SHAREHOLDER
      RIGHTS PLAN AGREEMENT

    


    POLYMET
      MINING CORP.

    


    (the
      "Corporation")

    


    AND

    


    PACIFIC
      CORPORATE TRUST COMPANY 

    


    (the
      "Rights Agent")

    


    December
      4, 2003

     

     

     

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    


    TABLE
      OF CONTENTS

    


    
      	 	 	Page
	 	 	 
	
              ARTICLE
                1 INTERPRETATION

            	
              2

            
	 	 	 
	
              1.1

            	
              Definitions:

            	
              2

            
	
              1.2

            	
              Currency:

            	
              16

            
	
              1.3

            	
              Headings
                and References:

            	
              16

            
	
              1.4

            	
              Calculation
                of Number and Percentage of Beneficial Ownership of Outstanding Voting
                Shares:

            	
              17

            
	
              1.5

            	
              Acting
                Jointly or in Concert:

            	
              17

            
	
              1.6

            	
              Generally
                Accepted Accounting Principles:

            	
              18

            
	 	 	 
	
              ARTICLE
                2 THE RIGHTS

            	
              18

            
	 	 	 
	
              2.1

            	
              Legend
                on Common Share Certificates:

            	
              18

            
	
              2.2

            	
              Initial
                Exercise Price: Exercise of Rifts: Detachment of Rifts:

            	
              19

            
	
              2.3

            	
              Adjustments
                to Exercise Price: Number of Rights:

            	
              22

            
	
              2.4

            	
              Date
                on Which Exercise is Effective:

            	
              27

            
	
              2.5

            	
              Execution.
                Authentication. Delivery and Dating of Rifts Certificates:

            	
              27

            
	
              2.6

            	
              Registration.
                Transfer and Exchange:

            	
              28

            
	
              2.7

            	
              Mutilated.
                Destroyed. Lost and Stolen Rights Certificates:

            	
              28

            
	
              2.8

            	
              Persons
                Deemed Owners:

            	
              29

            
	
              2.9

            	
              Delivery
                and Cancellation of Certificates:

            	
              29

            
	
              2.10

            	
              Agreement
                of Rights Holders:

            	
              30

            
	
              2.11

            	
              Rights
                Certificate Holder Not Deemed a Shareholder:

            	
              30

            
	 	 	 
	
              ARTICLE
                3 ADJUSTMENTS TO THE RIGHTS

            	
              31

            
	 	 	 
	
              3.1

            	
              Flip-in
                Event:

            	
              31

            
	
              3.2

            	
              Exchange
                Option:

            	
              32

            
	 	 	 
	
              ARTICLE
                4 THE RIGHTS AGENT

            	
              34

            
	 	 	 
	
              4.1

            	
              General:

            	
              34

            
	
              4.2

            	
              Merger
                or Amalgamation or Chance of Name of Rights Agent:

            	
              34

            
	
              4.3

            	
              Duties
                of Rights Agent:

            	
              35

            
	
              4.4

            	
              Change
                of Rights Agent:

            	
              37

            


    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	 	 	 
	
              ARTICLE
                5 MISCELLANEOUS

            	
              37

            
	 	 	 
	
              5.1

            	
              Redemption
                and Waiver:

            	
              37

            
	
              5.2

            	
              Expiration:

            	
              39

            
	
              5.3

            	
              Issue
                of New Rights Certificates:

            	
              39

            
	
              5.4

            	
              Supplements
                and Amendments:

            	
              39

            
	
              5.5

            	
              Fractional
                Rights and Fractional Common Shares:

            	
              41

            
	
              5.6

            	
              Rights
                of Action:

            	
              41

            
	
              5.7

            	
              Regulatory
                Approvals:

            	
              42

            
	
              5.8

            	
              Declaration
                as to Non-Canadian holders:

            	
              42

            
	
              5.9

            	
              Notices:

            	
              42

            
	
              5.10

            	
              Costs
                of Enforcement:

            	
              43

            
	
              5.11

            	
              Successors:

            	
              44

            
	
              5.12

            	
              Benefits
                of this Agreement:

            	
              44

            
	
              5.13

            	
              Governing
                Law:

            	
              44

            
	
              5.14

            	
              Severability:

            	
              44

            
	
              5.15

            	
              Effective
                Date:

            	
              44

            
	
              5.16

            	
              Confirmation:

            	
              44

            
	
              5.17

            	
              Determinations
                and Actions by the Board of Directors:

            	
              45

            
	
              5.18

            	
              Counterparts:

            	
              46

            


    

    


    SCHEDULE
      A - FORM OF RIGHTS CERTIFICATE

    


    
      
         

      

      
        -ii-

        
          

        

      

      
         

      

    

    


    SHAREHOLDER
      RIGHTS PLAN AGREEMENT

    


    THIS
      SHAREHOLDER RIGHTS PLAN AGREEMENT made as of December 4,
      2003.

    


    BETWEEN:

    


    
      	 	 	
              POLYMET
                MINING CORP.,
                a
                corporation incorporated pursuant to the laws of British Columbia
                and
                having its registered office at 1040-999 West Hastings Street, Vancouver,
                B.C. V6C 2W2

            


    

    


    (the
      "Corporation")

    


    OF
      THE
      FIRST PART

    


    AND:

    


    
      	 	 	
              PACIFIC
                CORPORATE TRUST COMPANY,
                a
                trust company under the laws of British Columbia and having an office
                at
                10th
                Floor, 625 Howe Street, Vancouver, B.C., V6C
                3B8

            


    

    


    (the
      "Rights
      Agent")

    


    OF
      THE
      SECOND PART

    


    WHEREAS:

    


    A.  The
      Board
      of Directors of the Corporation have determined that it is in the best interests
      of the Corporation to adopt a shareholder rights plan to ensure, to the extent
      possible, that all shareholders of the Corporation are treated fairly in
      connection with any take-over bid for the Corporation.

    


    B.  In
      order
      to implement the adoption of a shareholder rights plan as established by this
      Agreement the Board of Directors of the Corporation has:

    


    
      	 	
              (1)

            	
              authorized
                the issuance, effective at 12:01 a.m. (Vancouver time) on the Effective
                Date, of one Right in respect of each Common Share outstanding as
                of 12:01
                a.m. (Vancouver time) on the Effective Date (the "Record
                Time");
                and

            


    

    


    
      	 	
              (2)

            	
              authorized
                the issue of one Right in respect of each Common Share issued after
                the
                Record Time and prior to the earlier of the Separation Time and the
                Expiration Time.

            


    

    


    C.  Each
      Right entitles the holder thereof, after the Separation Time, to purchase
      securities of the Corporation pursuant to the terms and subject to the
      conditions set forth in this Agreement.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    D.  The
      Corporation wishes to appoint the Rights Agent to act on behalf of the
      Corporation and the holders of Rights, and the Rights Agent is willing to so
      act, in connection with the issuance, transfer, exchange and replacement of
      Rights Certificates, the exercise of Rights and other matters referred to in
      this Agreement.

    


    E.  The
      Board
      of Directors of the Corporation proposes that this Agreement be in place for
      a
      period of ten years.

    


    NOW
      THEREFORE, in consideration of the premises and respective agreements set forth
      herein, the parties hereto agree as follows:

    


    ARTICLE
      1

    INTERPRETATION

     

    
      	
              1.1

            	 	
              Definitions:

            


    

    


    In
      this
      Agreement, the following words and terms will, unless the context otherwise
      requires, have the following meanings:

    


    
      	 	
              (a)

            	
              "Acquiring
                Person"
                means any Person who is or becomes the Beneficial Owner of 20% or
                more of
                the outstanding Voting Shares, provided that the term "Acquiring
                Person"
                will not include:

            


    

    


    
      	 	
              (i)

            	
              the
                Corporation or any Subsidiary of the
                Corporation;

            


    

    


    
      	 	
              (ii)

            	
              any
                Person who becomes the Beneficial Owner of 20% or more of the outstanding
                Voting Shares as a result of one or any combination
                of:

            


    

    


    
      	 	
              (A)

            	
              a
                Voting Share Reduction;

            


    

    


    
      	 	
              (B)

            	
              Permitted
                Bid Acquisitions;

            


    

    


    
      	 	
              (C)

            	
              an
                Exempt Acquisition; or

            


    

    


    
      	 	
              (D)

            	
              a
                Pro Rata Acquisition,

            


    

    


    provided
      that if a Person becomes the Beneficial Owner of 20% or more of the outstanding
      Voting Shares by reason of one or any combination of a Voting Share Reduction,
      Permitted Bid Acquisitions, an Exempt Acquisition or a Pro Rata Acquisition
      and
      thereafter such Person becomes the Beneficial Owner of any additional Voting
      Shares (other than pursuant to a Voting Share Reduction, Permitted Bid
      Acquisitions, an Exempt Acquisition or a Pro Rata Acquisition), then as of
      the
      date that such Person becomes the Beneficial Owner of such additional Voting
      Shares, such Person will become an "Acquiring Person";

    


    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

    
      	 	
              (iii)

            	
              for
                a period of ten days after the Disqualification Date (as defined
                below),
                any person who becomes the Beneficial Owner of 20% or more of the
                outstanding Voting Shares as a result of such Person becoming disqualified
                from relying on Section 1.1(f)(viii) solely because such Person or
                the
                Beneficial Owner of such Voting Shares has participated in, proposes
                or
                intends to make or is participating in a Take-Over Bid or any plan
                or
                proposal relating thereto or resulting therefrom, either alone or
                by
                acting jointly or in concert with any other Person. For the purposes
                of
                this definition, "Disqualification Date" means the first date of
                public
                announcement of facts indicating that any Person has participated
                in, has
                made, proposes or intends to make or is participating in a Take-Over
                Bid
                or any plans or proposals relating thereto or resulting therefrom,
                including, without limitation, a report filed pursuant to Section
                111 of
                the Securities
                Act
                (British Columbia), Section 101 of the Securities
                Act
                (Ontario), or Section 176 of the Securities
                Act
                (Alberta);

            


    

    


    
      	 	
              (iv)

            	
              an
                underwriter or member of a banking or selling group that becomes
                the
                Beneficial Owner of 20% or more of the outstanding Voting Shares
                in
                connection with a bona fide distribution to the public of securities
                pursuant to an underwriting agreement with the Corporation;
                or

            


    

    


    
      	 	
              (v)

            	
              a
                Grandfathered Person, provided that this exception will not be, and
                will
                cease to be, applicable to a Grandfathered Person in the event that
                such
                Grandfathered Person, after the Record Time, becomes the Beneficial
                Owner
                of any additional Voting Shares that increases its Beneficial Ownership
                of
                Voting Shares by more than 5% of the number of Voting Shares outstanding
                from time to time, other than through a Voting Share Reduction, a
                Permitted Bid Acquisition, an Exempt Acquisition, a Pro Rata Acquisition
                or through the exercise of existing rights to acquire additional
                Voting
                Shares from the Corporation where such rights were owned by the
                Grandfathered Person at the Record
                Time.

            


    

    


    
      	 	
              (b)

            	
              "Affiliate"
                means, when used to indicate a relationship with a specified Person,
                a
                Person that, directly, or indirectly through one or more intermediaries
                or
                otherwise, controls, or is controlled by, or is under common control
                with,
                such specified Person.

            


    

    


    
      	 	
              (c)

            	
              "Agreement"
                means this shareholder rights plan agreement dated as of December
                4, 2003
                between the Corporation and the Rights Agent, as amended, modified
                or
                supplemented from time to time.

            


    

    


    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

    
      	 	
              (d)

            	
              "annual
                cash dividend"
                means cash dividends paid at regular intervals in any financial year
                of
                the Corporation to the extent that such cash dividends do not exceed,
                in
                the aggregate, the greatest of:

            


    

    


    
      	 	
              (i)

            	
              200%
                of the aggregate amount of cash dividends declared payable by the
                Corporation on its Common Shares in its immediately preceding financial
                year;

            


    

    


    
      	 	
              (ii)

            	
              300%
                of the arithmetic average of the aggregate amount of cash dividends
                declared payable by the Corporation on its Common Shares in its three
                immediately preceding financial years;
                and

            


    

    


    
      	 	
              (iii)

            	
              100%
                of the aggregate consolidated net income of the Corporation, before
                extraordinary items, for its immediately preceding financial
                year.

            


    

    


    
      	 	
              (e)

            	
              "Associate"
                means, when used to indicate a relationship with a specified
                Person:

            


    

    


    
      	 	
              (i)

            	
              a
                corporation of which that Person owns, at law or in equity, shares
                or
                securities currently convertible into shares carrying more than 10%
                of the
                Voting Rights exercisable with respect to the election of directors
                under
                all circumstances or by reason of the occurrence of an event that
                has
                occurred and is continuing, or a currently exercisable option or
                right to
                purchase such shares or such convertible securities and with whom
                that
                Person is acting jointly or in
                concert;

            


    

    


    
      	 	
              (ii)

            	
              a
                partner of that Person acting on behalf of the partnership of which
                they
                are partners;

            


    

    


    
      	 	
              (iii)

            	
              a
                trust or estate in which that Person has a beneficial interest and
                with
                whom that Person is acting jointly or in concert or in which that
                Person
                has a beneficial interest of 50% or more or in respect of which that
                Person serves as a trustee or in a similar capacity provided, however,
                that a Person shall not be an associate of a trust by reason only
                of the
                fact that such Person serves as a trustee or any similar capacity
                in
                relation to such trust if such Person is duly licensed to carry on
                the
                business of a trust company under the laws of Canada or any province
                thereof or if the ordinary business of such Person includes the management
                of investment funds for unaffiliated investors and such Person acts
                as
                trustee or in a similar capacity in relation to such trust in the
                ordinary
                course of such business; and

            


    

    


    
      	 	
              (iv)

            	
              a
                spouse of that Person, any person of the same or opposite sex with
                whom
                that person is living in a conjugal relationship outside marriage,
                a child
                of that Person or a relative of that Person if that relative has
                the same
                residence as that Person.

            


    

    


    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

    
      	 	
              (f)

            	
              "Beneficial
                Owner":
                a
                Person shall be deemed the "Beneficial Owner", and to have "Beneficial
                Ownership" of, and to "Beneficially
                Own":

            


    

    


    
      	 	
              (i)

            	
              any
                securities as to which such Person or any of such Person's Affiliates
                is
                the direct or indirect owner at law or in equity and for the purposes
                of
                this Clause 1.1(f)(i), but without limiting the generality of the
                foregoing, a Person shall be deemed to be an owner at law or in equity
                of
                all securities:

            


    

    


    
      	 	
              (A)

            	
              owned
                by a partnership of which the Person is a
                partner;

            


    

    


    
      	 	
              (B)

            	
              owned
                by a trust in which the Person has a beneficial interest and which
                is
                acting jointly or in concert with that Person or in which the Person
                has a
                beneficial interest of 50% or more;

            


    

    


    
      	 	
              (C)

            	
              owned
                jointly or in common with others;
                and

            


    

    


    
      	 	
              (D)

            	
              of
                which the Person may be deemed to be the beneficial owner (whether
                or not
                of record) pursuant to the provisions of the Company
                Act
                (British Columbia), or the Securities
                Act
                (British Columbia), the Securities
                Act
                (Ontario), the Securities
                Act
                (Alberta), or pursuant to Rule 13d-3 or 13d-5 under the Exchange
                Act of
                1934 (or pursuant to any comparable or successor laws, regulations
                or
                rules enacted in relation to the provisions of the Company
                Act
                (British Columbia), the Securities
                Act
                (British Columbia), the Securities
                Act
                (Ontario), the Securities
                Act
                (Alberta) or pursuant to Rule 13d-3 or 13d-5 as in effect on the
                date of
                this Agreement);

            


    

    


    
      	 	
              (ii)

            	
              any
                securities as to which such Person or any of such Person's Affiliates
                or
                Associates has, directly or
                indirectly:

            


    

    


    
      	 	
              (A)

            	
              the
                right to acquire (whether such right is exercisable immediately or
                after
                the lapse or passage of time and whether or not on condition or the
                happening of any contingency or otherwise) pursuant to any agreement,
                arrangement, pledge or understanding, whether or not in writing (other
                than (x) customary agreements with and between underwriters and/or
                banking
                group members and/or selling group members with respect to a bona
                fide
                public offering of securities; (y) pledges of securities in the ordinary
                course of business that meet all the conditions specified in Rule
                13d-3(d)(3) under the Exchange Act of 1934 (except for the condition
                in
                Rule 13d-3(d)(3)(ii)); and (z) pledge agreements with a registered
                securities dealer relating to the extension of credit for purchases
                of
                securities on margin in the ordinary course of the dealer's business),
                or
                upon the exercise of any conversion right, exchange right, share
                purchase
                right (other than the Rights), warrant or option, or otherwise;
                or

            


    

    


    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

    
      	 	
              (B)

            	
              the
                right to vote such securities (whether such right is exercisable
                immediately or after the lapse or passage of time and whether or
                not on
                condition or the happening of any contingency or otherwise) pursuant
                to
                any agreement, arrangement, pledge (other than (x) pledges of securities
                in the ordinary course of business that meet all the conditions specified
                in Rule 13d-3(d)(3) under the Exchange Act of 1934 (except for the
                condition in Rule 13d-3(d)(3)(ii)); and (y) pledge agreements with
                a
                registered securities dealer relating to the extension of credit
                for
                purchases of securities on margin in the ordinary course of the dealer's
                business) or understanding (whether or not in writing) or
                otherwise;

            


    

    


    
      	 	
              (iii)

