WESTERN COPPER AND GOLD CORPORATION SUBSCRIPTION AGREEMENT FOR COMMON SHARES

Exhibit B

EXECUTION VERSION

WESTERN COPPER AND GOLD CORPORATION

SUBSCRIPTION AGREEMENT FOR COMMON SHARES

THIS AGREEMENT is made this 14th of May, 2021, between:

WESTERN COPPER AND GOLD CORPORATION, a corporation

existing under the laws of the Province of British Columbia

(the “Corporation”)

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RIO TINTO CANADA INC., a corporation existing under the laws of Canada

(the “Purchaser”)

WHEREAS the Corporation has agreed to issue to the Purchaser, and the Purchaser has agreed to purchase from the Corporation, the number of common shares in the capital of the Corporation (the “Shares” and, each individually, a “Share”) set out below for a subscription price of C$2.17 per Share (the “Subscription Price”);

AND WHEREAS this subscription and the attached terms and conditions (the “Terms and Conditions”) are collectively referred to as the “Subscription Agreement”;

NOW THEREFORE THIS SUBSCRIPTION AGREEMENT WITNESSES THAT in consideration of the respective covenants and agreements of the Parties hereinafter contained and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged by each Party), the Purchaser and the Corporation agree to be bound by the Terms and Conditions and agree that each Party may rely upon the covenants, representations and warranties of the other Party contained in the Subscription Agreement.

SUBSCRIPTION AND PURCHASER INFORMATION


Rio Tinto Canada Inc.						Number of Shares: 11,808,490 x C$2.17
(Name of Purchaser)

000-0000 Xxxxxx xxx Xxxxxxxxx-xx-Xxxxxxxx						Aggregate Subscription Price: C$25,624,423.30
(Address of Purchaser)						(the “Subscription Amount”)

Xxxxxxxx Xxxxxx, Xxxxxx X0X 0X0


Account Registration Information: As above ☒ or:						Delivery Instructions: As above ☒ or:

(Name)						(Name)

(Account Reference, if applicable)						(Account Reference, if applicable)

(Address, including Postal Code)						(Address, including Postal Code)

						(Contact Name) (Contact Telephone Number)

Additional Purchaser Information

1.	Number and kind of securities of the Corporation held, directly or indirectly, if any: Nil

2.	State whether the Purchaser is an Insider (as defined in the Securities Act (British Columbia)) of the Corporation:

Yes ☐ No ☒

3.	State whether the Purchaser is a Registrant:

(defined as a person or company registered or required to be registered under the Securities Act (British Columbia))

Yes ☐ No ☒

IN WITNESS WHEREOF this Subscription Agreement has been executed by the Parties.

Dated this 14th day of May, 2021.


WESTERN COPPER AND GOLD CORPORATION

By:		/s/ Xxxx Xxxxxx
		Authorized signatory

By:		/s/ Xxxx Xxxx-Sells
		Authorized signatory

RIO TINTO CANADA INC.

By:		/s/ Xxxxx Xxxxxx
		Authorized signatory

iii

SUBSCRIPTION AGREEMENT

TERMS AND CONDITIONS

1.	Definitions

“Anti-Corruption Laws” means the Foreign Corrupt Practices Act of 1977 of the United States of America, the Corruption of Foreign Public Officials Act (Canada), the U.K. Bribery Act of 2010, as amended, and all other Applicable Law concerning or relating to bribery, money laundering or corruption in any jurisdiction in which either Party or any of its respective affiliates is located or is doing business.

“Applicable Law” means, in relation to any person or persons, the Securities Laws and all other statutes, regulations, ordinances, rules, orders, by-laws, codes, ordinances, decrees, the terms and conditions of any grant of approval, permission, authority or licence, or any judgment, order, decision, ruling, award, policy or guidance document, of any Governmental Entity that are applicable to such person or persons or its or their business, undertaking, property or securities and emanate from a Governmental Entity, having jurisdiction over the person or persons or its or their business, undertaking, property or securities.

“Business Day” means any day except Saturday, Sunday or a statutory or civic holiday in the Vancouver, British Columbia or any other day on which the principal chartered banks located in Vancouver, British Columbia are not open for business.

“Casino Project” means the Corporation’s copper-gold project located in Yukon, Canada and consisting of a total of 1,136 full and partial quartz claims and 55 placer claims.

“Closing” has the meaning set out in Section 5.1.

“Closing Date” has the meaning set out in Section 5.1.

“Closing Time” means 5:00 a.m. (Vancouver time) on the Closing Date.

“Existing Confidential Agreement” means that certain confidentiality agreement dated as of December 3, 2020 between the Corporation and Rio Tinto Exploration Canada Inc.

“Governmental Entity” means the government of Canada, the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union).

“Investment” means the subscription for Shares by the Purchaser pursuant to this Subscription Agreement.

“Intellectual Property” has the meaning set out in Section 6(mm).

“Investor Rights Agreement” means the investor rights agreement in the form attached as Schedule “B”.

“IT Systems and Data” has the meaning set out in Section 6(xx).

“Material Adverse Effect” means any fact, change, event, violation, circumstance or effect which is or could be reasonably likely to have a material adverse effect on the Corporation’s business, affairs, liabilities (absolute, accrued, contingent or otherwise), capital, operations, financial condition, properties or assets, in all cases, whether or not arising in the ordinary course of business and considered on a consolidated basis, other than any fact, change, event, violation, circumstance or effect relating to general economic conditions or securities, financing, banking or capital markets generally in Canada or the United States or affecting the mining industry in general.

“Money Laundering Laws” has the meaning set out in Section 6(ss).

“NI 43-101” means National Instrument 43-101 – Standards of Disclosure for Mineral Projects.

“NI 45-106” has the meaning set out in Section 7(b).

“NI 52-109” means National Instrument 52-109 - Certification of Disclosure in Issuers’ Annual and Interim Filings.

“NYSE American” means the NYSE American LLC.

“Party” or “Parties” refer to a party or the parties to this Subscription Agreement.

“Permits” has the meaning set out in Section 6(gg).

“Public Record” means any information concerning the Corporation which has been publicly filed at xxx.xxxxx.xxx or xxx.xxx.xxx/xxxxx by the Corporation pursuant to a requirement under applicable Securities Laws.

“Purchaser” has the meaning set out in the Recitals.

“Scope of Work” means the proposed scope of work for the Casino Project, substantially in the form attached as Schedule “C”.

“Securities Laws” means, as applicable, (a) the securities laws, regulations and rules, and the blanket orders and rulings, policies and written interpretations of and multilateral or national instruments adopted by the securities regulators in each of the provinces and territories of Canada, (b) all securities laws in the United States, including without limitation, the U.S. Securities Act and the United States Securities Exchange Act of 1934, as amended (including, in each case, the rules and regulations promulgated thereunder) and any applicable state securities laws and (c) the rules and policies of the TSX and the NYSE American.

“Shares” has the meaning set out in the Recitals.

“Subscriber” has the meaning set out in the Recitals.

“Subscription Agreement” or “Agreement” means this subscription agreement and any instrument amending this Subscription Agreement; “hereof”, “hereto”, “hereunder”, “herein” and similar expressions mean and refer to this Subscription Agreement and not to a particular Article or Section; and the expression “Article” or “Section” followed by a number means and refers to the specified Article or Section of this Subscription Agreement.

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“Subscription Amount” has the meaning set out in the Subscription and Purchaser Information section of this Agreement.

“Subsidiary” has the meaning set out in NI 45-106.

“Subscription Price” has the meaning set out in the Recitals.

“Technical Report” means the independent technical report entitled “Casino Project, Form 00- 000X0 Xxxxxxxxx Xxxxxx, Xxxxxxx Xxxxxxxx Xxxxxxxxx, Xxxxx, Xxxxxx” dated effective July 3, 2020 and issued on October 26, 2020, prepared by Xxxxxx Xxxx, P.E., X.Xxx., Xxxxxxx Xxxxxx, XXxxXXX, Xxxxxx X. Xxxxxx, MMSA-QP, Xxxx Xxxxxxx, X.Xxx. and Xxxxxxxx X. Xxxxxx, P.Xxx.

“Term and Conditions” has the meaning set out in the Recitals.

“TSX” means the Toronto Stock Exchange or any successor thereto.

“United States” means the United States of America, its territories and possessions, any state of the United States and the District of Columbia.

“U.S. Person” has the meaning given to that term in Rule 902(k) of Regulation S under the U.S. Securities Act (as defined herein), which means: (i) any natural person resident in the United States; (ii) any partnership or corporation organized or incorporated under the laws of the United States; (iii) any estate of which any executor or administrator is a U.S. person; (iv) any trust of which any trustee is a U.S. person; (v) any agency or branch of a foreign entity located in the United States; (vi) any non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. person, other than any such account held for the benefit or account of a non-U.S. Person; (vii) any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated, or (if an individual) resident in the United States; and (viii) any partnership or corporation if organized or incorporated under the laws of any foreign jurisdiction and formed by a U.S. person principally for the purpose of investing in securities not registered under the U.S. Securities Act, unless it is organized or incorporated, and owned, by accredited investors (as defined in Rule 501(a) under the U.S. Securities Act) who are not natural persons, estates or trusts.

“U.S. Securities Act” means the United States Securities Act of 1933, as amended.

2.	Investment in Corporation

2.1

On the Terms and Conditions of this Subscription Agreement, the Purchaser agrees to subscribe for and purchase from the Corporation at the Closing Time, and the Corporation agrees to issue from treasury and sell to the Purchaser at the Closing Time, the Shares at the Subscription Price for a total purchase price equal to the Subscription Amount.

3.	Payment of Subscription Amount

3.1

Unless other arrangements acceptable to the Corporation have been made, the Purchaser shall deliver at or before the Closing Time, the Subscription Amount payable in respect of the Shares to the Corporation by wire transfer, certified cheque, money order or bank draft payable to “Western Copper and Gold Corporation”.

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4.	Issue and Delivery of Shares

4.1

The Subscription Amount shall be paid against issue and delivery of the Shares registered in the name of the Purchaser (or as the Purchaser has otherwise indicated in this Agreement), duly executed and issued by the Corporation and registered in the share register of the Corporation in the name of the Purchaser (or as the Purchaser has otherwise indicated in this Agreement).

5.	Closing of Purchase of Shares

5.1

Closing of the subscription for the Shares pursuant to this Subscription Agreement (the “Closing”) will be completed at the offices of Xxxxxxx Xxxxx & Xxxxxxxxx LLP in Vancouver, British Columbia at the Closing Time on May 31, 2021 or such later date as the Corporation and the Purchaser may mutually determine (the “Closing Date”), and the delivery of certificates, if any, representing the Shares shall be made in Vancouver, British Columbia.

5.2	The Purchaser’s obligation to purchase the Shares at the Closing Time shall be subject to the following conditions:

(a)

Representations and Warranties; Covenants.

Each of the representations and warranties of the Corporation contained in this Agreement shall be true and accurate in all material respects (except those representations and warranties which are qualified by materiality or Material Adverse Effect which shall be true and correct in all respects) as and when made and at and as of the Closing Time as though such representations and warranties were made at and as of the Closing Time, and the Corporation shall have executed and delivered on the Closing Date a certificate to the Purchaser to that effect, signed by a duly authorized officer of the Corporation, in form and substance reasonably satisfactory to the Purchaser.

All covenants and agreements of the Corporation contained in this Agreement to be completed prior to the Closing Time shall have been performed or completed in all material respects by the Corporation, and the Corporation shall have executed and delivered on the Closing Date a certificate to the Purchaser to that effect, signed by a duly authorized officer of the Corporation, in form and substance reasonably satisfactory to the Purchaser.

(b)

Deliveries. The Corporation shall deliver or cause to be delivered to the Purchaser:

A certificate dated the Closing Date, addressed to the Purchaser and signed on behalf of the Corporation by an officer of the Corporation, with respect to the constating documents of the Corporation, all resolutions of the board of directors of the Corporation relating to this Agreement and the ancillary matters related thereto, the incumbency and specimen signatures of signing officers of the Corporation.

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A certificate of the Corporation dated the Closing Date, addressed to the Purchaser and signed on behalf of the Corporation by a duly authorized officer of the Corporation, certifying for and on behalf of the Corporation, after having made due inquiry, that:

since the date of this Agreement, that (1) there has been no material change (actual, anticipated, contemplated or threatened, whether financial or otherwise) in the business, affairs, liabilities (absolute, accrued, contingent or otherwise), capital, operations, financial condition, properties, prospects, assets or prospects of the Corporation, (2) no transaction has been entered into by the Corporation which is material to the Corporation, and (3) all material changes and all material facts in relation to the Corporation have been generally disclosed by the Corporation (within the meaning of applicable Securities Laws);

II.

no order, ruling or determination having the effect of suspending the sale or ceasing the trading of the Shares or any other securities of the Corporation has been issued by any Governmental Entity and is continuing in effect and no proceedings for that purpose have been instituted or are pending or, to the knowledge of such officers, after due inquiry, contemplated or threatened under applicable Securities Laws or by any Governmental Entity;

III.

the Corporation has complied with the terms and conditions of this Agreement on its part to be complied with up to and as of the Closing Time;

IV.

the representations and warranties of the Corporation contained in this Agreement and in any certificate or other document delivered pursuant to or in connection with this Agreement are accurate in all material respects (except those representations and warranties which are qualified by materiality or Material Adverse Effect which shall be true and correct in all respects) as of the Closing Time with the same force and effect as if made at and as of the Closing Time after giving effect to the transactions contemplated by this Agreement; and

such other matters as the Purchaser may reasonably request.

A Certificate of Good Standing for the Corporation dated within one Business Day of the Closing Date.

A certificate from the Corporation’s transfer agent: (I) as to its appointment as transfer agent and registrar of the Shares; and (II) as to the number of issued and outstanding Shares as at the close of business on the trading day prior to the Closing Date.

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A favourable legal opinion dated the Closing Date, in form and substance satisfactory to the Purchaser acting reasonably, from Canadian counsel to the Corporation, addressed to the Purchaser, as to the laws of Canada and British Columbia which such counsel may rely upon as to matters of fact on certificates of the Corporation’s transfer agent, government officials, public and stock exchange officials and officers of the Corporation, with respect to the following matters, assuming completion of the Closing, and subject to standard assumptions and qualifications:

as to the valid existence and good standing of the Corporation under the laws of its jurisdiction of incorporation;

II.

as to the authorized and issued capital of the Corporation;

III.

that the Corporation has all requisite corporate power and capacity including under the laws of its jurisdiction of incorporation to (i) carry on its business as presently carried on; (ii) own its property; and (iii) issue the Shares;

IV.

that all necessary corporate action has been taken by the Corporation to authorize the execution and delivery of this Agreement and the Investor Rights Agreement and the performance by the Corporation of its obligations hereunder and thereunder;

that each of this Agreement and the Investor Rights Agreement has been duly executed and delivered by the Corporation and constitutes a legal, valid and binding obligation of the Corporation enforceable against the Corporation in accordance with its terms;

VI.

that the Corporation is a reporting issuer in each of the provinces of British Columbia, Alberta and Ontario and is not in default of the Securities Laws of such provinces and territories (with reporting issuer lists to be provided separately for the other provinces and territories where the Corporation is a reporting issuer); and

VII.

that the Shares have been conditionally approved for listing on the TSX subject to the filing of documents in accordance with the requirements of the TSX.

Evidence of conditional approval of the listing of the Shares on the TSX and NYSE American.

A termination letter in respect of the Existing Confidential Agreement duly executed by the Corporation.

One or more share certificates duly executed by the Corporation (or evidence of electronic book-entry thereof) representing the Shares registered in the name of the Purchaser (or as the Purchaser has otherwise indicated in this Agreement), and duly issued by the Corporation and registered in the share register of the Corporation in the name of the Purchaser (or as the Purchaser has otherwise indicated in this Agreement).

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(c)

Securities Laws. The offer, sale and issuance of the Shares subscribed for hereunder shall be exempt from the prospectus and registration requirements of any and all Securities Laws.

(d)

Investor Rights Agreement. The Parties shall have entered into the Investor Rights Agreement.

(e)

Material Adverse Effect. There shall not have occurred a Material Adverse Effect.

(f)

No Order. There is no order in effect that temporarily or permanently prohibits the completion of the transactions contemplated by this Agreement.

5.3	The Corporation’s obligations to sell the Shares to the Purchaser at the Closing Time shall be subject to the following conditions:

(a)

Representations and Warranties; Covenants.

Each of the representations and warranties of the Purchaser contained in this Agreement shall be true and accurate in all material respects (except those representations and warranties which are qualified by materiality or Material Adverse Effect which shall be true and correct in all respects) as and when made and at and as of the Closing Time as though such representations and warranties were made at and as of the Closing Time, and the Purchaser shall have executed and delivered on the Closing Date a certificate to the Corporation to that effect, signed by a duly authorized officer or authorized signatory of the Purchaser, in form and substance reasonably satisfactory to the Corporation.

All covenants and agreements of the Purchaser contained in this Agreement to be completed prior to the Closing Time shall have been performed or completed in all material respects by the Purchaser, and the Purchaser shall have executed and delivered on the Closing Date a certificate to the Corporation to that effect, signed by a duly authorized officer or authorized signatory of the Purchaser, in form and substance reasonably satisfactory to the Corporation.

(b)

Deliveries. The Purchaser shall deliver or cause to be delivered to the Corporation:

Payment of the Subscription Amount in accordance with Section 3.

A termination letter in respect of the Existing Confidential Agreement duly executed by Rio Tinto Exploration Canada Inc.

Such other documentation as the Corporation may reasonably request, including any document required by Securities Laws, in form and substance satisfactory to each of the Corporation and the Purchaser, acting reasonably.

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(c)

Investor Rights Agreement. The Parties shall have entered into the Investor Rights Agreement.

(d)

No Order. There is no order in effect that temporarily or permanently prohibits the completion of the transactions contemplated by this Agreement.

6.	Representations, Warranties and Covenants of the Corporation

The Corporation hereby represents and warrants to, and covenants with, the Purchaser as follows, both as of the date hereof and at the Closing, as applicable, and acknowledges that the Purchaser (and its counsel, if applicable) is relying on such representations and warranties as of such dates in connection with the transactions contemplated herein:

(a)

The Corporation is a valid and subsisting corporation duly incorporated and in good standing under the Business Corporations Act (British Columbia).

(b)

Each of the Subsidiaries is a valid and subsisting corporation duly formed and in good standing under the laws of its jurisdiction of formation.

(c)

The Corporation and each of the Subsidiaries are, and will be, duly licensed or qualified for the transaction of business and in good standing under the laws of each other jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such licence or qualification, and have all corporate power and authority necessary to own or hold their respective properties and to conduct their respective businesses as described in the Public Record, except where the failure to be so qualified or in good standing or have such power or authority would not, individually or in the aggregate, have a Material Adverse Effect or would reasonably be expected to have a Material Adverse Effect.

(d)

The authorized capital of the Corporation consists of unlimited number of Shares without par value and an unlimited number of preferred shares without par value. As at the date hereof, 135,797,635 Shares are validly issued and outstanding as fully paid and non- assessable and, except as set forth on Schedule “A” hereto, no person, firm or corporation has any right, agreement or option, present or future, contingent or absolute, or any right capable of becoming such a right, agreement or option or privilege (whether pre-emptive or contractual), for the issue or allotment of any unissued shares in the capital of the Corporation or any other security convertible into or exchangeable for any such shares, or to require the Corporation to purchase, redeem or otherwise acquire any of the outstanding securities in the capital of the Corporation.

(e)

The Corporation owns, directly or indirectly, all of the equity interests of the Subsidiaries free and clear of any lien, charge, security interest, encumbrance, right of first refusal or other restriction, and all the equity interests of the Subsidiaries are validly issued and are fully paid, non-assessable and free of pre-emptive and similar rights.

(f)

The execution and delivery of this Subscription Agreement, the Investor Rights Agreement and the issue and sale of the Shares by the Corporation and the performance and compliance with the terms hereof and thereof will not result in any breach of, or be in conflict with, or constitute a default under, or create a state of facts which after notice or lapse of time or both would constitute a default under any laws applicable to the Corporation or any of the Subsidiaries, any term or provision of any constating

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documents or resolutions of the Corporation or any of the Subsidiaries, as applicable, or any indenture, contract, agreement (whether written or oral), instrument or other document to which the Corporation or a Subsidiary is a party or subject, or any judgment, decree, order, statute, rule or regulation applicable to the Corporation; nor will such action result in any violation of the provisions of the organizational or governing documents of the Corporation or any of the Subsidiaries.

