|UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 20549
|-----------------------------------------------------------------------



|FORM 20-F/A
|-----------

|Amendment Number 3
|------------------



|[X] | REGISTRATION
STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
|--- | ----------------------------------------------------------------------------------------------





|OR
|--



| | ANNUAL REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE  ACT OF 1934 For the fiscal
year ended______________________
| | -------------------------------------------------------------------------------------------------------------------------------------





|OR
|--



| | TRANSITION REPORT PURSUANT TO SECTION
      13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
      For the transition period from __________ to _______________
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------





|Commission file number: 0-49823
|-------------------------------



|Claude Resources Inc.
(Exact name of Registrant as specified in its charter)
|----------------------------------------------------------------------------



|Canada
(Jurisdiction of incorporation or organization)
|------------------------------------------------------



|224 4th Avenue South, Suite 200,
Saskatoon, Saskatchewan S7K 5M5 CANADA
(Address of principal executive offices)
|----------------------------------------------------------------------------------------------------------------



|Securities registered or to be registered
pursuant to Section 12(b) of the Act.
|-------------------------------------------------------------------------------

|Title of each class | Name of each exchange on which registered
|------------------- | -----------------------------------------
|                    |                                          
|N/A                 | N/A                                      



|Securities registered or to be
registered pursuant to Section  12(g) of the Act.
|--------------------------------------------------------------------------------



|Common Stock, No Par Value
(Title of Class)
|-------------------------------------------



|Securities for which there is a reporting
obligation pursuant to Section 15(d)  of the Act.
|-------------------------------------------------------------------------------------------



|Indicate the number of outstanding shares of
each of the issuers classes of  capital or common stock as of the close of the
period covered by the annual  report: 43,053,853
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|subject to such filing requirements for the past 90 days.
      Yes [   ] No N/A [X]
|------------------------------------------------------------------------------------



|Indicate by check mark which financial statement
item the registrant has elected to follow.
|-------------------------------------------------------------------------------------------



|[X] Item 17      [   ]
      Item 18
|------------------------------------



| |  | 
| |  | 



---





|CLAUDE RESOURCES INC.
Form 20-F/A Registration Statement
Table of Contents
|--------------------------------------------------------------------------

|Part
      I | Page                                                                   
|------------ | -----------------------------------------------------------------------
|             |                                                                        
|Item 1.      | Identity of Officers and Directors                                     
|Item 2.      | Offer Statistics and Expected Timetable                                
|Item 3.      | Key Information                                                        
|Item 4.      | Information on the Company                                             
|Item 5.      | Operating and Financial Review and Prospects                           
|Item 6.      | Directors, Senior Management and Employees                             
|Item 7.      | Major Shareholders and Related Party Transactions                      
|Item 8.      | Financial Information                                                  
|Item 9.      | Offer and Listing of Securities                                        
|Item 10.     | Additional Information                                                 
|Item 11.     | Disclosures about Market Risk                                          
|Item 12.     | Description of Other Securities                                        
|            
|Part II     
|             |                                                                        
|Item 13.     | Defaults, Dividend Arrearages and Delinquencies                        
|Item 14.     | Modifications of Rights of Securities Holders
      and Use of Proceeds
|            
|Part III    
|             |                                                                        
|Item 17.     | Financial Statements                                                   
|Item 18.     | Financial Statements                                                   
|Item 19.     | Exhibits                                                               



| |  | 
| |  | 



---





|METRIC EQUIVALENTS
|------------------



|For ease of reference, the following
factors for converting metric measurements into imperial equivalents are
provided:
|-----------------------------------------------------------------------------------------------------------------------

|To Convert from Metric | To Imperial        | Multiply by
|---------------------- | ------------------ | -----------
|                       |                    |            
|Hectares               | Acres              | 2.471      
|Meters                 | Feet (ft.)         | 3.281      
|Kilometers (km)        | Miles              | 0.621      
|Tonnes                 | Tons (2000 pounds) | 1.102      
|Grams/tonne            | Ounces (troy/ton)  | 0.029      

|GLOSSARY OF TERMS
|-----------------



|S.E.C Industry Guide
|--------------------



|Reserve: That part of a mineral deposit which
could be economically and legally extracted or produced at the time of the reserve
determination. The United States Securities and Exchange Commission requires a final or
full Feasibility Study to support either Proven or Probable Reserves and does not
recognize other classifications of mineralized deposits.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Proven Reserves: Reserves for which a quantity
is computed from dimensions revealed in outcrops, trenches, workings or drill holes;
grade and/or quality are computed from the results of detailed sampling and measurement
are spaced so closely and the geologic character is so well defined that size, shape,
depth, and mineral content of reserves are well established.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Probable Reserves: For which quantity and grade
and/or quality are computed from information similar to that used for proven reserves,
but the sites for inspection, sampling and measurement are farther apart or are
otherwise less adequately spaced. The degree of assurance, although lower than that for
proven reserves, is high enough to assume continuity between points of observation.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|National Instrument 43-101
|--------------------------



|Mineral Reserve: The economically mineable part
of a Measured or Indicated Mineral Resource demonstrated by at least a Preliminary
Feasibility study. This study must include adequate information on mining, processing,
metallurgical, economic and other relevant factors that demonstrate, at the time of
reporting, that economic extraction can be justified.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Proven Mineral Reserve: The economically
mineable part of a Measured Mineral Resource demonstrated by at least a Preliminary
Feasibility study. This study must include adequate information on mining, processing,
metallurgical, economic and other relevant factors that demonstrate, at the time of
reporting, that economic extraction is justified.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Probable Mineral Reserve: The economically
mineable part of an indicated, and in some circumstances, a Measured Mineral Resource,
demonstrated by at least a Preliminary Feasibility Study. This study must include
adequate information on mining, processing, metallurgical, economic and other relevant
factors that demonstrate, at the time of reporting, that economic extraction can be
justified.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3 | 
| | - | 



---





|ARTC  Alberta Royalty Tax Credit.
|----------------------------------



|Alteration  any change in the mineral
composition of a rock brought about by physical or chemical means.
|---------------------------------------------------------------------------------------------------------



|Amphibolite  a metamorphic rock that may have
originated as a basalt lava flow or mafic dike/sill.
|---------------------------------------------------------------------------------------------------



|Arsenopyrite  the most common arsenic
mineral and principal ore of arsenic; occurs in many sulfide ore deposits, particularly
those containing lead, silver, and gold.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Assaying  laboratory examination that
determines the content or proportion of a specific metal (ie:silver) contained within a
sample. Technique usually involves firing/smelting.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Autoclave  a high pressure and
temperature vessel for oxidizing refractory ore. Ore or concentrate is fed into the
strong vessel and placed under high pressure and temperature conditions with elevated
oxygen levels to liberate the gold or base metals.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Bbl  barrels; 34.972 Imperial gallons per
barrel or 42 U.S. gallons per barrel.
|--------------------------------------------------------------------------------



|BCF  billion cubic feet.
|-------------------------



|BOPD  barrels of oil per day.
|------------------------------



|Batholith  a very large intrusive mass of
igneous rock.
|--------------------------------------------------------



|Boudinage  a structure common in strongly
deformed sedimentary and metamorphic rocks, in which an original continuous competent
layer or bed has been stretched, thinned, and broken at regular intervals into bodies
resembling boudins or sausages.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|BQ Drill  a drill having a core diameter of
36.5 mm and a hole diameter of 60 mm.
|----------------------------------------------------------------------------------



|Bulk Sample  a collection of
representative mineralized material whose location, geologic character and metal assay
content can be determined and then used for metallurgical or geotechnical testing
purposes.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4 | 
| | - | 



---





|Carbon-in-pulp  a method of recovering
gold and silver from pregnant cyanide solutions by absorbing the precious metals within
the solution onto granules of activated carbon,
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Care and Maintenance Basis  in reference
to mining means the indefinite suspension of all operations except those services and
personnel necessary to insure the safeguarding of mining property and assets against
controllable acts.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Carried Interest  the Companys
working interest share of capital and operating costs are paid by another party for a
specified period of time or until a specific event occurs.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Chalcopyrite  a sulphide mineral of copper and
iron.
|-----------------------------------------------------



|Clastic  fragments of minerals and rocks
that have been moved individually from their places of origin.
|--------------------------------------------------------------------------------------------------------



|Core Samples  the cylindrical form of
rock called core that is extracted from a diamond drill hole. Mineralized
sections are separated and these samples are sent to a laboratory for analysis.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Cross-cut  a horizontal opening driven
from a shaft or haulage drift at an oblique or right angle to the strike of a vein or
other orebody.
|--------------------------------------------------------------------------------------------------------------------------------------------



|Cut-off Grade  the lowest grade of mineralized
material that qualifies as reserve in a deposit. ie: contributing material of the lowest
assay that is included in a reserve estimate.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Cut Value  applies to assays that have
been reduced a statistically determined maximum to prevent erratic high values from
inflating the average.
|--------------------------------------------------------------------------------------------------------------------------------------------------



|Developed or Development  in
oil and gas refers to land to which proved or probable reserves have been assigned, with
any wells drilled in a developed area specified as development wells.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Diamond Drilling  a type of rotary
drilling in which diamond bits are used as the rock-cutting tool to produce a
recoverable drill core sample of rock for observation and analysis.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Dip  the angle that a structural surface,
a bedding or fault plan, makes with the horizontal, measured perpendicular to the strike
of the structure.
|-----------------------------------------------------------------------------------------------------------------------------------------------------



| | 5 | 
| | - | 



---





|Disseminated  where minerals
occur as scattered particles in the rock.
|-----------------------------------------------------------------------



|Dore  the final saleable product from a gold
mine.
|---------------------------------------------------



|Drift  a horizontal underground
opening that follows along the length of a vein or rock formation.
|---------------------------------------------------------------------------------------------------



|Dry Well  a well found to be
incapable of producing hydrocarbons in quantities sufficient to justify
completion of the well.
|-----------------------------------------------------------------------------------------------------------------------------



|Electrowinning  the process of
recovering metal from solution by electrolysis.
|-------------------------------------------------------------------------------



|Environmental Baseline Study  a
geotechnical study that monitors and establishes the numerous naturally
occurring base levels present within a specific area/environment. These can
include; water chemistry, flora and fauna.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Epithermal  low temperature
hydrothermal process or product.
|-------------------------------------------------------------



|Exploration  work involved in
searching for ore, usually by drilling or driving a drift.
|-----------------------------------------------------------------------------------------



|Exploration Wells  wells drilled
to find hydrocarbons in an unproved area.
|---------------------------------------------------------------------------



|Face  the end of a drift,
crosscut or stope in which work is taking place.
|---------------------------------------------------------------------------



|Facies  the character and composition
of sedimentary deposits.
|---------------------------------------------------------------



|Fault  a fracture or break in
rock along which there has been movement.
|------------------------------------------------------------------------



|Feasibility Study  is a
definitive study of the viability of a mineral project by a qualified
professional which defines: (1) mining methods, pit configuration, mine
scheduling, mine equipment and all related costing, (2) method of mineral
processing and all related plant, equipment and costing, (3) necessary
determination of all infrastructure required and relevant costs and (4) all
requirements of government and markets for mine operation. A definitive
financial analysis of the mineral project taking into consideration all relevant
factors, which will establish the presence of a Mineral Reserve and the details
of its economic viability.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 6 | 
| | - | 



---





|Felsic  an adjective describing
an igneous rock having mostly light colored minerals and rich in silica,
potassium and sodium.
|-------------------------------------------------------------------------------------------------------------------------------



|Fire Assay  the assaying of metallic minerals
by use of a miniature smelting procedure with various agents.
|------------------------------------------------------------------------------------------------------------



|Footwall  the rock on the
underside of a vein or ore structure.
|----------------------------------------------------------------



|Fracture  a break or crack in rock.
|------------------------------------



|Fracture-controlled  a type of
mineralization where circulating fluids deposit minerals preferentially upon
fracture planes within a rock mass.
|------------------------------------------------------------------------------------------------------------------------------------------------



|Gabbro  a coarse-grained,
crystalline, dark igneous rock.
|----------------------------------------------------------



|Geochemistry  the study of the
chemical properties of rocks.
|-------------------------------------------------------------



|Geophysical Survey  a scientific
method of prospecting that measures the physical properties of rock formations.
Common properties investigated include magnetism, specific gravity, electrical
conductivity and radioactivity.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Gneiss  a layered or banded
crystalline metamorphic rock, the grains of which are aligned or elongated into
a roughly parallel arrangement.
|--------------------------------------------------------------------------------------------------------------------------------------------



|Grade  the metal content of rock
with precious metals, grade can be expressed as troy ounces or grams per tonne
of rock.
|-------------------------------------------------------------------------------------------------------------------------



|Gross  in reference to land or
wells means a 100% interest. When referring to the Companys natural gas,
crude oil, and natural gas liquids production, it means total projected
production or reserves from the property.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Gross Reserves  total remaining projected
production from a 100% interest in the applicable property.
|------------------------------------------------------------------------------------------------------



|Head grade  the average grade of ore fed into a
mill.
|------------------------------------------------------



|Highwall  the unexcavated face of
ore in an underground stope.
|---------------------------------------------------------------



|Hydrothermal  the products or the actions
of heated waters in a rock mass such as a mineral deposit precipitating from a
hot solution.
|---------------------------------------------------------------------------------------------------------------------------------------



| | 7 | 
| | - | 



---





|Hydrothermal alteration  the
process by which heated or superheated water/solutions alter the chemistry of
the rocks they circulate through.
|---------------------------------------------------------------------------------------------------------------------------------------------



|ICA  Investment Canada Act
|---------------------------



|Igneous  a primary type of rock
formed by the cooling of molten material.
|--------------------------------------------------------------------------



|Indicated Resource  in reference
to minerals means quantity and grade and (or) quality are computed from
information similar to that used for resources, but the sites for inspection,
sampling, and measurement are farther apart or are otherwise less adequately
spaced. The degree of assurance, although lower than that for resources, is high
enough to assume continuity between points of observation.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Inferred Resource  in reference to minerals,
      means estimates are based on an assumed continuity beyond measured and (or)
      indicated resources, for which there is geological evidence. Inferred resources
      may or may not be supported by samples or measurements.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Intrusion; Intrusive  molten rock
that is intruded (injected) into spaces that are created by a combination of
melting and displacement.
|-----------------------------------------------------------------------------------------------------------------------------------------



|Lens  a body of ore that is thick
in the middle and tapers towards the ends.
|-----------------------------------------------------------------------------



|LT  long tons.
|---------------



|Mafic  igneous rocks composed
mostly of dark, iron-and magnesium-rich minerals.
|--------------------------------------------------------------------------------



|MCF  thousand cubic feet.
|--------------------------



|Mineralization  occurrences of
minerals, which may have an economic value.
|---------------------------------------------------------------------------



|MLT  thousands of long tons.
|-----------------------------



|MMCF  millions of cubic feet.
|------------------------------



|MSTB  thousands of stock tank barrels.
|---------------------------------------



| | 8 | 
| | - | 



---





|Mesothermal  a hydrothermal
mineral deposit formed at considerable depth and in the temperature range of 200
to 300 degrees C (Celsius).
|-----------------------------------------------------------------------------------------------------------------------------------------



|Measured Resources  in reference
to minerals, means a quantity is computed from dimensions revealed in outcrops,
trenches, workings, or drill holes; grade and (or) quality are computed from the
results of detailed sampling. The sites for inspection, sampling, and
measurement are spaced so closely and the geological character is so well
defined that size, shape, depth and mineral content of the resource are well
established.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Metamorphosed rocks  rocks that
are changed in character by processes of intense heat and pressure deep within
the earths crust.
|----------------------------------------------------------------------------------------------------------------------------------



|Metallurgy  the study of the extractive
processes which produce minerals from their host rocks.
|------------------------------------------------------------------------------------------------



|Metallurgical Tests  are
scientific examinations of rock/material to determine the optimum extraction of
metal contained. Core samples from diamond drill holes are used as
representative samples of the mineralization for this test work.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Mineral  a naturally formed
chemical element or compound having a definitive chemical composition and,
usually a characteristic crystal form.
|----------------------------------------------------------------------------------------------------------------------------------------------



|Mineralization  a natural concentration in
rocks or soil of one or more metalliferous minerals.
|------------------------------------------------------------------------------------------------



|Muck  ore or rock that has been broken by
blasting.
|----------------------------------------------------



|Muskeg  a thick deposit of
decayed vegetable matter forming swampy areas.
|--------------------------------------------------------------------------



|NGLs  natural gas liquids, which primarily
consist of propane, butane and condensate.
|--------------------------------------------------------------------------------------



|Net Profit Interest  a phrase
used to describe a royalty payment made by a producer of metals based on a
percentage of revenue from production, less deduction of the costs of commercial
production, including exploration, capital and operating costs.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Net Smelter Return Royalty/ NSR Royalty  a
phrase used to describe a royalty payment made by a producer of metals based on
|---------------------------------------------------------------------------------------------------------------------------



| | 9 | 
| | - | 



---





|gross metal production from the property, less
deduction of certain  limited costs including smelting, refining, transportation and
insurance costs.
|----------------------------------------------------------------------------------------------------------------------------------------------------



|Pillar  a block of solid ore or
other rock left in place to structurally support the shaft, walls or roof of a
mine.
|---------------------------------------------------------------------------------------------------------------------



|Plunge  the vertical angle a linear geological
feature makes with the horizontal plane.
|----------------------------------------------------------------------------------------



|Porphyry  any igneous rock in which relatively
large crystals, are set in a fine-grained groundmass.
|-----------------------------------------------------------------------------------------------------



|Prefeasability Study  is a
comprehensive study of the viability of a mineral project that has advanced to a
stage where the mining method, in the case of underground mining, or the pit
configuration, in the case of an open pit, has been established, and where an
effective method of mineral processing had been determined. This Study must
include a financial analysis based on reasonable assumptions of technical
engineering, operating, and economic factors, which are sufficient for a
Qualified Person acting reasonably, to determine if all or part of the Mineral
Resource may be classified as a Mineral Reserve.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Pulp  a mixture of ground ore and water.
|-----------------------------------------



|Pyrite  an iron sulphide mineral (FeS2), the
most common naturally occurring sulphide mineral.
|-----------------------------------------------------------------------------------------------



|Pyrrhotite  a bronze-colored,
often magnetic iron sulphide mineral.
|--------------------------------------------------------------------



|Raise  a vertical or inclined underground
working that has been excavated from the bottom upward.
|--------------------------------------------------------------------------------------------------



|Quartz  crystalline silica; often forming veins
in fractures and faults within older rocks.
|--------------------------------------------------------------------------------------------



|Quartz Monzonite  a coarse
grained, quartz rich igneous rock usually occurring as a smaller rock mass
associated with major granitic bodies.
|---------------------------------------------------------------------------------------------------------------------------------------------



|Recovery Rate  the percentage of
valuable metal in the ore that is recovered by metallurgical treatment.
|---------------------------------------------------------------------------------------------------------



|Refractory  ore that resists the action
of chemical reagents in the normal treatment processes and which may require pressure
|------------------------------------------------------------------------------------------------------------------------------



| | 10 | 
| | -- | 



---





|leaching or other means to affect the full
recovery of the valuable  minerals.
|------------------------------------------------------------------------------



|Resource  a concentration of
mineral material in such form and amount that economic extraction of a commodity
from the concentration is currently or potentially feasible. Locations, grade,
quality or quantity are estimated from specific geologic evidence.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Reverse Circulation Drilling (RC)
 a drilling method used in geological appraisals whereby the drilling
fluid passes inside the drill stem to a down-the-hole percussion bit and returns
to the surface outside the drill stem carrying the drill chip samples.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Roasting  to heat a refractory
ore to drive off volatile substances or oxidize the ore. The oxidation of the
ore liberates the gold.
|-------------------------------------------------------------------------------------------------------------------------------------



|Sericite  a fine-grained
potassium mica found in various metamorphic rocks.
|----------------------------------------------------------------------------



|Shear zone  a zone in which shearing has
occurred on a large scale so that the rock is crushed and brecciated.
|---------------------------------------------------------------------------------------------------------------



|Showing  surface occurrence of mineral.
|----------------------------------------



|Shrinkage Stoping  any mining
method in which broken ore is temporarily retained in the stope to provide a
working platform and/or to offer temporary support to the stope walls during
active mining.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Silification  the in situ
alteration of a rock, which involves an increase in the proportion of silica
minerals.
|-----------------------------------------------------------------------------------------------------------------



|Sill  an intrusive sheet of
igneous rock of roughly uniform thickness that has been forced between the
bedding planes of existing rock; the initial horizontal drift along the strike
of the ore vein.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Specific Gravity  the ratio between the weight
of a unit volume of a substance and that of water.
|--------------------------------------------------------------------------------------------------



|Splay  one of a series of divergent small
faults or fractures at the extremities of a major fault.
|---------------------------------------------------------------------------------------------------



|STB  stock tank barrels.
|-------------------------



| | 11 | 
| | -- | 



---





|Stope  an underground excavation
from which ore has been extracted, either above or below a level. Access to
stopes is usually by way of adjacent raises.
|----------------------------------------------------------------------------------------------------------------------------------------------------------



|Stratigraphy  the sequence of
bedded rocks in a particular area.
|-----------------------------------------------------------------



|Supergene Effects  the near
surface effect of the water/solutions percolating down from the earths
surface (weathering); these solutions can dissolve minerals at the surface and
then reconcentrate at depth.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Synform  a fold whose limbs close downward in
strata for which the stratigraphic sequence is unknown.
|------------------------------------------------------------------------------------------------------



|Tailings Pond  a low-lying
depression used to confine tailings, the prime function of which is to allow
enough time for heavy metals to settle out or for cyanide to be destroyed before
water is discharged into the local watershed.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Tonne  a metric ton, or 2,204 pounds.
|--------------------------------------



|Tourmaline  a complex,
crystalized silicate containing boron.
|--------------------------------------------------------------



|Trenching  the process of exploration by which
till is removed from a trench cut from the earths surface.
|-----------------------------------------------------------------------------------------------------------



|Undeveloped Acreage  in reference
to oil and gas reserves, means land to which no proven or probable reserves have
been assigned.
|----------------------------------------------------------------------------------------------------------------------------------



|Unitized  the consolidation of
several producing leases into one operating unit and is usually undertaken to
enable greater recovery of natural gas, crude oil and NGLs because it allows for
more economical operations.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Vein  a thin, sheet-like, crosscutting body of
hydrothermal mineralization, principally quartz.
|------------------------------------------------------------------------------------------------



|Volcanics  those originally
molten rocks, generally fine grained, that have reached or nearly reached the
Earths surface before solidifying.
|----------------------------------------------------------------------------------------------------------------------------------------------



|Waste  barren rock in a mine, or
mineralized material that is too low in grade to be mined and milled at a
profit.
|-------------------------------------------------------------------------------------------------------------------



| | 12 | 
| | -- | 



---





|Waterflood  a method of secondary
recovery in which water is injected into an oil reservoir to force additional
oil out of the reservoir rock and into the well bore of producing wells.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Weighted Average Exercise Price 
the average price calculated when the grant price of each employees stock option
is multiplied by the number of options for each option grant price. The result
is summed and the total divided by the sum of the options granted.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Weighted Average Remaining Life 
the average remaining life of employee stock options outstanding calculated when
the remaining life of each employees stock options is multiplied by the
number of options for each grant price. The result is summed and the total
divided by the sum of the options granted.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Working interest or WI  in
reference to oil and gas reserves, means the interest held by the Company in
land or wells. This interest normally bears its proportionate share of capital
and operating costs as well as royalties or other production burdens. The
working interest percentage is expressed before royalty interests.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Working Interest Reserves  in reference to oil
and gas reserves, means the remaining reserves of the property multiplied by the Companys
percentage working interest.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 13 | 
| | -- | 



---





|Part I
|------



|Item 1.  Identity of Officers and Directors
|-------------------------------------------



|Table No. 1
|-----------

|Company Directors and Officers
|------------------------------

|Name                                  | Position                                    | Address                                                                            
|------------------------------------- | ------------------------------------------- | -----------------------------------------------------------------------------------
|                                     
|                                      |                                             |                                                                                    
|William R. MacNeill                   | Chairman and Director                       | 333 Saskatchewan Crescent West,
      
      Saskatoon, Saskatchewan Canada S7M 0A2
|                                      |                                             |                                                                                    
|Ronald G. Walker                      | Director                                    | 213 - 10 Paul Kane Place 
      Victoria, British Columbia Canada V9A 7J8          
|                                      |                                             |                                                                                    
|Jon R. MacNeill                       | Director                                    | 348 - 84th Ave. S.E.
      Calgary, 
      Alberta Canada T2H 1N4                  
|                                      |                                             |                                                                                    
|Arnie E. Hillier                      | Vice Chairman, CEO, CFO and 
      Director | 9 - 3415 Calder Crescent 
      Saskatoon, Saskatchewan Canada S7J 5A1             
|                                      |                                             |                                                                                    
|Neil McMillan                         | President and Director                      | 3675 Mount Royal, Furdale, 
      Saskatchewan Canada S7T 1B2                      
|                                      |                                             |                                                                                    
|Ray Gagnon                            | Chief Operating Officer                     | 701 - 5th Avenue
      North, Saskatoon, 
      Saskatchewan Canada S7K 2R6        
|                                      |                                             |                                                                                    
|Philip E. Olson, 
      M.Sc., P.Geo. | Vice President, Exploration                 | 214 Coben Crescent, Saskatoon,
      
      Saskatchewan Canada S7S 1B3            
|                                      |                                             |                                                                                    
|Val Michasiw                          | Secretary and Treasurer                     | 14 Riel Crescent, Saskatoon,
      
      Saskatchewan, Canada S7J 2W6             

|The legal advisors to the Company are
McPherson, Leslie & Tyerman, 1500, 410  22 Street East, Saskatoon, SK
S7K 5T6. Contact is Neil McKay, Partner.
|-----------------------------------------------------------------------------------------------------------------------------------------------------



|The Companys bank is Canadian
Western Bank, 244  2nd Avenue South, Saskatoon, SK S7K 1K9. Contact is
Doug Finnie, Assistant Vice President.
|---------------------------------------------------------------------------------------------------------------------------------------------



|The Companys auditor for the last
3 fiscal years is KPMG LLP, 660  128 Fourth Avenue South, Saskatoon, SK
S7K 1M8. KPMG is a member of the Canadian Institute of Chartered Accountants.
Contact is Gord Stewart, Partner.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Item 2.  Offer Statistics and Expected Timetable
|------------------------------------------------



|Not Applicable
|--------------



| | 14 | 
| | -- | 



---





|Item 3.  Key Information
|------------------------



|SELECTED FINANCIAL DATA
|-----------------------



|The selected financial data of the
Company for Fiscal 2001, Fiscal 2000, and Fiscal 1999 ended December 31st, was
derived from the financial statements of the Company which have been audited by
KPMGLLP Chartered Accountants, as indicated in their audit report which is
included elsewhere in this Registration Statement. KPMGLLP Chartered Accountants
are located at 600-128 4th Ave S., Saskatoon, Saskatchewan Canada S7K 1M8. The
selected financial data set forth for Fiscal 1998 and Fiscal 1997 ended December
31st are derived from the Companys audited financial statements, included
herein.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The selected financial data should be read in
conjunction with the financial  statements and other financial information included
elsewhere in the  Registration Statement.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Company has not declared any
dividends on its common shares since incorporation and does not anticipate that
it will do so in the foreseeable future. The present policy of the Company is to
retain future earnings for use in its operations and the expansion of its
business.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Table No. 2 is derived from the
financial statements of the Company, which have been prepared in accordance with
Canadian Generally Accepted Accounting Principles (GAAP), the application of
which, in the case of the Company, conforms in all material respects for the
periods presented with US GAAP, except as disclosed in a footnote to the
financial statements.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Table No. 2
Selected Financial Data
(CDN$ in 000, except per share data)
|------------------------------------------------------------------------

| |                            | ThreeMonthsEnded3/31/02 | ThreeMonthsEnded3/31/01 | YearEnded12/31/01 | YearEnded12/31/00 | YearEnded12/31/99 | YearEnded12/31/98 | YearEnded12/31/97
| | -------------------------- | ----------------------- | ----------------------- | ----------------- | ----------------- | ----------------- | ----------------- | -----------------
|
|
|
|
| | Revenue                    | $4,310                  | $5,371                  | $22,610           | $27,473           | $25,630           | $29,656           | $30,795          
| | Net Income (Loss)          | ($1,974)                | ($423)                  | ($2,183)          | ($48,723)         | $2,260            | $2,654            | $5,060           
| | Net Income (Loss)Per Share | ($0.05)                 | ($0.01)                 | ($0.05)           | ($1.25)           | $0.07             | $0.10             | $0.29            
| | DividendsPer Share         | 0                       | 0                       | 0                 | 0                 | 0                 | 0                 | 0                
| | Wtg. Avg. Shares(000)      | 43,329                  | 40,554                  | 40,622            | 38,964            | 31,310            | 25,432            | 17,269           
| | Working Capital            | $6,202                  | $$8,808                 | $8,480            | $8,431            | $11,087           | $10,066           | $10,712          
| | Long-Term Debt             | 0                       | 0                       | 0                 | 0                 | 0                 | $200              | 0                
| | ShareholdersEquity        | $21,734                 | $23,946                 | $23,543           | $24,257           | $72,083           | $60,809           | $29,848          



| | 15 | 
| | -- | 



---





| | Total Assets           | $31,383 | $32,580 | $28,911  | $30,973   | $78,817 | $72,875 | $35,433
| | ---------------------- | ------- | ------- | -------- | --------- | ------- | ------- | -------
| | US GAAP Net Loss       | N/A     | N/A     | ($1,697) | ($25,615) | N/A     | N/A     | N/A    
| | US GAAP Loss Per Share | N/A     | N/A     | ($0.04)  | ($0.66)   | N/A     | N/A     | N/A    
| | US GAAP Avg. Shares    | N/A     | N/A     | 40,622   | 38,964    | N/A     | N/A     | N/A    
| | US GAAP Equity         | N/A     | N/A     | $21,931  | $22,610   | N/A     | N/A     | N/A    
| | US GAAP Total Assets   | N/A     | N/A     | $27,662  | $29,644   | N/A     | N/A     | N/A    

|In this Registration Statement, unless
otherwise specified, all dollar amounts are expressed in Canadian Dollars
(CDN$). The Government of Canada permits a floating exchange rate to determine
the value of the Canadian Dollar against the U.S. Dollar (US$).
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Table No. 3 sets forth the rate of exchange for
the Canadian Dollar at the end  of the six most recent fiscal periods ended December
31st, the average rates for  the period, and the range of high and low rates for the
period. Table No. 3 also  sets forth the rate of exchange for the Canadian Dollar at the
end of the twelve  most recent months, and the range of high and low rates for these
periods.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|For purposes of this table, the rate of
exchange means the noon buying rate in New York City for cable transfers in
foreign currencies as certified for customs purposes by the Federal Reserve Bank
of New York. The table sets forth the number of U.S. dollars required under that
formula to buy one Canadian Dollar. The average rate means the average of the
exchange rates on the last day of each month during the period.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Table No. 3
Canadian Dollar/U.S. Dollar
|---------------------------------------