            	
              any
                securities which are Beneficially Owned within the meaning of Clauses
                1.1(f)(i) or (ii) by any other Person with which such Person or any
                of
                such Person's Affiliates or Associates has any agreement, arrangement
                or
                understanding, whether or not in writing (other than (x) customary
                agreements with and between underwriters and/or banking group members
                and/or selling group members with respect to a bona fide public offering
                of securities, (y) pledges of securities in the ordinary course of
                business that meet all the conditions specified in Rule 13d-3(d)(3)
                under
                the Exchange Act of 1934 (except for the condition in Rule
                13d-3(d)(3)(ii)) and (z) pledge agreements with a registered securities
                dealer relating to the extension of credit for purchases of securities
                on
                margin in the ordinary course of the dealer's business) with respect
                to or
                for the purpose of acting jointly or in concert in acquiring, holding,
                voting or disposing of any Voting Shares of any class;
                and

            


    

    


    
      	 	
              (iv)

            	
              any
                securities which are directly or indirectly owned at law or in equity
                by
                an Associate of such Person;

            


    

    


    provided,
      however, that a Person shall not be deemed the "Beneficial Owner" of, or to
      have
      "Beneficial Ownership" of, or to "Beneficially Own", any security:

    


    
      	 	
              (v)

            	
              where
                such security has been deposited or tendered pursuant to any Take-Over
                Bid
                made by such Person, made by any of such Person's Affiliates or Associates
                or made by any other Person referred to in Clause 1.1(f)(iii), until
                such
                deposited or tendered security has been taken up or paid for, whichever
                shall first occur;

            


    

    


    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

    
      	 	
              (vi)

            	
              where
                such Person, any of such Person's Affiliates or Associates or any
                other
                Person referred to in Clause 1.1(f)(iii), has or shares the power
                to vote
                or direct the voting of such security pursuant to a revocable proxy
                given
                in response to a public proxy solicitation or where such Person has
                an
                agreement, arrangement or understanding with respect to a shareholder
                proposal or proposals or a matter or matters to come before a meeting
                of
                shareholders, including the election of
                directors;

            


    

    


    
      	 	
              (vii)

            	
              where
                such Person, any of such Person's Affiliates or Associates or any
                other
                Person referred to in Clause 1.1(f)(iii), has or shares the power
                to vote
                or direct the voting of such security in connection with or in order
                to
                participate in a public proxy solicitation or where such Person has
                an
                agreement, arrangement or understanding with respect to a shareholder
                proposal or proposals or a matter or matters to come before a meeting
                of
                shareholders, including the election of
                directors;

            


    

    


    
      	 	
              (viii)

            	
              where
                such Person, any of such Person's Affiliates or Associates or any
                other
                Person referred to in Clause 1.1(f)(iii), holds or exercises voting
                or
                dispositive power over such security provided
                that:

            


    

    


    
      	 	
              A.

            	
              the
                ordinary business of any such Person (the "Investment
                Manager")
                includes the management of investment funds for others (which others,
                for
                greater certainty, may include or be limited to one or more employee
                benefit plans or pension plans) and such voting or dispositive power
                over
                such security is held by the Investment Manager in the ordinary course
                of
                such business in the performance of such Investment Manager's duties
                for
                the account of another Person (a "Client");

            


    

    


    
      	 	
              B.

            	
              such
                Person (the "Trust
                Company")
                is licensed to carry on the business of a trust company under the
                laws of
                Canada or any province thereof and, as such, acts as trustee or
                administrator or in a similar capacity in relation to the estates
                of
                deceased or incompetent Persons (each an "Estate
                Account")
                or in relation to other accounts (each an "Other
                Account")
                and holds such voting or dispositive power over such security in
                the
                ordinary course of such duties for the estate of any such deceased
                or
                incompetent Person or for such other
                accounts;

            


    

    


    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

    
      	 	
              C.

            	
              such
                Person is established by statute for purposes that include, and a
                substantial portion of the ordinary business or activity of such
                Person
                (the "Statutory
                Body")
                is, the management of investment funds for employee benefit plans,
                pension
                plans, insurance plans or various public bodies;
                or

            


    

    


    
      	 	
              D.

            	
              such
                Person (the "Administrator")
                is the administrator or trustee of one or more pension funds or plans
                registered under the laws of Canada or any Province thereof or the
                laws of
                the United States of America or any State
                thereof;

            


    

    


    provided,
      in any of the above cases, that the Investment Manager, the Trust Company,
      the
      Statutory Body or the Administrator, as the case may be, is not then making
      or
      proposing to make a Take-Over Bid, other than an Offer to Acquire Voting Shares
      or other securities by means of a distribution by the Corporation or by means
      of
      ordinary market transactions (including prearranged trades) executed through
      the
      facilities of a stock exchange or organized over-the-counter market, alone
      or by
      acting jointly or in concert with any other Person; or

    


    
      	 	
              (ix)

            	
              where
                such Person is a Client of the same Investment Manager as another
                Person
                on whose account the Investment Manager holds or exercises voting
                or
                dispositive power over such security, or by reason of such Person
                being an
                Estate Account or an Other Account of the same Trust Company as another
                Person on whose account the Trust Company holds or exercises voting
                or
                dispositive power over such
                security.

            


    

    


    
      	 	
              (g)

            	
              "Board
                of Directors"
                means the board of directors from time to time of the Corporation
                or any
                duly constituted and empowered committee
                thereof.

            


    

    


    
      	 	
              (h)

            	
              "Business
                Day"
                means any day other than a Saturday, Sunday or a day on which banking
                institutions in Vancouver are authorized or obligated by law to
                close.

            


    

    


    
      	 	
              (i)

            	
              "Canadian
                Dollar Equivalent"
                means, for any amount which is expressed in United States dollars
                on any
                date, the Canadian dollar equivalent of such amount determined by
                reference to the U.S.-Canadian Exchange Rate on such
                date.

            


    

    


    
      	 	
              (j)

            	
              "Canadian-U.S.
                Exchange Rate"
                means, on any date, the inverse of the U.S.-Canadian Exchange
                Rate.

            


    

    


    
      	 	
              (k)

            	
              "close
                of business"
                means, on any given date, the time on such date (or, if such date
                is not a
                Business Day, the time on the next succeeding Business Day) at which
                the
                principal transfer office in Vancouver, British Columbia of the transfer
                agent for the Common Shares of the Corporation (or, after the Separation
                Time, the principal transfer office in Vancouver of the Rights Agent)
                closes to the public.

            


    

    


    
      
         

      

      
        -8-

        
          

        

      

      
         

      

    

    
      	 	
              (l)

            	
              "Common
                Shares"
                means the common shares without par value in the capital of the
                Corporation as presently constituted, as such shares may be subdivided,
                consolidated, reclassified or otherwise changed from time to
                time.

            


    

    


    
      	 	
              (m)

            	
              "Company
                Act"
                means the Company
                Act
                (British Columbia) and the regulations thereunder, as now in effect
                or as
                the same may from time to time be amended, re-enacted or
                replaced.

            


    

    


    
      	 	
              (n)

            	
              "Competing
                Permitted Bid"
                means a Take-Over Bid made while a Permitted Bid is in existence
                and that
                satisfies all of the provisions of a Permitted Bid except that the
                condition set forth in Section 1.1(am)(ii) may provide that the Voting
                Shares that are the subject of the Take-Over Bid may be taken up
                or paid
                for on a date which is not earlier than the later of 21 days after
                the
                date of the Take-Over Bid or the earliest date on which Voting Shares
                may
                be taken up or paid for under any other Permitted Bid that is in
                existence
                for the Voting Shares.

            


    

    


    
      	 	
              (o)

            	
              "controlled":
                a
                corporation shall be deemed to be "controlled" by another Person
                or two or
                more Persons if:

            


    

    


    
      	 	
              (i)

            	
              securities
                entitled to vote in the election of directors carrying more than
                50% of
                the votes for the election of directors are held, directly or indirectly,
                by or for the benefit of the other Person or Persons;
                and

            


    

    


    
      	 	
              (ii)

            	
              the
                votes carried by such securities are entitled, if exercised, to elect
                a
                majority of the Board of Directors of such
                corporation.

            


    

    


    
      	 	
              (p)

            	
              "Co-Rights
                Agents"
                means a Co-Rights Agent appointed pursuant to Subsection
                4.1(a).

            


    

    


    
      	 	
              (q)

            	
              "Corporation"
                means Polymet Mining Corp.

            


    

    


    
      	 	
              (r)

            	
              "Disposition
                Date"
                has the meaning ascribed thereto in Subsection
                5.1(h).

            


    

    


    
      	 	
              (s)

            	
              "Dividend
                Reinvestment Acquisition"
                shall mean an acquisition of Voting Shares pursuant to a Dividend
                Reinvestment Plan.

            


    

    


    
      	 	
              (t)

            	
              "Dividend
                Reinvestment Plan"
                means a regular dividend reinvestment or other plan of the Corporation
                made available by the Corporation to holders of its securities where
                such
                plan permits the holder to direct that some or all
                of:

            


    

    


    
      	 	
              (i)

            	
              dividends
                paid in respect of Common Shares;

            


    

    


    
      	 	
              (ii)

            	
              proceeds
                of redemption of shares of the
                Corporation;

            


    

    


    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    

    
      	 	
              (iii)

            	
              interest
                paid on evidence of indebtedness of the Corporation;
                or

            


    

    


    
      	 	
              (iv)

            	
              optional
                cash payments;

            


    

    


    be
      applied to the purchase from the Corporation of Common Shares.

    


    
      	 	
              (u)

            	
              "Effective
                Date"
                means December 4, 2003.

            


    

    


    
      	 	
              (v)

            	
              "Election
                to Exercise"
                means an election to exercise Rights substantially in the form attached
                to
                the Rights Certificate.

            


    

    


    
      	 	
              (w)

            	
              "Exchange
                Act of 1934"
                means the Securities
                Exchange Act of 1934
                (United States of America), as amended, and the rules and regulations
                thereunder, as now in effect or as the same may from time to time
                be
                amended, re-enacted or repealed.

            


    

    


    
      	 	
              (x)

            	
              "Exempt
                Acquisition"
                means a share acquisition in respect of which the Board of Directors
                has
                waived the application of Section 3.1 pursuant to the provisions
                of
                Sections 5.1(a) or (h).

            


    

    


    
      	 	
              (y)

            	
              "Exercise
                Price"
                means, as of any date, the price at which a holder of a Right may
                purchase
                the securities issuable upon exercise of one whole Right which, until
                adjusted in accordance with the terms hereof, will be
                $50.

            


    

    


    
      	 	
              (z)

            	
              "Expansion
                Factor"
                shall have the meaning ascribed thereto in Section
                2.3(a)(1).

            


    

    


    
      	
            	(aa)	
              "Expiration
                Time"
                means the close of business on that date which is the earlier of
                the date
                of termination of this Agreement pursuant to Section 5.16 or, if
                this
                Agreement is confirmed pursuant to Section 5.16, the close of business
                on
                the tenth anniversary of the Effective
                Date.

            


    

    


    
      	 	
              (ab)

            	
              “Feasibility
                Study”
                has the meaning set out in Section 1.2 of National Instrument
                43-101.

            


    

    


    
      	 	
              (ac)

            	
              "Flip-in
                Event"
                means a transaction or event in or pursuant to which a Person becomes
                an
                Acquiring Person.

            


    

    


    
      	 	
              (ad)

            	
              "Grandfathered
                Person"
                means a Person who is the Beneficial Owner of 20% or more of the
                outstanding Voting Shares of the Corporation determined as at the
                Record
                Time. 

            


    

    


    
      	 	
              (ae)

            	
              "holder"
                shall have the meaning ascribed thereto in Section
                2.8.

            


    

    


    
      	 	
              (af)

            	
              "Independent
                Shareholders"
                means holders of outstanding Voting Shares, other
                than:

            


    

    


    
      	 	
              (i)

            	
              any
                Acquiring Person;

            


    

    


    
      	 	
              (ii)

            	
              any
                Offeror;

            


    

    


    
      
         

      

      
        -10-

        
          

        

      

      
         

      

    

    
      	 	
              (iii)

            	
              any
                Affiliate or Associate of any Acquiring Person or
                Offeror;

            


    

    


    
      	 	
              (iv)

            	
              any
                Person acting jointly or in concert with any Acquiring Person or
                Offeror,
                or with any Affiliate or Associate of any Acquiring Person or Offeror;
                and

            


    

    


    
      	 	
              (v)

            	
              any
                employee benefit plan, deferred profit-sharing plan, stock participation
                plan and any other similar plan or trust for the benefit of employees
                of
                the Corporation unless the beneficiaries of the plan or trust direct
                the
                manner in which the Voting Shares are to be voted or direct whether
                the
                Voting Shares are to be tendered to a Take-Over
                Bid.

            


    

    


    
      	 	
              (ag)

            	
              "Market
                Price"
                per share of any securities on any date means the average daily Closing
                Price per Share of such securities on each of the 20 consecutive
                Trading
                Days through and including the Trading Day immediately preceding
                such date
                provided, however, that if an event of a type analogous to any of
                the
                events described in Section 2.3 hereof shall have caused the closing
                prices used to determine the Market Price on any Trading Day not
                to be
                fully comparable with the closing price on such date (or, if such
                date is
                not a Trading Day, on the immediately preceding Trading Day), each
                such
                closing price so used shall be appropriately adjusted in a manner
                analogous to the applicable adjustment provided for in Section 2.3
                hereof
                in order to make it fully comparable with the closing price on such
                date
                or, if such date is not a Trading Day, on the immediately preceding
                Trading Day. The closing price per share ("Closing
                Price per Share")
                of any securities on any date shall
                be:

            


    

    


    
      	 	
              (i)

            	
              the
                closing board lot sale price or, in case no sale takes place on such
                date,
                the average of the closing bid and asked prices per security, as
                reported
                by the principal Canadian stock exchange (as determined by the Board
                of
                Directors) on which such securities are listed and posted for
                trading;

            


    

    


    
      	 	
              (ii)

            	
              if
                for any reason none of such prices is available on such day or the
                securities are not listed or posted for trading on a Canadian stock
                exchange, the last sale price or, in case no such sale takes place
                on such
                date, the average of the closing bid and asked prices for each of
                such
                securities as reported by the principal United Stated securities
                exchange
                (as determined by the Board of Directors) on which such securities
                are
                listed or remitted to trading;

            


    

    


    
      	 	
              (iii)

            	
              if
                for any reason none of such prices is available on such date or the
                securities are not listed or remitted to trading on a Canadian stock
                exchange or a United States securities exchange, the last sale price
                or,
                in case no sale takes place on such date, the average of the high
                bid and
                low ask prices for each of such securities in the over the counter
                market,
                as quoted by any reporting system then in use (as determined by the
                Board
                of Directors); or

            


    

    


    
      
         

      

      
        -11-

        
          

        

      

      
         

      

    

    
      	 	
              (iv)

            	
              if
                for any reason none of such prices is available on such date or the
                securities are not listed or remitted to trading on a Canadian stock
                exchange or a United States securities exchange or quoted by any
                such
                reporting system, the average of the closing bid and ask prices as
                furnished by a professional marketmaker making a market in the securities
                selected by the Board of Directors;

            


    

    


    provided,
      however, that if for any reason none of such prices is available on such day,
      the Closing Price per Share of such securities on such a date means the fair
      value per share of such securities on such date as determined by the Board
      of
      Directors, after consultation with a nationally recognized investment dealer
      or
      investment banker with respect to the fair value per share of such securities.
      The market price shall be expressed in Canadian dollars and, if initially
      determined in respect of any date following part of the 20 consecutive trading
      day period in question in United States dollars, such amount shall be translated
      into Canadian dollars at such date at the Canadian dollar equivalent
      thereof.

    


    Notwithstanding
      the foregoing, where the Board of Directors is satisfied that the Market Price
      of securities as determined herein was affected by an anticipated or actual
      Take-Over Bid or by improper manipulation, the Board of Directors may, acting
      in
      good faith, determine the Market Price of securities, such determination to
      be
      based on a finding as to the price at which a holder of securities of that
      class
      could reasonably have expected to dispose of his securities immediately prior
      to
      the relevant date excluding any change in price reasonably attributable to
      the
      anticipated or actual Take-Over Bid or to the improper
      manipulation.

    


    
      	 	
              (ah)

            	
              "Nominee"
                has the meaning ascribed thereto in Subsection
                2.2(c).

            


    

    


    
      	 	
              (ai)

            	
              “Northmet
                Property”
                means those patented mineral claims covering 4,162 acres in the Mesabi
                Range District, St. Louis County, Minnesota leased by the Corporation,
                together with the associated improvements and other assets subject
                to the
                agreement between the Corporation and Cleveland Cliffs
                Inc.

            


    

    


    
      	 	
              (aj)

            	
              "Offer
                to Acquire"
                includes:

            


    

    


    
      	 	
              (i)

            	
              an
                offer to purchase or a solicitation of an offer to sell Voting Shares;
                and

            


    

    


    
      	 	
              (ii)

            	
              an
                acceptance of an offer to sell Voting Shares, whether or not such
                offer to
                sell has been solicited;

            


    

    


    or
      any
      combination thereof, and the Person accepting an offer to sell shall be deemed
      to be making an Offer to Acquire to the Person that made the offer to
      sell.

    


    
      
         

      

      
        -12-

        
          

        

      

      
         

      

    

    
      	 	
              (ak)

            	
              "Offeror"
                means a Person who has announced an intention to make, or who has
                made, a
                Take-Over Bid.

            


    

    


    
      	 	
              (al)

            	
              "Offeror's
                Securities"
                means the aggregate of all Voting Shares Beneficially Owned by the
                Offeror
                on the date of an Offer to Acquire.