(g)

This Subscription Agreement and the Investor Rights Agreement have been duly authorized by all necessary corporate action on the part of the Corporation, and this Subscription Agreement has been, and the Investor Rights Agreement will be, duly executed and delivered by the Corporation, constitute a legal, valid and binding agreement of the Corporation enforceable against the Corporation, and the Corporation has full corporate power and authority to undertake the Investment.

(h)

The Shares to be purchased hereunder have been duly authorized for issuance and sale by all necessary action on the part of the Corporation and, when issued and delivered by the Corporation against payment of the consideration thereof pursuant to this Subscription Agreement, will be validly issued, and such Shares will be outstanding as fully paid and non-assessable shares, and will not have been issued in violation of or subject to any pre- emptive rights or other contractual rights to purchase securities issued by the Corporation.

(i)

Except for the conditional approval of the TSX and the NYSE American, no consent, approval, authorization, order, registration or qualification of or with any Governmental Entity is required for the execution, delivery and performance by the Corporation of this Agreement and the issuance and sale by the Corporation of the Shares to be purchased hereunder.

(j)

Neither the Corporation nor any of the Subsidiaries is (i) in violation of its notice of articles, articles, by-laws or similar organizational documents; (ii) in violation or default, and no event has occurred that, with notice or lapse of time or both, would constitute such a violation or default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Corporation or any of the Subsidiaries is a party or by which the Corporation or any of the Subsidiaries is bound or to which any of the property or assets of the Corporation or any of the Subsidiaries are subject; or (iii) in violation of any Applicable Law, except in the case of each of clauses (ii) and (iii) above, for any such violation or default that would not, individually or in the aggregate, have a Material Adverse Effect. To the Corporation’s knowledge, no other party under any material agreements, contracts, arrangements or understandings (written or oral) to which the Corporation or any of the Subsidiaries is a party is in violation or default in any respect thereunder where such violation or default would have a Material Adverse Effect.

(k)

Except for Shares issuable pursuant to outstanding convertible securities of the Corporation, (i) no person has the right, contractual or otherwise, to cause the Corporation to issue or sell to such person any Shares or other securities of the Corporation, (ii) the Corporation has not granted to any person any pre-emptive rights, resale rights, rights of first refusal, or any other rights (whether pursuant to a “poison pill” provision or otherwise) to purchase any Shares or other securities of the Corporation, and (iii) no person has the right to act as an underwriter or as a financial advisor to the Corporation in connection with the Investment.

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(l)

The Corporation is a “reporting issuer” within the meaning of the Securities Act (British Columbia) in each of the provinces and territories of Canada and is not in material default of any of the requirements of those securities acts or any of the written administrative policies or notices of the regulatory authorities.

(m)

The Corporation has complied and will comply fully with the requirements of all applicable corporate and Securities Laws in all matters relating to the Investment.

(n)

The Shares are listed and posted for trading on the TSX under the symbol “WRN” and the Corporation is in material compliance with the rules and regulations of the TSX.

(o)

The Shares are registered pursuant to Section 12(b) of the United States Securities Exchange Act of 1934, as amended, and are accepted for trading on the NYSE American under the symbol “WRN” and the Corporation is in material compliance with the rules and regulations of the NYSE American.

(p)

No order ceasing or suspending trading in securities of the Corporation nor prohibiting the sale of such securities has been issued to and is outstanding against the Corporation or its directors, officers or promoters or against any other companies that have common directors, officers or promoters and, to the best of the Corporation’s knowledge, no investigations or proceedings for such purposes are pending or threatened.

(q)

The Corporation has not taken any action which would be reasonably expected to result in the delisting or suspension of the Shares on or from the TSX or the NYSE American.

(r)

The Corporation will within the required time, file with the TSX, NYSE American or any other applicable securities agency, any documents, reports and information, in the required form, required to be filed by applicable Securities Law in connection with the Investment, together with any applicable filing fees and other materials.

(s)

The form of certificates representing the Shares to be purchased hereunder, to the extent that physical certificates are issued, will be in due and proper form and conform to the requirements of the Business Corporations Act (British Columbia), the articles of incorporation of the Corporation and applicable requirements of the TSX, NYSE American, The Depository Trust Company and CDS Clearing and Depository Services Inc. or will have been otherwise approved by the TSX and NYSE American, if required.

(t)

Computershare Investor Services Inc. has been duly appointed as registrar and transfer agent for the Shares.

(u)

The information in all documents filed by the Corporation in the Public Record was, at the time of such filing, accurate in all material respects, did not contain any material misrepresentation and did not omit to disclose any material fact, except as subsequently corrected or updated in a subsequently filed document (in this Agreement, “misrepresentation” and “material fact” have them meanings ascribed to them in the Securities Act (British Columbia)). All information relating to the business, assets, liabilities, properties (including the Casino Project), capitalization or financial condition of the Corporation provided by the Corporation or any of its advisers to the Purchaser is true, accurate and complete in all material respects.

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(v)

Except as disclosed in the Public Record, the Corporation and its Subsidiaries are conducting their business operations in material compliance with Applicable Law, including for greater certainty Anti-Corruption Laws and Securities Laws.

(w)

Except as disclosed in the Public Record, there are no material legal, governmental or regulatory claims, actions, suits, arbitration, administration, electoral, or other proceedings to which the Corporation or any of its Subsidiaries is a party or of which any property of the Corporation or any of its Subsidiaries is the subject; and, to the knowledge of the Corporation, no such proceedings are threatened or pending by Governmental Entities or any other person; there is no agreement, judgment, injunction, order or decree binding upon the Corporation or its Subsidiaries that has or would reasonably be expected to have the effect of prohibiting, restricting or materially impairing any business practice of the Corporation or its Subsidiaries, any acquisition of property by the Corporation or any of its Subsidiaries other than such agreements, judgments, injunctions, orders or decrees which would not, individually or in the aggregate, be expected to have a Material Adverse Effect on the Corporation or its Subsidiaries, taken as a whole.

(x)

Each of the Corporation and the Subsidiaries: (i) are in compliance in all material respects with any and all applicable foreign, federal, provincial, territorial, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”); (ii) have received all material permits, licences or other approvals currently required of any of them under applicable Environmental Laws to conduct their current business; and (iii) are in material compliance with all terms and conditions of any such permits, licences or approvals. Neither the Corporation nor the Subsidiaries (including, if applicable, any predecessor companies) has received (A) any notice of, or been prosecuted for an offence alleging, non-compliance with any Environmental Law that would have a Material Adverse Effect and neither the Corporation nor the Subsidiaries (including, if applicable, any predecessor companies) has settled any allegation of non-compliance that would have a Material Adverse Effect short of prosecution, and, to the knowledge of the Corporation, no such proceedings are threatened or pending by Governmental Entities or any other person; (B) any notice wherein it is alleged or stated that the Corporation or the Subsidiaries is potentially responsible for a federal, provincial, state, municipal or local clean-up site or corrective action under any Environmental Laws that would have a Material Adverse Effect; and (C) any request for information in connection with any federal, state, provincial, territorial, municipal or local inquiries as to disposal sites. There are no orders or directions relating to environmental matters requiring any material work, repairs, construction or capital expenditures to be made with respect to any of the assets of the Corporation or the Subsidiaries, nor has the Corporation or the Subsidiaries received notice of any of the same.

(y)

The Corporation’s financial statements in the Public Record have been prepared in accordance with International Financial Reporting Standards consistently applied throughout the periods involved, and present fairly the consolidated financial position and results of operation and changes in the financial position of the Corporation and its Subsidiaries for the financial year ended December 31, 2020 and such accounts fairly present in all material respects the financial condition, financial performance and cash flows of the Corporation for the periods indicated.

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(z)

Neither the Corporation nor its Subsidiaries have any liabilities or obligations of any nature, whether or not accrued, contingent or otherwise, except for: (a) liabilities and obligations that are specifically presented on the audited balance sheet of the Corporation as of December 31, 2020 or disclosed in the notes thereto; or (b) liabilities and obligations incurred in the ordinary course of business since January 1, 2021.

(aa)

Since December 31, 2020, each of the Corporation and its Subsidiaries have conducted its business in the ordinary course and:

no liability or obligation of any nature (whether absolute, accrued, contingent or otherwise) which has had or is reasonably likely to have a Material Adverse Effect, has been incurred;

there has not been any event, circumstance or occurrence which has had or is reasonably likely to give rise to a Material Adverse Effect, nor has there been a Material Adverse Effect to the Casino Project; and

there has not been any entering into, or an amendment of, any material contract to which the Corporation or its Subsidiaries is a party.

(bb)

The auditor of the Corporation, PricewaterhouseCoopers LLP, are independent public, certified public or chartered accountants as required by Securities Laws. There has not been any “reportable event” (as that term is defined in National Instrument 51-102 Continuous Disclosure Obligations) with PricewaterhouseCoopers LLP or any other prior auditor of the Corporation or any of its Subsidiaries. PricewaterhouseCoopers LLP has advised the Corporation that it is not in violation of the auditor independence requirements of the Xxxxxxxx-Xxxxx Act of 2002.

(cc)

Each of the Corporation and its Subsidiaries has paid or caused to be paid to the appropriate Governmental Entity all taxes which are due and payable by it, all assessments and reassessments, and all other taxes due and payable by it on or before the date hereof, other than those which are being or have been contested in good faith by appropriate proceedings and in respect of which reserves have been provided in the most recently published consolidated financial statements of the Corporation. The Corporation and its Subsidiaries have provided adequate accruals in accordance with applicable accounting rules in the most recently published consolidated financial statements of the Corporation for any taxes of the Corporation and each of its Subsidiaries for the period covered by such financial statements that have not been paid whether or not shown as being due on any returns. Since such publication date, no material liability in respect of taxes not reflected in such statements or otherwise provided for has been assessed, proposed to be assessed, incurred or accrued, other than in the ordinary course of business.

(dd)

Each of the Corporation and its Subsidiaries have operated in all material respects in accordance with all Applicable Law with respect to employment and labour, including employment and labour standards, occupational health and safety, employment equity, pay equity, workers’ compensation, human rights, labour relations and privacy, and there are no current, pending, or to the knowledge of the Corporation, threatened proceedings before any Governmental Entity with respect to any such matters.

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(ee)

Each of the Corporation and its Subsidiaries is the sole legal and beneficial owner, and has valid and sufficient right, title and interest, free and clear of any title defect or lien in all material respects: (A) to its leases, licences, and all other rights relating in any manner whatsoever to the interest in, or exploration for minerals on its properties, in each case, as are necessary to perform the operation of its business as presently owned and conducted; (B) to its real property interests including fee simple estate of and in real property, licences (from landowners and authorities permitting the use of land by the Corporation or any of its Subsidiaries), leases, rights of way, occupancy rights, surface rights, mineral rights, easements and all other real property interests, in each case, as are necessary to perform the operation of its business as presently owned and conducted; and (C) to, or is entitled to the material benefits of, all of its properties and assets of any nature whatsoever and to all benefits derived therefrom and mineral rights including all the properties and assets reflected in the balance sheet, except as indicated in the notes thereto, and such properties and assets are not subject to any lien or defect in title of any kind except as is specifically identified in the annual financial statements and in the notes thereto.

(ff)

The Casino Project is the only mineral property currently material to the Corporation in which the Corporation or the Subsidiaries has an interest; the Corporation or through the Subsidiaries, hold either mineral claims, exploration permits, prospecting permits or participant interests or other conventional property or proprietary interests or rights, recognized in the jurisdiction in which the Casino Project is located, in respect of the ore bodies and minerals located on the Casino Project in which the Corporation (through the applicable Subsidiary) has an interest under valid, subsisting and enforceable title documents or other recognized and enforceable agreements, contracts, arrangements or understandings, sufficient to permit the Corporation (through the applicable Subsidiary), subject to compliance with customary permit requirements for specific work programs, to explore for the minerals relating thereto; all leases or claims and permits relating to the Casino Project in which the Corporation (through the applicable Subsidiary) has an interest or right have been validly located and recorded in accordance with all Applicable Law and are valid and subsisting; the Corporation (through the applicable Subsidiary) has all necessary rights and interests relating to the Casino Project in which the Corporation (through the applicable Subsidiary) has an interest granting the Corporation (through the applicable Subsidiary) the right and ability to explore for minerals as are appropriate in view of the rights and interests therein of the Corporation or the applicable Subsidiary, with only such exceptions as do not materially interfere with the current use made by the Corporation or the applicable Subsidiary of the rights or interest so held as disclosed in the Public Record, and each of the proprietary interests or rights and each of the agreements, contracts, arrangements or understandings and obligations relating thereto referred to above is currently in good standing in all respects in the name of the Corporation or the applicable Subsidiary; except as disclosed in the Public Record, the Corporation and the Subsidiaries do not have any responsibility or obligation to pay any commission, royalty, licence, fee or similar payment to any person with respect to the property rights thereof, other than mineral claim fees.

(gg)

The Corporation and the Subsidiaries have identified all the material permits, certificates, and approvals (collectively, the “Permits”) which are or will be required for the exploration, development and eventual or actual operation of the Casino Project, which Permits include but are not limited to environmental assessment certificates, water licences, land tenures, rezoning or zoning variances and other necessary local, provincial, state and federal approvals; and the appropriate Permits have either been received,

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applied for, or the processes to obtain such Permits have been or will in due course be initiated by the Corporation or the applicable Subsidiaries; and neither the Corporation nor the applicable Subsidiaries know of any issue or reason why the Permits should not be approved and obtained in the ordinary course;

all assessments or other work required to be performed in relation to the material mineral claims of the Corporation and the applicable Subsidiary in order to maintain their respective interests therein, if any, have been performed to date and the Corporation and the applicable Subsidiary have complied in all material respects with all Applicable Law in this regard as well as with regard to legal and contractual obligations to third parties in this regard except in respect of mineral claims that the Corporation and the applicable Subsidiary intend to abandon or relinquish and except for any non-compliance which would not either individually or in the aggregate have a Material Adverse Effect; all such mineral claims are in good standing in all respects as of the date of this Agreement;

except as disclosed in the Public Record, there are no environmental audits, evaluations, assessments, studies or tests relating to the Corporation or the Subsidiaries except for annual and at will assessments by Governmental Entities and ongoing assessments conducted by or on behalf of the Corporation and the Subsidiaries in the ordinary course;

the Corporation made available to the authors thereof prior to the issuance of the Technical Report, for the purpose of preparing the Technical Report, all information requested, and no such information contained any material misrepresentation as at the relevant time such information was made available;

the Technical Report complied in all material respects with the requirements of NI 43-101 as at the date of the Technical Report and as of the date hereof there is no new material scientific or technical information concerning the Casino Project that is not included in the Technical Report; and

all scientific and technical information disclosed in the Public Record: (i) is based upon information prepared, reviewed and/or verified by or under the supervision of a “qualified person” (as such term is defined in NI 43-101), (ii) has been prepared and disclosed in accordance with Canadian industry standards set forth in NI 43-101, (iii) was true, complete and accurate in all material respects at the time of filing, (iv) information relating to the Corporation’s estimates of mineral resources as at the date they were prepared has been reviewed and verified by the Corporation or independent consultants to the Corporation as being consistent with the Corporation’s mineral resource estimates as at the date they were prepared and (v) the methods used in estimating the Corporation’s mineral resources are in accordance with accepted mineral resource estimation practices.

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(hh)

(A) The Corporation and its Subsidiaries have the exclusive right to deal with their respective properties in all material respects; (B) no person or entity of any nature whatsoever other than the Corporation or its Subsidiaries has any material interest in the Corporation’s properties or any right to acquire or otherwise obtain any such interest; (C) there are no back-in rights, earn-in rights, rights of first refusal, off-take rights or obligations, royalty rights, streaming rights, or other rights of any nature whatsoever which would materially affect the Corporation’s or its Subsidiaries’ interests in the Corporation’s properties, and no such rights are threatened; (D) neither the Corporation nor any of its Subsidiaries has received any material notice, whether written or oral, from any Governmental Entity or any other person of any revocation or intention to revoke, diminish or challenge its interest in the Corporation’s properties; and (E) the Corporation’s properties are in good standing under and comply with all Applicable Law and all work required to be performed has been performed and all taxes, fees, expenditures and all other payments in respect thereof have been paid or incurred and all filings in respect thereof have been made, with only such exceptions as do not materially interfere with the use made by the Corporation or its Subsidiaries of the rights or interests so held.

(ii)

There are no material adverse claims, demands, actions, suits or proceedings that have been commenced or are pending or, to the knowledge of the Corporation, that are threatened, affecting or which could affect the Corporation’s or any of the Subsidiaries’ right, title or interest in the Corporation’s properties or the ability of the Corporation or its Subsidiaries to explore or develop the Corporation’s properties, including the title to or ownership by the Corporation or its Subsidiaries of the foregoing, or which might involve the possibility of any judgement or liability affecting the Corporation’s properties.

(jj)

To the knowledge of the Corporation, none of the directors or officers of the Corporation holds any right, title or interest in, nor has taken any action to obtain, directly or indirectly, any right, title and interest in any of Corporation’s properties or in any permit, concession, claim, lease, licence or other right to explore for, exploit, develop, mine or produce minerals from or in any manner in relation to the Corporation’s properties and any other properties located within 20 kilometres of any of the Corporation’s properties.

(kk)

There are no disputes between the Corporation or any of the Subsidiaries and any local, aboriginal or indigenous group outstanding, or to the Corporation’s knowledge, threatened or imminent with respect to any of the Corporation’s or any Subsidiary’s properties or exploration and development activities.

(ll)

Except as described in the Public Record, there are no material agreements, contracts, arrangements or understandings (written or oral) with any persons relating to the acquisition or proposed acquisition by the Corporation or its Subsidiaries of any material interest in any business (or part of a business) or corporation, nor are there any other specific contracts or agreements (written or oral) in respect of any such matters in contemplation.

(mm)

The Corporation and the Subsidiaries own, possess, licence or have other rights to use all foreign and domestic patents, patent applications, trade and service marks, trade and service mark registrations, trade names, copyrights, licences, inventions, trade secrets, technology, Internet domain names, know-how and other intellectual property (collectively, the “Intellectual Property”), necessary for the conduct of their respective

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businesses as now conducted except to the extent that the failure to own, possess, licence or otherwise hold adequate rights to use such Intellectual Property would not, individually or in the aggregate, have a Material Adverse Effect. (i) There are no rights of third parties to any such Intellectual Property owned by the Corporation and the Subsidiaries; (ii) to the Corporation’s knowledge, there is no infringement by third parties of any such Intellectual Property; (iii) there is no pending or, to the Corporation’s knowledge, threatened action, suit, proceeding or claim by others challenging the Corporation’s and the Subsidiaries’ rights in or to any such Intellectual Property, and the Corporation is unaware of any facts which could form a reasonable basis for any such action, suit, proceeding or claim; (iv) there is no pending or, to the Corporation’s knowledge, threatened action, suit, proceeding or claim by others challenging the validity or scope of any such Intellectual Property; (v) there is no pending or, to the Corporation’s knowledge, threatened action, suit, proceeding or claim by others that the Corporation and the Subsidiaries infringe or otherwise violate any patent, trademark, copyright, trade secret or other proprietary rights of others; (vi) to the Corporation’s knowledge, there is no third-party U.S. patent or published U.S. patent application which contains claims for which an Interference Proceeding (as defined in 35 U.S.C. § 135) has been commenced against any patent or patent application described in the Public Record, as being owned by or licensed to the Corporation; and (vii) the Corporation and the Subsidiaries have complied with the terms of each agreement pursuant to which Intellectual Property has been licensed to the Corporation or such Subsidiary, and all such agreements are in full force and effect, except, in the case of any of clauses (i)-(vii) above, for any such infringement by third parties or any such pending or threatened suit, action, proceeding or claim as would not, individually or in the aggregate, result in a Material Adverse Effect.

(nn)

The Corporation and each of the Subsidiaries carry, or are covered by, insurance in such amounts and covering such risks as the Corporation and each of the Subsidiaries reasonably believe are adequate for the conduct of their respective businesses and as is customary for companies engaged in similar businesses in similar industries.

(oo)

Neither the Corporation nor any of the Subsidiaries has defaulted on any installment on indebtedness for borrowed money or on any rental on one or more long-term leases. The Corporation has not filed a report pursuant to Section 13(a) or 15(d) of the Exchange Act since the filing of its last Annual Report on Form 40-F, indicating that it (i) has failed to pay any dividend or sinking fund installment on preferred stock or (ii) has defaulted on any installment on indebtedness for borrowed money or on any rental on one or more long-term leases.

(pp)

Other than as disclosed to the Purchaser, neither the Corporation nor any of the Subsidiaries has incurred any liability for any finder’s fees, brokerage commissions or similar payments in connection with the transactions herein contemplated.

