ACCOUNTING TERMS	21
SECTION 1.9	RATEABLE PORTION OF ADVANCES	21
SECTION 1.10	INCORPORATION OF SCHEDULES	21
SECTION 1.11	CONFLICT.	21
SECTION 1.12	CERTIFICATES	21
ARTICLE 2 CREDIT FACILITY		22
SECTION 2.1	AVAILABILITY.	22
SECTION 2.2	COMMITMENT AND FACILITY LIMIT.	22
SECTION 2.3	USE OF PROCEEDS.	22
SECTION 2.4	REDUCTIONS OF COMMITMENTS	23
SECTION 2.5	MANDATORY REPAYMENTS.	23
SECTION 2.6	VOLUNTARY CANCELLATION AND REPAYMENT	24
SECTION 2.7	PAYMENTS UNDER THIS AGREEMENT.	24
SECTION 2.8	APPLICATION OF PAYMENTS AND PREPAYMENTS	25
SECTION 2.9	COMPUTATIONS OF INTEREST AND FEES	25
SECTION 2.10	SECURITY	25
SECTION 2.11	ENTRY INTO EFFECT OF THIS AGREEMENT.	26
SECTION 2.12	TRANSITIONAL PROVISIONS	26
SECTION 2.13	BONUS PAYMENT.	27
ARTICLE 3 ADVANCES		27
SECTION 3.1	THE ADVANCES	27
SECTION 3.2	PROCEDURE FOR BORROWING.	27
SECTION 3.3	INTEREST ON ADVANCES	28
ARTICLE 4 CONDITIONS OF LENDING		28
SECTION 4.1	INITIAL CONDITIONS PRECEDENT.	28
SECTION 4.2	FURTHER CONDITIONS PRECEDENT.	30
SECTION 4.3	NO WAIVER	33
ARTICLE 5 REPRESENTATIONS AND WARRANTIES		33
SECTION 5.1	REPRESENTATIONS AND WARRANTIES.	33
SECTION 5.2	SURVIVAL OF REPRESENTATIONS AND WARRANTIES.	41
ARTICLE 6 COVENANTS OF THE BORROWER		41
SECTION 6.1	AFFIRMATIVE COVENANTS	41
SECTION 6.2	NEGATIVE COVENANTS.	45
SECTION 6.3	FINANCIAL COVENANTS.	47
ARTICLE 7 EVENTS OF DEFAULT		48
SECTION 7.1	EVENTS OF DEFAULT	48
SECTION 7.2	REMEDIES UPON DEFAULT.	49
ARTICLE 8 THE ADMINISTRATIVE AGENT AND THE LENDERS		50

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SECTION 8.1	AUTHORIZATION AND ACTION	50
SECTION 8.2	NO LIABILITY.	50
SECTION 8.3	ACCOMMODATIONS BY ADMINISTRATIVE AGENT.	51
SECTION 8.4	HOLDING OF SECURITY; SHARING OF PAYMENTS, ETC.	51
SECTION 8.5	LENDER CREDIT DECISIONS	52
SECTION 8.6	INDEMNIFICATION.	52
SECTION 8.7	LIABILITY OF THE LENDERS INTER SE	52
SECTION 8.8	SUCCESSOR AGENTS	52
ARTICLE 9 MISCELLANEOUS		53
SECTION 9.1	AMENDMENTS, ETC	53
SECTION 9.2	WAIVER	53
SECTION 9.3	EVIDENCE OF INDEBTEDNESS AND BORROWING NOTICES.	53
SECTION 9.4	NOTICES, ETC	54
SECTION 9.5	COSTS, EXPENSES AND INDEMNITY.	54
SECTION 9.6	TAXES AND OTHER TAXES.	56
SECTION 9.7	SUCCESSORS AND ASSIGNS	57
SECTION 9.8	RIGHT OF SET-OFF.	59
SECTION 9.9	ADVANCES BY LENDERS	59
SECTION 9.10	RATEABLE PAYMENTS	59
SECTION 9.11	JUDGMENT CURRENCY.	59
SECTION 9.12	INTEREST ON AMOUNTS	60
SECTION 9.13	ARBITRATION	60
SECTION 9.14	GOVERNING LAW AND WAIVER OF JURY TRIAL	61
SECTION 9.15	COUNTERPARTS	61
EXHIBIT “A” FORM OF BORROWING NOTICE		1
EXHIBIT “B” FORM OF COMPLIANCE CERTIFICATE		2
EXHIBIT “C” SOLVENCY CERTIFICATE		3
EXHIBIT “D” CERTIFICATE OF OFFICER		4
SCHEDULE 1.1 MINING RIGHTS		5
SCHEDULE 5.1(h) MATERIAL CONTRACTS		6
SCHEDULE 5.1(j) PROPERTY		7
SCHEDULE 5.1(k) LEASES AND OWED PROPERTIES		8
SCHEDULE 5.1(l) MINING TITLE		9
SCHEDULE 5.1(r) TAXES		10
SCHEDULE 5.1 (w) LOANS		11
SCHEDULE 5.1(dd) RELATED TRANSACTIONS		12
SCHEDULE 5.1(gg) TECHNICAL REPORT		13
SCHEDULE 5.1(hh) ROYALTY OBLIGATIONS		14

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AMENDED AND RESTATED CREDIT AGREEMENT

This AMENDED AND RESTATED CREDIT AGREEMENT is dated January 26, 2016, and entered into by and between TIMMINS GOLD CORP., a corporation incorporated pursuant to the laws of the Province of British Columbia (the “Borrower”), SPROTT RESOURCE LENDING PARTNERSHIP, as administrative agent (the “Administrative Agent”) and SPROTT RESOURCE LENDING PARTNERSHIP (“SRLP”) and GOLDCORP INC. (“Goldcorp”), as lenders.

RECITALS

WHEREAS on or about May 27, 2011, the Borrower, the Administrative Agent and SRLP entered into a credit agreement pursuant to which certain Original Lenders agreed to extend senior secured non-revolving term facilities to the Borrower;

AND WHEREAS, inter alia, the Borrower, the Administrative Agent and certain Original Lenders entered into several amendment agreements in relation to such credit agreement, including, without limitation, an amended and restated credit agreement dated February 2, 2015 (such credit agreement, as previously amended, the “Original Credit Agreement”);

AND WHEREAS Xxxxxx Xxxxxxx Capital Group Inc. (“MSCG”) became a party to the Original Credit Agreement as Lender on February 2, 2015;

AND WHEREAS Goldcorp became a party to the Original Credit Agreement as Lender and MSCG assigned and transferred to Goldcorp (and Goldcorp accepted) all of MSCG’s right, interest, benefit and obligations (including, without limitation, MSCG’s interest in all outstanding Facility Debt, being US$5,111,268.38) under and to the Original Credit Agreement and all Credit Documents on the date hereof;

AND WHEREAS the parties hereto have agreed to amend and restate the Original Credit Agreement in accordance with the terms and conditions set out herein;

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

ARTICLE 1
INTERPRETATION

Section 1.1 Defined Terms.

As used in this Agreement, the following terms have the following meanings:

“Acceptable Bank” means Bank of Montreal, Bank of Nova Scotia, Bancomer or any other bank with which the Credit Parties have their bank accounts provided that they have delivered written notice of such bank to the Administrative Agent.

“Additional Guarantor” means each of Xxxxx Mining, Xxxxxx Xxxxx, Newstrike and any other Person which becomes a Guarantor after the date hereof.

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“Administrative Agent” means Sprott Resource Lending Partnership, as administrative agent for the Lenders under this Agreement, and any successor appointed pursuant to Section 8.8.

“Administrative Agent’s Counsel” means Xxxxx & XxXxxxxx LLP.

“Advances” means advances made by a Lender pursuant to Article 3 and “Advance” means any one of such advances.

“Affairs” means the business, affairs, operations, undertaking, property, assets, liabilities, condition (financial or otherwise), prospects, performance and results of operations of a specified Person.

“Affiliate” means an affiliated body corporate and, for the purposes of this Agreement, (i) one body corporate is affiliated with another body corporate if one such body corporate is the subsidiary of the other or both are subsidiaries of the same body corporate or each of them is Controlled by the same Person and (ii) if two bodies corporate are affiliated with the same body corporate at the same time, they are deemed to be affiliated with each other.

“Agreement” means this amended and restated credit agreement and all schedules and instruments in amendment or confirmation of it; and the expressions “Article”, “Section”, “Subsection” and “paragraph” followed by a number mean and refer to the specified Article, Section, Subsection or paragraph of this Agreement.

“Xxx Xxxxx Mine” means the Xxx Xxxxx mine project located in the Xxxxxxxx gold belt in the north central part of the Sate of Guerrero in Southern Mexico.

“Xxx Xxxxx Mining Rights” means the governmental approvals and authorisations required in connection with the exploration, the exploitation and the production of mineral mining that are owned by Xxxxxx Xxxxx, including without limitation any and all mining concessions issued by the Ministry of Economy (Secretaria de Economica) in accordance with Article 10 and other applicable provisions of the mining law (Ley Minera) of Mexico, or more particularly described in Schedule 1.1.

“Xxx Xxxxx Pledge” means the pledge agreement executed and delivered by Xxxxxx Xxxxx in favour of the Administrative Agent (on behalf of the Finance Parties) in form and substance satisfactory to the Administrative Agent.

“Xxx Xxxxx Surface Mortgage” means the mortgage over surface land executed and delivered by Xxxxxx Xxxxx in favour of the Administrative Agent on behalf of the Finance Parties in form and substance satisfactory to the Administrative Agent.

“Applicable Law” means any international treaty, any domestic or foreign constitution or any supranational, regional, federal, provincial, territorial, state, municipal, tribal or local statute, law, ordinance, code, rule, regulation, order (including any consent decree or administrative order), applicable to, or any directive, guideline, policy or Authorization of any Governmental Entity having jurisdiction with respect to any specified Person, property, transaction or event or any of such Person’s Affairs, and any order, judgment, award or decree of any Governmental Entity, or arbitrator in any proceeding or action to which the Person in question is a party or by which such Person or any of its Affairs is bound.

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“Applicable Securities Legislation” means all applicable securities laws of each of the Reporting Jurisdictions and the respective rules and regulations under such laws together with applicable published fee schedules, prescribed forms, policy statements, national or multilateral instruments, orders, blanket rulings and other regulatory instruments of the securities regulatory authorities therein.

“Assignee” has the meaning specified in Section 9.7.

“Xxxxx Mining” means Xxxxx Mining Inc., organized and existing under the laws of the province of British Columbia.

“Xxxxx Mining Guarantee” means the guarantee executed and delivered by Xxxxx Mining in favour of the Administrative Agent, on behalf of the Finance Parties, in form and substance satisfactory to the Administrative Agent.

“Authorization” means any authorization, approval, consent, exemption, licence, permit, franchise or no-action letter from any Governmental Entity having jurisdiction with respect to any specified Person, property, transaction or event, or any of such Person’s Affairs or from any Person in connection with any easements or contractual rights.

“Available Commitment” means, in relation to a Credit Facility, a Lender's Commitment under that Credit Facility minus:

	(a)	the amount of its participation in any outstanding Advances under that Credit Facility; and
	(b)	in relation to any proposed Advance, the amount of its participation in any other Advances that are due to be made under that Credit Facility on or before the proposed date of such Advance.

“Borrower” means, at any time, Timmins Gold Corp., a corporation incorporated and existing under the laws of British Columbia, and its successors and permitted assigns.

“Borrower's Account” means, collectively, account 00000-000-0000000 (Cdn$) and account 00000-000-0000000 (US$) maintained by the Borrower with Bank of Montreal.

“Borrowing Notice” has the meaning specified in Section 3.2.

“Buildings and Fixtures” means all plant, buildings, structures, erections, improvements, appurtenances and fixtures (including fixed machinery and fixed equipment) situate on any of the Subject Properties.

“Business” means, in relation to any Credit Party, the business of such Credit Party as conducted and described to the Administrative Agent as at the date hereof.

“Business Day” means any day of the year, other than a Saturday, Sunday or any day on which major banks are closed for business in Xxxxxxx, Xxxxxxx.

“Caballo Xxxxxx Mine” means the Caballo Xxxxxx mine project located on the eastern coast of Mexico in the State of Veracruz.

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“Caballo Xxxxxx Mining Rights” means the governmental approvals and authorisations required in connection with the exploration, the exploitation and the production of mineral mining that are owned by Molimentales, including without limitation any and all mining concessions issued by the Ministry of Economy (Secretaria de Economica) in accordance with Article 10 and other applicable provisions of the mining law (Ley Minera) of Mexico, or more particularly described in Schedule 1.1.

“Caballo Xxxxxx Pledge” means the pledge agreement executed and delivered by Molimentales in favour of the Administrative Agent (on behalf of the Finance Parties) in form and substance satisfactory to the Administrative Agent.

“Caballo Xxxxxx Surface Mortgage” means the mortgage over surface land executed and delivered by Molimentales in favour of the Administrative Agent, on behalf of the Finance Parties in form and substance satisfactory to the Administrative Agent.

“Capital Lease” means, with respect to a Person, a lease or other arrangement in respect of real or personal property that is required to be classified and accounted for as a capital lease or debt obligation on a balance sheet of the Person in accordance with IFRS.

“Capital Lease Obligation” means, with respect to a Person, the obligation of the Person to pay rent or other amounts under a Capital Lease and for the purposes of this definition, the amount of such obligation at any date shall be the capitalized amount of such obligation at such date as determined in accordance with IFRS.

“Cash” means, at any time, cash denominated in US$ or CAD$ in hand or at bank and (in the latter case) credited to an account in the name of Molimentales, Xxxxxx Xxxxx or the Borrower with an Acceptable Bank and to which Molimentales, Xxxxxx Xxxxx or the Borrower (as the case may be) is alone beneficially entitled and for so long as:

	(a)	that cash is repayable on demand;
	(b)	repayment of that cash is not contingent on the prior discharge of any other Indebtedness of any Person whatsoever or on the satisfaction of any other condition;
	(c)	there is no Lien over that cash except for the Security in favour of the Administrative Agent, for the benefit of the Finance Parties, pursuant to the Security Documents; and
	(d)	the cash is freely and immediately available to be applied in repayment or prepayment of the Outstandings and all interest and other amounts that may be owing under this Agreement.

“Cash Equivalents” means (a) marketable obligations issued or unconditionally guaranteed by, and backed by the full faith and credit of, the government of the United States or Canada maturing within 30 days of the date of acquisition; (b) certificates of deposit, time or term deposits and bankers' acceptances maturing within 30 days of the date of acquisition, and overnight bank deposits, in each case which are issued by a commercial bank organized under the laws of the United States or Canada, rated A-1 (or better) by S&P or P-1 (or better) by Xxxxx'x at the time of acquisition, and not subject to offset rights; (c) commercial paper rated A-1 (or better) by S&P or P-1 (or better) by Xxxxx'x, and maturing within 30 days of the date of acquisition; and (d) units of any money market fund that has substantially all of its assets invested continuously in the types of investments referred to above, has net assets of at least $500,000,000 and has the highest rating obtainable from either Xxxxx'x or S&P.

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“Change of Control” means the occurrence of any of the following events:

	(a)	there is a report filed with any securities commission or securities regulatory authority in Canada, disclosing that any offeror (as the term “offeror” is defined in section 89(1) of the Securities Act for the purpose of section 102.1 of the Securities Act or any successor provision to either of the foregoing), other than the Borrower, has acquired beneficial ownership (within the meaning of the Securities Act) of, or the power to exercise control or direction over, or securities convertible into, any Voting Shares of the Borrower, that together with the offeror’s securities (as the term “offeror’s securities” is defined in section 89(1) of the Securities Act or any successor provision thereto in relation to the Voting Shares of the Borrower) would constitute Voting Shares of the Borrower representing more than 50% of the total voting power attached to all Voting Shares of the Borrower then outstanding;
	(b)	there is consummated any amalgamation, consolidation, statutory arrangement (involving a business combination) or merger of the Borrower (1) in which the Borrower is not the continuing or surviving corporation or (2) pursuant to which any Voting Shares of the Borrower would be reclassified, changed or converted into or exchanged for cash, securities or other property, other than (in each case) an amalgamation, consolidation, statutory arrangement or merger of the Borrower in which the holders of the Voting Shares of the Borrower immediately prior to the amalgamation, consolidation, statutory arrangement or merger have, directly or indirectly, more than 50% of the Voting Shares of the continuing or surviving corporation immediately after such transaction; or
	(c)	any Person or group of Persons shall succeed in having a sufficient number of its nominees elected as Directors such that such nominees, when added to any existing Director after such election who was a nominee of or is an Affiliate or related Person of such Person or group of Persons, will constitute a majority of the Directors.

“Collateral” means any and all property and assets in respect of which the Administrative Agent, the Collateral Agent or any Lender has or will have a Lien pursuant to a Security Document.

“Collateral Agent” means (i) for purposes of the Collateral relating to the San Francisco Mine, Xxxx Xxxxxx Y Asociados, S.C., as collateral agent for the Administrative Agent and the Lenders pursuant to the Collateral Agency Agreement until replaced by the Administrative Agent and (ii) for all other purposes, the Administrative Agent as collateral agent for the Lenders and, in each case, any successor.

“Collateral Agency Agreement” means the collateral agency agreement between the Borrower, the Administrative Agent and Xxxx Xxxxxx Y Asociados, S.C. dated May 27, 2011.

“Commitment” means a Facility A Commitment or Facility B Commitment, as the case may be, and a “Lender’s Commitment” means, at any time, such Lender’s Facility A Commitment or Facility B Commitment, as the case may be.

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“Common Shares” means the common shares in the capital of the Borrower.

“Compliance Certificate” means a certificate of the Borrower substantially in (i) the form of Exhibit “B”, signed on its behalf by its chief financial officer or any other officer acceptable to the Administrative Agent or (ii) such other form as the Administrative Agent may determine.

“Contaminant” means any solid, liquid, gas, odour, heat, sound, vibration, radiation or combination of any of them that may (i) injure or damage property or plant or animal life, (ii) harm or cause a nuisance to any Person, (iii) adversely affect the health of any individual, (iv) impair the safety, of any individual, (v) render any property or plant or animal life unfit for use by humans, (vi) cause loss of enjoyment of normal use of property, or (vii) interfere with the normal course of business, and includes any “contaminant” within the meaning assigned to such term in any Environmental Law applicable to the Mine or any Credit Party.

“Contingent Liabilities” means, with respect to a Person, any agreement, undertaking or arrangement by which the Person guarantees, endorses or otherwise becomes or is contingently liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to, or otherwise to invest in a debtor, or otherwise to assure a creditor against loss) the obligation, debt or other liability of any other Person or guarantees the payment of dividends or other distributions upon the shares of any Person. The amount of any contingent liability will, subject to any limitation contained therein, be deemed to be the outstanding principal amount (or maximum principal amount, if larger) of the obligation, debt or other liability to which the contingent liability is related.

“Control” of any Person means:

(a) the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to:

	(i)	cast, or control the casting of, more than 50% of the maximum number of votes that might be cast at a general meeting of such Person; or
	(ii)	appoint or remove all, or the majority, of the directors or other equivalent officers of such Person; or
	(iii)	give directions with respect to the operating and financial policies of such Person with which the directors or other equivalent officers of such person are obliged to comply; and/or

(b) the holding beneficially of more than 50% of the issued share capital of such Person.

“Credit Documents” means this Agreement, the Security Documents, each Compliance Certificate and all other documents to be executed and delivered to the Administrative Agent or the Lenders, or both, by the Credit Parties.

“Credit Facility” means each of Facility A and Facility B made available to the Borrower under this Agreement for the purposes specified in Section 2.3.

“Credit Parties” means, collectively, the Borrower and each Guarantor, and “Credit Party” means any one of them.

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“Current Assets” means (on a consolidated basis) the current assets of the Borrower as determined in accordance with IFRS.

“Current Liabilities” means (on a consolidated basis) the current liabilities of the Borrower as determined in accordance with IFRS but excluding the outstanding amount of the Advances made under this Agreement.

“Default” means an event which, with the giving of notice or passage of time, or the making of any determination or any combination of the foregoing, would constitute an Event of Default.

“Director” means a director of the Borrower for the time being and “Directors” means the board of directors of the Borrower or, whenever duly empowered, a committee of the board of directors of the Borrower, and reference to action by the Directors means action by the directors as a board or action by such a committee of the board as a committee.

“Disposal” means any royalty, sale, lease, release, abandonment, licence, exchange, transfer, loan or other disposal by a Person of any asset, undertaking or business (whether by a, voluntary or involuntary, single transaction or series of transactions) and “Dispose” shall have a corresponding meaning.

“Disposal Proceeds” means the consideration receivable by any Credit Party or any other Subsidiary (including any amount receivable in repayment of intercompany debt) for any Disposal made by such Credit Party or Subsidiary, after deducting any reasonable expenses (approved in writing by the Administrative Agent) which are incurred by such Credit Party with respect to such Disposal to a Person who is not a Credit Party or any other Subsidiary.

“Distribution” includes with respect to any Person (i) any dividend or other distribution on issued shares or any other equity interest of the Person or any of its Subsidiaries, (ii) any purchase, redemption or retirement of any issued share, warrant or other equity interest or any other option or right to acquire any share or other equity interest of the Person or any of its Subsidiaries or (iii) any payment whether as consulting fees, management fees or otherwise to any Affiliate of the Person or any of its Subsidiaries.

“Environmental Laws” means any Applicable Law relating to the environment, ecology, public health, safety and/or any Hazardous Material.

“Event of Default” has the meaning specified in Section 7.1.

“Exchange” means the Toronto Stock Exchange or any other stock exchange on which the Borrower’s securities may be listed from time to time.

“Excluded Insurance Proceeds” means any proceeds of an insurance claim which the Borrower notifies the Administrative Agent in writing are, or are to be, applied in the replacement, reinstatement and/or repair of the assets or otherwise in amelioration of the loss in respect of which the relevant insurance claim was made, in each case as soon as possible (but in any event within 90 days) after receipt.

“Facility A” means the facility described in Section 2.1(1)(a) .

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“Facility A Closing Date” means the earlier of: (i) the date on which all conditions listed in Section 4.1 and Section 4.2(1)(a) have been waived by the Administrative Agent or satisfied and (ii) May 31, 2011.

“Facility A Commitment” means:

	(a)	in relation to an Original Lender, the amount designated as such opposite its name on the signature pages to the Original Credit Agreement and the amount of any other Facility A Commitment transferred to it under this Agreement; and
	(b)	in relation to any other Lender, the amount of any Facility A Commitment transferred to it under this Agreement,

to the extent not cancelled, reduced or transferred by it under this Agreement. “Facility B” means the facility described in Section 2.1(1)(b) .

“Facility B Closing Date” means the earlier of: (i) date on which all conditions listed in Section 4.1 and Section 4.2(1)(b) have been waived by the Administrative Agent or satisfied and (ii) May 31, 2011.

“Facility B Commitment” means:

	(a)	in relation to an Original Lender, the amount designated as such opposite its name on the signature pages to the Original Credit Agreement and the amount of any other Facility B Commitment transferred to it under this Agreement; and
	(b)	in relation to any other Lender, the amount of any Facility B Commitment transferred to it under this Agreement,

to the extent not cancelled, reduced or transferred by it under this Agreement.

“Facility Debt” means all Indebtedness outstanding under any of the Credit Documents.

“Fees” means the Prepayment Fee and all other fees (if any) payable by the Borrower under this Agreement or any other Credit Document.

“Finance Parties” means each of the Lenders and the Administrative Agent and “Finance Party” means any one of them.

“Financial Assistance” has the meaning specified in Section 6.2(i) .

