__________

 

ARRANGEMENT AGREEMENT

 

- Between -

 

URANIUM ENERGY CORP.

 

- And -

 

CUE RESOURCES LTD.

 

 

Dated as of January 20, 2012

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TABLE OF CONTENTS

ARTICLE 1 INTERPRETATION

2

     DEFINITIONS

2

     INTERPRETATION

13

     ENTIRE AGREEMENT

13

     CURRENCY

14

     TIME

14

     SCHEDULES

14

     KNOWLEDGE

14

     ACCOUNTING PRINCIPLES

14

     INVALIDITY OF PROVISIONS

14

ARTICLE 2 THE ARRANGEMENT

15

     ARRANGEMENT

15

     IMPLEMENTATION STEPS BY TARGET

15

     TARGET INFORMATION CIRCULAR AND RELATED MATERIALS

16

     INTERIM ORDER

16

     FINAL ORDER

17

     PAYMENT OF CONSIDERATION

17

     ARRANGEMENT FILINGS

17

     EFFECTIVE DATE

17

     SECURITIES AND CORPORATE COMPLIANCE

17

     PREPARATION OF FILINGS

17

     DISSENTING SHARES

18

     PURCHASER APPROVALS

19

     TARGET APPROVALS

19

     NO FRACTIONAL SHARES

19

ARTICLE 3 REPRESENTATIONS AND WARRANTIES

19

     REPRESENTATIONS AND WARRANTIES OF TARGET

19

     REPRESENTATIONS AND WARRANTIES OF PURCHASER

20

ARTICLE 4 ADDITIONAL AGREEMENTS

20

     NON-WAIVER

20

     NATURE AND SURVIVAL

20

     INSURANCE AND INDEMNIFICATION

20

ARTICLE 5 COVENANTS

21

     CONSULTATION WITH RESPECT TO NEWS RELEASES

21

     TARGET'S COVENANTS

21

     PRE-ACQUISITION REORGANIZATION

23

     COVENANTS OF PURCHASER

25

     MUTUAL COVENANTS

26

     TARGET'S COVENANTS REGARDING NON-SOLICITATION

27

     RIGHT TO ACCEPT SUPERIOR PROPOSAL

29

ARTICLE 6 REMEDIES

31

     AVAILABILITY OF EQUITABLE REMEDIES

31

ARTICLE 7 CONDITIONS

31

     MUTUAL CONDITIONS

31

     CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PURCHASER

32

     CONDITIONS PRECEDENT TO THE OBLIGATIONS OF TARGET

34

     NOTICE AND CURE PROVISIONS

35

     SATISFACTION OF CONDITIONS

36

ARTICLE 8 AMENDMENT

36

     AMENDMENT

36

     MUTUAL UNDERSTANDING REGARDING AMENDMENTS

36

     COOPERATION ON STRUCTURE

37

ARTICLE 9 TERMINATION AND COMPENSATION

37

     TERMINATION

37

     EFFECT OF TERMINATION

38

     EXPENSES

38

     TERMINATION FEES

38

ARTICLE 10 GENERAL

39

     NOTICES

39

     TIME OF ESSENCE

40

     NO THIRD PARTY BENEFICIARIES

41

     FURTHER ASSURANCES

41

     GOVERNING LAW

41

     EXECUTION IN COUNTERPARTS

41

     ENUREMENT AND ASSIGNMENT

41

Schedule 1     -     Plan of Arrangement.

Schedule 2     -     Representations and Warranties of Target.

Schedule 3     -     Representations and Warranties of Purchaser.

Schedule 4     -     Locked-up Shareholders.

Schedule 5     -     Arrangement Resolution.

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ARRANGEMENT AGREEMENT

THIS ARRANGEMENT AGREEMENT

is made as of the 20th day of January, 2012.

BETWEEN:

URANIUM ENERGY CORP.

, a company incorporated under the laws of the State of Nevada, U.S.A., and
having an address for notice and delivery located at Suite 320, 1111 West
Hastings Street, Vancouver, British Columbia, Canada, V6E 2J3

("Purchaser");

AND:

CUE RESOURCES LTD.

, a company incorporated under the laws of the Province of British Columbia,
Canada, and having an address for notice and delivery located at Suite 1430, 800
West Pender Street, Vancouver, British Columbia, Canada, V6C 2V6

("Target");

(and Purchaser and Target being hereinafter singularly also referred to as a
"Party" and collectively referred to as the "Parties" as the context so
requires).

WHEREAS

:

(A)     Purchaser and Target are proposing to carry out a transaction pursuant
to which Purchaser will acquire all of the issued and outstanding shares of
Target; and

(B)     Purchaser and Target intend that the acquisition of Target by Purchaser
be carried out under the arrangement provisions of Part 9, Division 5 of the
Business Corporations Act (British Columbia);

THIS AGREEMENT WITNESSES

that in consideration of the covenants and agreements herein contained and other
good and valuable consideration (the receipt and sufficiency of which are hereby
mutually acknowledged), the Parties hereto do hereby covenant and agree as
follows:

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ARTICLE 1
INTERPRETATION

Definitions

1.1     Wherever used in this Agreement, unless there is something inconsistent
in the subject matter or context, the following words and terms will have the
meanings set out below and in addition certain other words and terms are defined
in the Plan of Arrangement:

"Acquisition Proposal" means any proposal or offer made by a third party
(including a stated intention to make a proposal or offer) regarding a merger,
amalgamation, statutory arrangement, share exchange, business combination,
recapitalization, take-over bid, tender offer, sale or other disposition of 10%
or more of the assets of Target (on a consolidated basis) in a single
transaction or a series of related transactions (or any lease, long-term supply
agreement or other arrangement having the same economic effect as a sale or
other disposition of 10% or more of the assets of Target), reorganization,
liquidation, winding-up, sale, issue or redemption of 10% or more of the total
number of common shares or rights or interests therein or thereto or similar
transactions involving Target (other than the Transaction);

"Affiliate" has the meaning ascribed to it in the Securities Act (British
Columbia), as amended;

"Arrangement" means the arrangement under Part 9, Division 5 of the BCBCA on the
terms set forth in the Plan of Arrangement which is attached hereto as Schedule
1;

"Arrangement Agreement" or "Agreement" means this arrangement agreement and any
amendment or variation hereto made in accordance with Article 8, including all
Schedules hereto and any instrument or agreement supplementary or ancillary
hereto;

"Arrangement Filings" means the filings, if any, that are required under the
BCBCA to be made with the Registrar in order for the Arrangement to be
effective;

"Arrangement Resolution" means the special resolution approving this Agreement
and the Plan of Arrangement to be considered at the Target Meeting, to be
substantially in the form and content of Schedule 5 hereto;

"Authorization"

means an authorization, order, permit, approval, grant, licence, registration,
consent, right, notification, condition, franchise, privilege, certificate,
judgment, writ, injunction, award, determination, direction, decision, decree,
bylaw, rule or regulation, whether or not the same have the force of Laws, and
includes any Environmental Approval;

"BCBCA" means the Business Corporations Act (British Columbia), as now enacted
and as amended, and the regulations thereto;

"Business Day" means a day that is not a Saturday, Sunday or civic or statutory
holiday, in British Columbia or Ontario;

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"Canadian GAAP" means generally accepted accounting principles in effect from
time to time in Canada, being those accounting principles set forth by the
Institute of Chartered Accountants in Canada;

"Canadian Securities Laws" means the Securities Act and the equivalent
legislation in the other Provinces and in the Territories of Canada, as amended
from time to time, the rules, regulations and forms made or promulgated under
any of such statutes, and the published policies, bulletins and notices of the
regulatory authorities administering such statutes;

"Change in Recommendation" will have the meaning ascribed to it in Section
5.7(b)(iv);

"Circular" means the notice of the Target Meeting and accompanying management
information circular, including all schedules thereto and documents incorporated
by reference therein, to be sent to holders of Target Shares in connection with
the Target Meeting and includes any amendments thereto;

"Claims"

means claims of any nature or kind whatsoever against the Target Shares, Target
Options or Target Warrants, as the case may be, including without limitation
encumbrances, charges, liens, security interests, trust claims or any other
claims in equity, at law or otherwise;

"Competition Act" means the Competition Act (Canada), as amended from time to
time;

"Concessions" means any mining concession, claim, lease, licence, permit or
other right to explore for, exploit, develop, mine or produce minerals or any
interest therein which Target owns or has a right or option to acquire or use,
all as listed in Schedule (U) to the Target Disclosure Letter;

"Confidentiality Agreement"

means the agreement entered into by Purchaser and Target dated December 1, 2011;

"Consideration" means the number of Purchaser Shares issuable by Purchaser in
respect of each Target Share pursuant to the Plan of Arrangement;

"Contracts" means all contracts, licences, leases, agreements, commitments,
entitlements, engagements, warranties or guarantees to which a Person or any
Subsidiary of the Person is a party or pursuant to which the Person or any
Subsidiary of the Person is obligated to provide a benefit to, or is entitled to
receive a benefit from, any other Person;

"Court" means the Supreme Court of British Columbia;

"Depositary" means Transfer Online Inc.;

"Dissenting Shareholder" means a holder of Dissenting Shares;

"Dissenting Shares" will have the meaning ascribed to it in Section 2.11;

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"Effective Date" means the date upon which the Arrangement becomes effective as
provided in the Plan of Arrangement;

"Effective Time" has the meaning ascribed thereto in the Plan of Arrangement;

"Encumbrance" means any encumbrance including any mortgage, pledge, assignment,
charge, lien, security interest, adverse interest in property, other third party
interest or encumbrance of any kind whether contingent or absolute, and any
agreement, option, right or privilege (whether by law, contract or otherwise)
capable of becoming any of the foregoing;

"Environmental Approvals" means all permits, certificates, licences,
authorizations, consents, instructions, registrations, directions or approvals
issued or required by Governmental Entities pursuant to Environmental Laws with
respect to the operation of a Person or its Subsidiaries or its businesses,
including the control or ownership of leased property or Real Property;

"Environmental Laws" means all applicable Laws, including applicable civil or
common law, relating to the protection or enhancement of the Environment and
employee and public health and safety;

"Exchange Ratio" means 0.0195 of a Purchaser Share for each Target Share;

"Final Order" means the order of the Court approving the Arrangement, as such
order may be amended at any time before the Effective Date or, if appealed, then
unless such appeal is withdrawn or denied, as affirmed or as amended on appeal;

"Financial Advisor" means Ross Glanville & Associates Ltd. and Bruce McKnight
Minerals Advisor Services, financial advisor to the Target Board;

"Governmental Entity" means any domestic or foreign legislative, regulatory,
executive, judicial or administrative or quasi-governmental body or Person,
including the Stock Exchanges and the Securities Regulators, having or
purporting to have jurisdiction in the relevant circumstances;

"Hazardous Substance" means any chemical, material or substance, pollutant,
contaminant, waste of any nature, hazardous substance, hazardous material, toxic
substance, dangerous substance or dangerous good as defined, judicially
interpreted or identified in any Environmental Law and includes any constituents
or breakdown product related to such material, substance or good;

"IFRS"

means International Financial Reporting Standards;

"Interim Order" means the interim order of the Court providing for, among other
things, the calling and holding of the Target Meeting, as the same may be
amended;

"Investment Canada Act" means the Investment Canada Act (Canada), as amended
from time to time;

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"Lands" means all interests and rights in real and immoveable property
interests, including property rights, possession rights, licenses, leases,
rights of way, rights to use, surface rights, easements and, any kind of permits
or authorizations permitting the use of land or other Real Property interests
(but excluding the Concessions) which Target owns or has an right in or interest
in or has an option or other right to acquire or use, all as indicated in
Schedule (V) to the Target Disclosure Letter;

"Laws" means all laws, statutes, codes, ordinances, decrees, rules, regulations,
by-laws, statutory rules, published policies and guidelines, judicial or
arbitral or administrative or ministerial or departmental or regulatory
judgments, orders, decisions, rulings or awards, including general principles of
common and civil law, and terms and conditions of any grant of approval,
permission, authority or license of any Governmental Entity, statutory body or
self-regulatory authority, and the term "applicable" with respect to such Laws
and in the context that refers to one or more Persons, means that such Laws
apply to such Person or Persons or its or their business, undertaking, property
or securities and emanate from a Person having jurisdiction over the Person or
Persons or its or their business, undertaking, property or securities;

"Letter of Intent" means the letter agreement between Purchaser and Target dated
December 21, 2011;

"Liens" means any hypothecs, mortgages, pledges, assignments, liens, charges,
security interests, encumbrances and adverse rights or claims, other third
person interest or encumbrance of any kind, whether contingent or absolute, and
any agreement, option, right or privilege (whether by Law, contract or
otherwise) capable of becoming any of the foregoing;

"Loan Agreement" means that certain "Secured Loan Agreement" and its related
General Security Agreement, dated for reference January 20, 2012, as entered
into between Purchaser and Target pursuant to which Purchaser will loan to the
Target, on a secured basis, the Loan Amount advanced or to be advanced in the
following manner: (i) an initial USD $50,000 of the Loan Amount advanced to
Target on or about the execution of the Loan Agreement; and (ii) the final USD
$285,000 of the Loan Amount to be advanced upon the execution of the Voting
Agreements;

"Loan Amount" means the USD $335,000 to be provided by Purchaser to Target for
the purposes outlined in and pursuant to the terms of the Loan Agreement;

"Locked-up Shareholders" means those Target Shareholders, being all the
directors and officers of Target and the four largest shareholders of the Target
(as well as certain holding companies thereof), all as set forth in Schedule 4
hereto, who have entered into Voting Agreements with Purchaser pursuant to which
they have agreed, subject to the terms of such Voting Agreements, to vote their
Target Shares (including any Target Shares issuable upon the exercise of Target
Options and Target Warrants) in favour of the Arrangement Resolution;

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"Material Adverse Effect" means, in respect of either Party, an effect that is
material and adverse to the business, properties, assets, liabilities,
obligations (including any contingent liabilities that may arise through
outstanding, pending or threatened litigation or otherwise), capitalization,
condition (financial or otherwise), operations or results of operations of that
Party and its Subsidiaries and material joint ventures taken as a whole, other
than any change, effect, event or occurrence:

(a)     relating to the global economy, political conditions or securities
markets in general;

(b)     affecting the worldwide Uranium, nuclear energy and/or mining industries
in general;

(c)     relating to a change in the market trading price of publicly traded
securities of that Party, either:

(i)     related to this Agreement and the Transaction or the announcement
thereof; or

(ii)     related to such a change in the market trading price primarily
resulting from a change, effect, event or occurrence excluded from this
definition of Material Adverse Effect under clauses (a), (b), (d), (e) or (f)
hereof;

(d)     the exchange ratio between the United States dollar and the Canadian
dollar;

(e)     relating to any generally applicable change in applicable laws or
regulations (other than orders, judgments or decrees against that Party any of
its Subsidiaries and material joint ventures) or in applicable accounting
principles; or

(f)     attributable to the announcement or pendency of this Agreement or the
Transaction, or otherwise contemplated by or resulting from the terms of this
Agreement,

provided, however, that such effect referred to in clause (a), (b) or (e) above
does not primarily relate only to (or have the effect of primarily relating only
to) that Party and its Subsidiaries and material joint ventures, taken as a
whole, or disproportionately adversely affect that Party and its Subsidiaries
and material joint ventures taken as a whole, compared to other companies of
similar size operating in the industry in which that Party and its Subsidiaries
and material joint ventures operate;

"Material Contract" in respect of Target means:

(a)     any Contract involving aggregate payments to or by Target or any of the
Target Subsidiaries in excess of $25,000;

-6-

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(b)     any Contract with annual payments to or by Target or any of the Target
Subsidiaries in excess of $25,000, with a term or commitment to or by Target or
any of the Target Subsidiaries that may reasonably extend beyond one year and
which cannot be terminated without penalty on less than 30 days notice or which
is outside the ordinary course of business; and

(c)     any other Contract which is material to the Target, excluding contracts
entered into for the purposes of the Transaction contemplated herein; and

in respect of the Purchaser, means a "material contract" within the meaning of
such term under NI 51-102.

"Material Fact" has the meaning ascribed thereto in the Securities Act;

"Misrepresentation" has the meaning set out in the Securities Act;

"MI 61-101" means Multilateral Instrument 61-101 - Protection of Minority
Security Holders in Special Transactions;

"NI 43-101" means National Instrument 43-101 - Standards of Disclosure for
Mineral Projects;

"NI 51-102" means National Instrument 51-102 - Continuous Disclosure
Obligations;

"NI 54-101" means National Instrument 54-101 - Communication with Beneficial
Owners of Securities of a Reporting Issuer;

"NYSE Amex" means the NYSE Amex Equities Exchange;

"ordinary course of business", "ordinary course of business consistent with past
practice", or any similar reference, means, with respect to an action taken by a
person, that such action is consistent with the past practices of such person
and is taken in the ordinary course of the normal day-to-day business and
operations of such person;

"Parties" means Purchaser and Target and "Party" means any one of them;

"Person" means any individual, sole proprietorship, partnership, unlimited
liability company, unincorporated association, unincorporated syndicate,
unincorporated organization, trust, body corporate, Governmental Entity, and a
natural person in such person's capacity as trustee, executor, administrator or
other legal representative and, when the context requires it, means either
Purchaser or Target;

"Plan of Arrangement" means the plan of arrangement as set forth in Schedule 1
to this Agreement as amended or supplemented from time to time;

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"Purchaser" means Uranium Energy Corp., a company existing under the laws of the
of the State of Nevada, U.S.A., together with, unless the context implies
otherwise, all of the Purchaser Subsidiaries and Purchaser's Affiliates;

"Purchaser Balance Sheet" means the balance sheet of Purchaser as at July 31,
2011 and 2010, forming part of the Purchaser Financial Statements;

"Purchaser Benefit Plans" means the long term incentive plan, deferred share
unit plan and share option plans of Purchaser;

"Purchaser Board" means the board of directors of Purchaser;

"Purchaser Disclosure Documents" means, collectively, all documents published or
filed by Purchaser with the securities regulatory authorities in Canada since
January 1, 2009;

"Purchaser Financial Statements" means the audited financial statements of
Purchaser, which comprise the Purchaser Balance Sheet and the statements of
operations, comprehensive loss and deficit and cash flows for the years then
ended;

"Purchaser Material Properties"

means the Palangana Mine, in Duval County, Texas and the Goliad Project in
Goliad County, Texas as such properties are described in the Purchaser Public
Documents;

"Purchaser Options" means stock options to purchase Purchaser Shares;

"Purchaser Shareholders

" means holders of Purchaser Shares;

"Purchaser Shares" means the common shares with a par value of USD $0.001 per
share in the capital of Purchaser;

"Purchaser Subsidiaries" means Subsidiaries of the Purchaser as set out in the
Purchaser Disclosure Documents;

"Purchaser Warrants" means the warrants to purchase Purchaser Shares;

"Real Property" means all lands owned, purported to be owned, or leased by a
Person and its Subsidiaries and all plants, buildings, structures, erections,
improvements, appurtenances and fixtures (other than tenant's fixtures) situate
on or forming part of such lands;

"Registrar" means the Registrar of Companies under the BCBCA;

"Regulatory Approval" means any approval, consent, waiver, permit, order or
exemption from any Governmental Entity that is required or advisable to be
obtained in order to permit the Arrangement to be effected;

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"Release" has the meaning prescribed in any Environmental Law and includes,
without limitation, any release, spill, leak, pumping, pouring, emission,
emptying, discharge, injection, escape, leaching, disposal, dumping, deposit,
spraying, burial, abandonment, incineration, seepage, or placement;

"Resinco" means Resinco Capital Partners Inc.;

"SEC" means the United States Securities and Exchange Commission;

"Securities Act" means the Securities Act (British Columbia), as amended;

"Securities Laws" means, collectively, all applicable Canadian Securities Laws,
U.S. Securities Laws, and any other applicable securities Laws;

"Securities Regulators" means the British Columbia Securities Commission, the
securities regulatory authorities in each of the other Provinces of Canada and
the SEC;

"SEDAR" means the System for Electronic Document Analysis and retrieval of the
Canadian Securities Administrators;

"Statutory Plan" means a statutory benefit plan which Target or Purchaser are
required to participate in or comply with, including the Canada Pension Plan and
plans administered pursuant to applicable health tax, workplace safety insurance
and employment insurance legislation;

"Stock Exchanges" means the TSXV and the NYSE Amex;

"Subsidiary" means, with respect to a specified body corporate, any body
corporate of which through share ownership or otherwise, the specified body
corporate is entitled to elect a majority of the board of directors thereof
(whether or not shares of any other class or classes will or might be entitled
to vote upon the happening of any event or contingency) are at the time owned
directly or indirectly by such specified body corporate and will include any
body corporate, partnership, joint venture or other entity over which it
exercises direction or control or which is in a like relation to a Subsidiary;

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"Superior Proposal" means a bona fide written Acquisition Proposal made by a
third party with whom Target and each of its officers and directors deals at
arm's length to, directly or indirectly, acquire assets that individually or in
the aggregate constitute more than 50% of the assets (on a consolidated basis)
of Target or more than 50% of the common shares of Target, whether by way of
merger, amalgamation, arrangement, share exchange, take-over bid, business
combination, or otherwise, and that the Target Board determines in good faith
after consultation with its financial advisors and outside legal counsel: (a) is
reasonably capable of being completed without undue delay, taking into account
all legal, financial, regulatory and other aspects of such proposal and the
party making such proposal; (b) is fully financed or is reasonably capable of
being fully financed; (c) is not subject to a due diligence condition, (d) is
not subject, by virtue of law or the policies of any stock exchange, to the
condition that the issue of shares by the acquiring party be approved by a vote
of any of its securityholders, (e) that is offered or made to all shareholders
in Canada and the United States of Target on the same terms; and (f) would in
the opinion of the Target Board acting in good faith if consummated in
accordance with its terms (without assuming away the risk of non-completion),
result in a transaction more favourable to the shareholders of Target, from a
financial point of view, than the terms of the Transaction;

"Target" means Cue Resources Ltd., a company existing under the laws of the
Province of British Columbia, Canada and, where the context permits, a reference
to the Target includes the Target Subsidiaries;

"Target Balance Sheet" means the consolidated balance sheet of Target as at
April 30, 2011, 2010 and 2009, forming part of the Target Financial Statements;

"Target Benefit Plan"

means all plans with respect to Target employees or former employees to which
Target is a party to or bound by or to which Target has an obligation to
contribute relating to retirement savings, pensions, bonuses, profit sharing,
deferred compensation, incentive compensation, life or accident insurance,
hospitalization, health, medical or dental treatment or expenses, disability,
unemployment insurance benefits, employee loans, vacation pay, severance or
termination pay or other benefit plan, other than a Statutory Plan;

"Target Board" means the board of directors of Target;

"Target Disclosure Documents" means, collectively, all documents published or
filed by Target with the securities regulatory authorities in Canada since
January 1, 2009 and available on SEDAR;

"Target Disclosure Letter" means the disclosure letter executed by Target and
delivered to Purchaser before the execution of this Agreement;

"Target Financial Statements" means the consolidated annual financial statements
of Target, which comprise the Target Balance Sheet and the consolidated
statements of loss, comprehensive loss, and deficit, shareholders' equity, and
cash flows for the years then ended.