            


    

    


    
      	 	
              (am)

            	
              "Permitted
                Bid"
                means a Take-Over Bid made by an Offeror by way of a takeover bid
                circular
                which also complies with the following additional
                provisions:

            


    

    


    
      	 	
              (i)

            	
              the
                Take-Over Bid is made for all outstanding Voting Shares and to all
                holders
                of Voting Shares as registered on the books of the Corporation, other
                than
                the Offeror. The Take-Over Bid shall expressly state that Common
                Shares
                issued on the exercise of share purchase warrants, options and other
                securities convertible into Common Shares shall, subject to compliance
                with the procedures applicable generally to the tendering of Voting
                Shares
                of the Take-Over Bid, be eligible to be tendered under the Take-Over
                Bid;

            


    

    


    
      	 	
              (ii)

            	
              the
                Take-Over Bid contains, and the take-up and payment for securities
                tendered or deposited is subject to, an irrevocable and unqualified
                provision that no Voting Shares will be taken up or paid for pursuant
                to
                the Take-Over Bid prior to the close of business on the Permitted
                Bid
                Expiry Date and only if at such date more than 50% of the Voting
                Shares
                held by Independent Shareholders shall have been deposited or tendered
                pursuant to the Take-Over Bid and not
                withdrawn;

            


    

    


    
      	 	
              (iii)

            	
              the
                Take-Over Bid contains an irrevocable and unqualified provision that
                Voting Shares may be deposited pursuant to such Take-Over Bid at
                any time
                during the period of time described in Section 1.1(am)(ii) and that
                any
                Voting Shares deposited pursuant to the Take-Over Bid may be withdrawn
                until taken up and paid for; and

            


    

    


    
      	 	
              (iv)

            	
              the
                Take-Over Bid contains an irrevocable and unqualified provision that
                in
                the event that the deposit condition set forth in Section 1.1(am)(ii)
                is
                satisfied the Offeror will make a public announcement of that fact
                and the
                Take-Over Bid will remain open for deposits and tenders of Voting
                Shares
                for not less than ten Business Days from the date of such public
                announcement.

            


    

    


    
      	 	
              (an)

            	
              "Permitted
                Bid Acquisition"
                means an acquisition of Voting Shares made pursuant to a Permitted
                Bid or
                a Competing Permitted Bid.

            


    

    


    
      	 	
              (ao)

            	
              “Permitted
                Bid Expiry Date”
                means the earliest of the following
                dates:

            


    

    


    
      
         

      

      
        -13-

        
          

        

      

      
         

      

    

    
      	 	
              (i)

            	
              75
                days following the date of the Take-Over Bid, upon the earlier to
                occur
                of: (A) the completion of a Feasibility Study on the Northmet Property
                and
                (B) five years from the Effective
                Date;

            


    

    


    
      	 	
              (ii)

            	
              35
                days following the date of the Take-Over Bid, upon the earlier to
                occur of
                (A) seven years from the Effective Date and (B) the date on which
                the
                Corporation abandons or sells all of its interest in the Northmet
                Property.

            


    

    


    
      	 	
              (ap)

            	
              "Person"
                includes an individual, body corporate, partnership, syndicate or
                other
                form of unincorporated association, a government and its agencies
                or
                instrumentalities, any entity or group (as such term is used in Rule
                13d-5
                under the Exchange Act of 1934 as in effect on the date hereof) whether
                or
                not having legal personality and any of the foregoing acting in any
                derivative, representative or fiduciary
                capacity.

            


    

    


    
      	 	
              (aq)

            	
              "Pro-Rata
                Acquisition"
                means an acquisition by a Person of Voting Shares pursuant
                to:

            


    

    


    
      	 	
              (i)

            	
              a
                Dividend Reinvestment Acquisition;

            


    

    


    
      	 	
              (ii)

            	
              a
                stock dividend, stock split or other event in respect of securities
                of the
                Corporation pursuant to which such Person becomes a beneficial owner
                of
                Voting Shares on the same pro-rata basis as all other holders of
                securities;

            


    

    


    
      	 	
              (iii)

            	
              the
                exercise by the Person of only those rights to purchase Voting Shares
                distributed to that Person in the course of a distribution to all
                holders
                of securities of the Corporation pursuant to a bona fide rights offering
                or pursuant to a prospectus; or

            


    

    


    
      	 	
              (iv)

            	
              a
                distribution to the public of Voting Shares, or securities convertible
                into or exchangeable for Voting Shares (and the conversion or exchange
                of
                such convertible or exchangeable securities), made pursuant to a
                prospectus or by way of a private placement, provided that the Person
                does
                not thereby acquire a greater percentage of such Voting Shares, or
                securities convertible into or exchangeable for Voting Shares, so
                offered
                than the Person's percentage of Voting Shares beneficially owned
                immediately prior to such
                acquisition.

            


    

    


    
      	 	
              (ar)

            	
              "Record
                Time"
                means 12:01 a.m. (Vancouver time) on December 4,
                2003.

            


    

    


    
      	 	
              (as)

            	
              "Redemption
                Price"
                has the meaning ascribed thereto in Section
                5.1(b).

            


    

    


    
      	 	
              (at)

            	
              "Right"
                means a right to purchase Common Shares on and subject to the terms
                and
                conditions of this Agreement.

            


    

    


    
      
         

      

      
        -14-

        
          

        

      

      
         

      

    

    
      	 	
              (au)

            	
              "Rights
                Agent"
                means Pacific Corporate Trust Company and any successor rights agent
                hereunder.

            


    

    


    
      	 	
              (av)

            	
              "Rights
                Certificate"
                means a certificate representing Rights in substantially the form
                of
                Schedule A attached hereto.

            


    

    


    
      	 	
              (aw)

            	
              "Rights
                Register"
                shall have the meaning ascribed thereto in Section
                2.6(a).

            


    

    


    
      	 	
              (ax)

            	
              (i)

            	
              “Securities
                Act (Alberta)”
                means the Securities
                Act,
                SA, 1981, c.S-61, as amended, and the regulations
                thereunder;

            


    

    


    
      	 	
              (ii)

            	
              "Securities
                Act (British Columbia)”
                means the Securities Act, RSBC 1996, c.418, as amended, and the
                Securities
                Rules
                thereunder, 

            


    

    


    
      	 	 	
              (iii)

            	
              "Securities
                Act (Ontario)"
                means the Securities
                Act,
                R.S.O. 1990, c.s.5, as amended, and the regulations thereunder;
                and

            


    

    


    
      	 	
              (ay)

            	
              "Separation
                Time"
                means the close of business on the tenth Business Day after the earlier
                of:

            


    

    


    
      	 	
              (i)

            	
              the
                Share Acquisition Date; and

            


    

    


    
      	 	
              (ii)

            	
              the
                date of the commencement of or first public announcement of the intent
                of
                any Person (other than the Corporation or any Subsidiary of the
                Corporation) to commence a Take-Over Bid (other than a Permitted
                Bid or a
                Competing Permitted Bid), or such earlier or later time as may be
                determined by the Board of Directors, provided that, if any Take-Over
                Bid
                referred to in this clause (ii) expires, is cancelled, terminated
                or
                otherwise withdrawn prior to the Separation Time, such Take-Over
                Bid shall
                be deemed, for the purposes of this definition, never to have been
                made.

            


    

    


    
      	 	
              (az)

            	
              "Share
                Acquisition Date"
                means the first date of a public announcement or disclosure (which,
                for
                purposes of this definition, shall include, without limitation, a
                report
                filed pursuant to Section 101 of the Securities Act (Ontario), Section
                111
                of the Securities Act (British Columbia), and Section 141 of the
                Securities Act (Alberta)) by the Corporation or an Acquiring Person
                that a
                Person has become an Acquiring
                Person.

            


    

    


    
      	 	
              (ba)

            	
              "Subsidiary":
                a
                corporation shall be deemed to be a subsidiary of another corporation
                if:

            


    

    


    
      	
            	(i)	
              it
                is controlled by:

            


    

    


    
      	 	
              (A)

            	
              that
                other; or

            


    

    


    
      
         

      

      
        -15-

        
          

        

      

      
         

      

    

    
      	 	
              (B)

            	
              that
                other and one or more corporations, each of which is controlled by
                that
                other; or

            


    

    


    
      	 	
              (C)

            	
              two
                or more corporations, each of which is controlled by that other;
                or

            


    

    


    
      	 	
              (ii)

            	
              it
                is a Subsidiary of a corporation that is that other's
                Subsidiary.

            


    

    


    
      	 	
              (bb)

            	
              "Take-Over
                Bid"
                means an Offer to Acquire Voting Shares, or securities convertible
                into
                Voting Shares if, assuming that the Voting Shares or convertible
                securities subject to the Offer to Acquire are acquired and are
                Beneficially Owned at the date of such Offer to Acquire by the Person
                making such Offer to Acquire, such Voting Shares (including Voting
                Shares
                that may be acquired upon conversion of securities, convertible into
                Voting Shares) together with the Offeror's Securities, constitute
                in the
                aggregate 20% or more of the outstanding Voting Shares at the date
                of the
                Offer to Acquire.

            


    

    


    
      	 	
              (bc)

            	
              "Trading
                Day"
                means, when used with respect to any securities, a day on which the
                principal Canadian stock exchange on which such securities are listed
                or
                posted for trading is open for the transaction of business or, if
                the
                securities are not listed or posted for trading on any Canadian stock
                exchange, a Business Day.

            


    

    


    
      	 	
              (bd)

            	
              "U.S.-Canadian
                Exchange Rate"
                means, on any date:

            


    

    


    
      	 	
              (i)

            	
              if
                on such date the Bank of Canada sets an average noon spot rate of
                exchange
                for the conversion of one United States dollar into Canadian dollars,
                such
                rate; and

            


    

    


    
      	 	
              (ii)

            	
              in
                any other case, the rate for such date for the conversion of one
                United
                States dollar into Canadian dollars calculated in the manner determined
                by
                the Board of Directors from time to
                time.

            


    

    


    
      	 	
              (be)

            	
              "U.S.
                Dollar Equivalent"
                means, for any amount which is expressed in Canadian dollars on any
                date,
                the United States dollar equivalent of such amount determined by
                reference
                to the Canadian-U.S. Exchange Rate on such
                date.

            


    

    


    
      	 	
              (bf)

            	
              "Voting
                Shares"
                means the Common Shares and any other shares of the Corporation entitled
                to vote generally and at all times for the election of directors
                of the
                Corporation.

            


    

    


    
      	 	
              (bg)

            	
              "Voting
                Share Reduction"
                means an acquisition or redemption by the Corporation of outstanding
                Voting Shares which, by reducing the number of Voting Shares outstanding,
                increases the percentage of Voting Shares Beneficially Owned by a
                Person
                to 20% or more of the Voting Shares then
                outstanding.

            


    

     

    
      
         

      

      
        -16-

        
          

        

      

      
         

      

    

    
      	
              1.2

            	 	
              Currency:

            


    

    


    All
      sums
      of money which are referred to in this Agreement are expressed in lawful money
      of Canada, unless otherwise specified.

     

    
      	
              1.3

            	 	
              Headings
                and References:

            


    

    


    The
      headings of the articles, sections and subsections of this Agreement and the
      table of contents are inserted for convenience of reference only and shall
      not
      affect the construction or interpretation of this Agreement. All references
      to
      articles, sections, subsections and paragraphs are to articles, sections,
      subsections and paragraphs of this Agreement. The words "hereto", "herein",
      "hereof', "hereunder", "this Agreement", "the Rights Agreement" and similar
      expressions refer to this Agreement including the schedule attached hereto
      as a
      whole, as the same may be amended, modified or supplemented at any time or
      from
      time to time.

     

    
      	
              1.4

            	 	
              Calculation
                of Number and Percentage of Beneficial Ownership of Outstanding Voting
                Shares:

            


    

    


    For
      purposes of this Agreement, the percentage of Voting Shares of any class
      Beneficially Owned by any Person, will be and be deemed to be the product
      (expressed as a percentage) determined by the formula:

    


    100
      x
      A/B

    


    where:

    


    
      	 	
              A

            	
              =

            	
              the
                number of votes for the election of all directors generally attaching
                to
                the Voting Shares of the particular class Beneficially Owned by such
                Person; and

            


    

    


    
      	 	
              B

            	
              =

            	
              the
                number of votes for the election of all directors generally attaching
                to
                all outstanding Voting Shares of the particular class.
                

            


    

    


    Where
      any
      Person is deemed to Beneficially Own unissued Voting Shares such Voting Shares
      will be deemed to be outstanding for the purpose of calculating the percentage
      of Voting Shares of the particular class Beneficially Owned by such
      Person.

     

    
      	
              1.5

            	 	
              Acting
                Jointly or in Concert:

            


    

    


    For
      purposes of this Agreement, whether Persons are acting jointly or in concert
      is
      a question of fact in each circumstance, however, a Person shall be deemed
      to be
      acting jointly or in concert with another Person if such Person would be deemed
      to be acting jointly or in concert with such other Person for purposes of
      Section 91(1) of the Securities Act (Ontario), Section 96(1) of the Securities
      Act (British Columbia), and Section 131.1(1) of the Securities Act (Alberta)
      (other than by virtue of the inclusion of the word "associate" in Section 91(1)
      of the Securities Act (Ontario), Section 96(1) of the Securities Act (British
      Columbia), and Section 131.1(1) of the Securities Act (Alberta) as it exists
      on
      the date hereof). Notwithstanding the foregoing and for greater certainty,
      the
      phrase "acting jointly or in concert", wherever used in this Agreement, shall
      not include conduct:

    


    
      
         

      

      
        -17-

        
          

        

      

      
         

      

    

    
      	 	
              (a)

            	
              unrelated
                to the Corporation; or

            


    

    


    
      	 	
              (b)

            	
              pertaining
                to:

            


    

    


    
      	 	
              (i)

            	
              voting
                or directing the vote of securities of the Corporation pursuant to
                a
                revocable proxy given in response to a public proxy
                solicitation;

            


    

    


    
      	 	
              (ii)

            	
              voting
                or directing the vote of securities of the Corporation in connection
                with
                or in order to participate in a public proxy solicitation made or
                to be
                made;

            


    

    


    
      	 	
              (iii)

            	
              having
                an agreement, arrangement or understanding with respect to a particular
                shareholder proposal or a particular matter to come before a meeting
                of
                shareholders, including the election of
                directors.

            


    

     

    
      	
              1.6

            	 	
              Generally
                Accepted Accounting Principles:

            


    

    


    Wherever
      in this Agreement reference is made to generally accepted accounting principles,
      such reference shall be deemed to be the recommendations at the relevant time
      of
      the Canadian Institute of Chartered Accountants, or any successor institute,
      applicable on a consolidated basis (unless otherwise specifically provided
      herein to be applicable on an unconsolidated basis) as of the date on which
      a
      calculation is made or required to be made in accordance with generally accepted
      accounting principles. Where the character or amount of an asset or liability
      or
      item of revenue or expense is required to be determined, or any consolidation
      or
      other accounting computation is required to be made for the purpose of this
      Agreement or any document, such determination or calculation shall, to the
      extent applicable and except as otherwise specified herein or as otherwise
      agreed in writing by the parties, be made in accordance with generally accepted
      accounting principles applied on a consistent basis.

    


    ARTICLE
      2

    THE
      RIGHTS

     

    
      	
              2.1

            	 	
              Legend
                on Common Share Certificates:

            


    

    


    Certificates
      representing Common Shares which are issued after the Record Time but prior
      to
      the earlier of the Separation Time and the Expiration Time, will evidence one
      Right for each Common Share represented thereby and shall have impressed,
      printed or written thereon or otherwise affixed thereto the following
      legend:

    


    "Until
      the Separation Time (as such term is defined in the Shareholder Rights Agreement
      referred to below), this certificate also evidences and entitles the holder
      hereof to certain rights as set forth in the shareholder rights agreement (the
      "Shareholder Rights Agreement") dated as of December 4, 2003 between Polymet
      Mining Corp. (the "Corporation") and Pacific Corporate Trust Company, as Rights
      Agent, the terms of which are hereby incorporated herein by reference and a
      copy
      of which is on file and may be inspected during normal business hours at the
      principal executive office of the Corporation. Under certain circumstances
      as
      set forth in the Shareholder Rights Agreement, such Rights may be amended,
      redeemed or exchanged, may expire, may lapse, may become void (if, in certain
      circumstances, they are "Beneficially Owned" by a person who is or becomes
      an
      "Acquiring Person", as such terms are defined in the Shareholder Rights
      Agreement, or a transferee thereof) or may be evidenced by separate certificates
      and may no longer be evidenced by this certificate. The Corporation will mail
      or
      arrange for the mailing of a copy of the Shareholder Rights Agreement to the
      holder of this certificate without charge as soon as practicable after the
      receipt of a written request therefor."

    


    
      
         

      

      
        -18-

        
          

        

      

      
         

      

    

    Certificates
      representing Common Shares that are issued and outstanding at the Record Time
      will also evidence one Right for each one Common Share evidenced thereby,
      notwithstanding the absence of the foregoing legend, until the close of business
      on the earlier of the Separation Time and the Expiration Time.

     

    
      	
              2.2

            	 	
              Initial
                Exercise Price; Exercise of Rights; Detachment of
                Rights:

            


    

    


    
      	 	
              (a)

            	
              Exercise
                Terms:
                Subject to adjustment as herein set forth, each Right will entitle
                the
                holder thereof, from and after the Separation Time and prior to the
                Expiration Time, to purchase one Common Share for the Exercise Price.
                Notwithstanding any other provision of this Agreement, any Rights
                held by
                the Corporation or any of its Subsidiaries will be
                void.