“Financial Instrument Obligations” means, with respect to any Person, obligations arising under:

(a) any interest rate swap agreement, forward rate agreement, floor, cap or collar agreement, future or option, insurance or other similar agreement or arrangement, or any combination thereof, entered into or guaranteed by the Person where the subject matter thereof is interest rates or the price, value or amount payable thereunder is dependent or based upon interest rates or fluctuations in interest rates in effect from time to time (but excluding non-speculative conventional floating rate indebtedness);

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	(b)	any currency swap agreement, cross-currency agreement, forward agreement, floor, cap or collar agreement, future or option, insurance or other similar agreement or arrangement, or any combination thereof, entered into or guaranteed by the Person where the subject matter thereof is currency exchange rates or the price, value or amount payable thereunder is dependent or based upon currency exchange rates or fluctuations in currency exchange rates in effect from time to time; and
	(c)	any agreement for the making or taking of any commodity, swap agreement, floor, cap or collar agreement or commodity future or option or other similar agreement or arrangement, or any combination thereof, entered into or guaranteed by the Person where the subject matter thereof is any commodity or the price, value or amount payable thereunder is dependent or based upon the price or fluctuations in the price of any commodity;

or any other similar transaction, including any option to enter into any of the foregoing, or any combination of the foregoing, in each case to the extent of the net amount due or accruing due by the Person under the obligations determined by marking the obligations to market in accordance with their terms.

“Financial Quarter” means a period of three consecutive months in each Financial Year ending on June 30, September, 30, December 31 and March 31, as the case may be, of such year.

“Financial Year” means, in relation to the Borrower, its financial year commencing on January 1 of each calendar year and ending on December 31 of such year.

“General Security Agreement” means the general security agreement to be executed and delivered by the Borrower in favour of the Administrative Agent (on behalf of the Finance Parties) in form and substance satisfactory to the Administrative Agent.

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

“Guarantees” means each of (i) the Molimentales Guarantee, (ii) the Timmins Mexico Guarantee, (iii) the Newstrike Guarantee, (iv) the Xxxxx Mining Guarantee, (v) the Xxxxxx Xxxxx Guarantee and (vi) any guarantee issued by any other Subsidiary in favour of the Administrative (in form and substance satisfactory to the Administrative Agent).

“Guarantors” means each Original Guarantor and each Additional Guarantor and “Guarantor” means any one of them.

“Hazardous Materials” means any pollutant or Contaminant, including any hazardous, dangerous, registrable or toxic chemical, material or other substance within the meaning of any Environmental Law.

“IFRS” means international financial reporting standards, approved by the International Accounting Standards Board or any successor thereto (“IASB”), adopted by the Borrower, as applicable, as at the date on which any calculation or determination is required to be made, provided that, in accordance with the international financial reporting standards, where the IASB includes a recommendation concerning the treatment of any accounting matter, such recommendation shall be regarded as the only international financing reporting standard.

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“Indebtedness” means, with respect to a Person, without duplication:

	(a)	all obligations of the Person for borrowed money, including debentures, notes or similar instruments and other financial instruments and obligations with respect to bankers’ acceptances and contingent reimbursement obligations relating to letters of credit;
	(b)	all Financial Instrument Obligations of the Person;
	(c)	all Capital Lease Obligations and Purchase Money Obligations of the Person;
	(d)	all obligations to pay the deferred and unpaid purchase price of property or services, which purchase price is due and payable more than six months after the date of placing such property or service or taking delivery at the completion of such services;
	(e)	all Indebtedness of any other Person secured by a Lien on any assets of such first-mentioned Person;
	(f)	all obligations to repurchase, redeem or repay any shares of such Person prior to the Repayment Date; and
	(g)	all Contingent Liabilities of the Person with respect to obligations of another Person if such obligations are of the type referred to in paragraphs (a) to (f).

“Indemnified Person” has the meaning specified in Section 9.5(1) .

“Insurance Proceeds” means any casualty insurance, loss insurance or condemnation proceeds received or receivable by any Credit Party or any other Subsidiary except for Excluded Insurance Proceeds.

“Interest Rate” means twelve per cent. (12%) per annum.

“Leased Properties” means, collectively, the real properties forming the subject matter of the Leases.

“Leases” means the leases, subleases, rights to occupy and licences of real property or Buildings and Fixtures to which the Borrower or any of its Subsidiaries are a party (i) at the date of this Agreement, as listed and described in Schedule 5.1(k) or (ii) after the date of this Agreement as notified to the Administrative Agent pursuant to a Compliance Certificate.

“Lenders” means, collectively, SRLP and Goldcorp and any Person who may become a Lender under and in accordance with this Agreement and, “Lender” means any one of them.

“Lien” means any mortgage, charge, pledge, hypothecation, security interest, assignment, encumbrance, lien (statutory or otherwise), title retention agreement or arrangement, restrictive covenant, royalty or other encumbrance of any nature or any other arrangement or condition that in substance secures payment or performance of an obligation.

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“Majority Lenders” means, at any time, Lenders who, taken together, are beneficially entitled to at least 66-2/3% of the aggregate Outstandings at that time, or, if there are no Outstandings at that time, Lenders whose Commitments, taken together, are at least 66 2/3% of the aggregate amount of the Commitments.

“Material Adverse Effect” means a material adverse effect (or a series of adverse effects, none of which is material in and of itself but which cumulatively result in a material adverse effect) on (i) any Mine, (ii) the business, operations, results of operations, assets, properties, liabilities, performance, prospects or the condition (financial or otherwise) of any of the Credit Parties, (iii) any of the rights or remedies of any of the Lenders or the Administrative Agent (or any one of them) or (iv) the ability of any Credit Party to perform its obligations to the Lenders or the Administrative Agent (or any one of them) under any of the Credit Documents. Unless otherwise indicated, determination of the aforementioned shall be made by any Lender, in its sole discretion.

“Material Contracts” means any agreement to which the Borrower or any of its Affiliates is a party and which is deemed material by the Administrative Agent (in its sole discretion) to the Business or the operation of any Mine.

“Xxxxxx Xxxxx” means Xxxxxx Xxxxx S.A. de C.V., a sociadad anomima de capital variable, organized and existing under the laws of the United Mexican States.

“Xxxxxx Xxxxx Guarantee” means the guarantee executed and delivered by Xxxxxx Xxxxx in favour of the Administrative Agent, on behalf of the Finance Parties, in form and substance satisfactory to the Administrative Agent.

“Minas Pimeria (Goldcorp)” means Minas de la Alta Pimeria S.A. de C.V., a sociadad anomima de capital variable, organized and existing under the laws of the United Mexico States.

“Mines” means, collectively, each of the San Francisco Mine, the Xxx Xxxxx Mine and the Caballo Xxxxxx Mine and “Mine” means any one of them.

“Mining Rights” means, collectively, each of the San Francisco Mining Rights, the Xxx Xxxxx Mining Rights and the Caballo Xxxxxx Mining Rights.

“Molimentales” means Molimentales del Noroeste, S.A. de C.V., a sociedad anonima de capital variable organized and existing under the laws of the United Mexican States.

“Molimentales Guarantee” means the guarantee executed and delivered by Molimentales in favour of the Administrative Agent (or the Collateral Agent, as the case may be), on behalf of the Finance Parties, in form and substance satisfactory to the Administrative Agent.

“Newstrike” means Newstrike Capital Inc., organized and existing under the laws of the province of British Columbia.

“Newstrike Guarantee” means the guarantee executed and delivered by Newstrike in favour of the Administrative Agent, on behalf of the Finance Parties, in form and substance satisfactory to the Administrative Agent.

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“Note Indenture” means the note indenture, dated as of January 22, 2010, between the Note Trustee and the Borrower.

“Note Trustee” means Computershare Trust Company of Canada.

“Notes” means the notes issued pursuant to the Note Indenture.

“Original Credit Agreement” has the meaning specified in the recitals.

“Original Currency” has the meaning specified in Section 9.11(1) .

“Original Guarantors” means Molimentales and Timmins Mexico and “Original Guarantor” means any one of them.

“Original Lender” means each lender set forth on the signature pages of the Original Credit Agreement.

“Other Currency” has the meaning specified in Section 9.11(1) .

“Other Taxes” has the meaning specified in Section 9.6(2) .

“Outstandings” means, in relation to the Borrower and any Lender at any time under the Credit Facility, an amount equal to the aggregate principal amount of all outstanding Advances made by the Lender; and in relation to the Borrower and all Lenders means the sum of the Outstandings to each Lender.

“Owned Properties” means, collectively, (i) the land and premises owned by any Credit Party on the date of this Agreement which are listed on Schedule 5.1(k), and (ii) after the date of this Agreement the lands and premises notified to the Administrative Agent pursuant to each Compliance Certificate, but shall exclude lands and premises sold or otherwise disposed of as permitted in this Agreement from the date of such sale or disposition.

“Participant” has the meaning specified in Section 9.7(3) .

“Parties” means each of the parties to this Agreement and “Party” means any one of them.

“Permitted Encumbrances” means, in relation to any Person:

	(a)	any Lien or deposit under workers’ compensation, social security or similar legislation or in connection with bids, tenders, leases, contracts or expropriation proceedings or to secure related public or statutory obligations, surety and appeal bonds or costs of litigation where required by law;
	(b)	any Lien or privilege imposed by law, such as builders’, mechanics’, materialman’s, carriers’, warehousemen’s and landlords’ liens and privileges in favour of employees; or any Lien or privilege arising out of judgments or awards with respect to which, at the time an appeal or proceedings for review is being prosecuted and with respect to which it has secured a stay of execution pending such appeal or proceedings for review for tax or labour proceedings; or any Lien for taxes, assessments in tax or labour proceedings that are directly related to such Person’s mining concessions and lots, unpaid wages related to labour proceedings or governmental charges or levies for the then current year, or not at the time due and delinquent or the validity of which is being contested at the time in good faith; or any undetermined or inchoate Lien or privilege incidental to current operations that has not been filed pursuant to law or that relates to obligations not due or delinquent; or the deposit of cash or securities in connection with any Lien or privilege referred to in this paragraph (b);

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	(c)	any right reserved to or vested in any municipality or governmental or other public authority by the terms of any lease, licence, franchise, grant or permit held or acquired by such Person, or by any statutory provision, to terminate the lease, licence, franchise, grant or permit or to purchase assets used in connection therewith or to require annual or other periodic payments as a condition of the continuance thereof;
	(d)	any Lien created or assumed by such Person in favour of a public utility or Governmental Entity when required by the utility or Governmental Entity in connection with the operations of such Person;
	(e)	any reservations, limitations, provisos and conditions expressed in original grants from any Governmental Entity;
	(f)	any minor encumbrance, such as easements, rights-of-way, servitudes or other similar rights in land granted to or reserved by other Persons, rights-of-way for sewers, electric lines, telegraph and telephone lines, oil and natural gas pipelines and other similar purposes, or zoning or other restrictions applicable to the use of real property by such Person, or title defects, encroachments or irregularities, that do not in the aggregate materially detract from the value of the property or materially impair its use in the operation of the business of such Person;
	(g)	any Lien securing the Indebtedness referred to in paragraph (a) of the definition of Permitted Indebtedness;
	(h)	a share pledge granted by Xxxxx Mining over the shares of Xxxxxx Xxxxx in favour of Zebra Holdings and Investments S.a.r.l. and Lorito Holdings S.a.r.l. as security for the Indebtedness referred to in paragraphs (d) and (e) of the definition of “Permitted Indebtedness”; and
	(i)	a non-possessory pledge over the assets acquired with the proceeds of the Indebtedness referred to in paragraph (c) of the definition of “Permitted Indebtedness” pursuant to a non-possessory pledge agreement, dated on or about November, 2015, granted by Xxxxxx Xxxxx in favour of Minas Pimeria (Goldcorp), a true copy of which non-possessory pledge agreement has been provided to the Administrative Agent prior to the date hereof.

“Permitted Indebtedness” means:

(a) Indebtedness incurred by the Borrower on account of credit card liabilities not exceeding at any time an aggregate amount of $20,000;

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	(b)	any Indebtedness owed by Molimentales to Timmins Mexico or the Borrower provided such Indebtedness is fully subordinated to the Facility Debt in form and substance satisfactory to the Administrative Agent;
	(c)	Indebtedness in an amount not exceeding CAD$4,000,000 to Minas Pimeria (Goldcorp) on account of the unpaid portion of the purchase price for the process plant and select auxiliary equipment (previously used in the operation of Goldcorp’s El Sauzal Mine in Chihuahua, Mexico) acquired from Minas Pimeria (Goldcorp);
	(d)	Indebtedness in an amount not exceeding CAD$1,333,333 to Zebra Holdings and Investments S.a.r.l.;
	(e)	Indebtedness in an amount not exceeding CAD$666,667 to Lorito Holdings S.a.r.l.; and
	(f)	Indebtedness not exceeding at any time in the aggregate $1,000,000.

“Person” means a natural person, partnership, corporation, joint stock company, trust, unincorporated association, joint venture or other entity or Governmental Entity, and pronouns have a similarly extended meaning.

“Prepayment Fee” means, in relation to any repayment or prepayment of any Advance, the product of (i) the amount of such repayment or prepayment (as the case may be) multiplied by (ii) by 12% and further multiplied by (iii) (X / 366), where X is the greater of: (A) zero, and (B) 120 less the number of calendar days, calculated on the date of such repayment or prepayment (as the case may be), that have elapsed since the date of this Agreement.

“Purchase Money Obligation” means, in relation to any Person, indebtedness of such Person issued, incurred or assumed to finance all or part of the cost of acquiring any asset for such Person.

“Repayment Date” means June 30, 2016 (or, if such day is not a Business Day, the immediately preceding Business Day), as such date may be extended by mutual agreement of the Borrower and the Administrative Agent, in writing.

“Reporting Jurisdictions” means the Provinces of British Columbia, Alberta and Ontario.

“Rules” has the meaning specified in Section 9.13(3) .

“San Francisco Mine” means the San Francisco open pit gold and heap leaching mine, located approximately 150 km north of Hermosillo in the state of Sonora, Mexico.

“San Francisco Mining Concessions Mortgage” means the mortgage over mining concessions executed and delivered by Molimentales in favour of the Administrative Agent (or the Collateral Agent, as the case may be), on behalf of the Finance Parties, in form and substance satisfactory to the Administrative Agent.

“San Francisco Mining Rights” means the governmental approvals and authorizations required in connection with the exploration, the exploitation and the production of mineral mining that are owned by Molimentales, including without limitation any and all mining concessions issued by the Ministry of Economy (Seretaría de Economía) in accordance with article 10 and other applicable provisions of the mining law (Ley Minera) of Mexico, as more particularly described in Schedule 1.1.

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“San Francisco Project Assets Pledge” means the pledge agreement executed and delivered by Molimentales in favour of the Administrative Agent (or the Collateral Agent, as the case may be) (on behalf of the Finance Parties) in form and substance satisfactory to the Administrative Agent. “San Francisco Surface Mortgage” means the mortgage over surface land executed and delivered by Molimentales in favour of the Administrative Agent (or the Collateral Agent, as the case may be), on behalf of the Finance Parties, in form and substance satisfactory to the Administrative Agent.

“Sanctioned Country” means, at any time, a country or territory which is the subject or target of any Sanctions.

“Sanctioned Person” means, at any time, (a) any Person that is named as a “specially designated national and blocked person” on the most current list published by the Office of Foreign Assets Control of the United States Department of the Treasury at its official website or any replacement website or other replacement official publication of such list or (b) any Person operating, organized or resident in a Sanctioned Country.

“Sanctions” means comprehensive economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, (b) the United Nations Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom or (c) the Canadian government.

“Securities Act” means the Securities Act (Ontario).

“Secured Assets” means all of the assets now owned or hereinafter acquired by the Credit Parties including all plant, property, Mining Rights, land rights, and inventory in the heap xxxxx pads, and including without limitation, the equipment listed in the Security Documents and the proceeds under or rights of insurance policies thereon.

“Security” means, at any time, the charges, mortgages, pledges, assignments, security interests, encumbrances and other Liens in favour of the Administrative Agent or the Lenders, or both, in the assets and properties of any of the Credit Parties securing their obligations under this Agreement and/or any of the other Credit Documents.

“Security Documents” means each of the Guarantees, the General Security Agreement, the San Francisco Project Assets Pledge, the Collateral Agency Agreement, the San Francisco Surface Mortgage, the San Francisco Mining Concessions Mortgage, the Xxx Xxxxx Pledge, the Xxx Xxxxx Surface Mortgage, the Caballo Xxxxxx Pledge, the Caballo Xxxxxx Surface Mortgage and any other guarantee and security granted to the Collateral Agent, the Administrative Agent or the Lenders, or any of them, as security for the obligations of the Credit Parties under this Agreement and the other Credit Documents.

“Subject Properties” means, collectively, the Owned Properties and the Leased Properties.

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“Subsidiaries” means each of the (direct or indirect) subsidiaries of the Borrower including, as at the date hereof, Molimentales, Timmins Mexico, Newstrike, Mineral Xxxxx and Xxxxx Mining and “Subsidiary” means any one of them.

“subsidiary” means with respect to any Person (the “parent”) at any date, (i) any corporation, limited liability company, association or other business entity of which securities or other ownership interests representing more than 50% of the voting power of all equity interests entitled to vote in the election of the board of directors thereof are, as of such date, held by the parent and/or one or more subsidiaries of the parent, (ii) any partnership, (x) the sole general partner or the managing general partner of which is the parent and/or one or more subsidiaries of the parent or (y) the only general partners of which are the parent and/or one or more subsidiaries of the parent and (iii) any other Person that is otherwise Controlled by the parent and/or one or more subsidiaries of the parent.

“$” and “Dollars” means: (i) in relation to any reference to any Advance, Commitment or Total Commitment, the lawful money of the United States of America and (ii) otherwise, the lawful money of Canada.

“Taxes” has the meaning specified in Section 5.1(r) ..

“Timmins Mexico” means Timmins Goldcorp Mexico, S.A. de C.V., a sociedad anonima de capital variable organized and existing under the laws of the United Mexican States.

“Timmins Mexico Guarantee” means the guarantee executed and delivered by Timmins Mexico in favour of the Administrative Agent (or the Collateral Agent, as the case may be) (on behalf of the Finance Parties) in form and substance satisfactory to the Administrative Agent.

“Total Commitments” means the aggregate of the Total Facility A Commitments and the Total Facility B Commitments.

“Total Facility A Commitments” means the aggregate of the Facility A Commitments, being $5,000,000 at the date of the Original Credit Agreement.

“Total Facility B Commitments” means the aggregate of the Facility B Commitments, being $13,000,000 at the date of the Original Credit Agreement.

“Voting Shares” means shares of capital stock of any class of any corporation carrying voting rights under all circumstances, provided that for the purposes of such definition, shares which only carry the right to vote conditionally on the happening of any event shall not be considered Voting Shares, whether or not such event shall have occurred, nor shall any shares be deemed to cease to be Voting Shares solely by reason of a right to vote accruing to shares of another class or classes by reason of the happening of such event.

Section 1.2 Other Usages.

References to “this Agreement”, “the agreement”, “hereof”, “herein”, “hereto” and like references refer to this Credit Agreement and not to any particular Article, Section, Subsection, paragraph or other subdivision of this Agreement. Any references herein to any agreements or documents shall mean such agreements or documents as amended, supplemented, restated or otherwise modified from time to time in accordance with the terms hereof and thereof.

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Section 1.3 Gender and Number.

Any reference in the Credit Documents to gender includes all genders and words importing the singular number only include the plural and vice versa.

Section 1.4 Headings, etc.

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

Section 1.5 Currency.

	(a)	All references to “CAD$” refer to the lawful currency of Canada. All references to “US$” refer to the lawful currency of the United States of America.
	(b)	All references in the Credit Documents to dollars (other than in relation to any Advance, any Commitment or Total Commitment), unless otherwise specifically indicated, are expressed in Canadian currency. All references in the Credit Documents to the amount of any Advance, Commitment or Total Commitment, are expressed in United States of America currency.
	(c)	The Advances, the Commitments and the Total Commitments shall be denominated in US$ such that all references in any Credit Document to any Advance, Commitment or Total Commitment shall be to the amounts thereof as expressed in US$. For the avoidance of doubt, as at the date hereof, the amounts of the Facility B Advances, Facility B Commitments and Total Facility B Commitments shall be the following: US$10,222,536.76.
	(d)	Subject to Section 9.11, any conversion from any currency to any other currency shall be determined by the Administrative Agent and shall be calculated based on the Bank of Canada noon rate on the Business Day immediately preceding such determination.

Section 1.6 Certain Phrases, etc.

In any Credit Document: (i) (x) the words “including” and “includes” mean “including (or includes) without limitation”, (y) the phrase “the aggregate of”, “the total of”, “the sum of”, or a phrase of similar meaning means “the aggregate (or total or sum), without duplication, of”, and (z) the word “asset” includes present and future properties, revenues and rights of every description, (ii) in the computation of periods of time from a specified date to a later specified date, unless otherwise expressly stated, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding” and (iii) any obligation of a Party to cause, ensure or procure any action or omission from or by any other Person shall be deemed to be an absolute obligation of such first-mentioned Person.

Section 1.7 Meaning of certain terms

Any reference in this Agreement to:

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	(a)	“assets” includes present and future properties, revenues and rights of every description;
	(b)	a Default being “continuing” means that such Default has not been waived or remedied and an Event of Default being “continuing” means that such Event of Default has not been waived;
	(c)	a “Credit Document” or any other agreement or instrument is a reference to that Credit Document or other agreement or instrument as amended, novated, supplemented, extended or restated;
	(d)	“indebtedness” includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;
	(e)	“knowledge” of any Person shall be deemed to mean such knowledge after due and diligent inquiry; and
	(f)	“repay” (or any derivative form thereof) shall, subject to any contrary indication, be construed to include “prepay” (as, as the case may be, the corresponding derivative form thereof).

Section 1.8 Accounting Terms.

All accounting terms not specifically defined in this Agreement shall be interpreted in accordance with IFRS.

Section 1.9 Rateable Portion of Advances.

References in this Agreement to a Lender’s rateable portion of Advances or rateable share of payments of principal, interest, Fees or any other amount, shall mean and refer to a rateable portion or share as nearly as may be rateable in the circumstances, as determined in good faith by the Administrative Agent. Each such determination by the Administrative Agent shall be prima facie evidence of such rateable share.

Section 1.10 Incorporation of Schedules.

The schedules and exhibits attached to this Agreement shall, for all purposes of this Agreement, form an integral part of it.

Section 1.11 Conflict.

The provisions of this Agreement prevail in the event of any conflict or inconsistency between its provisions and the provisions of any of the other Credit Documents.

Section 1.12 Certificates.

Whenever the delivery of a certificate is a condition precedent to the taking of any action by any Credit Party or the occurrence of any event hereunder, the truth and accuracy of the facts and the diligent and good faith determination of the opinions stated in such certificate shall in each case be conditions precedent to the right of any Credit Party to have such action taken, and any certificate executed by any Credit Party shall be deemed to represent and warrant that the facts stated in such certificate are true and accurate in all respects.

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ARTICLE 2
CREDIT FACILITY

Section 2.1 Availability.

(1) Each Lender severally agrees, subject to the terms and conditions of this Agreement, to make the following facilities available to the Borrower:

	(a)	a senior secured working capital term facility in an aggregate amount equal to the Total Facility A Commitments (“Facility A”); and
	(b)	a senior secured term facility in an aggregate amount equal to the Total Facility B Commitments (“Facility B”).

(2)	Subject to the terms and conditions of this Agreement, each Lender agrees to make Advances rateably to the Borrower in accordance with its Commitment.
(3)	The Administrative Agent shall give each Lender prompt notice of (i) any Borrowing Notice received from the Borrower and of each Lender’s rateable portion of any Advance requested under such Borrowing Notice and (ii) any other notice received by it from the Borrower under the Agreement.

Section 2.2 Commitment and Facility Limit.

Any cancellation of any part of any Credit Facility shall permanently reduce the amount available under such Credit Facility. No amount cancelled under any Credit Facility may be subsequently reinstated.

Section 2.3 Use of Proceeds.