"Target Meeting" means the special meeting of Target Shareholders to be held to
consider the Arrangement Resolution, including any adjournment or adjournments
thereof;

"Target Mineral Rights"

shall have the meaning ascribed thereto in subsection (u)(i) of Schedule 2;

"Target Option" means an option that is outstanding immediately before the
Effective Date, to acquire Target Shares pursuant to an option granted by
Target;

"Target Permitted Encumbrances"

means:

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(a)     minor title defects or irregularities or servitudes, easements,
restrictions, encroachments, covenants, rights of way and other similar rights
or restrictions in real property or mineral property, or any interest therein,
whether registered or unregistered, provided the same are not of such nature as
to materially impair the operation or enjoyment of the Target Property or Target
Mineral Rights;

(b)     undetermined or inchoate liens, charges and privileges (including
mechanics', construction, carriers', workers', repairers', storers' or similar
liens) which individually or in the aggregate are not material, arising or
incurred in the ordinary course of business of Target;

(c)     statutory liens, adverse claims or Encumbrances of any nature whatsoever
claimed or held by any Governmental Entity that have not at the time been filed
or registered against the title to the Target Property or Target Mineral Rights
or served upon Target pursuant to Law or that relate to obligations not due or
delinquent save and except for statutory liens, adverse claims or Encumbrances
related to Taxes which are due and payable;

(d)     the reservations, limitations and exceptions in any original grants from
any Governmental Entity of any real property or mineral property or interest
therein and statutory exceptions to title that do not materially detract from
the value of the Target Property or Target Mineral Rights or materially impair
the operation or enjoyment of the Target Property or Target Mineral Rights; and

(e)     the Encumbrances listed in Schedule (V)(ii) to the Target Disclosure
Letter;

"Target Property"

means the Yuty Property, as such property is disclosed by Target in their
Management Discussion and Analysis filed December 20, 2011 for the quarter
ending October 31, 2011;

"Target Securities" means, collectively, the Target Shares, the Target Options
and the Target Warrants;

"Target Securityholders" means Target Shareholders, holders of Target Options
and holders of Target Warrants;

"Target Shareholder Approval" has the meaning ascribed to such term in Section
2.4(d);

"Target Shareholders" means the holders of Target Shares;

"Target Shares" means the common shares without par value in the capital of
Target;

"Target Subsidiaries" means, collectively, those subsidiaries of Target listed
in Schedule (E) of the Target Disclosure Letter;

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"Target Warrants" means the warrants to purchase Target Shares as described in
Schedule (B) of the Target Disclosure Letter;

"Tax Act" means the Income Tax Act (Canada);

"Taxes" means all taxes, duties, levies, imposts and charges however
denominated, including any interest, penalties or other additions that may
become payable in respect thereof, imposed by any Governmental Entity, including
all income or profits taxes (including federal income taxes and provincial and
state income taxes), capital taxes, payroll and employee and other withholding
taxes, employment insurance, social insurance taxes (including Canada and Quebec
Pension Plan payments), sales and use taxes, ad valorem taxes, goods and
services and harmonized sales taxes, excise taxes, franchise taxes, gross
receipts taxes, business license taxes, goods and services taxes, occupation
taxes, real and personal property taxes, stamp taxes, environmental taxes,
transfer taxes, workers' compensation, pension assessment and other obligations
of the same or of a similar nature to any of the foregoing;

"Tax Returns" includes, without limitation, all returns, reports, declarations,
elections, notices, filings, information returns and statements in respect of
Taxes;

"Termination Date" means March 31, 2012, or such later date as may be mutually
agreed to in writing by the Parties;

"Termination Fee" has the meaning ascribed thereto in Section 9.4;

"Transaction" means collectively, the transactions contemplated herein and in
the Plan of Arrangement as such may be amended from time to time;

"Transaction Documents" means collectively, this Agreement, the Target
Disclosure Letter, the Plan of Arrangement and any Schedules attached hereto and
thereto and the Voting Agreements;

"Transmittal Letter" means the letter of transmittal to be sent by Target to
holders of Target Shares for use in connection with the Arrangement;

"TSXV" means the TSX Venture Exchange;

"U.S. Exchange Act" means the United States Securities Exchange Act of 1934, as
amended;

"U.S. Securities Act" means the United States Securities Act of 1933, as
amended;

"U.S. Securities Laws" means the "blue sky" or securities law of any state or
territory of the United States or the District of Columbia, together with the
U.S. Exchange Act and the U.S. Securities Act, and the rules and regulations of
the SEC thereunder;

"U.S. Tax Code" means the United States Internal Revenue Code of 1986, as
amended;

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"Voting Agreements" means the voting agreements (including all amendments
thereto) between Purchaser and the Locked-up Shareholders;

"Yuty Project" means Target's Yuty Uranium project located in Paraguay; and

"Yuty Project Concessions" means the 4 mineral concessions relating to the Yuty
Project, covering approximately 230,992 hectares;

Interpretation

1.2     In this Agreement, unless otherwise expressly stated or the context
otherwise requires:

(a)     the division of this Agreement and the Plan of Arrangement into Articles
and Sections and the further division thereof and the insertion of headings and
a table of contents are for convenience of reference only and will not affect
the construction or interpretation of this Agreement or the Arrangement. Unless
otherwise indicated, any reference in this Agreement and the Plan of Arrangement
to an Article, Section or the symbol Section , or Schedule refers to the
specified Article or Section of or Schedule to this Agreement;

(b)     the terms "Arrangement Agreement", "this Agreement", "hereof", "herein",
"hereunder" and similar expressions refer to this Agreement and not to any
particular section or other portion hereof and include any agreement or
instrument supplementary or ancillary hereto and, unless otherwise indicated, a
reference herein to a section is to the appropriate section of this Agreement;

(c)     words importing the singular number only will include the plural and
vice versa, words importing the use of any gender will include all genders and
words importing persons will include firms and corporations and vice versa;

(d)     if any date on which any action is required to be taken hereunder by any
of the parties is not a Business Day, such action will be required to be taken
on the next succeeding day which is a Business Day;

(e)     the word "including" means "including, without limiting the generality
of the foregoing"; and

(f)     a reference to a statute is to that statute as now enacted or as the
statute may from time to time be amended, re-enacted or replaced and includes
any regulation, rule or policy made thereunder.

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Entire Agreement

1.3     The Transaction Documents and the Confidentiality Agreement constitute
the entire agreement between Purchaser and Target pertaining to the subject
matter of this Agreement and supersede all prior arrangements, understandings,
negotiations and discussions, whether oral or written, among them with respect
to the subject matter hereof including the Letter of Intent.

Currency

1.4     All references to cash or currency in this Agreement are to Canadian
dollars unless otherwise indicated.

Time

1.5     Unless otherwise indicated, all times expressed herein are local time,
Vancouver, British Columbia, Canada.

Schedules

1.6     The following Schedules are attached hereto and form part of this
Agreement:

Schedule

               Description

Schedule 1     -     Plan of Arrangement;

Schedule 2     -     Representations and Warranties of Target;

Schedule 3     -     Representations and Warranties of Purchaser;

Schedule 4     -     Locked-up Shareholders; and

Schedule 5     -     Arrangement Resolution.

Knowledge

1.7     Any reference to the knowledge of Target will mean to the best of the
knowledge, information and belief of the Chief Executive Officer, the Chief
Operating Officer and the Chief Financial Officer of Target, after due inquiry
within Target. Any reference to the knowledge of Purchaser will mean to the best
of the knowledge, information and belief of the Chief Executive Officer and the
Chief Financial Officer of Purchaser, after due inquiry within Purchaser and
Purchaser Subsidiaries.

Accounting Principles

1.8     All references to generally accepted accounting principles, unless
otherwise stated, are to the principles recommended, from time to time, in the
Handbook of the Canadian Institute of Chartered Accountants and all accounting
terms not otherwise defined in this Agreement have the meanings assigned to them
in accordance with Canadian generally accepted accounting principles.

Invalidity of Provisions

1.9     Each of the provisions contained in this Agreement is distinct and
severable and a declaration of invalidity or unenforceability of any such
provision or part thereof by a court of competent jurisdiction shall not affect
the validity or enforceability of other provision thereof.

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ARTICLE 2
THE ARRANGEMENT

Arrangement

2.1     Purchaser and Target agree that the Arrangement will be implemented in
accordance with and subject to the terms and conditions contained in this
Agreement and the Plan of Arrangement, without limitation to the foregoing, at
the Effective Time the Plan of Arrangement shall become effective with the
result that among other things, Purchaser will become the holder of all the
outstanding Target Shares.

Implementation Steps by Target

2.2     Target covenants in favour of Purchaser that Target will act
expeditiously and in good faith to:

(a)     apply to the Court, as soon as reasonably practicable, in a manner
acceptable to Purchaser, acting reasonably, under Part 9, Division 5 of the
BCBCA for the Interim Order, which application will clearly state Target's and
Purchaser's intention to rely on exemption from registration requirements of the
U.S. Securities Act provided by section 3(a)(10) of the U.S. Securities Act to
implement the Transaction, and thereafter proceed with and diligently pursue the
Interim Order;

(b)     lawfully convene and hold the Target Meeting as soon as reasonable
practicable after the receipt of the Interim Order, and in any event no later
than March 26, 2012, for the purpose of approving the Arrangement Resolution,
provided that Purchaser has satisfied its obligations under Section 2.10(b).
Except as otherwise provided in this Agreement, Target will not adjourn or
otherwise change the timing of the Target Meeting without the prior written
consent of Purchaser, such consent not to be unreasonably withheld;

(c)     subject to obtaining such shareholder approval as is required by the
Interim Order, apply to the Court under Part 9, Division 5 of the BCBCA, as soon
as reasonably practicable after the Target Meeting, for the Final Order
approving the Arrangement, and thereafter proceed with and diligently pursue,
the obtaining of the Final Order;

(d)     subject to obtaining the Final Order, as soon as reasonably practicable
thereafter, but subject to the satisfaction or waiver of the other conditions
herein contained in favour of each party, deliver to the Registrar any
Arrangement Filings and take all other steps or actions as may be required in
connection with the Transaction to give effect to the Arrangement;

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(e)     instruct counsel acting for it to bring the applications referred to in
Section 2.2(a) and Section 2.2(c) in cooperation with counsel to Purchaser.
Target shall not file any material with the Court in connection with the
Arrangement or serve any such material, and shall not agree to modify or amend
materials so filed or served except as expressly permitted hereby or with
Purchaser's prior written consent, acting reasonably; and

(f)     permit Purchaser and its counsel to review and comment upon drafts of
all materials to be filed by Target with the Court in connection with the
Transaction and provide counsel to Purchaser on a timely basis with copies of
any notice of appearance and evidence served on Target or its counsel in respect
of the application for the Final Order or any appeal therefrom and of any notice
(written or oral) received by Target indicating any intention to oppose the
granting of the Final Order or to appeal the Final Order.

Target Information Circular and Related Materials

2.3     With the assistance of Purchaser, Target will use commercially
reasonable efforts to expeditiously prepare the Circular, together with any
other documents required by applicable Canadian Securities Laws or other
applicable Laws in connection with the Arrangement, and Target will use
commercially reasonable efforts to cause the Circular and other documentation
required in connection with the Target Meeting to be sent to each Target
Shareholder and filed as required by the Interim Order or applicable Laws as
soon as reasonably practicable. In any event, Target will use commercially
reasonable efforts to prepare all materials necessary for filing the application
for the Interim Order with the Court within 35 days after the date of execution
of this Agreement, except to the extent any delay beyond such period is due to
Purchaser's failure to comply on a timely basis with its obligations under
Section 2.10(b) in respect of the Circular; provided that the Circular and other
documentation will not be sent to the Target Shareholders except with the prior
written consent of Purchaser (such consent not to be unreasonably withheld).

Interim Order

2.4     The notice of motion for the application referred to in Section 2.2(a)
will request that the Interim Order provide:

(a)     that Target Shareholders will be the only class of Persons to whom
notice is to be provided in respect of the Arrangement and the Target Meeting
and for the manner in which such notice is to be provided;

(b)     that the Target Meeting may be adjourned from time to time by management
of Target without the need for additional approval of the Court;

(c)     that the record date for Target Shareholders entitled to notice of and
to vote at, the Target Meeting will not change in respect of adjournments of the
Target Meeting;

(d)     that the requisite approval for the Arrangement Resolution will be
two-thirds of the votes cast on the Arrangement Resolution by Target
Shareholders (voting together as a single class) present in person or
represented by proxy at the Target Meeting and entitled to vote thereat,
together with, if required by MI 61-101, minority approval in accordance with MI
61-101 (together, the "Target Shareholder Approval");

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(e)     that, in all other respects, the terms, restrictions and conditions of
the notice of articles and articles of Target, including quorum requirements and
all other matters, will apply in respect of the Target Meeting;

(f)     for the grant of the dissent rights referred to in Section 2.11; and

(g)     for the notice requirements with respect to the presentation of the
application for the Final Order.

Final Order

2.5     Following approval of the Target Resolution at the Target Meeting,
Target will forthwith apply to the Court for the Final Order, on terms
satisfactory to each of the Parties. All notices of motion and related materials
referred to in Section 2.2 shall be in a form satisfactory to Purchaser and
Target acting reasonably.

Payment of Consideration

2.6     Purchaser will, following receipt of the Final Order and before the
Effective Date, ensure that the Depositary has been provided with sufficient
Purchaser Shares in escrow to pay the aggregate Consideration.

Arrangement Filings

2.7     If necessary to give effect to the Arrangement, Target will make the
Arrangement Filings.

Effective Date

2.8     From and after the Effective Time, the Plan of Arrangement will have all
of the effects provided by applicable Law, including the BCBCA. The closing of
the transactions contemplated hereby will take place at the offices of McMillan
LLP in Vancouver, or at such other location as may be agreed upon by the
Parties.

Securities and Corporate Compliance

2.9     Target will (with the assistance of Purchaser and Purchaser's counsel)
diligently do all such acts and things as may be necessary to comply, in all
material respects, with NI 54-101 in relation to the Target Meeting.

Preparation of Filings

2.10

(a)     Purchaser and Target will cooperate in:

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(i)     the preparation of the applications for the Interim Order and Final
Order and the preparation of any other documents reasonably considered by
Purchaser or Target to be necessary to discharge their respective obligations
under applicable Laws in connection with the Transaction; and

(ii)     the taking of all such action as may be required under applicable Laws
in connection with the Transaction.

(b)     Each of Purchaser and Target will furnish to the other all such
information concerning it, its Affiliates and its shareholders as may be
required to effect the actions described in Section 2.3 and Section 2.9 and the
foregoing provisions of this Section 2.10, and each covenants that no
information furnished by it in connection with such actions or otherwise in
connection with the consummation of the Transaction, will contain any untrue
statement of a Material Fact or omit to state a Material Fact required to be
stated or which is necessary in order to make any information so furnished not
misleading in the light of the circumstances in which it is furnished or to be
used.

(c)     Purchaser and Target will each promptly notify the other if at any time
before the Effective Time it becomes aware that the Circular or an application
for an order described in Section 2.2 or Section 2.4 or any application filed
with a Governmental Entity, contains any untrue statement of a Material Fact or
omits to state a Material Fact required to be stated therein or which is
necessary to make the statements contained therein not misleading in light of
the circumstances in which they were made, or that otherwise requires an
amendment or supplement to the Circular or such application. In any such event,
Purchaser and Target will cooperate in the preparation of a supplement or
amendment to the Circular or such other application, as required and as the case
may be, and, if required, will cause the same to be distributed to the Target
Shareholders and/or filed with the applicable Governmental Entities.

(d)     Target will ensure that the Circular complies with all applicable Laws
and, without limiting the generality of the foregoing, that the Circular does
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 contained
therein not misleading in light of the circumstances in which they were made
(other than with respect to any information relating to and provided by
Purchaser to Target in writing). Without limiting the generality of the
foregoing, Target will ensure that the Circular provides Target Shareholders
with information in sufficient detail to permit them to form a reasoned judgment
concerning the matters to be placed before them at the Target Meeting and to
allow Purchaser to rely upon the exemption from registration provided under
section 3(a)(10) of the U.S. Securities Act with respect to the issuance of
Purchaser Shares in exchange for Target Shares pursuant to the Transaction.

Dissenting Shares

2.11     Target Shareholders may exercise rights of dissent with respect to
their Target Shares in connection with the Arrangement pursuant to and in the
manner set forth in the Plan of Arrangement. Target will give Purchaser prompt
notice of any written notice of a dissent, withdrawal of such notice, and any
other instruments served pursuant to such rights of dissent and received by
Target.

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Purchaser Approvals

2.12     Purchaser represents as of the date hereof that its Board of Directors,
after considering the Transaction, has determined:

(a)     to authorize Purchaser to consummate the Transaction on the terms set
forth herein and in the Plan of Arrangement; and

(b)     to authorize Purchaser to execute and deliver this Agreement.

Target Approvals

2.13     Target represents as of the date hereof that its Board of Directors has
unanimously:

(a)     determined that the Transaction is fair to the Target Shareholders as a
whole and is in the best interests of Target;

(b)     resolved to recommend that the Target Shareholders vote in favour of the
Arrangement Resolution;

(c)     resolved to authorize Target to consummate the Transaction on the terms
set forth herein and in the Plan of Arrangement;

(d)     resolved to authorize Target to execute and deliver this Agreement; and

(e)     approved obtaining an opinion from the Financial Advisor prior to the
mailing of the Circular and other documentation required in connection with the
Target Meeting that the consideration payable under the Arrangement by Purchaser
for the Target Shares is fair from a financial point of view to the Target
Shareholders, subject to the assumptions and limitations described in such
opinion.

No Fractional Shares

2.14     Purchaser will not be required to issue or deliver fractions of
Purchaser Shares or to distribute share certificates which evidence fractional
Purchaser Shares.