            


    

    


    
      	 	
              (b)

            	
              No
                Exercise Prior to Separation Time:
                Until the Separation Time:

            


    

    


    
      	 	
              (i)

            	
              the
                Rights will not be exercisable and no Right may be exercised;
                and

            


    

    


    
      	 	
              (ii)

            	
              each
                Right shall be evidenced by the certificate for the associated Common
                Share registered in the name of the holder thereof (which certificate
                shall also be deemed to represent a Rights Certificate) and shall
                be
                transferable only together with, and shall be transferred by a transfer
                of, such associated Common Share.

            


    

    


    
      	 	
              (c)

            	
              Exercise
                After Separation Time:
                From and after the Separation Time and prior to the Expiration
                Time:

            


    

    


    
      	 	
              (i)

            	
              the
                Rights are exercisable; and

            


    

    


    
      	 	
              (ii)

            	
              the
                registration and transfer of Rights will be separate from and independent
                of Common Shares.

            


    

    


    
      
         

      

      
        -19-

        
          

        

      

      
         

      

    

    Promptly
      following the Separation Time, the Corporation will prepare and the Rights
      Agent
      will mail to each holder of record of Common Shares as of the Separation Time
      (other than an Acquiring Person and, in respect of any Rights Beneficially
      Owned
      by such Acquiring Person which are not held of record by such Acquiring Person,
      the holder of such Rights (a "Nominee")),
      at
      such holder's address as shown by the records of the Corporation (the
      Corporation hereby agreeing to furnish copies of such records to the Rights
      Agent for this purpose):

    


    
      	 	
              (iii)

            	
              a
                Rights Certificate appropriately completed, representing the number
                of
                Rights held by such holder at the Separation Time and having such
                marks of
                identification or designation and such legends, summaries or endorsements
                printed thereon as the Corporation may deem appropriate and as are
                not
                inconsistent with the provisions of this Agreement, or as may be
                required
                to comply with any law, rule or regulation or with any rule or regulation
                of any self-regulatory organization, stock exchange or "system" on
                which
                the Rights may from time to time be listed or traded, or to conform
                to
                usage; and

            


    

    


    
      	 	
              (iv)

            	
              a
                disclosure statement describing the
                Rights;

            


    

    


    provided
      that a Nominee shall be sent the materials provided for in (iii) and (iv) in
      respect of all Common Shares of the Corporation held of record by it which
      are
      not Beneficially Owned by an Acquiring Person.

    


    
      	 	
              (d)

            	
              Manner
                of Exercise:
                Rights may be exercised, in whole or in part, on any Business Day
                after
                the Separation Time and prior to the Expiration Time by submitting
                to the
                Rights Agent:

            


    

    


    
      	 	
              (I)

            	
              the
                Rights Certificate evidencing such
                Right;

            


    

    


    
      	 	
              (ii)

            	
              an
                election to exercise such Rights (an "Election
                to Exercise")
                substantially in the form attached to the Rights Certificate appropriately
                completed and executed by the holder or his executors or administrators
                or
                other personal representatives or his or their legal attorney duly
                appointed by instrument in writing in form and executed in a manner
                satisfactory to the Rights Agent;
                and

            


    

    


    
      	 	
              (iii)

            	
              payment
                by certified cheque, banker's draft or money order payable to the
                order of
                the Corporation, in a sum equal to the Exercise Price multiplied
                by the
                number of Rights being exercised and a sum sufficient to cover any
                transfer tax or charge which may be payable in respect of any transfer
                involved and the transfer or delivery of Rights Certificates or the
                issuance or delivery of certificates of Common Shares in a name other
                than
                that of the holder of the Rights being
                exercised.

            


    

    


    
      
         

      

      
        -20-

        
          

        

      

      
         

      

    

    
      	 	
              (e)

            	
              Issue
                of Common Shares:
                Upon receipt of a Rights Certificate, together with a completed Election
                to Exercise executed in accordance with Subsection 2.2(d)(ii) which
                does
                not indicate that such Right is null and void as provided by Subsection
                3.1(b), and payment as set forth in Section 2.2(d)(iii), the Rights
                Agent
                (unless otherwise instructed by the Corporation in the event that
                the
                Corporation is of the opinion that the Rights cannot be exercised
                in
                accordance with this Agreement) will thereupon
                promptly:

            


    

    


    
      	 	
              (i)

            	
              requisition
                from the transfer agent certificates representing the number of Common
                Shares to be purchased (the Corporation hereby irrevocably authorizing
                its
                transfer agent to comply with all such
                requisitions);

            


    

    


    
      	 	
              (ii)

            	
              when
                appropriate, requisition from the Corporation the amount of cash
                to be
                paid in lieu of issuing fractional Common
                Shares;

            


    

    


    
      	 	
              (iii)

            	
              after
                receipt of the certificates referred to in Section 2.2(e)(i), deliver
                the
                same to or upon the order of the registered holder of such Rights
                Certificates, registered in such name or names as may be designated
                by
                such holder; and

            


    

    


    
      	 	
              (iv)

            	
              when
                appropriate, after receipt, deliver the cash referred to in clause
                2.2(e)(ii) to or to the order of the registered holder of such Rights
                Certificate.

            


    

    


    
      	 	
              (f)

            	
              Partial
                Exercise:
                In case the holder of any Rights shall exercise less than all of
                the
                Rights evidenced by the Rights Certificate of such holder, a new
                Rights
                Certificate evidencing the Rights remaining unexercised (subject
                to the
                provisions of Subsection 5.5(a)) will be issued by the Rights Agent
                to
                such holder or to such holder's authorized
                assigns.

            


    

    


    
      	 	
              (g)

            	
              Covenants:
                The Corporation covenants and agrees
                to:

            


    

    


    
      	 	
              (i)

            	
              take
                all such action as may be necessary on its part and within its powers
                to
                ensure that all Common Shares delivered upon exercise of Rights shall,
                at
                the time of delivery of the certificates evidencing such Common Shares
                (subject to payment of the Exercise Price), be validly authorized,
                executed, issued and delivered and be fully paid and
                non-assessable;

            


    

    


    
      	 	
              (ii)

            	
              take
                all such action as may be necessary and within its power to comply
                with
                any applicable requirements of the Company Act, the Securities Act
                (Ontario), the Securities Act (British Columbia), and the Securities
                Act
                (Alberta), and the securities laws or comparable legislation of each
                of
                the other provinces and territories of Canada, and any other applicable
                law, rule or regulation thereof, in connection with the issue and
                delivery
                of the Rights Certificates and the issuance of the Common Shares
                upon
                exercise of Rights;

            


    

    


    
      
         

      

      
        -21-

        
          

        

      

      
         

      

    

    
      	 	
              (iii)

            	
              use
                reasonable efforts to cause all Common Shares issued upon exercise
                of
                Rights to be listed upon the stock exchanges upon which the Common
                Shares
                were traded immediately prior to the Share Acquisition
                Date;

            


    

    


    
      	 	
              (iv)

            	
              cause
                to be reserved and kept available out of the authorized and unissued
                Common Shares, the number of Common Shares that, as provided in this
                Agreement, will from time to time be sufficient to permit the exercise
                in
                full of all outstanding Rights;

            


    

    


    
      	 	
              (v)

            	
              pay
                when due and payable, if applicable, any and all federal, provincial
                and
                municipal transfer taxes and charges (not including any income or
                capital
                taxes of the holder or exercising holder or any liability of the
                Corporation to withhold tax) which may be payable in respect of the
                original issuance or delivery of the Rights Certificates, or certificates
                for the Common Shares to be issued upon exercise of any Rights, provided
                that the Corporation shall not be required to pay any transfer tax
                or
                charge which may be payable in respect of any transfer involved in
                the
                transfer or delivery of Rights Certificates or the issuance or delivery
                of
                certificates for Common Shares in a name other than that of the holder
                of
                the Rights being transferred or exercised;
                and

            


    

    


    
      	 	
              (vi)

            	
              after
                the Separation Time, except as permitted by Section 5.1, not take
                (or
                permit any subsidiary to take) any action if at the time such action
                is
                taken it is reasonably foreseeable that such action will diminish
                substantially or otherwise eliminate the benefits intended to be
                afforded
                by the Rights.

            


    

    


    
      	 	
              (h)

            	
              Authorized
                Capital:
                If the number of Common Shares which are not issued or reserved for
                issue
                is insufficient to permit the exercise in full of the Rights in accordance
                with this Section 2.2, then each Right, when such Right is aggregated
                with
                a sufficient number of Rights to acquire a whole number of Common
                Shares,
                will entitle the holder thereof, after the Separation Time, to purchase
                that number of Common Shares at the Exercise Price per Common Share
                equal
                to the quotient determined by dividing the difference between the
                number
                of authorized Common Shares and the number of Common Shares then
                issued or
                allotted or reserved for issuance by the Corporation, by the number
                of
                Rights then outstanding.

            


    

     

    
      
         

      

      
        -22-

        
          

        

      

      
         

      

    

    
      	
              2.3

            	 	
              Adjustments
                to Exercise Price; Number of
                Rights:

            


    

    


    The
      Exercise Price, the number and kind of securities subject to purchase upon
      exercise of each Right and the number of Rights outstanding are subject to
      adjustment from time to time as provided in this Section 2.3.

    


    (a) Share
      Reorganization: If
      the
      Corporation shall at any time after the date of this Agreement:

    


    
      	 	
              (i)

            	
              declare
                or pay a dividend on Common Shares payable in Common Shares (or other
                securities exchangeable for or convertible into or giving a right
                to
                acquire Common Shares or other securities of the Corporation) other
                than
                pursuant to any optional stock dividend
                program;

            


    

    


    
      	 	
              (ii)

            	
              subdivide
                or change the then outstanding Common Shares into a greater number
                of
                Common Shares;

            


    

    


    
      	 	
              (iii)

            	
              consolidate
                or change the then outstanding Common Shares into a smaller number
                of
                Common Shares; or

            


    

    


    
      	 	
              (iv)

            	
              issue
                any Common Shares for other securities exchangeable for or convertible
                into or giving a right to acquire Common Shares or other securities
                of the
                Corporation or in respect of, in lieu of or in exchange for existing
                Common Shares, except as otherwise provided in this Section
                2.3,

            


    

    


    the
      Exercise Price and the number of Rights outstanding, or, if the payment or
      effective date therefor shall occur after the Separation Time, the securities
      purchasable upon exercise of Rights shall be adjusted as of the payment or
      effective date in the manner set forth below.

    


    If
      the
      Exercise Price and number of Rights outstanding are to be adjusted:

    


    
      	 	
              (1)

            	
              the
                Exercise Price in effect after such adjustment will be equal to the
                Exercise Price in effect immediately prior to such adjustment divided
                by
                the number of Common Shares (or other capital stock) (the "Expansion
                Factor")
                that a holder of one Common Share immediately prior to such dividend,
                subdivision, change, consolidation or issuance would hold thereafter
                as a
                result thereof; and

            


    

    


    
      	 	
              (2)

            	
              each
                Right held prior to such adjustment will become that number of Rights
                as
                results from the application of the Expansion
                Factor,

            


    

    


    and
      the
      adjusted number of Rights will be deemed to be distributed among the Common
      Shares with respect to which the original Rights were associated (if they remain
      outstanding) and the shares issued in respect of such dividend, subdivision,
      change, consolidation or issuance, so that each such Common Share (or other
      capital stock) will have exactly one Right associated with it in effect
      following the payment or effective date of the event referred to in Clause
      2.3(a)(i), (ii), (iii) or (iv), as the case may be.

    


    
      
         

      

      
        -23-

        
          

        

      

      
         

      

    

    For
      greater certainty, if the securities purchasable upon exercise of Rights are
      to
      be adjusted, the securities purchasable upon exercise of each Right after such
      adjustment will be the securities that a holder of the securities purchasable
      upon exercise of one Right immediately prior to such dividend, subdivision,
      change, consolidation or issuance would hold thereafter as a result of such
      dividend, subdivision, change, consolidation or issuance.

    


    If,
      after
      the Record Time and prior to the Expiration Time, the Corporation shall issue
      any shares of capital stock other than Common Shares in a transaction of a
      type
      described in Clause 2.3(a)(i) or (iv), shares of such capital stock shall be
      treated herein as nearly equivalent to Common Shares as may be practicable
      and
      appropriate under the circumstances and the Corporation and the Rights Agent
      agree to amend this Agreement in order to effect such treatment.

    


    In
      the
      event the Corporation shall at any time after the Record Time and prior to
      the
      Separation Time issue any Common Shares otherwise than in a transaction referred
      to in this Subsection 2.3(a), each such Common Share so issued shall
      automatically have one new Right associated with it, which Right shall be
      evidenced by the certificate representing such associated Common
      Share.

    


    
      	 	
              (b)

            	
              Rights Offering:
                If
                the Corporation shall at any time after the Record Time and prior
                to the
                Separation Time fix a record date for the issuance of rights, options
                or
                warrants to all holders of Common Shares entitling them (for a period
                expiring within 21 calendar days after such record date) to subscribe
                for
                or purchase Common Shares (or securities convertible into or exchangeable
                for or carrying a right to purchase Common Shares) at a price per
                Common
                Share (or, if a security convertible into or exchangeable for or
                carrying
                a right to purchase or subscribe for Common Shares, having a conversion,
                exchange or exercise price, including the price required to be paid
                to
                purchase such convertible or exchangeable security or right per share)
                less than the Market Price per Common Share on such record date,
                the
                Exercise Price to be in effect after such record date shall be determined
                by multiplying the Exercise Price in effect immediately prior to
                such
                record date by a fraction:

            


    

    


    
      	 	
              (i)

            	
              the
                numerator of which shall be the number of Common Shares outstanding
                on
                such record date, plus the number of Common Shares that the aggregate
                offering price of the total number of Common Shares so to be offered
                (and/or the aggregate initial conversion, exchange or exercise price
                of
                the convertible or exchangeable securities or rights so to be offered,
                including the price required to be paid to purchase such convertible
                or
                exchangeable securities or rights) would purchase at such Market
                Price per
                Common Share; and

            


    

    


    
      
         

      

      
        -24-

        
          

        

      

      
         

      

    

    
      	 	
              (ii)

            	
              the
                denominator of which shall be the number of Common Shares outstanding
                on
                such record date, plus the number of additional Common Shares to
                be
                offered for subscription or purchase (or into which the convertible
                or
                exchangeable securities or rights so to be offered are initially
                convertible, exchangeable or
                exercisable).

            


    

    


    In
      case
      such subscription price may be paid by delivery of consideration, part or all
      of
      which may be in a form other than cash, the value of such consideration shall
      be
      as determined in good faith by the Board of Directors, whose determination
      shall
      be described in a statement filed with the Rights Agent and shall be binding
      on
      the Rights Agent and the holders of Rights. Such adjustment shall be made
      successively whenever such a record date is fixed, and in the event that such
      rights, options or warrants are not so issued, or if issued, are not exercised
      prior to the expiration thereof, the Exercise Price shall be readjusted to
      the
      Exercise Price which would then be in effect if such record date had not been
      fixed, or to the Exercise Price which would be in effect based upon the number
      of Common Shares (or securities convertible into, or exchangeable or exercisable
      for Common Shares) actually issued upon the exercise of such rights, options
      or
      warrants, as the case may be.

    


    For
      purposes of this Agreement, the granting of the right to purchase Common Shares
      (whether from treasury or otherwise) pursuant to the Dividend Reinvestment
      Plan
      or any employee benefit stock option or similar plans shall be deemed not to
      constitute an issue of rights, options or warrants by the Corporation; provided,
      however, that, in all such cases, the right to purchase Common Shares is at
      a
      price per share of not less than 95% of the current market price per share
      (determined as provided in such plans) of the Common Shares.

    


    
      	 	
              (c)

            	
              Special Distribution:
                If
                the Corporation shall at any time after the Record Time and prior
                to the
                Separation Time fix a record date for the making of a distribution
                to all
                holders of Common Shares (including any such distribution made in
                connection with a merger or amalgamation) of evidences of indebtedness,
                cash (other than an annual cash dividend or a dividend paid in Common
                Shares, but including any dividend payable in securities other than
                Common
                Shares), assets or rights, options or warrants (excluding those referred
                to in Subsection 2.3(b)), the Exercise Price to be in effect after
                such
                record date shall be determined by multiplying the Exercise Price
                in
                effect immediately prior to such record date by a
                fraction:

            


    

    


    
      	 	
              (i)

            	
              the
                numerator of which shall be the Market Price per Common Share on
                such
                record date, less the fair market value (as determined in good faith
                by
                the Board of Directors, whose determination shall be described in
                a
                statement filed with the Rights Agent and shall be binding on the
                Rights
                Agent and the holders of Rights), on a per share basis, of the portion
                of
                the cash, assets, evidences of indebtedness, rights, options or warrants
                so to be distributed; and

            


    

    


    
      
         

      

      
        -25-

        
          

        

      

      
         

      

    

    
      	 	
              (ii)

            	
              the
                denominator of which shall be such Market Price per Common
                Share.

            


    

    


    Such
      adjustments shall be made successively whenever such a record date is fixed,
      and
      in the event that such a distribution is not so made, the Exercise Price shall
      be adjusted to be the Exercise Price which would have been in effect if such
      record date had not been fixed.