(qq)

Except as may be restricted by Applicable Law, no Subsidiary is prohibited or restricted, directly or indirectly, from paying dividends to the Corporation, or from making any other distribution with respect to such Subsidiary’s equity securities or from repaying to the Corporation or any other Subsidiaries any amounts that may from time to time become due under any loans or advances to such Subsidiaries from the Corporation or from transferring any property or assets to the Corporation or to any other Subsidiaries.

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(rr)

(A) Neither the Corporation nor the Subsidiaries, nor to the Corporation’s knowledge, any of their respective directors, officers, employees, agents, affiliates or representatives has, in the past five years, made any unlawful contributions to any candidate for any political office (or failed fully to disclose any contribution in violation of Applicable Law) or made any contribution or other payment to any official of, or candidate for, any federal, state, provincial, municipal, or foreign office or other person charged with similar public or quasi-public duty in violation of any Applicable Law or of the character required to be disclosed in the Public Record; (B) no relationship, direct or indirect, exists between or among the Corporation or, to the Corporation’s knowledge, any Subsidiary or any affiliate of any of them, on the one hand, and the directors, officers, employees, agents, affiliates or representatives and shareholders of the Corporation or, to the Corporation’s knowledge, any Subsidiary, on the other hand, that is required by Securities Laws to be described in the Public Record that is not so described; (C) except as described in the Public Record, there are no material outstanding loans or advances or material guarantees of indebtedness by the Corporation or, to the Corporation’s knowledge, any Subsidiary to or for the benefit of any of their respective officers or directors or any of the members of the families of any of them; (D) the Corporation has not offered, or caused any placement agent to offer, Shares or to make any payment of funds to any person with the intent to influence unlawfully (i) a customer or supplier of the Corporation or any Subsidiary to alter the customer’s or supplier’s level or type of business with the Corporation or any Subsidiary or (ii) a trade journalist or publication to write or publish favorable information about the Corporation or any Subsidiary or any of their respective businesses; and (E) neither the Corporation nor any Subsidiary nor, to the Corporation’s knowledge, any director, officer, employee, agent, affiliate or representative of the Corporation or any Subsidiary has made any payment of funds of the Corporation or any Subsidiary or received or retained any funds in violation of any Applicable Law (including, without limitation, any Anti-Corruption Law).

(ss)

The operations of the Corporation and the Subsidiaries are and have been conducted at all times in compliance with applicable financial record keeping and reporting requirements of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), the Corruption of Foreign Public Officials Act (Canada) and applicable rules and regulations thereunder, and the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar applicable rules, regulations or guidelines, issued, administered or enforced by any Governmental Entity (collectively, the “Money Laundering Laws”); and no action, suit or proceeding by or before any court or Governmental Entity involving the Corporation or any of the Subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Corporation, threatened.

(tt)

The Corporation:

represents that, neither the Corporation nor any of the Subsidiaries (collectively, the “Entity”) nor, to the Corporation’s knowledge, any director, officer, employee, agent, affiliate or representative of the Corporation, is a government, individual, or entity (in this Section 6(tt), a “Member”) that is, or is owned or controlled by a Member that is:

the subject of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control, the United Nations Security Council, the European Union, Her Majesty’s Treasury, the Office of the Superintendent of Financial Institutions (Canada), or pursuant to the Special Economic Measures Act (Canada) or other relevant sanctions authority or Applicable Law (collectively, “Sanctions”); nor

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II.

located, organized or resident in a country or territory that is the subject of Sanctions (including, without limitation, Burma/Myanmar, Cuba, Iran, Libya, North Korea, Russia, Sudan, Syria, Ukraine and Zimbabwe).

represents and covenants that it will not, directly or indirectly, use the proceeds of the Investment, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Member:

to fund or facilitate any activities or business of or with any Member or in any country or territory that, at the time of such funding or facilitation, is the subject of Sanctions; or

II.

in any other manner that will result in a violation of Sanctions by any Member; or

represents and covenants that for the past five years, it has not knowingly engaged in, is not now knowingly engaged in, and will not engage in, any dealings or transactions with any Member, or in any country or territory, that at the time of the dealing or transaction is or was the subject of Sanctions.

(uu)

There has been no failure on the part of the Corporation or any of the Corporation’s directors or officers, in their capacities as such, to comply in all material respects with any applicable provisions of the Xxxxxxxx-Xxxxx Act, NI 52-109 and the rules and regulations promulgated thereunder. Each of the principal executive officer and the principal financial officer of the Corporation (or each former principal executive officer of the Corporation and each former principal financial officer of the Corporation as applicable) and each certifying officer of the Corporation (or each former certifying officer of the Corporation and each former certifying officer of the Corporation as applicable) has made all certifications required by Sections 302 and 906 of the Xxxxxxxx- Xxxxx Act with respect to all reports, schedules, forms, statements and other documents required to be filed by it or furnished by it to the SEC and as required to be made and filed by NI 52-109. For purposes of the preceding sentence, “principal executive officer” and “principal financial officer” shall have the meanings given to such terms in the Xxxxxxxx-Xxxxx Act and “certifying officer” shall have the meanings given to such term in NI 52-109.

(vv)

Since January 1, 2016, the Corporation has filed all documents or information required to be filed by it under Securities Laws, except where the failure to file such documents or information will not have a Material Adverse Effect, either individually or in the aggregate; all material change reports, annual information forms, financial statements, management proxy circulars and other documents filed or furnished by or on behalf of the Corporation pursuant to Securities Laws, as of its date, did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading and did not contain a misrepresentation at the time at which it was filed; the Corporation has not filed any confidential material change report or any document requesting confidential treatment with any Governmental Entity that at the date hereof remains confidential.

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(ww)

To the knowledge of the Corporation, all documents and information delivered and provided by or on behalf of the Corporation to the Purchaser as a part of its due diligence in connection with the Investment were complete and accurate in all material respects.

(xx)

There has been no security breach or other compromise of or relating to any of the Corporation’s information technology and computer systems, networks, hardware, software, data (including the data of their respective customers, employees, suppliers, vendors and any third party data maintained by or on behalf of them), equipment or technology (collectively, the “IT Systems and Data”) and (i) the Corporation has not been notified of, and has no knowledge of any event or condition that would reasonably be expected to result in, any security breach or other compromise to the IT Systems and Data; (ii) the Corporation is presently in compliance with all Applicable Law and all judgments, orders, rules and regulations of any court or arbitrator or Governmental Entities, internal policies and contractual obligations relating to the privacy and security of the IT Systems and Data and to the protection of the IT Systems and Data from unauthorized use, access, misappropriation or modification, except as would not, in the case of this clause (ii), individually or in the aggregate, have a Material Adverse Effect; and (iii) the Corporation has implemented backup and disaster recovery technology consistent with industry standards and practices.

(yy)

The Corporation will use commercially reasonable efforts to ensure that the Shares are listed for trading on the TSX and the NYSE American.

7.	Representations, Warranties and Covenants of the Purchaser

By executing this Subscription Agreement, the Purchaser represents, warrants, acknowledges and covenants to the Corporation, both as of the date hereof and at the Closing, as applicable, and acknowledges that the Corporation (and its counsel, if applicable) are relying thereon that:

(a)

The Purchaser was offered the Shares in, and has its head office in, the jurisdiction referred to in Section 13.1 and intends that the applicable Securities Laws of that jurisdiction do and shall govern this subscription by the Purchaser, and is not aware of any reason why the laws of such jurisdiction would not govern such subscription.

(b)

The Purchaser is purchasing the Shares with the benefit of the prospectus exemption provided by Section 2.3 of National Instrument 45-106 – Prospectus Exemptions (“NI 45-106”) and Section 73.3(2) of the Securities Act (British Columbia), is an “accredited investor” (being a person that has net assets of at least $5 million as shown on its most recently prepared financial statements) and is purchasing the Shares as principal for its own account and has not been created, and is not being used, solely to purchase or hold the Shares in reliance on the exemption provided by Section 2.10 of NI 45-106.

(c)

The Purchaser is aware that the Shares have not been and will not be registered under the U.S. Securities Act or the securities laws of any state of the United States, and that the Shares may not be offered or sold, directly or indirectly, in the United States or to for the account or benefit of a U.S. Person without registration under the U.S. Securities Act or compliance with the requirements of an exemption from registration.

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(d)

The Purchaser is not a U.S. Person and is not acquiring the Shares for the account or benefit of a U.S. Person or a person in the United States and has not received funds for this investment from a U.S. Person.

(e)

The Shares have not been offered to the Purchaser in the United States, and the individuals making the order to purchase the Shares and executing and delivering this Subscription Agreement on behalf of the Purchaser were not in the United States when the order was placed and this Subscription Agreement was executed and delivered.

(f)

The Purchaser undertakes and agrees that it will not offer or sell any of the Shares in the United States unless such securities are registered under the U.S. Securities Act and the securities laws of all applicable states of the United States, or an exemption from such registration requirement is available to the Purchaser and the Purchaser has furnished an opinion of counsel of recognized standing in form and substance satisfactory to the Corporation to that effect.

(g)

The Purchaser has the legal capacity and authority to execute this Subscription Agreement and to take all actions required pursuant hereto.

(h)

This Subscription Agreement (and all other documentation in connection with such subscription) has been duly authorized, executed and delivered by, and constitutes a legal, valid and binding agreement of the Purchaser, enforceable in accordance with its terms against the Purchaser.

(i)

The execution and delivery of this Subscription Agreement and the performance and compliance with the terms hereof will not result in any breach of, or be in conflict with, or constitute a default under, or create a state of facts which after notice or lapse of time or both would constitute a default under any laws applicable to the Purchaser, any term or provision of any constating documents or resolutions of the Purchaser, as applicable, or any indenture, contract, agreement (whether written or oral), instrument or other document to which the Purchaser is a party or subject, or any judgment, decree, order, statute, rule or regulation applicable to the Purchaser.

(j)

The Purchaser has been advised to consult its own legal advisors with respect to the execution, delivery and performance by it of the Subscription Agreement and as to the restrictions with respect to trading in the Shares imposed by applicable securities legislation in the jurisdiction in which it resides and confirms that no representation has been made to it by or on behalf of the Corporation with respect thereto. The Purchaser understands that the Shares will be subject to a contractual hold period and it will not be able to resell the Shares until the expiry of such hold period except in accordance with limited exemptions and the Purchaser (and not the Corporation) is solely responsible for compliance with such hold period in connection with any resale of the Shares.

(k)

The Purchaser is aware that the Shares will have attached to them, whether through an ownership statement issued under a direct registration system or other electronic book- entry system, or on certificates that may be issued, as applicable, a legend setting out the resale restrictions in Section 7(j) in substantially the following form:

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“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE [INSERT THE DATE THAT IS FOUR MONTHS AND ONE DAY AFTER THE APPLICABLE CLOSING DATE].

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE TORONTO STOCK EXCHANGE (“TSX”); HOWEVER, THE SAID SECURITIES CANNOT BE TRADED THROUGH THE FACILITIES OF TSX SINCE THEY ARE NOT FREELY TRANSFERABLE, AND CONSEQUENTLY ANY CERTIFICATE REPRESENTING SUCH SECURITIES IS NOT “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON TSX.”

(l)

The Purchaser acknowledges that the Corporation bears no responsibility for the removal of resale restrictions or legends on securities and that the responsibility for compliance and cost with such restrictions or the removal of legends is to be borne by the Purchaser and not the Corporation.

(m)

There is no person acting or purporting to act in connection with the transactions contemplated herein who is entitled to any brokerage or finder’s fee and if any person establishes a claim that any fee or other compensation is payable in connection with this subscription for the Shares.

(n)

The Purchaser will execute and deliver within the applicable time periods all documentation as may be required by applicable Securities Laws to permit the purchase of the Shares on the terms set forth herein and the Purchaser will execute, deliver, file and otherwise assist the Corporation in filing such reports, undertakings and other documents with respect to the issue of the Shares as may be required by applicable Securities Laws or by any securities regulatory authority or stock exchange or other regulatory authority.

(o)

Other than this Subscription Agreement, the Purchaser has not received, nor has the Purchaser requested, any prospectus, sales or advertising literature, offering memorandum or any other document describing or purporting to describe the business and affairs of the Corporation that has been prepared primarily for delivery to, and review by, prospective purchasers so as to assist them in making an investment decision in respect of the purchase of the Shares pursuant to the Investment.

(p)

The Purchaser has no knowledge of a “material fact” or “material change” (as those terms are defined in the Securities Act (British Columbia)) in the affairs of the Corporation that has not been generally disclosed to the public, except knowledge of the Investment.

(q)

Except as provided herein, no person has made any written or oral representation to the Purchaser that any person will re-sell or re-purchase the Shares, or refund any of the Subscription Amount, or that the Shares will be listed on any exchange or quoted on any quotation and trade reporting system, or that application has been or will be made to list any such security on any exchange or quote the security on any quotation and trade reporting system other than the TSX, and no person has given any undertaking to the Purchaser relating to the future value or price of the Shares.

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(r)

The Purchaser agrees that it is solely responsible for obtaining such legal, tax and other advice as the Purchaser considers appropriate in connection with the execution, delivery and performance of this Subscription Agreement and the transactions contemplated hereunder and the Purchaser acknowledges that the Corporation’s counsel is acting solely as counsel to the Corporation and not as counsel to the Purchaser.

(s)

The Purchaser acknowledges that no securities commission or similar regulatory authority has reviewed or passed on the merits of the Shares and that there is no government or other insurance covering the Shares.

(t)

The Purchaser acknowledges that it is aware of the characteristics of the Shares, the risks relating to an investment therein and agrees that the Purchaser is capable of bearing the economic risk of his or her investment in the Shares, including total loss of such investment.

(u)

The Purchaser has such knowledge in financial and business affairs as to be capable of evaluating the merits and risks of the Purchaser’s proposed investment in the Shares.

(v)

The Purchaser acknowledges that as a result of the Shares being purchased pursuant to exemptions from the prospectus requirements contained in applicable Securities Laws:

the Purchaser is restricted from using most of the civil remedies available under applicable Securities Laws;

the Purchaser may not receive information that would otherwise be required to be provided to the Purchaser under applicable Securities Laws; and

the Corporation is relieved from certain obligations that would otherwise apply under applicable Securities Laws.

(w)

None of the funds being used to purchase the Shares are to the Purchaser’s knowledge, proceeds obtained or derived directly or indirectly as a result of illegal activities. The funds being used to purchase the Shares which will be advanced, directly or indirectly, by or on behalf of the Purchaser to the Corporation or to the account of the Corporation hereunder will not represent proceeds of crime for the purposes of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) (the “PCMLTFA”) (or the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (the “Patriot Act”) or any other legislation of a similar nature of an International Jurisdiction) and the Purchaser acknowledges that the Corporation may in the future be required by law to disclose the Purchaser’s name and other information relating to this Subscription Agreement and the Purchaser’s subscription hereunder, on a confidential basis, pursuant to the PCMLTFA or the Patriot Act. To the best of the Purchaser’s knowledge, none of the funds to be provided by the Purchaser, are being tendered on behalf of a person or entity who has not been identified to the Purchaser, and the Purchaser shall promptly notify the Corporation if the Purchaser discovers that any of such representations cease to be true, and shall promptly provide the Corporation with all necessary information in connection therewith.

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(x)

The Purchaser is aware that (i) the Corporation may complete additional financings in the future in order to develop the Corporation’s business and to fund its ongoing development; (ii) there is no assurance that such financings will be available and, if available, on reasonable terms; (iii) any such future financings may have a dilutive effect on the Corporation’s securityholders, including the Purchaser if the Purchaser does not exercise its subscription and top-up rights under the Investor Rights Agreement in respect thereof; and (iv) if such future financings are not available, the Corporation may be unable to fund its on-going development and the lack of capital resources may result in the failure of the Corporation’s business.

8.	Reliance Upon Representations, Warranties and Covenants

The Parties acknowledge that the representations, warranties and covenants made by the other Party in this Subscription Agreement, both as of the date hereof and at the Closing, are made with the intent that they may be relied upon by the other Party (and their respective counsel, if applicable) to, among other things, determine the Purchaser’s eligibility to purchase the Shares, including without limitation the availability of exemptions from the registration and prospectus requirements of applicable Securities Laws in connection with the issuance of the Shares to the Purchaser. The Parties each undertake to promptly notify the other party of any change in any statement or other information relating to transactions contemplated by this Agreement that take place prior to the Closing Date.

9.	Waiver and Termination

9.1

It is understood that the Purchaser and the Corporation may at their sole discretion waive, in whole or in part, or extend the time for compliance with, any of the terms and conditions of this Agreement in their favour without prejudice to their rights in respect of any other of such terms and conditions or any other subsequent breach or non-compliance; provided, however, that to be binding on the Purchaser or the Corporation as applicable any such waiver or extension must be in writing.

9.2	This Agreement may be terminated on or before the Closing Date under the following circumstances:

(a)

upon mutual consent of the Parties;

(b)

by either the Purchaser or the Corporation, if the Closing Date has not occurred on or before the June 30, 2021 or such later date as may be mutually agreed by the Purchaser and the Corporation in writing, provided that a Party may not terminate this Agreement pursuant to this Section 9.2(b) if the failure of the Closing Date to so occur has been caused by, or is a result of, a breach by such Party of any of its representations or warranties or the failure of such Party to perform any of its covenants or agreements under this Agreement;

(c)

by the Purchaser, upon written notice to the Corporation, if there has been a material violation, breach or inaccuracy of any representation, warranty or covenant of the Corporation contained in this Agreement, which violation, breach or inaccuracy would cause any of the representations, warranties, covenants or conditions of the Corporation in this Agreement not to be satisfied; or

(d)

by the Corporation, upon written notice to the Purchaser, if there has been a material violation, breach or inaccuracy of any representation, warranty or covenant of the Purchaser contained in this Agreement, which violation, breach or inaccuracy would cause any of the representations, warranties, covenants or conditions of the Purchaser in this Agreement not to be satisfied.

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9.3	If the Agreement is terminated in accordance with the terms hereof, the Corporation will promptly return any funds, certified cheques and bank drafts delivered by the Purchaser representing the Subscription Amount without interest or deduction.

10.

Survival of Representations, Warranties and Covenants

10.1

The representations, warranties and covenants of the Corporation contained in this Subscription Agreement shall survive the Closing and continue in full force and effect for the benefit of the Purchaser for a period of three years following the Closing, in each case notwithstanding such closing or any investigation made by or on behalf of the Purchaser with respect thereto.

10.2

The representations, warranties and covenants of the Purchaser contained in this Subscription Agreement shall survive the Closing and continue in full force and effect for the benefit of the Corporation for a period of three years following the Closing, in each case notwithstanding such closing or any investigation made by or on behalf of the Corporation with respect thereto and notwithstanding any subsequent disposition by the Purchaser of any of the Shares.

11.

Personal Information Authorization

11.1

The Purchaser acknowledges that this Subscription Agreement requires the Purchaser to provide certain personal information, including without limitation, the Purchaser’s name, address, telephone number and identity of authorized signatories, to the Corporation. By executing this Subscription Agreement, the Purchaser hereby consents to the collection, use and disclosure of the personal information provided herein and other personal information provided by the Purchaser or collected by the Corporation or its agents as reasonably necessary in connection with the Purchaser’s subscription for the Shares (collectively, “personal information”). Such personal information is being collected by the Corporation for the purposes of completing the transactions contemplated by this Agreement, which includes, without limitation, determining the Purchaser’s eligibility to purchase the Shares under the Securities Laws and other applicable securities laws, preparing and registering the Shares to be issued to the Purchaser and completing filings required by any stock exchange or securities regulatory authority. The Purchaser’s personal information may be disclosed by the Corporation to: (a) stock exchanges or securities regulatory authorities; (b) the Canada Revenue Agency; (c) the Corporation’s registrar and transfer agent; and (d) any of the other parties involved in the Investment, including legal counsel and may be included in record books in connection with the Investment, but for greater certainty, the Purchaser’s personal information shall be used for no other purpose without the express written consent of the Purchaser. By executing this Subscription Agreement, the Purchaser is deemed to be consenting to the foregoing collection, use and disclosure of the Purchaser’s personal information. The Purchaser also consents to the filing of copies or originals of any of the Purchaser’s documents delivered in connection herewith as may be required to be filed with any stock exchange or securities regulatory authority in connection with the transactions contemplated hereby.