ARTICLE 3
REPRESENTATIONS AND WARRANTIES

Representations and Warranties of Target

3.1     Target hereby represents and warrants to Purchaser as set forth in
Schedule 2, such representations and warranties being subject to the
Transaction. For purposes of the representations and warranties of Target,
Purchaser is deemed to have knowledge of all information contained in the Target
Disclosure Documents as were publicly available through SEDAR as at January 19,
2012.

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Representations and Warranties of Purchaser

3.2     Purchaser hereby represents and warrants to Target as set forth in
Schedule 3, such representations and warranties being subject to the
Transaction. For purposes of the representations and warranties of Purchaser,
Target is deemed to have knowledge of all information contained in the Purchaser
Disclosure Documents as were publicly available through SEDAR as at January 19,
2012.

ARTICLE 4
ADDITIONAL AGREEMENTS

Non-Waiver

4.1     No investigations made by or on behalf of any of Purchaser or Target at
any time, will have the effect of waiving, diminishing the scope of or otherwise
affecting any representation or warranty made by any of them in or pursuant to
this Agreement. No waiver of any condition or other provision in whole or in
part, will constitute a waiver of any other condition or provision (whether or
not similar) nor will such waiver constitute a continuing waiver unless
otherwise expressly provided. No waiver by Purchaser or Target will be effective
unless it is in writing.

Nature and Survival

4.2     All representations and warranties contained in this Agreement on the
part of each of Purchaser and Target will terminate on the Effective Date
provided, however, that, subject to Section 9.4, neither Purchaser or Target
will be released or relieved from any liability arising from the breach by it of
any of its covenants, representations or warranties set forth in this Agreement.

Insurance and Indemnification

4.3     Target hereby agrees to use commercially reasonable efforts to secure
directors' and officers' liability insurance for the current and former
directors and officers of Target on a three year "trailing" (or "run-off") basis
provided that such trailing policy is available at a reasonable cost. If a
trailing policy is not available at a reasonable cost, Purchaser will use
commercially reasonable efforts to, or cause Target to, maintain in effect
without any reduction in scope or coverage for three years from the Effective
Date customary policies of directors' and officers' liability insurance
providing protection no less favourable to the protection provided by the
policies maintained by Target which are in effect immediately before the
Effective Date and providing protection in respect of claims arising from facts
or events which occurred on or before the Effective Date, provided that they are
available at a reasonable cost.

Purchaser agrees that it will cause Target to honour all rights to
indemnification or exculpation now existing in favour of present and former
officers and directors of Target to the extent that they are disclosed in
Schedule (O) of the Target Disclosure Letter, and acknowledges that such rights,
to the extent that they are disclosed in Schedule (O) of the Target Disclosure
Letter, will survive the completion of the Plan of Arrangement and will continue
in full force and effect for a period of not less than six years from the
Effective Date.

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The provisions of this Section 4.3 are intended for the benefit of, and will be
enforceable by, each insured or indemnified person, his or her heirs and his or
her legal representatives and, for such purpose, Target hereby confirms that it
is acting as agent and trustee on their behalf.

ARTICLE 5
COVENANTS

Consultation With Respect to News Releases

5.1     Prior to the Effective Time, Target will consult with Purchaser prior to
issuing any press release or otherwise making public statements. In addition,
Target will consult with Purchaser prior to making any filing with any
Governmental Entity with respect to the Transaction. Target will use all
commercially reasonable efforts to enable Purchaser to review and comment on all
such press releases before the release thereof and will enable Purchaser, to
review and comment on such filings before the filing thereof, provided that the
obligations herein will not prevent any party from making such disclosure as its
counsel advises is required by applicable laws or the rules and policies of the
reporting jurisdictions of the party, or such disclosure that is made in the
ordinary course of business consistent with past practice. Target agrees not to
make any public statement that is inconsistent with any such press release or
this Agreement. Purchaser will take commercially reasonable efforts to provide
Target in advance with a copy of any press releases with respect to the
Transaction.

Target's Covenants

5.2     Target covenants and agrees, except as contemplated in this Agreement or
the Plan of Arrangement, that from the date hereof until the Effective Date or
the day upon which this Agreement is terminated, whichever is earlier:

(a)     it will continue to carry on the business and affairs of Target in the
usual and normal course, take all action and make all expenditures necessary to
maintain all of the properties and assets owned and controlled by Target in good
standing and it will not, without prior consultation with and the consent of
Purchaser, such consent not to be unreasonably withheld, enter into new
commitments of a capital expenditure nature or incur any new contingent
liabilities, indebtedness or guarantee any new indebtedness other than
expenditures permitted under the Loan Agreement;

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(b)     it will not, except as provided for in this Agreement or as disclosed in
the Target Disclosure Letter, without prior consultation with and the consent of
Purchaser, directly or indirectly do, agree to do, or permit to occur any of the
following: (i) amend its constating documents; (ii) declare, set aside or pay
any dividend or other distribution or payment in respect of any of the Target
Shares; (iii) issue, grant, sell or pledge or agree to issue, grant, sell or
pledge any Target Securities (other than Target Shares issuable upon the
exercise of currently outstanding Target Options or Target Warrants); (iv)
redeem, purchase or otherwise acquire any of the outstanding Target Securities;
(v) split, combine or reclassify any of the Target Shares; (vi) adopt
resolutions or enter into any agreement providing for the amalgamation, merger,
consolidation, reorganization, liquidation, dissolution or any other
extraordinary transaction or adopt any plan of liquidation; (vii) reduce its
stated capital; (viii) sell or otherwise dispose or encumber of any of the
assets of Target outside the ordinary course of business that individually or in
the aggregate are material to Target; (ix) amend, alter, enter into or terminate
any employment or consulting agreement or alter the pay, benefits or other terms
and conditions of employment or service of any employees or consultants other
than with non-executive employees in the ordinary course; (x) make or commit to
make any severance payments or termination payments to any person including,
without limitation, consultants, directors, officers, employees or agents of
Target; or (xi) enter into or amend any agreements, arrangements or transactions
with any related party;

(c)     it will fully cooperate and consult through a weekly meeting with
Purchaser to allow Purchaser to monitor, and provide input with respect to all
activities relating to the exploration, permitting, development and maintenance
of all of the properties and assets owned and controlled by Target (and any
disclosure of new technical information), including without limitation those
items dealt with in the budget of expenditures referred to in Section 5.2(a);

(d)     subject to the terms of the Letter of Intent and the Confidentiality
Agreement and applicable laws, it will permit Purchaser's officers, directors,
employees, consultants and advisors, at all reasonable times, access to the
properties owned, controlled or operated by Target and to the books, records,
reports, Target's data, periodic site reports and all other information relevant
to the business, properties and affairs of Target, including drill core and
other samples and all reports, correspondence and other information provided by
all of Target's consultants. In addition, Target will, in all material respects,
conduct itself so as to keep Purchaser fully informed as to the material
decisions or actions required to be made or undertaken with respect to the
operation of its business, provided that such disclosure is not otherwise
prohibited by operation of applicable Laws or by reason of a confidentiality
obligation owed to a third party for which a waiver could not be obtained.

(e)     subject to Section 5.7 and Section 5.8, it will publicly support the
Transaction and recommend to the Target Shareholders that they vote in favour of
the Arrangement at the Target Meeting;

(f)     notwithstanding the terms of the Confidentiality Agreement, it will
permit Purchaser' officers, directors, employees, consultants and advisors to
solicit acceptance of the Arrangement from the Target Shareholders in accordance
with applicable Law;

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(g)     Target shall use commercially reasonable efforts to cause its respective
current insurance (or reinsurance) policies not to be cancelled or terminated or
any of the coverage thereunder to lapse, unless simultaneously with such
termination, cancellation or lapse, replacement policies underwritten by
insurance and re- insurance companies of internationally recognized standing
providing coverage equal to or greater than the coverage under the cancelled,
terminated or lapsed policies for substantially similar premiums are in full
force and effect;

(h)     Target shall not enter into, renew or modify in any material respect any
Material Contract, agreement, lease, commitment or arrangement to which Target
is a party or by which either of them is bound, except insofar as may be
necessary to permit or provide for the completion of the Arrangement or with the
prior consent of Purchaser which consent shall not be arbitrarily or
unreasonably withheld or delayed;

(i)     Target shall use its commercially reasonable efforts to conduct its
affairs so that all of the representations and warranties of Target contained
herein shall be true and correct on and as of the Effective Date as if made on
and as of such date; and

(j)     Target shall continue to provide access to the Purchaser and its
advisors for the purposes of conducting the Purchaser's due diligence
investigations;

5.3     Target covenants and agrees with Purchaser that:

(a)     it will use its commercially reasonable efforts to satisfy all of the
conditions precedent to the completion of the Transaction and to use its
commercially reasonable efforts to apply for and obtain, and will cooperate with
Purchaser in applying for and obtaining, the consents, orders and approvals
necessary for Target and Purchaser, respectively, to complete the Transaction;

(b)     subject to obtaining any required consents and except as prohibited by
Law, it will promptly provide Purchaser with any information in the possession
or control of, and relating to, Target and in addition, subject to any
confidentiality obligations, will provide any information specifically requested
by Purchaser or its counsel so that Purchaser may complete its due diligence
investigations of Target; and

(c)     it will (i) take all commercially reasonable action to lawfully solicit
proxies in favour of the Arrangement Resolution, (ii) if requested by Purchaser,
engage a Person to solicit proxies for the Target Meeting, and (iii) not make a
Change in Recommendation except in accordance with Section 5.7 and Section 5.8.

Pre-Acquisition Reorganization

5.4

(a)     Target will, before the Effective Date, take such actions to reorganize
the ownership structure of its assets as Purchaser may reasonably request;
provided that, and notwithstanding any other provision in this Agreement:

(i)     any element of such pre-acquisition reorganization will not materially
delay, impair or prevent the completion of the Arrangement;

(ii)     all elements of the pre-acquisition reorganization will be effective as
close, as is reasonably practical, to the Effective Date;

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(iii)     all elements of the pre-acquisition reorganization will be contingent
upon Purchaser confirming that it is prepared to proceed immediately with the
Arrangement;

(iv)     Target will not be required to take any action that could result in a
material amount of additional Taxes being imposed on Target or the Target
Securityholders, or any other material adverse Tax or other consequences to
Target or the Target Securityholders, incrementally greater than the Taxes or
other consequences to such party in connection with the consummation of this
Agreement in the absence of action being taken pursuant to this Section 5.4(a);

(v)     any pre-acquisition reorganization will not unreasonably interfere in
the ongoing operations of Target;

(vi)     any pre-acquisition reorganization will not require Target to
contravene any Law, its respective organizational documents, or any contract of
Target;

(vii)     Purchaser fully indemnifies Target, in form and substance satisfactory
to Target (acting reasonably), for any expense, damage, loss or other
disadvantage for so doing; and

(viii)     in the opinion of Target (acting reasonably), such pre-acquisition
reorganization does not prejudice or adversely affect Target Securityholders.
Purchaser will provide Target with 10 Business Days notice, and a description
of, the pre-acquisition reorganization, with it being understood in all cases
that (A) any action taken by Target in good faith pursuant to any request to
effect a pre-acquisition reorganization will be deemed not to constitute a
breach of any representation, warranty or covenant under this Agreement or any
other agreement to which Target and Purchaser are parties, (B) any expenses
incurred by Target in preparing and carrying out any pre-acquisition
reorganization will be borne by Purchaser, and (C) if, at the request of
Purchaser, Target effects any pre-acquisition reorganization and the Arrangement
is not consummated, Purchaser will be responsible for any structuring and
unwinding costs (including any Tax costs) reasonably incurred in connection with
any proposed or completed pre-acquisition reorganization.

(b)     Target will co-operate with Purchaser to confirm and provide support for
all non-capital loss, net capital loss, adjusted cost base and other tax
attributes of Target and its assets that may be necessary in connection with the
pre-acquisition reorganization, the Arrangement or otherwise, and Target will
co-operate with Purchaser to determine the nature of any pre-acquisition
reorganizations that might be undertaken and the manner in which they may most
effectively be undertaken.

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(c)     Target will not knowingly take any action or enter into any transaction,
other than a transaction contemplated by this Agreement or a transaction
undertaken in the ordinary course of business consistent with past practice,
that could reasonably be expected to have the effect of reducing or eliminating
the amount of the tax cost "bump" pursuant to paragraphs 88(1)(c) and (d) of the
Tax Act otherwise available to Purchaser and its successors and assigns in
respect of the non-depreciable capital properties owned by Target as of the date
of this Agreement or acquired by such entities subsequent to the date of this
Agreement in accordance with the terms of this Agreement, without first
consulting with Purchaser on same. Target will use it reasonable efforts to
address the reasonable concerns of Purchaser in regards to such provisions
before entering into such transaction.

Covenants of Purchaser

5.5     Purchaser covenants and agrees with Target that:

(a)     subject to obtaining any required consents and except as prohibited by
Law, and subject to Target entering into a confidentiality agreement in favour
of Purchaser on terms satisfactory to Purchaser, acting reasonably, it will
promptly provide Target with any information in the possession or control of
Purchaser and relating to Purchaser that is relevant to Target's due diligence
investigations of Purchaser and in addition, subject to any confidentiality
obligations, will provide any information specifically requested by Target or
its counsel so that Target may complete its due diligence investigations of
Purchaser;

(b)     it will loan, concurrently with the execution of this Agreement, the
Loan Amount to Target on the terms set out in the Loan Agreement with the
proceeds to be used as agreed to between the Purchaser and the Target pursuant
to the Loan Agreement;

(c)     it will use commercially reasonable efforts (i) to cause the Purchaser
Shares to be issued to Target Shareholders pursuant to the terms of the
Arrangement to be listed and posted for trading on the NYSE Amex and (ii) to
cause the Purchaser Shares which the holders of Target Options and Target
Warrants are entitled to receive on exercise of Target Options and Target
Warrants, respectively, to be listed and posted for trading on the NYSE Amex;

(d)     the Purchaser will honour the Target Options and Target Warrants
outstanding on the Effective Date which will continue in effect on the same
terms and conditions (subject to the adjustments required after giving effect to
the Arrangement including, without limitation, that such Target Options and
Target Warrants will be exercisable for Purchaser Shares). Purchaser will take
all corporate action necessary to reserve for issuance a sufficient number of
Purchaser Shares for delivery upon the exercise of the Target Options and Target
Warrants to be honoured in accordance with this Section 5.5(d);

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(e)     it will not, prior to the Effective Date, except as provided for in this
Agreement, without prior consultation with and the consent of Target, directly
or indirectly do, agree to do, or permit to occur any of the following: (i)
amend its constating documents in a manner that affects the Target Shareholders
differently than the existing shareholders of Purchaser; (ii) declare, set aside
or pay any dividend or other distribution or payment in respect of any of the
Purchaser Shares; (iii) split, combine or reclassify any of the Purchaser
Shares; or (iv) reduce its stated capital; and

(f)     following the Effective Date, Purchaser will cause Target to make the
election provided for in subsection 110(1.1) of the Tax Act in respect of the
Target Options, if available under the Tax Act.

Mutual Covenants

5.6     Each of Target and Purchaser covenants and agrees that, except as
contemplated in the Transaction Documents, from the date hereof until the
Effective Date or the day upon which this Agreement is terminated, whichever is
earlier:

(a)     it will:

(i)     use its reasonable commercial efforts to preserve intact in all material
respect its business organizations and goodwill, to keep available the services
of its officers and employees as a group and to maintain satisfactory
relationships with suppliers, unions, agents, distributors, customers and others
having business relationships with it;

(ii)     not take any action that would interfere with or be inconsistent with
the completion of the Transaction or which would render, or that reasonably may
be expected to render, any representation or warranty made by it in this
Agreement untrue in any material respect at any time before the Effective Date;
and

(iii)     promptly notify the other Person of any Material Adverse Effect, or
any change which could reasonably be expected to result in a Material Adverse
Effect, in respect of its business or properties, and of any Governmental Entity
or third party complaints, investigations or hearings (or communications
indicating that the same may be contemplated);

(b)     it will use commercially reasonable efforts to satisfy (or cause the
satisfaction of) the conditions precedent to the obligations of Purchaser and
Target set forth in Article 7 to the extent that such is within its control and
to take, or cause to be taken, all other reasonable action and to do, or cause
to be done, all other things reasonably necessary, proper or advisable under all
applicable Laws to complete the Transaction, including using all of its
commercially reasonable efforts to:

(i)     obtain or co-operate in obtaining all necessary waivers, consents and
approvals required to be obtained to consummate the Transaction;

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(ii)     effect or co-operate in effecting all necessary registrations and
filings and submissions of information requested by Governmental Entities
required to be effected by it in connection with the Transaction and participate
and appear in any required proceedings before Governmental Entities in
connection therewith;

(iii)     oppose, lift or rescind or co-operate in opposing, lifting or
rescinding any injunction or restraining order or other order or action seeking
to stop, or otherwise adversely affecting the ability of Purchaser or Target to
consummate, the Transaction;

(iv)     fulfill all conditions and satisfy all provisions of the Transaction
Documents on its part, including, where applicable, delivery of the certificates
of its officers contemplated by Section 7.2(a) in the case of Target and Section
7.3(a) in the case of Purchaser; and

(v)     otherwise cooperate with the other in connection with the performance by
it of its obligations under the Transaction Documents;

(c)     subject in the case of Target to those actions it is permitted to do in
compliance with Section 5.7 and Section 5.8, it will not take any action or
refrain from taking any action, which would reasonably be expected to
significantly impede or delay the consummation of the Transaction;

(d)    it will vigorously defend or cause to be defended any Claim or other
legal proceedings brought against it challenging the Transaction; and

(e)     it will use commercially reasonable efforts to carry out all actions
necessary to ensure the availability of the exemption from the registration
requirements of the U.S. Securities Act provided by section 3(a)(10) thereunder.

Target's Covenants Regarding Non-Solicitation

5.7

(a)     Target shall, and shall direct and cause its officers, directors,
employees, representatives, advisors and agents to immediately cease and cause
to be terminated any solicitation, encouragement, activity, discussion or
negotiation with any parties that may be ongoing with respect to an Acquisition
Proposal whether or not initiated by Target.

(b)     Subject to Section 5.8 or unless permitted pursuant to Section 5.7,
Target agrees that it will not, and will not authorize or permit any of its
officers, directors, employees, representatives, advisors or agents, directly or
indirectly, to:

(i)     make, solicit, initiate, entertain, encourage, promote or facilitate,
including by way of permitting any visit to its facilities or properties or
entering into any form of agreement, arrangement or understanding, any inquiries
or the making of any proposals regarding an Acquisition Proposal or that may be
reasonably be expected to lead to an Acquisition Proposal;

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(ii)     participate, directly or indirectly, in any discussions or negotiations
regarding, or furnish to any person any information or otherwise co operate
with, respond to, assist or participate in any Acquisition Proposal or potential
Acquisition Proposal;

(iii)     remain neutral with respect to, or agree to, approve or recommend any
Acquisition Proposal or potential Acquisition Proposal (it being understood that
publicly taking no position or a neutral position with respect to an Acquisition
Proposal until 10 Business Days following formal announcement of such
Acquisition Proposal will not be considered to be a violation of this paragraph
(b)(iii));

(iv)     withdraw, modify, qualify or change in a manner adverse to Purchaser,
or publicly propose to or publicly state that it intends to withdraw, modify,
qualify or change in a manner adverse to Purchaser the approval, recommendation
or declaration of advisability of the Target Board of the Transaction (a "Change
in Recommendation") (it being understood that failing to affirm the approval or
recommendation of the Target Board of the Transaction within two Business Days
after an Acquisition Proposal relating to such Party has been publicly announced
and, in circumstances where no Acquisition Proposal has been made, within 10
Business Days of being requested to do so by Purchaser, will be considered an
adverse modification);

(v)     enter into any agreement, arrangement or understanding related to any
Acquisition Proposal or requiring it to abandon, terminate or fail to consummate
the Transaction or providing for the payment of any break, termination or other
fees or expenses to any person in the event that the Transaction is completed or
any other transaction agreed to before any termination of this Agreement; or

(vi)     make any public announcement or take any other action inconsistent with
the recommendation of the Target Board to approve the Transaction.

