July 19, 2009 Board of Directors of Klondex Mines Ltd. Suite 750 – 580 Hornby Street Vancouver, British Columbia V6C 3B6Letter Agreement • July 22nd, 2009 • Paramount Gold & Silver Corp. • Metal mining • British Columbia
This letter agreement (the “Letter Agreement”) sets out the principal terms upon which Paramount Gold and Silver Corp. (“Paramount”) will (i) purchase all of the issued and outstanding common shares (the “Klondex Shares”) of Klondex Mines Ltd. (“Klondex”) from the holders thereof in consideration for common shares of Paramount (“Paramount Shares”), and (ii) exchange all outstanding options and warrants of Klondex for options and warrants of Paramount, as a result of which: (i) Klondex will become a wholly-owned subsidiary of Paramount; (ii) the shareholders of Klondex (the “Klondex Shareholders”) will become shareholders of Paramount, and (iii) the holders of options and warrants of Klondex will become holders of options and warrants of Paramount. The foregoing are collectively referred to as the “Merger” and together with the other transactions contemplated hereby, the “Transactions”).