11.2

The Purchaser authorizes the indirect collection of personal information (as defined in the Securities Laws of the Province of British Columbia) by the applicable securities regulatory authority and confirms that it has been notified by the Corporation: (i) that the Corporation will be delivering such personal information to the applicable securities regulatory authority; (ii) that such personal information is being collected indirectly by the applicable securities regulatory authority under the authority granted to it under the applicable Securities Laws; (iii) that such

- 24 -

personal information is being collected for the purpose of the administration and enforcement of the applicable Securities Laws; and (iv) the following are the contact details of the public official who can answer questions about the British Columbia Securities Commission’s indirect collection of personal information:

British Columbia Securities Commission

FOI Inquiries

000 Xxxx Xxxxxxx Xxxxxx

Xxxxxxxxx, XX X0X 0X0

Tel: (000) 000-0000

Toll free in Canada: 0-000-000-0000

Email: xxx-xxxxxxx@xxxx.xx.xx

12.

Other Covenants

12.1

The Corporation shall promptly fulfill all necessary requirements and take all necessary action required to be taken by the Corporation to permit the creation, issuance and delivery by the Corporation of the Shares to be issued hereunder to the Purchaser pursuant to an exemption from the prospectus requirements of applicable Securities Laws.

12.2

The Corporation shall promptly apply for, and use its best efforts to expeditiously obtain, approval of the TSX and the NYSE American for the issuance of the Shares to be issued hereunder and shall take all required action to satisfy the conditions set out in the conditional approval of the TSX and the NYSE American for the listing of such Shares, and in any event within the time period prescribed by the TSX and the NYSE American, as applicable, to satisfy such conditions, including, to the extent required, disinterested Shareholder approval pursuant to Section 607(g)(ii) of the TSX Company Manual.

12.3

The Corporation shall, within ten (10) days of the Closing Date, file with the applicable regulators any reports required to be filed by Securities Laws, including under NI 45-106 in connection with this Agreement and the transactions contemplated by this Agreement in the required form, and will provide the Purchaser’s legal counsel with copies of such reports.

12.4

The Corporation shall use the Subscription Amount solely to fund the technical and related costs in respect of the Scope of Work and such further study costs on the Casino Project as may be agreed to by the Purchaser and the Corporation from time to time. The Corporation covenants and agrees with the Purchaser that the Subscription Amount shall not be used, directly or indirectly, for the payment or making of any cash dividends or distributions to the shareholders of the Corporation.

12.5

To the fullest extent permitted by Applicable Law, neither party nor any of their respective affiliates have any obligation to the other party or its affiliates to refrain from: (a) engaging in the same or similar activities or lines of business as the other party or its affiliates; (b) investing or owning any interest publicly or privately in, or developing a business relationship with, any person engaged in the same or similar activities or lines of business as, or otherwise in competition with, the other party or any of its affiliates; (c) doing business with any counterparty of the other party or any of its affiliates; or (d) employing or otherwise engaging a former officer, employee or contractor of the other party or any of its affiliates.

12.6

The Corporation and its affiliates shall at all times comply, and shall ensure that their respective directors, officers, employees and consultants comply, with all applicable Anti-Corruption Laws. The Corporation shall immediately notify the Purchaser upon becoming aware of any breach or suspected breach of any Anti-Corruption Law by any of such persons.

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12.7	Subject to (x) Applicable Law, and (y) the rights and obligations of the Corporation or any of its affiliates to any third parties, the Corporation shall provide the Purchaser with:

(a)

reasonable access during normal business hours and upon reasonable advance notice to senior management and employees of the Corporation and its affiliates; and

(b)

such other information or reports reasonably requested by the Purchaser and are reasonably available to, or producible by, the Corporation or any of its affiliates in the ordinary course of business,

in each case where such access, information or reports are reasonably required by the Purchaser in order to comply with its and its affiliates accounting and any public company disclosure obligations and to verify compliance with Anti-Corruption Laws.

13.

Notice

13.1	Any notice, direction or other instrument required or permitted to be given to either party hereto shall be in writing and shall be sufficiently given if delivered personally, or transmitted electronically by email or facsimile to such party, as follows:

(a)

in the case of the Corporation, to:

Western Copper and Gold Corporation

Suite 1200 – 0000 Xxxxxxx Xxxxxx

Xxxxxxxxx, XX X0X 0X0

With a copy to (which shall not constitute notice):

Xxxxxxx Xxxxx & Xxxxxxxxx LLP

Suite 2200, HSBC Building

000 Xxxx Xxxxxxx Xxxxxx

Xxxxxxxxx, XX X0X 0X0

(b)

in the case of the Purchaser, to:

Rio Tinto Canada Inc.

000-0000 Xxxxxx xxx Xxxxxxxxx-xx-Xxxxxxxx

Xxxxxxxx XX X0X 0X0

Xxxxxx

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Attention: The Directors

with copies (which shall not constitute notice) to:

Rio Tinto Exploration Canada Inc.

000-000 Xxxx Xxxxxxxx Xxxxxx

Xxxxxxxxx XX X0X 0X0

Xxxxxx

Stikeman Elliott LLP

0000 Xxxxxxxx Xxxxx Xxxx

000 Xxx Xxxxxx

Xxxxxxx, Xxxxxxx, Xxxxxx

X0X 0X0

13.2

Any such notice, direction or other instrument, if delivered personally, shall be deemed to have been given and received on the day on which it was delivered, provided that if such day is not a Business Day then the notice, direction or other instrument shall be deemed to have been given and received on the first Business Day next following such day and if transmitted electronically by email or fax, shall be deemed to have been given and received on the day of its transmission, provided that if such day is not a Business Day or if it is transmitted or received after the end of normal business hours then the notice, direction or other instrument shall be deemed to have been given and received on the first Business Day next following the day of such transmission.

13.3	Any party hereto may change its address for service from time to time by notice given to the other party hereto in accordance with the foregoing provisions.

14.

Press Release and Consent

No press release, public statement or announcement or other public disclosure with respect to this Subscription Agreement, the transactions contemplated herein, or the discussions, communications or negotiations leading up to the execution hereof, may be made except with the prior written consent and joint approval of all of the Parties, or if required by law or a Governmental Entity, and then only to the extent legally required. Where the public disclosure is required by law or a Governmental Entity, the Party required to make the public disclosure will use its commercially reasonable efforts to obtain the approval of the other Party as to the form, nature and extent of the disclosure. The Purchaser acknowledges and agrees that once it has approved the form, nature and extent of any disclosure, subsequent approval will not be required for so long as the disclosure is not materially amended.

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15.

Governing Law

This Subscription Agreement shall be governed by and construed in accordance with the laws of the Province of British Columbia and the federal laws of Canada applicable therein. The Purchaser hereby irrevocably attorns to the non-exclusive jurisdiction of the courts of the Province of British Columbia with respect to any matters arising out of this Subscription Agreement.

16.

Costs

All costs and expenses (including, without limitation, the fees and disbursements of legal counsel) incurred in connection with this Subscription Agreement and the transactions herein contemplated shall be paid and borne by the party incurring such costs and expenses.

17.

Assignment

This Subscription Agreement shall enure to the benefit of and be binding on the Corporation, the Purchaser and their respective heirs, administrators, executors, successors and permitted assigns. This Subscription Agreement may not be assigned by the Corporation and may only be transferred or assigned by the Purchaser: (i) subject to compliance with applicable Securities Law, and (ii) with the prior written consent of the Corporation.

18.

Entire Agreement

This Subscription Agreement and the Investor Rights Agreement constitute the entire agreement between the parties hereto pertaining to the subject matter hereof and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written. There are no conditions, representations, warranties, covenants or other agreements between the parties hereto relating to the subject matter hereof, except as specifically set out, referred to or incorporated by reference herein.

19.

Amendments and Waivers

No amendment to this Subscription Agreement will be valid or binding unless set forth in writing and duly executed by the parties hereto and no waiver of any breach of any provision of this Subscription Agreement will be effective or binding unless made in writing and signed by the waiving party.

20.

Language

The Parties hereto confirm their express wish that this Subscription Agreement and all documents and agreements directly or indirectly relating hereto be drawn up in the English language. Les Parties reconnaissent leur volonté expresse que la présente ainsi que tous les documents et contrats s’y rattachant directmente ou indirectmente soient rédigés en anglais.

21.

Time of Essence

Time shall be of the essence of this Subscription Agreement in all respects.

22.

Facsimile or Electronic Deliveries and Counterparts

Each of the Parties shall be entitled to rely on delivery by facsimile or other electronic means of a copy of this Subscription Agreement executed by the other Party, and acceptance by the other Party of such executed Subscription Agreement shall be legally effective to create a valid and binding agreement between the Purchaser and the Corporation in accordance with the terms hereof. In addition, this Subscription Agreement may be executed in counterparts, each of which shall be deemed to be an original and all of which shall constitute one and the same document.

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23.

Extended Meanings and Headings

In this Subscription Agreement words importing the singular number include the plural and vice versa, words importing any gender include all genders and words importing persons include individuals, partnerships, associations, trusts and unincorporated associations. The headings contained herein are for convenience of reference only and shall not affect the construction or interpretation hereof.

24.

Currency

All references to “C$” are to Canadian dollars.

25.

Further Assurances

Each of the Parties hereto shall from time to time execute and deliver all such further documents and instruments and do all acts and things as the other Party may, either before or after the closing of the transactions contemplated hereby, reasonably require to effectively carry out or better evidence or perfect the full intent and meaning of this Subscription Agreement.

26.

Severability

The invalidity, illegality or unenforceability of any provision of this Subscription Agreement shall not affect the validity, legality or enforceability of any other provision herein.

- 29 -

SCHEDULE “A”

OUTSTANDING CONVERTIBLE SECURITIES

Stock Options


Amount	Exercise Price ($)	Expiry Date
900,000	0.96	September 12, 2021
1,800,000	1.20	February 21, 2023
400,000	0.75	April 23, 2024
1,550,000	0.90	June 18, 2024
200,000	1.11	June 11, 2025
1,825,000	1.66	July 27, 2025
200,000	1.41	November 9, 2025

6,875,000

Warrants


Amount	Exercise Price ($)	Expiry Date
1,500,000	0.85	February 28, 2025

A-1

SCHEDULE “B”

FORM OF INVESTOR RIGHTS AGREEMENT

(see attached)

B-1

INVESTOR RIGHTS AGREEMENT

WESTERN COPPER AND GOLD CORPORATION

AND

RIO TINTO CANADA INC.

DATED , 2021

TABLE OF CONTENTS


Article 1 DEFINITIONS AND INTERPRETATION		4
Section 1.1	Definitions	4
Section 1.2	Gender, Number and Derivatives	8
Section 1.3	Headings, etc.	8
Section 1.4	Currency	8
Section 1.5	Rules of Construction	9
Section 1.6	Certain Phrases, etc.	9
Section 1.7	Schedules	9
Section 1.8	Parties and Persons	9
Section 1.9	Statutory and Contractual References	9
Section 1.10	Business Days	9
Section 1.11	Time of Day and Date	10
Section 1.12	Time Periods	10
Section 1.13	Time By Which Obligations Must Be Performed	10
Section 1.14	Conflicts	10
Article 2 GOVERNANCE		10
Section 2.1	Investor Board Observer	10
Section 2.2	Board Nomination Right	11
Section 2.3	Management to Endorse and Vote	12
Section 2.4	Director Compensation and Expenses	13
Section 2.5	Technical Committee	13
Section 2.6	Secondment Program	14
Article 3 REGISTRATION RIGHTS		15
Section 3.1	Demand Registration	15
Section 3.2	Piggyback Registration	16
Section 3.3	Registration Procedures	17
Section 3.4	Underwriters’ Cutback	20
Section 3.5	Withdrawal	21
Section 3.6	Expenses	21
Section 3.7	Agreement Regarding Compliance with Securities Laws	22
Section 3.8	Preparation; Reasonable Investigation	22
Section 3.9	Indemnification	22
Section 3.10	Defence of the Action by the Indemnifying Parties	24
Section 3.11	Contribution	24
Section 3.12	U.S. Registration Rights	25
Section 3.13	Termination of Rights	25
Article 4 SUBSCRIPTION RIGHTS		25
Section 4.1	Subscription Rights	25
Section 4.2	Subscription Rights Process	26
Section 4.3	Subscription Rights Exclusions	26
Section 4.4	Top-Up Rights	27
Section 4.5	Application of Securities Laws	28
Section 4.6	Termination of Rights	28
Article 5 RESTRICTIONS ON TRANSFER AND SALE OF SECURITIES		29
Section 5.1	Restrictions on Transfer and Sale of Securities	29
Section 5.2	Standstill	30
Article 6 OTHER COVENANTS		31
Section 6.1	Voting Alignment	31

Page 3 of 42


Section 6.2	Project Information and Access	31
Section 6.3	Study Results	31
Section 6.4	Reporting Issuer Status and Listing of Common Shares	32
Article 7 DISPUTE RESOLUTION		32
Section 7.1	Disputes; Arbitration	32
Section 7.2	Injunctive Relief	32
Article 8 REPRESENTATIONS AND WARRANTIES		33
Section 8.1	Representations and Warranties of the Corporation	33
Section 8.2	Representations and Warranties of the Investor	33
Article 9 MISCELLANEOUS		33
Section 9.1	Authority; Effect	33
Section 9.2	Notices	34
Section 9.3	Determining Ownership Percentage	35
Section 9.4	Termination and Effect of Termination	35
Section 9.5	Confidentiality	36
Section 9.6	Common Shares Subject to this Agreement	37
Section 9.7	Permitted Transferees	37
Section 9.8	Remedies	37
Section 9.9	Amendments	37
Section 9.10	Waiver	37
Section 9.11	No Third Party Rights	38
Section 9.12	Time of Essence	38
Section 9.13	Governing Law	38
Section 9.14	Further Assurances	38
Section 9.15	Independent Legal Advice	38
Section 9.16	Entire Agreement	38
Section 9.17	Successors and Assigns	39
Section 9.18	Counterparts	39
Section 9.19	Severability	39

Page 4 of 42

INVESTOR RIGHTS AGREEMENT

THIS INVESTOR RIGHTS AGREEMENT (this “Agreement”) is dated as of this , 2021, between:

WESTERN COPPER AND GOLD CORPORATION, a corporation incorporated under the laws of the Province of British Columbia, Canada (the “Corporation”)

- and -

RIO TINTO CANADA INC., a corporation incorporated under the laws of Canada (the “Investor”)

WHEREAS the Corporation has entered into a subscription agreement dated May 14, 2021 pursuant to which the Investor will acquire common shares (the “Common Shares”) in the capital of the Corporation (the “Subscription”);

AND WHEREAS in consideration of the Investor’s agreement to complete the Subscription, the Corporation has agreed to grant certain rights set out herein to the Investor, on the terms and subject to the conditions set out herein;

NOW THEREFORE in consideration of the foregoing and the mutual covenants and agreements hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which is irrevocably acknowledged, it is agreed by and between the Parties hereto as set forth below.

ARTICLE 1

DEFINITIONS AND INTERPRETATION

Section 1.1 Definitions.

As used in this Agreement, the following terms shall have the following meanings unless the context otherwise requires:

“Act” means the Business Corporations Act (British Columbia);

“affiliate” has the meaning given to it in NI 45-106, subject to the terms “person” and “issuer” in NI 45-106 being ascribed the same meaning as the term “Person” in this Agreement, and in the case of the Investor, “affiliate” shall include any member of the Rio Tinto Group;

“Agreement” has the meaning ascribed thereto in the preamble;

“Arbitration” has the meaning ascribed thereto in Section 7.1;

“Base Shelf Prospectus” has the meaning ascribed thereto in NI 44-102;

“Board” means the board of directors of the Corporation;

Page 5 of 42

“Bought Deal” means a sale of securities of the Corporation to underwriters for reoffering to the public as described in the definition of “bought deal agreement” in Section 7.1 of NI 44-101;

“Business Day” means a day (other than a Saturday or Sunday or a public holiday) when commercial banks are open for ordinary banking business in Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx;

“Buyer Identification Period” has the meaning ascribed thereto in Section 5.1(1);

“Canadian Securities Authorities” means the “Canadian securities regulatory authorities” as defined in National Instrument 14-101 – Definitions, and any of their successors;

“Common Shares” means the common shares in the capital of the Corporation;

“Confidential Information” has the meaning ascribed thereto in Section 9.5(1);

“Convertible Securities” means securities directly or indirectly convertible into, exchangeable for or exercisable to acquire Common Shares or other voting or participating securities of the Corporation;

“Corporation” has the meaning ascribed thereto in the preamble;

“Corporation Indemnified Party” has the meaning ascribed thereto in Section 3.9(2);

“Demand Registration” has the meaning ascribed thereto in Section 3.1(1);

“Demand Registration Request” has the meaning ascribed thereto in Section 3.1(1);

“Dilutive Issuance” has the meaning ascribed thereto in Section 4.4(1)(a);

“Director Election Meeting” means any meeting of shareholders of the Corporation at which Directors are to be elected to the Board;

“Directors” means the persons who are elected or appointed as directors of the Corporation, and “Director” means any one of them;

“Exchanges” means, collectively, the Toronto Stock Exchange and the NYSE American;

“Exercise Notice” has the meaning ascribed thereto in Section 4.4(3);

“Governmental Entity” means (i) any international, multinational, national, federal, provincial, state, municipal, local or other 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 above, (iii) any stock exchange and (iv) any quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the above;

“Indemnified Parties” has the meaning ascribed thereto in Section 3.10;

“Indemnifying Party” has the meaning ascribed thereto in Section 3.10;

Page 6 of 42

“Independent Director” means an independent Director, as determined by the Corporate Governance and Nominating Committee of the Board in accordance with the applicable Securities Laws and rules of the Exchanges or any stock exchange(s) on which the Common Shares are then listed;

“Xxxxxxx Xxxxxxx Policy” has the meaning ascribed thereto in Section 2.1(5);

“Investor” has the meaning ascribed thereto in the preamble;

“Investor Expenses” has the meaning ascribed thereto in Section 3.6(2);

“Investor Indemnified Party” has the meaning ascribed thereto in Section 3.9(1);

“Investor Nominee” means a Director that was designated by the Investor for election as a nominee or appointed pursuant to Section 2.2(1);

“Investor Observer” has the meaning ascribed thereto in Section 2.1;

“Investor’s Ownership Percentage” means, at any time, the Investor’s percentage ownership interest in the equity capital of the Corporation, which shall be calculated by dividing (y) the number of Common Shares beneficially owned and controlled, directly or indirectly, by the Investor, by (z) the total number of Common Shares issued and outstanding at such time; provided that in the case of both (y) and (z), the number of Common Shares used in the calculation shall not assume the exercise and/or conversion of any Convertible Securities (regardless of the exercise or conversion price);

“Laws” means applicable (i) laws, constitutions, treaties, statutes, codes, ordinances, principles of common and civil law and equity, orders, decrees, rules, regulations and municipal by-laws, whether domestic, foreign or international, (ii) judicial, arbitral, administrative, ministerial, departmental and regulatory judgments, orders, writs, injunctions, decisions, rulings, decrees and awards of any Governmental Entity, and (iii) policies, practices and guidelines of, or contracts with, any Governmental Entity, which, although not actually having the force of law, are considered by such Governmental Entity as requiring compliance as if having the force of law, in each case binding on or affecting the Person, or the assets of the Person, referred to in the context in which such word is used;

“Market Price” means the “market price” of the Common Shares calculated in accordance with the rules of the Toronto Stock Exchange or, if the Common Shares are not traded on the Toronto Stock Exchange at the relevant time, the closing price of the Common Shares on the trading day immediately prior to the date of public announcement of the event, as applicable, on such other exchange or marketplace as such Common Shares are then traded (or at the “market price” otherwise determined pursuant to the rules of such other exchange or marketplace, if different);

“Maximum Offering Size” has the meaning ascribed thereto in Section 3.4(1);

“New Securities” has the meaning ascribed thereto in Section 4.1(1);

“NI 44-101” means National Instrument 44-101 - Short Form Prospectus Distributions;

“NI 44-102” means National Instrument 44-102 - Shelf Distributions;

Page 7 of 42

“NI 45-106” means National Instrument 45-106—Prospectus Exemptions;

“Offered Securities” has the meaning ascribed thereto in Section 4.1(1);

“Party” or “Parties” means one or more of the parties to this Agreement;

“Person” includes a natural person, partnership, limited partnership, limited liability partnership, corporation, limited liability company, unlimited liability company, joint stock company, trust, unincorporated organization, an association, a union, joint venture or other entity or Governmental Entity, and pronouns have a similarly extended meaning;

“Piggyback Registration” has the meaning ascribed thereto in Section 3.2(1);

“Piggyback Registration Request” has the meaning ascribed thereto in Section 3.2(1);

“Project” means the Corporation’s Casino project located in Yukon Territory, Canada;

“Proposal” has the meaning ascribed thereto in Section 5.2(2);

“Registration” means the qualification of securities for distribution under Securities Laws (or any of them) by way of a prospectus prepared in accordance with the applicable Securities Laws;

“Rio Tinto Group” means, collectively, the Investor, Rio Tinto plc and its subsidiaries and Rio Tinto Limited and its subsidiaries;

“Sale Notice” has the meaning ascribed thereto in Section 5.1(1);

“Sale Shares” has the meaning ascribed thereto in Section 5.1(1);

“Secondment Program” has the meaning ascribed thereto in Section 2.6(1);

“Securities Laws” means the securities laws, regulations and rules of each of the provinces and territories of Canada, the forms and disclosure requirements made or promulgated under those laws, regulations or rules, the published policy statements, rules, orders and companion policies of or administered by the Canadian Securities Authorities, and applicable published discretionary rulings, blanket orders or orders issued by the Canadian Securities Authorities pursuant to such laws, regulations, rules and policy statements, all as amended and in effect from time to time;

“Shelf Prospectus Supplement” has the meaning given to it in NI 44-102;

“Short Form Prospectus” means a prospectus in the form of Form 44-101F1 under NI 44-101;

“Study” means the Corporation’s proposed scope of work for the Project, substantially in the form attached as Schedule “C” in that certain subscription agreement between the Parties in respect of the Subscription;

“Subscription” has the meaning ascribed thereto in the preamble;

“Subscription Closing Date” means the closing date of the Subscription;

Page 8 of 42

“subsidiary” has the meaning given to it in NI 45-106;

“Technical Committee” has the meaning ascribed thereto in Section 2.5(1);

“Technical Committee Nominee” has the meaning ascribed thereto in Section 2.5(2);

“Third Party” means any Person other than the Investor, any affiliate of the Investor or any person acting jointly or in concert with any of them;

“Top-up Notice” has the meaning ascribed thereto in Section 4.4(2);

“Top-up Offering” has the meaning ascribed thereto in Section 4.4(4);

“Top-up Right” has the meaning ascribed thereto in Section 4.4(1)(a);

“Top-up Shares” has the meaning ascribed thereto in Section 4.4(1)(a);

“Top-up Threshold” has the meaning ascribed thereto in Section 4.4(1)(b);

“Transfer” means, with respect to any Common Shares, any interest therein, or any other securities or equity interests relating thereto, a direct or indirect transfer, sale, exchange, assignment, pledge, hypothecation or other encumbrance or other disposition thereof, including the grant of an option or other right, whether directly or indirectly, whether voluntarily, involuntarily, by operation of law, pursuant to judicial process or otherwise, and “Transferred” shall have a correlative meaning; and

“Valid Business Reason” has the meaning ascribed thereto in Section 3.1(7).