Notwithstanding the foregoing and any other provisions of this Agreement, the
Target Board may consider, participate in any discussions or negotiations with
and provide information to, any person who has delivered a written Acquisition
Proposal which was not solicited or encouraged by Target after the date of this
Agreement and did not otherwise result from a breach of this Section 5.7 by
Target and that the Target Board determines in good faith constitutes a Superior
Proposal provided, however, that if Target provides confidential non-public
information to such person, Target obtains a confidentiality and standstill
agreement from the person making such Acquisition Proposal that is substantively
the same as the Letter of Intent and the Confidentiality Agreement, and
otherwise on terms no more favourable to such person than such Letter of Intent
and Confidentiality Agreement, including a standstill provision at least as
stringent as contained in such Letter of Intent and Confidentiality Agreement;
provided, however, that it will not preclude such person from making a Superior
Proposal, and provided that Target sends a copy of any such confidentiality
agreement to Purchaser promptly upon its execution and Purchaser is provided
with a list of the information provided to such person and is immediately
provided with access to similar information to which such person was provided.

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(c)     Target will, and will cause the officers, directors, employees,
consultants, representatives and agents of Target and the Target Subsidiaries
to, immediately terminate and cease any discussions or negotiations with any
parties (other than Purchaser) with respect to any proposal that constitutes, or
may reasonably be expected to constitute, an Acquisition Proposal. Target will:
(i) discontinue or not allow access to any of its confidential information to
any third party; and (ii) immediately request the return or destruction of all
information provided to any third party that has entered into a confidentiality
agreement with Target relating to a potential Acquisition Proposal to the extent
that such information has not previously been returned or destroyed, and will
use all commercially reasonable efforts to ensure that such requests are
honoured. Target agrees not to: (iii) release any third party from any
confidentiality agreement relating to a potential Acquisition Proposal to which
such third party is a party except to allow a Person to propose an Acquisition
Proposal to the Target Board; (iv) release any third party from any
non-solicitation or standstill agreement or provision to which such third party
is a party. Target also agrees not to amend, modify or waive any such
confidentiality, non-solicitation or standstill agreement or provision and
undertakes to enforce, or cause the Target Subsidiaries to enforce such
agreements and provisions.

(d)     From and after the date of this Agreement, Target will promptly (and in
any event within 24 hours) notify Purchaser, at first orally and then in
writing, of any proposals, offers or written inquiries relating to or
constituting an Acquisition Proposal, or any request for non-public information
relating to Target. Such notice will include a description of the terms and
conditions of any proposal, inquiry or offer, the identity of the person making
such proposal, inquiry or offer and provide such other details of the proposal,
inquiry or offer as Purchaser may reasonably request. Target will keep Purchaser
fully informed on a prompt basis of the status, including any change to the
material terms, of any such inquiry, proposal or offer.

Right to Accept a Superior Proposal

5.8

(a)     If Target has complied with Section 5.7 with respect thereto, Target may
accept, approve, recommend or enter into any agreement, understanding or
arrangement in respect of an Acquisition Proposal which the Target Board has
determined to be a Superior Proposal (other than a confidentiality agreement,
the execution of which will not be subject to the conditions of this Section
5.8) received before the date of approval of the Transaction by its shareholders
and terminate this Agreement if, and only if:

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(i)     Target has provided Purchaser with a copy of the Superior Proposal
document;

(ii)     Target has provided Purchaser with the information regarding such
Superior Proposal required under Section 5.7(d);

(iii)     the Target Board has determined in good faith after consultation with
outside legal counsel and its financial advisors that it is necessary in order
for the Board of Directors to discharge properly its fiduciary duties to
withdraw or modify its approval or recommendation of this Agreement and to
approve or recommend such Superior Proposal;

(iv)     five Business Days will have elapsed from the later of the date
Purchaser received written notice (a "Superior Proposal Notice") advising
Purchaser that the Target Board has resolved to accept, approve, recommend or
enter into an agreement in respect of such Superior Proposal subject only to
this Section 5.8, and the date Purchaser received a copy of such Superior
Proposal document. In the event that Target provides Purchaser with a Superior
Proposal Notice on a date that is less than seven Business Days before the
Target Meeting of shareholders, Target shall, at the request of Purchaser,
adjourn such meeting to a date that is not less than five Business Days and not
more than 15 days after the date of the Superior Proposal Notice. Unless
otherwise ordered by a court, Target will continue to take all reasonable steps
necessary to hold the Target Meeting and to cause the Transaction to be voted on
at such meeting; and

(v)     Target has previously or concurrently paid to Purchase the Termination
Fee, Target acknowledging and agreeing that payment of the Termination Fee under
Section 9.4 is a condition to valid termination of this Agreement under Section
9.1(f) and this Section 5.8(a).

(b)     During the five Business Day period referred to in Section 5.8(a)(iv),
Target agrees that Purchaser will have the right, but not the obligation, to
offer in writing to amend the terms of this Agreement, which offer must be
received by Target before 5:00 p.m. (Vancouver time) on the fifth Business Day
of such period in order for such offer to comply with the requirements of this
Section 5.8(b). The Target Board will review any written proposal by Purchaser
to amend the terms of this Agreement in good faith in order to determine, in its
discretion in the exercise of its fiduciary duties, whether the amended proposal
would, upon acceptance by Target, be at least equivalent to the Superior
Proposal. If the Target Board so determines, it will enter into an amended
agreement with Purchaser reflecting the amended proposal. If the Target Board
does not so determine, Target may accept, approve, recommend or enter into an
agreement, understanding or arrangement in respect of such Superior Proposal,
subject to compliance with Section 9.4 hereof.

(c)      Each Party also acknowledges and agrees that each successive material
modification of any Acquisition Proposal will constitute a new Acquisition
Proposal for the purposes of the requirement under clause (iv) of Section 5.8(a)
and will initiate an additional five Business Day notice period.

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ARTICLE 6
REMEDIES

Availability of Equitable Remedies

6.1    Each of Purchaser and Target acknowledges that the other will be
irreparably harmed and that there will be no adequate remedy at law for a
violation of any of its covenants and agreements contained in this Agreement. In
addition to any other remedies that may be available to each of Purchaser and
Target upon the breach by the other of its covenants and agreements hereunder,
each of Purchaser and Target will have the right to seek injunctive relief to
restrain any breach or threatened breach of those covenants or agreements or
obtain specific performance of any of those covenants or agreements.

ARTICLE 7
CONDITIONS

Mutual Conditions

7.1     The obligations of the Parties to complete the transactions contemplated
hereby are subject to fulfilment of the following conditions on or before the
Termination Date or such earlier time as is specified below:

(a)     the Interim Order will have been granted in form and substance
satisfactory to Target and Purchaser, acting reasonably, and will not have been
set aside or modified in a manner unacceptable to such Parties, acting
reasonably, on appeal or otherwise;

(b)     the Arrangement Resolution will have been passed at the Target Meeting
in accordance with the Interim Order;

(c)     the Final Order will have been granted in form and substance
satisfactory to Target and Purchaser, acting reasonably, and will not have been
set aside or modified in a manner unacceptable to such Parties, acting
reasonably, on appeal or otherwise;

(d)     the Effective Date will occur before the Termination Date;

(e)     there will be no action taken under any Laws or by any Governmental
Entity, that:

(i)     makes it illegal or, directly or indirectly, restrains, enjoins or
prohibits the Transaction or any other transactions or agreements contemplated
herein, or

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(ii)     results in a judgment or assessment of damages, directly or indirectly,
relating to the transactions or agreements contemplated in the Transaction
Documents which would have a Material Adverse Effect on Purchaser taking into
account the Transaction;

(f)     all required material consents, waivers, permits, orders and approvals
of any Governmental Entity or other Persons and the Stock Exchanges and the
expiry of any waiting periods, in connection with, or required to permit, the
consummation of the Transaction, will have been obtained or received on terms
that will not have a Material Adverse Effect on Purchaser taking into effect the
Transaction, and reasonably satisfactory evidence thereof will have been
delivered to each Person;

(g)     the distribution of the Purchaser Shares in Canada pursuant to the
Arrangement, and the distribution of the Purchaser Shares upon exercise of the
Target Options and Target Warrants are exempt from, or otherwise not subject to,
prospectus requirements of applicable Securities Laws and, except with respect
to persons deemed to be "control persons" or the equivalent under applicable
Securities Laws, the Purchaser Shares to be distributed in Canada pursuant to
the Arrangement and pursuant to the exercise of the Target Warrants are not
subject to any resale restrictions under applicable Securities Laws;

(h)     the distribution of the Purchaser Shares in the United States in
exchange for the Target Shares pursuant to the Arrangement is exempt from
registration requirements under the U.S. Securities Act; and

(i)     this Agreement will not have been terminated pursuant to Article 9.

The foregoing conditions are for the mutual benefit of Purchaser and Target and
may be waived, in whole or in part, by either of them at any time. If any of the
said conditions precedent will not be complied with or waived as aforesaid on or
before the date required for the performance thereof, either Target or Purchaser
may rescind and terminate this Agreement by written notice to the other
(provided such non-compliance did not arise from the acts or omissions of the
Person purporting to rescind and terminate this Agreement) and will have no
other right or remedy, except as set forth in Article 9.

Conditions Precedent to the Obligations of Purchaser

7.2     The obligation of Purchaser to complete the Transaction will also be
subject to the fulfilment of each of the following conditions precedent (each of
which is for the exclusive benefit of Purchaser and may be waived by Purchaser
in its sole discretion and any one or more of which, if not satisfied or waived,
will relieve Purchaser of any obligation under this Agreement), on or before the
Termination Date or such earlier time as is specified below:

(a)     all covenants of Target under this Agreement to be performed on or
before the Effective Date will have been duly performed by Target in all
material respects. Each of the Locked-up Shareholders shall have complied with
their respective Voting Agreements;

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(b)     all representations and warranties of Target will be true and correct in
all material respects as of the Effective Date, as if made on and as of such
date (except to the extent such representations and warranties speak as of an
earlier date, in which event such representations and warranties will be true
and correct or true and correct in all material respects, as the case may be, as
of such earlier date, or except as affected by transactions contemplated or
permitted by this Agreement), without giving effect to any materiality or
similar qualifications contained in or incorporated directly or indirectly in
such representations and warranties, and Purchaser will have received a
certificate of Target addressed to Purchaser and dated on such date, signed on
behalf of Target by two senior executive officers of Target in their capacity as
such and without personal liability, confirming the same;

(c)     since the date of this Agreement, there will not have been any change,
effect, event, occurrence, development or state of facts that, individually or
in the aggregate, has had or could reasonably be expected to have a Material
Adverse Effect on Target (excluding any change, effect, event, occurrence or
state of facts that is specifically referred to in the Target Disclosure
Letter);

(d)     holders of no more than 5% of the issued and outstanding Target Shares
will have exercised their dissent rights (and not withdrawn such exercise) in
respect of the Arrangement;

(e)     Purchaser will have received an opinion of Paraguayan counsel of Target
in respect of the title to the Yuty Project, the good standing of the Yuty
Project Concessions and the Target Subsidiaries, in a form acceptable to
Purchaser, acting reasonably;

(f)     Purchaser will be satisfied with the results of its due diligence
investigations of the Target and the Target's business and operations, including
but not limited to the exploration and development of the Yuty Project;

(g)     Purchaser will have received confirmation that the Target Subsidiaries
are 100% owned by the Target, with no minority share interests, options, or
other interests or Encumbrances held by any other Person;

(h)     Purchaser will have received releases executed in favour of Purchaser,
Target and Target Subsidiaries from and against all claims in respect of any
change of control payments and/or accrued fees from each of:

(i)     Resinco Capital Partners Inc.;

(ii)     JRI Strategy Consultants Inc.;

(iii)     John Icke;

(iv)     Transpacific Capital (Hong Kong) Limited; and

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(v)     Robert Tyson; and

(i)     Purchaser will have received all such other documents and certificates
as may reasonably be required by Purchaser in connection with completion of the
Arrangement.

Purchaser may not rely on the failure to satisfy any of the above conditions
precedent as a basis for non-compliance by Purchaser with its obligations under
this Agreement if the condition precedent would have been satisfied but for a
material default by Purchaser in complying with its obligations hereunder.

Conditions Precedent to the Obligations of Target

7.3     The obligation of Target to complete the transactions contemplated by
this Agreement will also be subject to the following conditions precedent (each
of which is for the exclusive benefit of Target and may be waived by Target in
its sole discretion and any one or more of which, if not satisfied or waived,
will relieve Target of any obligation under this Agreement), on or before the
Termination Date or such earlier time as is specified below:

(a)     all covenants of Purchaser under this Agreement to be performed on or
before the Effective Date will have been duly performed by Purchaser in all
material respects;

(b)     all representations and warranties of Purchaser will be true and correct
in all material respects as of the Effective Date, as if made on and as of such
date (except to the extent such representations and warranties speak as of an
earlier date, in which event such representations and warranties will be true
and correct or true and correct in all material respects, as the case may be, as
of such earlier date, or except as affected by transactions contemplated or
permitted by this Agreement), without giving effect to any materiality or
similar qualifications contained in or incorporated directly or indirectly in
such representations and warranties, and Target will have received a certificate
of Purchaser addressed to Target and dated on such date, signed on behalf of
Purchaser by two senior executive officers of Purchaser without personal
liability, confirming the same;

(c)     since the date of this Agreement, there will not have been any change,
effect, event, occurrence, development or state of facts that, individually or
in the aggregate, has had or could reasonably be expected to have a Material
Adverse Effect on Purchaser (excluding any change, effect, event occurrence or
state of facts that is specifically referred to in the Purchaser Disclosure
Documents);

(d)     Purchaser will, on the Effective Date, pay the following expenses of the
Target on behalf of the Target as follows:

(i)     with respect to the consulting agreement dated May 1, 2010 between the
Target and Robert Tyson, an $80,000 change of control payment, payable:

(A)     $30,000 in cash; and

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(B)     $50,000 in Purchaser Shares at a deemed price of $3.0705 per Purchaser
Share;

(ii)     with respect to the $260,000 in loans owing by Target to Resinco,
$260,000 in cash; and

(iii)     with respect to all other outstanding loans, accrued interest payable,
accounts payable, accrued liabilities and/or any other financial liabilities
that Target has outstanding as of the date of this Agreement, and incurred
subsequently until the Effective Date, whereby the creditor and/or payee is an
insider of the Target and/or is an affiliate of insiders of the Target, such
amounts shall be settled and extinguished by the Purchaser at the Effective Date
by the issuance of Purchaser Shares to such creditors and payees at a price of
$3.0705 per Purchaser Share; and

(e)     Target will have received all such other documents and certificates as
may reasonably be required by Target in connection with completion of the
Arrangement.

Target may not rely on the failure to satisfy any of the above conditions
precedent as a basis for non-compliance by Target with its obligations under
this Agreement if the condition precedent would have been satisfied but for a
material default by Target in complying with its obligations hereunder.

Notice and Cure Provisions

7.5    Each of the Parties will give prompt notice to the other of the
occurrence, or failure to occur, at any time from the date hereof until the
Effective Date, of any event or state of facts that would likely:

(a)     cause any of the representations or warranties of such Person contained
herein to be untrue or inaccurate in any material respect as of the date hereof
or at the Effective Date; or

(b)     result in the failure of such Person to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it under
this Agreement before the Effective Date.

Purchaser or Target may elect to not complete the Transaction contemplated
hereby pursuant to the conditions precedent contained in Section 7.1, Section
7.2 and Section 7.3, as the case may be, or exercise any termination right
arising therefrom, only if forthwith and in any event before the Effective Date,
Purchaser or Target, as the case may be, has delivered a written notice to the
other specifying in reasonable detail all breaches of covenants, representations
and warranties or other matters which Purchaser or Target, as the case may be,
is asserting as the basis for the non-fulfilment of the applicable condition
precedent or the exercise of the termination right, as the case may be. If any
such notice is delivered, provided that Purchaser or Target, as the case may be,
is proceeding diligently to cure such matter, if such matter is susceptible to
being cured, the other may not terminate this Agreement until the expiration of
a period of 20 days from such notice. If such notice has been given before the
making of the application for the Final Order, such application will be
postponed until the expiry of such period. For greater certainty, in the event
that such matter is cured within the time period referred to herein, this
Agreement may not be terminated as a result of such matter.

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Satisfaction of Conditions

7.6     The conditions precedent set out in Section 7.1, Section 7.2 and Section
7.3 will be conclusively deemed to have been satisfied, waived or released at
the Effective Time.

ARTICLE 8
AMENDMENT

Amendment

8.1    This Agreement may, at any time and from time to time before or after the
holding of the Target Meeting, but not later than the Effective Date, be amended
by mutual written agreement of the Parties hereto, and any such amendment may,
without limitation:

(a)     change the time for performance of any of the obligations or acts of the
parties;

(b)     waive any inaccuracies or modify any representation or warranty
contained herein or in any document delivered pursuant hereto;

(c)     waive compliance with or modify any of the covenants herein contained
and waive or modify performance of any of the obligations of the parties; and

(d)      waive compliance with or modify any conditions precedent herein
contained;

provided that, notwithstanding the foregoing: (i) following the Target Meeting,
the Consideration shall not be amended without approval of the Target
Shareholders given in the same manner as required for the approval of the
Arrangement or as may be ordered by the Court and (ii) this Agreement and the
Plan of Arrangement may be amended in accordance with the Final Order, but in
the event that the terms of the Final Order require any such amendment, the
rights of the parties hereto under Section 8.2 shall remain unaffected.

Mutual Understanding Regarding Amendments

8.2    If either Purchaser or Target proposes any amendment to this Agreement or
to the Plan of Arrangement, the other will act reasonably in considering such
amendment and if the other and its security holders are not prejudiced by reason
of any such amendment, the other will co-operate in a reasonable fashion with
the Person who made the proposal so that such amendment can be effected subject
to applicable Laws and the rights of the affected Person's security holders.

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Cooperation on Structure

8.3     Purchaser and Target will cooperate in good faith and will take all
reasonable steps and actions after the date hereof to complete the Transaction
in a manner which is most tax effective for Purchaser and Target. The parties
may also agree to modify the structure of the Plan of Arrangement if necessary
to provide for a more tax effective structure for their respective shareholders.

ARTICLE 9
TERMINATION AND COMPENSATION

Termination

9.1     This Agreement may be terminated at any time before the Effective Date,
whether before or after Target Shareholder Approval:

(a)     by mutual written consent of Target and Purchaser;

(b)     by either Target or Purchaser pursuant to the exercise of their rights
set forth in Section 7.1, hereof, provided that the provisions of Section 7.4
have been complied with;

(c)     by Purchaser pursuant to the exercise of its rights set forth in Section
7.2, provided the provisions of Section 7.4 have been complied with;

(d)     by Target pursuant to the exercise of its rights set forth in Section
7.3, provided the provisions of Section 7.4 have been complied with;

(e)     by either Target or Purchaser if the Target Shareholders fail to approve
the Arrangement Resolution at the Target Meeting;

(f)     by Target, following receipt of, and in order to enter into a definitive
written agreement with respect to a Superior Proposal, but only in compliance
with Section 5.8 and Section 9.4;

(g)     by Purchaser, (i) if the Target Board has made a Change in
Recommendation, or (ii) Target will have entered into a binding agreement with
respect to a Superior Proposal, in each case only in compliance with Section 5.8
and Section 9.4;

(h)     by Purchaser, if, subject to Section 7.4, a failure to perform, in all
material respects, any covenant or agreement on the part of Target set forth in
this Agreement that would cause the conditions set forth in Section 7.1 or
Section 7.2 not to be satisfied, and such conditions are incapable of being
satisfied by the Termination Date; provided that Purchaser is not then in breach
of this Agreement so as to cause any of the conditions set forth in Section 7.1
or Section 7.3 not to be satisfied; or

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(i)     by Target, if, subject to Section 7.4, a failure to perform, in all
material respects, any covenant or agreement on the part of Purchaser set forth
in this Agreement that would cause the conditions set forth in Section 7.1 or
Section 7.3 not to be satisfied, and such conditions are incapable of being
satisfied by the Termination Date; provided that Target is not then in breach of
this Agreement so as to cause any of the conditions set forth in Section 7.1 or
Section 7.2 not to be satisfied.

Where action is taken to terminate this Agreement pursuant to this Section 9.1,
it will be sufficient for such action to be authorized by the Board of Directors
of the Person taking such action.