(1) The Borrower shall use the proceeds of the Advances as follows:

(a) all proceeds of any Advance under Facility A shall be applied:

	(i)	as to $4,900,000 for working capital purposes; and
	(ii)	as to $100,000 for the payment of the Original Lenders’ structuring and other fees and expenses; and

(b) all proceeds of any Advance under Facility B shall be applied:

	(i)	first, to the repayment in full of the Notes; and
	(ii)	second, for working capital purposes;

and for no other purpose without the prior written consent of the Lenders.

(2) None of the Finance Parties is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.

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Section 2.4 Reductions of Commitments.

(1) The Commitments under each of Facility A and Facility B shall reduce to zero as follows:

	(a)	in relation to Facility A, on the Facility A Closing Date; and
	(b)	in relation to Facility B, on the Facility B Closing Date;

unless cancelled, reduced or terminated earlier in accordance with the provisions of this Agreement.

(2) The Borrower shall repay (subject to Section 7.1) all of the Outstandings, together with all accrued interest and Fees and all other amounts payable in connection with the Credit Facility on the Repayment Date.

Section 2.5 Mandatory Repayments.

(1) The Borrower shall, and shall ensure that each other Credit Party shall, first reduce the Commitments and, if no Commitments remain outstanding, prepay Advances in the following amounts and at the following times:

	(a)	the amount of all Disposal Proceeds, immediately upon receipt;
	(b)	the amount of all Insurance Proceeds, immediately upon receipt and provided that if any Excluded Insurance Proceeds cease, at any time, to constitute Excluded Insurance Proceeds, an amount equal to such Excluded Insurance Proceeds shall immediately be applied in prepayment of the Advances;
	(c)	the amount of all proceeds of any Indebtedness incurred by any Credit Party, immediately upon receipt; and
	(d)	the amount of all proceeds from the issuance of any securities by any Credit Party, immediately upon receipt.

(2)

Where Excluded Insurance Proceeds include amounts which are intended to be used for a specific purpose within a specified period (as set out in the definition of Excluded Insurance Proceeds), the Borrower shall ensure that those amounts are not used for any other purpose and, if requested to do so by the Administrative Agent, shall promptly deliver a certificate to the Administrative Agent at the time of application and at the end of such period confirming the amount (if any) which has been so applied within the requisite time periods provided for in the definition of Excluded Insurance Proceeds.

(3)

In the event that a Change of Control occurs, each of the Commitments shall immediately be reduced to zero and the Borrower shall immediately prepay all Advances, together with all accrued and unpaid interest, all Fees then due and payable (including, without limitation, the Prepayment Fee) and all other amounts which may then be due and payable under any other provision hereof.

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(4)	The Credit Facility and the Commitments, if any, shall be permanently reduced by any and all amounts required to be prepaid pursuant to the provisions hereof. Each Lender’s Commitment, if any, shall be reduced by its rateable share of the Commitment.
(5)	Each payment and each cancellation under any Credit Facility pursuant to this Section 2.5 shall first reduce the Commitments (respectively), if any, across Facility A and Facility B rateably (and each Lender’s Commitment rateably) and then be used to prepay the Advances across Facility A and Facility B rateably.
(6)	Simultaneously with any cancellation and/or prepayment of Facility B under any provision of this Agreement, the Borrower shall pay to the Administrative Agent (for the account of the Lenders) an amount equal to the Prepayment Fee.

Section 2.6 Voluntary Cancellation and Repayment.

(1)	Subject to Section 2.6(3), the Borrower may, if it gives the Administrative Agent not less than 10 Business Days' prior notice, cancel the whole or any part of a Credit Facility. Any cancellation under this Section 2.6(1) shall permanently reduce the availability under the applicable Credit Facility and shall reduce the Commitments of the Lenders rateably under that Credit Facility.
(2)	Subject to Section 2.6(3), the Borrower may, at any time before the Repayment Date, if it gives the Administrative Agent not less than 10 Business Days' prior notice, prepay the whole or any part of any Advance under Facility B, together with all accrued and unpaid interest, all Fees then due and payable and all other amounts which may then be due and payable under any provision hereof, upon payment of the Prepayment Fee and provided such payment is made on the last Business Day of a calendar month.
(3)	Each payment and each cancellation under any Credit Facility pursuant to this Section 2.6 shall first reduce the Commitments (respectively), if any, across Facility A and Facility B as the Borrower may notify the Administrative Agent in writing or, failing which, rateably (and, in any event, each Lender’s Commitment rateably), and then be used to prepay the Advances across Facility A and Facility B as the Borrower may notify the Administrative Agent in writing or, failing which, rateably.
(4)	Any notice of cancellation or prepayment shall be irrevocable.

Section 2.7 Payments under this Agreement.

(1) Unless otherwise expressly provided in this Agreement, the Borrower shall (i) make any payment required to be made by it to the Administrative Agent or the Lenders by depositing the amount of the payment not later than 10:00 a.m. (Toronto time) on the date the payment is due to an account designated by the Administrative Agent at least two Business Days prior to the date such payment is due, and (ii) provide to the Administrative Agent, three Business Days’ written notice of prepayment which shall be irrevocable and binding on the Borrower and shall specify (x) the date of prepayment, and (y) the amount of the Advances to be prepaid. The Borrower shall make each such payment in US$. The Administrative Agent shall distribute to each Lender, promptly upon receipt by the Administrative Agent of any payment, an amount equal to the amount then due to such Lender. Any amount received by the Administrative Agent for the account of the Lenders shall be held in trust for their benefit until distributed.

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(2)	Unless otherwise expressly provided in this Agreement, the Administrative Agent shall make Advances and other payments to the Borrower under this Agreement by crediting the Borrower’s Account (or causing the Borrower’s Account to be credited) with the amount of the payment not later than 3:00 p.m. (Toronto time) on the date the payment is to be made.
(3)	Any prepayment under this Agreement shall be made together with payment of the applicable Prepayment Fee, all accrued and unpaid interest and any and all other amounts which may then be due and payable under any other provision hereof.

Section 2.8 Application of Payments and Prepayments.

All amounts received by the Administrative Agent from or on behalf of the Borrower and not previously applied pursuant to this Agreement shall be applied by the Administrative Agent as follows: (i) first, in reduction of the Borrower’s obligation to pay any unpaid interest and any Fees which are due and owing, (ii) second, in reduction of the Borrower’s obligation to pay any amounts referred to in Section 9.5, (iii) third, subject to any other provision hereof relating to the order in which the Facilities are to be reduced and the Advances repaid, in reduction of the Borrower’s obligation to pay any amounts due and owing on account of any unpaid principal amount of Advances which is due and owing, (iv) fourth, in reduction of the Borrower’s obligation to pay any other unpaid Outstandings which are due and owing, (v) fifth, in reduction of any other obligation of the Borrower under this Agreement and/or the other Credit Documents, and (vi) sixth, to the Borrower or such other Persons as may lawfully be entitled to or directed to receive the remainder.

Section 2.9 Computations of Interest and Fees.

(1)

All computations of any interest or Fee shall be made by the Administrative Agent taking into account the actual number of days occurring in the period in relation to which such interest or Fee (as the case may be) accrues or is payable and on the basis of a year of 365 or 366 (as the case may be) days.

(2)

For purposes of the Interest Act (Canada), (i) whenever any interest or Fee under this Agreement is calculated using a rate based on a year of 366 or 365 (as the case may be) days, the rate determined pursuant to such calculation, when expressed as an annual rate, is equivalent to (x) the applicable rate based on a year of 366 or 365 (as the case may be) days, (y) multiplied by the actual number of days in the calendar year in which the period for which such interest or fee is payable (or compounded) ends, and (z) divided by 365 or 366 (as the case may be), (ii) the principle of deemed reinvestment of interest does not apply to any interest calculation under this Agreement, and (iii) the rates of interest stipulated in this Agreement are intended to be nominal rates and not effective rates or yields.

Section 2.10 Security

Without prejudice to any other provision hereof, as security for all indebtedness, obligations and liabilities, direct or indirect, absolute or contingent, matured or not, solely or jointly, incurred under or in connection with this Agreement and/or any other Credit Document, the Credit Parties have executed and delivered the Security Documents, including, without limitation:

(a) the Guarantees;

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	(b)	the General Security Agreement;
	(c)	the San Francisco Surface Mortgage;
	(d)	the San Francisco Mining Concessions Mortgage;
	(e)	the San Francisco Project Assets Pledge;
	(f)	the Collateral Agency Agreement;
	(g)	the Xxx Xxxxx Surface Mortgage;
	(h)	the Xxx Xxxxx Pledge;
	(i)	the Caballo Xxxxxx Surface Mortgage;
	(j)	the Caballo Xxxxxx Pledge; and
	(k)	such other Credit Documents and documents requested by the Administrative Agent.

Section 2.11 Entry into Effect of this Agreement.

From and as of the time that the Administrative Agent advises the Borrower in writing that this Agreement is effective (the “Effective Time”), this Agreement shall amend, restate and supersede the Original Credit Agreement in its entirety. Notwithstanding the foregoing, this Agreement is not intended by the parties to, and shall not constitute, a payment discharge, satisfaction or novation of any obligation of any Credit Party to any Finance Party, including the whole or any item or part of any Advance, the Facility Debt and Outstandings (all as defined in the Original Credit Agreement) remaining outstanding and owing under the Original Credit Agreement as of the date hereof, all of which shall be obligations, Advances, Facility Debt and Outstandings under and pursuant to this Agreement until paid and/or repaid in full in accordance with the provisions of this Agreement. Each Credit Party hereby confirms to and agrees with the Finance Parties that the Advances, the Facility Debt and the Outstandings under the Original Credit Agreement shall continue in full force and effect in accordance with their representative terms (as amended and restated, as applicable, by this Agreement). Each Credit Party hereby confirms its obligations and the validity and effectiveness of the Guarantees and the Liens created under the Security (each as defined in this Agreement and all of which were originally delivered in connection with the Original Credit Agreement) and agrees that such Guarantees and Security continue in full force and effect in all respects, and that (i) such Guarantees guarantee all obligations, Advances, Facility Debt and Outstandings under and pursuant to this Agreement and (ii) such Security secures all obligations, Advances, Facility Debt and the Outstandings under and pursuant to this Agreement.

Section 2.12 Transitional Provisions.

On or about the date hereof, the Administrative Agent will determine and notify the Borrower of the amounts of all interest, fees and other amounts accrued and payable under this Agreement to the Finance Parties and specify the date each such amount should be paid.

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Section 2.13 Bonus Payment.

In consideration for the Lenders entering into this Agreement, the Borrower shall make a bonus payment to the Administrative Agent (for the account of the Lenders on a proportionate basis) in the amount of US$408,901.47 (the “Bonus Payment”) on the earlier of (a) the repayment of the Facility Debt and (b) June 30, 2016, payable, at the option of each Lender (in relation to its proportion), (i) in cash or (ii) in Common Shares, or any combination of cash and Common Shares. In the event that a Lender opts to receive its proportion of the Bonus Payment in Common Shares, the Borrower shall issue to such Lender a number of Common Shares equal to the relevant amount of the Bonus Payment divided by the Adjusted VWAP as at the day such Lender notifies the Administrative Agent of its election to receive some or all of the Bonus Payment in Common Shares provided that such Lender and the Borrower agree that the issuance of such Common Shares shall be subject to the approval of the Exchange if so required pursuant to Applicable Securities Legislation.

In this Section 2.13:

	(a)	“Adjusted VWAP” means, at any time, the VWAP less 10% of such VWAP at such time (expressed as a number); and
	(b)	“VWAP” means, on any day, the volume weighted average price per Common Share on the Exchange for the ten trading days immediately preceding such day.

ARTICLE 3
ADVANCES

Section 3.1 The Advances.

(1) The Lenders severally agree, subject to the terms and conditions of this Agreement, to make a single Advance to the Borrower under each Credit Facility from time to time on any Business Day:

	(a)	in relation to Facility A, on or prior to the Facility A Closing Date; and
	(b)	in relation to Facility B, on or prior to the Facility B Closing Date.

(2)	Not more than one Advance shall be made or at any time be outstanding per Credit Facility.
(3)	The amount of any Advance must be:

	(a)	in relation to Facility A, an amount not exceeding the Total Facility A Commitments; and
	(b)	in relation to Facility B, an amount not exceeding the Total Facility B Commitments.

Section 3.2 Procedure for Borrowing.

Subject to the terms and conditions of this Agreement, each Advance shall be made on not less than five Business Days prior notice, given not later than 10:00 a.m. (Toronto time) by the Borrower to the Administrative Agent. Each notice of an Advance (a “Borrowing Notice”) shall be in substantially the form of Exhibit “A”, shall be irrevocable and binding on the Borrower and shall specify (i) whether the Advance is under Facility A or Facility B, (ii) the proposed date for the Advance and (iii) the aggregate amount of the Advance. Upon receipt by the Administrative Agent of funds from the Lenders and fulfilment of the applicable conditions set forth in Article 4, the Administrative Agent will make such funds available to the Borrower in accordance with Article 2.

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Section 3.3 Interest on Advances.

(1)	The Borrower shall pay interest on the unpaid principal amount of each Advance from the date of the Advance until the principal amount of the Advance is repaid in full, at the Interest Rate.
(2)	Interest on each Advance shall be calculated and payable in arrears:

	(a)	on the last Business Day of each month;
	(b)	when the Advance becomes due and payable in full; and
	(c)	when the Advance is repaid.

ARTICLE 4
CONDITIONS OF LENDING

Section 4.1 Initial Conditions Precedent.

The obligation of each Lender to make the initial Advance under this Agreement is subject to fulfilment of the following conditions precedent at the time such Advance is made (in each case, in form and substance satisfactory to the Administrative Agent, acting reasonably):

	(a)	no Default or Event of Default has occurred or is continuing or would arise immediately after giving effect to or as a result of such Advance;
	(b)	such Advance will not violate any Applicable Law;
	(c)	no order, judgment or decree of any court, arbitrator or Governmental Agency shall purport to enjoin or restrain the Lenders from making an Advance;
	(d)	there is not pending or threatened, any action, charge, claim, demand, suit, proceeding, petition, governmental investigation or arbitration by, against or affecting any Credit Party or any property of any Credit Party that has not been disclosed to the Administrative Agent by the Borrower in writing, and nothing has occurred and there has been no development in any such action, charge, claim, demand, suit, proceeding, petition, governmental investigation or arbitration that, in the opinion of the Administrative Agent, could reasonably be expected to have a Material Adverse Effect;
	(e)	each of the representations and warranties of the Borrower contained in Article 5 and of the Credit Parties contained in any other Credit Document are true and correct on the date of the Borrowing Notice relating to such Advance and on the date of such Advance as if such representations and warranties were made on each such date;

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	(f)	there has not occurred any change of circumstance or event since the date hereof, nor has any Administrative Agent become aware of any facts not previously disclosed or known, which the Administrative Agent determines could have a Material Adverse Effect;
	(g)	delivery of a certificate from a senior officer of each Credit Party in the form of Exhibit “D”: (i) attaching true copies of (A) the constating documents and by- laws including all amendments thereto, if any, (B) all resolutions of the board of directors or shareholders, as the case may be, approving the borrowing and other matters contemplated by this Agreement and the other Credit Documents to which it is a party and (C) a list of the officers and directors authorized to sign agreements together with their specimen signatures and (ii) certifying that all necessary permits and licenses relating to the operation of, and production at, the San Francisco Mine have been obtained and none have been rescinded, cancelled or otherwise terminated in any respect;
	(h)	delivery of a certificate of status, compliance or like certificate with respect to each of the Credit Parties issued by the appropriate Governmental Entity of the jurisdiction of its incorporation and of each jurisdiction in which it owns any material assets or carries on any material business;
	(i)	delivery of a solvency certificate from the chief financial officer of the Borrower in the form of Exhibit “C”;
	(j)	each of the Credit Documents specified in Section 2.10 have been duly executed and delivered by each Credit Party thereto and is in full force and effect enforceable against such parties thereto in accordance with its respective terms;
	(k)	evidence of registration or other perfection of the Security under the Security Documents in such jurisdictions as the Administrative Agent may require to ensure that such Security creates legal, valid, binding, enforceable and first- priority security interests in the assets to which such Security relates, enforceable against third parties, trustees in bankruptcy and similar officials;
	(l)	delivery of all discharges, subordination agreements, waivers and confirmations as may be required to ensure that all obligations under the Credit Documents are secured by first priority Liens on the property and assets of each Credit Party with such exceptions as are permitted pursuant to this Agreement or any of the other Credit Documents;
	(m)	delivery of favourable opinions of counsel to each Credit Party, in customary form and addressing customary matters, addressed to the Administrative Agent, the Lenders and Administrative Agent’s Counsel;
	(n)	evidence showing the Administrative Agent (on behalf of the Finance Parties) as loss payee and additional insured on each Credit Party’s insurance policies;

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	(o)	all Fees and other amounts then payable under the Credit Documents and any and all reasonable costs, expenses and disbursements (including, without limitation, all legal fees and expenses) incurred by the Administrative Agent or any Lender in connection with the negotiation, preparation, execution and delivery of the Credit Documents and any due diligence or other matters relating to any of the transactions contemplated in any of the Credit Documents have been paid in full;
	(p)	evidence of repayment in full of all the Notes and evidence that the Note Indenture, each of the Notes and all guarantees and all Liens (and all other documents, instruments, registrations, filings and similar evidence) relating thereto have been or will, simultaneously with such Advance, have been indefeasibly, fully and unconditionally terminated, discharged and released and none of the Credit Parties has any obligation or liability in relation thereto;
	(q)	receipt of all Authorizations which the Administrative Agent may require, including, all approvals from the Exchange in relation to the transactions contemplated by this Agreement and/or the other Credit Documents;
	(r)	the Borrower has issued 193,237 Common Shares to the Original Lender as duly paid and non assessable shares, as payment of the working capital facility bonus; and
	(s)	the Borrower has issued 108,696 Common Shares to the Original Lender as duly paid and non assessable shares, as payment of the standby facility break fee.

Section 4.2 Further Conditions Precedent.

(1) The obligation of each Lender to make any Advance is subject to fulfilment of the following conditions at the time of any Borrowing Notice and the related Advance (in each case, in form and substance satisfactory to the Administrative Agent, acting reasonably):

(a) if such Advance is under Facility A:

	(i)	no Default or Event of Default has occurred or is continuing or would arise immediately after giving effect to or as a result of the Advance or Borrowing Notice;
	(ii)	the Advance will not violate any Applicable Law;
	(iii)	no order, judgment or decree of any court, arbitrator or Governmental Agency shall purport to enjoin or restrain the Lenders from making an Advance;
	(iv)	there is not pending or threatened, any action, charge, claim, demand, suit, proceeding, petition, governmental investigation or arbitration by, against or affecting any Credit Party or any property of any Credit Party that has not been disclosed to the Administrative Agent by the Borrower in writing, and nothing has occurred and there has been no development in any such action, charge, claim, demand, suit, proceeding, petition, governmental investigation or arbitration that, in the opinion of the Administrative Agent, could reasonably be expected to have a Material Adverse Effect;

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	(v)	each of the representations and warranties of the Borrower contained in Article 5 and of the Credit Parties contained in any other Credit Document are true and correct on the date of the Borrowing Notice relating to such Advance and on the date of such Advance as if such representations and warranties were made on each such date;
	(vi)	each of the terms and conditions to such Advance contained in this Agreement shall have been fully complied with (including delivery to the Administrative Agent of a properly completed Borrowing Notice);
	(vii)	unless already delivered on the same day pursuant to Section 4.1, delivery of a solvency certificate from the chief financial officer of the Borrower in the form of Exhibit “C”;
	(viii)	unless already delivered on the same day pursuant to Section 4.1, delivery of a certificate of status, compliance or like certificate with respect to each Credit Party issued by the appropriate Governmental Entity of the jurisdiction of its incorporation and of each jurisdiction in which it owns any assets or carries on any business;
	(ix)	a promissory note in the form of Exhibit “E” has been duly executed and delivered by the Borrower in an amount equal to the amount of the Advance and is in full force and effect enforceable against the Borrower in accordance with its terms;
	(x)	there has not occurred any change of circumstance or event since the date hereof, nor has the Administrative Agent or any Lender become aware of any facts not previously disclosed or known, which the Administrative Agent or any Lender reasonably determines could have a Material Adverse Effect; and
	(xi)	all Fees and other amounts then payable under the Credit Documents have been paid in full;

(b) if such Advance is under Facility B:

	(i)	no Default or Event of Default has occurred or is continuing or would arise immediately after giving effect to or as a result of the Advance or Borrowing Notice;
	(ii)	the Advance will not violate any Applicable Law;
	(iii)	no order, judgment or decree of any court, arbitrator or Governmental Agency shall purport to enjoin or restrain the Lenders from making an Advance;
	(iv)	there is not pending or threatened, any action, charge, claim, demand, suit, proceeding, petition, governmental investigation or arbitration by, against or affecting any Credit Party or any property of any Credit Party that has not been disclosed to the Administrative Agent by the Borrower in writing, and nothing has occurred and there has been no development in any such action, charge, claim, demand, suit, proceeding, petition, governmental investigation or arbitration that, in the opinion of the Administrative Agent, could reasonably be expected to have a Material Adverse Effect;

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	(v)	each of the representations and warranties of the Borrower contained in Article 5 and of the Credit Parties contained in any other Credit Document are true and correct on the date of the Borrowing Notice relating to such Advance and on the date of such Advance as if such representations and warranties were made on each such date;
	(vi)	each of the terms and conditions to such Advance contained in this Agreement shall have been fully complied with (including delivery to the Administrative Agent of a properly completed Borrowing Notice);
	(vii)	unless already delivered on the same day pursuant to Section 4.1, delivery of a solvency certificate from the chief financial officer of the Borrower in the form of Exhibit “C”;
	(viii)	unless already delivered on the same day pursuant to Section 4.1, delivery of a certificate of status, compliance or like certificate with respect to each Credit Party issued by the appropriate Governmental Entity of the jurisdiction of its incorporation and of each jurisdiction in which it owns any assets or carries on any business;
	(ix)	a promissory note in the form of Exhibit “E” has been duly executed and delivered by the Borrower in an amount equal to the amount of the Advance and is in full force and effect enforceable against the Borrower in accordance with its terms;
	(x)	there has not occurred any change of circumstance or event since the date of this Agreement, nor has the Administrative Agent or any Lender become aware of any facts not previously disclosed or known, which the Administrative Agent or any Lender reasonably determines could have a Material Adverse Effect; and
	(xi)	all Fees and other amounts then payable under the Credit Documents have been paid in full.

(2) Each of the giving of any Borrowing Notice by the Borrower and the acceptance by the Borrower of any Advance shall be deemed to constitute a representation and warranty by the Borrower that, on the date of such Borrowing Notice or Advance, as the case may be, and after giving effect to it and to the application of any proceeds from it, the statements set forth in Section 4.1, Section 4.2(1)(a) and Section 4.2(1)(b) have been satisfied.

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Section 4.3 No Waiver.

The making of an Advance or otherwise giving effect to any Borrowing Notice, without the fulfilment of one or more conditions set forth in Section 4.1 or Section 4.2, shall not constitute a waiver of any condition and the Administrative Agent and the Lenders reserve the right to require fulfilment of such condition in connection with any subsequent Borrowing Notice or Advance.

ARTICLE 5
REPRESENTATIONS AND WARRANTIES

Section 5.1 Representations and Warranties.