|                            | Average | High  | Low   | Close
|--------------------------- | ------- | ----- | ----- | -----
|                           
|                            |         |       |       |      
|Fiscal Year Ended 12/31/02  | $0.64   | $0.66 | $0.62 | $0.63
|Fiscal Year Ended 12/31/01  | $0.64   | $0.66 | $0.62 | $0.63
|Fiscal Year Ended 12/31/00  | $0.68   | $0.69 | $0.64 | $0.67
|Fiscal Year Ended 12/31/99  | $0.68   | $0.69 | $0.65 | $0.69
|Fiscal Year Ended 12/31/98  | $0.71   | $0.75 | $0.68 | $0.70
|Fiscal Year Ended 12/31/97  | $0.74   | $0.75 | $0.72 | $0.72
|                            |         |       |       |      
|Nine Months Ended 9/30/02   | $0.63   | $0.66 | $0.63 | $0.63
|Six Months Ended 6/30/02    | $0.64   | $0.66 | $0.62 | $0.66
|                            |         |       |       |      
|Three Months Ended 12/31/02 | $0.64   | $0.65 | $0.63 | $0.63



| | 16 | 
| | -- | 



---





|Three Months Ended 9/30/02 | $0.64 | $0.65 | $0.63 | $0.63
|-------------------------- | ----- | ----- | ----- | -----
|Three Months Ended 6/30/02 | $0.65 | $0.66 | $0.63 | $0.66
|Three Months Ended 3/31/02 | $0.63 | $0.63 | $0.62 | $0.63
|                           |       |       |       |      
|March 2003                 |       | $0.68 | $0.67 | $0.68
|February 2003              |       | $0.67 | $0.65 | $0.67
|January 2003               |       | $0.66 | $0.63 | $0.66
|December 2002              |       | $0.65 | $0.63 | $0.63
|November 2002              |       | $0.64 | $0.63 | $0.64
|October 2002               |       | $0.64 | $0.63 | $0.64
|September 2002             |       | $0.65 | $0.63 | $0.63
|August 2002                |       | $0.65 | $0.63 | $0.64
|July 2002                  |       | $0.66 | $0.63 | $0.63
|June 2002                  |       | $0.66 | $0.65 | $0.66
|May 2002                   |       | $0.65 | $0.64 | $0.65
|April 2002                 |       | $0.64 | $0.63 | $0.63

|The exchange rate was 0.68 on March 31, 2003.
|---------------------------------------------



|Forward Looking Statements
|--------------------------



|Certain Statements presented herein are
forward-looking statements which may include conclusions of prefeasibility and
feasibility studies, estimates of future production, capital and operating
costs, prices of silver and gold and other known and unknown risks. These and
other factors and uncertainties may cause material differences from future
results as expressed or implied by these forward-looking statements. These
risks, uncertainties and other factors include but are not limited to the risks
involved in the exploration, development and mining business.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Statement of Capitalization and
Indebtedness
|--------------------------------------------



|Table No. 4
Statement of Capitalization and Indebtedness
|--------------------------------------------------------

|Designation of Security        | Amount Authorized | Amount Outstanding as of
      
      March 31, 2003
|------------------------------ | ----------------- | ----------------------------------------------------
|                               |                   |                                                     
|                               |                   |                                                     
|Common Shares                  | Unlimited         | 52,223,538 shares                                   
|First Preferred Shares         | Unlimited         | None                                                
|Second Preferred Shares        | Unlimited         | None                                                
|Common Share Purchase Warrants |                   | 3,800,770 warrants                                  
|Common Share Options           |                   | 2,425,000 options                                   



| | 17 | 
| | -- | 



---





|Risk Factors
|------------



|An investment in the Common Shares of
the Company must be considered speculative due to the nature of the
Companys business and the present stage of exploration and development of
its non producing mineral properties. In particular, the following risk factors
apply:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Company is Involved in the Resource
Industry which has Certain Inherent Exploration and Mining Risks
|--------------------------------------------------------------------------------------------------------



|The level of profitability of the
Company in future years will depend to a degree on gold prices and the costs of
production at the Seabee mine and whether any of the Companys exploration
stage properties can be brought to production. The exploration for and
development of mineral deposits involves significant risks, which even a
combination of careful evaluation, experience and knowledge may not eliminate.
It is impossible to ensure that the current and future exploration programs on
the Companys existing mineral properties will establish reserves. Whether
an ore body will continue to be commercially viable depends on a number of
factors, some of which are the particular attributes of the deposit, such as
size, grade and proximity to infrastructure, as well as metal prices, which
cannot be predicted and which have been highly volatile in the past, mining
costs, and government regulations, including regulations relating to prices,
taxes, royalties, land tenure, land use, importing and exporting of minerals,
environmental protection and reclamation and closure obligations. The effect of
these factors cannot be accurately predicted, but the combination of these
factors may cause a mineral deposit that has been mined profitably in the past,
such as the Seabee mine, to become unprofitable. The Company is subject to the
risks normally encountered in the mining industry, such as unusual or unexpected
geological formations, cave-ins or flooding. The Company may become subject to
liability for pollution, cave-ins or other hazards against which it cannot
insure or against which it may elect not to insure.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The development of gold and other  mineral
properties is affected by many factors, including the cost of  operations, variations in
the grade of ore, fluctuations in metal markets, costs  of processing equipment and other
factors such as government regulations,  including regulations relating to royalties,
allowable production, importing and  exporting of minerals and environmental protection.
Depending on the price of  gold, the
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 18 | 
| | -- | 



---





|Company may determine that it is impractical to
commence or, if  commenced, to continue commercial production.
|--------------------------------------------------------------------------------------------------------------



|Non-Operator Status of Oil and Gas Properties
|---------------------------------------------



|All of Claudes oil and gas
properties are operated by others, as such, the Company has little or no control
over the operation of these assets. The Company relies on the operators to
ensure they are following best industry practices and thereby mitigating
potential risks. The risk factors found in the Companys oil and gas
properties are similar to those found for its gold assets. These include,
inherent exploration and operating risks, volatility of crude oil and natural
gas prices, fluctuations in the U.S. dollar vs. Canadian dollar exchange rate,
environmental regulation and risk, uncertainty of reserve and resource
estimates, governmental regulations, competition and insurance risks.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Persistent  Low Gold Prices Could Cause Mine
Operations  to be Suspended  or Shutdown  and  Negatively  Effect the  Companys
Profitability
|-------------------------------------------------------------------------------------------------------------------------------------------



|The economics of developing gold and
other metal properties are affected by many factors including the cost of
operations, variations in the grade of ore mined and the price of gold or other
metals. Depending on the price of gold or other metals, the Company may
determine that it is impractical to commence or continue commercial production.
The prices of gold and other metals have fluctuated in recent years. During the
year ended December 31, 2001, the market price for gold ranged from a low of
$255.95 to a high of $304.30 with an average price of $273.22.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Any significant drop in the price of
gold adversely impacts the Companys revenues, profitability and cash
flows. Also, sustained low gold prices can:
|------------------------------------------------------------------------------------------------------------------------------------------------------



|1. | Reduce
revenues by production cutbacks caused by the stoppage of  mining operations involving
deposits or portions of deposits that  have become uneconomic at the prevailing price of
gold;
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|2. | Cause
the stoppage of new mining projects;
|-- | ------------------------------------------





|3. | Decrease
the amount of capital available for exploration  activities;
|-- | ---------------------------------------------------------------------





|4. | Reduce
existing reserves by removing ore from reserves that  cannot be economically mined or
treated at prevailing prices; or,
|-- | ------------------------------------------------------------------------------------------------------------------------------





| | 19 | 
| | -- | 



---





|5. | Cause
the write-off of an asset whose value is impaired by the  low price of gold.
|-- | ----------------------------------------------------------------------------------





|Gold prices may fluctuate widely and
are affected by numerous industry factors, such as demand for precious metals,
forward selling by producers, central bank sales and purchases of gold and
production and cost levels in major gold producing regions. Moreover, gold
prices are also affected by macro-economic factors such as expectations for
inflation, interest rates, currency exchange rates and global or regional
political and economic situations. The current demand for and supply of gold
affects gold prices, but not necessarily in the same manner as current demand
and supply affect the prices of other commodities. The potential supply of gold
consists of new mine production plus existing stocks of bullion and fabricated
gold held by governments, financial institutions, industrial organizations and
individuals. If gold prices remain at low market levels for a sustained period
or further decline, the Company could determine that it is not economically
feasibly to continue mining operations or exploration activities.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|There can be no assurance that the
price of gold will remain stable or that such price will be at a level that will
prove feasible to continue the Companys exploration activities, or if
applicable begin development of its properties or commence or, if commenced,
continue commercial production.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Fluctuations in the US Dollar vs Canadian
Dollar Exchange Rate Could Negatively Impact Operating Results
|--------------------------------------------------------------------------------------------------------



|The price of gold and oil and gas is
denominated in US dollars and, accordingly, the Companys proceeds from
operations from the Seabee mine will be denominated and received in U.S.
dollars. As a result, fluctuations in the US dollar against the Canadian dollar
could result in unanticipated fluctuations in the Companys financial
results, which are reported in Canadian dollars.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Unfavorable Government Regulatory Changes may
Cause Cessation of Mining Operations and Exploration Activities
|-------------------------------------------------------------------------------------------------------------



|The Companys exploration  operations are
affected to varying degrees by government regulations relating to  mining operations, the
acquisition of land, pollution control and environmental  protection, safety, production
and expropriation of property. Changes in these  regulations or in their application are
beyond the control of the Company and  may adversely affect its
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 20 | 
| | -- | 



---





|operations, business and results of operations.
Failure  to comply with the conditions set out in any permit or failure to comply with
the applicable statutes and regulations may result in orders to cease or curtail
operations or to install additional equipment. The Company may be required to  compensate
those suffering loss or damage by reason of its operating or  exploration activities.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Currently, all of the Companys
properties are subject to the jurisdiction of the federal laws of Canada, the
provincial laws of Manitoba, Alberta and Saskatchewan, as well as local laws
where they are located. Mineral exploration and mining may be affected in
varying degrees by government regulations relating to the mining industry. Any
changes in regulations or shifts in political conditions are beyond the control
of the Company and may adversely affect its business.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Operations may be affected in varying
degrees by government regulations with respect to restrictions on production,
price controls, export controls, foreign exchange controls, income taxes,
expropriation of property, environmental legislation and mine safety.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Stricter Government Environmental Policies
may Materially Affect Operating Results and/or Delay Projects
|--------------------------------------------------------------------------------------------------------



|In connection with its operations and
properties, the Company is subject to extensive and changing environmental  legislation,
regulation and actions. The Company cannot predict what  environmental legislation,
regulation or policy will be enacted or adopted in  the future or how future laws and
regulations will be administered or  interpreted. The recent trend in environmental
legislation and regulation  generally is toward stricter standards and this trend is
likely to continue in  the future. The recent trend includes, without limitation, laws
and regulations  relating to air and water quality, mine reclamation, waste handling and
disposal, the protection of certain species and the preservation of certain  lands. These
regulations may require obtaining permits or other authorizations  for certain
activities. These laws and regulations may also limit or prohibit  activities on certain
lands lying within wetland areas, area providing for  habitat for certain species or
other protected areas. Compliance with more  stringent laws and regulations, as well as
potentially more vigorous enforcement  policies or stricter interpretation of existing
laws, may necessitate  significant capital outlays, may materially affect
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 21 | 
| | -- | 



---





|the Companys results of  operations and
business, or may cause material changes or delays in the  Companys intended
activities.
|---------------------------------------------------------------------------------------------------------------------------------



|Currently, the Company has estimated
$2.8 million in reclamation for certain of its properties as follows: Seabee
mine  $1.2 million; Tartan Lake mine  $1.0 million; and Madsen
properties  $600,000. As of December 31 2002, $767,000 of Seabees
assurance requirements have been funded and it is expected that the remaining
$500,000 will be funded in 2003. The Madsen properties assurance has been
funded via a demand loan with proceeds used to purchase a Guaranteed Investment
Certificate for collateral as detailed in Note 7 in the audited December 31 2001
Financial Statements. There has been no funding for the Tartan Lake Mine.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Imprecise Ore Reserves and Ore Grade
Estimates may Negatively Impact Gold Production and Operating Profitability
|----------------------------------------------------------------------------------------------------------------



|Although the Company has assessed the
mineral reserve and mineral resource estimates contained in this document and
believes that the methods used to estimate such mineral reserves and mineral
resources are appropriate, such figures are estimates. As well, estimates of
mineral reserves and mineral resources are inherently imprecise and depend to
some extent on statistical inferences drawn from limited drilling, which may
prove unreliable. Furthermore, the indicated level of recovery of gold or other
minerals may not be realized. Market price fluctuations of gold or other
minerals may render reserves and deposits containing relatively lower grades of
mineralization uneconomic. Moreover, short-term operating factors relating to
the mineral reserves, such as the need for orderly development of the deposits
or the processing of new or different grades, may cause mining operations to be
unprofitable in any particular period.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|During 2001, 74% of the Companys
gold production came from the 2d structure on Currie Rose property at the Seabee
mine. Gold recovery on the 2d structure has been less than that predicted in
prior reserve estimates. The overstating of the reserve grade has led to the
mining of inappropriate widths and mining losses appear to be higher than usual.
This has led to a decline in overall gold production for 2001 from that in prior
years. The Company expects to continue production from the 2d structure in 2002
until the ore from this area is exhausted sometime in mid-2002. If reserve
grades and recovery rates continue below estimates, the Companys overall
gold production and financial return for 2002 could be negatively affected.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 22 | 
| | -- | 



---





|Recent Changes have Caused a Decline in the
Companys Proven Mineral Reserve Estimates
|--------------------------------------------------------------------------------------



|The current proven reserve estimates as
calculated by A.C.A. Howe in their report dated March 7, 2002 is 22,800 ounces.
This estimate is a decline of 50,700 ounces from the prior years estimate
due to production in 2001 of 48,500 ounces of gold and the overstatement of
reserve estimates from the 2d structure. The current proven reserve estimate is
less than managements forecasted production from the Seabee mine for the
current year. Although the Company is currently working to upgrade a significant
amount of the tonnage in the Probable category to Proven reserves prior to
mining, the Companys efforts may not be successful in doing so or that the
ultimate ore grades and recovery rates will support current production estimates
and profitable mining operations.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Inability to Raise Required Funding Could
Cause Deferral of Projects and/or Dilution of Property Interests
|----------------------------------------------------------------------------------------------------------



|As of December 31, 2001, the company
had cash and cash equivalents of approximately $1.9 million and working capital
of $8.48 million. At the end of Fiscal 2001 (December 31st), the Company had a
net loss of approximately ($2.2 million); at the end of Fiscal 2000 (December
31st), the Company had a net loss of approximately ($48.7 million); and, at the
end of Fiscal 1999 the Company had a net profit of approximately $2.26 million.
As at December 31, 2001, the Company had retained earnings of approximately $5.2
million. The Companys ability to continue its production, exploration and
development activities depends in part on its ability to generate revenues from
its operations or to obtain financing through joint ventures, debt financing,
equity financing, and production sharing arrangements or other means.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The failure of the Company to meet its
ongoing obligations on a timely basis could result in the loss or substantial
dilution of its interest (as existing or as proposed to be acquired) in its
properties. In addition, management estimates that $1  $1.5 million is the
minimum exploration expenditures required to fulfill the Companys intended
exploration programs.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 23 | 
| | -- | 



---





|Departures of Key Personnel may cause
Managerial and Technical Difficulties
|---------------------------------------------------------------------------



|The Company strongly depends on the business and technical
      expertise of its management including William R. MacNeill, Chairman of the
      Board; Arnie E. Hillier, Vice Chairman, CEO and CFO; Neil McMillan, President;
      Ray Gagnon, COO; and, Philip Olson, Vice President Exploration. There is
      little possibility that this dependence will decrease in the near term.
      Investors must be willing to rely to a great extent on their discretion
      and judgment. The Company does not maintain key man insurance on any of
      its employees, nor does the Company have employment contracts with any of
      its key employees.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Negative Market Response to Potentional
Shareholder Dilution Could Impact Share Price and New Equity Issues
|-----------------------------------------------------------------------------------------------------------



|As of March 31, 2003, there were
employee options outstanding to purchase 2,425,000 common shares and 3,700,770
share purchase warrants outstanding. Such options, if fully exercised, would
constitute approximately 10.5% of the Companys resulting share capital.
The exercise of such options or warrants and the subsequent resale of such
shares in the public market could adversely affect the prevailing share market
price and the Companys ability to raise equity capital in the future at a
time and price which it deems appropriate. The Company may also enter into
commitments in the future which would require the issuance of additional common
shares and the Company may grant additional share purchase warrants and stock
options. Any share issuances from the Companys treasury will result in
immediate dilution to existing shareholders.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Industry Competition may Hinder Corporate
Growth
|------------------------------------------------



|The Companys business is  intensely
competitive, and the Company competes with other mining companies,  some of which have
greater resources and experiences. Competition in the  precious metals mining industry is
primarily for mineral rich properties which  can be developed and produced economically;
the technical expertise to find,  develop, and produce such properties; the labor to
operate the properties; and,  the capital for the purpose of financing development of
such properties. Many  competitors not only explore for and mine precious metals, but
also conduct  refining and marketing operations on a worldwide basis and some of these
companies have much greater financial and technical resources than the Company.  Such
competition may result in the Company being unable to acquire desired
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 24 | 
| | -- | 



---





|properties, to recruit or retain qualified
employees or to acquire the capital  necessary to fund its operations and develop its
properties. The Companys  inability to compete with other mining companies for
these mineral deposits  could have a material adverse effect on the Companys
results of operation  and business.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Extreme and Persistent Weather Conditions
could cause Operating and Exploration Difficulties
|--------------------------------------------------------------------------------------------



|The Seabee mine, certain of the
Companys oil and gas properties and the Companys exploration
properties are all located in the northern portions of either Saskatchewan,
Alberta, or Manitoba. Access to these properties and the ability to conduct work
on them can be affected by adverse weather conditions. Adverse weather
conditions can also increase the costs of both access and work on the
Companys properties.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Title to Company Properties could be
Challenged with Potential Loss of Ownership
|--------------------------------------------------------------------------------



|Acquisition of title to mineral
properties is a very detailed and time-consuming process. The Company believes
it has investigated title to all of its mineral claims and has obtained title
opinions with respect to its most significant properties and, to the best of its
knowledge titles to all properties are in good standing. For the Madsen
properties, the Company has searched title records for any and all encumbrances.
For the Seabee Property, the Company has examined disposition search abstracts
from the Saskatchewan Department of Energy and Mines, made inquiries to
Saskatchewan Energy and Mines, reviewed lease files at Saskatchewan Energy and
Mines, and received confirmation from Saskatchewan Environment and Resource
Management.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The title to the Companys
properties could be challenged or impugned. The properties may have been
acquired in error from parties who did not possess transferable title, may be
subject to prior unregistered agreements or transfers and title may be affected
by undetected defects.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Uninsured Risks could Negatively Impact
Profitability
|-----------------------------------------------------



|In the course of exploration,  development and
production of mineral properties, certain risks, and in  particular, unexpected or
unusual geological operating conditions including rock  bursts, cave-ins, fire and
flooding and earthquakes may occur.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 25 | 
| | -- | 



---





|It is not always  possible to fully insure
against such risks and the Company may decide not to  take out insurance against such
risks as a result of high premiums or other  reasons. Should such liabilities arise, they
could reduce or eliminate any  future profitability and result in increased costs and a
decline in the value of  the securities of the Company.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Issuance of Flow Through  Securities  and the
Potential  Liabilities  Associated  with the Failure to Incur Defined  Exploration
Expenditures within a Certain Time Frame
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Flow through securities are securities
of the Corporation which meet certain criteria and qualify for flow through tax
treatment for the purposes of the Income Tax Act (Canada). Qualification as a
flow through share enables the Corporation to renounce certain
eligible resource expenditures incurred by the Corporation for the benefit of
any investor who is a Canadian taxpayer. Once issued, the shares are common
shares of the Corporation and are not differentiated from shares which were not
flow through shares on issue.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Corporation has financed certain
exploration activities and operations primarily through the issuance of equity,
including flow through shares. See Operating and Financial Review and
Prospects  Overview.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Under the Income Tax Act (Canada),
companies are permitted to issue flow through shares pursuant to a written
agreement under which the issuer agrees to incur certain eligible Canadian
exploration expenses within the time frame specified in the agreement
(generally, 12 to 24 months) and to flow through or renounce the
related tax deduction to the investor. The proceeds from the issuance of flow
through shares must be expended on qualifying expenditures, which
are related to mineral exploration in Canada.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|In the event that the Corporation is  unable to
make the renunciation or fails to expend the funds on qualifying  exploration
expenditures, the investor may be subject to reassessment for any  related tax deduction
taken by the investor and the Corporation could be liable  to the investor for damages in
an action for breach of contract. However, there  is no right of rescission of the
subscription contract that would result in a  reversal of the share issuance. The
investor may be entitled to damages (based  on a breach of contract claim), which may
include amounts related to the  increased tax liability that the shareholder experienced
resulting form the  failure of the
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 26 | 
| | -- | 



---





|Corporation to renounce the contracted
qualifying expenditures.  In addition, the Corporation could be required to pay a penalty
and interest to  the Government of Canada for failure to make and renounce such
qualifying  expenditures, within prescribed time limits.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Although the Corporation believes it
will make the qualifying expenditures and renounce the related tax deduction for
the benefit of the purchasers of its flow-through shares, there can be no
assurance that the Corporation will make the qualifying expenditures or renounce
such deductions in a timely manner. The failure to make the qualifying
expenditures or to renounce such deductions in a timely manner could have a
material adverse effect on the Corporations business or its ability to
raise additional financing through the issuance of flow through shares.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Company is Classified as a Penny
Stock with Rules that may Defer Trading Activity
|---------------------------------------------------------------------------------------



|The Companys stock is subject to
penny stock rules as defined in 1934 Securities and Exchange Act
rule 3a51-1. The Commission has adopted rules that regulate broker-dealer
practices in connection with transactions in penny stocks. The Companys
common shares are subject to these penny stock rules. Transaction costs
associated with purchases and sales of penny stocks are likely to be higher than
those for other securities. Penny stocks generally are equity securities with a
price of less than U.S. $5.00 (other than securities registered on certain
national securities exchanges or quoted on the NASDAQ system, provided that
current price and volume information with respect to transactions in such
securities is provided by the exchange or system).
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The penny stock rules require a
broker-dealer, prior to a transaction in a penny stock not otherwise exempt from
the rules, to deliver a standardized risk disclosure document that provides
information about penny stocks and the nature and level of risks in the penny
stock market. The broker-dealer also must provide the customer with current bid
and offer quotations for the penny stock, the compensation of the broker-dealer
and its salesperson in the transaction, and monthly account statements showing
the market value of each penny stock held in the customers account. The
bid and offer quotations, and the broker-dealer and salesperson compensation
information, must be given to the customer orally or in writing prior to
effecting the transaction and must be given to the customer in writing before or
with the customers confirmation.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 27 | 
| | -- | 



---





|In addition, the penny stock rules
require that prior to a transaction in a penny stock not otherwise exempt from
such rules, the broker-dealer must make a special written determination that the
penny stock is a suitable investment for the purchaser and receive the
purchasers written agreement to the transaction. These disclosure
requirements may have the effect of reducing the level of trading activity in
the secondary market for the Companys common shares in the United States
and shareholders may find it more difficult to sell their shares.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Due to the Companys Canadian
Jurisdiction, Investors may be Deterred from Trading Company Stock as it may be
Difficult for U.S. Investors to Effect Service of Process Against the Company
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Company is incorporated under the
laws of Canada. All of the Companys directors and officers are residents
of Canada and all of the Companys assets and its subsidiary are located
outside of the United States. Consequently, it may be difficult for United
States investors to effect service of process in the United States upon the
Companys directors or officers or to realize in the United States upon
judgments of United States courts predicated upon civil liabilities under the
United States Securities Exchange Act of 1934, as amended. A judgment of a U.S.
court predicated solely upon such civil liabilities may be enforceable in Canada
by a Canadian court if the U.S. court in which the judgment was obtained had
jurisdiction, as determined by the Canadian court, in the matter. There is
substantial doubt whether an original action could be brought successfully in
Canada against any of such persons or the Company predicated solely upon such
civil liabilities.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Item 4. Information on the Company
|----------------------------------



|DESCRIPTION OF BUSINESS
|-----------------------



|Introduction
|------------



|The Companys executive office is located
at:
|---------------------------------------------



|224 4th Avenue South, Suite 200, Saskatoon,
Saskatchewan, Canada
S7K 5M5
Telephone: (306) 668-7505
Facsimile: (306) 668-7500
E-Mail: clauderesources@claudresources.com
Website: www.clauderesources.com
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 28 | 
| | -- | 



---





|The Company currently leases its
executive office. The lease calls for payments of $10,056 per month and
currently expires in July 2004. The Company has an option to renew the lease for
an additional five years. The Companys offices occupy the entire second
floor which is approximately 7,760 square feet.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The contact person in Saskatoon is: Mr. Neil
McMillan, President
|----------------------------------------------------------------



|The Companys fiscal year ends December 31st
|--------------------------------------------



|The Companys common shares trade
on the Toronto Stock Exchange under the symbol CRJ.
|---------------------------------------------------------------------------------------



|The authorized share capital of the
Company consists of an unlimited number of common shares and an unlimited number
of first and second preferred shares. As of December 31, 2001, there were
43,053,853 common shares issued and outstanding (March 31, 2003 
52,223,538 commons shares outstanding); no first preferred shares issued and
outstanding; and, no second preferred shares issued and outstanding.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Corporate Background
|--------------------



|Claude Resources Inc.
(Claude) was incorporated as a private corporation under the Canada
Business Corporations Act (the CBCA) on March 26, 1980 and was
converted to a public company by Articles of Amendment dated September 16, 1980.
The Articles of Claude were restated by Restated Articles of Incorporation dated
November 14, 1988. Articles of Reorganization dated November 8, 1993 were filed
by Claude pursuant to the CBCA, which resulted in all then issued and
outstanding 7.5% Convertible Redeemable First Preferred Shares, Series I in the
capital of the Company being changed into Common Shares. By Articles of
Amendment dated October 23, 1996, the Companys Articles were amended to
give the directors the ability to appoint additional directors to the board, not
to exceed one-third of the number of directors elected at the previous annual
meeting of shareholders. The following chart illustrates Claudes
subsidiary, together with the jurisdiction of incorporation of each company and
the percentage of voting securities held:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 29 | 
| | -- | 



---





| |                                       |     
| | ------------------------------------- | ----
| | CLAUDE RESOURCES INC. 
      (Canada) |     
| |                                       |     
| |                                       |     
| | 1                                     | 100%
| |                                       |     
| |                                       |     
| | 574095 Alberta Ltd. 
      (Alberta)  |     
| |                                       |     



|During 1998, Claude acquired 100% of
the issued and outstanding common shares of Madsen Gold Corp.
(Madsen) pursuant to a take-over bid offer made by Claude on March
13, 1998 (the Take-over Offer).
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|During 1998, the Company acquired all
of the outstanding shares of 3377474 Canada Inc., owner of the mineral property,
mill and equipment related to the Tartan Lake gold mine.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Claude amalgamated, effective January
1, 2000, with its subsidiaries Madsen Gold Corp. and 3377474 Canada Inc. The
amalgamated company will continue to carry on business under the name Claude
Resources Inc. Prior to the amalgamation, Claude dissolved three of its
remaining subsidiaries. The subsidiaries dissolved were Centaur Mining
Contractors Corp., Jael Explorations Limited (Jael) and RSGM
Exploration Limited (RSGM), both Jael and RSGM were wholly-owned
subsidiaries of Madsen. Following dissolution, the remaining assets of these
subsidiaries were transferred to Claude. The amalgamation and dissolutions are
intended to reduce the administrative and corporate governance requirements and
expense associated with maintaining a number of different corporations.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Business
|--------



|Claude is engaged in the acquisition,
exploration, and development of precious metal properties, the acquisition and
development of oil and gas properties, and the production and marketing of
minerals, oil, NGLs and natural gas. The majority of Claudes mineral
properties are in northern Saskatchewan and northwestern Ontario. The majority
of Claudes oil and gas properties are in Alberta, with some property
interests in southeastern Saskatchewan. Claudes Alberta oil and gas
properties are administered through its wholly-owned subsidiary, 574095 Alberta
Ltd. (574095).
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 30 | 
| | -- | 



---





|Claude Resources is the sole owner and
operator of the Seabee mine located 125 kilometers northeast of LaRonge,
Saskatchewan. This operation has been in production since December 1991
producing over 525,000 ounces of gold to December 31, 2001. In 2000, gold
production from the mine was approximately 58,300 ounces and in 2001 gold
production from the mine was approximately 46,300 ounces.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|During 1998, Claude acquired all the
issued and outstanding share capital of Madsen Gold Corp., which owned the
Madsen mine located in the Red Lake district of northwestern Ontario. The Madsen
mine was on a care and maintenance basis prior to Claudes acquisition.
Claude operated the mine in a pre-production mode from June, 1998 to October 31,
1999 when the mine was once again placed on care and maintenance as ore grades
became uneconomic at the then gold prices.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|In December 2000, Claude entered into
an option/joint venture agreement with Placer Dome whereby Placer could earn a
55% interest in the Madsen project by spending $CDN 8.2 million within three
years and delivering a positive feasibility study by the end of year five.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|During 2001, the Company experienced
decreased production from its operating assets. Gold revenue was $19.5 million
and revenue from the Companys oil and gas interests was $9 million. In
spite of the lower revenues, the Company did report positive cash flows from
operations. Also during 2001, Placer Dome continued to work on the Madsen
property in order to fulfill the terms of its option/joint venture agreement
with the Company.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|During 2001, Claudes gold
operations accounted for 68.3% of its total gross revenues while oil and gas
properties accounted for the remaining 31.7%.
|-----------------------------------------------------------------------------------------------------------------------------------------------------



|Centaur Mining Contractors
(Centaur), a division of Claude Resources Inc., conducts all
underground mining activities at the Seabee mine. Pursuant to an agreement
between Madsen and Centaur, Centaur had also been contracted to conduct all
mining activities at the Madsen mine. This contract was terminated when mine
operations were discontinued.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Claudes growth strategy is to increase
production through expansion of its  existing operations, exploration and acquisitions of
gold and/or oil and gas  assets.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 31 | 
| | -- | 