Effect of Termination

9.2     In the event of termination of this Agreement by either Target or
Purchaser as provided in Section 9.1, this Agreement will forthwith become void
and have no further effect, and there will be no liability or further obligation
on the part of Target or Purchaser or their respective officers or directors
under the Transaction Documents, except that:

(a)     the provisions of Section 9.3 and Section 9.4 (Expenses and Termination
Fees), and this Section 9.2 will remain in full force and effect and will
survive any such termination;

(b)     neither Target nor Purchaser will be released or relieved from any
liability arising from their breach of any of their representations, warranties,
covenants, or agreements as set forth in the Transaction Documents save and
except as provided therein; and

(c)     the covenant of Purchaser and Target with respect to confidentiality set
forth in the Confidentiality Agreement will survive the termination of this
Agreement or completion of the Transaction and continue in full force and effect
for a period of two years thereafter.

Expenses

9.3     Whether or not the Transaction is consummated, except as otherwise
provided herein, all costs and expenses incurred in connection with this
Agreement and the Transaction (including the fees and expenses of advisors,
accountants and legal counsel) will be paid by the Person incurring such
expense.

Termination Fees

9.4     If this Agreement is terminated pursuant to

(a)     Section 9.1(e) in circumstances where a bona fide Acquisition Proposal,
or the intention to enter a bona fide Acquisition Proposal with respect to
Target, has been publicly announced before the termination of this Agreement and
not withdrawn, and within 12 months of the date of such termination:

(i)     the Person who made such Acquisition Proposal or an affiliate of such
Person:

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(A)     directly or indirectly acquires Target by arrangement, business
combination or otherwise;

(B)     directly or indirectly acquires the assets of Target that: (1)
constitute more than 20% of the consolidated assets of Target; (2) generate more
than 20% of the consolidated revenue of Target; or (3) generate more than 20% of
the consolidated operating income of Target; or

(C)     directly or indirectly acquires more than 50% of the Target Shares; or

(ii)     Target enters into a definitive agreement in respect of, or the Target
Board approves or recommends, a transaction contemplated by (a) above with the
Person or such affiliate that made such Acquisition Proposal and that
transaction is consummated at any time thereafter;

(b)     Section 9.1(f); or

(c)     Section 9.1(g);

Target will pay to Purchaser an amount equal to USD $300,000 in cash or
immediately available funds (the "Termination Fee").

Each of Purchaser and Target acknowledges and agrees that if the full fee is
paid to Purchaser by Target pursuant to Section 9.4, the amount so paid and
accepted is in lieu of any damages or any other payment or remedy which
Purchaser may be entitled to and will constitute payment of liquidated damages
which are a genuine estimate of the damages which Purchaser will suffer or incur
as a result of the event giving rise to such damages and the resultant
termination of this Agreement and are not penalties. Target irrevocably waives
any right it may have to raise as a defense that any such liquidated damages are
excessive or punitive. For greater certainty, Purchaser agrees that the payment
of any amount pursuant to Section 9.4 is the sole monetary remedy available to
it and that it will not have any alternative right or remedy against Target for
damages, whether for consequential damages or otherwise. Nothing in this Section
9.4 will preclude a Party from seeking injunctive relief to restrain any breach
or threatened breach of the covenants or agreements set forth in this Agreement
or the Confidentiality Agreement or otherwise to obtain specific performance of
any such covenants or agreements, without the necessity of posting bond or
security in connection therewith.

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ARTICLE 10
GENERAL

Notices

10.1     Any notice, consent, waiver, direction or other communication required
or permitted to be given under this Agreement by a Person to any other Person
will be in writing and may be given by delivering same or sending same by
facsimile transmission or by delivery addressed to the Person to which the
notice is to be given at its address for service herein. Any notice, consent,
waiver, direction or other communication aforesaid will, if delivered, be deemed
to have been given and received on the date on which it was delivered to the
address provided herein (if a Business Day, if not, the next succeeding Business
Day) and if sent by facsimile transmission be deemed to have been given and
received at the time of receipt unless actually received after 4:00 p.m. at the
point of delivery in which case it will be deemed to have been given and
received on the next Business Day.

The address for service of each of the parties hereto will be as follows:

(a)     if to Target:

Cue Resources Ltd.
Suite 1430, 800 West Pender Street
Vancouver, British Columbia, Canada, V6C 2V6
Attention:     Robert Tyson, Chief Executive Officer
Facsimile:    (604) 684-2990; and

with a copy (that will not constitute notice) to:

Kjeld Werbes Law Corp.
Suite 708, 1111 West Hastings Street
Vancouver, British Columbia, Canada, V6E 2J3
Attention:     Kjeld Werbes
Facsimile:    (604) 689-4626; and

if to Purchaser:

Uranium Energy Corp.
Suite 320, 1111 West Hastings Street
Vancouver, British Columbia, Canada, V6E 2J3
Attention:     Amir Adnani, Chief Executive Officer
Facsimile:    (604) 682-3591; and

with a copy (that will not constitute notice) to:

McMillan LLP
Royal Centre, 1055 West Georgia Street
Suite 1500, Vancouver, British Columbia, Canada, V6E 4N7
Attention:     Daniel Dex
Facsimile:    (604) 893-7623.

Time of Essence

10.2     Time will be of the essence in this Agreement.

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No Third Party Beneficiaries

10.3     Except as provided in Section 4.3, this Agreement is not intended to
confer any rights or remedies upon any person other than the Parties to this
Agreement.

Further Assurances

10.4     Each Person hereto will, from time to time, and at all times hereafter,
at the request of any other Person hereto, but without further consideration, do
all such further acts and execute and deliver all such further documents and
instruments as will be reasonably required in order to fully perform and carry
out the terms and intent hereof.

Governing Law

10.5     This Agreement will be governed by, and be construed in accordance
with, the laws of the Province of British Columbia, Canada, and the federal laws
of Canada applicable therein. Each Person hereby irrevocably attorns to the
non-exclusive jurisdiction of the Courts of the Province of British Columbia in
respect of all matters arising under or in relation to this Agreement.

Execution in Counterparts

10.6     This Agreement may be executed in identical counterparts, each of which
is and is hereby conclusively deemed to be an original and the counterparts
collectively are to be conclusively deemed to be one instrument and receipt of a
facsimile version of an executed signature page by a Person will constitute
satisfactory evidence of execution of this Agreement by such Person.

Enurement and Assignment

10.7     This Agreement will enure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns. This
Agreement may not be assigned by any Person hereto without the prior written
consent of the other Person hereto.

[The remainder of this page is intentionally blank.]

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IN WITNESS WHEREOF

the Parties hereto have executed this Arrangement Agreement as of the date first
above written.

CUE RESOURCES LTD.

Per:     /s/ Robert Tyson
           Name: Robert Tyson
          Title: Chief Executive Officer

Per:      /s/ John Icke
            Name: John Icke
            Title: Executive Chairman

URANIUM ENERGY CORP.

Per:     /s/ Amir Adnani
           Name: Amir Adnani
           Title: Chief Executive Officer

Per:      /s/ Mark Katsumata
            Name: Mark Katsumata
            Title: Chief Financial Officer

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Schedule 1

PLAN OF ARRANGEMENT

IN THE MATTER OF AN ARRANGEMENT among Cue Resources Ltd. ("Target") and the
holders from time to time of the issued and outstanding common shares without
par value in the capital of Target, pursuant to Part 9, Division 5 of the
Business Corporations Act (British Columbia), as amended.

ARTICLE 1
INTERPRETATION

1.1     In this Plan of Arrangement, any capitalized term used herein and not
defined in this Section 1.1 will have the meaning ascribed thereto in the
Arrangement Agreement. Unless the context otherwise requires, the following
words and phrases used in this Plan of Arrangement will have the meanings
hereinafter set out:

"Arrangement" means the arrangement under Part 9, Division 5 of the BCBCA as
described herein;

"Arrangement Agreement" means the agreement made as of January 20, 2012 between
Purchaser and Target, including all schedules annexed hereto, together with the
Target Disclosure Letter, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with the terms thereof;

"Arrangement Resolution" means the special resolution of the Target Shareholders
approving the Plan of Arrangement which is to be considered at the Target
Meeting and will be substantially in the form of Schedule "B" to the Arrangement
Agreement;

"BCBCA" means the Business Corporations Act (British Columbia) and the
regulations made thereunder, as now in effect and as they may be promulgated or
amended from time to time;

"Business Day" means any day, other than a Saturday, a Sunday or a statutory or
civic holiday in Vancouver, British Columbia;

"Court" means the Supreme Court of British Columbia;

"Depositary" means Transfer Online Inc.;

"Dissent Procedures" has the meaning ascribed thereto in Section 5.1;

"Dissent Rights" means the rights of dissent exercisable by the Target
Shareholders in respect of the Arrangement described in Article 5 hereto;

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"Dissenter" means a Target Shareholder who has duly exercised a Dissent Right
and who is ultimately entitled to be paid the fair value of the Target Shares
held by such Target Shareholder;

"Dissenting Shares" has the meaning ascribed thereto in Section 5.2;

"Effective Date" means the effective date of the Arrangement, being the second
business day after the date upon which all conditions precedent (excluding
conditions that, by their terms, cannot be satisfied until the Effective Date)
to the completion of the Arrangement as set out in Article 6 of the Arrangement
Agreement have been satisfied or waived in accordance with the Arrangement
Agreement, or such other date as may be agreed to by Purchaser and Target, and
Purchaser and Target will execute a certificate confirming the Effective Date,
not to be unreasonably withheld;

"Effective Time" means 12:01 a.m. (Vancouver time) on the Effective Date, or
such other time as may be agreed between Purchaser and Target;

"Exchange Ratio" means 0.0195 of a Purchaser Share in exchange for each Target
Share;

"Final Order" means the final order of the Court, after a hearing upon the
fairness of the terms and conditions of the Arrangement, approving the
Arrangement, in a form acceptable to Target and Purchaser, each acting
reasonably, as such order may be amended by the Court at any time prior to the
Effective Date or, if appealed, then, unless such appeal is withdrawn or denied,
as affirmed or as amended on appeal;

"Interim Order" means the interim order of the Court contemplated by Section 2.2
of the Arrangement Agreement and made pursuant to Section 291 of the BCBCA, in a
form acceptable to Target and Purchaser, each acting reasonably, providing for,
among other things, the calling and holding of the Target Meeting, as the same
may be amended by the Court;

"Plan of Arrangement" means this Plan of Arrangement and any amendments or
variations thereto made in accordance with this Plan of Arrangement or upon the
direction of the Court in the Final Order with the consent of Target and
Purchaser, each acting reasonably;

"Purchaser" means Uranium Energy Corp., a company incorporated under the laws of
the State of Nevada, U.S.A.;

"Purchaser Shares" means the common shares with a par value of USD $0.001 per
share in the capital of Purchaser;

"Registrar" means the Registrar of Companies appointed pursuant to Section 400
of the BCBCA;

"Subsidiary" has the meaning ascribed thereto in the National Instrument 45-106
- Prospectus and Registration Exemptions;

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"Target" means Cue Resources Ltd., a company continued under the laws of the
Province of British Columbia, Canada;

"Target Meeting" means the special meeting of Target Shareholders, voting as a
single class, including any adjournment or postponement thereof, to be called
and held in accordance with the Interim Order to consider the Arrangement
Resolution;

"Target Shareholders" means the holders from time to time of Target Shares and
Target Shareholder means any one of them;

"Target Shares" means the common shares in the authorized share capital of
Target;

"Tax Act" means the Income Tax Act (Canada) and the regulations made thereunder,
as now in effect and as they may be promulgated or amended from time to time;
and

"Transmittal Letter" means the letter of transmittal to be sent by Target to
Target Shareholders for use in connection with the Arrangement.

1.2     In this Plan of Arrangement, unless otherwise expressly stated or the
context otherwise requires:

(a)     the division of this Plan of Arrangement into Articles and Sections and
the further division thereof into subsections and the insertion of headings are
for convenience of reference only and will not affect the construction or
interpretation of this Plan of Arrangement. Unless otherwise indicated, any
reference in this Plan of Arrangement to an Article, Section or subsection
refers to the specified Article, Section or subsection to this Plan of
Arrangement;

(b)     the terms "hereof", "herein", "hereunder" and similar expressions refer
to this Plan of Arrangement and not to any particular section or other portion
hereof and include any agreement or instrument supplementary or ancillary hereto
and, unless otherwise indicated, a reference herein to a Section is to the
appropriate Section of this Plan of Arrangement;

(c)     words importing the singular number only will include the plural and
vice versa, words importing the use of any gender will include all genders and
words importing persons will include firms and corporations and vice versa;

(d)     if any date on which any action is required to be taken hereunder by any
of the parties is not a Business Day, such action will be required to be taken
on the next succeeding day which is a Business Day;

(e)     the word "including" means "including, without limiting the generality
of the foregoing";

(f)     a reference to a statute is to that statute as now enacted or as the
statute may from time to time be amended, re-enacted or replaced and includes
any regulation, rule or policy made thereunder; and

(g)     all references to cash or currency in this Plan of Arrangement are to
Canadian dollars unless otherwise indicated.

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ARTICLE 2
ARRANGEMENT AGREEMENT

2.1     This Plan of Arrangement is made pursuant to and subject to the
provisions of the Arrangement Agreement.

2.2     This Plan of Arrangement will become effective as at the Effective Time
and will be binding without any further authorization, act or formality on the
part of the Court, or the Registrar, on Purchaser, Target and the Target
Shareholders from and after the Effective Time.

ARTICLE 3
ARRANGEMENT

3.1     On the Effective Date, subject to the provisions of Article 5 hereof,
the following will occur and will be deemed to occur in the order and at the
times set out below without any further authorization, act or formality:

(a)     immediately thereafter, each issued Target Share outstanding immediately
prior to the Effective Time held by a Target Shareholder in respect of which
Dissent Rights have been validly exercised will be deemed to have been
transferred without any further act or formality to Purchaser, free and clear of
any liens, claims and encumbrances, and:

(i)     such Target Shareholder will cease to be the registered holder of such
Dissenting Shares and will cease to have any rights as registered holders of
such Target Shares other than the right to be paid fair value for such
Dissenting Shares as set out in Section 5.2(a);

(ii)     such Target Shareholder's name will be removed as the registered holder
of such Dissenting Shares from the registers of Target Shares maintained by or
on behalf of Target; and

(iii)     Purchaser will be deemed to be the transferee of such Dissenting
Shares, free and clear of any liens, claims and encumbrances, and will be
entered in the registers of Target Shares maintained by or on behalf of Target;
and

(b)     immediately thereafter, each issued and outstanding Target Share (other
than any Target Share in respect of which the Target Shareholder has validly
exercised his, her or its Dissent Right) will be transferred to, and acquired by
Purchaser, without any act or formality on the part of the holder of such Target
Share or Purchaser, free and clear of all liens, claims and encumbrances, in
exchange for 0.0195 of a Purchaser Share, provided that the aggregate number of
Purchaser Shares payable to any Target Shareholder, if calculated to include a
fraction of a Purchaser Share, will be rounded down to the nearest whole
Purchaser Share, with no consideration being paid for the fractional share, and
the name of each such Target Shareholder will be removed from the register of
holders of Target Shares and added to the register of holders of Purchaser
Shares, and Purchaser will be recorded as the registered holder of such Target
Shares so exchanged and will be deemed to be the legal and beneficial owner
thereof;

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The transactions provided for in this Section 3.1 will be deemed to occur on the
Effective Date and at the time specified notwithstanding that certain of the
procedures related hereto are not completed until after the Effective Date.

3.2     Notwithstanding that the transactions or events set out in Section 3.1
may occur or be deemed to occur in the order therein set out without any further
act or formality, each of Target and Purchaser agree to make, do and execute or
cause and procure to be made, done and executed all such further acts, deeds,
agreements, transfers, assurances, instruments or documents as may be required
by it in order to further document or evidence any of the transactions or events
set out in Section 3.1 including, without limitation, any resolution of
directors authorizing the issue, transfer or purchase for cancellation of
shares, any share transfer powers evidencing the transfer of shares, any receipt
therefor and any necessary additions to or deletions from share registers.

ARTICLE 4
CERTIFICATES AND PAYMENTS

4.1     Purchaser will, following receipt by Target of the Final Order and prior
to the Effective Time, deposit in escrow with the Depositary the Purchaser
Shares to satisfy the consideration issuable and/or payable to the Target
Shareholders pursuant to this Plan of Arrangement (other than Target
Shareholders exercising Dissent Rights and who have not withdrawn their notice
of objection).

4.2     After the Effective Date, certificates formerly representing Target
Shares which are held by a Target Shareholder will, except for Target Shares
held by Dissenters, represent only the right to receive the consideration
issuable and/or payable therefor pursuant to Section 3.1 in accordance with the
terms of this Plan of Arrangement.

4.3     No dividends or other distributions declared or made after the Effective
Date with respect to the Purchaser Shares with a record date after the Effective
Date will be payable or paid to the holder of any unsurrendered certificate or
certificates for Target Shares which, immediately prior to the Effective Date,
represented outstanding Target Shares and will not be payable or paid until the
surrender of certificates for Target Shares for exchange for the consideration
issuable and/or payable therefor pursuant to Section 3.1 in accordance with the
terms of this Plan of Arrangement.

4.4     As soon as reasonably practicable after the Effective Date (subject to
Section 6.2), the Depositary will forward to each Target Shareholder that
submitted a duly completed Transmittal Letter to the Depositary, together with
the certificate (if any) representing the Target Shares held by such Target
Shareholder, the certificates representing the Purchaser Shares issued to such
Target Shareholder pursuant to Section 31.(b), which shares will be registered
in such name or names and either (i) delivered to the address or addresses as
such Target Shareholder directed in their Transmittal Letter or (ii) made
available for pick up at the offices of the Depositary in accordance with the
instructions of the Target Shareholder in the Transmittal Letter.

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4.5     Target Shareholders that did not submit an effective Transmittal Letter
prior to the Effective Date may take delivery of the consideration issuable or
payable to them by delivering the certificates representing Target Shares or
Target Shares formerly held by them to the Depositary at the offices indicated
in the Transmittal Letter. Such certificates must be accompanied by a duly
completed Transmittal Letter, together with such other documents as the
Depositary may require. Certificates representing the Purchaser Shares issued to
such Target Shareholder pursuant to Section 3.1 will be registered in such name
or names and delivered to the address or addresses as such Target Shareholder
directed in their Transmittal Letter or (ii) made available for pick up at the
offices of the Depositary in accordance with the instructions of the Target
Shareholder in the Transmittal Letter, as soon as reasonably practicable after
receipt by the Depositary of the required certificates and documents.

4.6     Any certificate which immediately prior to the Effective Date
represented outstanding Target Shares and which has not been surrendered, with
all other instruments required by this Article 4, on or prior to the sixth
anniversary of the Effective Date, will cease to represent any claim against or
interest of any kind or nature in Target, Purchaser or the Depositary.

4.7     In the event any certificate, which immediately before the Effective
Time represented one or more outstanding Target Share that was exchanged
pursuant to Section 3.1, is lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming such certificate to be lost,
stolen or destroyed, the Depositary will issue in exchange for such lost, stolen
or destroyed certificate, the consideration to which such Person is entitled in
respect of the Target Shares represented by such lost, stolen, or destroyed
certificate pursuant to Section 3.1 deliverable in accordance with such Person's
Transmittal Letter. When authorizing such issuances or payment in exchange for
any lost, stolen or destroyed certificate, the Person to whom consideration is
to be issued and/or paid will, as a condition precedent to the issuance and/or
payment thereof, give a bond satisfactory to Purchaser and its transfer agent in
such sum as Purchaser may direct or otherwise indemnify Purchaser in a manner
satisfactory to it, against any Claim that may be made against one or both of
them with respect to the certificate alleged to have been lost, stolen or
destroyed.

ARTICLE 5
RIGHTS OF DISSENT

5.1     Notwithstanding Section 3.1, holders of Target Shares may exercise
rights of dissent (the "Dissent Rights") in connection with the Arrangement
pursuant to the Interim Order and in the manner set forth in sections 242 to 247
of the BCBCA (collectively, the "Dissent Procedures").

5.2     Target Shareholders who duly exercise Dissent Rights with respect to
their Target Shares ("Dissenting Shares") and who:

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(a)     are ultimately entitled to be paid fair value for their Dissenting
Shares will be deemed to have transferred their Dissenting Shares to Target for
cancellation immediately before the Effective Date; or

(b)     for any reason are ultimately not entitled to be paid for their
Dissenting Shares, will be deemed to have participated in the Arrangement on the
same basis as a non-dissenting Target Shareholder and will receive Purchaser
Shares on the same basis as every other non-dissenting Target Shareholder;

but in no case will Target be required to recognize such persons as holding
Target Shares on or after the Effective Date.