The Borrower represents and warrants to the Administrative Agent and each Lender, acknowledging and confirming that the Administrative Agent and each Lender are relying on such representations and warranties without independent inquiry in entering into this Agreement and providing Advances that:

	(a)	Incorporation, Qualification and Corporate Power. The Borrower and each Subsidiary has been duly incorporated and organized and is a valid and subsisting corporation under the laws of its jurisdiction of incorporation, has all requisite corporate power and authority and is duly qualified and holds all necessary material permits, licences and authorizations necessary or required to carry on its business as now conducted and to own, lease or operate its property and assets, no steps or proceedings have been taken by any person, voluntary or otherwise, requiring or authorizing its dissolution or winding up.
	(b)	Extra-provincial Registration. The Borrower and each Subsidiary is licensed, registered or qualified as an extra-provincial or foreign corporation in all jurisdictions where the character of the property or assets thereof owned or leased or the nature of the activities conducted by it make licensing, registration or qualification necessary and is carrying on the business thereof in material compliance with all Applicable Laws.
	(c)	Conflict and Consents. None of the execution and delivery of any Credit Document, the compliance by the Borrower or any Subsidiary with the provisions of any Credit Document to which it is a party or the consummation of the transactions contemplated herein and therein, for the consideration and upon the terms and conditions as set forth herein and therein, do or will (i) require the consent, approval, authorization, order or agreement of, or registration or qualification with, any governmental agency, body or authority, court, stock exchange, securities regulatory authority or other Person, except such as have been obtained; or (ii) conflict with or result in any breach or violation of any of the provisions of, or constitute a default under, any indenture, mortgage, deed of trust, lease or other agreement or instrument to which the Borrower or any Subsidiary is a party or by which any of them or any of their properties or assets thereof is bound, or (iii) conflict with or result in any breach or violation of any provisions of, or constitute a default under the articles or by-laws of the Borrower or any Subsidiary or any resolution passed by the directors (or any committee thereof) or shareholders of the Borrower or any Subsidiary, or any statute or any judgment, decree, order, rule, policy or regulation of any court, governmental authority, any arbitrator, stock exchange or securities regulatory authority applicable to the Borrower or any Subsidiary or any of the properties or assets thereof which could have a Material Adverse Effect.

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	(d)	Corporate Action, Governmental Approvals, etc. The Borrower and each of the Subsidiaries has full corporate power and authority to enter into each Credit Document to which it is a party and to do all acts and things and execute and deliver all documents as are required hereunder and thereunder to be done, observed, performed or executed and delivered by it in accordance with the terms hereof and thereunder and the Borrower and each of the Subsidiaries has taken all necessary corporate action to authorize the creation, execution, delivery and performance of each Credit Document to which it is a party and to observe and perform their respective obligations in accordance with the provisions hereof and thereof.
	(e)	Execution and Binding Obligation. Each Credit Document has been authorized, executed and delivered by the Borrower and/or each Subsidiary which is a party thereto and constitutes a valid and legally binding obligation enforceable against it in accordance with its terms.
	(f)	Authorizations and Registrations. The Borrower and each of the Subsidiaries is in compliance with the requirements of all Authorizations and registrations it holds and there are no investigations or proceedings existing, pending or, to the Borrower's knowledge, after due enquiry, threatened which could result in the revocation, cancellation, suspension or any adverse modification of any of such Authorizations and registrations.
	(g)	No Defaults. Neither the Borrower nor any of the Subsidiaries is in default of any material term, covenant or condition under or in respect of any judgment, order, agreement or instrument to which it is a party or to which it or any of the property or assets thereof are or may be subject, and no event has occurred and is continuing, and no circumstance exists which has not been waived, which constitutes a default in respect of any commitment, agreement, document or other instrument to which the Borrower or any of the Subsidiaries is a party or by which it is otherwise bound entitling any other party thereto to accelerate the maturity of any amount owing thereunder or which could have a Material Adverse Effect.
	(h)	Material Contracts. Neither the Borrower nor any Subsidiary is a party to or bound by any Material Contract other than as disclosed in Schedule 5.1(h).
	(i)	Contracts and Actions. Neither the Borrower nor any of the Subsidiaries is in violation of any term of the articles or by-laws thereof. Neither the Borrower nor any of the Subsidiaries is in violation of any term or provision of any agreement, indenture or other instrument applicable to it which would, or could, result in any Material Adverse Effect, and neither the Borrower nor any of the Subsidiaries is in default in the payment of any obligation owed which is now due and there is no action, suit, proceeding or investigation commenced, pending or, to the knowledge of the Borrower after due inquiry, threatened which, either in any case or in the aggregate, might result in any Material Adverse Effect or in any material liability on the part of the Borrower or any of the Subsidiaries or which places, or could place, in question the validity or enforceability of any Credit Document, or any document or instrument delivered, or to be delivered, by the Borrower or a Subsidiary pursuant hereto or thereto.

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	(j)	Property. Except as contemplated by this Agreement or as qualified in Schedule 5.1(j), the Borrower and the Subsidiaries are the beneficial owners of the properties, business and assets or the interests in the properties, business or assets referred to in their books and records, all agreements by which the Borrower or any of the Subsidiaries holds an interest in property, business or assets are in good standing according to their terms and the properties by which the Borrower or any of the Subsidiaries holds an interest are in good standing under Applicable Law, of the jurisdictions in which they are situated. None of the Borrower or any Subsidiary has approved, is contemplating, has entered into any agreement in respect of, or has any knowledge of: (i) the purchase of any property material to the Borrower or any Subsidiary or assets or any interest therein or the sale, transfer or other disposition of any property material to the Borrower or any Subsidiary or assets or any interest therein currently owned, directly or indirectly, by the Borrower or any Subsidiary whether by asset sale, transfer of shares or otherwise; or (ii) the change of control (by sale or transfer of shares or sale of all or substantially all of the property and assets of the Borrower or any Subsidiary or otherwise) of the Borrower or any Subsidiary.
	(k)	Leased Properties. With respect to the Leased Properties, Molimentales occupies the Leased Properties and has the exclusive right to occupy and use the Leased Properties and each of the Leases is in good standing and in full force and effect.
	(l)	Mining Title. Other than as set out in Schedule 5.1(l), applying customary standards in the Canadian mining industry, each of Molimentales and Xxxxxx Xxxxx has sufficient title, clear of any title defect or encumbrance, to its operating properties and properties with estimated proven and probable mineral reserves and/or estimated mineral resources (other than property to which it is lessee, in which case it has a valid leasehold interest) and has good and sufficient title to the real property interests including, without limitation, fee simple estate of and in real property, leases, easements, rights of way, permits or licences from landowners or authorities permitting the use of land by Molimentales or Xxxxxx Xxxxx (as the case may be) necessary to permit the operation of its business as presently owned and conducted. Each of Molimentales and Xxxxxx Xxxxx (as the case may be) holds all mineral rights required to continue its business and operations as currently conducted and as proposed to be conducted as set forth in Schedule 5.1(l). All mineral rights held by Molimentales or Xxxxxx Xxxxx (as the case may be) are free and clear of all Liens and royalty burdens, and none of such mineral rights are subject to reduction by reference to mine payout or otherwise except for those created in the ordinary course of business.
	(m)	Work Orders. There are no outstanding work orders relating to any of the Subject Properties from or required by any Governmental Entity, nor does the Borrower or any Subsidiary have notice of any possible impending or future work order, that in either case, could reasonably be expected to have a Material Adverse Effect.

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	(n)	Expropriation. No part of any of the Subject Properties or the Buildings and Fixtures located on the Subject Properties has been taken or expropriated by any Governmental Entity, no written notice or proceeding in respect of an expropriation has been given or commenced nor is the Borrower aware of any intent or proposal to give any such notice or commence any proceedings, that in any case, could reasonably be expected to have a Material Adverse Effect.
	(o)	Encroachments. The Buildings and Fixtures located at each of the Subject Properties are located entirely within such Subject Property and are in material conformity with set-back and coverage requirements of all applicable Governmental Entities. There are no encroachments upon any of the Subject Properties that could reasonably be expected to have a Material Adverse Effect.
	(p)	Compliance with Laws. The Borrower and each Subsidiary has conducted and is conducting its business in compliance in all material respects with all Applicable Laws of each jurisdiction in which it carries on business and possesses all material Authorizations issued by the appropriate Governmental Entity necessary to carry on the business currently carried on by it, is in compliance in all material respects with the terms and conditions of all such Authorizations and with all Applicable Laws material to the operations, and neither the Borrower nor any of the Subsidiaries has received any notice of the modification, revocation or cancellation of, any intention to modify, revoke or cancel or any proceeding relating to the modification, revocation or cancellation of any such Authorization, which, singly or in the aggregate, if the subject of an unfavourable decision, order, ruling or finding, would materially and adversely affect the conduct of the business or operations of, or the assets, liabilities (contingent or otherwise), condition (financial or otherwise) or prospects of, the Borrower or any of the Subsidiaries.
	(q)	Employment Matters. The Borrower and each Subsidiary is in compliance with all Applicable Laws respecting employment and employment practices, terms and conditions of employment, pay equity and wages, except where non- compliance with such laws could not reasonably be expected to have a Material Adverse Effect, and has not and is not engaged in any unfair labour practice. The execution of this Agreement and the consummation of the transactions contemplated in this Agreement will not trigger the rights of any employee of the Borrower or any of the Subsidiaries under the terms of any employment agreement, option agreement or option plan or any other compensation arrangement with the Borrower or any of the Subsidiaries, including but not limited to the right to terminate employment or exercise a “change of control” provision.
	(r)	Taxes. All taxes (including income tax, capital tax, payroll taxes, employer health tax, workers’ compensation payments, property taxes, custom and land transfer taxes), duties, royalties, levies, imposts, assessments, deductions, charges or withholdings and all liabilities with respect thereto including any penalty and interest payable with respect thereto (collectively, “Taxes”) due and payable by the Borrower and the Subsidiaries have been paid, except where the failure to pay such taxes would not constitute an adverse material fact in respect of the Borrower or have a Material Adverse Effect. Except as disclosed in Schedule 5.1(r), all tax returns, declarations, remittances and filings required to be filed by the Borrower and the Subsidiaries have been filed with all appropriate Governmental Entities and all such returns, declarations, remittances and filings are complete and accurate and no material fact or facts have been omitted therefrom which would make any of them misleading, except where such failure would not constitute an adverse material fact in respect of the Borrower or have a Material Adverse Effect. To the best of the knowledge of the Borrower, no examination of any tax return of the Borrower or any Subsidiary is currently in progress and there are no issues or disputes outstanding with any Governmental Entity respecting any Taxes that have been paid, or may be payable, by the Borrower or any Subsidiary, in any case, except where such examinations, issues or disputes would not constitute an adverse material fact in respect of the Borrower or have a Material Adverse Effect.

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	(s)	Environmental Compliance. (i) Neither the Borrower nor any of the Subsidiaries is in violation of any Environmental Laws, or the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials; (ii) the Borrower and each of the Subsidiaries have all Authorizations required under any applicable Environmental Laws and the Borrower and each of the Subsidiaries is in material compliance with such permits, authorizations and approvals; (iii) there are no pending or threatened administrative, regulatory or judicial actions, suits, demands, claims, liens, notices of non-compliance or violation, investigation or proceedings relating to any Environmental Laws against the Borrower or any of the Subsidiaries; and (iv) there are no events or circumstances that would reasonably be expected to form the basis of an order for clean-up or remediation, or an action, suit or proceeding by any private parry or governmental body or agency, against or affecting the Borrower or any of the Subsidiaries relating to any Environmental Laws.
	(t)	Corporate Structure.

	(i)	The only Subsidiaries of the Borrower are (i) Timmins Mexico, and the Borrower holds all outstanding shares in the capital of such Subsidiary other than one share held by Xxxxx Xxxxxxxxxx; (ii) Molimentales, and Timmins Mexico holds all outstanding shares in the capital of such Subsidiary other than one share held by Xxxxxx Xxxxxxxx Xxxxxx; (iii) Newstrike, and the Borrower holds all outstanding shares in the capital of such Subsidiary; (iv) Xxxxx Mining, and Newstrike holds all outstanding shares in the capital of such Subsidiary and (v) Xxxxxx Xxxxx, and Xxxxx Mining holds all outstanding shares in the capital of such Subsidiary other than one share held by Molimentales.
	(ii)	The Borrower is authorized to issue an unlimited number of common shares, of which 315,375,530 common shares are issued and outstanding as fully paid and non assessable shares and an unlimited number of convertible preference shares without par value of which none are currently outstanding.
	(iii)	No person, firm or company has any agreement, option, right or privilege (whether pre-emptive, contractual or otherwise) capable of becoming an agreement, for the purchase, acquisition, subscription for or issue of any of the unissued shares or other securities of the Borrower or any Subsidiary except for 10,000,000 warrants outstanding and 21,465,500 stock options outstanding under the Borrower’s stock option plan in effect.

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	(u)	Financial Statements. The financial statements of the Borrower furnished to the Administrative Agent and the Lender or filed with any securities commission, have all been prepared in accordance with IFRS and present fully, fairly and correctly in all material respects, the financial conditions of the Borrower as at the dates thereof and the results of the operations and the changes in the financial position of the Borrower for the periods then ended, and reflect accurately and adequately the financial position and all material liabilities (accrued, absolute, contingent or otherwise) of the Borrower as of the date thereof, and no adverse material changes in the financial position of the Borrower have taken place since the date thereof.
	(v)	Indebtedness. Neither the Borrower nor any Subsidiary has any Indebtedness save and except for Permitted Indebtedness. There exists no default (howsoever described) under any provision of any instrument evidencing any Indebtedness or of any agreement relating thereto.
	(w)	Loans. Except as qualified in Schedule 5.1(w), the Borrower has not made any loans to or guaranteed the obligations of any Person.
	(x)	No Litigation. There are no actions, suits, proceedings, inquiries or investigations existing, pending or, to the knowledge of the Borrower after due inquiry, threatened against or adversely affecting the Borrower or any of the Subsidiaries or to which any of the property or assets thereof is subject, at law or equity, or before or by any court, federal, provincial, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality or other Governmental Entity, domestic or foreign, which may in any way have a Material Adverse Effect and neither the Borrower nor any of the Subsidiaries is subject to any judgment, order, writ, injunction, decree, award, rule, policy or regulation of any Governmental Entities, which, either separately or in the aggregate, may result in a Material Adverse Effect.
	(y)	Insolvency. Neither the Borrower nor any of the Subsidiaries has committed an act of bankruptcy or is insolvent, proposed a compromise or arrangement to their respective creditors generally, had a petition or a receiving order in bankruptcy filed against any of them, made a voluntary assignment in bankruptcy, taken any proceedings with respect to a compromise or arrangement, taken any proceedings to have any of them declared bankrupt or wound-up, taken any proceedings to have a receiver appointed for any of their respective property or had any execution or distress become enforceable or become levied upon any of their respective property.
	(z)	No Liabilities. Except as reflected or reserved against in the balance sheet of the September 30, 2015 financial statements of the Borrower, neither the Borrower nor any Subsidiary has any liability or obligation of any nature (whether absolute, accrued, contingent or otherwise) except for current liabilities incurred in the ordinary course since September 30, 2015 described in writing to each of the Finance Parties prior to the date of this Agreement.

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	(aa)	Authorized Representatives. The only authorized representatives of each of Timmins Mexico, Molimentales and Xxxxxx Xxxxx are Xxxxxx Xxxxxxxx Xxxxxx, Xxxxxx Xxxxxxx Xxxx and Xxxxx Xxxx.
	(bb)	Disclosure. All information relating to the business, assets, liabilities, properties, capitalization or financial condition of the Borrower or any of the Subsidiaries or any member thereof provided by the Borrower or any of its advisors to the Administrative Agent or the Lenders is true, accurate and complete in all material respects.
	(cc)	Auditors: The Borrower’s auditors are independent public accountants and have participant status with the Canadian Public Accountability Board as required under Applicable Securities Legislation and there has never been a reportable disagreement (within the meaning of National Instrument 51-102 – Continuous Disclosure Obligations) between the Borrower and the Borrower’s auditors.
	(dd)	Related Transactions. Other than as set out in Schedule 5.1(dd), to the best knowledge of the Borrower, none of the directors, officers or employees of the Borrower or any associate or affiliate of any of the foregoing had or has any material interest, direct or indirect, in any transaction or any proposed transaction with the Borrower or its Subsidiaries which, as the case may be, materially affects, is material to or will materially affect the Borrower.
	(ee)	Insurance. The assets of the Borrower and its subsidiaries and their business and operations are insured against loss or damage with responsible insurers on a basis consistent with insurance obtained by reasonably prudent participants in comparable businesses, and such coverage is in full force and effect, and the Borrower has not failed to promptly give any notice of any material claim thereunder.
	(ff)	Property Agreements. Any and all of the agreements and other documents and instruments pursuant to which the Borrower or any of the Subsidiaries holds the property and assets thereof are valid and subsisting agreements, documents or instruments in full force and effect, enforceable in accordance with the terms and neither the Borrower nor any of the Subsidiaries is in default of any of the material provisions of any such agreements, documents or instruments nor has any such default been alleged.
	(gg)	Technical Reports. The information including the mineral reserve, resource and other information set forth in the following reports (i) “NI 43-101 F1 Technical Report Updated Resources and Reserves and Mine Plan for the San Francisco Gold Mine, Sonora, Mexico” dated November 30, 2010, (ii) “Preliminary Economic Assessment Caballo Xxxxxx Gold Heap Xxxxx, Veracruz, Mexico” readdressed to the Borrower on January 28, 2015, with an effective date as of May 7, 2012, (iii) “NI 43-101 Technical Report - Caballo Xxxxxx Project Resource Update at the La Paila Zone” dated February 10, 2012 (effective date February 7, 2012), (iv) “Xxx Xxxxx Project Preliminary Economic Assessment” dated October 29, 2014 (effective date August 8, 2014) and (v) “Newstrike Capital Inc. Xxx Xxxxx Project Technical Report and Initial Resource Estimate” dated February 26, 2013, has been prepared in accordance with Canadian industry standards set forth in National Instrument 43-101 of the Canadian Securities Administrators, and the method of estimating the mineral reserves and resources has been verified to current industry standards and the information upon which the estimates of reserves and resources were based, was, at the time of delivery thereof, complete and accurate in all material respects and, to the best of the Borrower’s knowledge, there have been no material changes to such information since the date of delivery or preparation thereof except as disclosed in Schedule 5.1(gg).

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	(hh)	Royalty Obligations. Other than as set out in Schedule 5.1(hh), there are no royalty obligations or any other rights to any Mine or any other properties of the Borrower or any of the Subsidiaries.
	(ii)	Intellectual Property. The Borrower and each of its Subsidiaries owns or has the right to use under license, sub-license or otherwise all material intellectual property used by the Borrower and its Subsidiaries in its business, including copyrights, industrial designs, trade marks, trade secrets, know how and proprietary rights, free and clear of any and all Liens.
	(jj)	Anti-Corruption Laws and Sanctions. Neither the Borrower, its Subsidiaries nor, to the best of the Borrower’s knowledge, any other Person associated with or acting on behalf of the Borrower or its Subsidiaries including, without limitation, any director, officer, agents or employee of the Borrower or the Subsidiaries, has, directly or indirectly, while acting on behalf of the Borrower or the Subsidiaries (i) used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity; (ii) made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns from corporate funds; (iii) violated any provision of the Foreign Corrupt Practices Act of 1977, as amended, the United Kingdom Bribery Act, as amended, applicable Sanctions or similar legislation; or iv) made any other unlawful payment. Neither the Borrower, its Subsidiaries nor, to the best of the Borrower’s knowledge, any other Person associated with or acting on behalf of the Borrower or any of its Subsidiaries including, without limitation, any director, officer, agent or employee of the Borrower or the Subsidiaries, is a Sanctioned Person.
	(kk)	Money Laundering Laws. The operations of the Borrower and the Subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Borrower or any of the Subsidiaries with respect to the Money Laundering Laws is pending, or to the best of the Borrower’s knowledge, threatened.

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Section 5.2 Survival of Representations and Warranties.

The representations and warranties in this Agreement and in any certificates or documents delivered to the Administrative Agent and the Lenders shall not merge in or be prejudiced by and shall survive any Advance and shall be made on the date hereof and be deemed repeated as at the last day of each month and shall continue in full force and effect so long as any amounts are owing by the Borrower to the Lenders under this Agreement.

ARTICLE 6
COVENANTS OF THE BORROWER

Section 6.1 Affirmative Covenants

So long as any amount owing under this Agreement remains unpaid or any Lender has any obligation under this Agreement, the Borrower shall do the following:

	(a)	Comply with Continuous Disclosure Obligations. It shall timely file all documents that must be publicly filed or sent to its shareholders pursuant to Applicable Securities Legislation in the Provinces of Canada in which the Borrower is a “reporting issuer” (as such term is defined in such Applicable Securities Legislation) within the time prescribed by such Applicable Securities Legislation and make such documents available on the System for Electronic Document Analysis and Retrieval (“SEDAR”) within such prescribed time period. In the event the Borrower is not at any time subject to Applicable Securities Legislation, the Borrower shall continue to provide to the Administrative Agent (with sufficient copies for each of the Lenders), (a) within 120 days after the end of each fiscal year, copies of its annual report and audited annual financial statements, and (b) within 45 days after the end of each of the first three fiscal quarters of each fiscal year, interim financial statements which shall, at a minimum, contain such information required to be provided in quarterly reports by a “reporting issuer” (as such term is defined in such Applicable Securities Legislation) under the Applicable Securities Legislation in each of the Reporting Jurisdictions. Each of such reports will be prepared in accordance with disclosure requirements of Applicable Securities Legislation of such Reporting Jurisdictions and IFRS.
	(b)	Notice of Litigation and Default. Notify the Administrative Agent in writing upon becoming aware of (i) any Default or Event of Default; (ii) any material suit, proceeding or governmental investigation pending or, to the Borrower’s knowledge, threatened or any notification of any challenge to the validity of any Authorization, relating to the Borrower, any of the Subsidiaries, any Mine or any of the Secured Assets and (iii) any force majeure event under any document relating to any Mine or any of the Secured Assets.
	(c)	Corporate Existence. Except as herein otherwise expressly provided, maintain, and cause each of the Subsidiaries to at all times maintain, its corporate existence, obtain and maintain all Authorizations required or necessary in connection with their respective Businesses, each Mine and/or each of the Secured Assets and to carry on and conduct their respective Businesses in a reasonably proper and efficient manner.

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	(d)	Compliance with Laws, etc. Comply, and cause each of the Subsidiaries to comply, in all respects, with all Applicable Laws.
	(e)	Maintenance of Properties. Maintain, and cause each Subsidiary to maintain, the Secured Assets in good condition in accordance with prudent industry standards.
	(f)	Payment of Taxes and Claims. It will, and will ensure that each of the Subsidiaries will, pay and discharge or cause to be paid and discharged, promptly when due, all Taxes imposed upon it or any Subsidiary in respect of any of the Secured Assets or upon the income or profits therefrom as well as all claims of any kind (including claims for labour, materials, supplies and rent) which, if unpaid, might become a lien thereupon; provided however, that it shall not be required to pay or cause to be paid any such Taxes if the amount, applicability or validity thereof shall concurrently be contested in good faith by appropriate proceedings diligently conducted.
	(g)	Keeping of Books. It will, and will cause each of the Subsidiaries to, keep or cause to be kept proper books of account and make or cause to be made therein true and complete entries of all dealings and transactions in relation to their respective Businesses in accordance with IFRS, and at all reasonable times furnish or cause to be furnished to the Administrative Agent such information relating to their respective operations as the Administrative Agent may reasonably request and such books of account shall be open for inspection by the Administrative Agent upon reasonable request.
	(h)	Rights of Inspection.

	(i)	At any time after a Default or Event of Default, permit any employee, officer, agent or other representative of the Administrative Agent and/or any of the Lenders, at the expense of the Borrower, to examine and make copies of any abstracts from the records and books of account of the Borrower or any Subsidiary and to discuss any of the Affairs of the Borrower or any Subsidiary with any of its directors, officers, employees, agents, representatives or auditors. At any time and from time to time, to a maximum of one inspection per month (provided that such limit shall not apply after a Default or an Event of Default), upon request of the Administrative Agent, permit an independent technical engineer selected by the Administrative Agent, any employee, officer, agent or other representative of the Administrative Agent, at the expense of the Borrower, to inspect any Mine and the Business and discuss any of the Affairs of the Borrower or any Subsidiary with any of the personnel of the Borrower or any Subsidiary and third party contractors.
	(ii)	The Borrower shall, on a bi-weekly basis, on the first Business Day of each second week, inform the Administrative Agent of all its efforts to generate funds required to (re)pay all Outstandings on or before the Repayment Date, all in such detail as the Administrative Agent may reasonably require from time to time.

