--------------------------------------------------------------------------------

EXECUTION VERSION

SUBORDINATION AGREEMENT

                          THIS SUBORDINATION AGREEMENT (this “Agreement”), dated
as of July 2, 2014, is delivered by and among GOLDEN QUEEN MINING COMPANY, INC.,
a California corporation (the “Borrower”), GOLDEN QUEEN MINING CO. LTD., a
British Columbia company (“Guarantor”), each entity listed on the signature page
hereof (each individually a “Subordinated Creditor”, and collectively, the
“Subordinated Creditors”), in favor of Leucadia National Corporation, a New York
corporation and Auvergne, LLC, a Delaware limited liability company (each
individually a “Senior Creditor”, and collectively, the “Senior Creditors”), in
light of the following:

                          WHEREAS, the Borrower, as a payor, the Guarantor, as a
guarantor and the Senior Creditors, as payees are parties to that certain Senior
Secured Promissory Note, dated the date hereof (the ”Note”);

                           WHEREAS, Subordinated Creditors have made certain
loans or advances to the Borrower or the Borrower has issued a guarantee in
favor of Subordinated Creditors, as applicable, in each case, as set forth on
Schedule I attached hereto (the “Existing Debt”); and

                          WHEREAS, in order to comply with the condition
precedent set forth in the Note, each Subordinated Creditor has agreed to the
subordination of all of its Subordinated Debt, upon the terms and subject to the
conditions set forth in this Agreement.

                          NOW, THEREFORE, in consideration of the mutual
promises, covenants, conditions, representations, and warranties set forth
herein and for other good and valuable consideration, the parties hereto agree
as follows:

                          SECTION 1 Definitions; Interpretation.

                          (a)        Terms Defined in Credit Agreement. All
capitalized terms used in this Agreement and not otherwise defined herein shall
have the meanings assigned to them in the Note.

                          (b)        Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings:

                          “Insolvency Event” has the meaning set forth in
Section 3.

                          “Senior Debt” means all Obligations of the Borrower
under the Note and all other indebtedness and obligations in connection with any
renewal, refunding, restructuring or refinancing thereof, including interest
thereon accruing after the commencement of any proceedings referred to in
Section 3 below, whether or not such interest is an allowed claim in such
proceeding.

                          “Subordinated Debt” means, collectively, the Existing
Debt and all other indebtedness and obligations in connection with any renewal,
refunding, restructuring or refinancing thereof, including interest thereon
accruing after the commencement of any proceedings referred to in Section 3
below, whether or not such interest is an allowed claim in such proceeding.

                          “Subordinated Debt Payment” means any payment or
distribution by or on behalf of the Borrower, directly or indirectly, of any
kind or character, whether in cash, property, or securities, including on
account of the payment of interest, repayment, purchase, redemption, or other
acquisition of Subordinated Debt, as a result of any collection, sale, or other
disposition of collateral securing the same, or by setoff, exchange, or in any
other manner, for or on account of the Subordinated Debt.

--------------------------------------------------------------------------------

                          SECTION 2 Subordination To Payment Of Senior Debt.
Each Subordinated Creditor hereby agrees that all Subordinated Debt now or
hereafter owned or held by or owing to it, and any interest therein, is and
shall be subject, subordinate, and junior, in right of payment and exercise of
remedies, to the extent and in the manner set forth herein, to the prior payment
in full in cash of all Senior Debt.

                          SECTION 3 Subordination Upon Any Distribution Of
Assets Of Borrower. Each Subordinated Creditor agrees that in the event of any
payment or distribution of assets of the Borrower of any kind or character,
whether in cash, property, or securities, upon the dissolution, winding up, or
total or partial liquidation or reorganization, readjustment, arrangement, or
similar proceeding relating to the Borrower or its property, whether voluntary
or involuntary, or in bankruptcy, insolvency, receivership, arrangement, or
similar proceedings or upon an assignment for the benefit of creditors, or upon
any other marshaling or composition of the assets and liabilities of the
Borrower, or otherwise (such events, collectively, the “Insolvency Events”): (i)
all amounts owing on account of the Senior Debt shall first be paid in full in
cash before any Subordinated Debt Payment is made or before any Subordinated
Creditor is entitled to receive (directly or indirectly), or make any demands
for, any payment on account of any Subordinated Debt; and (ii) any Subordinated
Debt Payment to which such Subordinated Creditor would be entitled except for
the provisions hereof, shall be paid or delivered by the trustee in bankruptcy,
receiver, assignee for the benefit of creditors, or other liquidating lender
making such payment or distribution directly to the Senior Creditors (or their
representatives) for application to the payment of the Senior Debt ratably
according to the respective aggregate amounts remaining unpaid under the Note,
after giving effect to any concurrent payment or distribution or provision
therefor to the Senior Creditors in respect of such Senior Debt.