5.3     If a Target Shareholder exercises the Dissent Right, Purchaser will on
the Effective Date set aside a number of Purchaser Shares which is attributable
under the Arrangement to the Target Shares for which Dissent Rights have been
exercised. If the dissenting Target Shareholder is ultimately not entitled to be
paid for their Dissenting Shares, they will be deemed to have participated in
the Arrangement on the same basis as the non-dissenting Target Shareholders and
Purchaser will distribute to such Target Shareholder the Purchaser Shares that
the Target Shareholder is entitled to receive pursuant to the terms of the
Arrangement. If a Target Shareholder duly complies with the Dissent Procedures
and is ultimately entitled to be paid for their Dissenting Shares, Purchaser
will pay the amount to be paid in respect of the Dissenting Shares.

ARTICLE 6
EFFECT OF THE ARRANGEMENT

6.1     As at and from the Effective Time:

(a)     Target will be a wholly-owned Subsidiary of Purchaser;

(b)     the rights of creditors against the property and interests of Target
will be unimpaired by the Arrangement; and

(c)     Target Shareholders, other than Dissenters, will hold Purchaser Shares
in replacement for their Target Shares, as provided by the Plan of Arrangement.

6.2      Purchaser, Target and the Depositary will be entitled to deduct and
withhold from any consideration payable to any holder of Target Shares and to
any Dissenter, such amounts as Purchaser, Target or the Depositary is required
or permitted to deduct and withhold with respect to such payment under the Tax
Act, the United States Internal Revenue Code of 1986 or any provision of
provincial, state, local or foreign tax laws, in each case, as amended. To the
extent that amounts are so withheld, such withheld amounts will be treated for
all purposes hereof as having been paid to the holder of the shares in respect
of which such deduction and withholding was made, provided that such withheld
amounts are actually remitted to the appropriate taxing authority. Each of
Target, Purchaser and the Depositary is hereby authorized to sell or otherwise
dispose of such portion of Purchaser Shares payable as consideration as is
necessary to provide sufficient funds to Purchaser, Target or the Depositary, as
the case may be, to enable it to implement such deduction or withholding, and
Purchaser, Target or the Depositary will notify the holder thereof and remit to
the holder any unapplied balance of the net proceeds of such sale.

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ARTICLE 7
AMENDMENTS

7.1     Purchaser and Target reserve the right to amend, modify and/or
supplement this Plan of Arrangement from time to time at any time prior to the
Effective Date, provided that any such amendment, modification or supplement
must be contained in a written document that is approved by each of Purchaser
and Target and is filed with the Court. Subject to Section 7.3, if such
amendment, modification or supplement is made following the Target Meeting, it
will be approved by the Court and, if required by the Court, communicated to the
Target Shareholders, and will become part of the Arrangement upon completion of
all the conditions required in the Court approval.

7.2     Save and except as may be otherwise provided in the Interim Order, any
amendment, modification or supplement to this Plan of Arrangement may be
proposed by Purchaser or Target (provided that the other will have consented
thereto) at any time prior to the Target Meeting with or without any other prior
notice or communication to Target Shareholders, and if so proposed and accepted
by Target Shareholders voting at the Target Meeting, will become part of this
Plan of Arrangement for all purposes.

7.3     Any amendment, modification or supplement to this Plan of Arrangement
may be made by Purchaser and Target without approval of the Target Shareholders
provided that it concerns a matter which, in the reasonable opinion of Purchaser
and Target is of an administrative or ministerial nature required to better give
effect to the implementation of this Plan of Arrangement and is not materially
adverse to the financial or economic interests of any of the Target
Shareholders.

ARTICLE 8
FURTHER ASSURANCES

8.1     Notwithstanding that the transactions and events set out herein will
occur and be deemed to occur in the order set out in this Plan of Arrangement
without any further act or formality, each of the parties to the Arrangement
Agreement will make, do and execute, or cause to be made, done and executed, all
such further acts, deeds, agreements, transfers, assurances, instruments or
documents as may reasonably be required by any of them in order further to
document or evidence any of the transactions or events set out therein.

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Schedule 2

REPRESENTATIONS AND WARRANTIES OF TARGET

Each of the representations and warranties of Target set forth in this Schedule
2 is qualified and made subject to the disclosures made in the Target Disclosure
Letter, and any specific reference to the Target Disclosure Letter herein is
solely for greater certainty. Target hereby represents and warrants to Purchaser
(and acknowledges that Purchaser is relying upon such representations and
warranties in connection with entering into this Agreement) as set forth below:

(a)     Organization: Target and each of the Target Subsidiaries is a
corporation duly incorporated or amalgamated or an entity duly created and
validly existing under all applicable Laws of its jurisdiction of incorporation,
continuance or creation and has all necessary corporate or other power,
authority and capacity to own its property and assets as now owned and to carry
on its business as it is now being conducted. Target and each of its
subsidiaries (i) has all licenses, permits, certificates, orders and other
authorizations of or from any Governmental Entity necessary to conduct its
business substantially as now conducted, and (ii) is duly registered or
otherwise authorized and qualified to do business and is in good standing in
each jurisdiction in which the character of its properties, owned, leased,
licensed or otherwise held, or the nature of its activities makes such
qualification necessary, except where the failure to be so registered or in good
standing would not reasonably be expected to have a Material Adverse Effect.

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(b)     Capitalization: The authorized share capital of Target consists of
unlimited number of Target Shares. The number of issued and outstanding Target
Shares, Target Options and Target Warrants as of the close of business on
January 19, 2012 is set forth in Schedule (B) of the Target Disclosure Letter.
There are no options, warrants, conversion privileges or other rights,
shareholder rights plans, agreements, arrangements or commitments (pre-emptive,
contingent or otherwise) of any character whatsoever requiring or which may
require the issuance, sale or transfer by Target of any securities of Target
(including Target Shares), or any securities or obligations convertible into, or
exchangeable or exercisable for, or otherwise evidencing a right or obligation
to acquire, any securities of Target (including Target Shares). All outstanding
Target Shares have been duly authorized and validly issued, are fully paid and
non-assessable, and all Target Shares issuable upon the exercise of rights under
the Target Options and Target Warrants in accordance with their respective terms
have been duly authorized and, upon issuance, will be validly issued as fully
paid and non-assessable, and are not and will not be subject to, or issued in
violation of, any pre-emptive rights. All securities of Target (including the
Target Shares, the Target Options and the Target Warrants) have been issued in
compliance with all applicable Laws and Securities Laws. There are no securities
of Target outstanding which have the right to vote generally (or, other than the
Target Options and the Target Warrants, are convertible into, or exchangeable or
exercisable for securities having the right to vote generally) with the Target
Shareholders on any matter. There are no outstanding contractual or other
obligations of Target or any of the Target Subsidiaries to repurchase, redeem or
otherwise acquire any of its securities or with respect to the voting or
disposing of any of its outstanding securities. There are no outstanding bonds,
debentures or other evidences of indebtedness of Target having the right to vote
with the holders of the outstanding Target Shares on any matters.

(c)     Authority: Target has the requisite corporate power, authority and
capacity to enter into this Agreement and all other agreements and instruments
to be executed by Target as contemplated by this Agreement and to perform its
obligations hereunder and under such other agreements and instruments. The
execution and delivery of this Agreement by Target and the performance by Target
and of its obligations under this Agreement have been duly authorized by the
Target Board and no other corporate proceedings on the part of Target or any of
the Target Subsidiaries is necessary to authorize the execution and delivery of
this Agreement or the performance by Target and its obligations under this
Agreement or the Arrangement pursuant to the Plan of Arrangement. This Agreement
has been duly executed and delivered by Target and constitutes a legal, valid
and binding obligation of Target, enforceable against Target in accordance with
its terms, subject to the qualification that such enforceability may be limited
by bankruptcy, insolvency, reorganization or other laws of general application
relating to or affecting rights of creditors and that equitable remedies,
including specific performance, are discretionary and may not be ordered.

(d)    No Consent: No consent, approval, order or Authorization of, or
declaration or filing with, any Governmental Entity or other Person is required
to be obtained by Target or any of the Target Subsidiaries in connection with
the execution and delivery of this Agreement or the consummation by Target of
the transactions contemplated hereby other than:

(i)     in connection with or in compliance with applicable securities Laws;

(ii)     obtaining the Interim Order and Final Order, obtaining any approvals
required by the Interim Order and Final Order and filing any documents as may be
required to be filed with the Registrar;

(iii)     any other consents, waivers, permits, orders or approvals referred to
in the Target Disclosure Letter; and

(iv)     any other consents, approvals, orders, authorizations, declarations or
filings which, if not obtained, would not, individually or in the aggregate,
have a Material Adverse Effect on Target.

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(e)     Target Subsidiaries: The only Subsidiaries of Target are the Target
Subsidiaries and Target does not own a direct or indirect voting or equity
interest in any Person that is not one of the Target Subsidiaries and has no
agreement or other commitment to acquire such interest. The authorized and
issued securities of each Target Subsidiary is set out in Schedule (E) of the
Target Disclosure Letter. All of the outstanding shares of the Target
Subsidiaries are validly issued, fully paid and non-assessable and free of
pre-emptive rights to the extent such concepts exists under applicable Laws. All
of the outstanding shares of the Target Subsidiaries are owned, directly or
indirectly, by Target. Except pursuant to restrictions on transfer contained in
the Articles or by-laws (or their equivalent) of the applicable Subsidiary of
Target, the outstanding shares of the Target Subsidiaries are owned free and
clear of all Encumbrances, other than the Target Permitted Encumbrances, and
Target is not liable to any creditor in respect thereof.

(f)     No Violation: None of the authorization, execution and delivery of this
Agreement by Target, the completion of the transactions contemplated by this
Agreement or the Plan of Arrangement, or compliance by Target with any of the
provisions hereof or thereof will: (1) violate, conflict with, or result (with
or without notice or the passage of time) in a violation or breach of any
provision of, or require, except in respect of any consent, approval or notice
under, or constitute a default (or an event which, with notice or lapse of time
or both, would constitute a default) or result in a right of termination or
acceleration under, or result in the creation of any Lien upon, any of the
properties or assets of Target, or cause any indebtedness to come due before its
stated maturity or cause any credit commitment to cease to be available or cause
any payment or other obligation to be imposed on Target, under any of the terms,
conditions or provisions of (A) their respective articles, charters or by-laws
or other comparable organizational documents, or (B) any note, bond, mortgage,
indenture, loan agreement, deed of trust, Lien, license, permit, or other
Contract; or (2) result (with or without notice or the passage of time) in a
violation or breach of or constitute a default under any provisions of any Laws
applicable to Target or any of their respective properties or assets; or (3)
cause the suspension or revocation of any Permit currently in effect in respect
of Target (except, in the case of each of clauses (1) and (2) above, for such
violations, conflicts, breaches, defaults, terminations, accelerations or
creations of Liens which, or any consents, approvals or notices which if not
given or received, would not, individually or in the aggregate, reasonably be
expected to have any Material Adverse Effect on Target). The authorization of
this Agreement, the execution and delivery by Target of this Agreement, the
performance by Target of its obligations under this Agreement, and the
consummation by Target of the Arrangement, will not (x) give rise to any rights
of first refusal or trigger any change in control provisions or any restrictions
or limitation under any such note, bond, mortgage, indenture, contract, license,
franchise or Permit, or result in the imposition of any Encumbrance, charge or
Lien upon any of Target's assets; (y) result in or accelerate the time for
payment or vesting of, or increase the amount of any severance, unemployment
compensation, "golden parachute", bonus, termination payments or otherwise,
becoming due to any director or officer of Target or any of the Target
Subsidiaries or increase any benefits otherwise payable under any pension or
benefits plan of Target or any of the Target Subsidiaries or result in the
acceleration of the time of payment or vesting of any such benefits (other than
in respect of those employment agreements or other agreements described in
Schedule (F) of the Target Disclosure Letter); or (z) result in the imposition
of any Liens upon any assets of Target.

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(g)     Company Authorizations: Target and the Target Subsidiaries have obtained
all Authorizations necessary for the ownership, operation, development,
maintenance, or use of the material assets of Target or the Target Subsidiaries
or otherwise in connection with the material business or operations of Target or
the Target Subsidiaries and such Authorizations are in full force and effect.
Target and the Target Subsidiaries have fully complied with and are in
compliance with all Authorizations, except, in each case, for such
non-compliance which, individually or in the aggregate, would not have a
Material Adverse Effect on Target. There is no action, investigation or
proceeding pending or, to the knowledge of Target, threatened regarding any of
the Authorizations. None of Target and the Target Subsidiaries has received any
notice, whether written or oral, of revocation or non-renewal of any such
Authorizations, or of any intention of any Person to revoke or refuse to renew
any of such Authorizations, except in each case, for revocations or non-renewals
which, individually or in the aggregate, would not have a Material Adverse
Effect on Target and all such Authorizations continue to be effective in order
for Target and the Target Subsidiaries to continue to conduct their business as
they are currently being conducted. No Person other than Target or any of the
Target Subsidiaries owns or has any proprietary, financial or other interest
(direct or indirect) in any of the Authorizations.

(h)     Financial Statements and Information: The Target Financial Statements
were prepared in accordance with generally accepted accounting principles in
Canada consistently applied, and fairly represent, in all material respects, the
consolidated financial condition of Target at the respective dates indicated and
the results of operations of Target (on a consolidated basis) for the periods
covered.

(i)     Since April 30, 2011, neither Target nor any of the Target Subsidiaries
nor, to Target's knowledge, any director, officer, employee, auditor, accountant
or representative of Target or any of the Target Subsidiaries has received or
otherwise had or obtained knowledge of any complaint, allegation, assertion, or
claim, whether written or oral, regarding the accounting or auditing practices,
procedures, methodologies or methods of Target or any of the Target Subsidiaries
or their internal accounting controls, including any complaint, allegation,
assertion, or claim that Target or any of the Target Subsidiaries has engaged in
questionable accounting or auditing practices, which has not been resolved to
the satisfaction of the audit committee of the Target Board.

(j)     Target has converted to IFRS for financial reporting purposes, and, to
the knowledge of Target, the transition to IFRS will not result in any delay in
the release of Target's financial results for any relevant period.

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(k)     Employment Agreements:

(i)     the Target Subsidiaries have no employees, and no severance amounts
and/or retention or bonuses are payable by the Target Subsidiaries to anyone,
and the Target Subsidiaries are not a party to any consulting agreements;

(ii)     Target and the Target Subsidiaries are and have been operated in all
material respects in compliance with all applicable Laws relating to employees;

(iii)     there is no material proceeding, action, suit or claim pending or
threatened involving any employee of Target and the Target Subsidiaries;

(iv)     except as set out in Schedule (F) of the Target Disclosure Letter, none
of Target and the Target Subsidiaries is a party to any written or oral policy,
agreement, obligation or understanding providing for severance or termination
payments to, or any employment or consulting agreement with, any director or
officer of Target or any of the Target Subsidiaries that would be triggered by
Target's entering into this Agreement or the completion of the Arrangement;

(v)     none of Target and the Target Subsidiaries has any employee or
consultant whose employment or contract with Target or one of the Target
Subsidiaries cannot be terminated by Target or one of the Target Subsidiaries,
as applicable; and

(vi)     none of Target and the Target Subsidiaries: (A) is a party to any
collective bargaining agreement; (B) is, to the knowledge of Target, subject to
any application for certification or threatened or apparent union-organizing
campaigns for employees not covered under a collective bargaining agreement; or
(C) is subject to any current, or to the knowledge of Target, pending or
threatened strike, lockout, slowdown or work stoppage.

(l)     Reporting Status and Securities Laws Matters: Target is a "reporting
issuer" and is in compliance in all material respects with applicable Canadian
Securities Laws in each of the provinces of British Columbia and Alberta. No
delisting, suspension of trading in or cease trading order with respect to any
securities of Target and, to the knowledge of Target, no inquiry or
investigation (formal or informal) of any Securities Regulator, is in effect or
ongoing or, to the knowledge of Target, expected to be implemented or
undertaken. The Target Shares are listed and posted for trading on the TSXV.
Target is in compliance in all material respects with all requirements of the
TSXV.

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(m)     Public Record: Target has filed all required reports, statements, forms
and other documents required to be filed by it in accordance with applicable
Laws and, as of their respective dates, the documents and materials comprising
the Target Disclosure Documents (including all exhibits and schedules thereto
and documents incorporated by reference therein) did not contain any
Misrepresentation, and complied in all material respects with all Securities
Laws. Target has not filed any confidential material change or other report or
other document with any Securities Regulator or stock exchange or other
self-regulatory authority which at the date hereof remains confidential.

(n)     Books and Records: The financial books, records and accounts of Target
in all material respects: (i) have been maintained in accordance with Canadian
GAAP, (ii) are stated in reasonable detail and accurately and fairly reflect the
material transactions and dispositions of the assets of Target, and
(iii) accurately and fairly reflect the basis for the Target Financial
Statements. The corporate records and minute books for Target have been
maintained in accordance with all applicable Laws and contain complete and
accurate minutes of all meetings and resolutions of the directors and
shareholders of Target held and/or passed, as applicable, since their
incorporation or amalgamation, as the case may be.

(o)     No Undisclosed Liabilities: Other than as disclosed in Schedule (O) of
the Target Disclosure Letter, Target has no outstanding indebtedness or
liabilities and is not party to or bound by any material suretyship, guarantee,
indemnification or assumption agreement, or endorsement of, or any other similar
commitment with respect to the obligations, liabilities or indebtedness of any
person, other than those specifically identified in the Target Financial
Statements or, to the extent disclosed in the Target Disclosure Letter, incurred
in the ordinary course of business since the date of the most recent financial
statements of Target filed on SEDAR.

(p)     Absence of Changes: Since April 30, 2011, except as disclosed in
Schedule (P) of the Target Disclosure Letter:

(i)     there has been no change (actual, contemplated or threatened) in the
condition (financial or otherwise), earnings, position, value, operation,
properties, business results of operations or prospects of Target or any of the
Target Subsidiaries that has or is reasonably likely to have a Material Adverse
Effect on Target, and the debt, business and material property of Target and of
the Target Subsidiaries conform in all respects to the description thereof
contained in the Target Disclosure Letter;

(ii)     there has been no dividend or distribution of any kind declared, paid
or made by Target on any Target Shares;

(iii)     Target and each of the Target Subsidiaries have conducted their
respective businesses only in the ordinary and regular course of business
consistent with past practice;

(iv)     there has not been any acquisition or sale by Target or any of the
Target Subsidiaries of any material property or assets thereof;

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(v)     other than in the ordinary and regular course of business consistent
with past practice, there has not been any incurrence, assumption or guarantee
by Target or any of the Target Subsidiaries of: (A) any payment, liability or
obligation of any nature which has had or is reasonably likely to have a
Material Adverse Effect on Target; (B) any debt for borrowed money; (C) any
creation or assumption by Target or any of the Target Subsidiaries of any
Encumbrance; (D) any making by Target or any of the Target Subsidiaries of any
loan, advance or capital contribution to or investment in any other Person
(other than (1) loans and advances in an aggregate amount that does not exceed
$10,000 outstanding at any time, and (2) loans made to other Target
Subsidiaries); or (E) any entering into, amendment of, relinquishment,
termination or non-renewal by Target or any of the Target Subsidiaries of any
contract, agreement, licence, lease transaction, commitment or other right or
obligation which has had or is reasonably likely to have a Material Adverse
Effect on Target;

(vi)     Target has not effected or passed any resolution to approve a split,
consolidation or reclassification of any of the outstanding Target Shares;

(vii)     other than in the ordinary and regular course of business consistent
with past practice, there has not been any material increase in or modification
of the compensation payable to or to become payable by Target or any of the
Target Subsidiaries to any of their respective directors, officers, employees or
consultants or any grant to any such director, officer, employee or consultant
of any increase in severance or termination pay or any increase or modification
of any bonus, pension, insurance or benefit arrangement made to, for or with any
of such directors or officers;

(viii)     Target has not effected any material change in its accounting
methods, principles or practices; and

(ix)     Target has not adopted any, or materially amended any, collective
bargaining agreement, bonus, pension, profit sharing, stock purchase, stock
option or other benefit plan or shareholder rights plan.