Section 1.2 Gender, Number and Derivatives.

Any reference in this Agreement to gender includes all genders. Words importing the singular number only include the plural and vice versa, as the context requires. If a term is defined herein, a capitalized derivative of such term shall have a corresponding meaning unless the context otherwise requires.

Section 1.3 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 convenience of reference only and shall not and do not affect the interpretation of this Agreement.

Section 1.4 Currency.

All references in this Agreement to dollars or to “$” are expressed in Canadian currency unless otherwise specifically indicated.

Page 9 of 42

Section 1.5 Rules of Construction.

The Parties to this Agreement waive the application of any law or rules of construction providing that ambiguities in any agreement or other document shall be construed against the Party drafting such agreement or other document. In construing this Agreement, the rule known as the ejusdem generis rule shall not apply nor shall any similar rule or approach apply to the construction of this Agreement and, accordingly, general words introduced or followed by the word “other” or “including” or “in particular” shall not be given a restrictive meaning because they are followed or preceded (as the case may be) by particular examples intended to fall within the meaning of the general words.

Section 1.6 Certain Phrases, etc.

In this Agreement, (i) the words “including”, “includes” and “include” mean “including (or includes or include) without limitation”, and (ii) the words “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”. The expressions “Article” or “Section” or other subdivisions followed by a number mean and refer to the specified Article, Section or other subdivision of the Agreement and the expressions “hereof”, “herein”, “hereinafter”, “hereto”, “hereunder”, “hereby” and similar expressions refer to this Agreement. All references to specific Articles, Sections, or other subdivisions of this Agreement followed by a number are references to the whole of the Article, Section or other subdivision of this Agreement, as applicable, bearing that number, including all subsidiary provisions containing that same number as a prefix.

Section 1.7 Schedules.

The Schedules to this Agreement are an integral part of this Agreement and a reference to this Agreement includes a reference to the Schedules.

Section 1.8 Parties and Persons.

References in this Agreement to any Party or other Person shall include, where the context permits, references to the estate of that Party or Person or that Party or Person’s respective successors resulting from any amalgamation, merger, arrangement or other reorganization of such Party or other Person.

Section 1.9 Statutory and Contractual References.

Except as otherwise provided in this Agreement:

(a)

any reference in this Agreement to a statute shall include and shall be deemed to be a reference to, such statute and to the regulations, policies and rules made pursuant thereto, with all amendments made thereto and in force from time to time, and to any statute, regulation, policy or rule that may be passed that has the effect of supplementing or superseding the statute so referred to or the regulations, policies or rules made pursuant thereto; and

(b)

any reference in this Agreement to an agreement refers to such agreement as amended, restated, supplemented or replaced from time to time.

Section 1.10 Business Days.

Any reference to a number of days shall refer to calendar days unless Business Days are specified.

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Section 1.11 Time of Day and Date.

Any references to time of day or date means the local time or date in Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx unless otherwise specified.

Section 1.12 Time Periods.

Unless otherwise specified, time periods within or following which any act is to be done shall be calculated by excluding the day on which the action is taken and including the day on which the period ends and by extending the period to the Business Day immediately following if the last day of the period is not a Business Day.

Section 1.13 Time By Which Obligations Must Be Performed.

Where this Agreement states that an obligation shall be performed “no later than” or “within” or “by” a prescribed number of days before a stipulated date or event or “by” a date which is a prescribed number of days before a stipulated date or event, the latest performance shall be 5:00 p.m. on the last day for performance of the obligation concerned, or if that day is not a Business Day, 5:00 p.m. on the next Business Day. Where this Agreement states that an obligation shall be performed “on” a stipulated date, the latest time for performance shall be 5:00 p.m. on that day, or, if that day is not a Business Day, 5:00 p.m. on the next Business Day.

Section 1.14 Conflicts.

If there is any conflict or inconsistency between a provision of the body of this Agreement and that of any document delivered pursuant to this Agreement, the provision of the body of this Agreement shall prevail.

ARTICLE 2

GOVERNANCE

Section 2.1 Investor Board Observer.

(1)

Following the Subscription Closing Date, the Investor shall have the right (but not the obligation) to designate one (1) individual to act as a non-voting observer (the “Investor Observer”) to attend all meetings of the Board, such right exercisable at the sole discretion of the Investor by delivery of notice in writing to the Corporation given in accordance with Section 9.2.

(2)

Subject to the following sentence, the Investor Observer shall be entitled to: (a) receive notice of and to attend all meetings of the Board; (b) to the extent permitted by the Chair of the Board, acting reasonably, take part in discussions of matters brought before the Board; (c) receive all notices, consents, minutes, documents and other information and materials that are sent to members of the Board; and (d) receive copies of all written resolutions proposed to be adopted by the Board, including any resolution as approved, each at substantially the same time and in substantially the same manner as the Directors. Notwithstanding the foregoing sentence, the Investor Observer shall not be entitled to: (i) vote on any matters brought before the Board; and (ii) attend (x) meetings or portions of meetings of the Board comprised exclusively of Independent Directors; (y) meetings of any committee of the Board; or (z) meetings of the Board where the Chair of the Board believes, in his or her sole discretion, acting reasonably, that there could be a potential conflict as a matter of applicable corporate law as a result of a topic of discussion in the Board meeting relating to the Investor Observer or any member of the Rio Tinto Group.

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(3)

All Board meetings shall be duly constituted notwithstanding the absence of the Investor Observer. No Board meeting shall be subject to delay and the Corporation shall not be in breach of its obligations hereunder provided that the Corporation has made reasonable efforts to provide notice of a Board meeting, as applicable, to the Investor Observer on the same terms as provided to the Directors, unless the Corporation determines, in its sole discretion, that it is not practicable to provide such notice to the Investor Observer.

(4)

The Investor will cause the Investor Observer to enter into a confidentiality agreement with the Corporation in form and substance satisfactory to the Investor and the Corporation, each acting reasonably, and to agree to be bound by the Corporation’s policies, including without limitation the Corporation’s xxxxxxx xxxxxxx policy, last approved by the Board on November 26, 2020, as amended from time to time (the “Xxxxxxx Xxxxxxx Policy”).

(5)

The Corporation shall not be required to (i) pay any compensation to the Investor Observer, (ii) provide any indemnification or maintain coverage under any policies of directors’ and officers’ insurance, in favour of the Investor Observer, or (iii) reimburse any costs or expenses incurred by the Investor Observer in connection with his or her attendance at meetings of the Board or otherwise.

(6)

The Corporation hereby acknowledges that the Investor Observer will be acting solely as an observer of the Board on behalf of the Investor, and that in no event do the Parties intend that the Observer be responsible as a fiduciary to the Corporation, its management, shareholders or creditors or any other person.

(7)

The rights set forth in this Section 2.1 shall terminate upon the earlier of: (a) the Investor’s Ownership Percentage falling below 5.0%; (b) the date that is 18 months following the Subscription Closing Date; and (c) the Investor exercising the right to nominate an Investor Nominee pursuant to Section 2.2; provided, however, that the Investor shall have a one- time right, exercisable at its sole discretion by delivery of notice in writing to the Corporation, to extend the 18 month period referred to in (b) above by an additional 12 month period (or such longer period of time as may be agreed in writing between the Corporation and the Investor).

Section 2.2 Board Nomination Right.

(1)	If, at any time following the Subscription Closing Date, the Investor’s Ownership Percentage increases to 12.5% or more, the Investor shall have the right (but not the obligation) to designate one (1) nominee to serve as a Director (such nominee, an “Investor Nominee”).

(2)

Subject to Section 2.2(1), the Corporation covenants and agrees, upon 10 Business Days’ written notice by the Investor to the Corporation given in accordance with Section 9.2, to forthwith take all necessary steps, including increasing the size of the Board or causing the resignation of a Director, to cause the appointment of the Investor Nominee to serve on the Board until the next annual meeting of the Corporation’s shareholders, and in the

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event that it is necessary to seek shareholder approval for the election of the Investor Nominee, the Corporation shall put forth the Investor Nominee for election as a Director at the next Director Election Meeting, subject to the timeframes set out below. Notwithstanding the foregoing, if any Exchange objects to an Investor Nominee, such Investor Nominee will either not be appointed or elected to the Board or will resign as a Director. The Corporation shall advise the Investor of the date on which proxy solicitation materials are to be mailed for the purpose of any Director Election Meeting at least 25 Business Days prior to such mailing date and the Investor shall advise the Corporation of the identity of the Investor Nominee, and provide any required information for inclusion in its management information circular relating to the election of the Investor Nominee, at least 20 Business Days prior to the mailing date. If the Investor does not advise the Corporation of the identity of the Investor Nominee prior to any such deadline, then the Investor will be deemed to have nominated its incumbent Investor Nominee, if any.

(3)

Notwithstanding anything to the contrary in this Agreement, the Investor Nominee shall, in advance of appointment or election as a Director and at all times while serving on the Board, be approved by the corporate governance and nominating committee of the Board and otherwise meet the qualification requirements to serve as a Director under the Act, applicable Securities Laws and the rules of the Exchanges.

(4)	Subject to having the appropriate qualifications, the Investor Nominee shall be considered for appointment to each of the following committees of the Board:

(a)

the audit committee;

(b)

the compensation committee;

(c)

the corporate governance and nominating committee; and

(d)

any other committee of the Board formed from time to time to oversee technical decisions and health, safety, environment and communities matters.

(5)

The rights set forth in this Section 2.2 shall terminate: (a) upon the Investor’s Ownership Percentage falling below 12.5% (for such purpose, the Investor shall immediately advise the Corporation in writing when the Investor’s Ownership Percentage falls below 12.5% as calculated in accordance with Section 9.3), in which case and at such time, the Corporation shall be entitled, in its sole discretion, to require the resignation of the Investor Nominee; or (b) if the Investor’s Ownership Percentage does not increase to 12.5% or more before the date that is 18 months following the Subscription Closing Date, upon such date; provided, however, that the Corporation and the Investor may mutually agree to extend the 18 month period referred to in (b) above by such additional period of time as may be agreed in writing between the Corporation and the Investor.

Section 2.3 Management to Endorse and Vote.

(1)

The Corporation agrees that management of the Corporation shall, in respect of every Director Election Meeting, and at every reconvened meeting following an adjournment thereof or postponement thereof, recommend the Investor Nominee identified in the proxy materials for election to the Board in a manner no less rigorous or favourable than the

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manner in which the Corporation supports all of its other nominees, and shall vote the Common Shares and any other shares of the Corporation entitled to vote in the election of directors in respect of which management is granted a discretionary proxy in favour of the election of such Investor Nominee to the Board at every such meeting, and the Corporation shall use its commercially reasonable efforts to cause management to vote their Common Shares and any other shares of the Corporation entitled to vote in the election of directors in favour of the election of such Investor Nominee to the Board at every such meeting.

(2)

If the Investor Nominee resigns, is removed, or is unable to serve for any reason prior to the expiration of his or her term as a Director, then the Investor shall be entitled to designate a replacement to be appointed by the Board as a Director, except if the Investor would have otherwise ceased to be entitled to designate such Investor Nominee pursuant to the terms hereof, and the Corporation agrees to appoint, subject to the Act, applicable Securities Laws and the rules of the Exchanges, within 10 Business Days of receiving written notice from the Investor of its new Investor Nominee, such individual to the Board to serve as the Investor Nominee until the next Director Election Meeting.

(3)	The provisions of this Article 2 applicable to Director Election Meetings shall apply mutatis mutandis to any written consent resolutions of shareholders relating to the election of Directors.

Section 2.4 Director Compensation and Expenses.

(1)	No Investor Nominee who is an officer or employee of the Corporation shall be entitled to any compensation for his or her service as a Director or on any committee of the Board.

(2)	The Corporation shall compensate the Investor Nominee that is not an Investor Nominee specified in Section 2.4(1) on the same terms and conditions as an Independent Director, that is not an Investor Nominee, in the ordinary course.

(3)

The Corporation shall reimburse the Investor Nominee for all reasonable out-of-pocket expenses incurred in connection with the attendance at meetings of the Board and any committees thereof on the same terms and conditions as an Independent Director, that is not an Investor Nominee, in the ordinary course.

(4)	The Investor Nominee shall be entitled to the benefit of customary director liability insurance applicable to all Directors.

(5)	The Investor Nominee shall be entitled to customary director indemnities as permitted by the Act applicable to all Directors.

Section 2.5 Technical Committee.

(1)	Promptly following the Subscription Closing Date, the Corporation shall form a technical committee (the “Technical Committee”) to review and recommend all material technical decisions to be made in respect of the Project, including without limitation the Study.

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(2)

The Technical Committee shall be comprised of three members, two of which will be appointed by the Corporation and one of which will be appointed by the Investor (the “Technical Committee Nominee”). The Technical Committee Nominee must be satisfactory to the Board, acting reasonably, and with reference solely to the scientific and/or technical capabilities of such Technical Committee Nominee. The Investor will cause the Technical Committee Nominee to enter into a confidentiality agreement with the Corporation in form and substance reasonably satisfactory to the Investor and the Corporation, each acting reasonably, and to agree to be bound by the Corporation’s policies, including without limitation the Xxxxxxx Xxxxxxx Policy.

(3)	The Technical Committee shall follow the terms of reference attached as Schedule “A” to this Agreement, as such Terms of Reference may be amended or otherwise modified by the Corporation and the Investor from time to time.

(4)

The Corporation hereby acknowledges that the Technical Committee Nominee will be acting solely as a member of the Technical Committee on behalf of the Investor, and that in no event do the Parties intend that the Technical Committee Nominee be responsible as a fiduciary to the Corporation, its management, shareholders or creditors or any other person.

(5)

The rights set forth in this Section 2.5 shall terminate upon the earlier of: (a) the Investor’s Ownership Percentage falling below 5.0%; and (b) the date that is 18 months following the Subscription Closing Date; provided, however, that the Investor shall have a one-time right, exercisable at its sole discretion by delivery of notice in writing to the Corporation, to extend the 18 month period referred to in (b) above by an additional 12 month period (or such longer period of time as may be agreed in writing between the Corporation and the Investor).

Section 2.6 Secondment Program.

(1)

Promptly following the Subscription Closing Date, the Investor and the Corporation shall establish a secondment program for Rio Tinto Group employees, with a view to facilitating the exchange of people, ideas and best practices between the Rio Tinto Group and the Corporation (the “Secondment Program”).

(2)

Pursuant to the Secondment Program, the Investor, on behalf of the Rio Tinto Group, will have the right (but not the obligation) to second up to three (3) suitably qualified persons (or such greater number as may be agreed between the Investor and the Corporation from time to time) to the Corporation to perform technical and/or health, safety, environment and community (HSEC) roles.

(3)

The rights set forth in this Section 2.6 shall terminate upon the earlier of: (a) the Investor’s Ownership Percentage falling below 5.0%; and (b) the date that is 18 months following the Subscription Closing Date; provided, however, that the Corporation and the Investor may mutually agree to extend the 18 month period referred to in (b) above by such additional period of time as may be agreed in writing between the Corporation and the Investor.

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ARTICLE 3

REGISTRATION RIGHTS

Section 3.1 Demand Registration.

(1)

Subject to the limitations of this Article 3, at any time after the Subscription Closing Date, the Investor shall have the one-time right to make a written request to the Corporation for Registration of all or a portion of the Common Shares held by the Investor. The written request to the Corporation for Registration of Common Shares shall hereinafter be referred to as a “Demand Registration Request” and any such Registration pursuant to a Demand Registration Request shall hereinafter be referred to as a “Demand Registration”.

(2)	Subject to Section 3.1(3), if the Investor makes a Demand Registration Request under this Section 3.1, it shall be entitled to choose the jurisdictions in Canada, in which the Demand Registration shall be effected.

(3)

Each Demand Registration Request shall be in writing and specify: (i) the aggregate number of Common Shares that the Investor intends to offer and sell under the Demand Registration; (ii) the intended method of disposition thereof (which may include the use of a Short Form Prospectus, including a Base Shelf Prospectus and Shelf Prospectus Supplement, if the Corporation then qualifies to use such procedures); (iii) whether the intended offer and sale of Common Shares shall be made by an underwritten offering; and (iv) the jurisdiction(s) in Canada in which the Registration is to be effected, which jurisdictions shall be acceptable to the Corporation, acting reasonably. The Investor shall also provide an undertaking to the Corporation to provide all such information regarding the Investor’s holdings of Common Shares and the proposed manner of distribution for the Common Shares which the Investor intends to offer and sell in connection with such Demand Registration or as may otherwise be reasonably required in order to permit the Corporation to comply with applicable Securities Laws. In the event that the Corporation has filed a Base Shelf Prospectus with any of the Canadian Securities Authorities, the Investor shall also be entitled, during the effectiveness of such Base Shelf Prospectus, as its one-time right, to request and require the Corporation to prepare and file a Shelf Prospectus Supplement to effect the sale of the Investor’s Common Shares qualified under such Base Shelf Prospectus.

(4)	Subject to Section 3.4(1), the Corporation shall be entitled to include Common Shares to be issued and sold by the Corporation in any Demand Registration.

(5)

The Investor shall have the right to select the investment banker(s) and manager(s) to administer the offering of the Common Shares which are the subject of a Demand Registration, subject to the Corporation’s approval, which shall not be unreasonably withheld; provided that if any Demand Registration also involves an underwritten or agency treasury offering of the Corporation, the Corporation and the Investor shall jointly select the investment banker(s) and manager(s) to administer the offering. In the case of an underwritten Demand Registration, the Investor and its representatives may participate in the negotiation of the terms of any underwriting agreement.

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(6)

The Corporation shall not be obligated to take any action to effect any Demand Registration: (i) within one (1) year following the Subscription Closing Date; (ii) if within the preceding 90 days a Piggyback Registration was effected; or (iii) if it is expected to result in gross proceeds from the sale of Common Shares subject to the Demand Registration of less than $1.0 million.