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	(i)	Maintenance of Insurance. It will, and will cause each of the Subsidiaries, to: (i) maintain policies of insurance with responsible carriers and in such amounts and covering such risks as are usually carried by companies engaged in similar businesses and owning similar properties in the same general areas in which the Borrower or such Subsidiary (as the case may be) operate, and add the Administrative Agent as loss payee and a named insured under the policies of Molimentales and any other Credit Party as the Administrative Agent may request in connection with the Secured Assets; and (ii) on an annual basis and/or at any other time, promptly at the request of the Administrative Agent, deliver to the Administrative Agent all certificates and reports prepared in connection with such insurance.
	(j)	Authorizations. It will, and will ensure that each of the Subsidiaries will, obtain and maintain all required Authorizations for development and operation of, and production at, each Mine.
	(k)	Perfection and Protection of Security. It will, and will ensure that each of the Subsidiaries will, cause all necessary and proper steps to be taken diligently to protect and defend the Secured Assets and the proceeds thereof against any material adverse claim or demand, including without limitation, the employment or use of counsel for the prosecution or defence of litigation and the contest, settlement, release or discharge of any such claim or demand.
	(l)	Security. It will, and will cause each of the Subsidiaries to, ensure that each of the Security Documents will at all times constitute valid and, upon registration in the appropriate registry, perfected first ranking security interest on all the Secured Assets (subject to Permitted Encumbrances), and will at all times take all actions necessary or reasonably requested to create, perfect and maintain the Security Interests granted pursuant to the Security as perfected first ranking security over the Secured Assets.
	(m)	Further Assurances. It will, and will cause each of the Subsidiaries to, duly and punctually perform and carry out all of the covenants and acts or things to be done by it as provided in each Credit Document to which it is a party. Additionally, the Borrower shall, and shall ensure that each of its Subsidiaries shall, from time to time, as may be reasonably required by the Administrative Agent, execute and deliver such further and other documents and do all matters and things which are necessary to carry out the intention and provisions of this Agreement.
	(n)	Payment. It will duly and punctually pay or cause to be paid all amounts payable hereunder to each Finance Party, on the dates, at the places, in the currency and in the manner mentioned herein.
	(o)	Share Ownership. It will at all times own, beneficially and of record, directly or indirectly, (i) 100% of the shares in Timmins Mexico (with the exception of one such share in Timmins Mexico which is held directly, beneficially and of record by Xxxxx Xxxxxxxxxx); (ii) Timmins Mexico will at all times own, beneficially and of record, directly 100% of the shares in Molimentales (with the exception of one such share in Molimentales which is held directly, beneficially and of record by Xxxxxx Xxxxxxxx Xxxxxx); (iii) 100% of the shares in Newstrike, (iv) Newstrike will at all times own, beneficially and of record, directly 100% of the shares in Xxxxx Mining and (v) Xxxxx Mining will at all times own, beneficially and of record, directly 100% of the shares in Xxxxxx Xxxxx (with the exception of one such share which is held directly, beneficially and of record by Molimentales). In relation to each Subsidiary, there shall at all times only be one class of shares outstanding with all the rights and entitlements attaching to such shares being the same.

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	(p)	Private Issuer. In the event that the Borrower begins filing with the U.S. Securities and Exchange Commission as a Foreign Private Issuer, the Borrower will promptly deliver to the Administrative Agent a certificate of the Borrower certifying such “reporting issuer” status and other information as the Administrative Agent may require at such given time including the Central Index Key (as such term is defined in the Securities Exchange Act of 1934) that has been assigned for filing purposes.
	(q)	Mines. It will, and will cause each of the Subsidiaries to, diligently and continuously proceed with the development of each Mine (other than the San Francisco Mine). The Borrower shall continue leaching operations at the San Francisco Mine in a manner consistent with the current leaching operations at the San Francisco Mine (as described to the Lenders) but shall not be required to continue mining operations at the San Francisco Mine.
	(r)	Common Shares. It shall take all reasonable steps and actions as may be required to maintain the listing and posting for trading of the Common Shares on the Exchange and to maintain its status as a “reporting issuer”, or the equivalent thereof not in default of the requirements of the Applicable Securities Legislation of each of the Reporting Jurisdictions.
	(s)	Information.

(i) The Borrower shall provide the following information (in form and substance satisfactory to the Lenders, in their sole and absolute discretion) to the Lenders on every Tuesday of every week in respect of the immediately preceding week:

	(A)	mining statistics (ore tonnes mined, ore grade mined, waste mined, contained ounces in mined ore);
	(B)	processing statistics (ore processed, ounces produced, recovery);
	(C)	commentary on where the gold produced is coming from (i.e. the source of the gold such as primary ore sent to pads, stockpiled ore under xxxxx, re-processing activity and similar matters);
	(D)	sales statistics (ounces sold, price achieved);
	(E)	San Francisco Mine cashflows (revenues, payments, expenditures, accounts receivable, accounts payable and similar matters);

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	(F)	inventories;
	(G)	cash balances (unrestricted and restricted reported separately); and
	(H)	other cashflows (financing payments, mill disassembly and transportation, Caballo Xxxxxx expenditures, Xxx Xxxxx expenditures).

	(ii)	On or prior to the 15th day of each month, the Borrower shall provide to the Administrative Agent (in each case, in form and substance satisfactory to the Lenders, in their sole and absolute discretion) (A) an up-to-date three-month mine plan and cash flow forecast in relation to the San Francisco Mine and (B) a list of aged payables and receivables as at the last day of the immediately preceding month.
	(iii)	The Borrower shall provide to the Administrative Agent a true and complete copy of the agenda and all materials and other information provided to the Directors in connection with any meeting of the Borrower's board of Directors (in person or by telephone conference) at the same time as such agenda, materials and other information are distributed to the Directors. Within 24 hours of each meeting of the Borrower's board of Directors (in person or by telephone conference), the Borrower shall provide to the Administrative Agent an accurate summary of the decisions taken at such meeting.
	(iv)	The Borrower shall ensure that on each Business Day the Administrative Agent has access to all financial, land, technical, environmental, health, safety and any other executive employees the Administrative Agent may require (all on terms and conditions satisfactory to the Lenders).

Section 6.2 Negative Covenants.

So long as any amount owing under the Credit Agreement remains unpaid or any Lender or the Administrative Agent has any obligation under this Agreement, the Borrower shall not, and shall ensure that none of the Subsidiaries shall:

	(a)	Debt. Directly or indirectly issue, incur, assume or otherwise become liable for or in respect of any Indebtedness except for Permitted Indebtedness.
	(b)	Liens. Directly or indirectly create, incur, assume, permit or suffer to exist any Lien against any assets, including, without limitation, any of the Secured Assets, other than Permitted Encumbrances.
	(c)	Dissolution, Etc. Enter into or become party or subject to any dissolution, winding-up, reorganization, or similar transaction or proceeding.
	(d)	Disposal of Assets Generally. Dispose of any of the Secured Assets, except that it may dispose of any used or surplus equipment, vehicles and other assets which are Secured Assets in the ordinary course of business and on arm’s length terms provided that the fair market value of such equipment, vehicles and/or other assets, when aggregated with the fair market value of all other assets disposed of since the date of this Agreement does not exceed $250,000 in aggregate.

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	(e)	Payments. Make any prepayment on, purchase, defease, redeem, prepay, decrease or otherwise acquire or retire for value, prior to any scheduled final maturity, scheduled repayment or scheduled sinking fund payment, any Indebtedness, other than any payment of Indebtedness by Molimentales to the Borrower in order to make payments on the Facility Debt.
	(f)	Payments re Affiliates. Make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of the Borrower or any Subsidiary (each, an “Affiliate Transaction”) other than:

	(i)	an Affiliate Transaction that, based on a Certificate of the Borrower to that effect, is on terms that are no less favourable than those that would have been obtained in a comparable arm’s length transaction with a person who is not a “related person”, as such term is defined in the Bankruptcy and Insolvency Act (Canada);
	(ii)	any payments made by a Subsidiary to the Borrower;
	(iii)	the advance by the Borrower of all the proceeds of Facility A to Molimentales and any payment by Molimentales to the Borrower for the sole purpose of the Borrower making payments required under this Agreement;
	(iv)	the making of any loan or advance by Timmins Mexico or the Borrower to Molimentales which is fully subordinated to the Facility Debt in form and substance satisfactory to the Administrative Agent; or
	(v)	the purchase of shares in Molimentales by the Borrower or Timmins Mexico or the purchase of shares in Timmins Mexico by the Borrower.

	(g)	Share Capital. Issue any securities (other than options, warrants and preference shares provided they are not convertible into Indebtedness) other than (i) to the Borrower or to a Credit Party or (ii) Common Shares in the Borrower.
	(h)	Distributions. Other than for the purposes of satisfying the Facility Debt, declare or pay any dividends or make any other Distributions.
	(i)	Financial Assistance. Provide any Financial Assistance to any Person.
		For the purposes of this Section 6.2(i), “Financial Assistance” means any advances, loans or other extensions of credit to any Person.
	(j)	Redemption. Purchase, redeem, retire or otherwise acquire for cash any securities (equity or other) of the Borrower or any Subsidiary.

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	(k)	Subsidiaries and Acquisitions. Save and except for the Subsidiaries in existence as of the date hereof, directly or indirectly, acquire any Person or any shares or securities or a business or undertaking (or, in each case, any interest in any of them) of any Person or incorporate any Person.
	(l)	Constating Documents. Amend any of its constating documents if such amendment is or could reasonably be expected to be prejudicial to any of the Finance Parties.
	(m)	Change in Business. Engage in the conduct of any business other than the Business as existing on the date hereof or in businesses reasonably related thereto on a basis consistent with the conduct of the Business as conducted on the date hereof.
	(n)	Sale-Leaseback. Enter into any sale leaseback, synthetic lease or similar transaction involving any of its assets.
	(o)	Other Payments. No Credit Party shall make any payment to any Person in an amount exceeding CAD$50,000 in aggregate, except with the prior written consent of the Administrative Agent, other than any payment to the Administrative Agent on account of the Facility Debt outstanding under this Agreement.

Section 6.3 Financial Covenants.

So long as any amount under the Credit Agreement remains unpaid or any Lender or the Administrative Agent has any obligation under this Agreement, each Credit Party covenants and agrees that:

	(a)	Minimum Cash and Cash Equivalents. The sum of Cash and Cash Equivalents shall at all times be more than US$1,000,000.
	(b)	Working Capital. The amount of Current Liabilities less the amount of Current Assets shall not at any time be greater than US$2,500,000.
	(d)	Testing. By not later than the 2nd Business Day of each week, the Borrower shall provide to the Administrative Agent a certificate of the Chief Financial Officer of the Borrower containing a confirmation/certification (accompanied by sufficient evidence and supporting calculations) showing compliance with paragraph 6.3(a) above as of the last day of the previous week, all in form and substance satisfactory to the Administrative Agent. By not later than the 20th day following the end of each month, the Borrower shall provide to the Administrative Agent a certificate of the Chief Financial Officer of the Borrower containing the detailed computations (accompanied by sufficient supporting data and calculations) showing compliance with the conditions described in paragraph 6.3(b) above as at the last day of such month, all in form and substance satisfactory to the Administrative Agent.

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ARTICLE 7
EVENTS OF DEFAULT

Section 7.1 Events of Default.

If any of the following events (each, an “Event of Default”) occurs and is continuing:

	(a)	Non-Payment. The Borrower fails to pay any amount of the Outstandings, any interest or any Fees when such amount, interest or Fees become due and payable;
	(b)	Misrepresentation. Any representation or warranty or certification made or deemed to be made by the Borrower or any Subsidiary in any Credit Document shall prove to have been incorrect or misleading in any material respect as at the date on which it was made and, if the circumstances giving rise to the incorrect or misleading misrepresentation or warranty are capable of modification or rectification (such that, thereafter the representation or warranty would be correct and not misleading), the representation or warranty remains incorrect or misleading at the end of a period of ten (10) days from the date the Borrower or such Subsidiary becomes aware of such incorrect or misleading representation, warranty or certification;
	(c)	Breach of Negative Covenants. The Borrower or any Subsidiary fails to perform, observe or comply with any of the covenants or conditions contained in Section 6.2 or Section 6.3 of this Agreement;
	(d)	Breach of Other Covenants. The Borrower or any Subsidiary fails to perform, observe or comply with any covenants or conditions contained in any Credit Document (other than the covenants and conditions contained in Section 6.2 or Section 6.3 hereof) and, with respect to such covenants or conditions which are capable of rectification, if such failure continues for a period of fourteen (14) days after notice in writing has been given to the Borrower specifying such failure and requiring the Borrower or the Subsidiary to rectify the same;
	(e)	Cross-Default. The Borrower or any Subsidiary fails to pay the principal of, premium, if any, interest on, or any other amount owing in respect of any of its Indebtedness or obligation which is outstanding in an aggregate principal amount exceeding $1,000,000 (or the equivalent amount in any other currency) when such amount becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) and such failure continues after the applicable grace period, if any, specified in the agreement or instrument relating to such Indebtedness or obligation; or any other event occurs or condition exists and continues after the applicable grace period, if any, specified in any agreement or instrument relating to any such Indebtedness or obligation, if its effect is to accelerate or permit the acceleration of, such Indebtedness or obligation; or any such Indebtedness or obligation shall be, or may be, declared to be due and payable prior to its stated maturity;
	(f)	Judgments. A final judgment or decree for the payment of money in excess of $1,000,000, individually or $2,000,000 on a cumulative basis, is rendered against the Borrower and/or any Subsidiary by a court having jurisdiction and within a period of fourteen (14) days thereafter such judgment or decree shall not have been and remain satisfied, vacated or discharged or stayed pending appeal within the applicable appeal period;

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	(g)	Insolvency. The Borrower or any Subsidiary (i) becomes insolvent or generally not able to pay its debts as they become due, (ii) admits in writing its inability to pay its debts generally or makes a general assignment for the benefit of creditors, (iii) institutes or has instituted against it any proceeding seeking (x) to adjudicate it a bankrupt or insolvent, (y) liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any Applicable Law relating to bankruptcy, insolvency, reorganization or relief of debtors including any plan of compromise or arrangement or other corporate proceeding involving or affecting its creditors, or (z) the entry of an order for relief or the appointment of a receiver, trustee or other similar official for it or for any part of its properties and assets, and in the case of any such proceeding instituted against it (but not instituted by it), either the proceeding remains undismissed or unstayed for a period of 14 days, or any of the actions sought in such proceeding (including the entry of an order for relief against it or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its properties and assets) occurs, or (iv) takes any corporate action to authorize any of the above actions;
	(h)	Guarantee/Security Imperilled. Any one or more of the Security Documents ceases to be in full force and effect or to constitute a valid and perfected first- priority Lien upon all the Secured Assets it purports to charge or encumber, in favour of any Finance Party;
	(i)	Material Adverse Effect. The occurrence of any Material Adverse Effect; or
	(j)	Credit Documents. If this Agreement or any other Credit Document shall for any reason, or is claimed by the Borrower or any Subsidiary to, cease in whole or in any part to be a legal, valid, binding and enforceable obligation of the Borrower or the applicable Subsidiary;

then the obligation of the Lenders to make any further Advance shall immediately terminate and the Administrative Agent may, and shall at the request of any Lender, declare the Outstandings, all accrued interest and Fees and all other amounts payable under this Agreement to be immediately due and payable, without presentment, demand, protest or further notice of any kind, all of which are expressly waived by the Borrower.

Section 7.2 Remedies Upon Default.

(1) Upon a declaration that the Outstandings are immediately due and payable pursuant to Section 7.1, the Administrative Agent shall at the request of, or may with the consent of, any Lender, commence such legal action or proceedings as such Lender or Lenders, as applicable, in its or their sole discretion, deem expedient, including, the commencement of enforcement proceedings under the Credit Documents all without any additional notice, presentation, demand, protest, notice of dishonour, entering into of possession of any property or assets, or any other action or notice, all of which are expressly waived by the Borrower.

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(2) The rights and remedies of the Administrative Agent and the Lenders under the Credit Documents are cumulative and are in addition to, and not in substitution for, any other rights or remedies. Nothing contained in the Credit Documents with respect to the indebtedness or liability of the Borrower to the Administrative Agent and the Lenders, nor any act or omission of the Administrative Agent or the Lenders with respect to the Credit Documents or the Security shall in any way prejudice or affect the rights, remedies and powers of the Administrative Agent and the Lenders under the Credit Documents and the Security.

ARTICLE 8
THE ADMINISTRATIVE AGENT AND THE LENDERS

Section 8.1 Authorization and Action.

(1)	Each Finance Party irrevocably appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to it by the terms of this Agreement and to hold the Security, together with all powers reasonably incidental thereto. As to any matters not expressly provided for by this Agreement, the Administrative Agent shall act or refrain from acting (and shall be fully protected in so doing) upon the instructions of the Majority Lenders which instructions shall be binding upon all Lenders. The Administrative Agent shall not be required to take any action which (i) would expose it to personal liability, (ii) is contrary to this Agreement or any Applicable Law, (iii) would require it to become registered to do business in any jurisdiction or (iv) would subject it to taxation.
(2)	The Administrative Agent shall have no duties or obligations other than as set out in this Agreement and there shall not be construed against the Administrative Agent any implied duties (including fiduciary duties), obligations or covenants. The Administrative Agent may execute or perform, and may delegate the execution and performance of, any of its powers, rights, discretions and duties under the Credit Documents through or to any Persons designated by it. References in any Credit Document to the Administrative Agent shall include references to any such Persons.
(3)	The Administrative Agent is not obliged to (i) take or refrain from taking any action or exercise or refrain from exercising any right or discretion under the Credit Documents, or (ii) incur or subject itself to any cost in connection with the Credit Documents, unless it is first specifically indemnified or furnished with security by the Lenders, in form and substance satisfactory to it (which may include further agreements of indemnity or the deposit of funds).
(4)	The Administrative Agent shall promptly deliver to each Lender any notices, reports or other communications contemplated in this Agreement which are intended for the benefit of the Lenders.

Section 8.2 No Liability.

Neither the Administrative Agent nor its directors, officers, agents or employees shall be liable to any Lender for any action taken or omitted to be taken by it or them in their capacity of Administrative Agent in connection with the Credit Documents except for its or their own gross negligence or wilful misconduct. Without limiting the generality of the foregoing, the Administrative Agent (i) may treat each Lender as the payee of amounts attributable to its Commitment, (ii) may consult with legal counsel (including legal counsel for the Borrower), independent accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken by it in accordance with their advice, (iii) makes no warranty or representation to any Lender and shall not be responsible to any Lender for the form, substance, accuracy or completeness of any Credit Document or any other documents or information made available to the Lenders, (iv) has no duty to inspect the property or assets (including books and records) of the Borrower or any other Person, (v) has no duty to ascertain or inquire as to the existence of a Default or the observance of any of the terms or conditions of the Credit Documents, (vi) is not responsible to any Lender for the execution, enforceability, genuineness, sufficiency or value of any of the Credit Documents, and (vii) shall incur no liability by acting upon any notice, certificate or other instrument believed by it to be genuine and signed or sent by the proper Person.

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Section 8.3 Accommodations by Administrative Agent.

The Administrative Agent has the same rights and powers under this Agreement with respect to its Commitment as any other Lender and may exercise such rights and powers as though it were not the Administrative Agent. The term “Lender” or “Lenders” shall, unless otherwise expressly indicated, include the Administrative Agent in its individual capacity. The Administrative Agent and its Affiliates may accept deposits from, lend money to, act as trustee under indentures of, and generally engage in any kind of business with, the Borrower, any of its subsidiaries or any Person who may do business with or own securities of such Persons, all as if it were not the Administrative Agent and without any duty to account to the Lenders.

Section 8.4 Holding of Security; Sharing of Payments, etc.

(1)	The Security shall be held by the Administrative Agent or any Person designated by the Administrative Agent for the rateable benefit of the Finance Parties in accordance with its terms and, except as otherwise expressly provided herein, any proceeds from any realization of the Security shall be applied to the Outstandings to each Lender rateably (whether such Security is held in the name of the Administrative Agent, any other Person or in the name of any one or more of the Lenders and without regard to any priority to which the Lender may otherwise be entitled under Applicable Law).
(2)	Each Lender agrees with the other Lenders that it will not, without the prior consent of the other Lenders, take or obtain any Lien on any properties or assets of any Credit Party to secure the obligations of the Borrower under this Agreement, except for the benefit of all Lenders or as may otherwise be required by Applicable Law.
(3)	If a Lender obtains any payment (whether voluntary, involuntary or through the exercise of any right of set off or realization of Security) on account of Advances made by it (other than amounts paid pursuant to Section 8.6) in excess of its rateable share of payments obtained by all the Lenders, the Lender shall account to and pay over to the other Lenders their rateable share and shall, upon request, immediately purchase from the other Lenders such participations in the Advances made by the other Lenders as shall be necessary to cause the purchasing Lender to share the excess payment rateably with the other Lenders. If all or any portion of the excess payment is recovered from the purchasing Lender, the purchase price shall be rescinded and each Lender shall repay to the purchasing Lender the purchase price to the extent of the recovery together with an amount equal to the Lender’s rateable share (according to the proportion that the amount the Lender’s required repayment bears to the total amount recovered from the purchasing Lender) of any interest or other amount paid by the purchasing Lender in respect of the total amount recovered. The Lender purchasing a participation from another Lender pursuant to this Section 8.4 may, to the fullest extent permitted by Applicable Law, exercise all its rights of payment (including any right of set off) with respect to such participation as fully as if the Lender were a direct creditor of the Borrower in the amount of the participation and the Borrower expressly acknowledges the creation of such right.

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Section 8.5 Lender Credit Decisions.

Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement.

Section 8.6 Indemnification.

Each Lender shall indemnify and save the Administrative Agent harmless (to the extent not otherwise reimbursed by the Borrower) rateably from any claim or loss suffered by, imposed upon or asserted against the Administrative Agent as a result of, or arising out of, the Credit Documents or the Security or any action taken or omitted by the Administrative Agent under, or in connection with the Credit Documents or the Security provided that no Lender shall be liable for any part of such loss resulting from the gross negligence or wilful misconduct of the Administrative Agent in its capacity as agent. Without limiting the foregoing, each Lender shall reimburse the Administrative Agent upon demand for its rateable share of any out-of-pocket expenses incurred by the Administrative Agent in connection with the preparation, execution, administration or enforcement of, or legal advice in respect of rights or responsibilities under or in connection with, the Credit Documents and/or the Security (to the extent not otherwise reimbursed by the Borrower).

Section 8.7 Liability of the Lenders inter se.

Each of the Lenders agrees with each of the other Lenders that, except as otherwise expressly provided in this Agreement, none of the Lenders has or shall have any duty or obligation, or shall in any way be liable, to any of the other Lenders in respect of the Credit Documents or any action taken or omitted to be taken in connection with them.

Section 8.8 Successor Agents.

The Administrative Agent may resign at any time by giving written notice to the Lenders and the Borrower, such resignation to be effective upon the appointment of a successor Administrative Agent. Upon notice of any resignation, the Majority Lenders have the right to appoint a successor Administrative Agent. If no successor Administrative Agent is appointed or has accepted the appointment within thirty days after the retiring Administrative Agent’s notice of resignation, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent. Upon the acceptance of the appointment by a successor Administrative Agent, the successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent and the retiring Administrative Agent shall be discharged from its duties and obligations under this Agreement. After any retiring Administrative Agent’s resignation, the provisions of this Article 8 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent.

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ARTICLE 9
MISCELLANEOUS

Section 9.1 Amendments, etc.