---





|Plan of Operations
|------------------



|All of the Companys operations
are located in Canada. The Company operates in the gold mining and oil and gas
sectors. For the last 3 fiscal years, gold mining accounted for 68%, 72% and 78%
of the Companys revenues, while oil and gas accounted for 32%, 28% and 22%
of revenues.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Operations are not seasonal as both
gold and oil and gas are produced year round. The Companys products are
commodities for which there is an active market and are not differentiated from
the products of other competitors. Therefore, the Company conducts no special
marketing for its products and its revenue is largely determined by prevailing
market prices which can be adjusted by the Companys commodity and currency
hedges. The Companys oil and gas interests are in wells operated by others
and the Company has no active management in the production of or the marketing
of the oil and gas produced.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Company is not dependent upon any
patents, licenses or new manufacturing processes, or is dependent upon any
financial contracts in the ordinary course of its business.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The mineral exploration, mining and oil
and gas operations of the Company are subject to regulation by several
government agencies at the Federal, Provincial and local levels. These
regulations are well documented and a fundamental aspect of operations for any
resource company in Canada. Management believes it is in compliance with all
current requirements and does not anticipate any significant changes to these
regulations which will have a material effect on the Companys operations.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Companys working capital
position, at December 31, 2001, was $8,480,000. Portions of these funds are
allocated over Fiscal 2002 to accommodate the development of Seabees 2B
zone at depth. Management expects to extract higher grade ore from these deeper
levels to provide mill throughput during the latter half of 2002.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|DESCRIPTION OF PROPERTY
|-----------------------



|The Company currently operates in the
gold mining and oil and gas sectors.
|--------------------------------------------------------------------------



| | 32 | 
| | -- | 



---





|Mineral Properties
|------------------



|Its mineral property portfolio includes
Seabee, a producing gold mine, and a portfolio of exploration properties in
Canada, most of which are located in the Provinces of Saskatchewan and Ontario.
The Company has assembled the majority of its property portfolio around three
areas  the Seabee mine in Saskatchewan, the Tartan Lake mine in Manitoba
and the Madsen mine in Ontario. At each of the three sites, Claude owns a mill
and equipment that could potentially be used to process ore from any economic
ore body found within the portfolio of properties clustered around it; either by
relocating the mill and equipment to the economic ore body or by transporting
the ore to the current mill site. At the present time, only the Seabee mine
contains an economic body of ore and is producing gold. The other two properties
are at the exploration stage and the mills and equipment are presently shutdown
and not in operation.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|CLAUDE ASSET LOCATIONS
|----------------------





|Except for the Seabee mine, all of the
Companys properties are at the exploration stage and do not contain any
proven ore bodies. Among the Companys exploration projects, several are
considered core projects and will receive the majority of the
Companys exploration budget and focus for the foreseeable future.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 33 | 
| | -- | 



---





|Seabee Mine
|-----------



|The Seabee mine is located at Laonil
Lake, Saskatchewan, approximately 125 kilometers northeast of the town of La
Ronge. Claude commenced commercial production at the mine in December, 1991.
Since start-up, the mine has produced 529,400 ounces of gold including 46,300
ounces in 2001.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|SEABEE PROPERTY
|---------------





|Property Description and Access
|-------------------------------



|The Seabee mine produces gold from two
different but contiguous properties. The original ten quartz claims covering the
mine site were consolidated into a single mineral lease (ML 5519) of
approximately 201 hectares granted by the Crown on November 25, 1999. In
November 1994, the Company entered into an option agreement to acquire a 100%
working interest, subject to a 30% Net Profits Interest, in the surrounding
Currie Rose property. After fulfilling the conditions in the option agreement
and obtaining a 100% interest in the property, a portion of the claims were
converted to a mineral lease (ML 5520) on January 1 1999.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Mine is located in the La Ronge
Mining District at the north end of Laonil Lake approximately 125 kilometers
northeast of the town of La Ronge, Saskatchewan and about 150 kilometers
northwest of Flin Flon, Manitoba.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 34 | 
| | -- | 



---





|Topography of the region is
characterized by low rocky ridges interspersed with lakes and muskeg.
Temperature in the region typically ranges from -13 degrees Fahrenheit (-25
degrees Celsius) in January to 62 degrees Fahrenheit (17 degrees Celsius) in
July. Mean annual precipitation is approximately 20 inches per year which
includes snowfall from late October to mid-April.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Access to the minesite is by fixed wing
aircraft from La Ronge or Flin Flon to a 3,000 foot airstrip located on the
property. Equipment and bulky or heavier supplies are trucked to the site via a
37 mile winter road from Brabant Lake on Highway 102. The winter road is
typically in use from January through March. The Seabee operation directly
supports a workforce of 130 employees with permanent camp facilities. Electrical
power is provided by a transmission line to the mine by the provincial power
authority while backup power is provided by diesel generators.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Property Royalties
|------------------



|The Company has a 100% interest in both
the Seabee and Currie Rose properties. However, production from the Currie Rose
is subject to a 30% Net Profits Interest (NPI) in favor of Currie Rose for the
first $1,000,000 of profits received by Claude from the property in a fiscal
year, which is reduced to a 25% NPI for any additional profits received by
Claude during that fiscal year. Prior to Currie Rose receiving any of the NPI,
Claude is entitled to first recover from the NPI the Currie Rose portion of
capital, development and operating costs related to the production of that ore.
Claude is also entitled to subtract the interest on Currie Roses operating
costs which is charged at prime plus .5% based upon the previous months
outstanding balance. As at December 31, 2001, the cumulative deficiency of
Currie Roses share of these capital and operating costs totaled
approximately $6.4 million. Since commencing commercial gold production, a total
of 509,103 tonnes of ore have been processed from the Currie Rose property, from
which a total of 109,446 ounces of gold have been recovered.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|To date, there have been no royalty
taxation payments made on this property to the Crown. Royalties to the Crown of
5% on the first million ounces of production escalating to 10% thereafter on net
operating profits only become payable once capital and exploration costs are
recovered. At current and anticipated production rates, Crown royalty payments
are not expected to be required for several more years.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 35 | 
| | -- | 



---





|Regional and Property Geology
|-----------------------------



|Northern Saskatchewan forms part of the
Churchill Province of the Canadian Shield. It has been subdivided into a series
of crustal units and the section containing the Seabee mine has been termed the
Glennie Lake domain. This domain includes both sediment-and volcanic-derived
rocks. The mine is located within the eastern contact area of the Laonil
metagabbro, a roughly triangular shaped intrusion. All rocks are deformed and
have been regionally metamorphosed at conditions of middle amphibolite facies.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Seabee property is underlain by the
Laonil Lake metagabbro. Numerous quartz-tourmaline bearing mineralized shear
structures traverse the complex forming a complicated shear system. The vein
structures dip steeply, generally strike at 70 degrees and exhibit extreme splay
structures. Although the predominant trend is around 70 degrees, sub-parallel to
the Laonil Lake Shear Zone, northwesterly structures have also been encountered.
Vein mineralogy is dominantly quartz with pyrite, pyrrhotite and chalcopyrite
and accessory tourmaline and carbonate. Silicification is the most common
alteration type. Gold mainly occurs in the free form as flakes and films
replacing pyrite or at sulphide boundaries. The higher grade gold values are
often associated with sections rich in sulphides or at vein junctions.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Mine Details
|------------



|Construction of the Seabee mine began
in 1990, the mill was completed in late 1991 and gold production began in
December, 1991. The mine hosts permanent facilities to support all mining
operations and personnel. Seabee employs approximately 130 workers of whom
approximately 70 are on site at any given time, subject to seasonal adjustments.
Approximately 60 persons are employed in the mill, maintenance, electrical,
catering, surface, diamond drilling and technical services areas, on a two
week-in and two week-out rotation. The remaining 70 people are employed in the
underground operations, the majority on a 36 day-in and 18 day-out rotation.
Camp facilities on site are capable of accommodating in excess of 100 people and
are supported by a full complement of dining and recreation facilities.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Underground mining is conducted by  Centaur
Mining Contractors (Centaur), a division of Claude Resources  Inc. The
Company utilizes the shrinkage stope mining method to mine its ore body
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 36 | 
| | -- | 



---





|at the Seabee mine. Shrinkage or shrinkage
stoping refers to any mining method  in which broken ore is temporarily retained in the
stope to provide a working  platform and/or to offer temporary support to the stope walls
during active  mining. Since ore swells when broken (blasted ore increases
its  occupied volume by approximately 70%), it is necessary to shrink the muck pile a
corresponding amount by drawing some of the broken ore out as the stope is  advanced
upward.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The illustration below describes the
general approach to shrinkage stoping:
|---------------------------------------------------------------------------





|The zones currently being mined are  accessed by
a 3.4 by 4.5 meter ramp to the 429 meter level. Mining efforts are  currently being
focused on the 2d and 2b zones at depth and on the Currie Rose  property (described
separately). The shaft and hoisting facility, commissioned  in the fourth quarter of
1997, provides ore and waste transport to surface as  deep as the 395 meter level.
Approximately 750 tonnes per day of ore and a  minimal amount of waste are moved to the
ore and waste pass system and
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 37 | 
| | -- | 



---





|hoisted  to surface with the ore then conveyed
to the mill. The milling capacity of the  Seabee mill was increased in 1997 to its
current processing capability that  exceeds 750 tonnes per day. The mill process consists
of a three stage crushing  circuit, a two stage grinding circuit which is then followed
by cyanide  leaching. The leached gold is collected in a carbon-in-pulp circuit that is
subsequently stripped using mild caustic and collected on stainless steel mesh  cathodes
by electrowinning. The product from electrowinning is refined into dore  bars in a
bullion furnace. Power is supplied by line from Saskatchewan Power  Corporations
provincial power grid.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The following table details the operations data
of the Seabee mine and mill for  the last 5 years.
|--------------------------------------------------------------------------------------------------



|Seabee mine Operating Data
|--------------------------

| |                             | 2001    | 2000    | 1999    | 1998    | 1997   
| | --------------------------- | ------- | ------- | ------- | ------- | -------
|
| |                             |         |         |         |         |        
| | Ore Milled (tonnes)         | 274,800 | 237,500 | 245,300 | 224,600 | 211,500
| | Ore Grade (grams per tonne) | 6.13    | 8.58    | 7.34    | 9.27    | 9.36   
| | Mill Recoveries (%)         | 88.8    | 87.9    | 92.3    | 92.2    | 92.6   
| | Gold Sales (ounces)         | 46,300  | 58,300  | 54,100  | 60,200  | 58,500 
| | Cash Cost (US$/ounce)*      | $221    | $190    | $193    | $168    | $215   

|*   The Company reports its operating costs on
      a per-ounce basis based on uniform standards developed by the Gold Institute.
      Management uses this measure to analyze the profitability (compared to average
      realized gold prices) of the Seabee mine, before depreciation and depletion.
      When evaluating this profitability measure investors should be aware that
      no provision has been made for exploration or development costs . A reconciliation
      to the cash costs in the above table is provided below:
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Consolidated Total Cash Costs
Per Gold Ounce Sold
|-------------------------------------------------

|Years ended December 31,
|------------------------
|                        
|                        
|                        
|                        
|                        
|                        
|                        
|                        
|                        
|                        
|                        
|                        
|                        



| | 38 | 
| | -- | 



---





|Investors are cautioned that the above
measures may not be comparable to other similarly titled measures of other
companies should these companies not follow Gold Institute Standards.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Since commencement of production in
1991, the mill has processed more than 2.1 million tonnes of ore at an average
head grade of 8.47 grams per tonne. With a recovery rate of 92.11%, the Seabee
mine has produced 529,400 ounces of gold to December 31, 2001.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Property History
|----------------



|Gold was first discovered around Laonil
Lake in 1947 by prospectors acting on behalf of Cominco. Between 1947 and 1950,
Cominco conducted an extensive program of prospecting, trenching, geological
mapping and 79 diamond drill holes totaling 4,414 meters which identified 4 main
gold veins, or zones, on the property.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The property received almost no
exploration work until 1974, although in 1958 Cominco applied for and was
granted 10 Quartz Mining Leases covering the property. In 1961, Cominco drilled
2 shallow holes of 41 meters as part of an overall review of the known property
data. This review allowed Cominco to estimate the property contained a small
gold resource. Cominco resumed exploration in 1974 and drilled 16 holes totaling
458 meters to test additional vein structures. In 1982-83, Cominco resumed work
and drilled 3,776 meters in 20 holes, but they did not complete the entire
program as Cominco sold the property to BEC International Corporation who
subsequently reached an agreement with Claude Resources who became the
beneficial owner.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|After its acquisition of the Seabee
property, Claude drilled 3 holes totaling 226 meters to collaborate
Comincos prior work and property estimates. In June 1985, Claude optioned
the property to Placer Dome. Placer carried out an extensive exploration
program, which included geologic mapping, trenching and stripping, geophysical,
geochemical, environmental and metallurgical studies, as well as both surface
and underground drilling. 95 surface drill holes were completed. 72 underground
drill holes were drilled from an underground exploration decline on Zone 2. The
decline was 1,000 meters long and diamond drill stations were cut from one of
two drives. At the completion of this program, Placer determined the property
did not meet its criteria for development and allowed its option on the Seabee
property to expire in June 1988 and returned the property to Claude.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|After the return of the property,  Claude
initiated geological compilation and analytical studies designed to  correlate and
|----------------------------------------------------------------------------------------------------------------------------



| | 39 | 
| | -- | 



---





|substantiate the work done by Placer Dome. The
Company engaged  Cominco Engineering Services Limited to conduct bulk sampling and
drilling as  part of a feasibility study. A.C.A. Howe International Limited completed a
reserve estimate for the property in December 1988 and Cominco Engineering  submitted a
positive Feasibility Study in August, 1989 and subsequently revised  the study in May,
1990. At that time, Claude made the decision to put the  deposit into production and
construction of the mine began in the summer of  1990. Mining commenced at Seabee in
December 1991.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Currie Rose
|-----------



|Claudes 11,000 acre (4,500
hectare) Currie Rose property surrounds the Seabee property but primarily lies
to the west, north and east. In 1994, Claude entered into an option agreement
with Currie Rose Resources Inc., a non-affiliated public company traded on the
TSX Venture Exchange, whereupon Claude could earn a 100% interest in the Currie
Rose property subject to a 30% Net Profits Interest (NPI).
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Currie Rose property was originally
staked by prospector David Partridge in 1980 to cover gold occurrences
discovered by his father, Eric Partridge, during the mid 1960s and early 1970s.
They were optioned to Currie Rose the same year and purchased outright by Currie
Rose in 1983. Currie Rose conducted exploration on the property from 1980 to
1984 before optioning the property to Placer Development Limited. Placer and its
successor company Placer Dome Inc. were the exploration operators and from 1981
to 1990, approximately $2.6 million was spent on various exploration activities
on the property.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Placers option on the property
expired in 1991 and Currie Rose Resources retained a 100% interest. No
exploration work was conducted until 1994 when Claude entered into the option
agreement and carried out a prospecting program. This program identified at
least 9 gold bearing structures that warranted drill testing. In 1995, Claude
conducted a drill program of 3,458 meters in 27 holes to test the structures
identified during the prior year. In 1996, Claude drilled a total of 2,566
meters in 23 holes to define the 10 Zone which was adjacent to the western
boundary of the Seabee property claims.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|In 1997, Claude drilled a total of  1,395 meters
in 6 holes, including one that straddled the Seabee property  boundary. The holes
encountered veins that were interpreted as extensions of the  Seabees 10 and 2c
structures. Work programs in 1999
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 40 | 
| | -- | 



---





|involved 60 holes  totaling 7,346 meters of
diamond drilling. This targeted showings discovered by  prospecting in the two preceding
years and focused on an area of the Currie Rose  property to the south and west of the
mine trend. This drilling produced some  remarkable intersections on a structure (R and S
Vein intersection) that proved  to have a very limited strike length. Additional
structures returned low-grade  intersections that require follow-up drilling.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The 2000 work program included the
winter drilling of 23 surface holes totaling 5,397 meters. As a follow-up to the
preceding years program, most of the holes were collared to the west of
the ML 5520 in the Bird Lake area exploring for mineralized structures parallel
to the 2 Vein shoots. Other targets in the Porky Lake and Pine Lake areas were
also tested. Drilling succeeding in confirming the existence of strong shear
structures, but produced only modest gold values.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|In 2001, Claude explored six more
remote target areas with a program that involved 42 holes that totaled 5,037
meters of diamond drilling. Testing splays and parallel structures, this
drilling encountered only nominally anomalous gold values within variably
sheared host rocks. Target areas included Scoop, Porky, Herb, Pine, East and
West Bird Lakes. Further ground work is warranted for many of these targets.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The geology of Currie Rose is largely
similar to that prevailing at Seabee as described above as the Laonil Lake
Intrusive Complex underlies much of the property. Outside the core of the
property, the Laonil Lake Intrusive Complex is flanked by a volcanic-sedimentary
rock sequence. Limited drilling in these volcanics has returned anomalous gold
values.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Seabee Mine Reserves
|--------------------



|Claude originally commissioned Cominco
Engineering Services to provide a feasibility study on the Seabee mine in 1989.
A positive feasibility study was prepared and presented to the Company in August
1989, and a revised study was presented in May 1990. The Reserve Estimates for
the property were prepared by A.C.A. Howe International Limited. Since the
original estimates in 1990, A.C.A. Howe visits the mine regularly and receives
all technical, developmental and production reports concerning the mine. Using
this information, ACA Howe then checks the reserve estimates developed by the
Companys own mining staff.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 41 | 
| | -- | 



---





|A.C.A. Howes methodology for
estimating reserves and resources is a manual interpolation and extrapolation
between sill sampling and diamond drill holes. Resource blocks are measured from
planned stope dimensions, excluding any pillars that will not be extracted
within a 12 month period. Surface drill intersections are cut to a statistically
determined 75 g/t and chip samples in stopes and development headings are
routinely cut to 50 g/t.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Proven Reserves are sampled in two
dimensions by a sill and a raise, or are sampled by silling and projected to no
more than one mine level to diamond drill holes on the same structure. Probable
Reserves include blocks that have either been sampled by silling and projected
beyond diamond drilling to a maximum one mine level, or have been sampled by
closely spaced diamond drill holes of usually less than 25 meters laterally and
up to 50 meters down dip on structures with a previous production history, or
have been mapped and sampled at surface.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The major portion of the Proven and
Probable Reserves occur within the well-defined shoots currently being mined.
The following mining and economic factors are well established and have been
applied to those resources which have then been converted to Proven and Probable
Reserves:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|A block cut off grade of 3.73 g/t is
applied to reserves. This is the current break-even grade following the
application of dilution, mining losses and mill recovery. It may be necessary on
occasion to mine and haul lower grade ore to access reserves, but if this lower
grade material averages greater than 3.7 g/t, it is stockpiled for blending.
Similarly, ore grading higher than 3.7 g/t that is already broken will be hauled
and processed.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The walls within the stopes at the mine
are supported by rock bolts prior to the ore being pulled to minimize external
dilution, which is currently estimated to average 10% at zero grade.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The use of a remotely operated scoop to
empty highwalls from within the stopes keeps average mining losses to around 3%.
|------------------------------------------------------------------------------------------------------------------------



|Based upon regular test work at the
mine, a Specific Gravity of 2.8 is utilized in tonnage estimates on the less
sulphide-rich zones; the 2d structure has a measured density of 2.9.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 42 | 
| | -- | 



---





|All samples at the Seabee mine are
assayed on site in a fire assay gold laboratory. Sample size is 30 grams (one
assay tonne). Surface and underground drill core is assayed in-house and
underground and drill and chip samples are assayed on a daily basis and checked
by internal standards, though currently there are no external checks. The
accuracy of the assaying at the mine is confirmed by bullion production.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|As reported by D. J. Patrick, PhD of A.C.A. Howe
International Limited in his  report dated March 7, 2002, the Proven and Probable
Reserves at the Seabee mine  and the Currie Rose Sector are as follows:
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Seabee Mine:
|------------

|Proven Mineral Reserves:                     | 40,762 tonnes @ 5.27 g/t 
|-------------------------------------------- | -------------------------
|Probable Mineral Reserves:                   | 448,934 tonnes @ 8.65 g/t
|                                             |                          
|Currie Rose Sector:                          |                          
|                                             |                          
|Proven Mineral Reserves:                     | 82,595 tonnes @ 6.00 g/t 
|Probable Mineral Reserves:                   | 37,711 tonnes @ 6.54 g/t 
|                                             |                          
|Total Proven plus Probable Mineral Reserves: | 610,002 tonnes @ 7.93 g/t



|For the above table of reserves, the following
mining and economic factors have  been applied to those resources:
|-----------------------------------------------------------------------------------------------------------------



|(a) | A
block cut-off grade of 3.73 g/t is applied to resources. This is  the break-even grade at
a gold price of US$295 following the  application of dilution, mining losses and mill
recovery;
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | External
dilution is estimated to average 10% at zero grade;
|--- | ------------------------------------------------------------

|(c) | Average
mining losses are around 3%;
|--- | ------------------------------------

|(d) | A
Specific Gravity of 2.8 is utilized in tonnage estimates on the  less sulphide rich
zones; The 2d structure has a measured density of  2.9.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------





|The following table details the Seabee
mines total Mineable Reserves for the last 3 fiscal years as calculated by
A.C.A. Howe using a long-term gold price of US $295 per ounce.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 43 | 
| | -- | 



---





| |                      | 2001Tonnes | 2001Gradeg/tonne | 2001GoldOunces | 2000Tonnes | 2000Gradeg/tonne | 2000GoldOunces | 1999Tonnes | 1999Gradeg/tonne | 1999GoldOunces
| | -------------------- | ---------- | ---------------- | -------------- | ---------- | ---------------- | -------------- | ---------- | ---------------- | --------------
|
| |                      |            |                  |                |            |                  |                |            |                  |               
| | Proven               | 123,400    | 5.76             | 22,800         |            | 299,000          | 7.64           | 73,500     |                  | 208,600       
| |                      |            |                  |                |            |                  |                |            |                  |               
| | Probable             | 486,600    | 8.49             | 132,780        |            | 280,300          | 7.43           | 67,000     |                  | 298,600       
| |                      |            |                  |                |            |                  |                |            |                  |               
| | TotalMineralReserves | 610,000    | 7.93             | 155,500        |            | 579,300          | 7.54           | 140,500    |                  | 507,200       

|The areas of the mine being worked
currently are in the eastern portion of the Seabee sector and several areas of
the Currie Rose sector. On Seabee, the 6509 decline is being driven to access a
newly defined high-grade zone in the area. During 2001, 74% of the production
has come from the 2d structure on Currie Rose. Gold recovery on the 2d structure
has been less than that predicted. The ore in this structure has different
characteristics from the previously mined structures. The gold appears to be
concentrated within segregated zones of sulphides; in addition, a major splay
structure has led to a broad zone of internal dilution.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Statistical analysis of the overall
assay data from the 2d structure indicates that a lower cutting factor should be
applied to the data for accurate reconciliation with the mill returns. The
overstating of the reserve grade has led to the mining of inappropriate widths
and mining losses appear to be higher than usual. The sulphide-rich metallurgy
of the 2d ore has also led to lower mill recoveries. As additional results are
obtained from the current stopes on the 2d structure, detailed reconciliation
will permit appropriate cutting factors to be established for future resource
estimation on the zone. Until this is done, additional resources cannot be
predicted for the 2d structure.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Recent Exploration Results
|--------------------------



|During the 2002 winter exploration
season, the Company drilled 3,355 meters of BQ core drilling in 18 holes on the
West Porky area of the Currie Rose property. The area lies approximately 2
kilometers north of the Seabee mine and was designed to test a two-kilometer
long geochemical anomaly coincident with a visible gold in outcrop.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The core from this program was logged  and split
at the Companys logging facility at the Seabee mine. Assaying  has been done by TSL
Laboratories of Saskatoon with random checks of pulps and  rejects performed by Chemex
Labs of Vancouver. All core
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 44 | 
| | -- | 



---





|intervals have been fire  assayed with a
gravimetric finish with samples that assayed greater than 10  grams per tonne checked by
a total metallics assay. The project is overseen by  Vice President Exploration, Philip
E. Olson P.Geo.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Company has drill-tested
approximately 600 meters of this targets strike length for that portion
that substantially parallels a major metamorphosed volcano-sedimentary rock
contact. Gold values have been recorded in several rock types, with significant
intersections encountered in both a feldspathic arenite (sedimentary unit) and a
calc-silicate (altered mafic volcanic rock) over two-thirds of the strike length
tested.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Significant assay results from the
program are detailed below:
|--------------------------------------------------------------

|Hole No. | From (m) | To (m) | Length (m) | Au (g/t) | Host
      Rock
|-------- | -------- | ------ | ---------- | -------- | ---------------
|        
|         |          |        |            |          |                
|PKY02-01 | 69.25    |        | 72.30      |          | 3.05           
|         | 122.70   |        | 125.70     |          | 3.00           
|PKY02-02 | 35.00    |        | 36.70      |          | 1.70           
|PKY02-03 | 36.50    |        | 39.30      |          | 2.80           
|         | 50.95    |        | 52.30      |          | 1.35           
|         | 62.20    |        | 64.40      |          | 2.20           
|PKY02-04 | 37.90    |        | 39.80      |          | 1.90           
|         | 73.55    |        | 77.40      |          | 3.85           
|PKY02-05 | 15.30    |        | 16.40      |          | 1.10           
|         | 18.30    |        | 19.50      |          | 1.20           
|PKY02-06 | 12.00    |        | 13.00      |          | 1.00           
|         | 67.20    |        | 70.70      |          | 3.50           
|PKY02-07 | 128.80   |        | 130.20     |          | 1.40           
|         | 152.60   |        | 155.00     |          | 2.40           
|PKY02-08 | 107.10   |        | 111.40     |          | 4.30           
|PKY02-09 | 64.95    |        | 66.80      |          | 1.85           
|         | 117.10   |        | 118.70     |          | 1.60           
|PKY02-10 | 25.40    |        | 26.50      |          | 1.10           
|PKY02-11 | 37.00    |        | 37.50      |          | 0.50           
|         | 101.30   |        | 104.90     |          | 3.60           
|PKY02-12 | 87.50    |        | 88.20      |          | 0.70           
|PKY02-14 | 179.60   |        | 182.00     |          | 2.40           
|         | 188.90   |        | 191.75     |          | 2.85           
|PKY02-15 | 239.80   |        | 241.20     |          | 1.40           
|         | 246.90   |        | 248.50     |          | 1.60           
|PKY02-16 | 202.15   |        | 204.10     |          | 1.95           
|         | 227.70   |        | 229.45     |          | 1.75           
|PKY02-17 | 191.10   |        | 191.60     |          | 0.50           
|         | 257.10   |        | 257.80     |          | 0.70           
|PKY02-18 | 333.55   |        | 335.20     |          | 1.65           
|         | 338.70   |        | 340.70     |          | 2.00           

|The mineralized intervals coincide with a SSE
trending, steeply dipping (75 degrees SW) shear  structure. This shear system appears to
diverge from the arenite contact near  the
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 45 | 
| | -- | 



---





|closure of the Porky Lake synform. The limited
on-ice winter drill season  did not permit sufficient time to evaluate the mineralized
systems  continuity to the southeast. This, as well as the structures
projection to  the northwest will be the focus of the Companys next drill program.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Seabee/Currie Rose Future Work Programs
|---------------------------------------



|Mining and development during 2002 will
come predominately from the Currie Rose property on the 2d zone above the 60
meter level and the Seabee 2b zone below the 390 meter level. Seabee will
continue to operate under a three year mine plan which will focus on the 2b
zones at depth and laterally to the west of the Seabee boundary.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Mineralization is known to extend below
the current lowest working levels at both Seabee and Currie Rose in addition to
known veins not yet mined. These areas have not been tested sufficiently to be
able to report any Proven or Probable Reserves, and the Company plans to
continue to explore and define these areas as they are considered highly
prospective for additional reserves. Additional drill stations have been
established and an underground drilling program will continue to test the areas
beneath the current workings. In particular, recent drilling on the 2b structure
has demonstrated the continuation of this major zone beneath the current mine
workings.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|In the second half of 2001, the Company
began development of the 425 to 800 meter levels of the mine, with positive
results. Claude expects to continue development of this area and access this ore
in the fourth quarter of 2002. The Company has also applied for the necessary
permits to construct an additional tailings containment facility which is
expected to enter service in late 2002. The current tailings pond is expected to
reach capacity by November 2002, and the Company anticipates depositing mine
tailings in the new facility beginning in September 2002. The new tailings
facility will have no effect on the current milling rate.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Company has begun to explore areas  to the
west and north of the mine and will continue to test known mineralized  structures in the
near vicinity of the mine. For 2002, Claude has committed to a  $1.3 million flow-through
funded exploration program that will result in  approximately 14,000 meters of diamond
drilling on targets within trucking  distance of the Seabee mine. Targets to the east of
the mine include a series of  silicified and
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 46 | 
| | -- | 



---





|sulfidized zones coincident with the northern
contact of an  altered quartz monzonite unit.
|-------------------------------------------------------------------------------------------



|In addition to the area around the
Seabee mine, a large portion of the Seabee property remains unexplored and the
Company intends to conduct exploration on these portions at an undetermined
future date.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Madsen Properties
|-----------------



|The Madsen Property consists of six
contiguous blocks of approximately 10,000 acres (4,047 hectares) located in the
Red Lake Mining District of northwestern Ontario. The properties are the Buffalo
property, the Starratt-Olsen property, the Aiken-Russett property, the Redaurum
property, the Hagar Option property and the Madsen Property are collectively
known as the Madsen Properties. Included on the southwestern part of
the Madsen Properties is the Madsen mine, a currently closed gold mine. Claude
acquired the properties through its acquisition of Madsen Gold Corp. in 1998. In
December 2000, Claude optioned the properties to Placer Dome who has the right
to earn up to a 55% interest in 4 of the Madsen Properties and 55% of
Claudes 20% interest in the Redaurum Property in exchange for exploration
expenditures and a bankable feasibility study. The Buffalo Property is not
included in the Placer Dome option agreement.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Company considers the Madsen
Properties to be an advanced exploration stage project. Although the Madsen mine
is a former gold producer, the Company has not to date conducted enough
exploration or prepared a feasibility study to determine if the property
contains any economic ore reserves. Therefore, the current operations on the
properties consist of an exploratory search for mineable deposits of ore.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Location and Access
|-------------------



|The properties are located in the Red
Lake Mining District of northwestern Ontario approximately ten kilometers
southwest of the town of Red Lake. Access to the property is via Ontario Highway
618 to a number of both paved and gravel roads. An all-weather road from Highway
618 leads directly to the headframe of the Madsen Mine on the property.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 47 | 
| | -- | 