    


    
      	 	
              (d)

            	
              Minimum Adjustments:
                Notwithstanding anything herein to the contrary, no adjustment in
                the
                Exercise Price shall be required unless such adjustment would require
                an
                increase or decrease of at least one per cent in the Exercise Price;
                provided, however, that any adjustments which by reason of this Subsection
                2.3(d) are not required to be made shall be carried forward and taken
                into
                account in many subsequent adjustment. All calculations under Section
                2.3
                shall be made to the nearest cent or to the nearest tenthousandth
                of a
                share. Notwithstanding the first sentence of this Subsection 2.3(d),
                any
                adjustment required by Section 2.3 shall be made no later than the
                earlier
                of:

            


    

    


    
      	 	
              (i)

            	
              three
                years from the date of the transaction which gives rise to such
                adjustment; or

            


    

    


    
      	 	
              (ii)

            	
              the
                Expiration Date.

            


    

    


    
      	 	
              (e)

            	
              Discretionary Adjustment:
                If
                the Corporation shall at any time after the Record Time and prior
                to the
                Separation Time issue any shares of capital stock (other than Common
                Shares), or rights, options or warrants to subscribe for or purchase
                any
                such capital stock, or securities convertible into or exchangeable
                for any
                such capital stock, in a transaction referred to in Clause 2.3(a)(i)
                or
                (iv), if the Board of Directors acting in good faith determines that
                the
                adjustments contemplated by Subsections 2.3(a), (b) and (c) in connection
                with such transaction will not appropriately protect the interests
                of the
                holders of Rights, the Board of Directors may determine what other
                adjustments to the Exercise Price, number of Rights and/or securities
                purchasable upon exercise of Rights would be appropriate and,
                notwithstanding Subsections 2.3(a), (b)and (c), such adjustments,
                rather
                than the adjustments contemplated by Subsections 2.3(a), (b)and (c),
                shall
                be made. The Corporation and the Rights Agent shall have authority
                without
                the approval of the holders of the Common Shares or the holders of
                Rights
                to amend this Agreement as appropriate to provide for such
                adjustments.

            


    

    


    
      	 	
              (f)

            	
              Benefit
                of Adjustments:
                Each Right originally issued by the Corporation subsequent to any
                adjustment made to the Exercise Price hereunder shall evidence the
                right
                to purchase, at the adjusted Exercise Price, the number of Common
                Shares
                purchasable from time to time hereunder upon exercise of a Right
                immediately prior to such issue, all subject to further adjustment
                as
                provided herein.

            


    

    


    
      
         

      

      
        -26-

        
          

        

      

      
         

      

    

    
      	 	
              (g)

            	
              No
                Change of Certificates:
                Irrespective of any adjustment or change in the Exercise Price or the
                number of Common Shares issuable upon the exercise of the Rights,
                the
                Rights Certificates theretofore and thereafter issued may continue
                to
                express the Exercise Price per Common Share and the number of Common
                Shares which were expressed in the initial Rights Certificates issued
                hereunder.

            


    

    


    
      	 	
              (h)

            	
              Timing
                of Issuance:
                In
                any case in which this Section 2.3 shall require that an adjustment
                in the
                Exercise Price be made effective as of a record date for a specified
                event, the Corporation may elect to defer until the occurrence of
                such
                event the issuance to the holder of any Right exercised after such
                record
                date the number of Common Shares and other securities of the Corporation,
                if any, issuable upon such exercise over and above the number of
                Common
                Shares and other securities of the Corporation, if any, issuable
                upon such
                exercise on the basis of the Exercise Price in effect prior to such
                adjustment;

            


    

    


    
      	 	
              (i)

            	
              Adjustments
                Regarding Tax:
                Notwithstanding anything contained in this Section 2.3 to the contrary,
                the Corporation shall be entitled to make such reductions in the
                Exercise
                Price, in addition to those adjustments expressly required by this
                Section
                2.3, as and to the extent that in their good faith judgment the Board
                of
                Directors shall determine to be advisable, in order that
                any:

            


    

    


    
      	 	
              (i)

            	
              consolidation
                or subdivision of Common Shares;

            


    

    


    
      	 	
              (ii)

            	
              issuance
                (wholly or in part for cash) of Common Shares or securities that
                by their
                terms are convertible into or exchangeable for Common
                Shares;

            


    

    


    
      	 	
              (iii)
                

            	
              stock
                dividends; or

            


    

    


    
      	 	
              (iv)

            	
              issuance
                of rights, options or warrants referred to in this Section
                2.3,

            


    

    


    hereafter
      made by the Corporation to holders of its Common Shares, shall not be taxable
      to
      such shareholders.

     

    
      	
              2.4

            	 	
              Date
                on Which Exercise is Effective:

            


    

    


    Each
      Person in whose name any certificate for Common Shares or other securities,
      if
      applicable, is issued upon the exercise of Rights shall for all purposes be
      deemed to have become the holder of record of the Common Shares or other
      securities, if applicable, represented thereon, and such certificate shall
      be
      dated the date upon which the Rights Certificate evidencing such Rights was
      duly
      surrendered in accordance with Subsection 2.2(d) (together with a duly completed
      Election to Exercise) and payment of the Exercise Price for such Rights (and
      any
      applicable transfer taxes and other governmental charges payable by the
      exercising holder hereunder) was made; provided, however, that if the date
      of
      such surrender and payment is a date upon which the transfer books of the Common
      Shares of the Corporation are closed, such Person shall be deemed to have become
      the holder of record of such Common Shares on, and such certificate shall be
      dated, the next succeeding Business Day on which the transfer books of the
      Common Shares are open.

     

    
      
         

      

      
        -27-

        
          

        

      

      
         

      

    

    
      	
              2.5

            	 	
              Execution,
                Authentication, Delivery and Dating of Rights
                Certificates:

            


    

    


    
      	 	
              (a)

            	
              Execution:
                The Rights Certificates shall be executed on behalf of the Corporation,
                under its corporate seal reproduced thereon, by any one of its Chairman,
                President, Chief Executive Officer or a Vice-President or Secretary.
                The
                signature of any of these officers on the Rights Certificates may
                be
                manual or facsimile.

            


    

    


    
      	 	
              (b)

            	
              Valid
                Signatures:
                Rights Certificates bearing the manual or facsimile signatures of
                individuals who were at any time the proper officers of the Corporation
                shall bind the Corporation, notwithstanding that such individuals
                or any
                of them have ceased to hold such offices prior to the countersignature
                and
                delivery of such Rights
                Certificates.

            


    

    


    
      	 	
              (c)

            	
              Delivery:
                Promptly after the Corporation learns of the Separation Time, the
                Corporation shall notify the Rights Agent of such Separation Time
                and
                shall deliver Rights Certificates executed by the Corporation to
                the
                Rights Agent for countersignature, and the Rights Agent shall countersign
                (manually or by facsimile signature in a manner satisfactory to the
                Corporation) and send such Rights Certificates to the holders of
                the
                Rights pursuant to Subsection 2.2(c) hereof. No Rights Certificate
                shall
                be valid for any purpose until countersigned by the Rights Agent
                in the
                manner described above.

            


    

    


    
      	 	
              (d)

            	
              Date:
                Each Rights Certificate shall be dated the date of countersignature
                thereof.

            


    

     

    
      	
              2.6

            	 	
              Registration,
                Transfer and Exchange:

            


    

    


    
      	 	
              (a)

            	
              Maintaining
                of Register:
                The Corporation shall cause to be kept a register (the "Rights Register")
                in which, subject to such reasonable regulations as it may prescribe,
                the
                Corporation shall provide for the registration and transfer of Rights.
                The
                Rights Agent is hereby appointed registrar for the Rights ("Rights
                Registrar") for the purpose of maintaining the Rights Register for
                the
                Corporation and registering Rights and transfers of Rights as herein
                provided and the Rights Agent hereby accepts such appointment. If
                the
                Rights Agent shall cease to be the Rights Registrar, the Rights Agent
                shall have the right to examine such register at all reasonable times.
                After the Separation Time and prior to the Expiration Time, upon
                surrender
                for registration of transfer or exchange of any Rights Certificate,
                and
                subject to the provisions of Subsection 2.6(c) below, the Corporation
                shall execute, and the Rights Agent shall countersign and deliver,
                in the
                name of the holder or the designated transferee or transferees, as
                required pursuant to the holder's instructions, one or more new Rights
                Certificates evidencing the same aggregate number of Rights as did
                the
                Rights Certificate so surrendered.

            


    

    


    
      
         

      

      
        -28-

        
          

        

      

      
         

      

    

    
      	 	
              (b)

            	
              Effect
                of Transfer or Exchange:
                All Rights issued upon any registration of a transfer or exchange
                of
                Rights Certificates shall be valid obligations of the Corporation,
                and
                such Rights shall be entitled to the same benefits under this Agreement
                as
                the Rights surrendered upon such registration of transfer or
                exchange.

            


    

    


    
      	 	
              (c)

            	
              Transfer
                or Exchange of Rights:
                Every Rights Certificate surrendered for registration of transfer
                or
                exchange shall have the form of assignment thereon completed and
                executed,
                or be accompanied by a written instrument of transfer in form satisfactory
                to the Corporation or the Rights Agent, as the case may be, executed
                by
                the holder thereof or the attorney of such holder duly authorized
                in
                writing. As a condition to the issue of any new Rights Certificate
                under
                this Section 2.6, the Corporation may require the payment of an amount
                sufficient to cover any tax or other governmental charge that may
                be
                imposed in relation thereto and other expenses, including the reasonable
                fees and expenses of its Rights Agent, connected
                therewith.

            


    

    


    
      	 	
              (d)

            	
              No
                Transfer or Exchange After Termination:
                The Corporation shall not be required to register the transfer or
                exchange
                of any Rights after the Rights have been terminated under Section
                5.1(e)
                hereof.

            


    

     

    
      	
              2.7

            	 	
              Mutilated,
                Destroyed, Lost and Stolen Rights
                Certificates:

            


    

    


    
      	 	
              (a)

            	
              Mutilation:
                If
                there shall be delivered to the Corporation and the Rights Agent
                prior to
                the Expiration Time, evidence to their satisfaction of the mutilation
                or
                defacing of any Rights Certificate, the Corporation shall execute
                and the
                Rights Agent shall countersign and deliver a new Rights Certificate
                upon
                surrender and cancellation of the mutilated or defaced Rights
                Certificate.

            


    

    


    
      	 	
              (b)

            	
              Destruction,
                Loss:
                If
                there shall be delivered to the Corporation and the Rights Agent
                prior to
                the Expiration Time:

            


    

    


    
      	 	
              (i)

            	
              evidence
                to their satisfaction of the destruction, loss or theft of any Rights
                Certificate; and

            


    

    


    
      	 	
              (ii)

            	
              such
                security or indemnity as may be required by them to save each of
                them and
                their respective agents harmless, then, in the absence of notice
                to the
                Corporation or the Rights Agent that such Rights Certificate has
                been
                acquired by a bona fide purchaser, the Corporation shall execute
                and the
                Rights Agent shall countersign and deliver, in lieu of any such destroyed,
                lost or stolen Rights Certificate, a new Rights Certificate evidencing
                the
                same number of Rights as did the Rights Certificate so destroyed,
                lost or
                stolen.

            


    

    


    
      	 	
              (c)

            	
              Taxes:
                As a condition to the issue of any new Rights Certificate under this
                Section 2.7, the Corporation may require the payment of an amount
                sufficient to cover any tax or other governmental charge that may
                be
                imposed in relation thereto and any other expenses, including the
                reasonable fees and expenses of the Rights Agent, connected
                therewith.

            


    

    


    
      
         

      

      
        -29-

        
          

        

      

      
         

      

    

    
      	 	
              (d)

            	
              Original
                Obligation:
                Every new Rights Certificate issued pursuant to this Section 2.7
                in lieu
                of any mutilated, destroyed, lost or stolen Rights Certificate shall
                evidence an original additional contractual obligation of the Corporation,
                whether or not the mutilated, destroyed, lost or stolen Rights Certificate
                shall be at any time enforceable by anyone, and shall be entitled
                to all
                the benefits of this Agreement equally and proportionately with any
                and
                all other Rights issued hereunder.

            


    

     

    
      	
              2.8

            	 	
              Persons
                Deemed Owners:

            


    

    


    The
      Corporation, the Rights Agent and any agent of the Corporation or the Rights
      Agent may deem and treat the person in whose name such Rights Certificate (or,
      prior to the Separation Time, the associated Common Share certificate) is
      registered as the absolute owner thereof and of the Rights evidenced thereby
      for
      all purposes whatsoever. As used in this Agreement, unless the context otherwise
      requires, the term "holder" of any Right shall mean the registered holder of
      such Right (or, prior to the Separation Time of the associated Common
      Share).

     

    
      	
              2.9

            	 	
              Delivery
                and Cancellation of
                Certificates:

            


    

    


    All
      Rights Certificates surrendered upon exercise or for redemption, registration
      of
      transfer or exchange shall, if surrendered to any person other than the Rights
      Agent, be delivered to the Rights Agent and, in any case, shall be promptly
      cancelled by the Rights Agent. The Corporation may at any time deliver to the
      Rights Agent for cancellation any Rights Certificates previously countersigned
      and delivered hereunder which the Corporation may have acquired in any manner
      whatsoever, and all Rights Certificates so delivered shall be promptly cancelled
      by the Rights Agent. No Rights Certificates shall be countersigned in lieu
      of or
      in exchange for any Rights Certificates cancelled as provided in this Section
      2.9, except as expressly permitted by this Agreement. The Rights Agent shall
      destroy all cancelled Rights Certificates and deliver a certificate of
      destruction to the Corporation.

     

    
      	
              2.10

            	 	
              Agreement
                of Rights Holders:

            


    

    


    Every
      holder of Rights by accepting the same consents and agrees with the Corporation
      and the Rights Agent and with every other holder of Rights that:

    


    
      	 	
              (a)

            	
              such
                holder is bound by and subject to the provisions of this Agreement,
                as
                amended from time to time in accordance with the terms hereof, in
                respect
                of all Rights held;

            


    

    


    
      	 	
              (b)

            	
              prior
                to the Separation Time, each Right shall be transferable only together
                with, and shall be transferred by a transfer of, the associated Common
                Share certificate representing such
                Right;

            


    

    


    
      	 	
              (c)

            	
              after
                the Separation Time, the Rights Certificates shall be transferable
                only on
                the Rights Register as provided
                herein;

            


    

    


    
      
         

      

      
        -30-

        
          

        

      

      
         

      

    

    
      	 	
              (d)

            	
              prior
                to due presentment of a Rights Certificate (or, prior to the Separation
                Time, the certificate evidencing the associated Common Shares certificate)
                for registration of transfer, the Corporation, the Rights Agent and
                any
                agent of the Corporation or the Rights Agent may deem and treat the
                Person
                in whose name the Rights Certificate (or, prior to the Separation
                Time,
                the certificate evidencing the associated Common Shares certificate)
                is
                registered as the absolute owner thereof and of the Rights evidenced
                thereby (notwithstanding any notations of ownership or writing on
                such
                Rights Certificate or the certificate evidencing the associated Common
                Shares made by anyone other than the Corporation or the Rights Agent)
                for
                all purposes whatsoever, and neither the Corporation nor the Rights
                Agent
                shall be affected by any notice to the
                contrary;

            


    

    


    
      	 	
              (e)

            	
              such
                holder has waived all rights to receive any fractional Right or any
                fractional Common Share or other securities upon exercise of a Right
                (except as provided herein); and

            


    

    


    
      	 	
              (f)

            	
              that,
                subject to the provisions of Section 5.4, without the approval of
                any
                holder of Rights or Voting Shares and upon the sole authority of
                the Board
                of Directors, acting in good faith, this Agreement may be supplemented
                or
                amended from time to time to cure any ambiguity or to correct or
                supplement any provision contained herein which may be inconsistent
                with
                the intent of this Agreement or is otherwise defective, as provided
                herein.

            


    

     

    
      	
              2.11

            	 	
              Rights
                Certificate Holder Not Deemed a
                Shareholder:

            


    

    


    No
      holder, as such, of any Rights or Rights Certificate shall be entitled to vote,
      receive dividends or be deemed for any purpose whatsoever the holder of any
      Common Share or any other share or security of the Corporation which may at
      any
      time be issuable on the exercise of the Rights represented thereby, nor shall
      anything contained herein or in any Rights Certificate be construed or deemed
      or
      confer upon the holder of any Right or Rights Certificate, as such, any right,
      title, benefit or privilege of a holder of Common Shares or any other shares
      or
      securities of the Corporation or any right to vote at any meeting of
      shareholders of the Corporation whether for the election of directors or
      otherwise or upon any matter submitted to the holders of Common Shares or any
      other shares of the Corporation at any meeting thereof, or to give or withhold
      consent to any action of the Corporation, or to receive notice of any meeting
      or
      other action affecting any holder of Common Shares or any other shares of the
      Corporation except as expressly provided herein, or to receive dividends,
      distributions or subscription rights, or otherwise, until the Rights or Rights
      evidenced by the Rights Certificates shall have been duly exercised in
      accordance with the terms and the provisions hereof.

    


    
      
         

      

      
        -31-

        
          

        

      

      
         

      

    

    ARTICLE
      3

    ADJUSTMENTS
      TO THE RIGHTS

     

    
      	
              3.1

            	 	
              Flip-in
                Event:

            


    

    


    
      	 	
              (a)

            	
              Flip-In:
                Subject to the provisions of Sections 3.1(b), 3.2 and Section 5.1,
                if
                prior to the Expiration Time a Flip-in Event shall occur, each Right
                shall
                constitute, effective at the close of business on the tenth Trading
                Day
                after the Share Acquisition Date, the right to purchase from the
                Corporation, upon exercise thereof in accordance with the terms hereof,
                that number of Common Shares as have an aggregate Market Price on
                the date
                of consummation or occurrence of such Flip-in Event equal to twice
                the
                Exercise Price for an amount in cash equal to the Exercise Price
                (such
                right to be appropriately adjusted in a manner analogous to the applicable
                adjustment provided for in Section 2.3 hereof in the event that,
                after
                such date of consummation or occurrence, an event of a type analogous
                to
                any of the events described in Section 2.3 hereof shall have
                occurred).