(1)	Subject to Section 9.1(2), no amendment or waiver of any provision of any of the Credit Documents, nor consent to any departure by any Credit Party or any other Person from any such provision, is effective unless in writing and approved by the Majority Lenders. Any amendment, waiver or consent is effective only in the specific instance and for the specific purpose for which it was given.
(2)	Only written amendments, waivers or consents signed by each affected Lender shall (i) increase such Lender’s Commitment, (ii) reduce the principal or amount of, or interest on, any Outstanding or any Fees payable to such Lender, or (iii) postpone any date fixed for any payment to such Lender of principal of, or interest on, any Outstandings or any Fees. The consent of all Lenders will be required to (i) change (y) the percentage of the Commitments, or (z) the number or percentage of Lenders required for the Lenders, or any of them, or the Administrative Agent, to take any action, (ii) permit any termination of any of the Security Documents, (iii) change the definition of Majority Lenders, or (iv) amend this Section 9.1(2).
(3)	Only written amendments, waivers or consents signed by the Administrative Agent in addition to the Majority Lenders, shall affect the rights or duties of the Administrative Agent under the Credit Documents.

Section 9.2 Waiver.

(1)

No failure on the part of a Lender or the Administrative Agent to exercise, and no delay in exercising, any right under any of the Credit Documents shall operate as a waiver of such right; nor shall any single or partial exercise of any right under any of the Credit Documents preclude any other or further exercise of such right or the exercise of any other right.

(2)

Except as otherwise expressly provided in this Agreement, the covenants, representations and warranties shall not merge on any, and shall survive each, Advance and, notwithstanding any such Advance or any investigation made by or on behalf of any Party, shall continue in full force and effect. The closing of this transaction shall not prejudice any right of one Party against any other Party in respect of anything done or omitted under this Agreement or in respect of any right to damages or other remedies.

Section 9.3 Evidence of Indebtedness and Borrowing Notices.

(1) The indebtedness of the Borrower resulting from Advances shall be evidenced by the records of the Lenders (or the Administrative Agent acting on behalf of the Lenders) which shall constitute prima facie evidence of such indebtedness absent manifest error, provided however that the Lender or the Administrative Agent shall covenant to keep accurate books and records of such indebtedness.

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(2) Prior to the receipt of any Borrowing Notice, the Administrative Agent may act on the basis of a notice by telephone (containing the same information as would be contained in the Borrowing Notice) believed by it to be from an authorized person representing the Borrower. In the event of a conflict between the Administrative Agent’s record of any Advance and the Borrowing Notice, the Administrative Agent’s record shall prevail, absent manifest error.

Section 9.4 Notices, etc.

Any notice, direction or other communication to be given under this Agreement shall, except as otherwise permitted, be in writing and given by delivering it or sending it by facsimile or other similar form of recorded communication addressed:

(a) to the Borrower at:

Xxxxx 000-000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Canada

	Attention:	Chief Executive Officer
	Facsimile:	000 000 0000
	Email:	Xxxxx.Xxxxxxx@xxxxxxxxxxx.xxx

(b) to the Administrative Agent or the Lenders at:

Sprott Resource Lending Partnership
Royal Bank Plaza, South Tower
000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx
Xxxxxx

	Attention:	Chief Executive Officer
	Facsimile:	000 000 0000

and, if to any other Lenders, to them at the addresses shown on the signature pages. Any such communication shall be deemed to have been validly and effectively given if (i) personally delivered, on the date of such delivery if such date is a Business Day and such delivery was made prior to 4:00 p.m. (Toronto time), otherwise on the next Business Day and (ii) transmitted by facsimile, electronic mail or similar means of recorded communication, on the Business Day following the date of transmission. Any Party may change its address for service from time to time by notice given in accordance with the foregoing and any subsequent notice shall be sent to such Party at its changed address.

Section 9.5 Costs, Expenses and Indemnity.

(1) The Borrower shall, whether or not the transactions contemplated in this Agreement are completed, indemnify and hold each of the Lenders and the Administrative Agent and each of their respective officers, directors, employees and agents (each an “Indemnified Person”) harmless from, and shall pay to such Indemnified Person promptly (and in any event within five Business Days of demand) any amounts required to compensate the Indemnified Person for, any cost, expense, claim or loss suffered by, imposed on, or asserted against, the Indemnified Person as a result of, connected with or arising out of (i) any of the Credit Documents or any action taken or omitted by any Indemnified Person under or in relation to any of the Credit Documents except to the extent caused by the gross negligence or wilful misconduct of the Indemnified Party; (ii) the preparation, execution and delivery of, preservation of rights under, enforcement of, or refinancing, renegotiation or restructuring of, the Credit Documents and any related amendment, waiver or consent, (iii) the exercise of the rights, powers and/or duties of the Administrative Agent and/or the Lenders with respect to the administration of the Credit Facility, the Credit Documents or any transaction contemplated under the Credit Documents, (iv) a default (whether or not constituting a Default or an Event of Default) by the Borrower, (v) any proceedings brought by or against the Indemnified Person, or in which the Indemnified Person otherwise participates, due to its entering into or being a party of any of the Credit Documents, or by reason of its exercising or performing, or causing the exercise or performance of, any right, power or duty under any of the Credit Documents or otherwise in connection with its interest in any Security, whether or not such proceedings are directly related to the enforcement of any Credit Document, except to the extent caused by the gross negligence or wilful misconduct of the Indemnified Person; and (vi) the presence of any Contaminants at, on or under, or the discharge or likely discharge of any Contaminants from, any of the Subject Properties or any of the properties now or previously used by the Credit Parties, or the breach by or non- compliance with any Environmental Law by any mortgagor, owner or lessee of such properties.

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(2) If, with respect to any Finance Party, (i) any change in any law, rule, regulation, judgment or order of general application, or any change in the interpretation or application of such law, rule, regulation, judgment or order, occurring or becoming effective after this date, or (ii) compliance by such Finance Party with any direction, request or requirement (whether or not having the force of law) of any Governmental Entity made or becoming effective after the date, has the effect of causing any loss to such Finance Party or reducing such Finance Party’s rate of return by (w) increasing the cost to such Finance Party of performing its obligations under this Agreement or in respect of any Outstandings (including the costs of maintaining any capital, reserve or special deposit requirements but other than a reduction resulting from a higher rate or from a change in the calculation of income or capital tax relating to such Finance Party’s income or capital in general), (x) requiring such Finance Party to maintain or allocate any capital or additional capital or affecting its allocation of capital in respect of its obligations under this Agreement or in respect of any Outstandings, (y) reducing any amount payable to such Finance Party under this Agreement or in respect of any Outstandings, (z) causing such Finance Party to make any payment or to forego any return on, or calculated by reference to, any amount received or receivable by such Finance Party under this Agreement or in respect of any Outstanding, then such Finance Party may give notice to the Borrower specifying the nature of the event giving rise to the loss and the Borrower may either, (i) on demand, pay such amounts as such Finance Party specifies is necessary to compensate it for any such loss or (ii) if such Finance Party is a Lender and provided no loss has yet been suffered by such Finance Party or the Borrower has paid the compensating amount to such Finance Party, repay the Outstandings and terminate such Lender’s Commitments. A certificate as to the amount of any such loss submitted in good faith by such Finance Party to the Borrower shall be conclusive and binding for all purposes, absent manifest error.

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(3)

The Borrower shall pay to each Finance Party on demand any amounts required to compensate such Finance Party for any loss suffered or incurred by it as a result of the failure of the Borrower to effect an Advance in the manner and at the time specified in any Borrowing Notice, or the failure of the Borrower to make a payment or a mandatory repayment in the manner and at the time specified in this Agreement. A certificate as to the amount of any loss submitted in good faith by a Finance Party to the Borrower shall be conclusive and binding for all purposes, absent manifest error.

(4)

The provisions of this Section 9.5 shall survive the termination of this Agreement and the repayment of all Outstandings. The Borrower acknowledges that neither its obligation to indemnify nor any actual indemnification by it of any Finance Party or any other Indemnified Person in respect of such Person’s losses for the legal fees and expenses shall in any way affect the confidentiality or privilege relating to any information communicated by such Person to its counsel.

Section 9.6 Taxes and Other Taxes.

(1)	All payments to the Lenders by any Credit Party under any of the Credit Documents shall be made free and clear of and without deduction or withholding for any and all Taxes imposed by Canada, Mexico or any other relevant jurisdiction (which for greater certainty does not include a jurisdiction in which Taxes are imposed because of an action of a Finance Party) or any political subdivision or taxing authority of it, unless such Taxes are required by Applicable Law to be deducted or withheld. If any Credit Party shall be required by Applicable Law to deduct or withhold any such Taxes from or in respect of any amount payable under any of the Credit Documents (i) the amount payable shall be increased (and for greater certainty, in the case of interest, the amount of interest shall be increased) as may be necessary so that after making all required deductions or withholdings (including deductions or withholdings applicable to any additional amounts paid under this Section 9.6(1)), the Lenders receive an amount equal to the amount they would have received if no such deduction or withholding had been made, (ii) such Credit Party shall make such deductions or withholdings, and (iii) such Credit Party shall immediately pay the full amount deducted or withheld to the relevant Governmental Entity in accordance with Applicable Law.
(2)	The Borrower agrees to immediately pay any present or future stamp or documentary taxes or any other excise or property taxes, charges, financial institutions duties, debits taxes or similar levies (all such taxes, charges, duties and levies being referred to as “Other Taxes”) which arise from any payment made by any Credit Party under any of the Credit Documents or from the execution, delivery or registration of, or otherwise with respect to, any of the Credit Documents.
(3)	The Borrower shall indemnify the Lenders and the Administrative Agent for the full amount of Taxes and Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts payable by the Borrower under this Section 9.6) imposed by Canada, Mexico or any other relevant jurisdiction (which for greater certainty does not include a jurisdiction in which Taxes or Other Taxes are imposed because of an action of a Finance Party) that is paid or incurred by the Lenders or the Administrative Agent and any liability (including penalties, interest and expenses) arising from or with respect to such Taxes or Other Taxes, whether or not they were correctly or legally asserted; provided that each Finance Party agrees to promptly repay to the Borrower any amount paid by the Borrower to such Finance Party for Taxes or Other Taxes that are ultimately determined (without any right to appeal) to be incorrectly or not legally assessed. The Borrower will not be required to indemnify a Finance Party for:

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	(a)	any Taxes or Other Taxes imposed by reason of such Finance Party being connected with Canada, Mexico or any other relevant jurisdiction otherwise than merely by lending money to the Borrower pursuant to this Agreement; or
	(b)	any Taxes or Other Taxes to the extent such Taxes or Other Taxes are imposed on or calculated by reference to the net income (excluding any amounts deemed to be included in such Finance Party’s income by virtue of a payment under this Agreement that is not actually received by that Finance Party) of such Finance Party.

Payment under this indemnification shall be made within 10 days from the date the Administrative Agent or the relevant Lender, as the case may be, make written demand for it. A certificate as to the amount of such Taxes or Other Taxes submitted to the Borrower by the Administrative Agent or the relevant Lender shall be conclusive evidence, absent manifest error, of the amount due from the Borrower to the Administrative Agent or the relevant Lender, as the case may be.

(4)

The Borrower shall furnish to the Administrative Agent and the Lenders the original or a certified copy of each receipt evidencing payment of Taxes or Other Taxes made by the Borrower within 10 days after the date of any payment of such Taxes or Other Taxes.

(5)

If any Lender is, in its sole opinion, entitled to claim a refund or able to apply for or otherwise take advantage of any tax credit, tax deduction or similar benefit by reason of any withholding or deduction made by the Borrower in respect of a payment made by it under this Agreement, which payment shall have been increased pursuant to Section 9.6(1), then such Lender will use reasonable effort to obtain the refund, credit, deduction or benefit and upon credit or receipt of it will pay to the Borrower, the amount (if any) not exceeding the increased amount paid by the Borrower, as equals the net after-tax value to such Lender of that part of the refund, credit, deduction or benefit as it considers is allocable to such withholding or deduction having regard to all of its dealings giving rise to similar credits, deductions or benefits in relation to the same tax period and to the cost of obtaining the same. Nothing contained in this Section 9.6(5) shall interfere with the right of any Finance Party to arrange its tax affairs in whatever manner it deems fit (in its sole and absolute discretion) and in particular, no Finance Party shall be under any obligation to claim relief from its corporate profits or similar tax liability in respect of any deduction or withholding in priority to any other relief, claims, credits or deductions available to it and no Finance Party shall be obligated to disclose to the Borrower any information regarding its tax affairs, tax computations or otherwise.

(6) The provisions of this Section 9.6 shall survive the termination of the Agreement and the repayment of all Outstandings.

Section 9.7 Successors and Assigns.

(1) This Agreement shall become effective when executed by the Borrower, the Administrative Agent and each Lender and after that time shall be binding upon and enure to the benefit of the Borrower, the Lenders and the Administrative Agent and their respective successors and permitted assigns.

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(2)	The Borrower shall not have the right to assign and/or transfer any of its rights or obligations under any of the Credit Documents without the prior consent of all the Finance Parties, which consent may be unreasonably withheld.
(3)	Without the prior written consent of the Borrower, each Lender may grant participations in all or any part of its interest in the Credit Facility to one or more Persons (each a “Participant”). At any time, any Lender may assign and/or transfer all or any part of its rights and/or obligations under the Credit Facility and/or any of the Credit Documents to one or more Persons (each an “Assignee/Transferee”) without the consent of the Borrower. Any Lender granting a participation shall, unless otherwise expressly provided in this Agreement, act on behalf of all of its Participants in all dealings with the Borrower in respect of the Credit Facility and no Participant shall have any voting or consent rights with respect to any matter requiring such Lender’s consent. In the case of an assignment or transfer, the Assignee/Transferee shall have the same rights and benefits and be subject to the same limitations under the Credit Documents as it would have if it was a Lender.
(4)	The Borrower shall provide such certificates, acknowledgments and further assurances in respect of this Agreement and the Credit Facility as any Lender may reasonably require in connection with any participation, assignment or transfer pursuant to this Section 9.7.
(5)	In the case of an assignment or transfer, the assigning or transferring Lender and the Borrower shall be released from their respective obligations under this Agreement (to the extent of such assignment or transfer) and shall have no liability or obligations to each other to such extent, except in respect of matters arising prior to the assignment or transfer.
(6)	Any assignment, transfer or grant of participation pursuant to this Section 9.7 will not constitute a repayment by the Borrower to the assigning, transferring or granting Lender of any Advance, nor a new Advance to the Borrower by the Lender or by the Assignee/Transferee or Participant, as the case may be, and the parties acknowledge that the Borrower’s obligations with respect to any such Advances will continue and will not constitute new obligations.
(7)	Unless the Agent otherwise agrees and excluding an assignment or transfer to an Affiliate of a Lender, an Assignee/Transferee shall, on the date upon which the relevant assignment or transfer takes effect, pay to the Administrative Agent (for its own account) a fee of $5,000.
(8)	The parties agree that, as at the date hereof, Goldcorp has become a party to the Original Credit Agreement as a Lender. For the avoidance of doubt, and as the Borrower has previously repaid Facility A and all outstanding Fees in respect thereof, the participation of each Lender in the outstanding Facility Debt shall be US$5,111,268.38. The parties hereto confirm that (i) all Facility A Commitments have been cancelled and (ii) none of the Facility Debt that is outstanding under this Agreement relates to Facility A.

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Section 9.8 Right of Set-off.

Upon the occurrence and during the continuance of any Event of Default, each Lender is authorized at any time and from time to time, to the fullest extent permitted by law (including general principles of common-law), to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by it to or for the credit or the account of any Credit Party against any and all of the obligations of any Credit Party under any of the Credit Documents, irrespective of whether or not such Lender has made demand under any of the Credit Documents. Each Lender shall promptly notify the Borrower after any set off and application is made by it, provided that the failure to give notice shall not affect the validity of the set off and application. The rights of the Lenders under this Section 9.8 are in addition to any other rights and remedies (including all other rights of set-off) which the Lenders may have.

Section 9.9 Advances by Lenders.

The failure of any Lender to make an Advance shall not relieve any other Lender of its obligations in connection with such Advance, but no Lender is responsible for any other Lender’s failure in respect of an Advance. Unless the Administrative Agent receives notice from any Lender prior to the date of any Advance that such Lender will not make its rateable portion of the Advance available to the Administrative Agent, the Administrative Agent may assume that such Lender has made its portion so available on the date of the Advance and may, in reliance upon such assumption, make a corresponding amount available to the Borrower. If any Lender has not made its rateable portion available to the Administrative Agent, such Lender shall pay the corresponding amount to the Administrative Agent immediately upon demand. If any Lender pays the corresponding amount to the Administrative Agent, the amount so paid shall constitute such Lender’s part of the Advance for purposes of this Agreement. If such Lender does not pay the amount to the Administrative Agent immediately upon demand and such amount has been made available to the Borrower, the Borrower shall pay the corresponding amount to the Administrative Agent immediately upon demand and any amount received and so reimbursed would not and will not constitute an Advance. The Administrative Agent shall also be entitled to recover from such Lender interest on the corresponding amount, for each day from the date the amount was made available to the Borrower until the date it is repaid to the Administrative Agent, at a rate per annum equal to the Administrative Agent’s reasonable cost of funds.

Section 9.10 Rateable Payments.

Unless the Administrative Agent receives notice from the Borrower prior to the date on which any payment is due to the Lenders that the Borrower will not make the payment in full, the Administrative Agent may assume that the Borrower has made the payment in full on that date and may, in reliance upon that assumption, distribute to each Lender on the due date an amount equal to the amount then due to the Lender. If the Borrower has not made the payment in full, each Lender shall repay to the Administrative Agent immediately upon demand the amount distributed to it together with interest for each day from the date such amount was distributed to the Lender until the date the Lender repays it to the Administrative Agent, at a rate per annum equal to the Administrative Agent’s reasonable cost of funds.

Section 9.11 Judgment Currency.

(1) If, for the purposes of obtaining judgment in any court, it is necessary to convert a sum due to a Lender in any currency (the “Original Currency”) into another currency (the “Other Currency”), the Parties agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which, in accordance with normal banking procedures, such Lender could purchase the Original Currency with the Other Currency on the Business Day preceding the day on which final judgment is given or, if permitted by Applicable Law, on the day on which the judgment is paid or satisfied.

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

Section 9.12 Interest on Amounts.

Except as may be expressly provided otherwise in this Agreement, all amounts owed by the Borrower to the Administrative Agent and to any of the Lenders, which are not paid when due (whether at stated maturity, on demand, by acceleration or otherwise) shall bear interest (both before and after default and judgment), from the date on which such amount is due until such amount is paid in full, payable on demand, at a rate per annum equal at all times to the sum of (x) the Interest Rate and (y) 5%.

Section 9.13 Arbitration

(1)	Any matter in dispute hereunder will be determined by a single arbitrator to be appointed by the Parties.
(2)	Any Party may refer any such matter to arbitration by notice to the other Party and, within 10 Business Days after receipt of such notice, the Parties will agree on the appointment of an arbitrator. No person will be appointed as an arbitrator hereunder unless such person agrees in writing to act.
(3)	If the Parties cannot agree on a single arbitrator as provided in Section 9.13 or if the person appointed is unwilling or unable to act, either Party may submit the matter to arbitration before a single arbitrator in accordance with rules for conciliation and arbitration of the Arbitration Act (British Columbia) (in this section, the “Rules”).
(4)	Except as otherwise specifically provided in this Section 9.13, an arbitration hereunder will be conducted in English in accordance with the Rules. The arbitrator will fix a time and place in Toronto for the purpose of hearing the evidence and representations of the Parties and he or she will preside over the arbitration and determine all questions of procedure not provided for under the Rules or this Section 9.13. After hearing any evidence and representations that the Parties may submit, the arbitrator will make an award and reduce the same to writing and deliver one copy thereof to each of the Parties. The decision of the arbitrator will be made within 45 days after his or her appointment, subject to any reasonable delay due to unforeseen circumstances. The expense of the arbitration will be paid as specified in the award. The arbitrator’s award will be final and binding upon each of the Parties.

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Section 9.14 Governing Law and Waiver of Jury Trial.

(1)	This Agreement shall be governed by and interpreted and enforced in accordance with the laws of the Province of British Columbia and the federal laws of Canada applicable therein.
(2)	The Borrower irrevocably attorns and submits to the non-exclusive jurisdiction of any court of competent jurisdiction of the Province of British Columbia sitting in Vancouver, British Columbia in any action or proceeding arising out of or relating to this Agreement and the other Credit Documents to which it is a party. The Borrower irrevocably waives objection to the venue of any action or proceeding in such court or that such court provides an inconvenient forum. Nothing in this Section 9.14 limits the right of the Administrative Agent to bring proceedings against the Borrower in the courts of any other jurisdiction.
(3)	The Borrower hereby irrevocably consents to the service of any and all process in any such action or proceeding by the delivery of copies of such process to the Borrower at its address set out in Section 9.4(a). Nothing in this Section 9.14 affects the right of any Finance Party to serve process in any manner permitted by Applicable Law.
(4)	Each of the Parties hereby irrevocably waives all right to a trial by jury in any action, proceeding or counterclaim arising out of or relating to this Agreement, the other Credit Documents or the transactions contemplated hereby or thereby. The scope of this waiver is intended to be all-encompassing with respect to any and all disputes that may be filed in any court and that relate to the subject matter of this transaction, including contract claims, tort claims, breach of duty claims and all other common law and statutory claims. Each of the parties hereto (a) acknowledges that this waiver is a material inducement for the parties to the Credit Documents to enter into a business relationship, that the parties to the Credit Documents have already relied on this waiver in entering into same and the transactions that are the subject thereof, and that they will continue to rely on this waiver in their related future dealings, and (b) further warrants and represents that each has reviewed this waiver with its legal counsel and that each knowingly and voluntarily waives its jury trial rights following consultation with legal counsel. This waiver is irrevocable, meaning that it may not be modified either orally or in writing, and this waiver shall apply to any subsequent amendments, modifications, supplements, extensions, renewals and/or replacements of this Agreement. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court.

Section 9.15 Counterparts.

This Agreement may be executed in any number of counterparts and all of such counterparts taken together shall be deemed to constitute one and the same instrument.

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Execution Copy

IN WITNESS WHEREOF the parties have executed this Credit Agreement.

	TIMMINS GOLD CORP.
	By:	/s/ Xxxx Xxxxxxx
		Authorized Signing Officer
	By:	/s/ Xxxxxx Kapusianyk
		Authorized Signing Officer

Execution Copy

	THE LENDERS
	SPROTT RESOURCE LENDING
	PARTNERSHIP, by its managing partner,
	Sprott Lending Consulting LP, by its general
	partner, Sprott Lending Consulting GP Inc.
	By:	/s/ Xxx Xxxxxxxxx
		Authorized Signing Officer
	By:	/s/ Xxxxxx Xxxxxxx
		Authorized Signing Officer
	GOLDCORP INC.
	By:	/s/: Xxxxxx Xxxx
		Authorized Signing Officer
	By:	/s/: Xxxx X. Xxxxxx
		Authorized Signing Officer
	ADMINISTRATIVE AGENT
	SPROTT RESOURCE LENDING
	PARTNERSHIP, by its managing partner,
	Sprott Lending Consulting LP, by its general
	partner, Sprott Lending Consulting GP Inc.
	By:	/s/ Xxx Xxxxxxxxx
		Authorized Signing Officer
	By:	/s/ Xxxxxx Xxxxxxx
		Authorized Signing Officer

EXHIBIT “A”
FORM OF BORROWING NOTICE

[Date]

SPROTT RESOURCE LENDING PARTNERSHIP,
by its managing partner, Sprott Lending Consulting LP,
by its general partner, Sprott Lending Consulting GP Inc.,
as Administrative Agent (the “Administrative Agent”)
[•]

Attention: [•]

Dear Sirs:

The undersigned, Timmins Gold Corp. (the “Borrower”), refers to the amended and restated credit agreement dated January [•], 2016 (as amended, supplemented or restated from time to time, the “Credit Agreement”, the terms defined therein being used herein as therein defined) among, inter alia, the Borrower and the Administrative Agent, and gives you notice pursuant to Section 3.2 of the Credit Agreement that the Borrower requests an Advance under the Credit Agreement, and, in that connection, sets forth below the information relating to the Borrowing (the “Proposed Advance”) as required by Section 3.2 of the Credit Agreement:

	1.	The date of the Proposed Advance, being a Business Day, is [•].
	2.	The Proposed Advance is under [Facility A/Facility B].
	3.	The aggregate amount of the Proposed Advance is [•].