(7)

In the event the Board reasonably determines in its good faith judgment (as evidenced by a resolution of the Board) that the filing of a prospectus (including, after the filing of a Base Shelf Prospectus, a Shelf Prospectus Supplement) in respect of a Demand Registration would require the disclosure of material non-public information relating to the Corporation that the Corporation has a bona fide business purpose for preserving as confidential and disclosure of which would have a material adverse effect on the business of the Corporation (a “Valid Business Reason”), then the Corporation’s obligation to effect a Demand Registration under this Article 3 will be deferred for a period of not more than 60 days from the date of receipt of the Demand Registration Request, provided that the Corporation may not defer its obligations under this Article 3 for a period of more than 120 days during any 12 month period, subject to the Xxxxxxx Xxxxxxx Policy and applicable Securities Laws. In each case, the Corporation shall provide prompt written notice to the Investor (including a copy of the above-mentioned resolution of the Board and copies of any other resolutions or determinations by the Board relating to such postponement) of its determination and the facts giving rise to the Valid Business Reason and an approximation of the anticipated period of time of such postponement. The Corporation shall provide prompt written notice to the Investor of the time at which it determines that the Valid Business Reason no longer exists.

(8)

A Demand Registration requested pursuant to this Section 3.1 shall not be deemed to have been effected if (i) a receipt is not obtained for a final prospectus (if applicable), (ii) the applicable proposed distribution is interfered with by any cease trade or stop order, injunction or other order or requirement of any Canadian Securities Authority, the Exchanges or other Governmental Entity, or (iii) the conditions to closing specified in the applicable underwriting or agency agreement entered into in connection with the applicable proposed distribution are not satisfied or waived by reason of the failure or refusal of the Corporation to satisfy or perform a condition to such closing (including if so specified by reason of the occurrence of a material adverse change).

Section 3.2 Piggyback Registration.

(1)

Subject to the limitations of this Article 3, at any time and from time to time following the Subscription Closing Date, if the Corporation proposes to qualify, distribute or register any securities of the Corporation under any of the Securities Laws in a form and manner which would permit qualification of Common Shares held by the Investor (a “Piggyback Registration”), the Corporation shall give prompt written notice to the Investor of its intention to do so and, subject to Section 3.4(2), shall include in such qualification or registration all Common Shares in respect of which the Corporation has received from the Investor a written request from the Investor for inclusion therein within five Business Days (two Business Days in the case of a Bought Deal to be undertaken by way of a Short Form Prospectus or Shelf Prospectus Supplement) after the receipt of the Corporation’s notice. The written request by the Investor for inclusion in the Piggyback Registration shall hereinafter be referred to as a “Piggyback Registration Request”.

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(2)

The Corporation’s notice shall include the particulars of the proposed offering, if available, including the proposed jurisdictions in which such distribution is to be effected, the estimated number and type of securities of the Corporation proposed to be issued, the range of the estimated offering price per security, the proposed plan of distribution (including the use of a Short Form Prospectus or Shelf Prospectus Supplement) and the proposed terms of the underwriting or agency arrangements.

(3)	The Corporation shall have the right to select the investment banker(s) and manager(s) to administer the offering from treasury and of the Common Shares which are subject to the Piggyback Registration, subject to the approval of the Investor, which shall not be unreasonably withheld.

(4)

The Corporation shall also provide to the Investor any current draft preliminary prospectus or draft Shelf Prospectus Supplement as applicable, if available, and any current draft engagement letter in respect of a Bought Deal, underwriting agreement or agency agreement, if available, relating to the proposed offering.

Section 3.3 Registration Procedures.

Upon receipt of a Demand Registration Request or an Piggyback Registration Request in accordance with and subject to the provisions of this Article 3, the Corporation will use commercially reasonable efforts to effect the Registration of the Common Shares which are the subject of the Demand Registration Request or the Piggyback Registration Request (as may be reduced under Section 3.4) and pursuant thereto the Corporation will use its commercially reasonable efforts, the extent necessary by virtue of the Securities Laws of the jurisdictions in which the Registration is to be effected, to:

(a)

prepare and file (in any event within 30 days (60 days in the event the Corporation is not eligible to file a Short Form Prospectus) after a request for Registration has been delivered to the Corporation, or such shorter period required under Securities Laws with respect to the particular prospectus process) under the Securities Laws, in the English language and, if required, the French language, a preliminary prospectus or similar document in each jurisdiction in which the Registration is to be effected as consented to by the Corporation and such other related documents (including exhibits, financial statements, and ancillary materials, where applicable) as may be necessary or appropriate relating to the proposed distribution;

(b)

furnish to the Investor copies of the preliminary prospectus, prospectus, or any amendments or supplements thereto, including exhibits, financial statements and ancillary materials, if applicable, and provide the Investor and the lead underwriter(s) or agent(s) if any (and their respective counsel) with a reasonable opportunity to participate in the preparation of such documents in accordance with Section 3.8;

(c)

notify the Investor and the lead underwriter(s) or agent(s), if any, and (if requested) confirm such advice in writing as soon as practicable after notice thereof is received by the Corporation (A) when the preliminary prospectus and prospectus, and any amendment thereto, has been filed or been receipted (as applicable); (B) of any request by the Canadian Securities Authorities for amendments to the

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preliminary prospectus or prospectus or for additional information; (C) of the issuance by the Canadian Securities Authorities of any stop trade or cease trade order relating to the prospectus or any order preventing or suspending the use of any preliminary prospectus or prospectus or the initiation or threatening of any proceedings for such purposes; and (D) of the receipt by the Corporation of any notification with respect to the suspension of the qualification of the Common Shares for offering or sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose;

(d)

as soon as possible after any comments of the relevant Canadian Securities Authorities have been satisfied with respect thereto, prepare and file under the Securities Laws a prospectus in the English language and, if required, the French language, and receive a receipt therefor;

(e)

take all other steps and proceedings that may be necessary in order to qualify the applicable Common Shares for distribution under applicable Securities Laws by registrants who comply with the relevant provisions of such Securities Laws;

(f)

prepare and file with the relevant Canadian Securities Authorities such amendments and supplements to such preliminary prospectus and prospectus as may be necessary to comply with the provisions of Securities Laws with respect to the distribution of all Common Shares and other securities covered thereby, and take such reasonable steps to maintain the qualification of such prospectus until the earlier of the completion of the distribution or 30 days following issuance of the receipt for the final prospectus;

(g)

furnish to the Investor and underwriters, if any, without charge, as many commercial copies of the preliminary prospectus, prospectus and any amendment and supplement thereto, including financial statements and schedules and all documents incorporated therein by reference, as such Persons may reasonably request, and such other documents as the Investor may reasonably request, in order to facilitate the distribution of the Common Shares;

(h)

furnish to the Investor:

(i)

opinions of counsel for the Corporation in the preliminary prospectus, final prospectus or Shelf Prospectus Supplement, as applicable, in forms that are customary at such times for distributions of securities similar to the distribution of the Common Shares to be offered and sold;

(ii)

opinions of counsel for the Corporation addressed to the underwriter(s) or agent(s) on the closing date for the distribution of such securities, in forms that are customary at such times for distributions of securities similar to the distribution of the Common Shares to be offered and sold;

(iii)

a “comfort” letter addressed to the Investor and the underwriters or agents dated the date of the final prospectus or Shelf Prospectus Supplement, as applicable, and a “bring-down comfort” letter on the closing date signed by the auditors of the Corporation and providing comfort in relation to financial information contained in the prospectus (or incorporated by reference therein), provided that the Investor shall have made such representations and provided such undertakings as the auditor may reasonably require;

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(iv)

if the prospectus is filed in Québec, opinions of Québec counsel for the Corporation and the auditors of the Corporation addressed to the Investor and the underwriters or agents relating to the translation of the preliminary prospectus, the prospectus and the respective documents incorporated by reference therein, such opinion being dated the dates of the preliminary prospectus, the final prospectus and/or Shelf Prospectus Supplement, as applicable, and closing; and

(v)

such corporate certificates, satisfactory to the Investor acting reasonably, as are customary at such times for distributions of securities similar to the distribution of the Common Shares to be offered and sold; and, in each case, covering substantially the same matters as are customarily covered in such documents in the relevant jurisdictions and such other matters as the Investor may reasonably request;

(i)

during the period after the filing of a preliminary prospectus (or Shelf Prospectus Supplement) and before the completion of the distribution, immediately notify the Investor and the lead underwriter(s) or agent(s), if any, of the happening of any event as a result of which the preliminary prospectus or the prospectus, as then in effect, would include an untrue statement of material fact or would omit any fact that is required to be stated or that is necessary to make any statement therein not misleading, or would fail to constitute full, true and plain disclosure of all material facts regarding the Common Shares when such preliminary prospectus or prospectus was delivered, and as promptly as practicable, prepare and file with the Canadian Securities Authorities, and furnish to the Investor and the lead underwriter(s) or agent(s), if any, a supplement or amendment to such preliminary prospectus or prospectus which would correct such information. The Corporation shall furnish to the Investor and the lead underwriter(s) or agent(s), if any, a reasonable number of commercial copies of any such supplement or amendment as may be necessary so that, as thereafter delivered to the purchasers of such Common Shares, the preliminary prospectus or prospectus shall not include an untrue statement of a material fact or omit to state any fact that is required to be stated or that is necessary to make any statement therein not misleading;

(j)

otherwise comply with all applicable policies, rules and regulations of the relevant Canadian Securities Authorities;

(k)

cause all of the Common Shares to be listed and posted for trading on each securities exchange on which any of the Corporation’s equity securities are then listed or quoted and on each inter-dealer quotation system on which any of the Corporation’s equity securities are then quoted;

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(l)

enter into such customary agreements and underwriting or agency agreements containing such representations and warranties by the Corporation, indemnification provisions in favour of the agents or underwriters, indemnification and contribution provisions consistent with Section 3.9, Section 3.10 and Section 3.11, and such other terms and provisions as are customary in underwriting or agency agreements for such offerings (including, where applicable, secondary offerings);

(m)

in the event of the issuance of any order or ruling suspending the effectiveness of a prospectus receipt or of any order suspending or preventing the use of any prospectus or suspending the qualification of any securities qualified by such prospectus for sale in any jurisdiction, the Corporation will notify the Investor and the lead underwriter(s) or agent(s), if any, of such event and use commercially reasonable efforts to promptly obtain the withdrawal of such order or ruling; in the case of a secondary offering by the Investor, the Investor will not (until further notice) effect sales thereof or deliver any prospectus in respect of such sale after notification by the Corporation to the Investor, under this Section 3.3(m);

(n)

use commercially reasonable efforts to qualify such Common Shares under the Securities Laws of such jurisdictions of Canada in which the Registration will be effected, and obtain such other governmental authorizations reasonably necessary to effect sales (provided that the Corporation will not be required to: (i) qualify generally to do business in any jurisdiction of Canada or any other jurisdiction in which it would not otherwise be required to qualify but for this Section 3.3(n); or (ii) consent to general service of process in any such jurisdiction in which it is not then so subject);

(o)

cause the senior officers and other representatives of the Corporation acceptable to the Investor, and the underwriter(s) or agent(s), on a reasonable basis, to be available for and participate in “road shows”, institutional investor meetings, and similar events to support the sale of the Common Shares subject to the offering; and

(p)

take such other actions and execute and deliver such other documents as may be reasonably necessary to give full effect to the rights of the Investor under this Article 3.

Section 3.4 Underwriters’ Cutback.

(1)

If any Demand Registration involves an underwritten or agency offering and the lead underwriter(s) or agent(s) advises the Corporation and the Investor in writing that in its or their good faith reasonable judgment, the number of Common Shares that the Investor and the Corporation have requested to be included in such offering together with any other Common Shares to be included in such offering exceeds the number (the “Maximum Offering Size”) that can be sold in such offering without being likely to have an adverse effect on the price, timing or distribution of the Common Shares offered or the market for the Common Shares, the Corporation shall include Common Shares in such qualification for distribution in the following priority to the extent possible, without causing the distribution to exceed the Maximum Offering Size:

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(a)

first, such Common Shares requested to be qualified for distribution by the Investor; and

(b)

second, after allowing for the inclusion of all of the Common Shares required under Section 3.4(1)(a), as many of the Common Shares proposed to be qualified for distribution by the Corporation as part of the Demand Registration.

(2)

If any Piggyback Registration involves an underwritten or agency offering and the lead underwriter(s) or agent(s) advises the Corporation and the Investor in writing that in its or their good faith reasonable judgment, the number of Common Shares that the Corporation and the Investor has requested to be included in such offering exceeds the Maximum Offering Size, the Corporation shall include Common Shares in such qualification for distribution in the following priority to the extent possible, without causing the distribution to exceed the Maximum Offering Size:

(a)

first, such Common Shares the Corporation proposes to sell from treasury; and

(b)

second, after allowing for the inclusion of all of the Common Shares required under Section 3.4(2)(a), such Common Shares requested to be qualified for distribution by the Investor.

Section 3.5 Withdrawal.

The Investor shall be entitled to withdraw its request for inclusion of its Common Shares in any Demand Registration or Piggyback Registration by giving written notice to the Corporation of its request, provided that: (i) such request is made one Business Day prior to the execution of an engagement letter in respect of a Bought Deal or five Business Days prior to the execution of an underwriting agreement with respect to such offering; and (ii) such withdrawal is irrevocable and, after making such request, the Investor shall no longer have any right to include its Common Shares in the Demand Registration or Piggyback Registration pertaining to which the withdrawal was made.

Section 3.6 Expenses.

(1)

All expenses incurred in connection with a Demand Registration pursuant to Section 3.1, including: (i) fees payable to Canadian Securities Authorities; (ii) fees and expenses of compliance with Securities Laws; (iii) printing and copying expenses; (iv) messenger and delivery expenses; (v) expenses incurred in connection with any road show and marketing activities; (vi) fees and disbursements of counsel to the Corporation and the Investor; (vii) fees and disbursements of all independent public accountants (including the expenses of any audit and/or “comfort” letter) and fees and expenses of any other special experts or advisors retained by the Corporation; (viii) translation expenses; and (ix) any other fees and disbursements of underwriters customarily paid by issuers or sellers of securities (but excluding the Investor Expenses), shall be borne by the Investor.

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(2)

All expenses incurred in connection with a Piggyback Registration pursuant to Section 3.2 (excluding underwriters’ discounts and commissions in respect of Common Shares to be sold by the Investor and fees and disbursements of counsel to the Investor, which shall be borne by the Investor (the “Investor Expenses”)), including: (i) fees payable to Canadian Securities Authorities; (ii) fees and expenses of compliance with Securities Laws; (iii) printing and copying expenses; (iv) messenger and delivery expenses; (v) expenses incurred in connection with any road show and marketing activities; (vi) fees and disbursements of counsel to the Corporation; (vii) fees and disbursements of all independent public accountants (including the expenses of any audit and/or “comfort” letter) and fees and expenses of any other special experts or advisors retained by the Corporation; (viii) translation expenses; and (ix) any other fees and disbursements of underwriters customarily paid by issuers or sellers of securities (but excluding the Investor Expenses), shall be borne by the Corporation.

Section 3.7 Agreement Regarding Compliance with Securities Laws.

If, in connection with a secondary offering as herein contemplated, in the reasonable opinion of counsel to the Corporation, it is necessary or appropriate in order to comply with any Securities Laws, the Corporation’s obligations under this Article 3 shall be conditional upon the Investor and any underwriter(s) or agent(s) participating in such public sale or distribution, executing and delivering to the Corporation an appropriate agreement, in a form reasonably satisfactory to counsel to the Corporation, that such Person will comply with all prospectus delivery requirements of all relevant Securities Laws and with stabilization, anti-manipulation and similar provisions of the relevant Securities Laws and will furnish to the Corporation information about sales made in such public sale or distribution.

Section 3.8 Preparation; Reasonable Investigation.

In connection with the preparation and filing of any preliminary prospectus, prospectus or similar document in connection with a secondary offering as herein contemplated, the Corporation will give the Investor and the applicable underwriter(s) or agent(s), if any, and their respective counsel, auditors and other representatives, the opportunity to participate in the preparation of such documents and each amendment thereof or supplement thereto, and shall include therein such material, provided to the Corporation in writing, which in the reasonable judgment of counsel to the Investor, should be included and the inclusion of which is agreed upon by the Corporation, acting reasonably, and will give the Investor, and its underwriter(s) and agent(s), if any, and their respective counsel, such access to its books and records and such opportunities to discuss the business of the Corporation with its officers and auditors and other experts as shall be necessary in the opinion of the Investor, such underwriter(s) or agent(s) and their respective counsel, and to conduct all due diligence as the Investor, such underwriter(s) or agent(s) and their respective counsel may reasonably require in order to conduct a reasonable investigation for purposes of establishing a due diligence defence as contemplated by the Securities Laws and in order to enable such underwriter(s) or agent(s) to execute the certificate required to be executed by them in Canada for inclusion in each such document.

Section 3.9 Indemnification.

(1)

In connection with any secondary offering as herein contemplated, to the extent permitted by Laws, the Corporation shall indemnify and hold harmless the Rio Tinto Group and each of their respective directors, officers, employees and agents (collectively, the “Corporation Indemnified Parties”) from and against all losses (other than losses of profit in connection with the distribution of the Common Shares), penalties, judgments, suits, costs, claims, damages, xxxxxxxxxxx and expenses whatsoever (including reasonable

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legal fees and expenses), including any amounts paid in settlement of any investigation, order, litigation, proceeding or claim, joint or several, incurred, arising out of or based upon: (a) any untrue or alleged untrue statement of material fact contained in any preliminary prospectus or prospectus or any amendment thereof or supplement thereto, including all documents incorporated therein by reference; (b) any omission or alleged omission of a material fact required to be stated therein or necessary to make any statement therein not misleading; or (c) any non-compliance by the Corporation with applicable Securities Laws in connection with a Demand Registration or a Piggyback Registration and the offering of securities effected thereunder; provided that the Corporation shall not be liable under this Section 3.9(1) for any settlement of any action effected without its written consent, which consent shall not be unreasonably withheld or delayed; and provided further that the indemnity provided for in this Section 3.9(1) shall not apply to any loss, penalty, judgment, suit, cost, claim, damage, liability or expense to the extent incurred, arising out of, or based upon an untrue statement or omission of material fact or alleged untrue statement or omission of material fact made in reliance upon and in conformity with written information provided to the Corporation by the Investor for use in the prospectus. This indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Investor and regardless of any indemnity agreed to in an underwriting agreement that is less favourable to the Investor.

(2)

In connection with any secondary offering as herein contemplated, to the extent permitted by Laws, the Investor shall indemnify and hold harmless the Corporation, each of its affiliates and subsidiaries and their respective directors, officers, employees and agents and underwriters or agents, their officers and directors and each person who controls such underwriters or agents who participates in such secondary offering (collectively, the “Investor Indemnified Parties”), from and against all losses, penalties, judgments, suits, costs, claims, damages, liabilities and expenses whatsoever (including reasonable costs of investigation and legal fees and expenses and any indemnity and contribution payments made to underwriters), including any amounts paid in settlement of any investigation, order, litigation, proceeding or claim, joint or several, incurred, arising out of or based on: (a) any untrue or alleged untrue statement of material fact contained in any preliminary prospectus or prospectus or any amendment thereof or supplement thereto, including all documents incorporated therein by reference caused by information relating solely to the Investor provided to the Corporation in writing by the Investor for use in the prospectus; or (b) any omission or alleged omission to state in any such document a material fact relating to the Investor required to be stated therein or necessary to make any statement therein not misleading; provided that the Investor shall not be liable under this Section 3.9(2) for any settlement of any action effected without its written consent, which consent shall not be unreasonably withheld or delayed; and provided further that the indemnity provided for in this Section 3.9(2) shall not apply to any loss, claim, damage, liability or expense to the extent arising out of an untrue statement or omission or alleged untrue statement or omission contained in any prospectus relating to the secondary offering if any underwriter or agent failed to send or deliver a copy of the prospectus to the Person asserting such losses, liabilities, claims, damages or expenses on or prior to the delivery of written confirmation of any sale of securities covered thereby to such Person in any case where such prospectus corrected such untrue statement or omission. In no event shall the liability of the Investor under this Section 3.9(2) be greater in amount than the dollar amount of the proceeds from the sale of Common Shares in the offering giving rise to such indemnification obligation, net of underwriting discounts and commissions but before expenses, less any amounts paid by the Investor under Section 3.11 and any amounts paid by the Investor as a result of liabilities incurred under the underwriting or agency agreement, if any.

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(3)

Notwithstanding any other provision of this Article 3, should the Investor not agree to the indemnification set out in Section 3.9(2), the Corporation shall not be required to qualify the Investor’s Common Shares in the Demand Registration or the Piggyback Registration in respect of which the Investor does not agree to provide such indemnification.