---





|MADSEN PROPERTY
|---------------





|MADSEN PROPERTIES
|-----------------







| | 48 | 
| | -- | 



---





|How Acquired
|------------



|Claude acquired the Madsen Mine and the
other properties comprising the Madsen Properties through the takeover of Madsen
Gold Corporation, a publicly traded company, in 1998. The Companys
ownership of each property is listed in the table below:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Property       | Claudes Ownership Percentage                                                                                                                                                                                                                                                                              
| | -------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |                |                                                                                                                                                                                                                                                                                                            
| | Madsen mine    | 100%, subject to Placer Domes right to earn
      a 55% interest under the option agreement.                                                                                                                                                                                                              
| |                |                                                                                                                                                                                                                                                                                                            
| | Starratt-Olsen | 100%, subject to Placer Domes right to earn
      a 55% interest under the option agreement.                                                                                                                                                                                                              
| |                |                                                                                                                                                                                                                                                                                                            
| | Aiken-Russett  | 100%, subject to Placer Domes right to earn
      a 55% interest under the option agreement.The property is also subject to
      a 2% net smelter return royalty, to a maximum of $2.0 million, held by previous
      property holders United Reef Limited and Canhorn Mining Corporation.              
| |                |                                                                                                                                                                                                                                                                                                            
| | Hagar Option   | 100%, subject to Placer Domes right to earn
      a 55% interest under the option agreement.                                                                                                                                                                                                              
| |                |                                                                                                                                                                                                                                                                                                            
| | Redaurum       | 20%, subject to Placer Domes right to earn
      55% of Claudes 20% under the option agreement. The property is operated
      by Sabina Resources, an arms-length public company which holds the remaining
      80% interest. The property is subject to a 0.4% NSR in favor of Redaurum
      Limited.
| |                |                                                                                                                                                                                                                                                                                                            
| | Buffalo        | 100%, subject to a 12 1/2% net proceeds production
      royalty held by a previous property holder.                                                                                                                                                                                                       

|Regional and Property Geology
|-----------------------------



|The Red Lake District is situated at
the western end of the Archean Uchi Subprovince which comprises a series of
metasedimentary and metavolcanic rocks essentially surrounded by granitic and
gneissose rocks. Several volcanic cycles have been distinguished in the area,
evolving from ultramafic, through mafic and intermediate phases to a felsic
cycle with abundant clastic and chemical metasediments. The rocks trend
northeast and are affected by regional and local scale folding accompanied by
restricted zones of intense shearing.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Madsen mine, when operational,  worked a
series of stacked, en echelon ore lenses consisting of gold-bearing
|----------------------------------------------------------------------------------------------------------------



| | 49 | 
| | -- | 



---





|pyritic shoots with subordinate pyrrhotite and
arsenopyrite. The mineralization  is hosted within two parallel micaceous units termed
the Austin and McVeigh  tuffs. These tuffs are interpreted to be
an  alteration/deformation corridor within basalts, with pillowed through  volcaniclastic
facies. The alteration corridor occurs at the contact of the  underlying Balmer
assemblage with the much younger Confederation assemblage. The  host rocks dip to the
southeast. The McVeigh horizon lies approximately 90  meters to the north of the Austin
tuff. The latter was the most  prolific producer in the past. Workings
extended to a depth of 1,275 meters and  the mineralized zone has been traced for 2,308
meters along strike.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The McVeigh tuff contains
variably altered, auriferous pyrite-bearing lenses that occur within the Flat
Lake-Howey Bay deformation zone hosted by massive and pillowed basalts overlain
by a thin mafic to ultramafic sill, highly altered mafic volcanic and
volcaniclastic rocks (the Austin tuff) and a quartz feldspar
porphyry that marks the base of the Confederation assemblage. The mineralization
is semi-conformable to stratigraphy and dips at a slightly steeper angle than
the host formations.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|High-grade gold pods were also
historically worked at depth in a zone of highly altered ultramafic rocks, in
the footwall of the main mine workings. Some of this high-grade mineralization
(No. 8 zone) occurs in blue quartz veins near the contact of an altered basalt
with an ultramafic unit. This mineralized contact is located stratigraphically
below the main sulfide replacement mineralized zones on the north side of the
shaft, approximately 600 meters in the footwall.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|History and Previous Work
|-------------------------



|The Madsen property was originally
owned by Madsen Red Lake Gold Mines Ltd. (Madsen Red Lake). Madsen
Red Lake commenced production from the mine in 1938 at 272 tonnes per day and
increased production to 726 tonnes per day in 1949. From 1966 to 1974,
production gradually decreased as the last 5 years of Madsen Red Lakes
ownership averaged production of 363 tonnes per day at a grade of 8.38 grams per
tonne. Gold production fell from 44,497 ounces in 1971 to 29,163 ounces in 1973.
Total production by Madsen Red Lake from 1938 to 1974 totaled 7.25 million tones
at an average grade of 9.93 grams per tonne, or over 2.6 million ounces of gold.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|In 1974, the mine was acquired by
Bulora Corporation Ltd.
|---------------------------------------------------------



| | 50 | 
| | -- | 



---





|(Bulora). Bulora continued
production until June 1976 when the mine was closed due to a lack of new
development and millfeed. The operation was petitioned into bankruptcy and was
purchased from Buloras trustee by Madsen-Rowland Mines Ltd.
(Madsen-Rowland). Noranda Exploration Limited (Noranda)
optioned the property from Madsen-Rowland. Noranda re-estimated the now flooded
mines reserves and conducted a limited surface drill program before
allowing their option to expire.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|In 1988, Madsen Gold Corp. acquired the Madsen
property from Madsen-Rowland.  Madsen acquired the adjacent Buffalo property in the prior
year. Subsequent to  these acquisitions, Madsen acquired interests in the Madsen
Properties referred  to above.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Madsen initiated a nine hole surface
drill program totaling approximately 1,200 meters to test identified lenses of
gold mineralization above the 2nd level in the 2-30 area near the 2-30 raise. A
second surface drill program totaling 1,310 meters was carried out in 1990. That
program discovered further gold mineralization in the McVeigh zone that the
previous operators had largely ignored.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|In January 1993, Madsen engaged Watts,
Griffis and McOuat, consulting geologists and engineers (WGM) to
check the ore reserves at the Madsen mine. A subsequent review was carried out
in December 1996 by Micon International Inc. (Micon).
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Madsen reopened the mine and carried
out limited mining operations before placing the mine on a care and maintenance
basis in November 1997. Before the suspension of mining operations, Madsen
processed 46,000 tonnes of ore at an average grade of 3.63 grams per tonne. The
overall mill grade was substantially below Madsens expectations.
Production came from stoping and development on various ore lenses, including
12,800 tonnes grading 3.95 grams per tonne from the Austin Tuff. The Austin Tuff
material was of a lower grade than predicted due to excessive internal dilution
and geological problems. Highly diluted development muck from the McVeigh Tuff
was included in the total production figures that contributed to the lower
overall grade. Study of development face assays demonstrated that continuous,
high grade lenses actually occur as predicted from detailed drilling; however,
the development muck passed to the mill included 50% or more dilution.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Claude resumed exploration at the mine
following its acquisition of Madsen in 1998. Claude conducted surface and  underground
exploration drilling in order to verify extensions of known gold
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 51 | 
| | -- | 



---





|zones which remained open at depth and along
strike as well as to identify new  sources of higher grade ore. Claude also conducted a
small exploratory drill  program at the Buffalo property. The Madsen mine was dewatered
and shaft  refurbishment was completed through the 12th level. Air, water and electrical
services were installed to the seventh level and mining in the old workings was
restarted in June of 1998. The mill was started in July of 1998, but low gold  prices and
small, marginal grade stopes did not provide economic feedstock at  500 tonnes per day
and the Madsen mine was not brought back into commercial  production. The Madsen mine
processed 209,357 tonnes of ore at a mill feed grade  of 4.15 grams per tonne from July
of 1998 to September of 1999 to produce 25,208  ounces of gold. Mining and mill
operations were suspended on October 31, 1999 to  enable Claude to undertake further
exploration programs in an attempt to define  economically mineable reserves at the
Madsen mine.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|In order to provide additional mill
feed, Claude had commenced a surface exploration program on a largely untested
section of the parallel McVeigh structure and based on encouraging drill
results, established a portal and ramp to access the McVeigh mineralized system
in October of 1998. While Claude was successful in discovering and developing
mineralized shoots in the upper two levels of the McVeigh zone, it was not
enough to provide economic feedstock for the mill at that time.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Claude retained A.C.A. Howe in early
2000 to undertake a review of the propertys mineral estimates. Working
with mine personnel, A.C.A. Howe completed a mineral reserve/resource review for
the Madsen mine. However, in the absence of additional exploration and data, the
mine estimates are not considered to be reserves and will require additional
exploration work in order to determine the economic potential of the mine.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|After optioning the properties from
Claude, Placer Dome initiated an exploration program at the mine in 2001. They
drilled 8 holes totaling 8,568 meters to establish the mafic-ultramafic
stratigraphy north of the Madsen mine and to test a segment of the up-plunge
projection of the high grade No. 8 Zone as hosted by the mafic-ultramafic rock
suite. The 2001 program encountered predictable stratigraphy, strong alteration
and four zones containing elevated gold values.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 52 | 
| | -- | 



---





|Mine Equipment Details
|----------------------



|Madsen purchased the Dona Lake mill
including the carbon-in-pulp circuit and semi-autonomous grinding circuit from
Placer Dome in 1994, and in 1996 moved the equipment and erected the mill on a
new site situated on the Madsen property.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The mill process consists of a single
stage crushing circuit; a two stage grinding circuit, which is then followed by
cyanide leaching. The leached gold is collected in a carbon-in-pulp circuit
which is subsequently stripped using mild caustic and collected on stainless
steel mesh cathodes by electrowinning. The product from electrowinning is
refined into dore bars in an induction furnace. Ontario Hydro supplies power via
overhead lines at 44KV to a step-down transformer on the Madsen property.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Placer Dome Agreement
|---------------------



|Claude and Placer Dome signed an option
agreement on the Madsen properties dated December 15, 2000. The option allows
Placer to earn a 55% working interest in the Madsen Property, Starratt Olsen
property, the Aiken-Russet property, the Hager Option and Claudes 20%
interest in the Redaurum property by spending $8.2 million on exploration and
delivering a bankable feasibility study prior to the fifth anniversary of the
option agreement. Placer may abandon the option at any time after spending $1.2
million. Upon Placer fulfilling its obligations in respect of the option phase,
Placer and Claude will be deemed to have formed a joint venture with interests
of 55% and 45%, respectively. At Claudes election, Placer may earn an
additional 5% of the project by funding Claudes share of infrastructure
costs associated with any mine development on the property. Under the agreement
Claudes interests can not be reduced below 40%. The agreement expires on
December 15, 2005. The Company does not incur any costs in maintaining the
agreement.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Planned Exploration
|-------------------



|Future work on the property will be
designed to test for additional mineralization on the property. With a work
commitment of approximately $1.2 million under the option agreement, Placer Dome
has outlined a 10,000-meter drill program designed to test five anomalous areas
to the north-northwest of the minesite where prior work has identified high
priority drill targets. Placer Dome has confirmed a May 2002 starting date for
the above program.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 53 | 
| | -- | 



---





|Amisk-Laural Property
|---------------------



|The Amisk-Laural property, totaling
13,800 hectares, is a gold exploration property located in the province of
Saskatchewan 20 kilometers southwest of Flin Flon, Manitoba, Canada. The
property consists of 87 mineral dispositions in the Amisk Lake area. Through an
option agreement with property owners Husky Oil and Cameco Corporation, Claude
has earned a 35% participatory interest in the property and can earn up to a 70%
interest in the property. There are no underlying royalties on the property.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The property is at the exploration
stage and is currently without economic ore reserves. Therefore, the current
operations on the properties consist of an exploratory search for mineable
deposits of ore.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Location and Access
|-------------------



|The property lies within Saskatchewan
near the border with Manitoba. The nearest town is Flin Flon, Manitoba, which is
approximately 20 kilometers to the northeast. Access is via bush plane from La
Ronge or by road from La Ronge or Flin Flon through a series of paved and gravel
roads.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|AMISK/TARTAN
LOCATION
|---------------------





| | 54 | 
| | -- | 



---





|How Acquired
|------------



|Husky Oil (Husky) and a
predecessor company of Cameco Corporation (Cameco) entered into a
joint venture agreement effective November 1, 1987 whereby a joint venture (the
Amisk Joint Venture) was established to prospect for and locate
minerals within the Amisk-Laural property. Each of Husky and Cameco had a 50%
participating interest in the Amisk Joint Venture.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|In October of 1995, Claude entered into
an option agreement (the Amisk Lake Option Agreement) with Husky and
Cameco, whereby it may earn and acquire a 35% participating interest in the
Amisk Joint Venture by spending an aggregate of $2.5 million on the property by
October, 1999 and an additional 35% participating interest by spending a further
$14.0 million by October, 2005, or by bringing the property into commercial
production within 3 months after October, 2005. At any time after Claude has
earned its initial 35% participating interest, it may present a feasibility
study to Cameco and Husky that will become an Approved Development
Program upon its approval by Cameco and Husky. Upon such approval, each of
Cameco and Husky must elect to participate in the project and repurchase a 5%
interest in the property at a predetermined price of $2,357,500 or sell its 15%
interest to Claude for $800,000. If Claude does not ultimately earn an
additional 35% participating interest, then any election made by Cameco or Husky
to participate or to participate and repurchase a 5% interest may be revoked
retroactively. Claude also issued 62,500 Common Shares to each of Husky and
Cameco pursuant to the Amisk Lake Option Agreement. For fiscal years 2000 and
2001, Claude had applied for and been granted extensions to fulfill its minimum
annual work commitments.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|To date, Claude has spent approximately
$3.4 million on this property and thereby is qualified, although has not yet
elected, to receive a 35% participating interest under the Amisk Lake Option
Agreement. Further expenditures on this project are contingent upon successful
renegotiation of the aforementioned option agreement with Cameco and Husky.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Regional and Property Geology
|-----------------------------



|The area lies within the Laural Lake
Rhyolite Complex within the Flin Flon-Snow Lake Greenstone Belt. The known
mineralization on the property is confined to the complex where deformation has
influenced its present distribution and orientation.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 55 | 
| | -- | 



---





|Precious metal mineralization is part
of a synergistic hydrothermal event. The observed vein mineralogy consists of
pyrite and quartz, along with copper, lead, zinc, and antimony sulphides, small
quantities of bismuth and antimony tellurides with quartz and carbonate
minerals. Sericite-muscovite alteration occurs in the wallrock, forming an
envelope about the sulphide dominant mineralization. Quartz veins on the
property have been observed to be deformed, boudinaged and folded which is
consistent with the overall deformation style.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Previous Exploration History
|----------------------------



|Free gold was discovered in quartz
veins on the northwest shore of Amisk Lake in 1913. Since then, many claims have
been staked at different times covering various parts of the area. Exploration
activity in the area remained somewhat sporadic and geophysically-oriented for
base metals until Saskatchewan Mining Development Corporation (a predecessor of
Cameco) began assembling a land package through staking and options in the late
1970s. Cameco continued with geophysical and geochemical programs which resulted
in the discovery of gold on the Laural Lake property and on a number of other
significant gold showings in the area prior to the programs being suspended in
1989.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|In the first three years of its option,
Claude completed four phases of diamond drilling totaling 18,000 meters in 57
holes as well as geological mapping during the summers of 1997 through 1999. In
2000, Claude conducted mapping and prospecting of those claims to fulfill
assessment obligations. This field program resulted in the discovery of a
gold-bearing shear system on Lookout Island that requires follow-up.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Planned Exploration
|-------------------



|In 2001, work programs on the
Amisk-Laural property focused on meeting assessment requirements as part of the
option agreement obligations. For 2002, prospecting and geological mapping on
Lookout Island will further evaluate the shear-hosted gold-bearing structure
discovered in 2000.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Tartan Lake Property
|--------------------



|Tartan Lake is a 6,675 acre property  located in
northwestern Manitoba about 12 kilometers northeast of Flin Flon. The  property consists
of 20 claims and three quarry leases and contains the Tartan  Lake mine, a former gold
producer that
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 56 | 
| | -- | 



---





|produced 48,000 ounces of gold before
production was suspended in 1989.
|-----------------------------------------------------------------------



|Although the property is a former gold
producer, Claude has not conducted a sufficient amount of exploration at the
property to determine if there remains an economic body of ore. Therefore, the
property is considered to be at the exploration stage and without mineable gold
reserves. Current work at the property is limited to the search for an economic
body of ore.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|How Acquired
|------------



|Claude acquired the property, mill and
equipment at Tartan Lake from Vista Gold Corp, an arms-length public company, in
exchange for 999,444 common shares of stock. The acquisition included a 440
tonne per day mill, rolling stock, mining equipment and related parts all
related mine operating infrastructure, a permitted tailings pond and 6,675 acres
of mineral and land leases in the area. Claude owns 100% of the property and
there are no underlying royalties.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Location and Access
|-------------------



|Access to the property is via road from Flin
Flon, approximately 12 kilometers  southwest of the property.
|----------------------------------------------------------------------------------------------------------



|TARTAN LAKE MINE
LOCATION
|-------------------------





| | 57 | 
| | -- | 



---





|Regional and Property Geology
|-----------------------------



|The Tartan Lake deposit is a
mesothermal lode gold deposit of Aphebian age. The region is underlain by the
Tartan Lake Gabbroic Complex. The mineralization on the property occurs within
quartz-tourmaline veins hosted by a gabbroic complex in contact with
intermediate to mafic volcanic rocks of the Amisk group. The mineralizing system
is dominated by early quartz-tourmaline veins that have been reactivated by a
subsequent shearing event with attendant offset and quartz flooding.
Mineralization in these zones is associated with shear zones transecting the
Tartan Lake Gabbroic Complex and all have some outcrop exposure. Gold appears to
be focused near the intersection of crosscutting vein sets.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Exploration History
|-------------------



|Gold was first discovered in the Tartan
Lake area in 1931. Between 1931 and 1947, previous operators completed several
trenches and drill holes on what are now referred to as the South, West
Baseline, East Baseline and Ruby Lake zones/showings. The Main Zone, which is
the largest deposit discovered on the property to date, was discovered by
Granges Inc. in 1984 by drilling a VLF conductor.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The deposit was brought into production
by Granges in 1987. A decline was driven to the 315 meter level between the Main
Zone and the South Zone, providing access to both. A drift was started to access
the Southeast Zone but was stopped 75 meters from the zone due to the suspension
of mining. Ore was mined using undercut-and-fill and cut-and-fill methods, and
hauled to surface by trucks and stockpiled for milling with equipment on site.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The mine produced 48,000 ounces of gold
during its 2.5 years of operation. All underground workings such as ventilation,
electrical and pumping systems were removed and the workings were allowed to
flood in 1993, but sporadic exploration continued from surface in an attempt to
define additional mineable reserves. The Southeast Zone was discovered under
Tartan Lake and, in 1995, drill testing discovered the West Zone.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 58 | 
| | -- | 



---





|Planned Exploration Work
|------------------------



|In July of 1998, an exploration crew
employed by Claude visited the Tartan Lake minesite and remapped the host
structures observed on surface. This program focused on the structural setting
and style of mineralization. As market conditions allow and exploration
financing becomes available, Claude intends to carry out a comprehensive
hydraulic stripping and mapping program of known veins on the margins of the
known mineralized system in order to define targets for subsequent diamond
drilling.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The property also contains a mill and
tailings pond. Although the mill and equipment is currently mothballed, the
tailings pond is fully permitted. Since the property is located in close
proximity to Claudes Amisk Lake option properties, the present mill could
be refurbished and used to process ore transported from Amisk Lake or other
properties nearby.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Other Mineral Properties
|------------------------



|The Company currently holds interests
in several other exploration properties located in Saskatchewan and Ontario. The
majority of these properties are in close proximity to the Companys core
properties around the Seabee/Amisk properties. The Company considers these
properties to be secondary to those described above and has planned little to no
expenditures on these properties in the foreseeable future. None of these
properties contain an economic body of ore. As the properties remain in good
standing, management intends to retain their interest and will re-evaluate their
exploration plans for them as market conditions warrant and as funds become
available.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|A brief description of the most recent
work conducted on the non-core properties is given below:
|------------------------------------------------------------------------------------------------



|Amisk-Pamon Property
|--------------------



|Amisk-Pamon is a 4,200 acre (1,688
hectares) gold exploration property located in the province of Saskatchewan 20
kilometers southwest of Flin Flon, Manitoba. Claude holds a 100% interest in the
property and there are no underlying royalties. Access to the property is
primarily via boat from the settlement of Denare Beach, Saskatchewan.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Companys most recent  exploration work
at Amisk-Pamon was in 1998. Crews re-established a grid over  the property and
|--------------------------------------------------------------------------------------------------------------------------



| | 59 | 
| | -- | 



---





|conducted magnetic and electromagnetic surveys
on the grid.  Follow-up diamond drilling identified strongly carbonatized alteration with
minor quartz veining. No significant gold values were returned. At this time,  the
Company has no exploration planned for the property.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Santoy Lake Property
|--------------------



|Santoy Lake is a 11,400 acre (4,566
hectares) gold exploration property located in Saskatchewan 133 kilometers
north-northeast of La Ronge, Saskatchewan and approximately 8 kilometers
northeast of the Companys operating Seabee mine. Claude holds a 100%
interest in the property and there are no underlying royalties. Access to the
property is via air from La Ronge or via the Companys annual winter ice
road off of Saskatchewan Highway 102.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Companys most recent
exploration work at Santoy Lake was conducted in 1998. Work crews conducted
basic prospecting and mapping and discovered several new veins. Future
exploration work will include geochemical sampling and testing of the vein
structures identified on the property and may include diamond drilling. The
Company has tentatively scheduled a limited amount of work on the property for
later in 2002, as finances and market conditions permit.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|In addition to the Amisk-Pamon and
Santoy Lake exploration properties discussed above, the Company also holds
interests in various gold, copper and diamond exploration properties totaling in
excess of 10,000 hectares. Claudes interest in these properties ranges
from 30%-100%. The Company has expended no funds on exploring these properties
in the last 3 fiscal years and has no work programs planned for any of these
other properties in the current year.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Oil and Gas Properties
|----------------------



|Claude produces crude oil, natural gas
and natural gas liquids (NGLs) from properties situated in Alberta
and Saskatchewan. Alberta properties represent 92% of Claudes oil and NGLs
reserves and 90% of total production. Saskatchewan properties represent 8% of
Claudes oil and NGLs reserves, and 10% of total production. Alberta
properties represent 100% of Claudes natural gas reserves and production.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 60 | 
| | -- | 



---





|OIL AND GAS
|-----------





|Annual  Economic  Evaluation  Reports of
Claudes  oil and gas  interests  in Alberta and  Saskatchewan  have been  prepared by
R.K. Agrawal, P. Eng. of NRG Engineering Ltd., Calgary,  Alberta.  The most recent
Economic Evaluations  are effective January 1, 2002.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Production
|----------



|The following Table lists Claudes total oil
(including NGLs) and gas  production for the last 3 years:
|--------------------------------------------------------------------------------------------------------

|Year | Average Oil 
      Production 
      (Barrels Per Day) | Total Oil 
      Production 
      (Barrels) | Average Gas 
      Production 
      (MMCF per Day) | Total Gas 
      Production 
      (MMCF)
|---- | ------------------------------------------------------ | -------------------------------------------- | --------------------------------------------------- | -----------------------------------------
|    
|1999 | 299                                                    | 109,300                                      | 3.20                                                | 1,166                                    
|2000 | 275                                                    | 100,300                                      | 2.75                                                | 1,005                                    
|2001 | 240                                                    | 87,500                                       | 2.61                                                | 951                                      

|The decrease of oil and gas production
volumes has been due to normal production decline rates on existing wells.
|-----------------------------------------------------------------------------------------------------------------



| | 61 | 
| | -- | 



---





|Reserve Estimates
|-----------------



|The following Table lists
Claudes proven oil and gas reserves as of January 1, 2002. All figures are
based upon Constant Price Economics.
|-------------------------------------------------------------------------------------------------------------------------------------------

|             |              | Gross       | Reserves  | Working     | Interests
|------------ | ------------ | ----------- | --------- | ----------- | ---------
|            
|Province     | Area Unit    | Oil #(MSTB) | Gas(MMcf) | Oil #(MSTB) | Gas(MMcf)
|Alberta      |              |             |           |             |          
|             | Edson        | 1,401       |           | 94,865      |          
|             | Nipisi       | 2,660       |           | 1,300       |          
|             | Zama         | 34          |           | 0           |          
|Saskatchewan |              |             |           |             |          
|             | Gainsborough | 38          |           | 0           |          
|             |              |            
|Totals       |              | 4,133       |           | 96,165      |          

|#   Oil Reserves, including natural gas liquids,
      are given in Thousands of Stock Tank Barrels (MSTB). Gas Reserves are given
      in Millions of Cubic Feet (MMcf). All reserves are from Proved Producing
      reservoirs.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Property Descriptions
|---------------------



|The following are descriptions of the
most significant oil and gas properties in which Claude has an interest.
|--------------------------------------------------------------------------------------------------------------



|Edson, Alberta
|--------------



|The Company holds a 7.8921168 percent interest
in the Edson Gas Unit No. 1 and a 7.1808666 percent interest in the Edson Gas
Plant. The unit covers about 5 townships 125 kilometers northwest of Calgary,
Alberta.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Current production comes from the
Elkton and Shunda formations at a depth of 10,000 feet. Production commenced in
April, 1963 and contains 62 wells of which 54 wells have produced in recent
months. The Edson Gas Unit No. 1 is operated by Talisman Energy Inc. and the gas
is contracted with TransCanada Gas Services Limited. The Edson Unit reserves
represent nearly 100% of Claudes natural gas reserves and 55% of the
Companys oil and natural gas liquids reserves.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 62 | 
| | -- | 



---





|Nipisi Gilwood Unit No. 1, Alberta
|----------------------------------



|Claude owns a 2.73003% working interest
in the Nipisi Gilwood Unit No. 1 (the Nipisi Unit) located 110
kilometers northwest of Edmonton, Alberta. The unit is an oil field operated by
Canada Natural Resources Limited.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Nipisi Unit began oil production in
1965 and by 1967 the unit area was developed on about 320 acres well spacing
with 134 wells in the unit area. A waterflood was implemented in January 1969.
An infill drilling program with the goal to reduce the well spacing from 320
acres to 160 acres with a new flood scheme was initiated in 1983. Three of the
four stages of this program were initiated by 1988 but there are no current
plans to implement Stage IV. In 1997, the operator initiated a new project to
improve field efficiencies by drilling new infill wells and converting certain
producing wells to injection wells.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Production for the year ending December
31, 2001 averaged approximately 140 barrels of crude oil per day (including
NGLs). Oil is produced from the Gilwood sandstone at an approximate depth of
5600 feet. Production is currently achieved by primary, secondary and tertiary
methods.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Nipisi Unit represents approximately 34% of
Claudes total oil and natural  gas liquids reserves.
|-----------------------------------------------------------------------------------------------------



|Viking Kinsella/Birch Lake, Alberta
|-----------------------------------



|The Company owns a 6.2439 percent
interest in the 7-31-49-11 well and a 12.4875 percent interest in the 7-10-50-11
W4M/2 well located in the Birch Lake area of Alberta. The Company also owns a
3.5949 percent interest in the Birch Lake Gas Plant operated by Signalta
Resources Limited. Both wells are near their economic limit.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Zama, Alberta
|-------------



|The Company owns various interests in
the 8-25-116-5 W6M well (two zones), and a 3.75 percent working interest in the
shut-in Sulphur Point gas well at 5-13-119-4 W6M. The well was producing from
the Keg River formation from 1967 to 1997 when it was shut in due to high water
production. In 2000, it was dual completed as a Sulpher Point/Keg River well.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 63 | 
| | -- | 



---





|Gainsborough, Saskatchewan
|--------------------------



|Claude has a 75% interest in six
producing vertical oil wells in the Gainsborough area of southeastern
Saskatchewan (the Gainsborough Property) and 2 former producing
wells that have been converted to injector wells. At a 40-acre drill-spacing,
eight additional vertical infill wells could be drilled on this property. Oil
production comes from two zones in the Frobisher/Alida formation at a depth of
3500 feet.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|During 1996, Claude together with the
other partners in the Gainsborough Property, entered into a Farm-in Letter
Agreement with Provident Energy Ltd. (Provident) whereby Provident
was granted the right to earn a 55% interest in the Gainsborough Property,
excluding the seven vertical wells then producing. In order to earn its
interest, Provident was required to complete a horizontal test well on the
Gainsborough Property. Provident has fulfilled its obligations and has thereby
earned a 55% interest in the Gainsborough Property, excluding the seven vertical
wells then producing. Subsequently, Provident drilled an additional four
horizontal wells in which Claude owns a 33.75 percent working interest.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Item 5.  Operating and Financial Review and
Prospects
|-----------------------------------------------------



|Critical Accounting Policies
|----------------------------



|The Company prepares its consolidated
financial statements in accordance with Canadian Generally Accepted Accounting
Principles. In doing so, management is required to make various estimates and
judgments in determining the reported amounts of assets and liabilities and
revenues and expenses for each year presented, and in the disclosure of
commitments and contingencies. Management believes the following critical
accounting policies reflect its more significant estimates and judgments used in
the preparation of the consolidated financial statements.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Company utilizes the shrinkage  stope mining
method to mine its ore body at the Seabee mine. Under this method,  ore used as a working
platform to access and mine further ore, is valued at the  lower of cost and net
realizable value and recorded as Shrinkage Stope Platform  Costs on the balance sheet
(see Note 3 to the December 31, 2001 consolidated  financial statements). This broken ore
is reclassified to inventory once  transported to
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 64 | 
| | -- | 



---





|surface. If actual tonnage and grade of this
broken ore vary  significantly from estimates or should the price of gold decline such
that the  timing of processing of this ore is affected, there could be a material impact
on the profitability of the mining operations.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Depreciation and depletion on mineral
and oil and gas properties is primarily calculated using the unit of production
method. This method allocates the cost of an asset to each period based on
current period production as a portion of estimated recoverable ore and oil and
gas reserves. Although these reserves are classified as Proven
reserves and the Company expects to recover them under existing economic and
operating conditions, if actual reserves prove to be significantly different
than the estimates, there could be a material impact on the amounts of
depreciation and depletion charged to earnings.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Company offsets proceeds from its
byproduct sales (silver) against the refining costs of its gold bars. During
2001, the Company poured 3,274 ounces of silver (2000  3,267 ounces; 1999
 5,119 ounces) for gross proceeds of CDN$22,145 (2000  $24,009; 1999
 $39,677). Due to the nominal amounts of proceeds received, the sale of
byproducts does not impact our determination of costs to produce.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Significant decommissioning activities
are often not undertaken until substantial completion of the useful lives of
productive assets. Future decommissioning and reclamation costs are estimated
and accrued using the unit of production method so that the estimated future
liability will be fully provided when decommissioning and reclamation activities
are undertaken. Regulatory requirements and alternatives with respect to
decommissioning and reclamation activities are subject to change over time. The
amount of reclamation charged to earnings is also dependent upon estimated
recoverable reserves. A significant change to either the estimated costs or
recoverable reserves may result in a material change in the amount of
reclamation charged to earnings.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|If it is determined that carrying
values of assets cannot be recovered, the unrecoverable amounts are written off
against current earnings. Recoverability is dependent upon assumptions and
judgments regarding future prices, costs of production, sustaining capital
requirements and economically recoverable ore and oil and gas reserves. A
material change in assumptions may significantly impact the potential impairment
of these assets.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 65 | 
| | -- | 