The undersigned hereby confirms that no Default or Event of Default has occurred or is continuing.

Yours truly,

TIMMINS GOLD CORP.

By:

Authorized Signing Officer

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EXHIBIT “B”
FORM OF COMPLIANCE CERTIFICATE

[Date]

TO: SPROTT RESOURCE LENDING PARTNERSHIP, as Administrative Agent (the “Administrative Agent”)

AND TO: The Lenders party to the Credit Agreement (as defined below)

The undersigned, Timmins Gold Corp. (the “Borrower”), refers to the amended and restated credit agreement dated January [•], 2016 (as amended, supplemented or restated from time to time, the “Credit Agreement”, the terms defined therein being used herein as therein defined) among, inter alia, the Borrower and the Administrative Agent.

I, the undersigned [Chief Financial Officer] of the Borrower, certify, without personal liability, to the Administrative Agent and the Lenders, that on [date] (the “Determination Date”):

1.     I have read the provisions of the Credit Agreement which are relevant to this certificate and have made such examinations or investigations as are necessary to enable me to express an informed opinion on the matters contained in this certificate.

2.     As at this date:

(a)     There have been no changes to the corporate structure as set out in Section 5.1(x) of the Credit Agreement;

(b)     No Default or Event of Default has occurred and is continuing;

(c)     None of the Credit Parties is in breach of any of the covenants, terms and conditions of any of the Credit Documents;

(d)     The representations and warranties referred to in Article 5 of the Credit Agreement are true and correct as though made on this date;

(e)     The attached financial information is true and correct in all respects; and

(f)     The financial statements delivered pursuant to Section 5.1(z) and/or Section 6.1 have been prepared in accordance with IFRS in effect on the date of such financial statements and the information contained therein is true and correct in all respects, subject only to year end audit adjustments, and present fairly and consistently the results of operations and changes in the financial position of the Credit Parties as of and to this date.

3.     I acknowledge and agree on behalf of the Borrower that this certificate constitutes a “Credit Document” for the purposes of the Credit Agreement.

DATED the • day of •, 20•.

Selected Officer

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EXHIBIT “C”
SOLVENCY CERTIFICATE

TIMMINS GOLD CORP.
CERTIFICATE
(Solvency Certificate)

[Date]

TO: SPROTT RESOURCE LENDING PARTNERSHIP as Administrative Agent (the “Administrative Agent”)

AND TO: The Lenders party to the Credit Agreement (as defined below)

This Certificate is delivered pursuant to the amended and restated credit agreement dated January [•], 2016 (as amended, supplemented or restated from time to time, the “Credit Agreement”, the terms defined therein being used herein as therein defined) among, inter alia, the Borrower and the Administrative Agent.

I, the undersigned [Chief Financial Officer] of the Borrower, certify, without personal liability, to the Administrative Agent and the Lenders, in relation to each Credit Party, that on [date] (the “Determination Date”):

(a)     the aggregate of such Credit Party’s property is, at a fair valuation, sufficient, or, if disposed of at a fairly conducted sale under legal process, would be sufficient, to enable payment of all its obligations and liabilities, due and accruing due,

(b)     such Credit Party is able to meet its obligations generally as they become due,

(c)     such Credit Party has not ceased paying its current obligations in the ordinary course of business generally as they become due,

(d)     such Credit Party does not intend to, and does not believe that it will, incur debts or liabilities beyond its ability to pay as such debts and liabilities mature,

(e)     such Credit Party is not engaged, and is not about to engage, in business or a transaction for which its property would constitute an unreasonably small capital, and

(f)     such Credit Party is otherwise solvent under Applicable Law.

DATED the • day of •, 20•.

Selected Officer

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EXHIBIT “D”
CERTIFICATE OF OFFICER

TIMMINS GOLD CORP.
CERTIFICATE OF OFFICER

See attached.

- 4 -

Incorporation number: BC0719511

TIMMINS GOLD CORP.
(the “Company”)

ARTICLES

1.	Interpretation
2.	Shares and Share Certificates
3.	Issue of Shares
4.	Share Registers
5.	Share Transfers
6.	Transmission of Shares
7.	Purchase of Shares
8.	Borrowing Powers
9.	Alterations
10.	Meetings of Shareholders
11.	Proceedings at Meetings of Shareholders
12.	Votes of Shareholders
13.	Directors
14.	Election and Removal of Directors
15.	Alternate Directors
16.	Powers and Duties of Directors
17.	Disclosure of Interest of Directors
18.	Proceedings of Directors
19.	Executive and Other Committees
20.	Officers

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21.	Indemnification
22.	Dividends and Reserves
23.	Documents, Records and Reports
24.	Notices
25.	Seal
26.	Prohibitions
27.	Special Rights and Restrictions

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1.	Interpretation
1.1	Definitions

In these Articles, unless the context otherwise requires:

(1)	“board of directors”, “directors” and “board” mean the directors or sole director of the Company for the time being;
(2)	“Business Corporations Act” means the Business Corporations Act (British Columbia) from time to time in force and all amendments thereto and includes all regulations and amendments thereto made pursuant to that Act;
(3)	“legal personal representative” means the personal or other legal representative of the shareholder;
(4)	“registered address” of a shareholder means the shareholder’s address as recorded in the central securities register;
(5)	“seal” means the seal of the Company, if any.

1.2 Business Corporations Act and Interpretation Act Definitions Applicable

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

2.	Shares and Share Certificates
2.1	Authorized Share Structure

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

2.2 Form of Share Certificate

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

2.3 Shareholder Entitled to Certificate or Acknowledgment

Each shareholder is entitled, without charge, to (a) one share certificate representing the shares of each class or series of shares registered in the shareholder’s name or (b) a non-transferable written acknowledgment of the shareholder’s right to obtain such a share certificate, provided that in respect of a share held jointly by several persons, the Company is not bound to issue more than one share certificate and delivery of a share certificate for a share to one of several joint shareholders or to one of the shareholders’ duly authorized agents will be sufficient delivery to all.

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2.4 Delivery by Mail

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

2.5 Replacement of Worn Out or Defaced Certificate or Acknowledgement

If the directors are satisfied that a share certificate or a non-transferable written acknowledgment of the shareholder’s right to obtain a share certificate is worn out or defaced, they must, on production to them of the share certificate or acknowledgment, as the case may be, and on such other terms, if any, as they think fit:

(1)	order the share certificate or acknowledgment, as the case may be, to be cancelled; and
(2)	issue a replacement share certificate or acknowledgment, as the case may be.

2.6 Replacement of Lost, Stolen or Destroyed Certificate or Acknowledgment

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

(1)	proof satisfactory to them that the share certificate or acknowledgment is lost, stolen or destroyed; and
(2)	any indemnity the directors consider adequate.

2.7 Splitting Share Certificates

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

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2.8 Certificate Fee

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

2.9 Recognition of Trusts

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

3.	Issue of Shares
3.1	Directors Authorized

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

3.2 Commissions and Discounts

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

3.3 Brokerage

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

3.4 Conditions of Issue

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

(1) consideration is provided to the Company for the issue of the share by one or more of the following:

(a) past services performed for the Company;

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	(b)	property;
	(c)	money; and

(2) the value of the consideration received by the Company equals or exceeds the issue price set for the share under Article 3.1.

3.5 Share Purchase Warrants and Rights

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

4.	Share Registers
4.1	Central Securities Register

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

4.2 Closing Register

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

5.	Share Transfers
5.1	Registering Transfers

A transfer of a share of the Company must not be registered unless:

(1)	a duly signed instrument of transfer in respect of the share has been received by the Company;
(2)	if a share certificate has been issued by the Company in respect of the share to be transferred, that share certificate has been surrendered to the Company; and
(3)	if a non-transferable written acknowledgment of the shareholder’s right to obtain a share certificate has been issued by the Company in respect of the share to be transferred, that acknowledgment has been surrendered to the Company.

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5.2 Form of Instrument of Transfer

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

5.3 Transferor Remains Shareholder

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

5.4 Signing of Instrument of Transfer

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

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

5.5 Enquiry as to Title Not Required

Neither the Company nor any director, officer or agent of the Company is bound to inquire into the title of the person named in the instrument of transfer as transferee or, if no person is named as transferee in the instrument of transfer, of the person on whose behalf the instrument is deposited for the purpose of having the transfer registered or is liable for any claim related to registering the transfer by the shareholder or by any intermediate owner or holder of the shares, of any interest in the shares, of any share certificate representing such shares or of any written acknowledgment of a right to obtain a share certificate for such shares.

5.6 Transfer Fee

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

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6.	Transmission of Shares
6.1	Legal Personal Representative Recognized on Death

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

6.2 Rights of Legal Personal Representative

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

7.	Purchase of Shares
7.1	Company Authorized to Purchase Shares

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

7.2 Purchase When Insolvent

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

(1)	the Company is insolvent; or
(2)	making the payment or providing the consideration would render the Company insolvent.

7.3 Sale and Voting of Purchased Shares

If the Company retains a share redeemed, purchased or otherwise acquired by it, the Company may sell, gift or otherwise dispose of the share, but, while such share is held by the Company, it:

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

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8. Borrowing Powers

The Company, if authorized by the directors, may:

(1)	borrow money in the manner and amount, on the security, from the sources and on the terms and conditions that they consider appropriate;
(2)	issue bonds, debentures and other debt obligations either outright or as security for any liability or obligation of the Company or any other person and at such discounts or premiums and on such other terms as they consider appropriate;
(3)	guarantee the repayment of money by any other person or the performance of any obligation of any other person; and
(4)	mortgage, charge, whether by way of specific or floating charge, grant a security interest in, or give other security on, the whole or any part of the present and future assets and undertaking of the Company.
9.	Alterations

9.1 Alteration of Authorized Share Structure

Subject to Article 9.2 and the Business Corporations Act, the Company may by special resolution:

(1)	create one or more classes or series of shares or, if none of the shares of a class or series of shares are allotted or issued, eliminate that class or series of shares;
(2)	increase, reduce or eliminate the maximum number of shares that the Company is authorized to issue out of any class or series of shares or establish a maximum number of shares that the Company is authorized to issue out of any class or series of shares for which no maximum is established;
(3)	subdivide or consolidate all or any of its unissued, or fully paid issued, shares;
(4)	if the Company is authorized to issue shares of a class of shares with par value:
(a)	decrease the par value of those shares; or
(b)	if none of the shares of that class of shares are allotted or issued, increase the par value of those shares;
(5)	change all or any of its unissued, or fully paid issued, shares with par value into shares without par value or any of its unissued shares without par value into shares with par value;
(6)	alter the identifying name of any of its shares; or

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(7) otherwise alter its shares or authorized share structure when required or permitted to do so by the Business Corporations Act.

9.2 Special Rights and Restrictions

Subject to the Business Corporations Act, the Company may by special resolution:

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

9.3 Change of Name

The Company may by special resolution authorize an alteration of its Notice of Articles in order to change its name or adopt or change any translation of that name.

9.4 Other Alterations

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

10.	Meetings of Shareholders
10.1	Annual General Meetings

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

10.2 Resolution Instead of Annual General Meeting

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

10.3 Calling of Meetings of Shareholders

The directors may, whenever they think fit, call a meeting of shareholders.

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10.4 Notice for Meetings of Shareholders

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

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

10.5 Record Date for Notice

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

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

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

10.6 Record Date for Voting

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

10.7 Failure to Give Notice and Waiver of Notice

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

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10.8 Notice of Special Business at Meetings of Shareholders

If a meeting of shareholders is to consider special business within the meaning of Article 11.1, the notice of meeting must:

(1)	state the general nature of the special business; and
(2)	if the special business includes considering, approving, ratifying, adopting or authorizing any document or the signing of or giving of effect to any document, have attached to it a copy of the document or state that a copy of the document will be available for inspection by shareholders:

	(a)	at the Company’s records office, or at such other reasonably accessible location in British Columbia as is specified in the notice; and
	(b)	during statutory business hours on any one or more specified days before the day set for the holding of the meeting.

11.	Proceedings at Meetings of Shareholders
11.1	Special Business

At a meeting of shareholders, the following business is special business:

(1)	at a meeting of shareholders that is not an annual general meeting, all business is special business except business relating to the conduct of or voting at the meeting;
(2)	at an annual general meeting, all business is special business except for the following:

	(a)	business relating to the conduct of or voting at the meeting;
	(b)	consideration of any financial statements of the Company presented to the meeting;
	(c)	consideration of any reports of the directors or auditor;
	(d)	the setting or changing of the number of directors;
	(e)	the election or appointment of directors;
	(f)	the appointment of an auditor;
	(g)	the setting of the remuneration of an auditor;
	(h)	business arising out of a report of the directors not requiring the passing of a special resolution or an exceptional resolution;

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

11.2 Special Majority

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

11.3 Quorum

Subject to the special rights and restrictions attached to the shares of any class or series of shares, the quorum for the transaction of business at a meeting of shareholders is two shareholders entitled to vote at the meeting whether present in person or by proxy.

11.4 One Shareholder May Constitute Quorum

If there is only one shareholder entitled to vote at a meeting of shareholders:

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

11.5 Other Persons May Attend

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

11.6 Requirement of Quorum

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

11.7 Lack of Quorum

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

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

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11.8 Lack of Quorum at Succeeding Meeting

If, at the meeting to which the meeting referred to in Article 11.7(2) was adjourned, a quorum is not present within one-half hour from the time set for the holding of the meeting, the person or persons present and being, or representing by proxy, one or more shareholders entitled to attend and vote at the meeting constitute a quorum.

11.9 Chair

The following individual is entitled to preside as chair at a meeting of shareholders:

(1)	the chair of the board, if any; or
(2)	if the chair of the board is absent or unwilling to act as chair of the meeting, the president, if any.

11.10 Selection of Alternate Chair

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

11.11 Adjournments

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

11.12 Notice of Adjourned Meeting

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

11.13 Decisions by Show of Hands or Poll

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

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11.14 Declaration of Result

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

11.15 Motion Need Not be Seconded

No motion proposed at a meeting of shareholders need be seconded unless the chair of the meeting rules otherwise, and the chair of any meeting of shareholders is entitled to propose or second a motion.

11.16 Casting Vote

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

11.17 Manner of Taking Poll

Subject to Article 11.18, if a poll is duly demanded at a meeting of shareholders:

(1) the poll must be taken:

	(a)	at the meeting, or within seven days after the date of the meeting, as the chair of the meeting directs; and
	(b)	in the manner, at the time and at the place that the chair of the meeting directs;

(2)	the result of the poll is deemed to be the decision of the meeting at which the poll is demanded; and
(3)	the demand for the poll may be withdrawn by the person who demanded it.

11.18 Demand for Poll on Adjournment

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

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11.19 Chair Must Resolve Dispute

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

11.20 Casting of Votes

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

11.21 Demand for Poll

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

11.22 Demand for Poll Not to Prevent Continuance of Meeting

The demand for a poll at a meeting of shareholders does not, unless the chair of the meeting so rules, prevent the continuation of a meeting for the transaction of any business other than the question on which a poll has been demanded.

11.23 Retention of Ballots and Proxies

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

12.	Votes of Shareholders
12.1	Number of Votes by Shareholder or by Shares

Subject to any special rights or restrictions attached to any shares and to the restrictions imposed on joint shareholders under Article 12.3:

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

12.2 Votes of Persons in Representative Capacity

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

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12.3 Votes by Joint Holders

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

(1)	any one of the joint shareholders may vote at any meeting, either personally or by proxy, in respect of the share as if that joint shareholder were solely entitled to it; or
(2)	if more than one of the joint shareholders is present at any meeting, personally or by proxy, and more than one of them votes in respect of that share, then only the vote of the joint shareholder present whose name stands first on the central securities register in respect of the share will be counted.

12.4 Legal Personal Representatives as Joint Shareholders

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

12.5 Representative of a Corporate Shareholder

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

(1) for that purpose, the instrument appointing a representative must:

	(a)	be received at the registered office of the Company or at any other place specified, in the notice calling the meeting, for the receipt of proxies, at least the number of business days specified in the notice for the receipt of proxies, or if no number of days is specified, two business days before the day set for the holding of the meeting; or
	(b)	be provided, at the meeting, to the chair of the meeting or to a person designated by the chair of the meeting;

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

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

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

12.6 Proxy Provisions Do Not Apply to All Companies

If and for so long as the Company is a public company or a pre-existing reporting company which has the Statutory Reporting Company Provisions as part of its Articles or to which the Statutory Reporting Company Provisions apply, Articles 12.7 to 12.15 apply only insofar as they are not inconsistent with any securities legislation in any province or territory of Canada or in the federal jurisdiction of the United States or in any states of the United States that is applicable to the Company and insofar as they are not inconsistent with the regulations and rules made and promulgated under that legislation and all administrative policy statements, blanket orders and rulings, notices and other administrative directions issued by securities commissions or similar authorities appointed under that legislation.

12.7 Appointment of Proxy Holders

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

12.8 Alternate Proxy Holders

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

12.9 When Proxy Holder Need Not Be Shareholder

A person must not be appointed as a proxy holder unless the person is a shareholder, although a person who is not a shareholder may be appointed as a proxy holder if:

(1)	the person appointing the proxy holder is a corporation or a representative of a corporation appointed under Article 12.5;
(2)	the Company has at the time of the meeting for which the proxy holder is to be appointed only one shareholder entitled to vote at the meeting; or
(3)	the shareholders present in person or by proxy at and entitled to vote at the meeting for which the proxy holder is to be appointed, by a resolution on which the proxy holder is not entitled to vote but in respect of which the proxy holder is to be counted in the quorum, permit the proxy holder to attend and vote at the meeting.

12.10 Deposit of Proxy

A proxy for a meeting of shareholders must:

(1) be received at the registered office of the Company or at any other place specified, in the notice calling the meeting, for the receipt of proxies, at least the number of business days specified in the notice, or if no number of days is specified, two business days before the day set for the holding of the meeting; or

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(2) unless the notice provides otherwise, be provided, at the meeting, to the chair of the meeting or to a person designated by the chair of the meeting.

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

12.11 Validity of Proxy Vote

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

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

12.12 Form of Proxy

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

[name of company]
(the “Company”)

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

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

Signed [month, day, year]

[Signature of shareholder]

[Name of shareholder—printed]

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12.13 Revocation of Proxy

Subject to Article 12.14, every proxy may be revoked by an instrument in writing that is:

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

12.14 Revocation of Proxy Must Be Signed

An instrument referred to in Article 12.13 must be signed as follows:

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

12.15 Production of Evidence of Authority to Vote

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

13.	Directors
13.1	First Directors; Number of Directors

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

(1)	subject to paragraphs (2) and (3), the number of directors that is equal to the number of the Company’s first directors;
(2)	if the Company is a public company, the greater of three and the most recently set of:

	(a)	the number of directors set by ordinary resolution (whether or not previous notice of the resolution was given); and
	(b)	the number of directors set under Article 14.4;

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(3) if the Company is not a public company, the most recently set of:

	(a)	the number of directors set by ordinary resolution (whether or not previous notice of the resolution was given); and
	(b)	the number of directors set under Article 14.4.

13.2 Change in Number of Directors

If the number of directors is set under Articles 13.1(2)(a) or 13.1(3)(a):

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

13.3 Directors’ Acts Valid Despite Vacancy

An act or proceeding of the directors is not invalid merely because fewer than the number of directors set or otherwise required under these Articles is in office.

13.4 Qualifications of Directors

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

13.5 Remuneration of Directors

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

13.6 Reimbursement of Expenses of Directors

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

13.7 Special Remuneration for Directors

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

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13.8 Gratuity, Pension or Allowance on Retirement of Director

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

14.	Election and Removal of Directors
14.1	Election at Annual General Meeting

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

(1)	the shareholders entitled to vote at the annual general meeting for the election of directors must elect, or in the unanimous resolution appoint, a board of directors consisting of the number of directors for the time being set under these Articles; and
(2)	all the directors cease to hold office immediately before the election or appointment of directors under paragraph (1), but are eligible for re-election or re-appointment.

14.2 Consent to be a Director

No election, appointment or designation of an individual as a director is valid unless:

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

14.3 Failure to Elect or Appoint Directors

If:

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

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

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

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

14.4 Places of Retiring Directors Not Filled

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

14.5 Directors May Fill Casual Vacancies

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

14.6 Remaining Directors Power to Act

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

14.7 Shareholders May Fill Vacancies

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

14.8 Additional Directors

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

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

Any director so appointed ceases to hold office immediately before the next election or appointment of directors under Article 14.1(1), but is eligible for re-election or reappointment.

14.9 Ceasing to be a Director

A director ceases to be a director when:

(1)	the term of office of the director expires;
(2)	the director dies;
(3)	the director resigns as a director by notice in writing provided to the Company or a lawyer for the Company; or
(4)	the director is removed from office pursuant to Articles 14.10 or 14.11.

14.10 Removal of Director by Shareholders

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

14.11 Removal of Director by Directors

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

15.	Alternate Directors
15.1	Appointment of Alternate Director

Any director (an “appointor”) may by notice in writing received by the Company appoint any person (an “appointee”) who is qualified to act as a director to be his or her alternate to act in his or her place at meetings of the directors or committees of the directors at which the appointor is not present unless (in the case of an appointee who is not a director) the directors have reasonably disapproved the appointment of such person as an alternate director and have given notice to that effect to his or her appointor within a reasonable time after the notice of appointment is received by the Company.

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15.2 Notice of Meetings

Every alternate director so appointed is entitled to notice of meetings of the directors and of committees of the directors of which his or her appointor is a member and to attend and vote as a director at any such meetings at which his or her appointor is not present.

15.3 Alternate for More Than One Director Attending Meetings

A person may be appointed as an alternate director by more than one director, and an alternate director:

(1)	will be counted in determining the quorum for a meeting of directors once for each of his or her appointors and, in the case of an appointee who is also a director, once more in that capacity;
(2)	has a separate vote at a meeting of directors for each of his or her appointors and, in the case of an appointee who is also a director, an additional vote in that capacity;
(3)	will be counted in determining the quorum for a meeting of a committee of directors once for each of his or her appointors who is a member of that committee and, in the case of an appointee who is also a member of that committee as a director, once more in that capacity;
(4)	has a separate vote at a meeting of a committee of directors for each of his or her appointors who is a member of that committee and, in the case of an appointee who is also a member of that committee as a director, an additional vote in that capacity.

15.4 Consent Resolutions

Every alternate director, if authorized by the notice appointing him or her, may sign in place of his or her appointor any resolutions to be consented to in writing.

15.5 Alternate Director Not an Agent

Every alternate director is deemed not to be the agent of his or her appointor.

15.6 Revocation of Appointment of Alternate Director

An appointor may at any time, by notice in writing received by the Company, revoke the appointment of an alternate director appointed by him or her.

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15.7 Ceasing to be an Alternate Director

The appointment of an alternate director ceases when:

(1)	his or her appointor ceases to be a director and is not promptly re-elected or re- appointed;
(2)	the alternate director dies;
(3)	the alternate director resigns as an alternate director by notice in writing provided to the Company or a lawyer for the Company;
(4)	the alternate director ceases to be qualified to act as a director; or
(5)	his or her appointor revokes the appointment of the alternate director.

15.8 Remuneration and Expenses of Alternate Director

The Company may reimburse an alternate director for the reasonable expenses that would be properly reimbursed if he or she were a director, and the alternate director is entitled to receive from the Company such proportion, if any, of the remuneration otherwise payable to the appointor as the appointor may from time to time direct.