            


    

    


    
      	 	
              (b)

            	
              Certain
                Rights Void:
                Notwithstanding anything in this Agreement to the contrary, upon
                the
                occurrence of any Flip-in Event, any Rights that are or were Beneficially
                Owned on or after the earlier of the Separation Time and the Share
                Acquisition Date by:

            


    

    


    
      	 	
              (i)

            	
              an
                Acquiring Person (or any Affiliate or Associate of an Acquiring Person
                or
                any Person acting jointly or in concert with an Acquiring Person
                or any
                Affiliate or Associate of an Acquiring Person);
                or

            


    

    


    
      	 	
              (ii)

            	
              a
                transferee of Rights, directly or indirectly, of an Acquiring Person
                (or
                any Affiliate or Associate of an Acquiring Person or any Person acting
                jointly or in concert with an Acquiring Person or an Affiliate or
                Associate of an Acquiring Person), where such transferee becomes
                a
                transferee concurrently with or subsequent to the Acquiring Person
                becoming such in a transfer that the Board of Directors has determined
                is
                part of a plan, arrangement or scheme of an Acquiring Person (or
                any
                affiliate or associate of an Acquiring Person or any person acting
                jointly
                or in concert with an Acquiring Person or any affiliate or associate
                of an
                Acquiring Person), that has the purpose or effect of avoiding Section
                3.1(b)(i),

            


    

    


    shall
      become null and void without any further action and any holder of such Rights,
      including transferees, shall thereafter have no right to exercise such Rights
      under any provision of this Agreement and further shall thereafter not have
      any
      other rights whatsoever with respect to such Rights, whether under any provision
      of this Agreement or otherwise.

    


    
      	 	
              (c)

            	
              Compliance
                with Laws:
                From and after the Separation Time, the Corporation shall do all
                acts and
                things as shall be necessary and within its power to ensure compliance
                with the provisions of this Section 3.1, including without limitation,
                all
                such acts and things that may be required to satisfy the requirements
                of
                the Securities
                Act
                (British Columbia) and the securities laws or comparable legislation
                of
                each of the Provinces of Canada in respect of the issue of Common
                Shares
                on the exercise of Rights in accordance with this
                Agreement.

            


    

    


    
      
         

      

      
        -32-

        
          

        

      

      
         

      

    

    
      	 	
              (d)

            	
              Legend:
                Any Rights Certificate that represents Rights Beneficially Owned
                by a
                Person described in either Section 3.1(b)(i) or (ii) or transferred
                to any
                Nominee of any such Person, and any Rights Certificate issued upon
                the
                transfer, exchange or replacement of any other Rights Certificate
                referred
                to in this sentence shall contain and be deemed to contain the following
                legend:

            


    

    


    "The
      Rights represented by this Rights Certificate were issued to a Person who was
      an
      Acquiring Person or an Affiliate or an Associate of an Acquiring Person (as
      such
      terms are defined in the Shareholder Rights Agreement) or a Person who was
      acting jointly or in concert with an Acquiring Person or an Affiliate or
      Associate of an Acquiring Person. This Rights Certificate and the Rights
      represented hereby shall become void in the circumstances specified in
      Subsection 3.1(b) of the Shareholder Rights Agreement."

    


    provided,
      however, that the Rights Agent shall not be under any responsibility to
      ascertain the existence of facts that would require the imposition of such
      legend but shall be required to impose such legend only if instructed to do
      so
      by the Corporation or if a holder fails to certify upon transfer or exchange
      in
      the space provided on the Rights Certificate that such holder is not a Person
      described in such legend.

     

    
      	
              3.2

            	 	
              Exchange
                Option:

            


    

    


    
      	 	
              (a)

            	
              Optional
                Exchange:
                In
                the event that the Board of Directors acting in good faith shall
                determine
                that conditions exist which would eliminate or otherwise materially
                diminish in any respect the benefits intended to be afforded to the
                holders of Rights pursuant to this Agreement, the Board of Directors
                may
                at its option and without seeking the approval of holders of Common
                Shares
                or Rights at any time after a Flip-in Event has occurred, authorize
                the
                Corporation to issue and deliver in respect of each Right which is
                not
                void pursuant to Section 3.1(b)
                either:

            


    

    


    
      	 	
              (i)

            	
              in
                return for the Exercise Price and Right, cash, debt, equity or other
                securities or other property or assets (or a combination thereof)
                having a
                value equal to twice the Exercise Price;
                or

            


    

    


    
      	 	
              (ii)

            	
              in
                return for the Right and without further charge, subject to any amounts
                that may be required to be paid under applicable law, cash, debt,
                equity
                or other securities or other property or assets (or a combination
                thereof), having a value equal to the Exercise
                Price;

            


    

    


    
      
         

      

      
        -33-

        
          

        

      

      
         

      

    

    in
      full
      and final settlement of all rights attaching to the Rights; provided that the
      value of any such debt, equity or other securities or other property or assets
      shall be determined by the Board of Directors who may rely for that purpose
      on
      the advice of a nationally recognized Canadian firm of investment dealers or
      investment bankers selected by the Board of Directors. To the extent that the
      Board of Directors determines in good faith that any action need be taken
      pursuant to this Section 3.2, the Board of Directors may suspend the
      exercisability of the Rights for a period up to 60 days following the date
      of
      the occurrence of the relevant Flip-in Event in order to determine the
      appropriate form and value of cash, debt, equity or other securities or other
      property or assets (or a combination thereof) to be issued or delivered on
      such
      exchange for Rights. In the event of any such suspension, the Corporation shall
      notify the Rights Agent and issue as promptly as practicable a public
      announcement stating that the exercisability of the Rights has been temporarily
      suspended.

    


    
      	 	
              (b)

            	
              Termination
                of Right to Exercise:
                If the Board of Directors authorizes and directs the exchange of
                cash,
                debt, equity or other securities or other property or assets (or
                a
                combination thereof) for Rights pursuant to Subsection 3.2(a) hereof,
                then
                without any further action or notice the right to exercise the Rights
                will
                terminate and the only right thereafter of a holder of Rights shall
                be to
                receive such cash, debt, equity or other securities or other property
                or
                assets (or a combination thereof) in accordance with the determination
                of
                the Board of Directors made pursuant to Section 3.2(a). Within 10
                Business
                Days of the Board of Directors authorizing and directing any such
                exchange, the Corporation shall give notice of such exchange to the
                holders of such Rights in accordance with Section 5.9. Each such
                notice of
                exchange shall state the method by which the exchange of cash, debt,
                equity or other securities or other property or assets (or a combination
                thereof) for Rights will be
                effected.

            


    

    


    
      	 	
              (c)

            	
              Additional
                Securities:
                If there shall not be sufficient securities authorized but unissued
                to
                permit the exchange in full of Rights pursuant to this Section 3.2,
                the
                Corporation will take all such action as may be necessary to authorize
                additional securities for issuance upon the exchange of Rights provided
                however, that the Corporation shall not be required to issue fractions
                of
                securities or to distribute certificates evidencing fractional securities.
                In lieu of issuing such fractional securities, subject to Section
                5.5(b),
                there shall be paid to the registered holders of Rights to whom such
                fractional securities would otherwise be issuable, an amount in cash
                equal
                to the same fraction of the market price of a whole such
                security.

            


    

    


    
      
         

      

      
        -34-

        
          

        

      

      
         

      

    

    ARTICLE
      4

    THE
      RIGHTS AGENT

     

    
      	
              4.1

            	 	
              General:

            


    

    


    
      	 	
              (a)

            	
              Appointment
                of Rights Agent:
                The Corporation hereby appoints the Rights Agent to act as agent
                for the
                Corporation and the holders of Rights in accordance with the terms
                and
                conditions hereof and the Rights Agent hereby accepts such appointment.
                The Corporation may from time to time appoint one or more Co-Rights
                Agents
                as it may deem necessary or desirable. In such event, the respective
                duties of the Rights Agent and any Co-Rights Agent shall be as the
                Corporation may determine. The Corporation agrees to pay to the Rights
                Agent reasonable compensation for all services rendered by it hereunder
                and, from time to time on demand of the Rights Agent, its reasonable
                expenses and counsel fees and other disbursements incurred in the
                administration and execution of this Agreement and the exercise and
                performance of its duties hereunder. The Corporation also agrees
                to
                indemnify the Rights Agent for, and to hold it harmless against,
                any loss,
                liability or expense, incurred without negligence, bad faith or wilful
                misconduct on the part of the Rights Agent, for anything done or
                omitted
                by the Rights Agent in connection with the acceptance and performance
                of
                this Agreement, including the costs and expenses of defending against
                any
                claim of liability, which right to indemnification shall survive
                the
                termination of this Agreement.

            


    

    


    
      	 	
              (b)

            	
              Protection
                of Rights Agent:
                The Rights Agent shall be protected from, and shall incur no liability
                for
                or in respect of, any action taken, suffered or omitted by it in
                connection with its performance of this Agreement in reliance upon
                any
                certificate for Common Shares, or any Rights Certificate, certificate
                for
                other securities of the Corporation, instrument of assignment or
                transfer,
                power of attorney, endorsement, affidavit, letter, notice, direction,
                consent, certificate, statement or other paper or document believed
                by it
                to be genuine and to be signed, executed and, where necessary, verified
                or
                acknowledged, by the proper Person or
                Persons.

            


    

     

    
      	
              4.2

            	 	
              Merger
                or Amalgamation or Change of Name of Rights
                Agent:

            


    

    


    
      	 	
              (a)

            	
              Merger:
                Any corporation into which the Rights Agent or any successor Rights
                Agent
                may be merged or amalgamated with or into, or any corporation succeeding
                to the shareholder services business of the Rights Agent or any successor
                Rights Agent, shall be the successor to the Rights Agent under this
                Agreement without the execution or filing of any paper or any further
                act
                on the part of any of the parties hereto, provided that such corporation
                would be eligible for appointment as a successor Rights Agent under
                the
                provisions of Section 4.4 hereof. In case at the time such successor
                Rights Agent succeeds to the agency created by this Agreement any
                of the
                Rights Certificates have been countersigned but not delivered, any
                such
                successor Rights Agent may adopt the countersignature of the predecessor
                Rights Agent and deliver such Rights Certificates so countersigned,
                and in
                case at that time any of the Rights Certificates have not been
                countersigned, any successor Rights Agent may countersign such Rights
                Certificates either in the name of the predecessor Rights Agent or
                in the
                name of the successor Rights Agent, and in all such cases such Rights
                Certificates shall have the full force and effect provided in the
                Rights
                Certificates and in this Agreement.

            


    

    


    
      
         

      

      
        -35-

        
          

        

      

      
         

      

    

    
      	 	
              (b)

            	
              Chance
                of Name:
                In
                case at any time the name of the Rights Agent is changed and at such
                time
                any of the Rights Certificates shall have been countersigned but
                not
                delivered, the Rights Agent may adopt the countersignature under
                its prior
                name and deliver Rights Certificates so countersigned, and in case
                at that
                time any of the Rights Certificates shall not have been countersigned,
                the
                Rights Agent may countersign such Rights Certificates either in its
                prior
                name or in its changed name and in all such cases such Rights Certificates
                shall have the full force provided in the Rights Certificates and
                in this
                Agreement.

            


    

     

    
      	
              4.3

            	 	
              Duties
                of Rights Agent:

            


    

    


    The
      Rights Agent undertakes the duties and obligations imposed by this Agreement
      upon the following terms and conditions, by all of which the Corporation and
      the
      holders of Rights Certificates, by their acceptance thereof, shall be
      bound:

    


    
      	 	
              (a)

            	
              Legal
                Counsel:
                The Rights Agent may consult with legal counsel (who may be legal
                counsel
                for the Corporation), and the opinion of such counsel shall be full
                and
                complete authorization and protection to the Rights Agent as to any
                action
                taken or omitted to be taken by it in good faith and in accordance
                with
                such opinion.

            


    

    


    
      	 	
              (b)

            	
              Satisfactory
                Proof:
                Whenever in the performance of its duties under this Agreement the
                Rights
                Agent deems it necessary or desirable that any fact or matter be
                proved or
                established by the Corporation prior to taking or suffering any action
                or
                omitting to take any action hereunder, such fact or matter (unless
                other
                evidence in respect thereof be herein specifically prescribed) may
                be
                deemed to be conclusively proved and established by a certificate
                signed
                by a person believed by the Rights Agent to be the Chairman, the
                President, the Chief Executive Officer or any Vice-President and
                by the
                Chief Financial Officer, the Treasurer, any Assistant Treasurer,
                the
                Secretary or any Assistant Secretary of the Corporation and delivered
                to
                the Rights Agent and such certificate shall be full authorization
                to the
                Rights Agent for any action taken, omitted or suffered in good faith
                by it
                under the provisions of this Agreement in reliance upon such
                certificate.

            


    

    


    
      	 	
              (c)

            	
              Bad
                Faith:
                The Rights Agent shall be liable hereunder only for its own negligence,
                bad faith or wilful misconduct.

            


    

    


    
      	 	
              (d)

            	
              Recitals:
                The Rights Agent shall not be liable for or by reason of any of the
                statements of fact or recitals contained in this Agreement or in
                the
                certificates representing Common Shares or the Rights Certificates
                (except
                its countersignature thereof) or be required to verify the same,
                but all
                such statements and recitals are and will be deemed to have been
                made only
                by the Corporation.

            


    

    


    
      
         

      

      
        -36-

        
          

        

      

      
         

      

    

    
      	 	
              (e)

            	
              No
                Responsibility:
                The Rights Agent shall not be under any responsibility in respect
                of the
                validity of this Agreement or the execution and delivery hereof (except
                the authorization, execution and delivery hereof by the Rights Agent)
                or
                in respect of the validity or execution of any certificate representing
                Common Shares or Rights Certificate (except its countersignature
                thereof),
                nor will it be responsible for any breach by the Corporation of any
                covenant or condition contained in this Agreement or in any Rights
                Certificate, any change in the exercisability of the Rights (including
                the
                Rights becoming void pursuant to Section 2.11 or Subsection 3.2(b)
                hereof)
                or any adjustment required under the provisions of Section 2.3 hereof
                or
                for the manner, method or amount of any such adjustment or the
                ascertaining of the existence of facts that would require any such
                adjustment (except with respect to the exercise of Rights after receipt
                of
                the certificate contemplated by Section 2.3 hereof describing any
                such
                adjustment) nor will it by any act hereunder be deemed to make any
                representation or warranty as to the authorization or reservation
                of any
                Common Shares to be issued pursuant to this Agreement or any Rights
                or as
                to whether any Common Shares shall, when issued, be duly and validly
                authorized, executed, issued and delivered and be fully paid and
                non-assessable.

            


    

    


    
      	 	
              (f)

            	
              Performance
                By Corporation:
                The Corporation agrees that it will perform, execute, acknowledge
                and
                deliver or cause to be performed, executed, acknowledged and delivered
                all
                such further and other acts, instruments and assurances as may reasonably
                be required by the Rights Agent for the carrying out or performing
                by the
                Rights Agent of the provisions of this
                Agreement.

            


    

    


    
      	 	
              (g)

            	
              Persons
                To Give Instructions:
                The Rights Agent is hereby authorized to rely upon and directed to
                accept
                instructions with respect to the performance of its duties hereunder
                from
                any person believed by the Rights Agent to be the Chairman, the President,
                the Chief Executive Officer, any Vice-President, the Secretary, any
                Assistant Secretary, the Chief Financial Officer, the Treasurer or
                any
                Assistant Treasurer of the Corporation and to apply to such persons
                for
                advice or instructions in connection with its duties, and it shall
                not be
                liable for any action taken, omitted or suffered by it in good faith
                in
                accordance with the instructions of any such
                person.

            


    

    


    
      	 	
              (h)

            	
              Ability
                To Deal:
                The Rights Agent and any shareholder, director, officer or employee
                of the
                Rights Agent may buy, sell or deal in Common Shares, Rights or other
                securities of the Corporation or become pecuniarily interested in
                any
                transaction in which the Corporation may be interested, or contract
                with
                or lend money to the Corporation or otherwise act as fully and freely
                as
                though it were not Rights Agent under this Agreement. Nothing herein
                shall
                preclude the Rights Agent from acting in any other capacity for the
                Corporation or for any other legal
                entity.

            


    

    


    
      	 	
              (i)

            	
              No
                Liability:
                The Rights Agent may execute and exercise any of the rights or powers
                hereby vested in it or perform any duty hereunder either itself or
                by or
                through its attorneys or agents, and the Rights Agent shall not be
                answerable or accountable for any act, default, neglect or misconduct
                of
                any such attorneys or agents or for any loss to the Corporation resulting
                from any such act, omission, default, neglect or misconduct, provided
                reasonable care was exercised in the selection and continued employment
                thereof.