---





|Access to the Seabee mines ore
deposit is not under any time constraints as a result of our mineral lease. The
proven and probable reserve life at Seabee indicates a mine life of 2.5 years
based upon current mill throughput. The existing surface lease as of December 31
2001 expires in 2023. Subsequent to December 31 2001, the Company renegotiated
with the Government of Saskatchewan and entered into a new lease on June 4, 2002
which expires in 2025.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Overview
|--------



|During Fiscal 1997 the Company issued a total of 1,008,127
      common shares: 12,627 of these shares were issued pursuant to the Companys
      Employee Share Purchase Plan; 103,800 were issued pursuant to the exercise
      of employee share purchase options from which the Company realized $107,000;
      741,700 shares were issued pursuant to the exercise of share purchase warrants
      from which the Company realized $1,854,000; and, 150,000 common shares as
      a consequence of a flow-through share agreement entered into in the prior
      year.1 This agreement required the Company to expend
      $487,500 in qualifying Canadian Exploration Expenses prior to December 31,
      1997. The Company used the proceeds from the sale of shares for exploration
      on its mineral properties and general corporate purposes. Under the terms
      of the sale of the Flow-Through shares, the proceeds were used for mineral
      exploration expenses that qualified under the Income Tax Act (Canada) prior
      to December 31, 1998.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|During Fiscal 1998 the Company issued a  total
of 12,594,435 common shares. 67,654 common shares were issued for proceeds  of $88,380
pursuant to the Companys Employee Share Purchase Plan; 251,200  common shares were
issued pursuant to the exercise of employee share purchase  options from which the
Company realized $352,000; 4,449,859 common shares were  issued pursuant to the
acquisition by the Company of a 96% interest in Madsen  Gold Corp. at a deemed value of
$2.00 per share for a total of $8,900,000;  999,444 common shares were issued pursuant to
the acquisition of the Tartan Lake  mine, mill and equipment; 12,378 common shares were
issued pursuant to the  Company acquiring rights on mineral properties; and 6,813,900
common shares were  issued pursuant to a public offering at an issue price of $2.00 per
share.  Approximately $764,000 of the proceeds of the
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|1 |  | See
Key Information  Risk Factors for complete flow through share
discussion.  While the cash proceeds are combined  with general corporate funds, as
disclosed in Note 17 (i) of the 2001 consolidated financial statements, US GAAP requires
cash amounts restricted against future use as a result of commitments related to flow
through share agreements to be  separately classified in the financial statements.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 66 | 
| | -- | 



---





|offering were used for property  acquisition
costs and the remainder for general corporate purposes and property  exploration.
|------------------------------------------------------------------------------------------------------------------------------



|During Fiscal 1999 the Company issued a total of 7,791,397
      common shares. 103,454 were issued pursuant to the Companys Employee
      Stock Purchase Plan; 364,000 common shares were issued pursuant to the exercise
      of employee share purchase options; 49,852 common shares were issued pursuant
      to the Madsen Gold Corp. acquisition of the remaining 4% interest the Company
      did not already own; 10,000 shares were issued in payment for the Company
      obtaining certain mineral property rights; 1,000,000 flow-through shares1
      were issued at a price of $2.90 for proceeds of $2,900,000; an additional
      909,091 flow-through shares were issued at a price of $1.65 for proceeds
      of $1,500,000; 5,350,000 common shares were issued pursuant to a public
      offering; and, 5,000 common shares were issued pursuant to employee awards
      at an attributed value of $7,000. The proceeds from the sale of the Flow-Through
      shares were used for mineral exploration that qualified under the Income
      Tax Act (Canada). The proceeds from the other common share sales was used
      for general corporate purposes.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|During Fiscal 2000 the Company issued a
total of 1,874,153 common shares. 245,567 of these shares were issued pursuant
to the Companys Employee Stock Purchase Plan as described elsewhere in
this document; 628,586 were issued as payment for the purchase of a 1.35% NSR
from Metal Royalties Corporation at a deemed price of $1,100,025; and, 1,000,000
common shares were issued pursuant to an option agreement with Placer Dome who
purchased the shares for $0.75 per share.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|During Fiscal 2001 the Company issued a total of 2,828,987
      shares. 328,987 of these shares were issued pursuant to the Companys
      Employee Stock Purchase Plan as described elsewhere in this document and
      2,500,000 flow-through shares2 were issued. The proceeds
      from the flow-through share are to be used for mineral exploration during
      2001 and 2002 for mineral exploration that qualifies under the Income Tax
      Act (Canada).
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|During the year ending December 31,  2002 the
Company issued a total of 6,405,624 shares. 227,934 of these shares  were issued
|------------------------------------------------------------------------------------------------------------------------------

|
|

|2 |  | See Key Information - Risk Factors for complete
      flow through share discussion. While the cash proceeds are combined with
      general corporate funds, as disclosed in Note 17 (i) of the 2001 consolidated
      financial statements, US GAAP requires cash amounts restricted against future
      use as a result of commitments related to flow through share agreements
      to be separately classified in the financial statements.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 67 | 
| | -- | 



---





|pursuant to the Companys Employee Stock Purchase Plan
      as described elsewhere in this document; 90,000 common shares were issued
      pursuant to the exercise of employee share purchase options; 75,000 common
      shares were issued pursuant to the Company acquiring rights on mineral properties;
      and, in April 2002, the Company completed the Private Placement of 5,000,000
      units at a price of $1.00 per unit for gross proceeds of $5,000,000. Each
      unit consists of one common share and one-half of one common share purchase
      warrant. Each whole common share purchase warrant entitles the holder to
      acquire one common share at an exercise price of $1.25 until April 23, 2003.
      The Company intends to use the proceeds for general corporate purposes.
      Concurrent with the offering, the Company issued the underwriters 63,463
      common share purchase warrants in consideration for services provided in
      connection with the offering. The exercise terms of the underwriter warrants
      are the same as the warrants issued with the units in the underwriting(as
      at December 31, 2002, 12,693 of these common share purchase warrants had
      been exercised). The Company also entered into a flow-through share3
      agreement for the issue of 1,000,000 common shares at a price of $1.50 per
      share for proceeds of $1,500,000.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|During the period ended March 31, 2003
the Company has issued a total of 2,764,061 common shares. 159,061 of these
shares were issued pursuant to the Companys Employee Stock Purchase Plan
as described elsewhere in this document; 5,000 common shares were issued
pursuant to the exercise of employee share purchase options; 100,000 common
shares were issued pursuant to common share purchase warrants outstanding; and
in January 2003 the Company completed a private placement offering of 2,500,000
units, each unit consisting of one common share and one half of one common share
purchase warrant at a price of $1.50 per unit, for gross proceeds of $3,750,000.
Each whole purchase warrant will entitle the holder, upon exercise at any time
up to and including January 31, 2004, and upon payment of $1.85, to subscribe
for one common share. The Company intends to use the proceeds to finance its
Seabee gold mineshaft extension project and for general corporate purposes.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|3 |  | The
Company reports its operating costs on a per-ounce basis based on uniform standards
developed by the Gold  Institute.  See Page 38  for  further discussion.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 68 | 
| | -- | 



---





|Results of Operations
|---------------------



|Three Months Ended 3/31/2002 vs. Three Months
Ended 3/31/2001
|-------------------------------------------------------------



|Total revenue generated in the first
three months of 2002 was $5.2 million, down 34% from the $7.9 million recorded
in 2001. Gold revenue declined to $3.8 million from $4.4 million due to lower
production, but was offset slightly by higher realized prices. Gold production
at the Seabee mine fell to 8,300 ounces in 2002 from 11,100 ounces during the
same period in 2001, but the average realized gold price rose to US$290 per
ounce from US$259 per ounce in the same period in 2001.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Oil and gas revenues decreased 63% from 2000 due
to lower production and lower realized prices. First quarter oil and NGL  production was
20,700 barrels, down 14% from the 24,100 barrels produced in the previous years
period. The average  realized price fell to US$18.26 (CDN$29.12) per barrel from an
average price of US$28.15 (CDN$43.01) per barrel in the  2001 period. Gas production fell
24% from 246 MMCF in 2001 to 187 MMCF in 2002.  The average realized price this quarter
was US$2.19 (CDN$3.49)per MCF compared to the US$6.37 (CDN$9.73) per MCF realized during
the first quarter last year.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Total operating and administrative costs
increased from $4.5 million for the first quarter of 2001 to $4.9 million this period.
Total mine cash costs were $3.9 million for this quarter versus $3.7 million last period.
The mining of smaller stoping blocks contributed to this slight increase. As a result of
the lower gold production during the first quarter, cash operating costs per ounce4
increased from US$217 in 2001 to US$294 this
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|4 |  | The
Company reports its operating costs on a per-ounce basis based on uniform standards
developed by the Gold  Institute.  See Page 38  for  further discussion. A reconciliation
to the cash costs per ounce is provided below:
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Consolidated Total Cash Costs 
        Per Gold Ounce Sold
|----------------------------------------------------------

|                                             
|---------------------------------------------
|Periods ended March 31                       
|                                             
|                                             
|                                             
|Direct mining cost                           
|                                             
|Other                                        
|                                             
|Cash operating costs                         
|                                             
|Royalties                                    
|                                             
|Total cash costs                             
|                                             
|Gold ounces sold                             
|                                             
|Mine operating costs 
        (US $ millions)
|                                             
|(CDN $ millions)                             
|                                             



| | 69 | 
| | -- | 



---





|period. Oil and gas operating costs remained
relatively unchanged period over period.
|-------------------------------------------------------------------------------------



|General and administrative costs increased by
50% from $.4 million in the first quarter of 2001 to $.6 million this  period. This
increase is attributable to the settlement of a prior year property tax assessment at the
Madsen property.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Depreciation and depletion of the Companys
gold assets was $1.3 million for the first three months of 2002, compared to  $1.1
million for the corresponding period of 2001. Due to decreased production, depreciation
and depletion costs per  ounce for the first quarter of 2002 were US$95 versus US$67 in
the 2001 period.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Fiscal 2001 Ended 12/31/2001 vs. Fiscal 2000
Ended 12/31/2000
|-------------------------------------------------------------



|Total  revenue  generated  in 2001 was $28.5
million  down 15% from the $33.5  million  recorded  last year.  Gold revenue  decreased
19% from last year as a result of lower  production,  but was offset by a slight
increase  in  Canadian  dollar  average  realized gold prices.  Oil and gas revenues
decreased by 3% from 2000, a combination of lower  production  offset  by higher realized
petroleum prices.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Seabee mine  contributed  $19.5 million to
revenues,  down from the $24.2  million  recorded in 2000.  Gold  production  decreased
from 58,300  ounces in 2000 to 48,500  ounces this year.  The  average  realized  gold
price in 2001 was US $272  (CDN $422) per ounce, compared with US $279 (CDN $414)
realized in 2000.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Gross oil, natural gas liquids (NGLs) and
gas revenues totaled $9.0 million in 2001 compared to $9.3 million in 2000.  Oil and NGLs
production in 2001 of 87,500 barrels was 13% lower than the 100,300 barrels produced the
previous year.  The average realized price was US $24.67 (CDN $38.21) per barrel versus
an average price per barrel of US $27.70 (CDN  $41.14) last year.  Gas production fell 5%
from 1,005 MMCF in 2000 to 951 MMCF in 2001.  The average realized price was  US $3.67
(CDN $5.68) per MCF compared to the US $3.17 (CDN $4.71) per MCF realized in 2000. Total
Crown Royalties and  Overriding Royalties remained relatively unchanged year over year as
revenues were constant and the percentages used to  calculate these royalties remained
relatively unchanged. The Alberta Royalty Tax Credit increased
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 70 | 
| | -- | 



---





|slightly, largely due to increased eligible
crown royalties paid in 2001 upon which the Tax Credit is based.
|------------------------------------------------------------------------------------------------------------



|Total operating and administration costs decreased 4% from
      the $19.9 million recorded in 2000 to $19.2 million in 2001. Interest and
      other decreased significantly as our gold and foreign currency derivative
      trading account, which gave rise to interest charges, was eliminated during
      the third quarter of 2000. Total mine cash costs dropped from $16.4 million
      in 2000 to $15.8 million in 2001, the result of concerted efforts to lower
      operating costs at the Seabee. These savings were negatively impacted by
      a reduction in broken ore stockpile inventory, reflecting the lower than
      expected ore grades from the D zone at the Seabee mine. When a large reduction
      in grade occurs, as was the case in 2001 with the D zone, all accumulated
      costs related to those inventory ounces stockpiled are immediately expensed
      in the current period. The decreased gold production led to an increase
      in cash operating costs per ounce5, from US $190 per
      ounce in 2000 to US $221 in 2001.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Oil and gas operating costs increased slightly
from the $1.6 million in 2000 to $1.7 million in 2001.
|-----------------------------------------------------------------------------------------------------



|Depreciation  and  depletion  of the  Companys
gold  assets was $5.2  million in 2001,  an  increase of 24% over the $4.2  million
recorded in 2000. This is attributable to the smaller  calculated  reserve base.
Depreciation and depletion costs  per ounce for the year were US$69 compared to US$48 in
2000.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Fiscal 2000 Ended 12/31/2000 vs. Fiscal 1999
Ended 12/31/1999
|-------------------------------------------------------------



|Total revenue  generated in Fiscal 2000, ended
December 31st, was $33.5 million,  an increase of 17% from the $28.7 million  recorded in
the prior year.  Gold revenues  during Fiscal 2000  increased 8% over the prior year as a
result of higher gold  production.  Oil and gas  revenues  for Fiscal  2000  increased
45% as  compared to Fiscal 1999 as oil and gas prices grew  progressively stronger during
2000.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Seabee mine contributed $24.2 million to
revenues during Fiscal 2000, an increase of $1.9 million from the $22.3  million recorded
for Fiscal 1999. Gold production increased from 54,100 ounces in Fiscal 1999 to 58,300
ounces in Fiscal  2000. The average realized gold price in Fiscal 2000 was US $279 (CDN
$414) per ounce, relatively unchanged from the US  $278 (CDN
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|5 |  | The
Company reports its operating costs on a per-ounce basis based on uniform standards
developed by the Gold  Institute.  See Page 38  for  further discussion.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 71 | 
| | -- | 



---





|$413) realized in 1999. Total Crown Royalties
and Overriding  Royalties increased over 1999 concurrent with the large increase in gross
revenues year over year. The Alberta Royalty Tax Credit decreased by 25%, a  result of a
large decrease in the credit rate allowed by Alberta Revenue.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Gross oil, natural gas liquids and gas
revenues totaled $9.3 million in Fiscal 2000 compared to $6.4 million in Fiscal
1999. This increase was a combination of improved realized petroleum prices
offset by an expected decrease in production due to normal decline rates.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Oil and NGLs production in Fiscal 2000
of 100,300 barrels was 8% lower than the 109,300 barrels produced the previous
fiscal year. The average realized price was US $27.70 (CDN $41.14) per barrel
versus an average price per barrel of US $16.15 (CDN $24.00) in Fiscal 1999. Gas
production fell 14% from 1,166 MMCF in Fiscal 1999 to 1,005 MMCF in Fiscal 2000.
The average realized price for Fiscal 2000 was US $3.17 (CDN $4.71) per MCF
compared to US $1.72 (CDN $2.55) per MCF realized in Fiscal 1999.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Total operating and administration
costs increased 5% from the $18.9 million recorded in Fiscal 1999 to $19.9
million in Fiscal 2000. General and Administrative costs increased from $1.6
million in 1999 to $1.7 million this year. The increase was largely a result of
professional and consulting fees incurred during the year. Interest and other
increased significantly to $167,000 from a credit of $183,000, a result of
increased interest charges on our foreign currency position offset by investment
income earned on proceeds from share offerings.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Total mine cash costs were $16.4 million in Fiscal 2000 compared
      to the $15.5 million recorded in Fiscal 1999. This increase in costs was
      largely a function of lower dollar valuations and physical unit decreases
      in the bullion in-circuit and broken ore stockpile inventories. As more
      ounces were being removed or milled from the stockpile than were being added
      or broken, the inventory reduction is greater during these periods and resulted
      in a larger charge to operating earnings. Cash operating costs per ounce6
      at the Seabee mine decreased to US $190 in Fiscal 2000 compared to US $193
      in Fiscal 1999, a result of increased gold production.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|6 |  | The
Company reports its operating costs on a per-ounce basis based on uniform standards
developed by the Gold  Institute.  See Page 38  for  further discussion.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 72 | 
| | -- | 



---





|Oil and gas operating costs decreased
by 16% from $1.9 million in Fiscal 1999 to $1.6 million in Fiscal 2000. This
change was a result of decreases in third party processing costs.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Depreciation and depletion of the
Companys gold assets was $4.2 million in 2000, a decrease of 21% from the
$5.3 million recorded in 1999. This reduction is a combination of a slight
decrease in mill throughput and an increase in Seabee ore reserves. Amortization
and depreciation costs per ounce were US$48 in 2000 compared to US$66 in 1999.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The $51.1 million write-down of mineral
properties recorded in Fiscal 2000 was comprised of the following: $39.0 million
related to the Madsen exploration property; $7.7 million related to exploration
and other non-core assets; $4.4 million related to the Seabee mine. The Company
reviewed the carrying values of these properties and determined that, as a
result of current gold prices and the absence of economically recoverable ore
reserves at the time, their values should be reduced.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Adjustments to the provision for
foreign currency fluctuations and settlement of foreign currency contracts have
been charged to earnings in the amount of ($529,000) versus a gain of $1,304,000
in 1999. These adjustments relate to the mark to market value gains or losses in
the Companys outstanding foreign currency derivative contracts. During the
third quarter of 2000 these positions were eliminated.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Liquidity and Capital Resources
|-------------------------------



|As of the end of the first quarter
ended 3/31/02, the Company had working capital of $6.20 million. On April 23,
2002, the Company completed the private placement of 5,000,000 units at a price
of $1.00 per unit for gross proceeds of $5 million. Management considers the
current level of liquidity and capital resources to be sufficient to meet all
the Companys required obligations in addition to the planned expenditures
for the remainder of the fiscal year.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Company has budgeted $1.3 million for exploration during
      FY 2002. The majority of the budgeted funds will be spent on the Seabee
      property. The Company also plans to fund during 2002 approximately $750,000
      of its estimated $1.2 million requirement for financial assurance at the
      Seabee mine. At March 31, 2003, $767,000 had been funded with Saskatchewan
      Environment.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 73 | 
| | -- | 



---





|First Quarter Fiscal 2002
|-------------------------



|Cash flow provided from operations decreased to ($.7) million
      from ($.3) million. The decline was largely due to lower gold and petroleum
      production as well as lower oil and gas prices partially offset by higher
      realized gold prices.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Investing activities for the quarter
were $2.0 million versus $1.3 million in the prior period. This increase is
primarily a result of increased exploration and development costs incurred at
the Seabee mine.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Financing costs were $.3 million, which
was up only slightly from the $.1 million recorded in the prior years
period.
|----------------------------------------------------------------------------------------------------------------------



|Fiscal 2001 Ended 12/31/2001
|----------------------------



|Cash flow provided from operations
decreased from $9.1 million in 2000 to $4.5 million in 2001. The decline was due
to lower gold production, which was offset to some extent by reductions in
Company operating costs.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Capital expenditures declined 45% in
2001, as $4.8 million was spent on capital additions compared to $8.8 million in
2000. At the Seabee mine, spending focused on underground development and
preparatory work for the Triangle Lake tailings dam expansion. The majority of
spending within the oil and gas division went to injection wells and tie-in at
the Nipisi as well as expansion and upgrade of the Edson gas plant. Capital
expenditures were funded by cash flows provided by operations.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|During the latter half of the year the
Company issued 2.5 million common shares for $1,375,000 pursuant to a
flow-through share agreement. A further 328,987 shares were issued in
conjunction with the Companys employee share purchase plan for
consideration of $176,000.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Short-term investments of $657,000 were
purchased and corresponding debt proceeds, in the form of a demand loan, were  received
as a requirement to secure reclamation assurance at the Madsen  property. As required by
regulatory authorities, the Company has provided  letters of credit of $657,000 as
security for reclamation at the Madsen  property. The above demand loan bears interest at
prime, is repayable in monthly  principal payments of $27,406 plus interest, and matures
on May 15, 2002. The  loan is secured by a general security agreement covering all
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 74 | 
| | -- | 



---





|assets of the  Company, excluding the Companys
Alberta oil and gas assets.
|---------------------------------------------------------------------------



|As at December 31, 2001, Claude had
$8.5 million in working capital, relatively unchanged from the $8.4 million
recorded in 2000. This slight increase was a combination of reduced working
capital from operations offset by share issuance proceeds as well as capital
expenditures continuing to be financed out of operating cash flows.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Company has a $2,500,000 operating
line of credit which bears interest at prime plus 1.5%. These funds are
available for general corporate purposes. At December 31,2001, the unused
portion of the bank line was $2.2 million. The operating line is secured by a
general security agreement excluding assets associated with the Alberta oil and
gas properties.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Fiscal 2000 Ended 12/31/2000
|----------------------------



|Cash flow provided from operations
increased by 78% from $5.1 million in Fiscal 1999 to $9.1 million in Fiscal
2000. This increase in cash flow was a combination of improved gold production
offset by increases in Company operating costs.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Capital expenditures declined by 34% in
Fiscal 2000 as $8.8 million was spent on capital additions compared to $13.3
million in Fiscal 1999. Capital expenditures in Fiscal 2000 focused primarily on
the Seabee mine and the Madsen exploration property. Capital spending at the
Seabee mine totaled $5.0 million for underground development, mill leach circuit
enhancement and work on the Triangle Lake tailings dam expansion. The $3.3
million spent at Madsen was largely focused on shaft rehabilitation and
de-watering. Capital expenditures were financed from proceeds of a 1999 public
offering and cash flows provided by operations.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|During Fiscal 2000, the Company issued
1,000,000 common shares for $750,000 in conjunction with the Madsen option
agreement with Placer Dome Limited. A further 245,567 shares were issued
pursuant to the Companys employee share purchase plan for consideration of
$211,000.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|As at December 31, 2000, the Company
had $9.1 million in working capital, a decrease of $2.0 million from the prior
year. This decrease resulted from capital expenditures being financed out of
operating cash flows.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 75 | 
| | -- | 



---





|Fiscal 1999 Ended 12/31/1999
|----------------------------



|Cash flow provided from operations
totaled $5.1 million in Fiscal 1999 versus $4.4 million in Fiscal 1998. This
increase in cash flow was due to an increase in inventories.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Total capital expenditures amounted to
$13.1 million in Fiscal 1999. The majority of these expenditures, more than $9.6
million, were incurred on exploration, development and refurbishment of
infrastructures at Madsen.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|During the second quarter of Fiscal
1999 the company purchased the 1.35% net smelter royalty on Madsen Gold Corp.
production from Metal Royalties Corp. The total acquisition cost, satisfied by
the issuance of special warrants, was $1.1 million.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|During Fiscal 1999, the Company issued
a total of 8.45 million common shares and special warrants for a total value,
net of issue costs, of $9.0 million.
|---------------------------------------------------------------------------------------------------------------------------------------------------------



|This included the issue of 5,350,000
common shares at a price of $1.50 per share for proceeds of $8.0 million as well
as 630,000 special warrants for the purchase of the Madsen net smelter royalty.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|As at December 31, 1999, the
Companys working capital increased from $10.1 million in Fiscal 1998 to
$11.1 million. In general, both current assets and current liabilities decreased
in Fiscal 1999 as operations at Madsen were suspended during the year.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|US GAAP Reconciliation with Canadian GAAP
|-----------------------------------------



|See Note 17 of the Companys
audited financial statements for the year ended December 31, 2001, for a
narrative explanation of the differences in Canadian and U.S. GAAP accounting
principles.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Variation in Operating Results
|------------------------------



|The Company derives interest income on its bank
deposits, which depend on the  Companys ability to raise funds.
|----------------------------------------------------------------------------------------------------------------



|Management periodically, through the
exploration process, reviews results both internally and externally through  mining
related professionals. Decisions to abandon, reduce or expand exploration  efforts is
based upon many factors including general and specific assessments of  mineral deposits,
the likelihood of increasing or decreasing those deposits,  land costs, estimates of
future mineral
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 76 | 
| | -- | 



---





|prices, potential extraction methods and  costs,
the likelihood of positive or negative changes to the environment,  permitting, taxation,
labor and capital costs. There cannot be a pre-determined  hold period for any property
as geological or economic circumstances render each  property unique.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Companys financial statements
are stated in Canadian Dollars (CDN$) and are prepared in accordance with
Canadian Generally Accepted Accounting Principles (GAAP), the application of
which, in the case of the Company, conforms in all material respects for the
periods presented with United States GAAP except as noted in Note 17 to the 2001
audited financial statements. The value of the Canadian Dollar in relationship
to the US Dollar was 0.63 as of 3/31/02.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Company has financed its activities
not only through cash flows derived from gold mining and oil and gas production
but also through the distribution of equity capital. The timing of such
distributions was dependent on the requirements of the Company and the economic
climate.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Trend Information
|-----------------



|The Company expected the first three quarters of 2002 to
      be at below mine life production levels due to the poor grade being throughput
      from the 2d zone at the Seabee mine. As a result, the Company experienced
      decreases in net earnings as well as cash flows for this period. As expected,
      higher grade ore from the lower levels of the Seabee mine were accessed
      during the third and fourth quarters of 2002 and increases in the average
      gold price realized for the year helped to offset first half decreased production.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|During 2002, pursuant to reclamation
assurance requirements at the Seabee mine, the Company will fund with
Saskatchewan Environment, approximately $767,000 of its approximately $1.2
million financial assurance requirements at the Seabee. As at March 31, 2003,
Claude has funded $767,000 of this financial assurance requirement.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|To offset the expected conditions and
requirements discussed above, on April 23, 2002, Claude completed and closed the
issuance of 5,000,000 units at a price of $1.00 per unit for aggregate gross  proceeds of
$5,000,000. Each unit consists of one common share and one-half of  one common share
purchase warrant. Each whole common share purchase warrant  entitles the holder to
acquire
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 77 | 
| | -- | 



---





|one common share at an exercise price of $1.25
per share for a period of twelve months from the closing date.
|-------------------------------------------------------------------------------------------------------------



|To meet exploration targets the Company
entered into a flow-through share(see Key Information  Risk
Factors for complete flow-through share discussion) agreement in November
2002 for the issue of 1,000,000 common shares at a price of $1.50 per share for
proceeds of $1,500,000.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|To finance the Seabee shaft extension
project in January 2003, the Company completed a private placement offering of
2,500,000 units, each unit consisting of one common share and one half of one
common share purchase warrant, at a price of $1.50 per unit, for gross proceeds
of $3,750,000. Each whole purchase warrant will entitle the holder, upon
exercise, at any time up to and including January 31, 2004, and upon payment of
$1.85, to subscribe for one common share.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Item 6.  Directors, Senior Management and Employees
|---------------------------------------------------



|Table No. 5 lists as of 4/01/02 the
names of the Directors of the Company. The Directors have served in their
respective capacities since their election and/or appointment and will serve
until the next Annual General Meeting or until a successor is duly elected,
unless the office is vacated in accordance with the Articles/By-Laws of the
Company. All Directors are residents and citizens of Canada.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Table No. 5  Directors
|----------------------

|Name                       |  | Age |  | Date First Elected/Appointed
|-------------------------- |  | --- |  | ----------------------------
|                          
|William R. MacNeill        |  | 62  |  | September 1980              
|Arnie E. Hillier
      (1) |  | 62  |  | April 1996                  
|A. Neil McMillan           |  | 50  |  | April 1996                  
|Jon R. MacNeill
      (1)  |  | 42  |  | June 1983                   
|Ronald G. Walker
      (1) |  | 65  |  | February 1984               



|(1)  Member of Audit Committee.
|-------------------------------



|Table No. 6 lists, as of 4/01/02, the names of
the Executive Officers of the  Company. The Executive Officers serve at the pleasure of
the Board of Directors.  All Executive Officers are citizens and residents of Canada.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 78 | 
| | -- | 



---





|Table No. 6  Executive Officers
|-------------------------------

|Name              |     | Position                   |  | Age |  | Date of
      
      Appointment
|----------------- | --- | -------------------------- |  | --- |  | --------------------------------
|                 
|Arnie E. Hillier  | (1) | CEO,CFO                    |  | 62  |  | April 1996                      
|A. Neil McMillan  | (2) | President                  |  | 50  |  | April 1996                      
|Raymond G. Gagnon | (3) | COO                        |  | 67  |  | March 2002                      
|Philip E. Olson   | (4) | Vice President Exploration |  | 51  |  | January 1997                    
|Val Michasiw      | (5) | Secretary-Treasurer        |  | 41  |  | March 2000                      

|(1)    He spends 100% of his time on the affairs
      of the Company.
|----------------------------------------------------------------------

|(2)    He spends 100% of his time on the affairs
      of the Company.
|----------------------------------------------------------------------

|(3)    He spends 100% of his time on the affairs
      of the Company.
|----------------------------------------------------------------------

|(4)    He spends 100% of his time on the affairs
      of the Company.
|----------------------------------------------------------------------

|(5)    She spends 100% of her time on the
      affairs of the Company.
|-----------------------------------------------------------------------



|Arnie E. Hillier is a graduate of the
University of Saskatchewan and received his designation as a Chartered
Accountant in 1965. He was the President and Chief Financial Officer of the
Company from 1994 to 1995 and has been the Vice Chairman, Chief Executive
Officer and Chief Financial Officer since 1995. From 1965 until 1971 he was the
Controller of Saskatchewan Government Insurance in Regina, Saskatchewan. From
1971 through 1980 he was the Vice President Finance of Manitoba Public Insurance
Corporation in Winnipeg, Manitoba. From 1980 until 1989 he was the Vice
President Finance of Cameco, the successor to Saskatchewan Mining Development
Corporation, in Saskatoon, Saskatchewan. In addition to his position as a
Director of the Company, he is also a Director of Pacific & Western Credit
and a Director of Pacific & Western Trust.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|A. Neil McMillan has been the President of the Company
      since 1996. Prior to that he was the Vice President of Corporate Development
      for the Company. Until 1995, Mr. McMillan was the Vice President/Manager
      of RBC Dominion Securities Inc., an investment banking and retail stockbrokerage
      firm located in Canada. Mr. McMillan also serves as a director of several
      other companies. These companies and his respective positions are: Philom
      Bios Inc., Director; Atomic Energy Canada Ltd., Director; and, Cameco Corporation,
      Director.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Raymond G. Gagnon was recently
appointed the Chief Operating Officer of the Company. He was a Consultant to the
Company from 1999 until 2002 and prior to that he was the Vice President Mining.
From 1987 until 1994 he was the Project Superintendent for Tonto Mining of
Saskatchewan.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 79 | 
| | -- | 



---





|William R. MacNeill has been the
Chairman of Claude Resources since 1982 and from 1982 until 1995 he was also the
Chief Executive Officer. From 1985 until 1992 he was also the Chairman and Chief
Executive Officer of Shore Resources Inc. and Pacific & Western Trust. He
was the Chairman of Bonn Energy from 1979 until 1982. From 1972 to the present,
he has also been President of BEC Corporation, a management consulting and
mining exploration and investment company.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Jon R. MacNeill is a member of the
Board of Directors of the Company and was the Secretary/Treasurer of the Company
from 1982 until 2000. Since 2000, Mr. MacNeill has been providing consulting
services to companies involved in the oil and gas industry in Alberta.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Ronald G. Walker is member of the Board
of Directors of the Company. He is the Founder and Chairman of the Great
Canadian Dollar Store, a company he founded in 1993. From 1980 until 1992 he was
the President of Pacific & Western Trust, a company that he also founded.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Philip E. Olson received his Bachelor
of Science Degree in 1974 from the University of Saskatchewan in Regina,
Saskatchewan and his Masters of Science Degree in 1978 from the University of
Manitoba. He is the Vice President of Exploration for the Company. From 1976
until 1985 he was an Exploration Geologist and the Chief Geologist of the Fox
mine for Sherritt Gordon Mines. He was the Chief Geologist at the Renable mine
for Corona Corp from 1987 until 1988. From 1989 until 1991 he was the Chief
Geologist and Exploration Manager for Giant Yellowknife Mines. From 1991 until
1994 he was the Chief Geologist for Falconbridge  Kidd Creek. Just prior
to joining the Company he was the Exploration Manager for Hemlo Gold/Battle
Mountain. Mr. Olsons current affiliations include: Director of Pelangio
Mines Inc.; Director of the Saskatchewan Mining Association; the Chairman of the
Saskatchewan Mining Association, Exploration Committee; an Executive Member and
Symposia/field Conference Co-Chair for the Geology Society of CIM; and, a Member
(P.Geo) of the Association of Professional Engineers and Geoscientists of
Saskatchewan. He is also currently a member of the following organizations:
Society of Economic Geologists; Geological Association of Canada; Prospectors
and Developers of Canada; and the Canadian Institute of Mining & Metallurgy
 National Saskatoon Branch and Section.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 80 | 
| | -- | 