Section 3.10 Defence of the Action by the Indemnifying Parties.

Each Corporation Indemnified Party and Investor Indemnified Party, as applicable, (collectively, the “Indemnified Parties”) will give notice to the Party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, but the omission to so notify the Indemnifying Party shall not relieve it from any liability which it may have to the Indemnified Party pursuant to the provisions of this Article 3 except to the extent of the damage or prejudice suffered by such delay in notification. The Indemnifying Party will assume the defence of such action, including the employment of counsel to be chosen by the Indemnifying Party to the reasonable satisfaction of the Indemnified Party, and the payment of expenses. The Indemnified Party will have the right to employ its own counsel in any such case, but the legal fees and expenses of such counsel will be at the expense of the Indemnified Party, unless the employment of such counsel is authorized in writing by the Indemnifying Party in connection with the defence of such action, the Indemnifying Party shall not have employed counsel to take charge of the defence of such action, or the Indemnified Party reasonably concludes, based on the opinion of counsel, that there may be defences available to it or them which are different from or additional to those available to the Indemnifying Party (in which case the Indemnifying Party shall not have the right to direct the defence of such action on behalf of the Indemnified Party); in any of which events the reasonable fees and expenses will be borne by the Indemnifying Party. The Indemnifying Party, in the defence of any such claim or litigation, will not, except with the consent of the Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation.

Section 3.11 Contribution.

In order to provide for just and equitable contribution in circumstances in which the indemnification provided for pursuant to Section 3.9 is due in accordance with its terms but is, for any reason, held by a court to be unavailable from an Indemnifying Party on grounds of policy or otherwise, each Indemnifying Party and Indemnified Party shall contribute to the aggregate liabilities, claims, demands, losses (other than losses of profit in connection with the distribution of the Common Shares), costs, damages, fines, penalties and expenses (including, without limitation, legal fees, charges and disbursements on an as between a solicitor and his own client basis incurred in connection with investigation or defence of the same) to which they may be subject or which they may suffer or incur in such proportion as is appropriate to reflect the relative fault of the party or parties seeking indemnity, on the one hand, and the parties from whom indemnity is sought, on the other hand, in connection with the statements, commissions or omissions or other matters which resulted in such liabilities, claims, demands, losses, costs, damages, fines, penalties or expenses as well as any other relevant equitable considerations. The Indemnifying Parties and the Indemnified Parties hereto agree that it would not be just and equitable if contributions pursuant to this Agreement were determined by pro rata allocation or by any other method of allocation which does not take into account the equitable considerations referred to in this Section 3.11.

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Section 3.12 U.S. Registration Rights.

If the Corporation proposes to file a registration statement for the distribution of Common Shares to the public in the United States, the Parties shall, prior to such distribution taking place, supplement this Agreement so as to provide the Investor with registration rights enabling the distribution of Common Shares to the public in the United States that are substantially equivalent to the registration rights provided under this Agreement, including demand registration rights and piggyback registration rights upon terms and conditions substantially equivalent to the demand registration rights and piggyback registration rights granted hereunder (with the necessary modifications to reflect differences in securities laws and process), and provisions relating to payment of expenses and indemnification and contribution substantially equivalent to the terms set forth in this Agreement.

Section 3.13 Termination of Rights.

The rights set forth in this Article 3 shall terminate upon the earlier of: (a) the Investor’s Ownership Percentage falling below 8.0%; and (b) the date that is 24 months following the Subscription Closing Date; provided, however, that the Investor shall have a one-time right, exercisable at its sole discretion by delivery of notice in writing to the Corporation, to extend the 24 month period referred to in (b) above by an additional 12 month period (or such longer period of time as may be agreed in writing between the Corporation and the Investor).

ARTICLE 4

SUBSCRIPTION RIGHTS

Section 4.1 Subscription Rights.

(1)

At any time and from time to time after the Subscription Closing Date, if the Corporation issues any Common Shares or Convertible Securities (the “New Securities”) to a Third Party, then the Corporation shall offer to the Investor the opportunity (directly or through an affiliate) to subscribe, and the Corporation hereby grants the Investor the right to subscribe, for such number of securities (the “Offered Securities”) of the same class as (or otherwise having attributes identical to) the securities comprising the new issue such that the ratio that the Offered Securities bears to the sum of the New Securities and the Offered Securities is the same as the ratio that (i) the aggregate of the Common Shares then owned by or over which control or direction is exercised by the Investor (calculated on a non-diluted basis), bears to (ii) all Common Shares then outstanding (calculated on a non-diluted basis).

(2)

Such Offered Securities shall be offered and, if applicable, issued to the Investor on the same terms and conditions (including price) as the terms and conditions on which the New Securities are to be or were issued to the Third Party; provided that, if the structure of the offering of the New Securities does not permit (or does not practically permit, including with respect to the time periods contemplated or otherwise) the Investor to participate directly, then such Offered Securities may be offered by way of a separate concurrent private placement to the Investor or by way of a separate private placement to the Investor completed as soon as practicable thereafter, but in accordance with the time periods set out in Section 4.2.

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Section 4.2 Subscription Rights Process.

(1)

Any offer required to be made under Section 4.1 shall be made by written notice to the Investor in accordance with Section 9.2, referencing Section 4.1 and specifying the number and class of securities offered, the subscription price, and other relevant terms and conditions. Such notice shall also specify the period within which the offer, if not accepted, will be deemed to have been declined. The period within which it must be accepted is (i) ten Business Days after the date of receipt of a notice, other than in connection with a Bought Deal, or (ii) subject to Section 4.2(3), within two Business Days after the date of receipt of a notice, in connection with a Bought Deal.

(2)

In response to any offer required to be made under Section 4.1, the Investor may elect to participate in such offer by providing a written notice to the Corporation within the acceptance period set forth in the notice under Section 4.2(1), which acceptance notice shall set forth the maximum amount of such offer for which the Investor wishes to subscribe.

(3)

Notwithstanding any other provision of this Article 4, if any offer is to be conducted on a Bought Deal basis, the Investor may, with the prior written consent of the Corporation (to be obtained prior to delivery of its acceptance notice), choose not to participate in the Bought Deal but instead elect, within ten Business Days after the date of receipt of an offer, to exercise its rights under this Agreement through a private placement to be completed concurrently with, or within three Business Days following, the completion of such Bought Deal.

(4)

The Investor and the Corporation shall use commercially reasonable efforts to complete the issuance of Common Shares or Convertible Securities issued to the Investor pursuant to the exercise of the right under Section 4.1 concurrently with the completion of the securities issuance related to the applicable exercise of such offer (or as soon as practicable thereafter); provided that in no event shall the Investor be required by the Corporation to close any subscription for its respective portion of the issuance prior to 15 Business Days from the date of the acceptance of the offer by the Investor under Section 4.2(2); and provided further that the failure of the Investor to so subscribe within such period shall not in any way affect or impede the ability of the Corporation to complete the issuance of the New Securities to any Third Party at the end of such time period.

Section 4.3 Subscription Rights Exclusions.

(1)	Notwithstanding Section 4.1, the Corporation shall not be obligated to make an offer under or to otherwise comply with, and the Investor shall not have any right to acquire any securities pursuant to, Section 4.1, if the New Securities were issued pursuant to:

(a)

a rights offering that is offered to all shareholders holding Common Shares;

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(b)

a share split, share dividend or any similar recapitalization of the Corporation; provided that the beneficial shareholders of the Corporation and the percentage ownership interest of each beneficial shareholder of the Corporation do not change as a result thereof;

(c)

issuances for compensatory purposes to directors, officers, employees of or consultants to the Corporation and its affiliates made after the Subscription Closing Date pursuant to a security based compensation plan of the Corporation that complies with the requirements of the Toronto Stock Exchange; or

(d)

an offering of Offered Securities made only to the Investor or any of its affiliates.

Section 4.4 Top-Up Rights.

(1)	Without limiting Section 4.1, at any time and from time to time after the Subscription Closing Date, the Corporation agrees that:

(a)

the Investor (directly or through an affiliate) shall have the right (the “Top-up Right”) to subscribe for and to be issued in connection with the issuance of Common Shares in connection with: (i) any equity-based compensation arrangements of the Corporation; and (ii) the conversion, exercise or exchange of Convertible Securities issued prior to or after the date of this Agreement (any, a “Dilutive Issuance”) up to such number of Common Shares that will allow the Investor to maintain or acquire up to the Investor’s Ownership Percentage that is the same as the Investor’s Ownership Percentage that the Investor would have had but for the Dilutive Issuance referenced in the Top-Up Notice (the “Top-up Shares”); and

(b)

the Top-up Right shall be exercisable from time to time following Dilutive Issuances that result in the reduction of the Investor’s Ownership Percentage by an aggregate of 1.0% or more (the “Top-up Threshold”). The Top-up Threshold shall be calculated by aggregating all Dilutive Issuances that occurred in each case from the later of: (i) the date of this Agreement; (ii) the date of the last Top-up Notice; and (iii) the date of completion of the last Top-up Offering.

(2)

Subject to Section 4.4(5), within five Business Days of the end of each three month period ending March 31, June 30, September 30 and December 31 during which one or more Dilutive Issuances occurred resulting in the Top-up Threshold being achieved, the Corporation shall deliver a written notice (a “Top-up Notice”) to the Investor containing the number of Convertible Securities converted, exercised or exchanged into Common Shares, and the total number of issued and outstanding Common Shares following such Dilutive Issuances and any other conversions, exercises and exchanges of Convertible Securities, in each case from the later of (A) the date of this Agreement, (B) the date of the last Top-up Notice, and (C) the date of completion of the last Top-up Offering.

(3)

If the Investor wishes to exercise the Top-up Right, the Investor shall give written notice to the Corporation (the “Exercise Notice”) of its intention to exercise such right and of the number of Top-up Shares the Investor wishes to subscribe for and purchase pursuant to the Top-up Right. The Investor shall deliver an Exercise Notice to subscribe to the Top-up Offering or issuance of Top-up Shares, within 15 Business Days after the date of receipt of a Top-up Notice, failing which the Investor will not be entitled to exercise the Top-up Right in respect of such issuance of Top-up Shares.

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(4)

If the Investor delivers an Exercise Notice in accordance with Section 4.4(3), the Corporation shall in accordance with the provisions of this Section 4.4, promptly, and in any event within 30 days of the date on which the relevant Exercise Notice was delivered, complete an offering to the Investor of the number of Top-up Shares the Investor wishes to subscribe for pursuant to the Top-up Right, as specified in the Exercise Notice, at an offering price per Top-up Share equal to the Market Price on the date the Top-up Notice was delivered to the Investor (each, a “Top-up Offering”). For greater certainty, each Top- up Offering will be an offering of Common Shares.

(5)

Notwithstanding any other provision of this Article 4 to the contrary, if a Top-up Threshold is achieved, or is determined by the Corporation, acting reasonably, to be likely to occur prior to the date on which a record date for any meeting of shareholders is to be set, the Corporation shall deliver a Top-up Notice to the Investor at least 20 Business Days prior to such record date or such shorter period prior to such record date as may be agreed in writing between the Investor and the Corporation upon confirmation by the Corporation that it has all necessary authorizations and approvals to complete the Top-up Offering within such shortened period. If the Investor delivers an Exercise Notice in accordance with Section 4.4(3) or during such shortened notice period as may have been agreed between the Corporation and the Investor pursuant to this Section 4.4(5), in response to a Top-up Notice delivered pursuant to Section 4.4(2), the Corporation shall in accordance with the provisions of this Article 4, promptly, and in any event prior to declaring the record date for such shareholder meeting, complete a Top-up Offering to the Investor.

Section 4.5 Application of Securities Laws.

The Parties acknowledge that the transactions contemplated pursuant to this Article 4, including the issuance and resale of Common Shares and Convertible Securities, are subject to the Xxxxxxx Xxxxxxx Policy, applicable Securities Laws and the rules, policies and determinations of the Exchanges, which may impose restrictions on the issuance and resale of the securities acquired by the Investor hereunder. In particular, the Parties acknowledge that the transactions contemplated pursuant to this Article 4 may be subject to applicable Securities Laws regarding “related party transactions”. Notwithstanding anything else in this Agreement, the Parties agree that, if as a result of complying with such Securities Laws, the time periods provided herein cannot be practicably complied with, such time periods shall be deemed not to apply to the applicable transaction and the Parties shall use commercially reasonable efforts to complete the transactions contemplated and intended to be carried out herein in as expeditious a manner as is practical in order to comply with such applicable Securities Laws.

Section 4.6 Termination of Rights.

The rights set forth in this Article 4 shall terminate upon the earlier of: (a) the Investor’s Ownership Percentage falling below 5.0%; and (b) the date that is 24 months following the Subscription Closing Date; provided, however, that the Investor shall have a one-time right, exercisable at its sole discretion by delivery of notice in writing to the Corporation, to extend the 24 month period referred to in (b) above by an additional 12 month period (or such longer period of time as may be agreed in writing between the Corporation and the Investor).

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ARTICLE 5

RESTRICTIONS ON TRANSFER AND SALE OF SECURITIES

Section 5.1 Restrictions on Transfer and Sale of Securities.

(1)

Subject to Section 5.1(2), for a period of 12 months after the Subscription Closing Date, if the Investor wishes to Transfer any Common Shares of which it owns (or over which it exercises control or direction over), directly or indirectly (the “Sale Shares”), the Investor shall notify the Corporation of its intention to Transfer the Sale Shares (the “Sale Notice”), which Sale Notice shall set out the minimum price that the Investor would be prepared to accept for the Sale Shares and any other terms and conditions of the disposition. The Corporation shall thereafter have the opportunity, until the sixtieth (60th) day following delivery of the Sale Notice, to identify one or more prospective purchasers of all, but not less than all, of such Sale Shares at the price specified in the Sale Notice (the “Buyer Identification Period”). If the Corporation identifies one or more prospective buyers, the Investor shall negotiate in good faith with the prospective buyer(s) the terms of such sale. If the Corporation fails to identify any prospective buyers within the Buyer Identification Period, the Investor does not approve of the prospective buyer(s) and/or the Investor is unable to agree to the terms of such sale with the prospective buyer(s), as applicable, the Investor shall be entitled to sell up to the number of Sale Shares set out in its Sale Notice, provided that such sale is completed within 45 days following expiry of the Buyer Identification Period.

(2)	Section 5.1(1) shall not apply in the case of a disposition by the Investor of Sale Shares:

(a)

in a private sale transaction with the prior written consent of the Corporation;

(b)

to an affiliate of the Investor, provided that prior to any such disposition, the affiliate agrees in writing (in the form attached as Schedule “B” to this Agreement) to be bound by the Investor’s obligations under this Agreement and provided that the Investor shall cause any such affiliates to comply with this Agreement on the same basis as the Investor and shall be liable for any breach thereof by any such affiliate; or

(c)

pursuant to a bona fide take-over bid by any Person (other than the Investor, any of its affiliates or any other Person jointly or in concert (within the meaning of applicable Securities Laws)), or in connection with a merger, business combination, amalgamation or arrangement that requires approval by holders of Common Shares and for which a circular has been delivered to the shareholders of the Corporation in accordance with Securities Laws.

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Section 5.2 Standstill.

(1)	For a period of 12 months following the Subscription Closing Date, the Investor shall not, directly or indirectly, without the prior written consent of the Corporation:

(a)

acquire or agree to acquire, individually or jointly or in concert with any other person, any securities of the Corporation (including Convertible Securities), other than in connection with the exercise of the Investor’s rights pursuant to Article 4 of this Agreement;

(b)

make, or in any way participate in, any solicitation of proxies to vote, or seek to advise or influence any other person or entity with respect to the voting of, any voting securities of the Corporation;

(c)

engage in any discussions or negotiations with, enter into any agreement or submit a proposal for, or offer to acquire or announce an intention to offer to acquire or assist, advise or encourage any other person or entity to affect a take-over bid, tender or exchange offer involving the Corporation or any of its affiliates; or

(d)

otherwise act alone or jointly or in concert with others in connection with any of the foregoing,

provided that the foregoing restrictions shall cease to apply to the Investor: (A) upon a public announcement by the Corporation that it has agreed to a merger, business combination, amalgamation, arrangement or direct or indirect sale of all or substantially all of its assets with or to a Third Party which, if the transaction is successfully completed, will result in the shareholders of the Corporation holding less than 50.0% of the voting securities of the resulting corporation or entity (or its parent corporation or entity, if the resulting corporation or entity is to be a wholly-owned subsidiary of another corporation or entity after successful completion of the transaction); (B) upon the commencement or public announcement of a bona fide take-over bid for the common shares of the Corporation by a Third Party (or an affiliate of such Third Party); or (C) upon a public announcement by the Corporation that it has entered into an agreement with a Third Party pursuant to which the Corporation has agreed to a treasury issuance of securities, which if completed would result in the acquisition of Common Shares or Convertible Securities representing 9.9% or more of the then outstanding Common Shares (on a non-diluted basis) by any person or group of persons (other than the Investor, any affiliate of the Investor or any person acting jointly or in concert with any of them).

(2)

Notwithstanding Section 5.2(1), the Investor shall be permitted to make a confidential proposal (a “Proposal”) to the Board regarding any of the transactions or activities contemplated in Section 5.2(1), to enter into discussions or negotiations with the Board (or with one or more individuals designated by the Board for such purpose) with respect to the terms of any such Proposal and to enter into any agreement with the Corporation providing for the consummation of such Proposal; provided that the Investor shall not under any circumstances make any public disclosure of the making of or terms of such Proposal or agreement except with the prior written consent of the Corporation, which consent may be withheld by the Corporation in its sole discretion.

(3)	The Investor acknowledges that it is subject to restrictions imposed by Securities Laws on the purchase or sale of securities of an issuer while in the possession of material non- public information concerning that issuer, and on the communication of that information to any other Person.

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ARTICLE 6

OTHER COVENANTS

Section 6.1 Voting Alignment.

For a period of 12 months following the Subscription Closing Date, the Investor shall: (a) agree to vote any Common Shares held by it in favor of each Director nominated and recommended by the Board for election at any meeting of shareholders of the Corporation; (b) abstain from voting or withhold the votes attached to any Common Shares held by it if any person is proposing to elect one or more individuals to the Board who are not nominees proposed by the Corporation’s management; and (c) agree to vote any Common Shares held by it in favor of the appointment of the Corporation’s independent auditor; provided, however, that the Investor shall not be under any obligation to vote in the same manner as recommended by the Board or in any other manner, other than in the Investor’s sole discretion, with respect to any other matter, including without limitation the approval (or non-approval) or adoption (or non-adoption) of, or other proposal directly related to, any merger or other business combination transaction involving the Corporation, the sale of all or substantially all of the assets of the Corporation or any other change of control transaction involving the Corporation.

Section 6.2 Project Information and Access.

(1)

The Corporation shall provide the Investor with quarterly reports describing the progress, results and findings of the Study, including work and activities conducted, expenditure incurred, safety, environmental performance and any matters of circumstances which may result in material delay to the Study. The Corporation shall provide the Investor with access to the underlying data supporting the Study and shall ensure that the data is maintained in a single physical location or contemporaneously maintained on a server accessible to both the Corporation and the Investor.

(2)

Upon reasonable notice and provided it would not unreasonably interfere with the business and affairs of the Corporation, the Corporation agrees to provide the Investor and its representatives with reasonable access during regular business hours to: (a) the Project; and (b) all books, records, data and information relating to the Project in its possession and control.

(3)

The foregoing right of the Investor shall terminate upon the earlier of: (a) the Investor’s Ownership Percentage falling below 5.0%; and (b) the later of (i) the date that is 18 months following the Subscription Closing Date and (ii) 6 months following completion of the Study; provided, however, that the Corporation and the Investor may mutually agree to extend the time periods referred to in (b) above by such additional period of time as may be agreed in writing between the Corporation and the Investor.

Section 6.3 Study Results.

Following the Subscription Closing Date, the Corporation shall provide to the Investor a draft of any press release announcing the results of the Study, and shall consider, acting reasonably, any comments made by the Investor thereon; provided, however, that the Corporation shall not be required to provide such opportunity to comment in the event that, in the opinion of its outside legal counsel, the Corporation is required to make immediate disclosure of such results

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under Securities Laws. The foregoing right of the Investor shall terminate upon the earlier of: (a) the Investor’s Ownership Percentage falling below 5.0%; and (b) the later of (i) the date that is 18 months following the Subscription Closing Date and (ii) 6 months following completion of the Study; provided, however, that the Corporation and the Investor may mutually agree to extend the time periods referred to in (b) above by such additional period of time as may be agreed in writing between the Corporation and the Investor.

Section 6.4 Reporting Issuer Status and Listing of Common Shares.