            


    

     

    
      
         

      

      
        -37-

        
          

        

      

      
         

      

    

    
      	
              4.4

            	 	
              Change
                of Rights Agent:

            


    

    


    The
      Rights Agent may resign and be discharged from its duties under this Agreement
      upon 90 days' notice (or such lesser notice as is acceptable to the Corporation)
      in writing delivered or mailed to the Corporation and to each transfer agent
      of
      Common Shares by first class or registered mail. The Corporation may remove
      the
      Rights Agent upon 60 days' notice in writing, mailed or delivered to the Rights
      Agent and to each transfer agent of Common Shares by first class or registered
      mail. If the Rights Agent should resign or be removed or otherwise become
      incapable of acting, the Corporation shall appoint a successor to the Rights
      Agent. If the Corporation fails to make such appointment within a period of
      60
      days after such removal or after it has been notified in writing of such
      resignation or incapacity by the resigning or incapacitated Rights Agent or
      by
      the holder of any Rights (which holder shall, with such notice, submit the
      Rights Certificate of such holder for inspection by the Corporation), then
      the
      holder of any Rights may apply to any court of competent jurisdiction for the
      appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
      by the Corporation or by such a court, shall be a trust company incorporated
      under the laws of Canada or a province thereof authorized to carry on the
      business of a trust company as principal or through an agent in the Provinces
      of
      Ontario and British Columbia. After appointment, the successor Rights Agent
      shall be vested with the same powers, rights, duties and responsibilities as
      if
      it had been originally named as Rights Agent without further act or deed;
      provided that the predecessor Rights Agent shall deliver and transfer to the
      successor Rights Agent any property at the time held by it hereunder, and
      execute and deliver any further assurance, conveyance, act or deed necessary
      for
      the purpose. Not later than the effective date of any such appointment, the
      Corporation shall file notice thereof in writing with the predecessor Rights
      Agent and the transfer agent of the Common Shares, and mail a notice thereof
      in
      writing to the holders of the Rights. Failure to give any notice provided for
      in
      this Section 4.4, however, or any defect therein, shall not affect the legality
      or validity of the resignation or removal of the Rights Agent or the appointment
      of the successor Rights Agent, as the case may be.

    


    ARTICLE
      5

    MISCELLANEOUS

     

    
      	
              5.1

            	 	
              Redemption
                and Waiver:

            


    

    


    
      	 	
              (a)

            	
              The
                Board of Directors acting in good faith may, until the occurrence
                of a
                Flip-in Event, upon prior written notice delivered to the Rights
                Agent,
                determine to waive the application of Section 3.1 to such particular
                Flip-in Event (which for greater certainty shall not include the
                circumstances described in Subsection 5.1(h)); provided that if the
                Board
                of Directors waives the application of Section 3.1 to a particular
                Flip-in
                Event pursuant to this Subsection 5.1(a), the Board of Directors
                shall be
                deemed to have waived the application of Section 3.1 to any other
                Flip-in
                Event which may arise in respect of any Take-Over Bid then in effect
                or
                made prior to the public announcement of the completion or termination
                of
                the transaction in respect of which the Board of Directors waived
                the
                application of Section 3.1.

            


    

    


    
      
         

      

      
        -38-

        
          

        

      

      
         

      

    

    
      	 	
              (b)

            	
              The
                Board of Directors acting in good faith may, at its option, at any
                time
                prior to the provisions of Section 3.1 becoming applicable as a result
                of
                the occurrence of a Flip-in Event, elect to redeem all but not less
                than
                all of the outstanding Rights at a redemption price of $0.0001 per
                Right
                appropriately adjusted in a manner analogous to the applicable adjustment
                provided for in Section 2.3 if an event of the type analogous to
                any of
                the events described in Section 2.3 shall have occurred (such redemption
                price being herein referred to as the "Redemption
                Price").
                The redemption of the Rights by the Board of Directors may be made
                effective at such time, on such basis and with such conditions as
                the
                Board of Directors in its sole discretion may
                establish.

            


    

    


    
      	 	
              (c)

            	
              In
                the event that prior to the occurrence of a Flip-in Event a Person
                acquires, pursuant to a Permitted Bid or a Competing Permitted Bid,
                not
                less than 90% of the outstanding Common Shares other than Common
                Shares
                Beneficially Owned at the date of the Permitted Bid or the Competing
                Permitted Bid by such Person, then the Board of Directors of the
                Corporation shall immediately upon the consummation of such acquisition
                without further formality be deemed to have elected to redeem the
                Rights
                at the Redemption Price.

            


    

    


    
      	 	
              (d)

            	
              Where
                a Take-Over Bid that is not a Permitted Bid Acquisition is withdrawn
                or
                otherwise terminated after the Separation Time has occurred and prior
                to
                the occurrence of a Flip-in Event, the Board of Directors may elect
                to
                redeem all the outstanding Rights at the Redemption
                Price.

            


    

    


    
      	 	
              (e)

            	
              If
                the Board of Directors is deemed under Subsection 5.1(c) to have
                elected,
                or elects under either of Subsection 5.1(b) or (d), to redeem the
                Rights,
                the right to exercise the Rights will thereupon, without further
                action
                and without notice, terminate and the only right thereafter of the
                holders
                of Rights shall be to receive the Redemption
                Price.

            


    

    


    
      	 	
              (f)

            	
              Within
                10 days after the Board of Directors is deemed under Subsection 5.1(c)
                to
                have elected, or elects under Subsection 5.1(b) or (d), to redeem
                the
                Rights, the Corporation shall give notice of redemption to the holders
                of
                the then outstanding Rights by mailing such notice to each such holder
                at
                his last address as it appears upon the registry books of the Rights
                Agent
                or, prior to the Separation Time, on the registry books of the transfer
                agent for the Common Shares. Any notice which is mailed in the manner
                herein provided shall be deemed given, whether or not the holder
                receives
                the notice. Each such notice of redemption will state the method
                by which
                the payment of the Redemption Price will be
                made.

            


    

    


    
      	 	
              (g)

            	
              Upon
                the Rights being redeemed pursuant to Subsection 5.1(d), all the
                provisions of this Agreement shall continue to apply as if the Separation
                Time had not occurred and Rights Certificates representing the number
                of
                Rights held by each holder of record of Common Shares as of the Separation
                Time had not been mailed to each such holder and for all purposes
                of this
                Agreement the Separation Time shall be deemed not to have
                occurred.

            


    

    


    
      
         

      

      
        -39-

        
          

        

      

      
         

      

    

    
      	 	
              (h)

            	
              The
                Board of Directors may waive the application of Section 3.1 in respect
                of
                the occurrence of any Flip-in Event if the Board of Directors has
                determined within ten Trading Days following a Share Acquisition
                Date that
                a Person became an Acquiring Person by inadvertence and without any
                intention to become, or knowledge that it would become, an Acquiring
                Person under this Agreement and, in the event that such a waiver
                is
                granted by the Board of Directors, such Share Acquisition Date shall
                be
                deemed not to have occurred. Any such waiver pursuant to this Subsection
                5.1(b) must be on the condition that such Person, within 14 days
                after the
                foregoing determination by the Board of Directors or such earlier
                or later
                date as the Board of Directors may determine (the "Disposition
                Date"),
                has reduced its Beneficial Ownership of Voting Shares such that the
                Person
                is no longer an Acquiring Person. If the Person remains an Acquiring
                Person at the close of business on the Disposition Date, the Disposition
                Date shall be deemed to be the date of occurrence of a further Share
                Acquisition Date and Section 3.1 shall apply
                thereto.

            


    

     

    
      	
              5.2

            	 	
              Expiration:

            


    

    


    No
      Person
      shall have any rights pursuant to this Agreement or any Right after the
      Expiration Time, except as provided in Section 4.1 hereof.

     

    
      	
              5.3

            	 	
              Issue
                of New Rights Certificates:

            


    

    


    Notwithstanding
      any of the provisions of this Agreement or of the Rights to the contrary, the
      Corporation may, at its option, issue new Rights Certificates evidencing Rights
      in such form as may be approved by the Board of Directors to reflect any
      adjustment or change in the number or kind of securities purchasable upon
      exercise of Rights made in accordance with the provisions of this
      Agreement.

     

    
      	
              5.4

            	 	
              Supplements
                and Amendments:

            


    

    


    
      	 	
              (a)

            	
              The
                Corporation may make amendments to this Agreement to correct any
                clerical
                or typographical error or which are required to maintain the validity
                of
                this Agreement as a result of any change in any applicable legislation
                or
                regulations thereunder. The Corporation may, prior to the date of
                the
                shareholders' meeting referred to in Section 5.16, supplement or
                amend
                this Agreement without the approval of any holders of Rights or Voting
                Shares in order to make any changes which the Board of Directors
                acting in
                good faith may deem necessary or desirable. Notwithstanding anything
                in
                this Section 5.4 to the contrary, no such supplement or amendment
                shall be
                made to the provisions of Article 4 except with the written concurrence
                of
                the Rights Agent to such supplement or
                amendment.

            


    

    


    
      
         

      

      
        -40-

        
          

        

      

      
         

      

    

    
      	 	
              (b)

            	
              Subject
                to the Section 5.4(a), the Corporation may, with the prior consent
                of the
                holders of Voting Shares obtained as set forth below, at any time
                prior to
                the Separation Time, amend, vary or rescind any of the provisions
                of this
                Agreement and the Rights (whether or not such action would materially
                adversely affect the interests of the holders of Rights generally).
                Such
                consent shall be deemed to have been given if the action requiring
                such
                approval is authorized by the affirmative vote of a majority of the
                votes
                cast by Independent Shareholders present or represented at and entitled
                to
                be voted at a meeting of the holders of Voting Shares duly called
                and held
                in compliance with applicable laws and the constating documents of
                the
                Corporation.

            


    

    


    
      	 	
              (c)

            	
              The
                Corporation may, with the prior consent of the holders of Rights,
                at any
                time on or after the Share Acquisition Date, vary or delete any of
                the
                provisions of this Agreement and the Rights (whether or not such
                action
                would materially adversely affect the interests of the holders of
                Rights
                generally), provided that no such amendment, variation or deletion
                shall
                be made to the provisions of Article 4 except with the written concurrence
                of the Rights Agent thereto. Such consent shall be deemed to have
                been
                given if such amendment, variation or deletion is authorized by the
                affirmative votes of the holders of Rights present or represented
                at and
                entitled to be voted at a meeting of the holders and representing
                50% plus
                one of the votes cast in respect
                thereof.

            


    

    


    
      	 	
              (d)

            	
              Any
                approval of the holders of Rights shall be deemed to have been given
                if
                the action requiring such approval is authorized by the affirmative
                votes
                of the holders of Rights present or represented at and entitled to
                be
                voted at a meeting of the holders of Rights and representing a majority
                of
                the votes cast in respect thereof. For the purposes hereof, each
                outstanding Right (other than Rights which are void pursuant to the
                provisions hereof) shall be entitled to one vote, and the procedures
                for
                the calling, holding and conduct of the meeting shall be those, as
                nearly
                as may be, which are provided in the Corporation's constating documents
                and the Company Act with respect to meetings of shareholders of the
                corporation.

            


    

    


    
      	 	
              (e)

            	
              Any
                amendments made by the Corporation to this Agreement pursuant to
                Subsection 5.4(a) which are required to maintain the validity of
                this
                Agreement as a result of any change in any applicable legislation
                or
                regulation thereunder shall:

            


    

    


    
      	 	
              (i)

            	
              if
                made before the Separation Time, he submitted to the shareholders
                of the
                Corporation at the next meeting of shareholders and the shareholders
                may,
                by the majority referred to in Subsection 5.4(b), confirm or reject
                such
                amendment;

            


    

    


    
      	 	
              (ii)

            	
              if
                made after the Separation Time, be submitted to the holders of Rights
                at a
                meeting to be called for on a date not later than immediately following
                the next meeting of shareholders of the Corporation and the holders
                of
                Rights may, by resolution passed by the majority referred to in Subsection
                5.4(c), confirm or reject such
                amendment.

            


    

    


    
      
         

      

      
        -41-

        
          

        

      

      
         

      

    

    Any
      such
      amendment shall be effective from the date of the resolution of the Board of
      Directors adopting such amendment, until it is confirmed or rejected or until
      it
      ceases to be effective (as described in the next sentence) and, where such
      amendment is confirmed, it continues in effect in the form so confirmed. If
      such
      amendment is rejected by the shareholders or the holders of Rights or is not
      submitted to the shareholders or holders of Rights as required, then such
      amendment shall cease to be effective from and after the termination of the
      meeting at which it was rejected or to which it should have been but was not
      submitted or from and after the date of the meeting of holders of Rights that
      should have been but was not held, and no subsequent resolution of the Board
      of
      Directors to amend this Agreement to substantially the same effect shall be
      effective until confirmed by the shareholders or holders of Rights as the case
      may be.

     

    
      	
              5.5

            	 	
              Fractional
                Rights and Fractional Common
                Shares:

            


    

    


    
      	 	
              (a)

            	
              No
                Fractional Rights:
                The Corporation shall not be required to issue fractions of Rights
                or to
                distribute Right Certificates which evidence fractional Rights. After
                the
                Separation Time, in lieu of issuing fractional Rights the Corporation
                shall pay to the holders of record of the Right Certificates, at
                the time
                such fractional Rights would otherwise be issuable, an amount in
                cash
                equal to the same fraction of the Market Price of one whole Right
                that the
                fraction of a Right that would otherwise be issuable is of one whole
                Right.

            


    

    


    
      	 	
              (b)

            	
              No
                Fractional Common Shares:
                The Corporation shall not be required to issue fractions of Common
                Shares
                upon exercise of the Rights or to distribute certificates which evidence
                fractional Common Shares. In lieu of issuing fractional Common Shares,
                the
                Corporation shall pay to the holders of record of Right Certificates
                at
                the time such Rights are exercised as herein provided, an amount
                in cash
                equal to the same fraction of the Market Price of one Common Share
                that
                the fraction of a Common Share that would otherwise be issuable upon
                the
                exercise of such Right is of a whole Common
                Share.

            


    

     

    
      	
              5.6

            	 	
              Rights
                of Action:

            


    

    


    Subject
      to the terms of this Agreement, rights of action in respect of this Agreement,
      other than rights of action vested solely in the Rights Agent, are vested in
      the
      respective holders of the Rights, and any holder of any Rights, without the
      consent of the Rights Agent or of the holder of any other Rights may, on such
      holder's own behalf and for such holder's own benefit and the benefit of other
      holders of Rights, enforce, and may institute and maintain any suit, action
      or
      proceeding against the Corporation to enforce, or otherwise act in respect
      of,
      such holder's right to exercise the Rights of such holder in the manner provided
      in the Rights Certificate of such holder and in this Agreement. Without limiting
      the foregoing or any remedies available to the holders of Rights, it is
      specifically acknowledged that the holders of Rights would not have an adequate
      remedy at law for any breach of this Agreement and shall be entitled to specific
      performance of the obligations under, and injunctive relief against actual
      or
      threatened violations of the obligations of any Person subject to, this
      Agreement.

     

    
      
         

      

      
        -42-

        
          

        

      

      
         

      

    

    
      	
              5.7

            	 	
              Regulatory
                Approvals:

            


    

    


    Any
      obligation of the Corporation or action or event contemplated by this Agreement
      shall be subject to the receipt of any requisite approval or consent from any
      governmental or regulatory authority, and without limiting the generality of
      the
      foregoing, necessary approvals of the TSX Venture Exchange and other exchanges
      will be obtained, such as to the issuance of Common Shares upon the exercise
      of
      Rights under Section 2.2(d) and the issuance of convertible debt, equity or
      other securities or other property or assets under section 3.2. Notwithstanding
      anything to the contrary in this Agreement, no supplement or amendment to this
      Agreement or to the terms of the Rights may be made without the prior consent
      of
      the TSX Venture Exchange.

     

    
      	
              5.8

            	 	
              Declaration
                as to Non-Canadian holders:

            


    

    


    If
      in the
      opinion of the Board of Directors (who may rely upon the advice of counsel)
      any
      action or event contemplated by this Agreement would require compliance by
      the
      Corporation with the securities laws or comparable legislation of a jurisdiction
      outside Canada, the Board of Directors acting in good faith shall take such
      actions as it may deem appropriate to ensure such compliance. In no event shall
      the Corporation or the Rights Agent be required to issue or deliver Rights,
      or
      securities issuable on exercise of Rights to persons who are citizens, residents
      or nationals of any jurisdiction other than Canada, in which such issue or
      delivery would be unlawful without registration of the relevant persons or
      securities for such purposes.

     

    
      	
              5.9

            	 	
              Notices:

            


    

    


    
      	 	
              (a)

            	
              Notices
                or demands authorized or required by this Agreement to be given or
                made by
                the Rights Agent or by the holder of any Rights to or on the Corporation
                shall be sufficiently given or made if delivered, sent by registered
                or
                certified mail, postage prepaid (until another address is filed in
                writing
                with the Rights Agent), or sent by facsimile or other form of recorded
                electronic communication, charges prepaid and confirmed in writing,
                as
                follows:

            


    

    


    POLYMET
      MINING CORP.

    1116
      -
      925 West Georgia Street

    Vancouver,
      B.C. V6C 3L2

    


    Attention:
      William Murray

    Telecopier
      No.: (604) 669-4776

    


    
      
         

      

      
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    With
      a
      copy to:

    


    VECTOR
      Corporate Finance Lawyers

    Barristers
      and Solicitors

    1040-999
      West Hastings Street

    Vancouver,
      B.C. V6C 2W2

    


    Attention:
      Graham H. Scott

    Telecopier
      No.: (604) 683-2643

    


    
      	 	
              (b)

            	
              Notices
                or demands authorized or required by this Agreement to be given or
                made by
                the Corporation or by the holder of any Rights to or on the Rights
                Agent
                shall be sufficiently given or made if delivered, sent by registered
                or
                certified mail, postage prepaid (until another address is filed in
                writing
                with the Corporation), or sent by facsimile or other form of recorded
                electronic communication, charges prepaid and confirmed in writing,
                as
                follows:

            


    

    


    Pacific
      Corporate Trust Company

    10th
      Floor, 625 Howe Street, 

    Vancouver,
      B.C. V6C 3B8

    


    Attention:
      Manager, Client Services

    Telecopier
      No.: (604) 689-8144

    


    
      	 	
              (c)

            	
              Notices
                or demands authorized or required by this Agreement to be given or
                made by
                the Corporation or the Rights Agent to or on the holder of any Rights
                shall be sufficiently given or made if delivered or sent by first
                class
                mail, postage prepaid, addressed to such holder as it appears upon
                the
                register of the Rights Agent or, prior to the Separation Time, on
                the
                register of the Corporation for its Common Shares. Any notice which
                is
                mailed or sent in the manner herein provided shall be deemed given,
                whether or not the holder receives the
                notice.