---





|Val Michasiw is the Secretary/Treasurer
of the Company. She has been employed by the Company since 1995. Prior to
joining Claude Resources she was employed by Labatts Saskatchewan Brewery in
Saskatoon, Saskatchewan from 1990 until 1994. At Labatts she was the Assistant
to the General Manager. From 1985 until 1990 she was employed by Claude as an
administrative secretary.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|No Director and/or Executive Officer
has been the subject of any order, judgment, or decree of any governmental
agency or administrator or of any court or competent jurisdiction, revoking or
suspending for cause any license, permit or other authority of such person or of
any corporation of which he is a Director and/or Executive Officer, to engage in
the securities business or in the sale of a particular security or temporarily
or permanently restraining or enjoining any such person or any corporation of
which he is an officer or director from engaging in or continuing any conduct,
practice, or employment in connection with the purchase or sale of securities,
or convicting such person of any felony or misdemeanor involving a security or
any aspect of the securities business or of theft or of any felony.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|There are no arrangements or
understandings between any two or more Directors or Executive Officers, pursuant
to which he was selected as a Director or Executive Officer. Two members of the
Board of Directors are related. William R. MacNeill is the father of Jon R.
MacNeill. Other than that there are no family relationships between any two or
more Directors or Executive Officers.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|COMPENSATION
|------------



|The Corporation pays each of its
outside directors a yearly stipend of $5,000 as well as $500 per meeting for
attendance personally or by telephone conference at directors and/or board
committee meetings. Directors are entitled to reimbursement for reasonable
travel and other out-of-pocket expenses incurred in connection with attendance
at meetings of the Board of Directors. The Board of Directors may award special
remuneration to any Director undertaking any special services on behalf of the
Company other than services ordinarily required of a Director. The Company
compensated Jon MacNeill $28,400 (2000-$32,600) for consulting services with
respect to its Alberta oil and gas properties. No other director received any
compensation for his services.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 81 | 
| | -- | 



---





|The Company grants stock options to
Directors, Executive Officers and employees; refer to ITEM #10, Stock
Options.
|--------------------------------------------------------------------------------------------------------------------



|Total compensation accrued and/or paid
(directly and/or indirectly) to all Officers/Directors during Fiscal 2001 ended
12/31/2001 was $630,065. Table No. 7 sets forth the compensation paid to the
Companys executive officers and members of its administrative body during
the last three fiscal years.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Table No. 7 
      Summary Compensation TableAll Figures in Canadian Dollars unless otherwise
      noted
|---------------------------------------------------------------------------------------------------------



|                            |                    |                     | Long-Term Compensation |                           |                          
|--------------------------- | ------------------ | ------------------- | ---------------------- | ------------------------- | -------------------------
|                            |                    | Annual Compensation | Awards                 |                           |                          
|Name and Principal Position | Fiscal 
      Year | Salary              | Bonus                  | Other Annual Compensation | Restricted Stock Award(s)
|                            |                   
|                            |                    |                     |                        |                           |                          
|W.R. MacNeill7              | 2001               | $135,000            | Nil                    |                          | 200,000                  
|Chairman of the             | 2000               | $135,000            | Nil                    |                          | 111,000                  
|Board                       | 1999               | $135,000            | Nil                    |                          | 289,000                  
|                            |                    |                     |                        |                           |                          
|A.E. Hillier, Vice          | 2001               | $123,000            | Nil                    |                          | 200,000                  
|Chairman, CEO,              | 2000               | $123,000            | Nil                    |                          | nil                      
|CFO and Director            | 1999               | $123,000            | Nil                    |                          | 200,000                  
|                            |                    |                     |                        |                           |                          
|A.N. McMillan               | 2001               | $123,000            | Nil                    |                          | 200,000                  
|President/Director          | 2000               | $123,000            | Nil                    |                          | nil                      
|                            | 1999               | $123,000            | Nil                    |                          | 200,000                  
|                            |                    |                     |                        |                           |                          
|Phil Olson                  | 2001               | $92,400             | Nil                    |                          | 50,000                   
|VP Exploration              | 2000               | $92,400             | Nil                    |                          | nil                      
|                            | 1999               | $92,400             | Nil                    |                          | nil                      
|                            |                    |                     |                        |                           |                          
|Rick Johnson                | 2001               | $80,000             | Nil                    |                          | 40,000                   
|Controller                  | 2000               | $80,000             | Nil                    |                          | nil                      
|                            | 1999               | $80,000             | Nil                    |                          | nil                      
|                            |                    |                     |                        |                           |                          
|Val Michasiw                | 2001               | $43,000             | Nil                    |                          | 20,000                   
|Secretary/                  | 2000               | $43,000             | Nil                    |                          | 25,000                   
|Treasurer                   | 1999               | $43,000             | Nil                    |                          | nil                      



|#  All Other Compensation relates to taxable
      benefits paid by the Company, which are Company paid life insurance premiums,
      and the Companys portion of the Employee Share Purchase Plan.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Except for the stock option program
discussed in ITEM #12, the Company has no material bonus or profit sharing plans
pursuant to which cash or non-cash compensation is or may be paid to the
Companys Directors or Executive Officers.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|7 |  | The
salary reported for Mr. W.R. MacNeill is the sum of annual management fees paid to BEC
International  Corporation. Mr. MacNeill and his spouse are the beneficial owners of all
of the shares of BEC International  Corporation.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 82 | 
| | -- | 



---





|No funds were set aside or accrued by
the Company during Fiscal 2001 to provide pension, retirement or similar
benefits for Directors or Executive Officers.
|------------------------------------------------------------------------------------------------------------------------------------------------------------



|Staffing
|--------



|The Company currently has 140 employees.
|----------------------------------------



|Share Ownership
|---------------



|The Registrant is a publicly owned
Canadian corporation, the shares of which are owned by U.S. residents, Canadian
residents and other foreign residents. The Registrant is not controlled by
another corporation as described below.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Table No. 8 lists, as of 03/31/2003, Directors
and Executive Officers who  beneficially own the Registrants voting securities and the
amount of the  Registrants voting securities owned by the Directors and Executive
Officers as  a group.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Table No. 8  Shareholdings of
Directors and Executive Officers
|--------------------------------------------------------------

|Title of Class           | Name of Beneficial Owner | Amount and Nature
      of BeneficialOwnership |           | Percent 
      of 
      Class #
|------------------------ | ------------------------ | ---------------------------------------------- | --------- | --------------------------------
|                        
|                         |                          |                                                |           |                                 
|Common                   |                          | W.R. MacNeill                                  | (1)       |                                 
|Common                   |                          | A.E. Hillier                                   | (2)       |                                 
|Common                   |                          | A.N. McMillan                                  | (3)       |                                 
|Common                   |                          | R. Walker                                      | (4)       |                                 
|Common                   |                          | J. MacNeill                                    | (5)       |                                 
|Common                   |                          | V. Michasiw                                    | (6)       |                                 
|Common                   |                          | R. Gagnon                                      | (7)       |                                 
|Common                   |                          | P. Olson                                       | (8)       |                                 
|                         |                          |                                                |           |                                 
|Total Directors/Officers |                          |                                                | 5,902,582 |                                 

|(1) | Of
these shares 600,000 represent currently exercisable share purchase  options. These
shares are owned, directly or indirectly, by BEC  International Corporation, a private
corporation controlled by William  R. MacNeill. These options have a weighted average
exercise price of  $0.90 with a weighted average remaining life of 7.36 years
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Of
these shares 600,000 represent currently exercisable share purchase  options. These
options have a weighted average exercise price of $1.05  with a weighted average
remaining life of 7.00 years
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 83 | 
| | -- | 



---





|(3) | Of
these shares 600,000 represent currently exercisable share purchase  options. These
options have a weighted average exercise price of $1.18  with a weighted average
remaining life of 6.67 years.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Of
these shares 25,000 represent currently exercisable share purchase  options. These
options have a weighted average exercise price of $1.24  with a weighted average
remaining life of 6.55 years.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Of
these shares 70,000 represent currently exercisable share purchase  options. These
options have a weighted average exercise price of $2.56  with a weighted average
remaining life of 3.91 years.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | Of
these shares 80,000 represent currently exercisable share purchase  options. These
options have a weighted average exercise price of $0.82  with a weighted average
remaining life of 7.54 years.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | Of
these shares 250,000 represent currently exercisable share purchase  options. These
options have a weighted average exercise price of $1.00  with a weighted average
remaining life of 9.49 years.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(8) | Of
these shares 100,000 represent currently exercisable share purchase  options. These
options have a weighted average exercise price of $1.59  with a weighted average
remaining life of 6.29 years.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|#    Based on 52,223,538 shares outstanding
      as of 03/31/03 and Stock options held by each beneficial holder exercisable
      within sixty days as detailed in Table Number 12, Stock Options Outstanding
      below.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Item 7.  Major Shareholders and Related Party
Transactions
|----------------------------------------------------------



|The Company is aware of one
person/company who beneficially owns 5% or more of the Registrants voting
securities. Table No. 9 lists as of 03/31/03, persons and/or companies holding
5% or more beneficial interest in the Companys outstanding common stock.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Table No. 9 
      5% or Greater Shareholders
|---------------------------------------------

|Title of 
      Class | Name and Address of Owner                     | Amount and Nature of 
      Beneficial Ownership | Percent of Class
|--------------------- | --------------------------------------------- | ------------------------------------------------ | ----------------
|                      |                                              
|                      |                                               |                                                  |                 
|Common                | W.R. MacNeill, 
      Saskatoon, Saskatchewan | 3,718,800 (1)                                    | 6.4%            



| | 84 | 
| | -- | 



---





|Based on 52,223,538 shares outstanding
as of 03/31/2003 and stock options held by each beneficial holder exercisable
within sixty days.
|---------------------------------------------------------------------------------------------------------------------------------------

|(1) | These
shares are owned, directly or indirectly, by BEC International  Corporation, a private
corporation controlled by William R. MacNeill.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------



|Of these shares 600,000 represent
currently exercisable share purchase options as detailed in Table Number 12,
Stock Options Outstanding below. These options have a weighted
average exercise price of $0.90 with a weighted average remaining life of 7.36
years.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|No shareholders of the Company have different
voting rights from any other  shareholder.
|----------------------------------------------------------------------------------------



|INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS
|----------------------------------------------



|There have been no transactions or
proposed transactions, which have materially affected or will materially affect
the Registrant in which any director, executive officer, or beneficial holder of
more than 10% of the outstanding common shares, or any of their respective
relatives, spouses, associates or affiliates has had or will have any direct or
material indirect interest.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Item 8.  Financial Information
|------------------------------



|The financial statements as required
under ITEM #8 are attached hereto and found immediately following the text of
this Registration Statement. The audit report of KMPG LLP, independent Chartered
Accountants, is included herein immediately preceding the financial statements
and schedules.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|There have been no significant changes
of financial condition since the most recent financial statements dated December
31, 2001 other than described below:
|------------------------------------------------------------------------------------------------------------------------------------------------------------



|On April 23, 2002, Claude finalized an
agreement with Canaccord Capital Corporation, under which Canaccord has agreed
to purchase 5.0 million Units at a price of $1.00 per Unit for aggregate gross
proceeds of $5,000,000. Each Unit consists of one common share and one half of
one common share purchase warrant. Each full warrant is exercisable into one
common share at an exercise price of $1.25, one year from the closing date. The
Company plans to use the proceeds from this issue for general corporate
purposes.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 85 | 
| | -- | 



---





|On November 25, 2002, the Company
entered into a flow-through share agreement for the issue of 1,000,000 common
shares at a price of $1.50 per share for proceeds of $1,500,000. The Company
must expend $1,500,000 in qualifying Canadian Exploration Expenses as defined in
the Income Tax Act (Canada) prior to December 31, 2003.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|On January 31, 2003, the Company
completed a private placement offering of 2,500,000 units, each unit consisting
of one common share and one half of one common share purchase warrant, at a
price of $1.50 per unit, for gross proceeds of $3,750,000. Each whole purchase
warrant will entitle the holder, upon exercise at any time up to and including
January 31, 2004, and upon payment of $1.85, to subscribe for one common share.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Item 9.  Offer and Listing of Securities
|----------------------------------------



|As of December 31, 2002, the authorized
capital of the Company consisted of unlimited number of common shares without
par value and an unlimited number of first and second preferred shares, each
issuable in series. There were 49,459,477 common shares issued and outstanding
as of December 31, 2002, the end of the Companys most recent fiscal year.
No first or second preferred shares were issued and outstanding as of that date.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|All of the authorized common shares of
the Company are of the same class and, once issued, rank equally as to
dividends, voting powers, and participation in assets. Holders of common shares
are entitled to one vote for each share held of record on all matters to be
acted upon by the shareholders. Holders of common shares are entitled to receive
such dividends as may be declared from time to time by the Board of Directors,
in its discretion, out of funds legally available therefore.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Upon liquidation, dissolution or
winding up of the Company, holders of common shares are entitled to receive pro
rata the assets of the Company that are distributable to such holders. No shares
have been issued subject to call or assessment. There are no pre-emptive or
conversion rights and no provisions for redemption or purchase for cancellation,
surrender, or sinking or purchase funds.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Provisions as to the modification,  amendment or
variation of such shareholder rights or provisions are contained in  the CBCA of Ontario.
Unless the CBCA or the Companys Articles otherwise  provide, any action to be taken
by a resolution of the
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 86 | 
| | -- | 



---





|shareholders may be taken  by a written
resolution signed by all shareholders or by a vote of a majority or  more of the shares
represented at a shareholders meeting.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The CBCA contains provisions which
require a special resolution for effecting certain corporate
actions. Such a special resolution requires a majority of not less
than two-thirds of the votes cast by shareholders entitled to vote rather than a
simple majority for passage. The principal corporate actions that require a
special resolution include:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|a.    Continuing the Company under the laws
      of another jurisdiction;
|--------------------------------------------------------------------------

|b.    Approving certain transactions or contracts
      in which directors or officers of the Company are interested;
|---------------------------------------------------------------------------------------------------------------------

|c.    Disposing of all or substantially all
      of the Companys property;
|----------------------------------------------------------------------------

|d.    Certain alterations of share capital;
|-------------------------------------------

|e.   Changing the Companys name;
|---------------------------------

|f.    Altering any restrictions on the business
      that the Company may carry on; and
|----------------------------------------------------------------------------------------

|g.    Amalgamating the Company with another
      company.
|----------------------------------------------------------



|There are no restrictions on the
repurchase or redemption of common shares of the Company while there is any
arrearage in the payment of dividends or sinking fund installments.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Companys common shares began trading on the
Toronto Stock Exchange in  Toronto, Ontario, Canada on Sept. 14, 1987. The current stock
symbol is CRJ.  The CUSIP number is #182873109.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|NATURE OF TRADING MARKET
|------------------------



|The Companys common shares are
issued in registered form and the following information is taken from the
records of Valiant Trust Company. Valiant Trust Company is located at 550 Sixth
Avenue S.W., Suite 510, Calgary, Alberta T2P 0S2.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|On 04/01/02, the shareholders
list for the Companys common shares showed 643 registered shareholders and
43,356,784 shares issued and outstanding.
|----------------------------------------------------------------------------------------------------------------------------------------------------



|The Company has researched the indirect
holding by depository institutions and estimates that there are 1,000 holders of
record in Canada and 156 holders of record resident in the United States. The
U.S. shareholders hold 2,260,986 shares or 5% of the total shares issued and
outstanding.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 87 | 
| | -- | 



---





|Based on this research and other
research into the indirect holdings of other financial institutions, the Company
believes that it has in excess of 1,000 beneficial owners of its common shares.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Companys common shares are
not registered to trade in the United States in the form of American Depository
Receipts (ADRs) or similar certificates.
|---------------------------------------------------------------------------------------------------------------------------------------------------------



|The Company has not declared any
dividends on its common shares for the last five years and does not anticipate
that it will do so in the foreseeable future. The present policy of the Company
is to retain future earnings for use in its operations and the expansion of its
business.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Table No. 10 lists the volume of trading and
high, low and closing sales prices  on the Toronto Stock Exchange for the Companys
common shares for the last  twelve fiscal quarters. Table No. 10 also sets forth the
price ranges for the  twelve most recent months and each of the last six full financial
years.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Table No. 10  Toronto Stock
Exchange  Common Shares Trading Activity
|--------------------------------------------------------------------



|- Sales -  Canadian Dollars
|---------------------------

|Period                     | High  | Low   | Close
|-------------------------- | ----- | ----- | -----
|                          
|                           |       |       |      
|March, 2003                | $1.64 | $1.19 | $1.41
|February, 2003             | $1.42 | $1.35 | $1.35
|January, 2003              | $1.69 | $1.58 | $1.68
|December, 2002             | $1.51 | $1.46 | $1.48
|November, 2002             | $0.96 | $0.92 | $.093
|October, 2002              | $1.12 | $1.05 | $1.08
|September, 2002            | $1.70 | $1.20 | $1.22
|August, 2002               | $1.73 | $1.18 | $1.64
|July, 2002                 | $2.45 | $1.12 | $1.30
|June, 2002                 | $2.24 | $1.45 | $2.13
|May, 2002                  | $1.86 | $1.41 | $1.75
|April, 2002                | $1.67 | $1.03 | $1.56
|                           |       |       |      
|Fiscal Year Ended 12/31/02 | $2.45 | $0.54 | $1.48
|Fiscal Year Ended 12/31/01 | $0.88 | $0.47 | $0.54
|Fiscal Year Ended 12/31/00 | $1.00 | $0.42 | $0.54
|Fiscal Year Ended 12/31/99 | $2.40 | $0.85 | $0.90
|Fiscal Year Ended 12/31/98 | $3.00 | $1.10 | $1.45
|Fiscal Year Ended 12/31/97 | $3.00 | $1.61 | $1.99



| | 88 | 
| | -- | 



---





|                         |  |       |  |       |  |       |  |            |  |        
|------------------------ |  | ----- |  | ----- |  | ----- |  | ---------- |  | -------
|Quarter Ended 12/31/2002 |  | $1.59 |  | $0.90 |  | $1.48 |  | 3,835,783  |  | 60,885 
|Quarter Ended 9/30/2002  |  | $2.45 |  | $1.12 |  | $1.22 |  | 11,061,696 |  | 175,582
|Quarter Ended 6/30/2002  |  | $2.24 |  | $1.03 |  | $2.13 |  | 17,793,592 |  | 278,025
|Quarter Ended 3/31/2002  |  | $1.03 |  | $0.54 |  | $0.98 |  | 10,273,488 |  | 165,701
|                         |  |       |  |       |  |       |  |            |  |        
|Quarter Ended 12/31/2001 |  | $0.58 |  | $0.47 |  | $0.54 |  | 4,204,858  |  | 68,932 
|Quarter Ended 9/30/2001  |  | $0.70 |  | $0.51 |  | $0.58 |  | 2,313,494  |  | 39,212 
|Quarter Ended 6/30/2001  |  | $0.83 |  | $0.56 |  | $0.65 |  | 7,137,462  |  | 113,293
|Quarter Ended 3/31/2001  |  | $0.88 |  | $0.50 |  | $0.72 |  | 3,673,427  |  | 57,397 
|                         |  |       |  |       |  |       |  |            |  |        
|Quarter Ended 12/31/2000 |  | $0.60 |  | $0.42 |  | $0.52 |  | 3,159,348  |  | 50,957 
|Quarter Ended 9/30/2000  |  | $0.65 |  | $0.51 |  | $0.55 |  | 2,999,283  |  | 48,375 
|Quarter Ended 6/30/2000  |  | $0.82 |  | $0.58 |  | $0.61 |  | 2,356,854  |  | 38,014 
|Quarter Ended 3/31/2000  |  | $1.00 |  | $0.55 |  | $0.80 |  | 5,340,992  |  | 83,453 

|Debt Securities to be Registered.  Not
applicable.
|--------------------------------------------------

|American Depository Receipts.  Not applicable.
|----------------------------------------------

|Other Securities to be Registered. Not applicable
|-------------------------------------------------



|LEGAL PROCEEDINGS
|-----------------



|The Company knows of no material,
active or pending, legal proceedings against them; nor is the Company involved
as a plaintiff in any material proceeding or pending litigation.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Company knows of no active or
pending proceedings against anyone that might materially adversely affect an
interest of the Company.
|---------------------------------------------------------------------------------------------------------------------------------------



|Item 10.  Additional Information
|--------------------------------



|The Company has, in part, financed its
operations through the issuance of common shares through private placement, the
exercise of warrants issued in the private placements, and the exercise of stock
options. The changes in the Companys share capital during the last 4
fiscal years are as follows:
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|During Fiscal 1999 the Company issued a  total
of 7,791,397 common shares. 103,454 were issued pursuant to the  Companys Employee
Stock Purchase Plan; 364,000 common shares were issued  pursuant to the exercise of
employee share purchase options; 49,852 common  shares were issued pursuant to the Madsen
Gold Corp. acquisition of the  remaining 4% interest the Company did not already own;
10,000 shares were issued  in payment for the Company obtaining certain mineral property
rights; 1,000,000  flow-through shares were issued at a price of $2.90 for proceeds
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 89 | 
| | -- | 



---





|of $2,900,000;  an additional 909,091
flow-through shares were issued at a price of $1.65 for  proceeds of $1,500,000;
5,350,000 common shares were issued pursuant to a public  offering; and, 5,000 common
shares were issued pursuant to employee awards at an  attributed value of $7,000.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|During Fiscal 2000 the Company issued a
total of 1,874,153 common shares. 245,567 of these shares were issued pursuant
to the Companys Employee Stock Purchase Plan as described elsewhere in
this document; 628,586 were issued as payment for the purchase of a 1.35% NSR
from Metal Royalties Corporation at a deemed price of $1,100,025; and, 1,000,000
common shares were issued pursuant to an option agreement with Placer Dome who
purchased the shares for $0.75 per share.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|During Fiscal 2001 the Company issued a
total of 2,828,987 shares. 328,987 of these shares were issued pursuant to the
Companys Employee Stock Purchase Plan as described elsewhere in this
document and 2,500,000 flow-through shares were issued.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|In April 2002, the Company completed
the Private Placement of 5,000,000 units at a price of $1.00 per unit for gross
proceeds of $5,000,000. Each unit consists of one common share and one-half of
one common share purchase warrant. Each whole common share purchase warrant
entitles the holder to acquire one common share at an exercise price of $1.25
until April 23, 2003. The Company intends to use the proceeds for general
corporate purposes. Concurrent with the offering, the Company issued the
underwriters 63,463 common share purchase warrants in consideration for services
provided in connection with the offering. The exercise terms of the underwriter
warrants are the same as the warrants issued with the units in the underwriting.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|On November 25, 2002, the Company
entered into a flow-through share agreement for the issue of 1,000,000 common
shares at a price of $1.50 per share for proceeds of $1,500,000. The Company
must expend $1,500,000 in qualifying Canadian Exploration Expenses as defined in
the Income Tax Act (Canada) prior to December 31, 2003.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|On January 31, 2003, the Company
completed a private placement offering of 2,500,000 units, each unit consisting
of one common share and one half of one common share purchase warrant, at a
price of $1.50 per unit, for gross proceeds of $3,750,000. Each whole purchase
warrant will entitle the holder, upon exercise at any time up to and including
January 31, 2004, and upon payment of $1.85, to subscribe for one common share.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 90 | 
| | -- | 



---





|There has been no changes in voting rights
attached to the common shares in the  last 3 years.
|----------------------------------------------------------------------------------------------



|Stock Options
|-------------



|Stock Options to purchase securities
from Registrant can be granted to Directors and Employees of the Company on
terms and conditions acceptable to the regulatory authorities in Canada, notably
the Toronto Stock Exchange and the Ontario Securities Commission.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Stock options for up to 10% of the
number of issued and outstanding common shares may be granted from time to time,
provided that stock options in favor of any one individual may not exceed 5% of
the issued and outstanding common shares. No stock option granted under the
stock option program is transferable by the optionee other than by will or the
laws of descent and distribution, and each stock option is exercisable during
the lifetime of the optionee only by such optionee.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The exercise prices for stock options
are determined in accordance with Toronto Stock Exchange guidelines and reflect
the closing price of the Registrants common shares immediately preceding
the day on which the Directors grant the stock options and the maximum term of
each stock option does not exceed ten years.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The names and titles of the
Directors/Executive Officers of the Registrant to whom outstanding stock options
have been granted and the number of common shares subject to such options are
set forth in Table No. 12 as of 03/31/2003, as well as the number of options
granted to Directors and all employees as a group.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Table No. 12  Stock Options
Outstanding
|---------------------------------------

|Name                                       | Number of 
      Shares of 
      Common 
      Stock | CDN$ 
      Exer. 
      Price  | Expiration 
      Date                  
|------------------------------------------ | ----------------------------------------------------- | ------------------------------- | ----------------------------------------
|                                          
|                                           |                                                       |                                 |                                         
|W.R. MacNeil, 
      Chairman              | 200,000 
      289,000 
      111,000                 | $0.53 
      $1.30 
      $0.53 | 12/27/11 
      06/22/09 
      07/31/10
|                                           |                                                       |                                 |                                         
|A.E. Hillier, 
      CEO, CFO and Director | 200,000 
      200,000 
      200,000                 | $0.53 
      $1.32 
      $1.30 | 12/27/11 
      12/15/08 
      07/26/09



| | 91 | 
| | -- | 



---





|A. Neil McMillan,President and Director                  | 200,000 
      150,000 
      50,000 
      200,000 | $0.53 
      $1.85 
      $1.32 
      $1.30 | 12/27/11 
      08/04/07 
      12/15/08 
      07/26/09
|-------------------------------------------------------- | --------------------------------------------------- | -------------------------------------------- | --------------------------------------------------------
|                                                         |                                                     |                                              |                                                         
|Raymond G. Gagnon,
      
      COO                      | 10,000 
      10,000 
      30,000 
      200,000   | $0.53 
      $1.32 
      $1.71 
      $0.90 | 12/27/11 
      12/15/08 
      05/21/12 
      11/29/12
|                                                         |                                                     |                                              |                                                         
|Philip E. Olson,
      
      Vice President Exploration | 50,000 
      50,000                                | $0.53 
      $2.65                           | 12/27/11 
      12/03/06                                
|                                                         |                                                     |                                              |                                                         
|Jon R. MacNeill,
      
      Director                   | 50,000 
      20,000                                | $3.05 
      $1.32                           | 04/23/06 
      12/15/08                                
|                                                         |                                                     |                                              |                                                         
|Ronald G. Walker,
      
      Director                  | 20,000 
      5,000                                 | $1.32 
      $0.90                           | 12/15/08 
      11/29/12                                
|                                                         |                                                     |                                              |                                                         
|Val Michasiw 
      Secretary/Treasurer                  | 20,000 
      25,000 
      25,000 
      10,000    | $0.53 
      $1.32 
      $0.53 
      $0.90 | 12/27/11 
      12/15/08 
      07/31/10 
      11/29/12
|                                                         |                                                     |                                              |                                                         
|Other Employees                                          | 50,000 
      40,000 
      10,000                  | $1.80 
      $0.53 
      $0.90              | 01/05/08 
      12/27/11 
      11/29/12                
|                                                         |                                                     |                                              |                                                         
|Total Officers and
      Directors 
      (8 persons)    | 2,325,000                                           |                                              |                                                         
|Total Other Employees                                    | 100,000                                             |                                              |                                                         
|                                                         |                                                     |                                              |                                                         
|Total Officers/Directors/Employees                       | 2,425,000                                           |                                              |                                                         

|Memorandum and Articles of Association
|--------------------------------------



|The objects and purposes of the Company are as
follows:
|-------------------------------------------------------

| | (a) | to prospect and explore for mines
      and minerals and to carry on the business of mining in all its branches;
      to purchase, hold, lease, acquire and sell mines, minerals and mining and
      other rights, easements and privileges; to mine, quarry, get, work, mill
      and prepare for sale by any process all or any minerals or metallic products
      and ores; to manufacture products
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 92 | 
| | -- | 



---





| |  | and by-products
therefrom;  to smelt such ores and other  metallic  substances;  and to trade in the
products of such mines and  manufacture;  (ii) to carry on all the  operations by which
the soil,  earth,  rocks and stones may, for the purposes of extracting any minerals
whatsoever,  be mined,  dug, raised,  washed,  cradled,  smelted,  refined,  crushed or
treated in any manner;  to render  such minerals merchantable by any means whatsoever,
and to sell or otherwise dispose thereof;
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | to acquire, own, lease, prospect
      for, open, explore, survey, develop., work, improve, maintain, and manage
      either for its own account or others, mines, petroleum and natural gas wells,
      permits, concessions, reservations and lands believed to contain or to be
      capable of containing and producing minerals, petroleum and natural gas,
      and, either for its own account or for others, to drill for, search for,
      get, pump, assay, refine, distill, analyze, manufacture, treat and prepare
      for market, store, transport, sell, buy, exchange and otherwise deal in
      minerals, petroleum and natural gas and components and by-products thereof;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c) | to take, acquire and hold as consideration
      for ores, metals or minerals, including oil and gas, sold or otherwise disposed
      of or for goods supplied or for work done by contract or otherwise, shares,
      debentures or other securities of or in any other company and to sell and
      otherwise dispose of the same.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|A directors power to vote on a
proposal, arrangement or contract in which the director is materially interested
and the directors power, in the absence of an independent quorum to vote
compensation to themselves or any members of their body is stated in Section
4.18 of the Company By-Laws as follows:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|CONFLICT OF INTEREST- A director or  officer who
is a party to, or who is a director or officer of or has a material  interest in, any
person who is a party to, a material contract or proposed  material contract with the
Corporation shall disclose the nature and extent of  his interest at the time and in the
manner provided by the Act. Any such  contract or proposed contract shall be referred to
the board or shareholders for  approval even if such contract is one that in the ordinary
course of the  Corporations business would not require approval
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 93 | 
| | -- | 