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(q)     Material Contracts: Schedule (Q) of the Target Disclosure Letter
includes a complete and accurate list of all Material Contracts to which Target
or any of the Target Subsidiaries is a party. All Material Contracts are in full
force and effect, and Target and any of the Target Subsidiaries are entitled to
all rights and benefits thereunder in accordance with the terms thereof. Target
has made available to the Purchaser true and complete copies of all Material
Contracts. All of the Material Contracts are valid and binding obligations of
Target or a Target Subsidiary, as applicable, enforceable in accordance with
their respective terms, except as may be limited by bankruptcy, insolvency and
other laws affecting the enforcement of creditors' rights generally and subject
to the qualification that equitable remedies may only be granted in the
discretion of a court of competent jurisdiction. Except as set out in the Target
Disclosure Letter, Target and the Target Subsidiaries have complied in all
material respects with all terms of such Material Contracts, have paid all
amounts due thereunder, have not waived any rights thereunder and no default or
breach exists in respect thereof on the part of Target or any of the Target
Subsidiaries or, to the knowledge of Target, on the part of any other party
thereto, and no event has occurred which, after the giving of notice or the
lapse of time or both, would constitute such a default or breach or trigger a
right of termination of any of the Material Contracts. As at the date hereof,
neither Target nor any of the Target Subsidiaries have received written notice
that any party to a Material Contract intends to cancel, terminate or otherwise
modify or not renew such Material Contract, and to the knowledge of Target or
any of the Target Subsidiaries, no such action has been threatened. Neither
Target nor any of the Target Subsidiaries is a party to any Material Contract
that contains any non-competition obligation or otherwise restricts in any
material way the business of Target or any of the Target Subsidiaries.

(r)     Compliance with Law: To the best of the knowledge of Target after due
enquiry, Target and each of the Target Subsidiaries have complied with and are
in compliance with all Laws applicable to the operation of its business, except
where such non-compliance, considered individually or in the aggregate, would
not be reasonably likely to have a Material Adverse Effect on Target or any of
the Target Subsidiaries and without limitation, Target and each of the Target
Subsidiaries hold all permits, licences and approvals required for the operation
of their business as is now being and has previously been conducted.

(s)     Litigation, etc: There are no claims, actions, suits, grievances,
complaints or proceedings pending or, to the knowledge of Target, threatened or
affecting Target or any of the Target Subsidiaries or affecting any of its
respective property or assets at law or in equity before or by any Governmental
Entity, including matters arising under Environmental Laws. Neither Target, any
of the Target Subsidiaries, nor their assets or properties are subject to any
outstanding judgement, order, writ, injunction or decree that involves or may
involve or restricts or may restrict the right or ability of Target or any of
the Target Subsidiaries to conduct their business in all material respects as it
has been carried on prior to the date hereof, or that would materially impair
the consummation of the transactions contemplated by this Agreement.

(t)     Absence of Cease Trade Orders: No order ceasing or suspending trading in
the Target Shares (or any of them) or any other securities of Target is
outstanding and no proceedings for this purpose have been instituted or, to the
knowledge of Target, are pending, contemplated or threatened.

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(u)     Licences, etc: Target and the Target Subsidiaries hold all requisite
licences, registrations, qualifications, permits, certificates, orders, grants,
approvals, consents and other authorizations necessary or appropriate for
carrying on their business as currently carried on and all such licences,
registrations, qualifications, permits, certificates, orders, grants, approvals,
consents and other authorizations are valid and subsisting and in good standing
in all material respects except where the failure to hold such licences,
registrations, qualifications, permits and consents would not have a Material
Adverse Effect on Target. In particular, without limiting the generality of the
foregoing, neither Target nor any of the Target Subsidiaries have received any
notice of proceedings relating to the revocation or adverse modification of any
material mining or exploration permit or licence, nor have they received notice
of the revocation or cancellation of, or any intention to revoke or cancel, any
mining rights, groups of claims, exploration rights, concessions or leases with
respect to any of the Target Mineral Rights.

(v)     Interest in Properties and Target Mineral Rights. Except as disclosed in
Schedule (V) of the Target Disclosure Letter:

(i)     all of Target's: (A) real properties (collectively, and where material,
the "Target Property"); and (B) mineral interests and rights (including any
mineral claims, mining claims, concessions, exploration licences, exploitation
licences, prospecting permits, mining leases and mining rights, in each case,
either existing under contract, by operation of Laws or otherwise)
(collectively, and where material, the "Target Mineral Rights"), are set out in
the Target Disclosure Letter. Other than the Target Property and the Target
Mineral Rights set out in Schedule (V) of the Target Disclosure Letter, neither
Target nor any of the Target Subsidiaries own or has any interest in any
material real property or any material mineral interests and rights;

(ii)     Target is the sole legal and beneficial owner of all right, title and
interest in and to the Target Property and the Target Mineral Rights, free and
clear of any Encumbrance, other than the Target Permitted Encumbrances.

(iii)     all of the Target Mineral Rights have been properly located and
recorded and otherwise granted in compliance with applicable Laws and are
comprised of valid and subsisting Target Mineral Rights;

(iv)     the Target Property and the Target Mineral Rights are in good standing
under applicable Laws and, to the knowledge of Target, all work required to be
performed and filed in respect thereof has been performed and filed, all Taxes,
rentals, fees, expenditures and other payments required to be made in respect
thereof have been paid or incurred and all filings in respect thereof have been
made;

(v)     there are no material adverse Claims against or challenge to the title
to or ownership of the Target Property or any of the Target Mineral Rights which
would reasonably be expected to have a Material Adverse Effect on Target;

(vi)     Target has the exclusive right to deal with the its interest in the
Target Property and the Target Mineral Rights;

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(vii)     no Person other than Target has any interest in the Target Property or
any of the Target Mineral Rights or the production or profits therefrom or any
royalty in respect thereof or any right to acquire any such interest;

(viii)     there are no back-in rights, earn-in rights, purchase options, rights
of first refusal or similar provisions or rights which would affect Target's
interest in the Target Property or any of the Target Mineral Rights;

(ix)     there are no material restrictions on the ability of Target to use,
transfer or exploit the Target Property or any of the Target Mineral Rights,
except pursuant to the applicable Laws;

(x)     Target has not received any notice, whether written or oral, from any
Governmental Entity of any revocation or intention to revoke any interest of
Target in any of the Target Property or any of the Target Mineral Rights;

(xi)     Other than fee simple estates, Target has all surface rights, including
leases, easements, rights of way and permits or licences operations from
landowners, or Governmental Entities permitting the use of land by Target, and
other interests that are required to exploit the development potential of the
Target Property and the Target Mineral Rights as contemplated in Target
Disclosure Letter and no third party or group holds any such rights that would
be required by Target to develop the Target Property or any of the Target
Mineral Rights as contemplated in Target Disclosure Letter; and

(xii)     No mines have been or are located in or on the lands of Target.

(w)     Mineral Resources: The most recent estimated, indicated, measured and
inferred mineral resources disclosed in the Target Disclosure Documents before
the date of this Agreement have been prepared and disclosed in all material
respects in accordance with accepted mining, engineering, geoscience and other
approved industry practices and all applicable Laws, including the requirements
of NI 43-101. The information provided by Target to the Qualified Persons (as
defined in NI 43-101) in connection with the preparation of such estimates was
complete and accurate at the time such information was furnished. No material
mineral deposits are subject to illegal occupation. There has been no material
reduction in the aggregate amount of estimated mineral resources of Target from
the amounts disclosed in the Target Disclosure Documents. All information
regarding the Target Property and the Target Mineral Rights, including drill
results, technical reports and studies, that are required to be disclosed by
Laws, have been disclosed in the Target Disclosure Documents.

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(x)     Operational Matters. Except as would not, individually or in the
aggregate, be reasonably expected to result in a Material Adverse Effect on
Target:

(i)     all rentals, royalties, overriding royalty interests, production
payments, net profits, interest burdens, payments and obligations due and
payable, or performable, as the case may be, on or prior to the date hereof
under, with respect to, or on account of, any direct or indirect assets of
Target, or any of the Target Subsidiaries and any of their material joint
ventures, have been: (A) duly paid; (B) duly performed; or (С) provided for
prior for the date hereof; and

(ii)     all costs, expenses, and liabilities payable on or prior to the date
hereof under the terms of any contracts and agreements to which Target or any of
the Target Subsidiaries or any of its material joint ventures is directly or
indirectly bound, have been properly and timely paid, except for such expenses
that are being currently paid prior to delinquency in the ordinary course of
business.

(y)     Off Balance Sheet Transactions. None of Target or any of the Target
Subsidiaries is a party to or bound by any operating leases or any
"off-balance-sheet" transactions or arrangements.

(z)     Title and Rights re: Other Assets. Target and the Target Subsidiaries,
as applicable, have good and valid title to all material properties and assets
other than the Target Properties and the Target Mineral Rights (which are
addressed elsewhere) reflected in the audited consolidated financial statements
for the year ended April 30, 2011 (or acquired after that date) or valid
leasehold or license interests in all material properties and assets not
reflected in such financial statements but used by Target or any of the Target
Subsidiaries, free and clear of all material Encumbrances, other than the Target
Permitted Encumbrances, and there are no back-in rights, earn-in rights,
purchase options, rights to first refusal or similar provisions or rights which
would affect Target's or any of the Target Subsidiaries' interest in any of the
foregoing-described material properties and assets.

(aa)     Environmental: Other than as set forth in Schedule (AA) of the Target
Disclosure Letter, to the knowledge of Target:

(i)     Target and the Target Subsidiaries are and have been in compliance with
and is not in violation of any Environmental Laws;

(ii)     Target and the Target Subsidiaries have operated their respective
businesses at all times and has generated, received, handled, used, stored,
treated, shipped and disposed of all contaminants, wastes, and hazardous and
toxic substances without violation of Environmental Laws;

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(iii)     there have been no spills, releases, deposits or discharges of
pollutants or hazardous or toxic substances, contaminants or wastes into the
earth, air or into any body of water, whether surface or otherwise, or any
municipal or other sewer or drain or drinking or water systems, by Target or any
of the Target Subsidiaries, or from Target assets or operations, which could
reasonably be expected to result in liability under any Environmental Law, that
have not been reported, mitigated and remedied in compliance with Environmental
Laws;

(iv)     no orders, notifications, directives, demands, claims, instructions,
directions or notices have been issued and remain outstanding by any
Governmental Entity pursuant to any Environmental Laws, whether or not have the
force of law, relating to the business or assets of Target or any of the Target
Subsidiaries;

(v)     neither Target nor any of the Target Subsidiaries has failed to report
to the proper Governmental Entity the occurrence of any event which is required
to be so reported by any Environmental Laws;

(vi)     Target and the Target Subsidiaries hold all Environmental Approvals
required under any Environmental Laws in connection with the operation of their
respective businesses and the ownership and use including rehabilitation of
their respective assets, all such Environmental Approvals are in full force and
effect, and neither Target nor any of the Target Subsidiaries has received any
notification from any Governmental Entity pursuant to any Environmental Laws
that any work, undertaking, study, report, assessment, repairs, constructions or
other expenditures are required to be made by it as a condition of continued
compliance with any Environmental Laws, or any Environmental Approvals issued
pursuant thereto, or that any Environmental Approvals referred to above are
about to be reviewed, made subject to limitation or conditions, revoked,
withdrawn or terminated;

(vii)     there are no changes in the status, terms or conditions of any
Environmental Approvals held by Target or any of the Target Subsidiaries, or any
renewal, modification, revocation, reassurance, alteration, transfer,
restriction or amendment of any such Environmental Approvals, or any review by,
or approval of, any Governmental Entity of such Environmental Approvals that are
required in connection with the execution or delivery of this Agreement, the
consummation of the transactions contemplated herein or the continuation of the
business and operations of Target or any of the Target Subsidiaries following
the Effective Date;

(viii)     Target and the Target Subsidiaries have made available to Purchaser
all material audits, assessments, investigation reports, studies, plans,
regulatory correspondence and similar information with respect to environmental,
health and safety matters; and

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(ix)     to the knowledge of Target, none of Target and the Target Subsidiaries
are subject to any past or present fact, condition or circumstance that could
reasonably be expected to result in liability under any Environmental Laws.

(bb)     Insurance: As of the date hereof, Target has such policies of insurance
as are listed in Schedule (BB) of the Target Disclosure Letter. All insurance
maintained by Target and each of the Target Subsidiaries is in full force and
effect and in good standing and neither Target nor any of the Target
Subsidiaries are in default, whether as to payment of premium or otherwise,
under the terms of any such insurance nor has Target or any of the Target
Subsidiaries failed to give any notice or present any material claim under any
such insurance in a due and timely fashion or received notice or otherwise
become aware of any intent of an insurer to either claim any default on the part
of Target or any of the Target Subsidiaries or not to renew any policy of
insurance on its expiry or to increase any deductible or cost.

(cc)     Tax Matters: Except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on Target:

(i)     each of Target and the Target Subsidiaries has duly and timely made or
prepared all Tax Returns required to be made or prepared by it, has duly and
timely filed all Tax Returns required to be filed by it with the appropriate
Governmental Entity and such Tax Returns are complete and correct;

(ii)     each of Target and the Target Subsidiaries has: (A) duly and timely
paid all Taxes due and payable by it; (B) duly and timely withheld all Taxes and
other amounts required by Laws to be withheld by it and has duly and timely
remitted to the appropriate Governmental Entity such Taxes and other amounts
required by Laws to be remitted by it; and (C) duly and timely collected all
amounts on account of sales or transfer taxes, including goods and services,
harmonized sales, sales, value added and federal, provincial, state or
territorial sales taxes, required by Laws to be collected by it and has duly and
timely remitted to the appropriate Governmental Entity any such amounts required
by Laws to be remitted by it;

(iii)     the charges, accruals and reserves for Taxes reflected on the Target
Financial Statements (whether or not due and whether or not shown on any of the
Tax Returns but excluding any provision for deferred income taxes) are, in the
opinion of Target, adequate under Canadian GAAP to cover Taxes with respect to
Target and the Target Subsidiaries accruing for the periods covered thereby;

(iv)     there are no proceedings, investigations, audits, assessments,
reassessments or claims now pending or to the knowledge of Target, threatened
against Target or the Target Subsidiaries that propose to assess Taxes in
addition to those reported in the Tax Returns;

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(v)     no waiver of any statutory limitation period with respect to Taxes has
been given or requested with respect to Target or any of the Target
Subsidiaries;

(vi)     none of Target and the Target Subsidiaries has entered into any
agreement or other arrangement in respect of Taxes or Tax Returns that has
effect for any period ending after the Effective Date;

(vii)     there are no proceedings, investigations, audits or claims now pending
or threatened against Target or any of the Target Subsidiaries in respect of any
Taxes and there are no matters under discussion, audit or appeal with any
Governmental Entity relating to Taxes;

(viii)     neither Target nor any of the Target Subsidiaries has acquired
property from a non-arm's length Person, within the meaning of the Tax Act:
(A) for consideration the value of which is less than the fair market value of
the property; or (B) as a contribution of capital for which no shares were
issued by the acquirer of the property;

(ix)     Target has made available to Purchaser copies of all Tax Returns for
the fiscal years ended April 30, 2008, 2009, 2010 and 2011 and all written
communication to or from any Governmental Entity and relating to the Taxes of
Target;

(x)     for the purposes of the Tax Act and any other relevant Tax purposes:

(A)     Target is resident in Canada; and

(B)     each of the Target Subsidiaries is resident in the jurisdiction in which
it was formed, and is not resident in any other country;

(xi)     there are no Encumbrances for Taxes upon any properties or assets of
Target or any of the Target Subsidiaries (other than Encumbrances relating to
Taxes not yet due and payable and for which adequate reserves have been recorded
on the most recent balance sheet included in the Target Financial Statements);

(xii)     to the best of its knowledge based on current business plans and
financial projections, Target expects that it should not be classified as a
"passive foreign investment company" (as defined under section 1297(a) of the
U.S. Tax Code) (a "PFIC") for its taxable year ending April 30, 2011;

(xiii)     Target has not declared or paid any dividends or made any other
distribution on any of the Target Shares or made any redemption or other
acquisition of Target Shares (A) in contemplation of this Agreement, the Plan of
Arrangement, or any transactions contemplated by this Agreement or the Plan or
Arrangement, or (B) since April 30, 2011;

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(xiv)     other than in the ordinary and regular course of business consistent
with past practice, neither Target nor any of the Target Subsidiaries has sold
any property or assets thereof (A) in contemplation of this Agreement, the Plan
of Arrangement, or any transactions contemplated by this Agreement or the Plan
or Arrangement or (B) since April 30, 2011; and

(xv)     Target does not own, and will not own on the Effective Date, any
"United States real property interest" as defined under section 897(c)(1)(A) of
the U.S. Tax Code and regulations promulgated thereunder.

(dd)     Non-Arm's Length Transactions. Except for employment or employment
compensation agreements entered into in the ordinary course of business, there
are no current contracts, commitments, agreements, arrangements or other
transactions (including relating to indebtedness by Target or any of the Target
Subsidiaries) between Target or any of the Target Subsidiaries on the one hand,
and any: (i) officer or director of Target or any of the Target Subsidiaries;
(ii) any holder of record or, to the knowledge of Target, beneficial owner of
five percent or more of the voting securities of Target; or (iii) any affiliate
or associate of any officer, director or beneficial owner, on the other hand.

(ee)     No Option on Assets. No Person has any agreement or option or any right
or privilege capable of becoming an agreement or option for the purchase from
Target or the Target Subsidiaries of the material assets of Target.

(ff)     Winding Up: No order has been made, petition presented or meeting
convened for the purpose of winding up of Target or any of the Target
Subsidiaries, or for the appointment of any provisional liquidator or in
relation to any other process whereby the business is terminated and the assets
of Target or any of the Target Subsidiaries are distributed amongst the
creditors and/or shareholders or other contributors, and there are no
proceedings under any applicable insolvency, bankruptcy, reorganisation or
similar laws in any relevant jurisdiction, and no events have occurred which,
under applicable Laws, would be reasonably likely to justify any such cases or
proceedings.

(gg)     Brokers: No broker, investment banker, financial advisor or other
person is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the transactions contemplated
hereby based upon arrangements made by or on behalf of Target, other than the
Financial Advisor, the fees and expenses of which are as set forth in Schedule
(GG) of the Target Disclosure Letter.

(hh)     No Expropriation. No property or asset of Target or any of the Target
Subsidiaries (including any Target Property or Target Mineral Rights) has been
taken or expropriated by any Governmental Entity nor has any notice or
proceeding in respect thereof been given or commenced nor, to the knowledge of
Target, is there any intent or proposal to give any such notice or to commence
any such proceeding.

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(ii)     Corrupt Practices: There have been no actions taken by Target or any of
its Affiliates which violated or are in violation of the Foreign Corrupt
Practices Act of 1977 (United States) or the Corruption of Foreign Public
Officials Act (Canada) or any similar legislation of another jurisdiction.

(jj)     Confidentiality Agreements: Target has not negotiated any Acquisition
Proposal with any Person who has not entered into a confidentiality agreement
and has not waived any "standstill" provisions in any such agreement, and no
such agreement contains any provision currently in effect which would require
Target to pay any break fee or similar payment to any Person, other than
Purchaser pursuant to this Agreement.

(kk)     Competition Act: Target does not have assets in Canada or annual gross
revenues from sales in or from Canada that exceed $73 million, in either case,
as determined in accordance with the Competition Act and the regulations
thereunder.

(ll)     U.S. Securities Law Matters. Target: (i) is a "foreign private issuer"
as defined in Rule 405 under the 1933 Act; (ii) has no class of securities
outstanding that is or is required to be registered under section 12 of the 1934
Act or that is subject to the reporting requirements of section 13 or 15(d) of
the 1934 Act; (iii) is not registered or required to register as an investment
company under the 1940 Act; and (iv) the Target Shares, Target Warrants and
Target Options have not been traded on any national securities exchange in the
United States during the past 12 calendar months.

(mm)     Vote Required. The only votes of the holders of any class or series of
the Target Shares, Target Options, Target Warrants or other securities of Target
necessary to approve this Agreement and the Arrangement and the transactions
contemplated hereof or thereby is, subject to the Interim Order, the Target
Shareholder Approval.

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Schedule 3

REPRESENTATIONS AND WARRANTIES OF PURCHASER

Each of the representations and warranties of Purchaser set forth in this
Schedule 3 is qualified and made subject to the disclosures made in the
Purchaser Disclosure Documents, and any specific reference to the Purchaser
Disclosure Documents herein is solely for greater certainty. Purchaser hereby
represents and warrants to Target (and acknowledges that Target is relying upon
such representations and warranties in connection with entering into this
Agreement) as set forth below:

(a)     Organization: Purchaser is a corporation duly incorporated or
amalgamated or an entity duly created and validly existing under all applicable
Laws of its jurisdiction of incorporation, continuance or creation and has all
necessary corporate or other power, authority and capacity to own its property
and assets as now owned and to carry on its business as it is now being
conducted. Purchaser (i) has all licenses, permits, certificates, orders and
other authorizations of or from any Governmental Entity necessary to conduct its
business substantially as now conducted, and (ii) is duly registered or
otherwise authorized and qualified to do business and is in good standing in
each jurisdiction in which the character of its properties, owned, leased,
licensed or otherwise held, or the nature of its activities makes such
qualification necessary, except where the failure to be so registered or in good
standing would not reasonably be expected to have a Material Adverse Effect.