16.	Powers and Duties of Directors
16.1	Powers of Management

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

16.2 Appointment of Attorney of Company

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

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17.	Disclosure of Interest of Directors
17.1	Obligation to Account for Profits

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

17.2 Restrictions on Voting by Reason of Interest

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

17.3 Interested Director Counted in Quorum

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

17.4 Disclosure of Conflict of Interest or Property

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

17.5 Director Holding Other Office in the Company

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

17.6 No Disqualification

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

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17.7 Professional Services by Director or Officer

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

17.8 Director or Officer in Other Corporations

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

18.	Proceedings of Directors
18.1	Meetings of Directors

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

18.2 Voting at Meetings

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

18.3 Chair of Meetings

The following individual is entitled to preside as chair at a meeting of directors:

(1)	the chair of the board, if any;
(2)	in the absence of the chair of the board, the president, if any, if the president is a director; or
(3)	any other director chosen by the directors if:

	(a)	neither the chair of the board nor the president, if a director, is present at the meeting within 15 minutes after the time set for holding the meeting;
	(b)	neither the chair of the board nor the president, if a director, is willing to chair the meeting; or

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(c) the chair of the board and the president, if a director, have advised the secretary, if any, or any other director, that they will not be present at the meeting.

18.4 Meetings by Telephone or Other Communications Medium

A director may participate in a meeting of the directors or of any committee of the directors in person or by telephone if all directors participating in the meeting, whether in person or by telephone or other communications medium, are able to communicate with each other. A director may participate in a meeting of the directors or of any committee of the directors by a communications medium other than telephone if all directors participating in the meeting, whether in person or by telephone or other communications medium, are able to communicate with each other and if all directors who wish to participate in the meeting agree to such participation. A director who participates in a meeting in a manner contemplated by this Article 18.4 is deemed for all purposes of the Business Corporations Act and these Articles to be present at the meeting and to have agreed to participate in that manner.

18.5 Calling of Meetings

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

18.6 Notice of Meetings

Other than for meetings held at regular intervals as determined by the directors pursuant to Article 18.1, reasonable notice of each meeting of the directors, specifying the place, day and time of that meeting must be given to each of the directors and the alternate directors by any method set out in Article 24.1 or orally or by telephone.

18.7 When Notice Not Required

It is not necessary to give notice of a meeting of the directors to a director or an alternate director if:

(1)	the meeting is to be held immediately following a meeting of shareholders at which that director was elected or appointed, or is the meeting of the directors at which that director is appointed; or
(2)	the director or alternate director, as the case may be, has waived notice of the meeting.

18.8 Meeting Valid Despite Failure to Give Notice

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

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18.9 Waiver of Notice of Meetings

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

18.10 Quorum

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

18.11 Validity of Acts Where Appointment Defective

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

18.12 Consent Resolutions in Writing

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

(1)	in all cases, if each of the directors entitled to vote on the resolution consents to it in writing; or
(2)	in the case of a resolution to approve a contract or transaction in respect of which a director has disclosed that he or she has or may have a disclosable interest, if each of the other directors who are entitled to vote on the resolution consents to it in writing.

A consent in writing under this Article may be by signed document, fax, email or any other method of transmitting legibly recorded messages. A consent in writing may be in two or more counterparts which together are deemed to constitute one consent in writing. A resolution of the directors or of any committee of the directors passed in accordance with this Article 18.12 is effective on the date stated in the consent in writing or on the latest date stated on any counterpart and is deemed to be a proceeding at a meeting of directors or of the committee of the directors and to be as valid and effective as if it had been passed at a meeting of the directors or of the committee of the directors that satisfies all the requirements of the Business Corporations Act and all the requirements of these Articles relating to meetings of the directors or of a committee of the directors.

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19.	Executive and Other Committees
19.1	Appointment and Powers of Executive Committee

The directors may, by resolution, appoint an executive committee consisting of the director or directors that they consider appropriate, and this committee has, during the intervals between meetings of the board of directors, all of the directors’ powers, except:

(1)	the power to fill vacancies in the board of directors;
(2)	the power to remove a director;
(3)	the power to change the membership of, or fill vacancies in, any committee of the directors; and
(4)	such other powers, if any, as may be set out in the resolution or any subsequent directors’ resolution.

19.2 Appointment and Powers of Other Committees

The directors may, by resolution:

(1)	appoint one or more committees (other than the executive committee) consisting of the director or directors that they consider appropriate;
(2)	delegate to a committee appointed under paragraph (1) any of the directors’ powers, except:

	(a)	the power to fill vacancies in the board of directors;
	(b)	the power to remove a director;
	(c)	the power to change the membership of, or fill vacancies in, any committee of the directors; and
	(d)	the power to appoint or remove officers appointed by the directors; and

(3) make any delegation referred to in paragraph (2) subject to the conditions set out in the resolution or any subsequent directors’ resolution.

19.3 Obligations of Committees

Any committee appointed under Articles 19.1 or 19.2, in the exercise of the powers delegated to it, must:

(1) conform to any rules that may from time to time be imposed on it by the directors; and

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(2) report every act or thing done in exercise of those powers at such times as the directors may require.

19.4 Powers of Board

The directors may, at any time, with respect to a committee appointed under Articles 19.1 or 19.2:

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

19.5 Committee Meetings

Subject to Article 19.3(1) and unless the directors otherwise provide in the resolution appointing the committee or in any subsequent resolution, with respect to a committee appointed under Articles 19.1 or 19.2:

(1)	the committee may meet and adjourn as it thinks proper;
(2)	the committee may elect a chair of its meetings but, if no chair of a meeting is elected, or if at a meeting the chair of the meeting is not present within 15 minutes after the time set for holding the meeting, the directors present who are members of the committee may choose one of their number to chair the meeting;
(3)	a majority of the members of the committee constitutes a quorum of the committee; and
(4)	questions arising at any meeting of the committee are determined by a majority of votes of the members present, and in case of an equality of votes, the chair of the meeting does not have a second or casting vote.

20.	Officers
20.1	Directors May Appoint Officers

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

20.2 Functions, Duties and Powers of Officers

The directors may, for each officer:

(1) determine the functions and duties of the officer;

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(2)	entrust to and confer on the officer any of the powers exercisable by the directors on such terms and conditions and with such restrictions as the directors think fit; and
(3)	revoke, withdraw, alter or vary all or any of the functions, duties and powers of the officer.

20.3 Qualifications

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

20.4 Remuneration and Terms of Appointment

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

21.	Indemnification
21.1	Definitions

In this Article 21:

(1)	“eligible penalty” means a judgment, penalty or fine awarded or imposed in, or an amount paid in settlement of, an eligible proceeding;
(2)	“eligible proceeding” means a legal proceeding or investigative action, whether current, threatened, pending or completed, in which a director, former director or alternate director of the Company (an “eligible party”) or any of the heirs and legal personal representatives of the eligible party, by reason of the eligible party being or having been a director or alternate director of the Company:

	(a)	is or may be joined as a party; or
	(b)	is or may be liable for or in respect of a judgment, penalty or fine in, or expenses related to, the proceeding;

(3)	“expenses” has the meaning set out in the Business Corporations Act.
21.2	Mandatory Indemnification of Directors and Former Directors

Subject to the Business Corporations Act, the Company must indemnify a director, former director or alternate director of the Company and his or her heirs and legal personal representatives against all eligible penalties to which such person is or may be liable, and the Company must, after the final disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by such person in respect of that proceeding. Each director and alternate director is deemed to have contracted with the Company on the terms of the indemnity contained in this Article 21.2.

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21.3 Indemnification of Other Persons

Subject to any restrictions in the Business Corporations Act, the Company may indemnify any person.

21.4 Non-Compliance with Business Corporations Act

The failure of a director, alternate director or officer of the Company to comply with the Business Corporations Act or these Articles does not invalidate any indemnity to which he or she is entitled under this Part.

21.5 Company May Purchase Insurance

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

(1)	is or was a director, alternate director, officer, employee or agent of the Company;
(2)	is or was a director, alternate director, officer, employee or agent of a corporation at a time when the corporation is or was an affiliate of the Company;
(3)	at the request of the Company, is or was a director, alternate director, officer, employee or agent of a corporation or of a partnership, trust, joint venture or other unincorporated entity;
(4)	at the request of the Company, holds or held a position equivalent to that of a director, alternate director or officer of a partnership, trust, joint venture or other unincorporated entity;

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

22.	Dividends
22.1	Payment of Dividends Subject to Special Rights

The provisions of this Article 22 are subject to the rights, if any, of shareholders holding shares with special rights as to dividends.

22.2 Declaration of Dividends

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

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22.3 No Notice Required

The directors need not give notice to any shareholder of any declaration under Article 22.2.

22.4 Record Date

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

22.5 Manner of Paying Dividend

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

22.6 Settlement of Difficulties

If any difficulty arises in regard to a distribution under Article 22.5, the directors may settle the difficulty as they deem advisable, and, in particular, may:

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

22.7 When Dividend Payable

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

22.8 Dividends to be Paid in Accordance with Number of Shares

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

22.9 Receipt by Joint Shareholders

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

22.10 Dividend Bears No Interest

No dividend bears interest against the Company.

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22.11 Fractional Dividends

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

22.12 Payment of Dividends

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

22.13 Capitalization of Surplus

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

23.	Accounting Records
23.1	Recording of Financial Affairs

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

23.2 Inspection of Accounting Records

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

24.	Notices
24.1	Method of Giving Notice

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

(1) mail addressed to the person at the applicable address for that person as follows:

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	(a)	for a record mailed to a shareholder, the shareholder’s registered address;
	(b)	for a record mailed to a director or officer, the prescribed address for mailing shown for the director or officer in the records kept by the Company or the mailing address provided by the recipient for the sending of that record or records of that class;
	(c)	in any other case, the mailing address of the intended recipient;

(2) delivery at the applicable address for that person as follows, addressed to the person:

	(a)	for a record delivered to a shareholder, the shareholder’s registered address;
	(b)	for a record delivered to a director or officer, the prescribed address for delivery shown for the director or officer in the records kept by the Company or the delivery address provided by the recipient for the sending of that record or records of that class;
	(c)	in any other case, the delivery address of the intended recipient;

(3)	sending the record by fax to the fax number provided by the intended recipient for the sending of that record or records of that class;
(4)	sending the record by email to the email address provided by the intended recipient for the sending of that record or records of that class;
(5)	physical delivery to the intended recipient.

24.2 Deemed Receipt of Mailing

A record that is mailed to a person by ordinary mail to the applicable address for that person referred to in Article 24.1 is deemed to be received by the person to whom it was mailed on the day, Saturdays, Sundays and holidays excepted, following the date of mailing.

24.3 Certificate of Sending

A certificate signed by the secretary, if any, or other officer of the Company or of any other corporation acting in that behalf for the Company stating that a notice, statement, report or other record was addressed as required by Article 24.1, prepaid and mailed or otherwise sent as permitted by Article 24.1 is conclusive evidence of that fact.

24.4 Notice to Joint Shareholders

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

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24.5 Notice to Trustees

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

(1) mailing the record, addressed to them:

	(a)	by name, by the title of the legal personal representative of the deceased or incapacitated shareholder, by the title of trustee of the bankrupt shareholder or by any similar description; and
	(b)	at the address, if any, supplied to the Company for that purpose by the persons claiming to be so entitled; or

(2) if an address referred to in paragraph (1)(b) has not been supplied to the Company, by giving the notice in a manner in which it might have been given if the death, bankruptcy or incapacity had not occurred.

25.	Seal
25.1	Who May Attest Seal

Except as provided in Articles 25.2 and 25.3, the Company’s seal, if any, must not be impressed on any record except when that impression is attested by the signatures of:

(1)	any two directors;
(2)	any officer, together with any director;
(3)	if the Company only has one director, that director; or
(4)	any one or more directors or officers or persons as may be determined by the directors.

25.2 Sealing Copies

For the purpose of certifying under seal a certificate of incumbency of the directors or officers of the Company or a true copy of any resolution or other document, despite Article 25.1, the impression of the seal may be attested by the signature of any director or officer.

25.3 Mechanical Reproduction of Seal

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

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26.	Prohibitions
26.1	Definitions

In this Article 26:

(1) “designated ssecurity” means:

	(a)	a voting security of the Company;
	(b)	a security of the Company that is not a debt security and that carries a residual right to participate in the earnings of the Company or, on the liquidation or winding up of the Company, in its assets; or
	(c)	a security of the Company convertible, directly or indirectly, into a security described in paragraph (a) or (b);

(2)	“security” has the meaning assigned in the Securities Act (British Columbia);
(3)	“voting security” means a security of the Company that:

	(a)	is not a debt security, and
	(b)	carries a voting right either under all circumstances or under some circumstances that have occurred and are continuing.

26.2 Application

Article 26.3 does not apply to the Company if and for so long as it is a public company or a pre-existing reporting company which has the Statutory Reporting Company Provisions as part of its Articles or to which the Statutory Reporting Company Provisions apply.

26.3 Consent Required for Transfer of Shares or Designated Securities

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

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27.	Special Rights and Restrictions
27.1	Convertible Preference Shares

The Convertible Preference Shares shall have attached to them the following powers, preferences, rights, qualifications, limitations and restrictions:

(a)	Voting. The holders of the Convertible Preference Shares are entitled to notice of but not to attend or vote at meetings of the holders of the Common Shares except as required by the British Columbia Business Corporations Act.
(b)	Dividends. The Convertible Preference Shares shall not be entitled to the payment of dividends.
(c)	Dissolution. On the liquidation, dissolution, winding-up or other distribution of the assets of the Company among its shareholders, the holders of the Convertible Preference Shares and the holders of the Common Shares shall participate rateably in equal amounts per share, without preference or distinction, in the remaining assets of the Company.
(d)	Conversion. The holders of the Convertible Preference Shares shall have the right at any time to convert, for no consideration, the Convertible Preference Shares into Common Shares of the Company on the basis of one Common Share for each Convertible Preference Share so converted, at any time after receipt of all required shareholder and regulatory approvals to such conversion and before the date which is 10 years (the “Automatic Conversion Date”) from the date of initial issuance of the Convertible Preferences Shares.
(e)	Automatic Conversion. Any Convertible Preference Shares which have not been converted into Common Shares prior to the Automatic Conversion Date, shall be automatically converted into Common Shares by the Company on the first business day after the Automatic Conversion Date.
(f)	Manner of Exercise of Conversion Privilege. The conversation privilege herein provided for may be exercised by notice in writing given to the Company at its registered office, accompanied by the certificate or certificates representing the Convertible Preference Shares in respect of which the holder thereof desires to exercise such right of conversion. Such notice shall be signed by such holder or his duly authorized attorney and shall specify the number of Convertible Preference Shares which the holder desires to have converted. If less than all of the Convertible Preference Shares represented by a certificate or certificates accompanying any such notice are to be converted, the holder shall be entitled to receive, at the expense of the Company, a new certificate representing the number of Convertible Preference Shares comprised in the certificate or certificates surrendered as aforesaid which are not to be converted.

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(g)	New Certificates on Conversion. On any conversion of Convertible Preference Shares the share certificates for Common Shares of the Company resulting therefrom shall be issued in the name of the registered holder of the Convertible Preference Shares converted or in such name or names as such registered holder may direct in writing (either in the notice herein referred to or otherwise) provided that such registered holder shall pay any applicable security transfer taxes. In either instance the transfer form on the back of the certificates in question shall be endorsed by the registered holder of the Convertible Preference Shares or his duly authorized attorney, with signature guaranteed in a manner satisfactory to the Company, provided that the Company may waive the requirement for any such guarantee.
(h)	Deemed Conversion. Subject as hereinafter provided, the right of a holder of Convertible Preference Shares to convert the same into Common Shares shall be deemed to have been exercised, and the register holder of the Convertible Preference Shares to be converted (or any Person or Persons in whose name or names any such registered holder of Convertible Preference Shares shall have directed certificates representing Common Shares to be issued) shall be deemed to have become (and at all time on such date to be) a holder of the Common Shares of record of the Company for all purposes on the dare of surrender of one or more certificates duly endorsed representing the Convertible Preference Shares to be converted.
(i)	Subdivision, Consolidation, Reclassification or Changes. If and whenever at any time the outstanding Convertible Preference Shares of the Company or the outstanding Common Shares of the Company shall be subdivided, redivided or changed into a greater or consolidated into a lesser number of shares or reclassified into different shares, the basis of conversion then in effect shall be appropriately adjusted and the Convertible Preference Shares shall thereafter be convertible into, upon the exercise of the conversion right at any time on the effective date or thereafter, in lieu of the number of Common Shares to which a Convertible Preference Share was theretofore entitled upon conversion, the aggregate number of shares of the Company that a holder of Convertible Preference Shares would have been entitled to receive as a result of such subdivision, redivision, change, consolidation or reclassification if, on the effective date thereof, the holder been the registered holder of the number of Common Shares to which the holder was theretofore entitled upon conversion.
(j)	Other Reorganizations. If and whenever at any time there is a capital reorganization of the Company not covered be section (i) or a consolidation or merger or amalgamation of the Company with or into any other company including by way of sale whereby all or substantially all of the Company’s undertaking and assets would become the property of any other company, the Convertible Preference Shares, shall thereafter be convertible into, upon the exercise of the conversion right at any time on the effective date or thereafter, in lieu of the number of Common Shares to which a Convertible Preference Share was theretofore entitled upon conversion, the aggregate number of shares or other securities or property of the Company or of the company resulting from the consolidation, merger or amalgamation or to which such sale may be made, as the case may be, that a holder of Convertible Preference Shares would have been entitled to receive as a result of such capital reorganization, consolidation, merger, amalgamation or sale if, on the effective date thereof, the holder had been the registered holder of the number of Common Shares to which the holder was theretofore entitled upon conversion.

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(k)

Notice of Subscription Rights, Stock Dividend, etc. If the Company proposes to issue subscription warrants or other rights to all of the holders of its Common Shares to purchase any share or other securities of the Company, or to pay any stock divided upon its Common Shares or make any distribution (other than cash dividends) to the holders of its Common Shares, the Company shall so notify each registered holder of Convertible Preference Shares by written notice at least 20 days prior to the date fixed by the Company as the record date in connection with the issue of subscription warrants or other rights to purchase shares or other securities, stock dividends or other distribution. Such notice shall set forth the record date fixed as aforesaid and such particulars of such issue or subscription warrants or other rights, stock dividends or other distribution as shall have been fixed and determined at the date on which such notice is given.

(l)

Taxes on Conversion. The issuance of certificates for Common Shares upon the conversion of Convertible Preference Shares will be made without charge to the converting holders of Convertible Preference Shares for any fee or tax in respect of the issuance of such certificates for the Common Shares represented thereby; provided, however, that the Company shall not be required to pay any tax which may be imposed upon the Person or Persons to whom such Common Shares are issued, in respect of the issuance of such Common Shares or the certificates therefore or which may be payable in respect of any transfer involved in the issuance and delivery of any such certificate in a name or names other than that of the holder of the Convertible Preference Shares converted, and the Company shall not be required to issue or deliver such certificate unless the Person or Persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid or that the Company has not and will not have any liability in respect of such tax.

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(m) Method of Automatic Conversion. In the case of automatic conversion of the Convertible Preference Shares pursuant to section (e), the Company shall on or after the date so specified for automatic conversion, send by prepaid first class mail, or deliver to each Person who is, on that date specified for automatic conversion, a holder of the Convertible Preference Shares to be converted, a notice in writing confirming the automatic conversion of the Convertible Preference Shares. Such notice shall specify the date of automatic conversion, and the office of the Company at which the holders of the Convertible Preference Shares may present and surrender certificates representing such shares for conversion. On the date specified for automatic conversion the Company shall issue or cause to be issued to or to the order of the holders of the Convertible Preference Shares to be converted, that number of Common Shares of the Company designated in the aforesaid notice of conversion, and shall deliver such Common Shares against delivery and surrender of the certificate or certificates representing the Convertible Preference Shares automatically converted.

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RESOLUTION OF THE DIRECTORS
OF TIMMINS GOLD CORP.
(the “Corporation”)

January 26, 2016

RE:     Amended and restated credit agreement dated as of January 26, 2016 (the “Amended and Restated Credit Agreement”) among the Corporation, as borrower, Sprott Resource Lending Partnership, as administrative agent for the Lenders (as defined below) (the “Agent”) and the lenders from time to time party thereto (the “Lenders”). All capitalized terms used but not defined herein shall have the meaning ascribed thereto in the Amended and Restated Credit Agreement.

WHEREAS:

A.	The Corporation is a party to an amended and restated credit agreement made as of February 2, 2015 between, among others, the Corporation, as borrower, and the Agent, as administrative agent to the lenders thereto (the “Credit Agreement”).
B.	The Corporation has agreed to further amend and restate the Credit Agreement upon the terms and conditions set forth in the Amended and Restated Credit Agreement pursuant to which the Lenders have agreed to extend certain credit facilities to the Corporation.
C.	The directors of the Corporation have reviewed copies of the Documents (as hereinafter defined), drafts of the Documents reflecting their material terms and conditions, a term sheet describing the material terms and conditions of the Documents, or otherwise satisfied themselves as to the terms and conditions of the Documents.

NOW THEREFORE BE IT RESOLVED THAT:

1.	The Corporation execute and deliver the Amended and Restated Credit Agreement with the Agent and the Lenders.
2.	The Corporation execute and deliver a confirmation of security agreement dated as of January 26, 2016 (the “Confirmation”), pursuant to which the Credit Parties have agreed with the Agent that the Credit Documents, as amended, and Security Documents shall remain in full force and effect.
3.	The Amended and Restated Credit Agreement and the Confirmation (the “Documents”) shall be in such form and shall contain such terms and provisions as may be approved by the Authorized Signing Officer (as defined below) executing such Documents, execution and delivery of a Document by an Authorized Signing Officer to be conclusive evidence of this and such Authorized Signing Officer’s approval of such Document such that each Document so executed and delivered shall be a valid and binding obligation of, and shall be enforceable against, the Corporation.
4.	The Documents be signed, under the corporate seal of the Corporation or otherwise, by any one director or officer of the Corporation (an “Authorized Signing Officer”) and notwithstanding any change in any of the persons holding such offices between the time of the actual signing and the delivery of any Document, and notwithstanding that the director or officer signing may not have held office at the date of any Document or at the date of delivery thereof, each Document so signed shall be a valid and binding obligations of, and shall be enforceable against, the Corporation.

50976299.1	Timmins Gold Corp.
	Resolution re 2016 Financing

- 2 -

5.

Any Authorized Signing Officer be and is hereby authorized and directed for and on behalf of and in the name of the Corporation to do, sign and execute, under the corporate seal of the Corporation or otherwise, all such other agreements, documents, securities, notes, instruments, certificates, powers of attorney (the “Additional Documents”) and things as in his opinion may be provided for under the Documents, or which may be advisable or necessary, or which may be requested by the Agent, in connection with the foregoing resolutions or in connection with the execution, delivery or registration of, or the performance of any of the Corporation’s obligations under, any of the Documents.

6.

The Corporation is authorized to obtain borrowings and other accommodation under the Amended and Restated Credit Agreement in accordance with the provisions of the Amended and Restated Credit Agreement, to charge its undertaking, property and assets in accordance with the provisions of the Documents and to observe, perform and comply with all of its covenants, duties, liabilities and obligations from time to time under and with respect to the Documents and the Additional Documents.

[signatures on the next following page]

50976299.1	Timmins Gold Corp.
	Resolution re 2016 Financing

S-1

The foregoing resolution is hereby consented to by all of the directors of Timmins Gold Corp. pursuant to the Business Corporations Act (British Columbia) as of the date first written above.

/s/ Xxxx Xxxxxxx		/s/ Xxxx Vizqerra
XXXX X. XXXXXXX		XXXX XXXXXXX XXXXXXXXX
		XXXXXXXXX
/s/ Xxxxxx Xxxxx		/s/ Xxxxx Xxxxxx
XXXXXX XXXXX		XXXXX XXXXXX
/s/ Xxxxxxx Xxxxxxxx		/s/ Xxxxxxx Xxxx
XXXXXXX XXXXXXXX		XXXXXXX X. XXXX
/s/ Xxx Xxxxxxx		/s/ Xxxxx Xxxxxx
LUC XXXXXXX		XXXXX XXXXXXX XXXXXX

Signature page	Timmins Gold Corp.
	Resolution re 2016 Financing