---





|by the board or  shareholders, and a director
interested in a contract so referred to the board  shall not vote on any resolution to
approve the same except as provided by the  Act.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|There is no age limit requirement for
directors retirement.
|------------------------------------------------------------



|Section 4.02 of the Companys
By-laws states the qualifications of a director:
|------------------------------------------------------------------------------



|QUALIFICATION- No person shall be
qualified for election as a director if he is less than 18 years of age; if he
is of unsound mind and has been so found by a court in Canada or elsewhere; if
he is not an individual; or if he has the status of a bankrupt. A director need
not be a shareholder. A majority of the directors shall be resident Canadians.
At least two directors shall not be officers or employees of the Corporation or
its affiliates.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|SPECIAL RIGHTS, PRIVLEGES, RESTRICTIONS AND
CONDITIONS ATTACHING TO EACH CLASS OF SHARES
|----------------------------------------------------------------------------------------



|The common shares of the Company are
entitled to dividends pro rata and when declared by the Board of Directors, to
one vote per share at meetings of the shareholders of the Company and, upon
dissolution, or any other distribution of assets, to receive pro rata such
assets of the Corporation as are distributable to the holders of the common
shares.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The first preferred shares are issuable
in series and rank ahead of the second preferred shares and the common shares in
respect of dividend payments, dissolution or any other distribution of assets.
The other rights, privileges, restrictions and conditions attaching to each
series of the first preferred shares are fixed by the Directors of the Company
at the time of creation of such series.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The second preferred shares are
issuable in series and rank ahead of the common shares in respect of dividend
payments, dissolution or any other distribution of assets. The other rights,
privileges, restrictions and conditions attached to each series of the second
preferred shares are fixed by the Directors of the Company at the time of
creation of such series.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|There are no restrictions on any share transfers
contained in the Companys  articles.
|--------------------------------------------------------------------------------------



| | 94 | 
| | -- | 



---





|Shareholders have no specified rights
to share in the profits of the Company and there are no sinking fund provisions
or shareholder liability to further capital calls by the Company.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|There are no provisions discriminating
against any existing or prospective holder of securities as a result of such
shareholder owning a substantial number of shares.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|The rights of holders of the Companys shares can
        only be altered by a special resolution of the shareholders.
|----------------------------------------------------------------------------------------------------------------------

|Rules pertaining to annual general
meetings and extraordinary general meetings of shareholders are described in
Section Ten of the Companys By-Laws, as well as in the Act. These rules
are summarized as follows:
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | The annual
meeting of shareholders shall be held at such time  in each year at such place as the
board, the chairman of the  board, the managing director or the president may from time
to  time determine, for the purpose of considering the financial  statements and reports
required by the Act to be placed before  the annual meeting, electing directors if
required, appointing  auditors if required and transacting such other business as  may
properly be brought before the meeting.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





| | Meetings of
the shareholders shall be held at the registered  office of the Company or elsewhere in
the municipality in  which the registered office is situated or, if the board shall  so
determine, at some  other place in Canada or, if all the shareholders entitled to  vote
at the meeting so agree, at some place outside Canada.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





| | The board, the
chairman of the board or the president shall  have power to call a special meeting of the
shareholders at  any time.
| | -----------------------------------------------------------------------------------------------------------------------------------





|There are no limitations on the rights
to own securities.
|---------------------------------------------------------



|There are no provisions of the
Companys articles or bylaws that would have an effect of delaying,
deferring or preventing a change in control of the Company and that would
operate only with respect to a merger, acquisition or corporate restructuring
involving the Company.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 95 | 
| | -- | 



---





|Material Contracts
|------------------



|The Company considers the following as
material contracts, which have been entered into by the Company which are
currently in effect:
|-------------------------------------------------------------------------------------------------------------------------------------



|1.   Currie Rose
      Agreement
|--------------------------------

|2.   Placer Dome
      Agreement
|--------------------------------

|3.   Amisk Lake Option
      Agreement
|--------------------------------------

|4.   Seabee Surface
      Lease Agreement
|-----------------------------------------

|5.   Underwriting
      Agreement with Canaccord Capital
|--------------------------------------------------------



|EXCHANGE CONTROLS AND OTHER LIMITATIONS 
AFFECTING SECURITY HOLDERS
|-------------------------------------------------------------------



|Except as discussed in ITEM #9, the
Company is not aware of any Canadian federal or provincial laws, decrees, or
regulations that restrict the export or import of capital, including foreign
exchange controls, or that affect the remittance of dividends, interest or other
payments to non-Canadian holders of the common shares. There are no limitations
on the right of non-Canadian owners to hold or vote the common shares imposed by
Canadian federal or provincial law or by the charter or other constituent
documents of the Company.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Investment Canada Act (the IC Act)
      governs acquisitions of Canadian business by a non-Canadian person or entity.
      The IC Act requires a non-Canadian (as defined in the IC Act) making an
      investment to acquire control of a Canadian business, the gross assets of
      which exceed certain defined threshold levels, to file an application for
      review with the Investment Review Division of Industry Canada. The IC Act
      provides, among other things, for a review of an investment in the event
      of acquisition of control in certain Canadian businesses in
      the following circumstances:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 1. If the
investor is a non-Canadian and is a national of a country  belonging to the North
American Free Trade Agreement (NAFTA) and/or the  World Trade Organization
(WTO) (NAFTA or WTO National), any direct  acquisition having an
asset value exceeding $179,000,000 is reviewable.  This amount is subject to an annual
adjustment on the basis of a  prescribed formula in the IC Act to reflect inflation and
real growth  within Canada. This threshold level does not apply in certain sections of
Canadian industry, such as uranium, financial services (except insurance),
transportation services and cultural services (i.e. the publication,  distribution or
sale of books, magazines, periodicals (other
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 96 | 
| | -- | 



---





| | than printing
or typesetting businesses), music in print or machine readable form,  radio, television,
cable and satellite services; the publication,  distribution, sale or exhibition of film
or video recordings on audio or  video music recordings), to which lower thresholds as
prescribed in the IC  Act are applicable.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. If the
investor is a non-Canadian and is not a NAFTA or WTO National,  any direct acquisition
having an asset value exceeding $5,000,000 and any  indirect acquisition having an asset
value exceeding $50,000,000 is  reviewable.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. If the
investor is a non-Canadian and is NAFTA or WTO National, an  indirect acquisition of
control is reviewable if the value of the assets  of the business located in Canada
represents more than 50% of the asset  value of the transaction or the business is
involved in uranium, financial  services, transportation services or cultural services
(as set forth  above).
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Finally, certain transactions prescribed in the
IC Act are exempted from review  altogether.
|--------------------------------------------------------------------------------------------



|In the context of the Company, in
essence, three methods of acquiring control of a Canadian business are regulated
by the IC Act: (i) the acquisition of all or substantially all of the assets
used in carrying on business in Canada; (ii) the acquisition, directly or
indirectly, of voting shares of a Canadian corporation carrying on business in
Canada; or (iii) the acquisition of voting shares of an entity which controls,
directly or indirectly, another entity carrying on business in Canada.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|An acquisition of a majority of the  voting
shares of a Canadian entity, including a corporation, is deemed to be an  acquisition of
control under the IC Act. However, under the IC Act, there is a  rebuttable presumption
that control is acquired if one-third of the voting  shares of a Canadian corporation or
an equivalent undivided interest in the  voting shares of such corporation are held by a
non-Canadian person or entity.  An acquisition of less than one-third of the voting
shares of a Canadian  corporation is deemed not to be an acquisition of control. An
acquisition of  less than a majority, but one-third or more, of the voting shares of a
Canadian  corporation is presumed to be an acquisition of control unless it can be
established that, on the acquisition, the Canadian corporation is not, in fact,
controlled by the acquirer through the
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 97 | 
| | -- | 



---





|ownership of voting shares. For  partnerships,
trusts, joint ventures or other unincorporated Canadian entities,  an acquisition of less
than a majority of the voting interests is deemed not to  be an acquisition of control.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|In addition, if a Canadian corporation
is controlled by a non-Canadian, the acquisition of control of any other
Canadian corporation by such corporation may be subject to the prior approval of
the Investment Review Division, unless it can be established that the Canadian
corporation is not in fact controlled by the acquirer through the ownership of
voting shares.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Where an investment is reviewable under
the IC Act, the investment may not be implemented unless it is likely to be of
net benefit to Canada. If an applicant is unable to satisfy the Minister
responsible for Industry Canada that the investment is likely to be of net
benefit to Canada, the applicant may not proceed with the investment.
Alternatively, an acquirer may be required to divest control of the Canadian
business that is the subject of the investment.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|In addition to the foregoing, the IC
Act provides for formal notification under the IC Act of all other acquisitions
of control by Canadian businesses by non-Canadian investors. The notification
process consists of filing a notification within 30 days following the
implementation of an investment, which notification is for information, as
opposed to review, purposes.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|TAXATION
|--------



|The following summary of the material
Canadian federal income tax consequences generally applicable in respect of the
common stock reflects the Companys opinion. The tax consequences to any
particular holder of common stock will vary according to the status of that
holder as an individual, trust, corporation or member of a partnership, the
jurisdiction in which that holder is subject to taxation, the place where that
holder is resident and, generally, according to that holders particular
circumstances. This summary is applicable only to holders who are resident in
the United States, have never been resident in Canada, deal at arms length
with the Company, hold their common stock as capital property and who will not
use or hold the common stock in carrying on business in Canada. Special rules,
which are not discussed in this summary, may apply to a United States holder
that is an issuer that carries on business in Canada and elsewhere.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 98 | 
| | -- | 



---





|This summary is based upon the
provisions of the Income Tax Act of Canada and the regulations thereunder
(collectively, the Tax Act or ITA)and the Canada-United
States Tax Convention (the Tax Convention) as at the date of the
Registration Statement and the current administrative practices of Canada
Customs and Revenue Agency. This summary does not take into account provincial
income tax consequences.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Management urges each holder to consult
his own tax advisor with respect to the income tax consequences applicable to
him in his own particular circumstances.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------



|CANADIAN INCOME TAX CONSEQUENCES
|--------------------------------



|Disposition of Common Stock.
|----------------------------



|The summary below is restricted to the
case of a holder (a Holder) of one or more common shares
(Common Shares) who for the purposes of the Tax Act is a
non-resident of Canada, holds his Common Shares as capital property and deals at
arms length with the Company.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Dividends
|---------



|A Holder will be subject to Canadian
withholding tax (Part XIII Tax) equal to 25%, or such lower rates as
may be available under an applicable tax treaty, of the gross amount of any
dividend paid or deemed to be paid on his Common Shares. Under the Tax
Convention, the rate of Part XIII Tax applicable to a dividend on Common Shares
paid to a Holder who is a resident of the United States is, if the Holder is a
company that beneficially owns at least 10% of the voting stock of the Company,
5% and, in any other case, 15% of the gross amount of the dividend. The Company
will be required to withhold the applicable amount of Part XIII Tax from each
dividend so paid and remit the withheld amount directly to the Receiver General
for Canada for the account of the Holder.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Disposition of Common Shares
|----------------------------



|A Holder who disposes of Common Shares,
including by deemed disposition on death, will not be subject to Canadian tax on
any capital gain thereby realized unless the common Share constituted
taxable Canadian property as defined by the Tax Act. Generally, a
common share of a public corporation will not constitute taxable Canadian
property of a Holder unless he held the common share as capital property used by
him carrying on a business in Canada, or he or persons with whom he did not deal
at arms length alone or together held or held options to acquire, at any
time within the
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 99 | 
| | -- | 



---





|60 months preceding the disposition, 25% or more
of the issued shares of any class of the capital stock of the Company.
|-----------------------------------------------------------------------------------------------------------------------



|A Holder who is a resident  of the United
States and  realizes a capital  gain on  disposition  of Common  Shares that was  taxable
Canadian  property  will  nevertheless,  by virtue of the Treaty,  generally  be exempt
from  Canadian tax thereon  unless (a) more than 50% of the value of the Common Shares is
derived  from, or from an interest in,  Canadian real estate,  including  Canadian
mineral  resources  properties,  (b) the Common  Shares  formed  part of the  business
property  of a  permanent  establishment  that the  Holder  has or had in Canada  within
the 12 months  preceding  disposition,  or (c) the  Holder (i) was a resident of Canada
at any time  within the ten years  immediately  preceding  the  disposition,  and for a
total of 120  months  during any period of 20  consecutive  years,  preceding  the
disposition,  and (ii) owned the Common  Shares when he ceased to be resident in Canada.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|A Holder who is subject to  Canadian  tax in
respect of a capital  gain  realized  on  disposition  of Common  Shares  must  include
one half of the capital  gain  (taxable  capital  gain) in computing  his
taxable  income  earned in Canada.  The  Holder may,  subject to certain  limitations,
deduct one half of any capital loss  (allowable  capital  loss) arising on
disposition  of taxable  Canadian  property from taxable  capital gains  realized in the
year of  disposition in respect to  taxable  Canadian  property  and, to the extent not
so  deductible,  from such  taxable  capital  gains of any of the three  preceding years
or any subsequent year.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
|---------------------------------------------



|The  following  is a discussion  of material
United  States  Federal  income tax  consequences,  under the law,  generally  applicable
to a U.S.  Holder (as defined below) of common shares of the Company.  This discussion
does not cover any state,  local or foreign tax consequences.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The following discussion is based upon the
sections of the Internal Revenue Code of 1986, as amended (the Code),
Treasury Regulations, published Internal Revenue Service (IRS) rulings, published
administrative positions of the IRS  and court decisions that are currently applicable,
any or all of which could be materially and adversely changed,  possible on a retroactive
basis, at any time.  In addition, the discussion does not consider the potential effects,
both  adverse and beneficial, or recently proposed legislation which, if enacted, could
be applied, possibly on a retroactive  basis, at any time. The discussion is for general
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 100 | 
| | --- | 



---





|information only and it is not intended
to be, nor should it be construed to be, legal or tax advice to any holder or
prospective holder of common shares of the Company and no opinion or
representation with respect to the U.S. federal income tax consequences to any
such holder or prospective holder is made. Management urges holders and
prospective holders of common shares of the Company to consult their own tax
advisors about the federal, state, local, and foreign tax consequences of
purchasing, owning and disposing of common shares of the Company.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|U.S. Holders
|------------



|As used herein, a (U.S.
Holder) includes a holder of common shares of the Company who is a citizen
or resident of the United States, a corporation created or organized in or under
the laws of the United States or of any political subdivision thereof, an estate
whose income is taxable in the United States irrespective of source or a trust
subject to the primary supervision of a court within the United States and
control of a United States fiduciary as described in Section 7701(a)(30) of the
Code. This summary does not address the tax consequences to, and U.S. Holder
does not include, persons subject to special provisions of Federal income tax
law, such as tax-exempt organizations, qualified retirement plans, financial
institutions, insurance companies, real estate investment trusts, regulated
investment companies, broker-dealers, non-resident alien individuals, persons or
entities that have a functional currency other than the U.S. dollar,
shareholders who hold common shares as part of a straddle, hedging or conversion
transaction, and shareholders who acquired their common shares through the
exercise of employee stock options or otherwise as compensation for services.
This summary is limited to U.S. Holders who own common shares as capital assets.
This summary does not address the consequences to a person or entity holding an
interest in a shareholder or the consequences to a person of the ownership,
exercise or disposition of any options, warrants or other rights to acquire
common shares.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Distribution on Common Shares
of the Company
|--------------------------------------------



|U.S. Holders receiving dividend  distributions
(including constructive dividends) with respect to common shares  of the Company are
required to include in gross income for United States Federal  income tax purposes the
gross amount of such distributions equal to the U.S.  dollar value of such distributions
on the date of receipt (based on the exchange  rate on such date), to the extent that the
Company has current or accumulated  earnings and profits, without reduction for any
Canadian income tax withheld
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 101 | 
| | --- | 



---





|from such distributions. Such Canadian tax
withheld may be credited, subject to  certain limitations, against the U.S. Holders
United States Federal Income  tax liability or, alternatively, individuals may be
deducted in computing the  U.S. Holders United States Federal taxable income by
those individuals who  itemize deductions. (See more detailed discussion at Foreign
Tax  Credit below). To the extent that distributions exceed current or  accumulated
earnings and profits of the Company, they will be treated first as a  return of capital
up to the U.S. Holders adjusted basis in the common  shares and thereafter as gain
from the sale or exchange of the common shares.  Dividend income will be taxed at
marginal tax rates applicable to ordinary  income while preferential tax rates for
long-term capital gains are applicable  to a U.S. Holder which is an individual, estate
or trust. There are currently no  preferential tax rates for long-term capital gains for
a U.S. Holder which is a  corporation.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|In the case of foreign currency
received as a dividend that is not converted by the recipient into U.S. dollars
on the date of receipt, a U.S. Holder will have a tax basis in the foreign
currency equal to its U.S. dollar value on the date of receipt. Generally any
gain or loss recognized upon a subsequent sale of other disposition of the
foreign currency, including the exchange for U.S. dollars, will be ordinary
income or loss.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Dividends paid on the common shares of
the Company will not generally be eligible for the dividends received deduction
provided to corporations receiving dividends from certain United States
corporations. A U.S. Holder which is a corporation may, under certain
circumstances, be entitled to a 70% deduction of the United States source
portion of dividends received from the Company (unless the Company qualifies as
a foreign personal holding company or a passive foreign
investment company, as defined below) if such U.S. Holder owns shares
representing at least 10% of the voting power and value of the Company. The
availability of this deduction is subject to several complex limitations which
are beyond the scope of this discussion.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Under current Treasury Regulations, dividends
paid on the Companys common  shares, if any, generally will not be subject to
information reporting and  generally will not be subject to U.S. backup withholding tax.
However, dividends  and the proceeds from a sale of the Companys common shares paid in
the U.S.  through a U.S. or U.S. related paying agent (including a broker) will be
subject  to U.S. information reporting requirements and may also be subject to the 31%
U.S. backup withholding tax, unless the paying agent is furnished with a duly  completed
and signed Form W-9. Any
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 102 | 
| | --- | 



---





|amounts withheld under the U.S. backup
withholding tax rules will be allowed as a refund or a credit against the U.S.  Holders
U.S. federal income tax liability, provided the required information is  furnished to the
IRS.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Foreign Tax Credit
|------------------



|For individuals whose entire income
from sources outside the United States consists of qualified passive income, the
total amount of creditable foreign taxes paid or accrued during the taxable year
does not exceed $300 ($600 in the case of a joint return) and an election is
made under section 904(j), the limitation on credit does not apply.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|A U.S. Holder who pays (or has withheld
from distributions) Canadian income tax with respect to the ownership of common
shares of the Company may be entitled, at the option of the U.S. Holder, to
either a deduction or a tax credit for such foreign tax paid or withheld.
Generally, it will be more advantageous to claim a credit because a credit
reduces United States Federal income taxes on a dollar-for-dollar basis, while a
deduction merely reduces the taxpayers income subject to tax. This
election is made on a year-by-year basis and applies to all foreign income taxes
(or taxes in lieu of income tax) paid by (or withheld from) the U.S. Holder
during the year. There are significant and complex limitations which apply to
the credit, among which is the general limitation that the credit cannot exceed
the proportionate share of the U.S. Holders United States income tax
liability that the U.S. Holders foreign source income bears to his/her or
its worldwide taxable income in the determination of the application of this
limitation. The various items of income and deduction must be classified into
foreign and domestic sources. Complex rules govern this classification process.
In addition, this limitation is calculated separately with respect to specific
classes of income such as passive income, high withholding tax
interest, financial services income, shipping
income, and certain other classifications of income. Dividends distributed
by the Company will generally constitute passive income or, in the
case of certain U.S. Holders, financial services income for these
purposes. The availability of the foreign tax credit and the application of the
limitations on the credit are fact specific and management urges holders and
prospective holders of common shares of the Company to consult their own tax
advisors regarding their individual circumstances.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 103 | 
| | --- | 



---





|Disposition of Common Shares of
the Company
|-------------------------------------------



|A U.S. Holder will recognize gain or
loss upon the sale of common shares of the Company equal to the difference, if
any, between (I) the amount of cash plus the fair market value of any property
received, and (ii) the shareholders tax basis in the common shares of the
Company. Preferential tax rates apply to long-term capital gains of U.S.
Holders, which are individuals, estates or trusts. This gain or loss will be
capital gain or loss if the common shares are capital assets in the hands of the
U.S. Holder, which will be a short-term or long-term capital gain or loss
depending upon the holding period of the U.S. Holder. Gains and losses are
netted and combined according to special rules in arriving at the overall
capital gain or loss for a particular tax year. Deductions for net capital
losses are subject to significant limitations. For U.S. Holders, which are not
corporations, any unused portion of such net capital loss may be carried over to
be used in later tax years until such net capital loss is thereby exhausted, but
individuals may not carry back capital losses. For U.S. Holders, which are
corporations (other than corporations subject to Subchapter S of the Code), an
unused net capital loss may be carried back three years from the loss year and
carried forward five years from the loss year to be offset against capital gains
until such net capital loss is thereby exhausted.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Other Considerations
|--------------------



|In the following circumstances, the
above sections of the discussion may not describe the United States Federal
income tax consequences resulting from the holding and disposition of common
shares of the Company.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Foreign Personal Holding Company
|--------------------------------



|If at any time during a taxable year
more than 50% of the total combined voting power or the total value of the
Companys outstanding shares is owned, actually or constructively, by five
or fewer individuals who are citizens or residents of the United States and 60%
(50% after the first tax year) or more of the Companys gross income for
such year was derived from certain passive sources (e.g. from interest income
received from its subsidiaries), the Company would be treated as a foreign
personal holding company. In that event, U.S. Holders that hold common
shares of the Company would be required to include in gross income for such year
their allocable portions of such passive income to the extent the Company does
not actually distribute such income.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 104 | 
| | --- | 



---





|The Company does not believe that it
currently has the status of a foreign personal holding company.
However, there can be no assurance that the Company will not be considered a
foreign personal holding company for the current or any future taxable year.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Foreign Investment Company
|--------------------------



|If 50% or more of the combined voting
power or total value of the Companys outstanding shares are held, actually
or constructively, by citizens or residents of the United States, United States
domestic partnerships or corporations, or estates or trusts other than foreign
estates or trusts (as defined by the Code Section 7701(a)(31), and the Company
is found to be engaged primarily in the business of investing, reinvesting, or
trading in securities, commodities, or any interest therein, it is possible that
the Company might be treated as a foreign investment company as
defined in Section 1246 of the Code, causing all or part of any gain realized by
a U.S. Holder selling or exchanging common shares of the Company to be treated
as ordinary income rather than capital gains.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Passive Foreign Investment
Company
|----------------------------------



|As a foreign corporation with U.S.
Holders, the Company could potentially be treated as a passive foreign
investment company (PFIC), as defined in Section 1297 of the Code,
depending upon the percentage of the Companys income which is passive, or
the percentage of the Companys assets which is held for the purpose of
producing passive income.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Certain United States income tax
legislation contains rules governing PFICs, which can have significant tax
effects on U.S. shareholders of foreign corporations. These rules do not apply
to non-U.S. shareholders. Section 1297 (a) of the Code defines a PFIC as a
corporation that is not formed in the United States and, for any taxable year,
either (I) 75% or more of its gross income is passive income, which
includes interest, dividends and certain rents and royalties or (ii) the average
percentage, by fair market value (or, if the company is a controlled foreign
corporation or makes an election, by adjusted tax basis), of its assets that
produce or are held for the production of passive income is 50% or
more. The taxation of a US shareholder who owns stock in a PFIC is extremely
complex and is therefore beyond the scope of this discussion. Management urges
US persons to consult with their own tax advisors with regards to the impact of
these rules.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 105 | 
| | --- | 



---





|Controlled Foreign Corporation
|------------------------------



|A Controlled Foreign Corporation (CFC)
is a foreign corporation more than 50% of whose stock by vote or value is, on
any day in the corporations tax year, owned (directly or indirectly) by
U.S. Shareholders. If more than 50% of the voting power of all classes of stock
entitled to vote is owned, actually or constructively, by citizens or residents
of the United States, United States domestic partnerships and corporations or
estates or trusts other than foreign estates or trusts, each of whom own
actually or constructively 10% or more of the total combined voting power of all
classes of stock of the Company could be treated as a controlled foreign
corporation under Subpart F of the Code. This classification would affect
many complex results, one of which is the inclusion of certain income of a CFC,
which is subject to current U.S. tax. The United States generally taxes United
States Shareholders of a CFC currently on their pro rata shares of the Subpart F
income of the CFC. Such United States Shareholders are generally treated as
having received a current distribution out of the CFCs Subpart F income
and are also subject to current U.S. tax on their pro rata shares of the
CFCs earnings invested in U.S. property. The foreign tax credit described
above may reduce the U.S. tax on these amounts. In addition, under Section 1248
of the Code, gain from the sale or exchange of shares by a U.S. Holder of common
shares of the Corporation which is or was a United States Shareholder at any
time during the five-year period ending with the sale or exchange is treated as
ordinary income to the extent of earnings and profits of the Company
(accumulated in corporate tax years beginning after 1962, but only while the
shares were held and while the Company was controlled) attributable
to the shares sold or exchanged. If a foreign corporation is both a PFIC and a
CFC, the foreign corporation generally will not be treated as a PFIC with
respect to the United States Shareholders of the CFC. This rule generally will
be effective for taxable years of United States Shareholders beginning after
1997 and for taxable years of foreign corporations ending with or within such
taxable years of United States Shareholders. The PFIC provisions continue to
apply in the case of PFIC that is also a CFC with respect to the U.S. Holders
that are less than 10% shareholders. Because of the complexity of Subpart F, a
more detailed review of these rules is outside of the scope of this discussion.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 106 | 
| | --- | 



---





|The amount of any backup withholding
will not constitute additional tax and will be allowed as a credit against the
U.S. Holders federal income tax liability.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------



|Filing of Information Returns. Under a
number of circumstances, United States Investor acquiring shares of the Company
may be required to file an information return with the Internal Revenue Service
Center where they are required to file their tax returns with a duplicate copy
to the Internal Revenue Service Center, Philadelphia, PA 19255. In particular,
any United States Investor who becomes the owner, directly or indirectly, of 10%
or more of the shares of the Company will be required to file such a return.
Other filing requirements may apply, and management urges United States
Investors to consult their own tax advisors concerning these requirements.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Item 11.  Disclosures about
Market Risk
|---------------------------------------



|Derivative Instruments and
Hedging Activities
|---------------------------------------------

|The Company will, from time to time,
use financial instruments to hedge their exposure to commodity and currency
markets.
|-------------------------------------------------------------------------------------------------------------------------



|As at December 31, 2001, Claude had
outstanding forward gold contracts related to 2002 production of 2,250 ounces at
an average price of US $292 per ounce. There was a market value gain inherent in
these contracts of US $34,000.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|As at December 31, 2000, Claude had no
outstanding gold derivative contacts.
|----------------------------------------------------------------------------



|As at December 31, 2001, Claude had
outstanding foreign contracts to sell US $5.3 million at an average exchange
rate of 1.5844 $CDN/$US. There was a market value loss inherent in these
contracts of US $27,000.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|As at December 31, 2000, Claude had no
outstanding foreign currency derivative  contracts.
|------------------------------------------------------------------------------------------



|Financial Risk
|--------------



|The principal financial risks of the
Corporation are associated with commodity pricing, foreign exchange and credit
lines. Claude has no long-term debt obligations. To provide maximum leverage for
our shareholders with gold price movements, only minimal gold hedging is
undertaken. The Company will not normally hedge gold beyond 25% of its annual
production.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 107 | 
| | --- | 



---





|A somewhat more aggressive approach is
taken in respect to hedging the CDN/US dollar exchange rate. The Company may
hedge up to 40% of its revenue stream, as considered appropriate.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Claude estimates that a US $10 per
ounce change in gold price will affect net earnings by approximately $.08
million ($0.02 per share), while a $0.01 change in the net earnings by
approximately $0.4 million ($0.01 per share).
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Company has a $2.5 million line of
credit available, which it utilizes to bridge working capital requirements. In
addition, letters of credit are provided to regulatory authorities to fund
future reclamation and decommission exposures.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Environmental
|-------------



|The Company monitors environmental
issues on an ongoing basis. Because environmental laws and regulations are
continually evolving, the Company is not able to predict the impact of future
changes on its financial and operating position. Reasonable provision for future
environmental cost has been made and is reflected in the financial statements.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Operational Risks
|-----------------



|Operational risks that could interrupt
or impact future production include supply obstacles, particularly those related
to the annual re-supply of the Seabee mine by means of the winter ice road,
physical asset damage or destruction, labor interruption, unexpected ground
conditions and incorrect estimates of geology and mineral reserves.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|To manage these risks, Claude carefully
plans and designs mining activities, trains employees in safety and production
methods, maintains adequate supply inventories and insurance and uses reputable
consultants where appropriate, particularly as related to rock mechanics and
reserve reviews. The Companys employees are non-unionized and every effort
is made to ensure that its labor relations are conducted in a professional
manner.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Competitive Environment
|-----------------------



|The Company competes with other mining
companies for exploration properties, joint venture agreements and for the  acquisition
of attractive gold companies. There is a risk that this
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 108 | 
| | --- | 



---





|competition  could increase the difficulty of
concluding a negotiation on terms that Claude  considers acceptable.
|------------------------------------------------------------------------------------------------------------------



|Item 12.  Description of Other
Securities
|-----------------------------------------



|Not Applicable
|--------------



|Part II
|-------



|Item 13.  Defaults, Dividend
Arrearages and Delinquencies
|---------------------------------------------------------



|Not Applicable
|--------------



|Item 14.  Modifications of
Rights of Securities Holders and  Use of Proceeds
|----------------------------------------------------------------------------



|Not Applicable
|--------------



|Part III
|--------



|Item 17.  Financial Statements
|------------------------------



|The Companys financial statements
are stated in Canadian Dollars (CDN$) and are prepared in accordance with
Canadian Generally Accepted Accounting Principles (GAAP), the application of
which, in the case of the Company, conforms in all material respects for the
periods presented with United States GAAP, except as disclosed in Note 17 to the
2001 audited financial statements.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The financial statements as required
under ITEM #17 are attached hereto and found immediately following the text of
this Registration Statement. The audit report of KPMGLLP, independent Chartered
Accountants, is included herein immediately preceding the financial statements
and schedules.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Item 18.  Financial Statements
|------------------------------



|The Company has elected to provide
financial statements pursuant to ITEM #17.
|-----------------------------------------------------------------------------



|Item 19.  Exhibits
|------------------



|(A) Financial Statements:
|-------------------------



|Audited Financial Statements
|----------------------------



| | 109 | 
| | --- | 



---





|Managements Responsibilities for Financial
Reporting
|-----------------------------------------------------



|Auditors Report, dated March 1, 2002
|-------------------------------------



|Consolidated Balance Sheets at December 31, 2001
and 2000
|---------------------------------------------------------



|Consolidated Statements of Earnings (Loss) for
the years ended December 31, 2001, 2000 and 1999
|-----------------------------------------------------------------------------------------------



|Consolidated Statements of Cash Flows for the
years ended December 31, 2001, 2000 and 1999
|------------------------------------------------------------------------------------------



|Consolidated Statements of Retained Earnings
(Deficit) for the years ended  December 31, 2001, 2000 and 1999
|------------------------------------------------------------------------------------------------------------



|Notes to Consolidated Financial Statements
|------------------------------------------



|Unaudited Financial Statements8
|-------------------------------



|Consolidated Balance Sheets at March 31, 2002
and March 31, 2001
|----------------------------------------------------------------



|Consolidated Statements of Loss for the three
months ended March 31, 2002 and  March 31, 2001
|---------------------------------------------------------------------------------------------



|Consolidated Statements of Retained
Earnings (Deficit) for the three months ended March 31, 2002 and March 31, 2001
|-------------------------------------------------------------------------------------------------------------------



|Consolidated Statements of Cash Flows for the three months
        ended March 31, 2002 and March 31, 2001
      Notes to Consolidated Financial Statements
|-----------------------------------------------------------------------------------------------------------------------------------------------------------

|(B) |  | Exhibits:
|--- |  | ---------

|    |  |                                                                                                                                 
|--- |  | --------------------------------------------------------------------------------------------------------------------------------
|1.1 |  | Certificate of Incorporation, Certificates of
      Name Change, Articles of Incorporation, Articles of Amalgamation and By-Laws

|    |  |                                                                                                              
|--- |  | -------------------------------------------------------------------------------------------------------------
|4.1 |  | Currie Rose Agreement dated August 1, 1994 between
      Claude Resources Inc. and Currie Rose Resources Inc.