            


    

    


    
      	 	
              (d)

            	
              Any
                notice given or made in accordance with this Section 5.9 shall be
                deemed
                to have been given and to have been received on the day of delivery,
                if so
                delivered, on the third Business Day (excluding each day during which
                there exists any general interruption of postal service due to strike,
                lockout or other cause) following the mailing thereof, if so mailed,
                and
                on the day of telegraphing, telecopying or sending of the same by
                other
                means of recorded electronic communication (provided such sending
                is
                during the normal business hours of the addressee on a Business Day
                and if
                not, on the first Business Day thereafter). Each of the Corporation
                and
                the Rights Agent may from time to time change its address for notice
                to
                the other given in the manner
                aforesaid.

            


    

     

    
      
         

      

      
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              5.
                10

            	 	
              Costs
                of Enforcement:

            


    

    


    The
      Corporation agrees that if the Corporation or any other Person the securities
      of
      which are purchasable upon exercise of Rights, fails to fulfil any of its
      obligations pursuant to this Agreement, then the Corporation or such Person
      shall reimburse the holder of any Rights for the costs and expenses (including
      legal fees) incurred by such holder in actions to enforce his rights pursuant
      to
      any Rights or this Agreement.

     

    
      	
              5.11

            	 	
              Successors:

            


    

    


    All
      of
      the covenants and provisions of this Agreement by or for the benefit of the
      Corporation or the Rights Agent shall bind their respective successors and
      assigns and shall enure to the benefit of their respective successors and
      permitted assigns hereunder.

     

    
      	
              5.12

            	 	
              Benefits
                of this Agreement:

            


    

    


    Nothing
      in this Agreement shall be construed to give to any Person other than the
      Corporation, the Rights Agent and the holders of Rights any legal or equitable
      right, remedy or claim under this Agreement and this Agreement shall be for
      the
      sole and exclusive benefit of the Corporation, the Rights Agent and the holders
      of Rights.

     

    
      	
              5.13

            	 	
              Governing
                Law:

            


    

    


    This
      Agreement and each Right issued hereunder shall be deemed to be a contract
      made
      under the laws of British Columbia and for all purposes shall be governed by
      and
      construed in accordance with such laws.

     

    
      	
              5.14

            	 	
              Severability:

            


    

    


    If
      any
      term or provision hereof or the application thereof in any circumstance shall,
      in any jurisdiction and to any extent, be invalid or unenforceable, such term
      or
      provision shall be ineffective as to such jurisdiction to the extent of such
      invalidity or unenforceability without invalidating or rendering unenforceable
      the remaining terms and provisions hereof or the application of such term or
      provision in circumstances other than those as to which it is held invalid
      or
      unenforceable.

     

    
      	
              5.15

            	 	
              Effective
                Date:

            


    

    


    This
      Agreement is effective and in full force and effect in accordance with its
      terms
      from and after the Effective Date, subject to confirmation pursuant to section
      5.16.

     

    
      	
              5.16

            	 	
              Confirmation:

            


    

    


    The
      Corporation shall request the confirmation of this Agreement at a general
      meeting of holders of Voting Shares to be held no later than six months from
      the
      date of this Agreement. If the Agreement is not confirmed at such meeting by
      a
      majority of the votes cast by holders of Voting Shares who vote in respect
      of
      the confirmation of this Agreement, this Agreement and all outstanding Rights
      shall terminate and be void and of no further force and effect on and from
      the
      close of business on the date of termination of such meeting; provided, that
      termination shall not occur if a Flip-in Event has occurred (other than a
      Flip-in Event which has been waived pursuant to Section 5.1(a) or (h) hereof)
      prior to the date upon which this Agreement would otherwise terminate pursuant
      to this Section 5.16.

     

    
      
         

      

      
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              5.17

            	 	
              Determinations
                and Actions by the Board of
                Directors:

            


    

    


    The
      Board
      of Directors shall have the exclusive power and authority to administer and
      amend this Agreement and to exercise all rights and powers specifically granted
      to the Board of Directors or the Corporation, or as may be necessary or
      advisable in the administration of this Agreement, including, without
      limitation, the right and power to (a) interpret the provisions of this
      Agreement and (b) make all determinations deemed necessary or advisable for
      the
      administration of this Agreement (including a determination to terminate or
      redeem or not to terminate or redeem the Rights or to amend the Agreement).
      All
      such actions, calculations, interpretations and determinations (including,
      for
      purposes of the balance of this sentence, all omissions with respect to the
      foregoing) which are done or made by the Board of Directors shall be final,
      conclusive and binding on the Corporation, the Rights Agent, the holders of
      Rights and all other parties and shall not subject the Board of Directors to
      any
      liability to the holders of Rights.

    


    
      
         

      

      
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              5.18

            	 	
              Counterparts:

            


    

    


    This
      Agreement may be executed in any number of counterparts and each of such
      counterparts shall for all purposes be deemed to be an original, and all such
      counterparts shall together constitute one and the same instrument.

    


    IN
      WITNESS WHEREOF the parties hereto have caused this Agreement to be duly
      executed.

     

    
      	 	
              POLYMET
                MINING CORP.

              


              c/s

              


              By: 
                _____________________________(signature)

              ______________________(name
                - please print)

              Authorized
                Signatory

              


              


              PACIFIC
                CORPORATE TRUST COMPANY

              


              


              

                By: 
                  _____________________________(signature)

                ______________________(name
                  - please print)

                Authorized
                  Signatory

              

              



              
                _____________________________(signature)

                ______________________(name
                  - please print)


              

              Authorized
                Signatory

            


    

    


    This
      is
      page 7
      to that
      certain Shareholder Rights Plan Agreement between
      POLYMET MINING CORP. and
      PACIFIC CORPORATE TRUST COMPANY dated
      as
      of the 4th
      day of
      December, 2003.

    


    
      
         

      

      
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    SCHEDULE
      A TO THE SHAREHOLDER RIGHTS AGREEMENT

    DATED
      AS OF DECEMBER 4, 2003 BETWEEN

    POLYMET
      MINING CORP. AND

    PACIFIC
      CORPORATE TRUST COMPANY

     

    
      
        

      

    

    


    [Form
      of Rights Certificate]

    


    Certificate
      No. ___________  Rights

    


    THE
      RIGHTS ARE SUBJECT TO REDEMPTION OR MANDATORY EXCHANGE, AT THE OPTION OF
POLYMET
      MINING CORP.,
      ON THE
      TERMS SET FORTH IN THE SHAREHOLDER RIGHTS AGREEMENT. RIGHTS BENEFICIALLY OWNED
      BY ACQUIRING PERSONS (AS SUCH TERMS ARE DEFINED IN THE SHAREHOLDER RIGHTS
      AGREEMENT) OR CERTAIN TRANSFEREES THEREOF ARE VOID.

    


    Rights
      Certificate

    


    This
      certifies that ___________________, or registered assigns, is the holder of
      record of the number of Rights set forth above, each one of which entitles
      the
      holder of record thereof, subject to the terms, provisions and conditions of
      the
      Shareholder Rights Agreement (the "Shareholder
      Rights Agreement"),
      dated
      as of December 4, 2003, between POLYMET MINING CORP. (the "Corporation"),
      a
      corporation incorporated under the Company
      Act
      (British
      Columbia), and PACIFIC CORPORATE TRUST COMPANY, a trust company incorporated
      under the laws of British Columbia, as Rights Agent under the Shareholder Rights
      Agreement, to purchase from the Corporation at any time after the Separation
      Time and prior to the Expiration Time (as such terms are defined in the
      Shareholder Rights Agreement), one common share of the Corporation (a
"Common
      Share")
      (subject to adjustment as provided in the Shareholder Rights Agreement) at
      the
      Exercise Price referred to below, upon presentation and surrender of this Rights
      Certificate with a completed and executed Form of Election to Exercise at the
      principal office of the Rights Agent in Vancouver, Canada. The Exercise Price
      shall initially be $50 (Cdn.) per Common Share and shall be subject to
      adjustment in certain events as provided in the Shareholder Rights
      Agreement.

    


    In
      certain circumstances described in the Shareholder Rights Agreement, the Rights
      evidenced hereby may entitle the holder of record thereof to purchase shares
      of
      an entity other than the Corporation or to purchase or receive in exchange
      for
      such Rights assets, securities or shares of the Corporation other than Common
      Shares or more or less than one Common Share, or some combination of the
      foregoing, all as provided in the Shareholder Rights Agreement.

    


    This
      Rights Certificate is subject to all of the terms, provisions and conditions
      of
      the Shareholder Rights Agreement which terms, provisions and conditions are
      hereby incorporated herein by reference and made a part hereof and to which
      reference is hereby made for a full description of the rights, limitations
      of
      rights, obligations, duties and immunities thereunder of the Rights Agent,
      the
      Corporation and the holders of the Rights Certificates. A copy of the
      Shareholder Rights Agreement is on file at the principal executive office of
      the
      Corporation and is available upon written request.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    This
      Rights Certificate, with or without other Rights Certificates, upon surrender
      at
      the offices of the Rights Agent designated for such purpose, may be exchanged
      for another Rights Certificate or Rights Certificates of like tenor and date
      evidencing the aggregate number of Rights equal to the aggregate number of
      Rights evidenced by the Rights Certificate or Rights Certificates so
      surrendered. If this Rights Certificate shall be exercised in part, the holder
      of record shall be entitled to receive, upon surrender hereof, another Rights
      Certificate or Rights Certificates for the number of whole Rights not
      exercised.

    


    Subject
      to the provision of the Shareholder Rights Agreement, the Rights evidenced
      by
      this Certificate may be redeemed by the Corporation at a redemption price of
      $0.0001 per Right, subject to adjustment in certain events, under certain
      circumstances at the option of the Corporation.

    


    Subject
      to the provisions of the Shareholder Rights Agreement, the Rights evidenced
      by
      this Certificate may be terminated or amended by the Corporation at its option
      without the consent of holders of Rights.

    


    No
      fractional Common Shares will be issued upon the exercise of any Right or Rights
      evidenced hereby nor will Rights Certificates be issued for less than one whole
      Right. After the Separation Time, in lieu of issuing factional Rights a cash
      payment will be made as provided in the Shareholder Rights
      Agreement.

    


    No
      holder
      of this Rights Certificate, as such, shall be entitled to vote or receive
      dividends or be deemed for any purpose the holder of Common Shares or of any
      other securities which may at any time be issuable on the exercise hereof,
      nor
      shall anything contained in the Shareholder Rights Agreement or herein be
      construed to confer upon the holder hereof, as such, any of the rights of a
      shareholder of the Corporation or any right to vote for the election of
      directors or upon any matter submitted to shareholders of the Corporation at
      any
      meeting, to give or withhold consent to any corporate action, to receive notice
      of meetings or other actions affecting shareholders of the Corporation (except
      as provided in the Shareholder Rights Agreement), to receive dividends or
      subscription rights or otherwise, until the Rights evidenced by this Rights
      Certificate shall have been exercised as provided in the Shareholder Rights
      Agreement.

    


    This
      Rights Certificate shall not be valid or obligatory for any purpose until it
      shall have been countersigned by the Rights Agent.

    


    
      
         

      

      
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    WITNESS
      the facsimile signature of the proper officers of the Corporation.

    


     

    
      	 	
              POLYMET
                MINING CORP.

              


              c/s

              



               
                
                By: 
                  _____________________________(signature)

                ______________________(name
                  - please print)

                Authorized
                  Signatory

              

            


    

     

    
      Countersigned
        by and on behalf of the Rights Agent, 

      PACIFIC
        CORPORATE TRUST COMPANY

      


       
        
        By: 
          _____________________________(signature)

        ______________________(name
          - please print)

        Authorized
          Signatory

         

      

    

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

    


    [Form
      of Reverse Side of Rights Certificate]

    


    POLYMET
      MINING CORP. - FORM OF ASSIGNMENT

    


    (To
      be
      executed by the holder of record if such

    holder
      desires to transfer the Rights.)

    


    FOR
      VALUE
      RECEIVED _______________________________________    hereby
      sells, assigns and transfers unto
      ______________________________________________________________________________________________

    ______________________________________________________________________________________________

    (Please
      print name and address of transferee)

    


    this
      Rights Certificate, together with all right, title and interest therein, and
      does hereby irrevocably constitute and appoint _______________ as
      attorney, to transfer the within Rights Certificate on the books of the
      Corporation with full power of substitution.

    


    Dated:
      _____________________ [month,
      day, year]

    


    Signature
      Guaranteed: 

    ___________________________________________

    Signature

    (Signature
      must correspond to name as written upon the face of this Rights Certificate
      in
      every particular, without alteration or enlargement or any change
      whatsoever.)

    


    The
      signature of the person executing this power must be guaranteed by a participant
      of a recognized Medallion Guarantee Program, for example, a bank, credit union,
      brokerage house or by a member of a recognized stock exchange. 


    


    CERTIFICATION

    (To
      be
      completed if true)

    


    The
      undersigned hereby represents, warrants and certifies, for the benefit of all
      holders of Rights and Common Shares, that the Rights evidenced by this Rights
      Certificate are not, and, to the knowledge of the undersigned, have never been,
      Beneficially Owned by an Acquiring Person or an Affiliate or Associate of an
      Acquiring Person or any Person acting jointly or in concert with an Acquiring
      Person or an Affiliate or Associate of an Acquiring Person (as such terms are
      defined in the Shareholder Rights Agreement).

    


    Signature
      Guaranteed:

     

    
      ___________________________________________

      Signature

    

    (Signature
      must correspond to name as written upon the face of this Rights Certificate
      in
      every particular, without alteration or enlargement or any change
      whatsoever.)

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    NOTICE

    


    In
      the event the certification set forth above is not completed in connection
      with
      a purported assignment, the Corporation will deem the Beneficial Owner of the
      Rights evidenced by this Rights Certificate to be an Acquiring Person or an
      Affiliate or Associate of an Acquiring Person or any Person acting jointly
      or in
      concert with an Acquiring Person or an Affiliate or Associate of an Acquiring
      Person (as defined in the Shareholder Rights Agreement) and accordingly will
      deem the Rights evidenced by this Rights Certificate to be void and not
      transferable or exercisable.

    


    
      
         

      

      
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    FORM
      OF ELECTION TO EXERCISE

    


    (To
      be
      executed if the holder desires to exercise the Rights Certificate)

    


    
      	TO:	
              Pacific
                Corporate Trust Company

            


    

    10th
      Floor, 625 Howe Street, 

    Vancouver,
      B.C. V6C 3B8

    


    The
      undersigned hereby irrevocably elects to exercise _____________________ whole
      Rights represented by the attached Rights Certificate to purchase the Common
      Shares issuable upon the exercise of such Rights and requests that certificates
      for such Common Shares be issued in the name of:

    


    Address:

    
      

        

      


      
 

    Social
      Insurance or Other Taxpayer Identification Number:

     

    
      

    

     

    If
      such
      number of Rights shall not be all the whole Rights evidenced by this Rights
      Certificate, a new Rights Certificate for the balance of such whole Rights
      shall
      be registered in the name of and delivered to:

    


    Full
      Address, including postal code:

    


    
      
 


    
      

    

    


    Social
      Insurance or Other Taxpayer Identification Number:

     

    
      

    

     

    Dated:
      _____________ [month,
      day, year]

    


    Signature
      Guaranteed:

     

    
      ___________________________________________

    

    Signature

    (Signature
      must correspond to name as written upon the face of this Rights Certificate
      in
      every particular, without alteration or enlargement or any change
      whatsoever.)

    


    The
      signature of the person executing this power must be guaranteed by a participant
      of a recognized Medallion Guarantee Program, for example, a bank, credit union,
      brokerage house or by a member of a recognized stock exchange. 


    


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    CERTIFICATION

    (To
      be
      completed if true)

    


    The
      undersigned hereby represents, warrants and certifies for the benefit of all
      holders of Rights and Common Shares, that the Rights evidenced by this Right
      Certificate are not, and, to the knowledge of the undersigned, have never been,
      Beneficially Owned by an Acquiring Person or an Affiliate or Associate of an
      Acquiring Person or any Person acting jointly or in concert with an Acquiring
      Person or an Affiliate or Associate of an Acquiring Person (as such terms are
      defined in the Shareholder Rights Agreement).

    


    
      ___________________________________________

    

    Signature

     

    


    NOTICE

    


    In
      the event the certification set forth above is not completed in connection
      with
      a purported assignment, the Corporation will deem the Beneficial Owner of the
      Rights evidenced by this Rights Certificate to be an Acquiring Person or an
      Affiliate or Associate of an Acquiring Person or any Person acting jointly
      or in
      concert with an Acquiring Person or an Affiliate or Associate of an Acquiring
      Person (as defined in the Shareholder Rights Agreement) and accordingly will
      deem the Rights evidenced by this Rights Certificate to be void and not
      transferable or exercisable.

    


    
      
         

      

      
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