(b)     Ownership of Subsidiaries: The material subsidiaries of Purchaser are
disclosed in the Purchaser Disclosure Documents. All of the issued and
outstanding shares of capital stock and other ownership interests in the
material subsidiaries of Purchaser are duly authorized, validly issued, fully
paid and non-assessable, and all such shares and other ownership interests held
directly or indirectly by Purchaser are legally and beneficially owned, and
there are no outstanding options, warrants, rights, entitlements, understandings
or commitments (contingent or otherwise) regarding the right to purchase or
acquire, or securities convertible into, or exchangeable or exercisable for, any
such shares of capital stock or other ownership interests in or material assets
or properties of any of the subsidiaries of Purchaser except as disclosed in the
Purchaser Disclosure Documents. There are no contracts, commitments, agreements,
understandings, arrangements or restrictions which require any material
subsidiaries of Purchaser to issue, sell or deliver any shares in its share
capital or other ownership interests, or any securities or obligations
convertible into, or exchangeable or exercisable for, any shares of its share
capital or other ownership interests except as disclosed in the Purchaser
Disclosure Documents. There are no outstanding options, rights, entitlements,
understandings or commitments (contingent or otherwise) providing to any third
party the right to acquire any shares or other ownership interests in any
subsidiaries of Purchaser except as disclosed in the Purchaser Disclosure
Documents.

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(c)     Capitalization: The authorized share capital of Purchaser consists of
750,000,000 common shares with a par value of USD $0.001 per share. As of the
close of business on October 31, 2011, there are 75,206,013 Purchaser Shares
issued and outstanding. In addition, as of the close of business on October 31,
2011, 9,595,250 Purchaser Options and 1,128,020 Purchaser Warrants are issued
and outstanding. Except as disclosed above, there are no options, warrants,
conversion privileges or other rights, shareholder rights plans, agreements,
arrangements or commitments (pre-emptive, contingent or otherwise) of any
character whatsoever requiring or which may require the issuance, sale or
transfer by Purchaser of any securities of Purchaser (including Purchaser
Shares), or any securities or obligations convertible into, or exchangeable or
exercisable for, or otherwise evidencing a right or obligation to acquire, any
securities of Purchaser (including Purchaser Shares) or of the Purchaser
Subsidiaries. All outstanding Purchaser Shares have been duly authorized and
validly issued, are fully paid and non-assessable, and all Purchaser Shares
issuable upon the exercise of rights under the Purchaser Options in accordance
with the respective terms have been duly authorized and, upon issuance, will be
validly issued as fully paid and non-assessable, and are not and will not be
subject to, or issued in violation of, any pre-emptive rights. All securities of
Purchaser (including Purchaser Shares and Purchaser Options) have been issued in
compliance with all applicable Laws and Securities Laws. There are no securities
of Purchaser or any of the Purchaser Subsidiaries outstanding which have the
right to vote generally (or, other than the Purchaser Options and Purchaser
Warrants, are convertible into, or exchangeable or exercisable for securities
having the right to vote generally) with the Purchaser Shareholders on any
matter.

(d)     Authority: Purchaser has the requisite corporate power, authority and
capacity to enter into this Agreement and to perform its obligations hereunder.
The execution and delivery of this Agreement by Purchaser and the performance by
Purchaser of its obligations under this Agreement has been duly authorized by
the Purchaser Board and no other corporate or shareholder proceedings on the
part of Purchaser is necessary to authorize the execution and delivery by the
Purchaser of this Agreement or the performance of its respective obligations
under this Agreement or the Arrangement pursuant to the Plan of Arrangement (and
for greater certainty, the issuance of the Purchaser Shares forming part of the
Consideration pursuant to the Arrangement does not require the approval of the
Purchaser Shareholders pursuant to the policies of the NYSE Amex). This
Agreement has been duly executed and delivered by Purchaser and constitutes a
legal, valid and binding obligation of Purchaser, enforceable against Purchaser
in accordance with its terms, subject to the qualification that such
enforceability may be limited by bankruptcy, insolvency, reorganization or other
laws of general application relating to or affecting rights of creditors and
that equitable remedies, including specific performance, are discretionary and
may not be ordered.

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(e)     No Violation: None of the authorization, execution and delivery of this
Agreement by Purchaser, the completion of the transactions contemplated by this
Agreement or the Plan of Arrangement, or compliance by Purchaser with any of the
provisions hereof or thereof will: (1) violate, conflict with, or result (with
or without notice or the passage of time) in a violation or breach of any
provision of, or require, except in respect of approvals from the NYSE Amex, any
consent, approval or notice under, or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a default) or result in a
right of termination or acceleration under, or result in the creation of any
Lien upon, any of the properties or assets of Purchaser or any of the Purchaser
Subsidiaries, or cause any indebtedness to come due before its stated maturity
or cause any credit commitment to cease to be available or cause any payment or
other obligation to be imposed on Purchaser or any of the Purchaser
Subsidiaries, under any of the terms, conditions or provisions of (A) their
respective articles, charters or by-laws or other comparable organizational
documents, or (B) any note, bond, mortgage, indenture, loan agreement, deed of
trust, Lien, license, permit, or other Contract; or (2) subject to obtaining the
approvals from the NYSE Amex, (x) result (with or without notice or the passage
of time) in a violation or breach of or constitute a default under any
provisions of any Laws applicable to Purchaser or any of the Purchaser
Subsidiaries or any of its properties or assets; or (y) cause the suspension or
revocation of any Permit currently in effect in respect of Purchaser or the
Purchaser Subsidiaries (except, in the case of each of clauses (1) and (2)
above, for such violations, conflicts, breaches, defaults, terminations,
accelerations or creations of Liens which, or any consents (expressly excluding
the approvals from the NYSE Amex), approvals or notices which if not given or
received, would not, individually or in the aggregate, reasonably be expected to
have any Material Adverse Effect). The authorization of this Agreement, the
execution and delivery by Purchaser of this Agreement, the performance by
Purchaser of its obligations under this Agreement, and the consummation by
Purchaser of the Arrangement, will not (x) give rise to any rights of first
refusal or trigger any change in control provisions or any restrictions or
limitation under any such note, bond, mortgage, indenture, contract, license,
franchise or Permit, or result in the imposition of any Encumbrance, charge or
Lien upon any of the assets of Purchaser or the assets of any of the Purchaser
Subsidiaries; or (y) result in the imposition of any Liens upon any assets of
Purchaser or any of the Purchaser Subsidiaries. There are no approvals and
notices (except for post-closing notices) required from any third party under
any Contracts in order for Purchaser and the Purchaser Subsidiaries to proceed
with the execution and delivery of this Agreement and the completion of the
transactions contemplated by this Agreement and the Arrangement pursuant to the
Plan of Arrangement.

(f)     Financial Statements and Information: The Purchaser Financial Statements
were prepared in accordance with generally accepted accounting principles in the
United States consistently applied, and fairly represent, in all material
respects, the consolidated financial condition of Purchaser at the respective
dates indicated and the results of operations of Purchaser (on a consolidated
basis) for the periods covered.

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(g)     Reporting Status and Securities Laws Matters: Purchaser is a "reporting
issuer" and not on the list of reporting issuers in default under applicable
Canadian Securities Laws in each of the provinces of Canada. The Purchaser
Shares are registered as a class under section 12(b) of the U.S. Exchange Act,
and Purchaser has filed all reports that it is required to file under section
13(a) of the U.S. Exchange Act. No delisting, suspension of trading in or cease
trading order with respect to any securities of and, to the knowledge of
Purchaser, no inquiry or investigation (formal or informal) of any Securities
Regulator, is in effect or ongoing or, to the knowledge of Purchaser, expected
to be implemented or undertaken. The Purchaser shall use its best efforts such
that the Purchaser Shares shall be listed and posted for trading on the NYSE
Amex at or before the Effective Date. Purchaser is in compliance in all material
respects with all requirements of the NYSE Amex.

(h)     Public Record: Purchaser has filed all required reports, statements,
forms and other documents required to be filed by it in accordance with
applicable Laws and, as of their respective dates, the documents and materials
comprising the Purchaser Disclosure Documents (including all exhibits and
schedules thereto and documents incorporated by reference therein) did not
contain any Misrepresentation, and complied in all material respects with all
Securities Laws.

(i)     Books and Records: The financial books, records and accounts of
Purchaser in all material respects: (i) have been maintained in accordance with
U.S. GAAP, (ii) are stated in reasonable detail and accurately and fairly
reflect the material transactions and dispositions of the assets of Purchaser,
and (iii) accurately and fairly reflect the basis for the Purchaser Financial
Statements. The corporate records and minute books for Purchaser have been
maintained in accordance with all applicable Laws and contain complete and
accurate minutes of all meetings and resolutions of the directors and
shareholders of Purchaser held and/or passed, as applicable, since their
incorporation or amalgamation, as the case may be.

(j)     No Undisclosed Liabilities: Purchaser and the Purchaser Subsidiaries
have no outstanding indebtedness or liabilities and are not party to or bound by
any material suretyship, guarantee, indemnification or assumption agreement, or
endorsement of, or any other similar commitment with respect to the obligations,
liabilities or indebtedness of any person, other than those specifically
identified in the Purchaser Financial Statements or incurred in the ordinary
course of business since the date of the most recent Purchaser Financial
Statements filed on SEDAR or otherwise disclosed in the Purchaser Public
Documents.

(k)     Absence of Changes: Since October 31, 2011, except as disclosed in the
Purchaser Disclosure Documents, there has been no material change (actual,
contemplated or threatened) in the condition (financial or otherwise), earnings,
position, value, operation, properties, business results of operations or
prospects of Purchaser and the Purchaser Subsidiaries, and the debt, business
and material property of Purchaser and the Purchaser Subsidiaries conform in all
respects to the description thereof contained in the Purchaser Disclosure
Documents.

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(l)     Compliance with Law: To the best of the knowledge of Purchaser after due
enquiry, Purchaser has complied with and are in compliance with all Laws
applicable to the operation of its business, except where such non-compliance,
considered individually or in the aggregate, would not be reasonably likely to
have a Material Adverse Effect on Purchaser and without limitation, Purchaser
holds all permits, licences and approvals required for the operation of their
business as is now being and has previously been conducted.

(m)     Litigation, etc: Other than as disclosed in the Purchaser Disclosure
Documents, there are no claims, actions, suits, grievances, complaints or
proceedings pending or, to the knowledge of Purchaser, threatened affecting
Purchaser or any of the Purchaser Subsidiaries or affecting any of their
respective property or assets at law or in equity before or by any Governmental
Entity, including matters arising under Environmental Laws which, individually
or in the aggregate will have a Material Adverse Effect on Purchaser.

(n)     Absence of Cease Trade Orders: No order ceasing or suspending trading in
the Purchaser Shares (or any of them) or any other securities of Purchaser is
outstanding and no proceedings for this purpose have been instituted or, to the
knowledge of Purchaser, are pending, contemplated or threatened.

(o)     Purchaser Material Properties:

(i)     the Purchaser Material Properties as disclosed in the Purchaser Public
Documents constitute the material mining concessions, claims, leases, licenses,
permits or other rights to explore for, develop and extract minerals that
Purchaser or any of the Purchaser Subsidiaries have any legal or equitable
interest in;

(ii)     each Purchaser Material Property is in good standing and Purchaser and
the Purchaser Subsidiaries are lawfully authorized to hold the interests of
Purchaser and the Purchaser Subsidiaries in the Purchaser Material Properties;

(iii)     neither Purchaser nor the Purchaser Subsidiaries have received any
notice, whether written or oral from any Governmental Entity or any person with
jurisdiction or applicable authority of any revocation or intention to revoke
Purchaser's or any of the Purchaser Subsidiaries' interests in the Purchaser
Material Properties, except as disclosed in the Purchaser Public Disclosure
Documents; and

(iv)     all work and activities carried out on the Purchaser Material
Properties or any of the Purchaser Subsidiaries or any other person appointed by
Purchaser or any of the Purchaser Subsidiaries have been carried out in all
material respects in compliance with all applicable Laws, and neither Purchaser
nor any of the Purchaser Subsidiaries, nor, to the knowledge of Purchaser or any
of the Purchaser Subsidiaries, any other person has received any notice of any
material breach of any such applicable Laws, except as disclosed in the
Purchaser Disclosure Documents.

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(p)     Off Balance Sheet Transactions. Purchaser is not a party to or bound by
any operating leases or any "off-balance-sheet" transactions or arrangements.

(q)     Environmental: Except as disclosed in the Purchaser Disclosure
Documents, to the knowledge of Purchaser, each of Purchaser and the Purchaser
Subsidiaries and their respective businesses, operations, and properties:

(i)     is in compliance in all material respects with all Environmental Laws
and all terms and conditions of all Environmental Permits;

(ii)      has not received any order, request or notice from any person alleging
a material violation of any Environmental Law; and

(iii)     (i) is not a party to any material litigation or administrative
proceeding, nor to its knowledge is any material litigation or administrative
proceeding threatened against it or its property or assets, which in either case
(1) asserts or alleges that it violated any Environmental Laws, (2) asserts or
alleges that it is required to clean up, remove or take remedial or other
response action due to the Release of any Hazardous Substances, or (3) asserts
or alleges that it is required to pay all or a portion of the cost of any past,
present or future cleanup, removal or remedial or other response action which
arises out of or is related to the Release of any Hazardous Substances, (ii) has
no knowledge of any conditions existing currently which could reasonably be
expected to subject it to damages, penalties, injunctive relief or cleanup costs
under any Environmental Laws or which require or are likely to require cleanup,
removal, remedial action or other response by it pursuant to applicable
Environmental Laws, except to the extent it would not have a Material Adverse
Effect of the Purchaser; and (iii) is not subject to any judgment, decree, order
or citation related to or arising out of applicable Environmental Law and has
not been named or listed as a potentially responsible party by any Governmental
Entity in a matter arising under any Environmental Laws, except to the extent it
would not have a Material Adverse Effect of the Purchaser.

(r)     Insurance: All insurance maintained by Purchaser or any of the Purchaser
Subsidiaries is in full force and effect and in good standing in all material
respects and neither Purchaser nor any of the Purchaser Subsidiaries is in
material default, whether as to payment of premium or otherwise, under the terms
of any such insurance nor has Purchaser or any of the Purchaser Subsidiaries
failed to give any notice or present any material claim under any such insurance
in a due and timely fashion or received notice or otherwise become aware of any
intent of an insurer to either claim any default on the part of Purchaser or any
of the Purchaser Subsidiaries or not to renew any policy of insurance on its
expiry or to increase any deductible or cost.

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(s)     Tax Matters: Except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on Purchaser:

(i)     Purchaser and each of the Purchaser Subsidiaries has duly and timely
filed all Tax Returns required to be filed by them before the date hereof and
all such Returns are complete and correct in all material respects;

(ii)     Purchaser and each of the Purchaser Subsidiaries has paid on a timely
basis all Taxes which are due and payable, all assessments and reassessments,
and all other Taxes due and payable by them on or before the date hereof, other
than those which are being or have been contested in good faith and in respect
of which reserves have been provided in the Purchaser Financial Statements;

(iii)     no material deficiencies, litigation, proposed adjustments or matters
in controversy exist or have been asserted with respect to Taxes of Purchaser or
any of the Purchaser Subsidiaries, and neither Purchaser nor any of the
Purchaser Subsidiaries is a party to any action or proceeding for assessment or
collection of Taxes and no such event has been asserted or, to the knowledge of
Purchaser, threatened against Purchaser or any of the Purchaser Subsidiaries or
any of their respective assets;

(iv)     no claim has been made by any Governmental Entity in a jurisdiction
where Purchaser and any of the Purchaser Subsidiaries does not file Returns that
Purchaser or any of the Purchaser Subsidiaries is or may be subject to Tax by
that jurisdiction;

(v)     there are no Tax Liens (other than in respect of Taxes not yet due and
payable) upon any of the assets of Purchaser or any of the Purchaser
Subsidiaries;

(vi)     Purchaser and each of the Purchaser Subsidiaries has withheld or
collected all amounts required to be withheld or collected by it on account of
Taxes and has remitted all such amounts to the appropriate Governmental Entity
when required by Law to do so; and

(vii)     there are no outstanding agreements extending or waiving the statutory
period of limitations applicable to any claim for, or the period for the
collection or assessment or reassessment of, Taxes due from Purchaser or any of
its the Purchaser Subsidiaries for any taxable period and no request for any
such waiver or extension is currently pending.

(t)     Winding Up: No order has been made, petition presented or meeting
convened for the purpose of winding up of Purchaser, or for the appointment of
any provisional liquidator or in relation to any other process whereby the
business is terminated and the assets of Purchaser are distributed amongst the
creditors and/or shareholders or other contributors, and there are no
proceedings under any applicable insolvency, bankruptcy, reorganisation or
similar laws in any relevant jurisdiction, and no events have occurred which,
under applicable Laws, would be reasonably likely to justify any such cases or
proceedings.

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(u)      Brokers: No broker, investment banker, financial advisor or other
person is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the transactions contemplated
hereby based upon arrangements made by or on behalf of Purchaser, other than the
Financial Advisor, the fees and expenses payable to Dundee Securities Inc., in
its capacity as the Purchaser's financial advisor for the Transaction.

(v)     No Expropriation: No property or asset of Purchaser has been taken or
expropriated by any Governmental Entity nor has any notice or proceeding in
respect thereof been given or commenced nor, to the knowledge of Purchaser, is
there any intent or proposal to give any such notice or to commence any such
proceeding.

(w)     Issuance of Purchaser Shares: The Purchaser Shares to be issued as part
of the Consideration will, when issued pursuant to the Arrangement, be duly and
validly issued as fully paid and non-assessable common shares in the capital of
Purchaser, free and clear of all Liens, freely tradeable and listed and posted
for trading on the NYSE Amex.

(x)     Corrupt Practices: There have been no actions taken by Purchaser or any
of its Affiliates which violated or are in violation of the Foreign Corrupt
Practices Act of 1977 (United States) or the Corruption of Foreign Public
Officials Act (Canada) or any similar legislation of another jurisdiction.

 

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Schedule 4

LOCKED-UP SHAREHOLDERS

Directors and Officers of Target

Robert S. Tyson; President, Chief Executive Officer and a director;

John Icke; Executive Chairman and VP Business Development;

Andrew Bell; a director;

Chris Healey; a director;

Peter Leighton; a director;

David McAdam; Chief Financial Officer; and

Christina Boddy; Corporate Secretary.

 

Major Shareholders of Target

Resinco;

Red Rock Resources PLC;

Regency Mines PLC; and

Pinetree Capital Ltd.

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Schedule 5

ARRANGEMENT RESOLUTION

BE IT RESOLVED THAT:

1.     The arrangement (the "Arrangement") under section 288 of the Business
Corporations Act (British Columbia) (the "BCBCA") involving Target Inc.
("Target"), all as more particularly described and set forth in the Management
Proxy Circular (the "Circular") of Target dated February <>, 2012, accompanying
the notice of this meeting (as the Arrangement may be modified or amended), is
hereby authorized, approved and adopted;

2.      The plan of arrangement, as it may be or has been amended (the "Plan of
Arrangement"), involving Target and implementing the Arrangement, the full text
of which is set out in Appendix <> to the Circular (as the Plan of Arrangement
may be, or may have been, modified or amended), is hereby approved and adopted;

3.      The arrangement agreement (the "Arrangement Agreement") between Target
and Purchaser Inc., dated January 20, 2012, the actions of the directors of
Target in approving the Arrangement and the actions of the officers of Target in
executing and delivering the Arrangement Agreement and any amendments thereto
are hereby ratified and approved;

4.     Notwithstanding that this resolution has been passed (and the Arrangement
adopted) by the securityholders of Target or that the Arrangement has been
approved by the Supreme Court of British Columbia, the directors of Target are
hereby authorized and empowered, without further notice to, or approval of, the
securityholders of Target:

(a)     to amend the Arrangement Agreement or the Plan of Arrangement to the
extent permitted by the Arrangement Agreement or the Plan of Arrangement; or

(b)     subject to the terms of the Arrangement Agreement, not to proceed with
the Arrangement.

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