                          SECTION 4 Unauthorized Payments. If any payment or
distribution of any kind or character, whether in cash, securities or other
property in respect of any Subordinated Debt shall (despite these subordination
provisions) be received by any Subordinated Creditor in violation of this
Agreement before all Senior Debt shall have been paid in full in cash, such
payment or distribution shall be held in trust for the benefit of, and shall be
paid over or delivered to, the Senior Creditors (or their representatives),
ratably according to the respective aggregate amounts remaining unpaid under the
Note, to the extent necessary to pay all Senior Debt in full in cash.

                          SECTION 5 Subrogation. Until the payment and
performance in full of all Senior Debt, no Subordinated Creditor shall have or
directly or indirectly exercise, any rights that it may acquire by way of
subrogation under this Agreement, by any payment or distribution to the Senior
Creditors hereunder or otherwise. Upon the payment and performance in full in
cash of all Senior Debt, each Subordinated Creditor shall be subrogated to the
rights of the Senior Creditor to receive payments or distributions applicable to
the Senior Debt until the Subordinated Debt shall be paid in full.

                          SECTION 6 Continuing Agreement; Reinstatement.

                          (a)        Continuing Agreement. This Agreement is a
continuing agreement of subordination and shall continue in effect and be
binding upon each Subordinated Creditor until the payment and performance in
full in cash of all Senior Debt. The subordinations, agreements, and priorities
set forth herein shall remain in full force and effect regardless of whether any
party hereto in the future seeks to rescind, amend, terminate, or reform, by
litigation or otherwise, its respective agreements with the other party hereto.

                          (b)        Reinstatement. This Agreement shall
continue to be effective or shall be reinstated, as the case may be, if, for any
reason, any payment of the Senior Debt by or on behalf of the Borrower shall be
rescinded or must otherwise be restored by the Senior Creditors, whether as a
result of an Insolvency Event or otherwise.

2

--------------------------------------------------------------------------------

                          SECTION 7 Obligations Of The Borrower Not Affected.
The provisions of this Agreement are intended solely for the purpose of defining
the relative rights of the Subordinated Creditors, on the one hand, and of the
Senior Creditors, on the other hand. Nothing contained in this Agreement shall
(i) impair, as among the Subordinated Creditors and the Borrower, the Borrower’s
obligation to pay the Subordinated Debt owing by it as and when the same shall
become due and payable, or (ii) otherwise affect the relative rights of each
Subordinated Creditor against the Borrower, on the one hand, and of the
creditors (other than the Senior Creditors) of the Borrower against the
Borrower, on the other hand.

                          SECTION 8 Notices. Any notice, request or other
communication required or permitted to be given hereunder shall be given in
writing by delivering it against receipt for it, by depositing it with an
overnight delivery service or by depositing it in a receptacle maintained by the
United States Postal Service, postage prepaid, registered or certified mail,
return receipt requested, addressed to the respective parties as reflected in
Schedule II attached hereto. Any party’s address for notices may be changed at
any time and from time to time, but only after five (5) calendar days advance
written notice to the other parties hereto and shall be the most recent such
address furnished in writing by such party to the other parties hereto. Actual
notice, however and from whomever given or received, shall always be effective
when received.

                          SECTION 9 VENUE; CHOICE OF LAW. THIS AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF. ALL JUDICIAL PROCEEDINGS
BROUGHT AGAINST THE SUBORDINATED CREDITORS OR THE BORROWER ARISING OUT OF OR
RELATING HERETO SHALL BE BROUGHT IN EITHER (i) THE UNITED STATED BANKRUPTCY
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, IF SUCH COURT HAS SUBJECT MATTER
JURISDICTION, OR OTHERWISE (ii) THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK, BOROUGH OF MANHATTAN OR, IF THAT COURT DOES NOT
HAVE SUBJECT MATTER JURISDICTION, IN ANY STATE COURT LOCATED IN THE CITY OF NEW
YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH SUBORDINATED CREDITOR AND
THE BORROWER, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (A)
ACCEPTS GENERALLY AND UNCONDITIONALLY THE JURISDICTION AND VENUE OF SUCH COURTS;
(B) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (C) AGREES THAT SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE ADDRESS PROVIDED NEXT TO ITS
NAME ON SCHEDULE II ATTACHED HERETO; (D) AGREES THAT SERVICE AS PROVIDED IN
CLAUSE (C) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH
SUBORDINATED CREDITOR OR THE BORROWER IN ANY SUCH PROCEEDING IN ANY SUCH COURT,
AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND
(E) AGREES THAT THE SENIOR CREDITORS RETAIN THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY SUBORDINATED
CREDITOR OR THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION TO THE EXTENT
THAT THE COURTS SPECIFIED ABOVE DO NOT HAVE SUBJECT MATTER JURISDICTION.