The Corporation shall during the term of this Agreement use its commercially reasonable efforts to: (a) maintain the Corporation’s status as a “reporting issuer” not in default under the Securities Laws in each of the provinces and territories of Canada; and (b) maintain the listing of the Common Shares on the Exchanges or another stock exchange(s) acceptable to the Investor, acting reasonably; provided, however, that none of the foregoing covenants shall restrict or prevent the Corporation from engaging in or completing any transaction which would result in the Corporation ceasing to be a “reporting issuer” or the Common Shares ceasing to be listed on any of the Exchanges so long as the holders of Common Shares receive cash or securities of an entity which is listed on either of the Exchanges or the holders of the Common Shares have approved the transaction.

ARTICLE 7

DISPUTE RESOLUTION

Section 7.1 Disputes; Arbitration.

Any dispute, controversy, questions, disagreement or claim arising out of or relating to this Agreement, including any question regarding its existence, interpretation, validity, breach or termination of the business relationship created by it or the enforcement of rights and obligations hereunder, will be finally resolved by binding confidential arbitration administered by the ADR Institute of Canada, Inc. under its Arbitration Rules, as amended or supplemented by the provisions of this Article 7 (an “Arbitration”). The service of any notice, process, motion or any other document in connection with an Arbitration or any enforcement of any arbitration award may be made in the same manner that communications may be given under Section 9.2. The Arbitration will be conducted in the English language in the City of Vancouver, British Columbia with one arbitrator. Except as required under applicable Law, neither a Party nor an arbitrator may disclose the existence, content, or results of any arbitration hereunder without the prior written consent of the parties to the Arbitration, save and except no consent is required for disclosure to professional advisors and tax authorities in connection with or as a result of an Arbitration.

Section 7.2 Injunctive Relief.

Any arbitrator appointed pursuant to Section 7.1 shall have the power to grant any legal or equitable remedy or relief available under the applicable law, including injunctive relief (whether interim and/or final) and specific performance and any measures ordered by the arbitrators may be specifically enforced by any court of competent jurisdiction. The Parties agree that any Party may have recourse to any court of competent jurisdiction to seek interim or provisional measures, including injunctive relief and pre-arbitral attachments or injunctions and any such request shall not be deemed incompatible with the agreement to arbitrate under this Agreement or a waiver of such right to arbitrate.

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ARTICLE 8

REPRESENTATIONS AND WARRANTIES

Section 8.1 Representations and Warranties of the Corporation.

The Corporation represents and warrants to the Investor as follows and acknowledges and agrees that the Investor is relying on such representations and warranties to enter into this Agreement:

(a)

the Corporation is duly incorporated, validly existing and in good standing under the laws of the Province of British Columbia and has all requisite corporate power and authority to execute and deliver this Agreement;

(b)

this Agreement has been duly executed and delivered by the Corporation; and

(c)

this Agreement constitutes the valid and binding agreement of the Corporation, enforceable against the Corporation in accordance with its terms, except as may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, and similar laws relating to or affecting creditors’ rights generally and general equitable principles (whether considered in a proceeding in equity or at law), in each case now or hereafter in effect.

Section 8.2 Representations and Warranties of the Investor.

The Investor represents and warrants to the Corporation as follows and acknowledges and agrees that the Corporation is relying on such representations and warranties to enter into this Agreement:

(a)

the Investor is duly incorporated, validly existing and in good standing under the laws of Canada and has all requisite corporate power and authority to execute and deliver this Agreement;

(b)

this Agreement has been duly executed and delivered by the Investor; and

(c)

this Agreement constitutes the valid and binding agreement of the Investor, enforceable against the Investor in accordance with its terms, except as may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, and similar laws relating to or affecting creditors’ rights generally and general equitable principles (whether considered in a proceeding in equity or at law), in each case now or hereafter in effect.

ARTICLE 9

MISCELLANEOUS

Section 9.1 Authority; Effect.

Each Party hereto represents and warrants to and agrees with each other Party that the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized on behalf of such Party and do not violate any agreement or other instrument applicable to such Party or by which its assets are bound. This Agreement does not, and shall not be construed to, give rise to the creation of a partnership among any of the Parties hereto, or to constitute any of such Parties members of a joint venture or other association. The Corporation and its subsidiaries (jointly and severally), on the one hand, and the Investor, on the other hand, shall be liable for all obligations of each such Party pursuant to this Agreement.

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Section 9.2 Notices.

Any notices, requests, demands, designations and other communications required or permitted pursuant to this Agreement shall be effective if in writing and (i) delivered personally, (ii) sent by e-mail, or (iii) sent by overnight courier, in each case, addressed as follows:

(a)

If to the Corporation, to:

Western Copper and Gold Corporation

Suite 1200 – 0000 Xxxxxxx Xxxxxx

Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx

X0X 0X0

Attention: Xxxx Xxxx-Sells

E-mail:

with a copy (which shall not constitute notice) to:

Xxxxxxx Xxxxx & Xxxxxxxxx LLP

Suite 2200, HSBC Building

000 Xxxx Xxxxxxx Xxxxxx

Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx

X0X 0X0

Attention: Xxxx Xxxxx / Xxxxxxxx Xxxxx

E-mail:

(b)

If to the Investor, to:

Rio Tinto Canada Inc.

000-0000 Xxxxxx xxx Xxxxxxxxx-xx-Xxxxxxxx Xxxxxxxx,

Xxxxxx, Xxxxxx

X0X 0X0

Attention: The Directors

E-mail: XxxxxxxXxxxxxxxxXxxxxxx@xxxxxxxx.xxx

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with copies (which shall not constitute notice) to:

Rio Tinto Exploration Canada Inc.

000-000 Xxxx Xxxxxxxx Xxxxxx

Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx

X0X 0X0

Attention: Xxxxx Xxxxxx

E-mail:

and

Stikeman Elliott LLP

0000 Xxxxxxxx Xxxxx Xxxx

000 Xxx Xxxxxx

Xxxxxxx, Xxxxxxx, Xxxxxx

X0X 0X0

Attention: Xxx X. Xxxxxxxxx / Xxxxxx X. Xxxxxxx

E-mail:

Unless otherwise specified herein, such notices or other communications shall be deemed to have been delivered (i) on the date received, if personally delivered, (ii) on the date received if delivered by e-mail on a Business Day before 5:00 p.m. (Vancouver time), or if not delivered on a Business Day or after 5:00 p.m. (Vancouver time) on a Business Day, on the first Business Day thereafter and (iii) 2 Business Days after being sent by overnight courier. Each of the Parties hereto shall be entitled to specify a different address by giving notice as aforesaid to the other Party hereto.

Section 9.3 Determining Ownership Percentage.

For the purposes of this Agreement, in determining the Investor’s Ownership Percentage, any Common Shares issued as a result of a Dilutive Issuance shall be disregarded and the Investor shall be deemed to own the percentage of Common Shares it would have held at such time if such Dilutive Issuance had not occurred, unless and until the Corporation has delivered to the Investor a Top-up Notice in respect of such Dilutive Issuance and the Investor fails to provide an Exercise Notice within the time required, in which case, the Common Shares issued in connection with such Dilutive Issuance shall be counted.

Section 9.4 Termination and Effect of Termination.

(1)	This Agreement shall terminate and all rights and obligations hereunder shall cease to apply upon the earliest to occur of the following:

(a)

the Transfer of all of the Investor’s Common Shares in accordance with this Agreement; and

(b)

the later of: (a) the day upon which all of the Investor’s rights under Article 2 to Article 6 inclusive of this Agreement have terminated or expired; and (b) the day upon which the Investor’s Ownership Percentage is deemed to have fallen below 5.0% in accordance with Section 9.3.

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(2)	Notwithstanding Section 9.4(1), the provisions of Article 7 and Article 9 shall survive any termination. No termination under this Agreement shall relieve any Person of liability for breach or Registration expenses incurred prior to termination.

Section 9.5 Confidentiality.

(1)	Any information regarding a Party that:

(a)

has not become generally available to the public;

(b)

was not available to a Party or its representatives on a non-confidential basis before the date of this Agreement; or

(c)

does not become available to a Party or its representatives on a non-confidential basis from a Person who is not, to the knowledge of the Party or its representatives, otherwise bound by confidentiality obligations to the provider of such information or otherwise prohibited from transmitting the information to the Party or its representatives,

will be kept confidential by each Party and shall constitute confidential information (the “Confidential Information”).

(2)

No Confidential Information may be released to third parties without the consent of the provider thereof, except that the Parties agree that they will not unreasonably withhold such consent to the extent that such Confidential Information is compelled to be released by legal process or must be released to regulatory bodies and/or included in public documents.

(3)

Upon request by the provider of the Confidential Information, the other Party will return to the provider, or destroy (subject only to normal course data back-up or archival processes), all documents, including any copies thereof, comprised in the Confidential Information provided by the provider, and the recipient of the Confidential Information will confirm in writing that all Confidential Information has been returned or destroyed (subject only to normal course data back-up or archival processes), as applicable, provided that one copy of the Confidential Information may be retained within a receiving Party’s legal department for liability defense purposes only. Notwithstanding any such return or destruction of any Confidential Information, Confidential Information, including, without limitation, any Confidential Information retained by a receiving Party, will continue to be subject to this Agreement. In addition, Confidential Information that has been prepared by either Party from publicly available information or from information not obtained pursuant to this Agreement may be retained by the Party that has prepared such information.

(4)	The foregoing confidentiality restrictions shall not prohibit a Party from using general geological inferences, interpretations or understanding which it has drawn from or in the course of the Project in the pursuit of any other business opportunity.

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Section 9.6 Common Shares Subject to this Agreement.

The Investor agrees that it shall be bound by the terms of this Agreement with respect to all Common Shares held by it from time to time during the term of this Agreement.

Section 9.7 Permitted Transferees.

The rights of the Investor hereunder may only be assigned (but only with all related obligations as set forth below) in connection with a Transfer of Common Shares to an affiliate of the Investor. Without prejudice to any other or similar conditions imposed hereunder with respect to any such Transfer, no assignment permitted under the terms of this Section 9.7 will be effective unless the Person to which the assignment is being made, if not a Party to this Agreement at the time of the proposed assignment, has delivered to the Corporation a written acknowledgment and agreement in the form attached as Schedule “B” to this Agreement that such Person will be bound by and subject to the terms and conditions, and will be a Party to, this Agreement. The Investor may not assign or transfer this Agreement or any of the rights or obligations under it without the prior written consent of the Corporation, except as provided herein.

Section 9.8 Remedies.

Subject to Article 7, the Parties shall have all remedies available at law, in equity or otherwise in the event of any breach or violation of this Agreement or any default hereunder. Each Party hereto acknowledges that a breach or threatened breach by a Party of any provision of this Agreement may result in the other Party suffering irreparable harm which cannot be calculated or fully or adequately compensated by recovery of damages alone. Accordingly, each Party agrees that the other Party shall be entitled to interim and permanent injunctive relief, specific performance and other equitable remedies, in addition to any other relief to which it or any other party may become entitled, any requirement for the securing or posting of any bond in connection with the obtaining of any such injunctive or other equitable relief hereby being waived. No delay of or omission in the exercise of any right, power or remedy accruing to either Party as a result of any breach or default by the other Party under this Agreement shall impair any such right, power or remedy, nor shall it be construed as a waiver of or acquiescence in any such breach or default, or of any similar breach or default occurring later; nor shall any such delay, omission nor waiver of any single breach or default be deemed a waiver of any other breach or default occurring before or after that waiver.

Section 9.9 Amendments.

This Agreement may not be orally amended, modified, extended or terminated. This Agreement may be amended, modified, extended or terminated only by an agreement in writing signed by each of the Parties. Each such amendment, modification, extension or termination shall be binding upon each Party hereto.

Section 9.10 Waiver.

Except as expressly provided in this Agreement, no waiver of any provision or of any breach of any provision of this Agreement shall be effective or binding unless made in writing and signed by the Party purporting to give such waiver and, unless otherwise provided in such written waiver, shall be limited to the specific provision or breach waived. No waiver by either Party hereto of any provisions or of any breach of any term, covenant, representation or warranty contained in this Agreement, in one or more instances, shall be deemed to be or construed as a further or continuing waiver of that or any other provision (whether or not similar) or of any breach of that or any other term, covenant, representation or warranty contained in this Agreement.

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Section 9.11 No Third Party Rights.

The terms and provisions of this Agreement are intended solely for the benefit of the Parties and their respective successors and permitted assigns, and it is not the intention of the Parties to confer any third party beneficiary rights and this Agreement does not confer any such rights upon any third party (including any holders of securities of the Corporation) that is not a Party to this Agreement.

Section 9.12 Time of Essence.

Time is of the essence of this Agreement.

Section 9.13 Governing Law.

This Agreement shall be governed by and construed in accordance with the laws of the Province of British Columbia (without giving effect to any conflict of laws principles thereunder) and the federal laws of Canada applicable therein.

Section 9.14 Further Assurances.

Each Party shall use reasonable efforts to take all such steps, execute all such documents and do all such acts and things as may be reasonably within its power to implement to their full extent the provisions of this Agreement and to cause the Corporation or the Investor, as the case may be, to act in the manner contemplated by this Agreement.

Section 9.15 Independent Legal Advice.

The Parties acknowledge that they have entered into this Agreement willingly with full knowledge of the obligations imposed by the terms of this Agreement. Further, the Parties acknowledge that they have been afforded the opportunity to obtain independent legal advice and confirm by the execution of this Agreement that they have either done so or waived their right to do so, and agree that this Agreement constitutes a binding legal obligation and that they are estopped from raising any claim on the basis that they have not obtained such advice.

Section 9.16 Entire Agreement.

This Agreement constitutes the entire agreement between the Parties with respect to the matters contemplated by this Agreement and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the Parties related to such matters, including the indicative term sheet entered into by the Parties on April 7, 2021. There are no representations, warranties, covenants, conditions or other agreements, express or implied, collateral, statutory or otherwise, between the Parties in connection with the subject matter of this Agreement, except as specifically set forth in this Agreement. The Parties have not relied and are not relying on any other information, discussion or understanding in entering into this Agreement.

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Section 9.17 Successors and Assigns.

This Agreement becomes effective only when executed by each of the Parties. After that time, it is binding on and enures to the benefit of the Parties and their respective heirs, administrators, executors, legal representatives, successors and permitted assigns.

Section 9.18 Counterparts.

This Agreement may be executed in any number of counterparts, each of which is deemed to be an original, and such counterparts together constitute one and the same instrument. Transmission of an executed signature page by email or other electronic means is as effective as a manually executed counterpart of this Agreement.

Section 9.19 Severability.

If any provision of this Agreement is determined to be illegal, invalid or unenforceable by an arbitrator or any court of competent jurisdiction from which no appeal exists or is taken, that provision will be severed from this Agreement and the remaining provisions will remain in full force and effect. The Parties shall engage in good faith negotiations to replace any provision which is declared invalid or unenforceable with a valid and enforceable provision, the economic and substantive effect of which comes as close as possible to that of the invalid or unenforceable provision which it replaces.

[Remainder of page intentionally left blank]

IN WITNESS WHEREOF the Parties hereto have duly executed this Agreement as of the day and year first above written.


WESTERN COPPER AND GOLD CORPORATION

By:
		Name: Xxxx Xxxxxx
		Title: Executive Chairman

By:
		Name: Xxxx Xxxx-Sells
		Title: President & Chief Executive Officer

RIO TINTO CANADA INC.

By:
		Name:
		Title:

Signature Page - Investor Rights Agreement

SCHEDULE “A”

TECHNICAL COMMITTEE TERMS OF REFERENCE

See attached.

TERMS OF REFERENCE OF THE TECHNICAL COMMITTEE

Capitalized terms not otherwise defined in these Terms of Reference have the meaning set forth in the Investor Rights Agreement between Western Copper and Gold Corporation (the “Issuer”) and Rio Tinto Canada Inc. (“Rio Tinto”) dated ●, 2021 to which this document is attached as a schedule.

Formation and Purpose of the Technical Committee:

These Terms of Reference are established for, and govern the conduct of, the Technical Committee. The purpose of the Technical Committee is to review and recommend all material technical and operational decisions on the Issuer’s Casino Project located in Yukon Territory, Canada.

Composition of the Technical Committee:

The Technical Committee shall consist of three members (each, a “Member”). The Issuer is entitled to appoint two Members and Rio Tinto is entitled to appoint one Member.

Each Member shall have the right to appoint an alternate.

The Technical Committee shall be chaired by a Member who is a nominee of the Issuer (the “Committee Chair”). The Committee Chair shall have the responsibility of running meetings of the Members (“Meetings”).

All members shall be individuals and not corporate bodies and shall have appropriate scientific and/or technical experience and capability.

Meetings

The Technical Committee shall meet at least quarterly or more frequently if required and to the extent practicable four (4) weeks before meetings of the Board.

Governance of the Technical Committee:

Quorum for a Meeting shall be at least one Issuer appointee and one Rio Tinto appointee, both of whom shall be present throughout the meeting in person or in accordance with paragraph 9.

At least ten (10) Business Days’ notice shall be given before each Meeting. Any notice of a Meeting must specify in reasonable detail the purpose of the Meeting and the agenda of items to be discussed at each meeting shall be determined by the Committee Chair in consultation with the Members. Each Member may waive notice of a Meeting (with attendance by a Member at the Meeting to be deemed a waiver of notice).

Members shall be permitted to participate in all Meetings by means of telephone conference, video conference or other communications facility.

10.

The Members of the Technical Committee may, when it is relevant to the issues to be discussed, invite technical and/or operational staff of the Issuer and/or Rio Tinto (including Rio Tinto’s secondees to the Project) (as applicable) to attend meetings of the Technical Committee from time to time.

11.

The Technical Committee may modify these terms of reference to, amongst other things, modify operating procedures and schedules and manner of meetings, such modifications of these terms of reference to be subject to approval by the Board.

Responsibilities of the Technical Committee:

12.

The Technical Committee shall be responsible for:

(a)

Reviewing the progress and results of the Study and implementation of the Scope of Work (as defined in the Subscription Agreement);

(b)

Reviewing and monitoring the technical and operational decisions relating to the Casino Project;

(c)

Reviewing and monitoring the health, safety, environmental and community social performance (HSEC) matters related to the Project; and

(d)

Acting in an advisory capacity to assist the Board to deal with any technical and/or operating issues (including HSEC) which arise from time to time.

13.

Notwithstanding the foregoing, the Technical Committee’s role is advisory in nature only and final approval in respect of all matters related to technical decisions for the Casino Project rests with the Board.

- 2 -

SCHEDULE “B”

FORM OF ASSUMPTION AGREEMENT

TO:

The Parties to the Investor Rights Agreement (the “Investor Rights Agreement”) made as of the [•] day of [•], 2021 by and between Western Copper and Gold Corporation and Rio Tinto Canada Inc., and any subsequent or replacement Parties thereto.

WHEREAS the undersigned (the “New Shareholder”) proposed to acquire common shares of Western Copper and Gold Corporation (the “Subject Shares”) from (the “Existing Shareholder”) and, as a condition precedent to such acquisition, is required to execute and deliver this Assumption Agreement pursuant to Section 9.7 of the Investor Rights Agreement.

NOW THEREFORE this agreement witnesses that, in consideration of the provisions set out below, the acquisition of the Subject Shares, and other good and valuable consideration (the receipt and sufficiency of which is hereby acknowledged), the New Shareholder xxxxxx agrees as follows:

1.	Any expression capitalized herein for other than grammatical purposes and not defined herein shall have the meaning set out in the Investor Rights Agreement.

The New Shareholder hereby consents to the terms and conditions of the Investor Rights Agreement and agrees to assume all of the obligations of the Existing Shareholder thereunder and to be subject to all of the restrictions to which the Existing Shareholder is subject thereunder, in each case as though the New Shareholder was the Existing Shareholder and had been an original signatory to the Investor Rights Agreement.

3.	The New Shareholder confirms that it has executed this agreement voluntarily after having had the opportunity to seek independent legal advice and that it fully appreciates the nature, extent and consequences of this agreement and the Investor Rights Agreement.

4.	The New Shareholder hereby acknowledges receipt of a copy of the Investor Rights Agreement.

This agreement shall enure to the benefit of the Parties and their respective heirs, executors, administrators, legal personal representatives, successors (including, without limitation, any successor by reason of amalgamation of any Party) and permitted assigns. Neither this agreement nor any rights or obligations hereunder shall be assignable by any Party except pursuant to the provisions of the Investor Rights Agreement.

DATED the day of , .




(Witness)				(New Shareholder)

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WESTERN COPPER AND GOLD CORPORATION SUBSCRIPTION AGREEMENT FOR COMMON SHARES

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