STRICTLY PRIVATE AND CONFIDENTIAL March 31, 2008 Peak Gold Ltd. Suite 3110 – 666 Burrard St. Vancouver, British Columbia V6C 2X8 Attention: President and Chief Executive Officer Metallica Resources Inc. c/o Metallica Management Inc. 12200 E. Briarwood...Business Combination Agreement • April 16th, 2008 • Metallica Resources Inc • Metal mining
This letter is to set out our agreement with respect to the proposed business combination between New Gold Inc. (“New Gold”), Peak Gold Ltd. (“Peak Gold”) and Metallica Resources Inc. (“Metallica”) pursuant to a transaction (the “Transaction”) whereby: (a) the holders of common shares of Peak Gold will receive common shares of New Gold on the basis of 0.1 of a common share of New Gold (the “Peak Gold Exchange Ratio”), or the Peak Gold Exchange Ratio and nominal cash consideration, for each one common share of Peak Gold; and (b) holders of common shares of Metallica will receive common shares of New Gold on the basis of 0.9 of a common share of New Gold (the “Metallica Exchange Ratio”), or the Metallica Exchange Ratio and nominal cash consideration, for each one common share of Metallica. We anticipate that the Transaction will be structured: (i) as an arrangement under the Business Corporations Act (British Columbia) (the “BCBCA”) between a newly formed, wholly-owned subsidiary of New