3

--------------------------------------------------------------------------------

                          SECTION 10 WAIVER OF JURY TRIAL. EACH OF THE PARTIES
HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF THE OTHER
LOAN DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF
THIS AGREEMENT. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF
ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE
SUBJECT MATTER OF THIS AGREEMENT, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH
OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO
ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS
AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED
FUTURE DEALINGS. EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS
REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY
REFERRING TO THIS SECTION 10 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS HERETO OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY OTHER
DOCUMENTS OR AGREEMENTS RELATING TO THE ADVANCE MADE HEREUNDER. IN THE EVENT OF
LITIGATION, THIS NOTE MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

                          SECTION 11 Entire Agreement; Amendments And Waivers.

                          (a)        Entire Agreement. This Agreement
constitutes the entire agreement of each party hereto with respect to the
matters set forth herein and supersedes any prior agreements, commitments,
drafts, communications, discussions, and understandings, oral or written, with
respect thereto. The terms and conditions of this Agreement shall not in any way
limit or affect the obligations or liabilities of the Borrower under the Note.

                          (b)        Amendments and Waivers. No amendment to any
provision of this Agreement shall in any event be effective unless the same
shall be in writing and signed by each party hereto; and no waiver of any
provision of this Agreement, or consent to any departure by any Subordinated
Creditor or the Borrower therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Senior Creditors. Any such amendment,
waiver, or consent shall be effective only in the specific instance and for the
specific purpose for which given.

                          SECTION 12 Counterparts; Telefacsimile Execution. This
Agreement may be executed in any number of counterparts and by different parties
on separate counterparts, each of which, when executed and delivered, shall be
deemed to be an original, and all of which, when taken together, shall
constitute but one and the same Agreement. Delivery of an executed counterpart
of this Agreement by telefacsimile or other electronic method of transmission
shall be equally as effective as delivery of an original executed counterpart of
this Agreement. Any party delivering an executed counterpart of this Agreement
by telefacsimile or other electronic method of transmission also shall deliver
an original executed counterpart of this Agreement but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Agreement.

4

--------------------------------------------------------------------------------

                          SECTION 13 Termination Of Agreement. Upon payment and
performance in full of the Senior Debt, this Agreement shall terminate and the
Senior Creditors shall promptly execute and deliver, at the expense of the
Borrower, to each Subordinated Creditor such documents and instruments as shall
be reasonably necessary to evidence such termination.

[Signature page follows.]

5

--------------------------------------------------------------------------------

                          IN WITNESS WHEREOF, the undersigned have executed and
delivered this Agreement as of the date first written above.

CLAY FAMILY 2009 IRREVOCABLE TRUST, DATED APRIL 14, 2009,
as Subordinated Creditor

  By:       Name: Thomas M. Clay     Title:   Trustee               By:      
Name: Harris Clay     Title:    Trustee

 

HARRIS CLAY,
as Subordinated Creditor

  By:       Name: Harris Clay

 

GOLDEN QUEEN MINING CO. LTD.,
as Subordinated Creditor

  By:       Name: H. Lutz Klingmann     Title:   President and Chief Executive
Officer

 

 

[GQ CALIFORNIA SUBORDINATION AGREEMENT]

--------------------------------------------------------------------------------

GOLDEN QUEEN MINING COMPANY, INC.,
as Borrower

  By:       Name: H. Lutz Klingmann     Title:   President

 

GOLDEN QUEEN MINING CO. LTD.,
as Guarantor

  By:       Name: H. Lutz Klingmann     Title:   President and Chief Executive
Officer

 

 

 

 

[GQ CALIFORNIA SUBORDINATION AGREEMENT]

--------------------------------------------------------------------------------

LEUCADIA NATIONAL CORPORATION,
as Senior Creditor

  By:       Name: Joseph A. Orlando     Title:   Chief Financial Officer

 

AUVERGNE, LLC,
as Senior Creditor

  By:       Name: Thomas M. Clay     Title:   Manager

 

 

 

[GQ CALIFORNIA SUBORDINATION AGREEMENT]

--------------------------------------------------------------------------------