|    |  |                                                                                                                        
|--- |  | -----------------------------------------------------------------------------------------------------------------------
|4.2 |  | Madsen property Option Agreement dated December
      15, 2000 between Claude Resources Inc. and Placer Dome (CLA) Ltd.

|
|

|8 |  | The Company has provided March 31, 2002 quarterly
      financial information pursuant to the requirements of Item 8.A.5 of Form
      20-F. This item states that if, at the date of the document, the Company
      has published interim financial information that covers a more current period
      than those otherwise required by this standard, the more current financial
      interim financial information must be included in this document.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 110 | 
| | --- | 



---



|4.3 |  | Amisk
Lake  Option  Agreement  dated  October  1, 1995  between  Claude  Resources  Inc.  and
Husky Oil  Operations Ltd. and Cameco Gold Inc.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------

|    |  |                                                                                                                         
|--- |  | ------------------------------------------------------------------------------------------------------------------------
|4.4 |  | Seabee Surface Lease Agreement between Claude
      Resources Inc. and the Government of Saskatchewan dated July 5, 1990

|    |  |                                                                         
|--- |  | ------------------------------------------------------------------------
|4.5 |  | Underwriting Agreement with Canaccord Capital
      dated April 23, 2002

|     |  |                               
|---- |  | ------------------------------
|10.1 |  | Geological Consultants Consent

|     |  |                                
|---- |  | -------------------------------
|10.2 |  | Oil and Gas Consultants Consent

|     |  |                     
|---- |  | --------------------
|10.3 |  | Accountants Consent

|     |  |                                          
|---- |  | -----------------------------------------
|99.1 |  | Information Circular dated April 12, 2001



| | 111 | 
| | --- | 



---





|SIGNATURE
|---------



|The Registrants hereby certify that they
meet all of the requirements for filing on Form 20-F and that they have duly
caused and authorized the undersigned to sign this Annual Report on their
behalf.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                    | CLAUDE RESOURCES INC.
|------------------- | ---------------------
|                    |                      
|                    | (Registrant)         
|                    |                      
|Dated: July 7, 2003 | By:                  









| |  | 
| |  | 



---





|MANAGEMENTS RESPONSIBILITY FOR  CONSOLIDATED
FINANCIAL STATEMENTS
|------------------------------------------------------------------



|The accompanying consolidated financial
statements of Claude Resources Inc. are  the responsibility of management and have been
approved by the Board of  Directors.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The consolidated financial statements
have been prepared by management in conformity with Canadian generally accepted
accounting principles. The consolidated Canadian financial statements include
some amounts that are based on best estimates and judgements. Financial
information used elsewhere in the annual report is consistent with that in the
financial statements.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The management of the Company, in
furtherance of the integrity and objectivity of data in the financial
statements, has developed and maintains a system of internal accounting
controls. Management believes the internal accounting controls provide
reasonable assurance that financial records are reliable and form a proper basis
for preparation of financial statements and that assets are properly accounted
for and safeguarded. The internal accounting control process includes
managements communication to employees of policies which govern ethical
business conduct.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Board of Directors carries out its
responsibility for the consolidated financial statements in this annual report
principally through its audit committee, consisting primarily of outside
directors. The audit committee reviews the Companys annual consolidated
financial statements and recommends their approval to the Board of Directors.
The shareholders auditors have full access to the audit committee, with
and without management being present.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|These consolidated financial statements
have been examined by the shareholders auditors, KPMG LLP, Chartered
Accountants, in accordance with Canadian generally accepted auditing standards
and their independent professional opinion on the fairness of the financial
statements is attached.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|/s/ Arnie E. Hillier
      Vice Chairman, Chief Executive Officer and 
      Chief Financial Officer 
      Saskatoon, Canada 
      March 1, 2002
|--------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|AUDITORS REPORT
|----------------



|To the shareholders of Claude Resources Inc.:
|---------------------------------------------



|We have audited the consolidated
balance sheets of Claude Resources Inc. as at December 31, 2001 and 2000 and the
consolidated statements of earnings (loss), retained earnings (deficit) and cash
flows for each of the years in the three year period ended December 31, 2001.
These financial statements are the responsibility of the companys
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|With respect to the consolidated
financial statements for the years ended December 31, 2001 and 2000, we
conducted our audits in accordance with Canadian generally accepted auditing
standards and United States generally accepted auditing standards. With respect
to the consolidated financial statements for the year ended December 31, 1999,
we conducted our audit in accordance with Canadian generally accepted auditing
standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|In our opinion, these consolidated
financial statements present fairly, in all material respects, the financial
position of the company as at December 31, 2001 and 2000 and the results of its
operations and its cash flows for each of the years in the three year period
ended December 31, 2001 in accordance with Canadian generally accepted
accounting principles.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Canadian generally accepted accounting
principles vary in certain significant respects from accounting principles
generally accepted in the United States. Application of accounting principles
generally accepted in the United States would have affected results of
operations for each of the years in the two year period ended December 31, 2001
and shareholders equity as at December 31, 2001 and 2000 to the extent
summarized in Note 17 to the consolidated financial statements.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|/s/ KPMG LLP
      Chartered Accountants 
      Saskatoon, Canada 
      March 1, 2002
|--------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|CONSOLIDATED BALANCE SHEETSDECEMBER 31
(CANADIAN DOLLARS IN THOUSANDS)
|----------------------------------------------------------------------

|                                                  |  | 2001          |  | 2000          |  
|------------------------------------------------- |  | ------------- |  | ------------- | -
|Assets                                            |  |               |  |               |  
|Current assets:                                   |  |               |  |               |  
|Cash                                              |  | $       1,899 |  | $         980 |  
|Short-term investments                            |  | 657           |  | -             |  
|Receivables                                       |  | 940           |  | 2,375         |  
|Inventories (Note 2)                              |  | 4,646         |  | 4,118         |  
|Shrinkage stope platform costs
          (Note 3) |  | 2,831         |  | 4,742         |  
|Prepaids                                          |  | 300           |  | 417           |  
|                                                 
|                                                  |  | 11,273        |  | 12,632        |  
|Oil and gas properties (Note 4)                   |  | 3,120         |  | 2,649         |  
|Mineral properties (Note 5)                       |  | 13,834        |  | 15,008        |  
|Investments (Note 6)                              |  | 684           |  | 684           |  
|                                                 
|                                                  |  | $     28,911  |  | $     30,973  |  
|                                                 
|Liabilities and Shareholders Equity              |  |               |  |               |  
|Current liabilities:                              |  |               |  |               |  
|Payables and accrued liabilities                  |  | $       2,355 |  | $       4,201 |  
|Demand loan (Note 7)                              |  | 438           |  | -             |  
|                                                 
|                                                  |  | 2,793         |  | 4,201         |  
|Future site reclamation costs (Note 8)            |  | 2,575         |  | 2,515         |  
|Shareholders equity:                             |  |               |  |               |  
|Share capital (Note 9)                            |  | 18,362        |  | 56,893        |  
|Retained earnings (deficit)                       |  | 5,181         |  | (32,636       | )
|                                                 
|                                                  |  | 23,543        |  | 24,257        |  
|                                                 
|Commitments and contingencies (Note 8 and 14)     |  | $    28,911   |  | $     30,973  |  
|                                                 



|See accompanying notes to consolidated
financial statements.
|------------------------------------------------------------



|On behalf of the Board:
|-----------------------



|/s/ William R. MacNeill
      Director | /s/ Jon R. MacNeill
      Director
|-------------------------------------- | ----------------------------------



| |  | 
| |  | 



---





|CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
YEARS ENDED DECEMBER 31 (CANADIAN DOLLARS IN THOUSANDS)
|--------------------------------------------------------------------------------------------------

|                                            |  | 2001         | 2000 | 1999         
|------------------------------------------- |  | ------------ | ---- | -------------
|Revenues:                                   |  |              |      |              
|Gold                                        |  | $     19,524 |      | $     24,166 
|Oil and gas:                                |  |              |      |              
|Gross revenue                               |  | 9,024        |      | 9,300        
|Crown royalties                             |  | (2,672       | )    | (2,516       
|Alberta Royalty Tax Credit                  |  | 619          |      | 584          
|Overriding royalties                        |  | (3,885       | )    | (4,061       
|                                            | 
|Net oil and gas revenue                     |  | 3,086        |      | 3,307        
|                                            | 
|                                            |  | 22,610       |      | 27,473       
|Expenses:                                   |  |              |      |              
|Gold                                        |  | 15,817       |      | 16,432       
|Oil and gas                                 |  | 1,732        |      | 1,582        
|General and administrative                  |  | 1,684        |      | 1,715        
|Interest and other (Note 10)                |  | (30          | )    | 167          
|Provision for income taxes (Note 11)        |  | 26           |      | 32           
|                                            | 
|                                            |  | 19,229       |      | 19,928       
|                                            |  |              |      |              
|Earnings before the undernoted items        |  | 3,381        |      | 7,545        
|Depreciation, depletion and reclamation:    |  |              |      |              
|Gold                                        |  | 5,217        |      | 4,194        
|Oil and gas                                 |  | 347          |      | 467          
|Write-down of mineral properties            |  | -            |      | 51,078       
|Provision for foreign currency fluctuations |  | -            |      | 529          
|                                            | 
|Net earnings (loss)                         |  | $     (2,183 | )    | $     (48,723
|                                            | 
|Net earnings (loss) per share (Note 12)     |  |              |      |              
|Basic and diluted                           |  | $(0.05       | )    | $(1.25       



|See accompanying notes to consolidated financial
statements.
|------------------------------------------------------------



|CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(DEFICIT) YEARS ENDED DECEMBER 31 (CANADIAN DOLLARS IN THOUSANDS)
|--------------------------------------------------------------------------------------------------------------

|                                               |  | 2001          | 2000 | 1999        
|---------------------------------------------- |  | ------------- | ---- | ------------
|Retained earnings (deficit), beginning of year |  | $    (32,636  | )    | $     16,087
|Reduction of stated capital (Note 9)           |  | 40,000        |      | -           
|Net earnings (loss)                            |  | (2,183        | )    | (48,723     
|                                               | 
|Retained earnings (deficit), end of year       |  | $       5,181 |      | $   (32,636 
|                                               | 



|See accompanying notes to consolidated
financial statements.
|------------------------------------------------------------



| |  | 
| |  | 



---





|CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS
ENDED DECEMBER 31 (CANADIAN DOLLARS IN THOUSANDS)
|---------------------------------------------------------------------------------------------

|                                                    |  | 2001        | 2000 | 1999       
|--------------------------------------------------- |  | ----------- | ---- | -----------
|Cash provided from (used in):                       |  |             |      |            
|                                                    |  |             |      |            
|Operations:                                         |  |             |      |            
|Net earnings (loss)                                 |  | $    (2,183 | )    | $   (48,723
|Non cash items:                                     |  |             |      |            
|Depreciation, depletion and reclamation             |  | 5,564       |      | 4,661      
|Write-down of mineral properties                    |  | -           |      | 51,078     
|Provision for foreign currency
        fluctuations |  | -           |      | 529        
|                                                   
|                                                    |  | 3,381       |      | 7,545      
|Net change in non-cash working capital:             |  |             |      |            
|Receivables                                         |  | 1,435       |      | 1,271      
|Inventories                                         |  | (528        | )    | 494        
|Shrinkage stope platform costs                      |  | 1,911       |      | 240        
|Prepaids                                            |  | 117         |      | (99        
|Payables and accrued liabilities                    |  | (1,846      | )    | 2,027      
|Obligations relating to foreign                     |  |             |      |            
|currency fluctuations                               |  | -           |      | (2,420     
|                                                   
|                                                    |  | 4,470       |      | 9,058      
|Investing:                                          |  |             |      |            
|Short-term investments                              |  | (657        | )    | -          
|Mineral properties                                  |  | (3,983      | )    | (8,294     
|Oil and gas properties                              |  | (818        | )    | (523       
|Increase in investments                             |  | -           |      | (31        
|                                                   
|                                                    |  | (5,458      | )    | (8,848     
|Financing:                                          |  |             |      |            
|                                                    |  |             |      |            
|Issue of common shares                              |  | 1,469       |      | 897        
|Demand loan:                                        |  |             |      |            
|Proceeds                                            |  | 658         |      | -          
|Repayment                                           |  | (220        | )    | -          
|Brokerage deposits                                  |  | -           |      | 198        
|                                                   
|                                                    |  | 1,907       |      | 1,095      
|                                                    |  |             |      |            
|Increase in cash position                           |  | 919         |      | 1,305      
|Cash position, beginning of year                    |  | 980         |      | (325       
|                                                   
|Cash position, end of year                          |  | $     1,899 |      | $      980 
|                                                   
|Supplemental cash flow disclosure:                  |  |             |      |            
|                                                    |  |             |      |            
|Interest paid                                       |  | 176         |      | 301        
|Income taxes paid                                   |  | 26          |      | 32         



|See accompanying notes to consolidated financial
statements.
|------------------------------------------------------------



| |  | 
| |  | 



---





|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31 CANADIAN DOLLARS IN THOUSANDS (EXCEPT PER SHARE AMOUNTS)
|---------------------------------------------------------------------------------------------------------------------------



|Operations:
|-----------



|The operations of the Company consist of the
following:
|-------------------------------------------------------



|SEABEE GOLD MINE
|----------------



|The Seabee gold mine, owned 100% by the
Company, is located 125 kilometres northeast of La Ronge, Saskatchewan. Mining  of the
ore reserves commenced in November, 1991 with commercial production  achieved in
December, 1991.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|OIL & GAS
|---------



|The Company, through its wholly-owned subsidiary
574095 Alberta Ltd., has a participating interest in the Nipisi  Gilwood No. 1 oilfield
and the Edson Gas Unit No. 1 gas field and associated gas plant and gathering lines. Both
areas are considered mature and are operated by others. The areas are also subject to an
overriding royalty.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|In the Gainsborough area of
southeastern Saskatchewan, the Company owns a 75% working interest in six
vertical producing oil wells, one water disposal well and a 33.75% working
interest in five producing horizontal wells.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|1. Significant Accounting Policies:
|-----------------------------------



|The consolidated financial statements
have been prepared in accordance with Canadian generally accepted accounting
principles. Generally accepted accounting principles require that management
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amount of revenues and expenses during
the year. Actual amounts could differ from those estimates.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|A summary of significant accounting
policies is as follows:
|-----------------------------------------------------------



|CONSOLIDATION PRINCIPLES
|------------------------



|The consolidated financial statements  include
the accounts of the Company and its subsidiary. Interests in joint  ventures are
accounted for by the proportionate consolidation method.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|CASH
|----



|Cash and cash equivalents include cash  and
short-term investments which, on acquisition, have a term to maturity of  three months or
less. Cash position consists of cash and cash equivalents less  bank indebtedness as it
relates to an excess of outstanding cheques over cash on  deposit.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|SHORT-TERM INVESTMENTS
|----------------------



|Short-term investment certificates are carried
at the lower of cost and market  value.
|--------------------------------------------------------------------------------------



|INVESTMENTS
|-----------



|Investments in shares of other  companies are
carried at cost or at cost less amounts written off to reflect an  impairment in value
that is other than a temporary decline.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|INVENTORIES
|-----------



|Gold inventory, which includes gold  bullion,
gold contained in the milling circuit and stockpiled ore is valued at  the lower of cost
and net realizable value. Costs include labour, equipment  costs and operating overhead.
Material and supplies inventory is valued at the  lower of cost and net realizable value.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|SHRINKAGE STOPE PLATFORM COSTS
|------------------------------



|The Company utilizes the shrinkage  stope mining
method to mine its ore body at the Seabee mine. Under this method,  ore used as a working
platform to access and mine further ore, is valued at the  lower of cost and net
realizable value. Costs include labour, equipment costs  and operating overhead. This
broken ore is reclassified to inventory once  transported to surface.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|OIL & GAS OPERATIONS
|--------------------



|The Company follows the full cost
method of accounting whereby all costs relating to the exploration for and
development of oil and gas reserves are capitalized. Such costs include land
acquisition costs, geological and geophysical expenses, engineering fees,
related direct administrative expenses, the costs of drilling both productive
and non-productive wells, including production equipment and the cost of
constructing processing facilities. Also capitalized are identifiable carrying
charges on undeveloped properties. Proceeds received from disposal of property
interests are credited against accumulated costs except when the disposition
results in a significant change in the depletion rate, in which case a gain or
loss on disposal is recognized. The carrying values of the Companys oil
and gas properties are compared annually to an estimate of future net cash flow
from the production of proven reserves, less future removal, restoration and
capital costs as well as general and administrative expenses, financing costs
and income taxes based on year-end prices and costs. Should this comparison
indicate an excess carrying value, a write-down is recorded.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Estimates are made of removal and site
restoration costs, net of expected recoveries, and are charged as additional
depletion expense using the unit of production method. The accumulated charges,
less actual costs incurred, are reflected on the balance sheet as a reduction in
the net book value of oil and gas properties.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The costs related to petroleum and  natural gas
properties are depleted on the unit of production method based on  the estimated proven
reserves as determined by independent consultants, before
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|deduction of royalties and after conversion to
units of common measure based on  relative energy content.
|---------------------------------------------------------------------------------------------------------



|The Company is engaged in oil and gas
exploration and production in Canada and substantially all of these activities  are
conducted with others. The accounts reflect only the Companys  proportionate
interest in such activities.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|MINERAL PROPERTIES
|------------------



|All costs related to the acquisition,
exploration and development of mineral properties and the development of milling
assets are capitalized. Development costs at our producing property include only
those historical expenditures incurred to extend reserves by converting
mineralized material to reserves or for further delineation of existing
reserves. Interest on debt associated with the acquisition of mineral properties
is capitalized until commencement of commercial production. There have been no
interest costs capitalized to date. Amounts reflected for mineral properties not
in commercial production represent costs incurred to date, net of write-downs
and are not intended to reflect present or future values. The recoverability of
the costs is dependent upon the discovery of economically recoverable ore
reserves, the ability to obtain necessary financing to complete development and
the development of future profitable production from the properties or
realization of sufficient proceeds from the disposition of the properties.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Upon commencement of commercial  production, the
related historical accumulated costs are amortized against  future income of the project
using the unit of production method over estimated  recoverable ore reserves. Estimated
recoverable ore reserves include proven and  probable mineral reserves. Costs which are
not considered economically  recoverable through mining operations, through sale of
reserves, or are related  to projects which are allowed to lapse, are expensed. Mining
equipment is  depreciated over its estimated useful life of three years on a straight
line  basis.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Estimated future site reclamation costs  are
based primarily on environmental and regulatory requirements and are accrued  on a unit
of production basis over estimated recoverable proven and probable  mineral reserves.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|When options are granted on mineral  properties
or properties are sold, proceeds are credited to the cost of the  property. If no future
capital expenditure is required and proceeds exceed  costs, the amount is reported as a
gain.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|REVENUE RECOGNITION
|-------------------



|Revenue from gold sales are recognized
when the rights and obligations of ownership pass to the buyer. Settlement
adjustments arising from final determination of metal weights and assays are
reflected in sales when determined. Revenue associated with the sale of oil,
ngls and gas represents the Companys share of the sale value of production
during the year (Entitlement Method). Revenue is recognized when the rights and
obligations of ownership pass to the buyer.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---







|FOREIGN CURRENCY TRANSLATIONS
|-----------------------------



|Revenues and expense transactions  denominated
in foreign currencies are translated in Canadian dollars at the rate  of exchange
prevailing at the date of the transaction. Monetary assets and  liabilities denominated
in foreign currencies are translated in Canadian dollars  at the rate of exhange in
effect at the balance sheet date. Exchange gains and  losses on these transactions are
included in earnings.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|HEDGING TRANSACTIONS
|--------------------



|In order to protect against the impact  of
falling gold prices and foreign currency fluctuations, the Company may enter  into spot
deferred, forward sales contracts and option contracts which not only  provide a minimum
price for future production, but also allows the Company to  take advantage of increases
in gold prices and the US dollar. Gains or losses on  hedge contracts are recognized as
part of operations on designated production  delivery dates.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|INCOME TAXES
|------------



|Future income tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying value of existing assets
and liabilities and their respective tax bases. Future income tax assets and
liabilities are measured using enacted or substantially enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|STOCK BASED COMPENSATION PLANS
|------------------------------



|The Company has two stock based
compensation plans which are described in Note 9. Under the share option plan,
no compensation expense is recognized when stock options are issued to
employees, officers or directors. Under the Employee Share Purchase Plan
compensation expense is recognized for the value of the Companys
contribution to the plan. Under both plans any consideration paid by employees,
officers or directors on exercise of stock options or purchase of stock is
credited to share capital.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|2. Inventories:
|---------------

|                       |  | 2001       | 2000
|---------------------- |  | ---------- | ----
|Bullion in-circuit     |  | $    1,113 |     
|Stockpiled ore         |  | 503        |     
|Materials and supplies |  | 3,030      |     
|                       | 
|                       |  | $    4,646 |     
|                       | 



|Bullion in-circuit and stockpiled ore
is composed of ore in various stages of the production cycle and is expected to
be processed in the following 12 months. The processing of the stockpiled ore
occurs in accordance with a mine plan based on the known mineral reserves and
current mill capacity. The timing of processing of ore in stockpiles has not
been significantly affected by historic prices of gold.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|3. Shrinkage Stope Platform Costs:
|----------------------------------

|                     |  | 2001       | 2000
|-------------------- |  | ---------- | ----
|Stope platform costs |  | $    2,831 |     
|                     | 



|Shrinkage stope platform costs
represent ore that is being used as a working stage, within the stope, to gain
access to further ore. This ore is expected to be processed in the following 12
months. The processing of this broken ore occurs in acccordance with a mine plan
based on the known mineral reserves and current mill capacity. The timing of
processing of ore has not been significantly affected by historic prices of
gold.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4. Oil & Gas Properties:
|------------------------



|Details of the Companys property,
plant and equipment are as follows:
|----------------------------------------------------------------------

|                                                     | Cost     | Accumulated 
        depreciation, 
        depletion and  
        write down | 2001 
        Net | Cost     | Accumulated 
        depreciation,  
        depletion and 
        write down | 2000 
        Net
|---------------------------------------------------- | -------- | ------------------------------------------------------------------------------ | ----------------- | -------- | ------------------------------------------------------------------------------ | -----------------
|                                                    
|Property acquisition 
            and drilling costs | $  2,481 | $  1,457                                                                       | $ 1,024           | $  2,255 | $  1,371                                                                       | $     884        
|Gas plant and production 
             equipment     | 5,078    | 2,982                                                                          | 2,096             | 4,503    | 2,738                                                                          | 1,765            
|                                                    
|                                                     | $  7,559 | $  4,439                                                                       | $ 3,120           | $  6,758 | $  4,109                                                                       | $  2,649         
|                                                    



|The Alberta oil and gas properties are
subject to an overriding royalty. This obligation will cease when approximately
$147,500,000 has been paid or when the properties cease to produce.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Amounts of the cumulative overriding
royalty paid or accrued are as follows:
|----------------------------------------------------------------------------

| |                  
| | -----------------
| | December 31, 2001
| | December 31, 2000



|5. Mineral Properties:
|----------------------



|Details of the Companys property,
plant and equipment are as follows:
|----------------------------------------------------------------------

|                                                                              | Cost          | Accumulated 
        depreciation, 
        depletion and  
        write down | 2001 
        Net | Cost     | Accumulated 
        depreciation,  
        depletion and 
        write down | 2000 
        Net
|----------------------------------------------------------------------------- | ------------- | ------------------------------------------------------------------------------ | ----------------- | -------- | ------------------------------------------------------------------------------ | -----------------
|                                                                             
|Property acquisition  
             and mine development  
             costs | $      59,103 | $  52,278                                                                      | $    6,825        | $ 56,641 | $  50,011                                                                      | $    6,630       
|Buildings, plant andequipment                                                 | 37,831        | 30,907                                                                         | 6,924             | 36,423   | 28,045                                                                         | 8,378            
|Exploration properties                                                        | 4,723         | 4,638                                                                          | 85                | 4,610    | 4,610                                                                          | -                
|                                                                             
|                                                                              | $  101,657    | $  87,823                                                                      | $ 13,834          | $ 97,674 | $  82,666                                                                      | $ 15,008         
|                                                                             



|On December 15, 2000, Claude entered
into an option agreement with Placer Dome (CLA) Limited (Placer) in
respect of the Madsen gold exploration property.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|This option agreement entitles Placer
to earn a 55% working interest in the Madsen property by expending $8.2 million
over three years and delivering to Claude a bankable feasibility study by the
end of the fifth year. Placer may abandon the option at any time after spending
$1.2 million.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Upon Placer fulfilling its obligations
in respect of the option agreement, Placer and Claude will form a joint venture
with respective interests of 55% and 45%. At Claudes request, Placer may
earn an additional 5% of the project by funding Claudes share of
infrastructure costs associated with any mine development on the property. Under
the agreement Claudes interests cannot be reduced below 40%.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|6. Investments:
|---------------

|                     |  | 2001      | 2000
|-------------------- |  | --------- | ----
|Investments, at cost |  | $     684 |     
|                     | 



|At December 31, 2001, the quoted market
value of the investments was $.7 million (2000  $1.2 million).
|-------------------------------------------------------------------------------------------------------



|7. Demand Loan:
|---------------



|The demand loan bears interest at
prime, is repayable in monthly principal payments of $27,406 plus interest, and
matures on May 15, 2002. The loan is secured by a general security agreement
covering all assets of the Company, excluding oil and gas assets in Alberta.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Company has a $2,500,000 operating
line of credit which bears interest at prime plus 1.5%. These funds are
available for general corporate purposes. At December 31, 2001, the unused
portion of the bank line was $2.2 million.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|8. Future Site Reclamation Costs:
|---------------------------------



|The Company has accrued estimated future site
reclamation costs for the  following properties:
|----------------------------------------------------------------------------------------------

|            |  | 2001      | 2000
|----------- |  | --------- | ----
|Seabee      |  | $     918 |     
|Madsen      |  | 657       |     
|Tartan Lake |  | 1,000     |     
|            | 
|            |  | $  2,575  |     
|            | 



|Potential changes in regulatory
requirements as well as the continuing process of evaluating reclamation
alternatives result in an element of uncertainty in estimating these amounts.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|As required by regulatory authorities, the
Company has provided letters of  credit as security for reclamation related to the Madsen
property in the amount  of $657,736.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|The Company estimates total future
reclamation costs on its mining properties to be $2,800,000.
|-----------------------------------------------------------------------------------------------



|9. Share Capital:
|-----------------



|AUTHORIZED
|----------



|The authorized share capital of the  Company
consists of unlimited common shares and two classes of unlimited  preferred shares
issuable in series.
|---------------------------------------------------------------------------------------------------------------------------------------------------



|The common shares of Claude are  entitled to
dividends pro rated and when declared by the Board of Directors, to  one vote per share
at meetings of the shareholders of Claude and, upon  dissolution or any other
distribution of assets, to receive pro rated such  assets of the Corporation as are
distributable to the holders of the common  shares.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The first preferred shares are issuable  in
series and rank ahead of the second preferred shares and the common shares in  respect of
dividend payment, dissolution or any other distribution of assets.  The other rights,
privileges, restrictions and conditions attaching to each  series of the first preferred
shares are fixed by the Directors of Claude at the  time of creation of such series.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The second preferred shares are
issuable in series and rank ahead of the common shares in respect of dividend
payment, dissolution or any other distribution of assets. The other rights,
privileges, restrictions and conditions attached to each series of the second
preferred shares are fixed by the Directors of Claude at the time of creation of
such series.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ISSUED AND OUTSTANDING COMMON SHARES
|------------------------------------

|                  |                                   | 2001      | 2000       | 1999   
|----------------- | --------------------------------- | --------- | ---------- | -------
|                  |                                   | Number    | Amount     | Number 
|                 
|Beginning of year | 40,224,866                        |           | $   56,893 |        
|                  | ESPP (a)                          | 328,987   |            | 176    
|                  | Exercise of stock options (b)     | -         |            | -      
|                  | Madsen Gold Corp. acquisition (c) | -         |            | -      
|                  | Issued for mineral properties (d) | -         |            | -      
|                  | Flow-through shares (e)           | -         |            | -      
|                  | Issue costs                       | -         |            | -      
|                  | Flow-through shares (f)           | -         |            | -      
|                  | Issue costs                       | -         |            | -      
|                  | Public offering (g)               | -         |            | -      
|                  | Issue costs                       | -         |            | -      
|                  | Purchase of royalty interest (h)  | -         |            | -      
|                  | Issue costs                       | -         |            | -      
|                  | Employee awards (i)               | -         |            | -      
|                  | Option agreement (j)              | -         |            | -      
|                  | Issue costs                       | -         |            | -      
|                  | Reduction in stated capital (k)   | -         |            | (40,000
|                  | Flow-through shares (l)           | 2,500,000 |            | 1,375  
|                  | Issue costs                       | -         |            | (82    
|                 
|End of year       | 43,053,853                        |           | $   18,362 |        
|                 



| |  | 
| |  | 



---







|(a) EMPLOYEE SHARE PURCHASE PLAN
(ESPP)
|-----------------------------------------



|The ESPP was established to encourage  employees
to purchase Company common shares. Under the plan, eligible employees  may contribute up
to 5% of their basic annual salary and the Company shall  contribute common shares in an
amount equal to 50% of the employees  contribution. Shares of the Company are
issued to employees based on a weighted  average market price over a specific period.
During 2001, the Company issued  328,987 common shares (2000-245,567; 1999-103,454) for
$176,000 (2000-$211,000;  1999-$143,000) pursuant to this plan. The Company has reserved
for issuance  1,250,000 common shares pursuant to this plan of which 768,289 shares have
been  issued.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) SHARE OPTION PLAN
|---------------------



|The Company has established a share  option plan
under which options may be granted to directors, officers and key  employees to purchase
up to an aggregate of 3,500,000 common shares. Options  granted have an exercise price of
not less than the market price of the common  shares on the stock exchange on which the
shares are traded. Options granted  expire 10 years from the date of the grant of the
option.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|For options outstanding at December 31, 2001 and
2000 weighted average exercise  prices are as follows:
|-------------------------------------------------------------------------------------------------------

|                  |  | 2001 
        Options |   | Average 
        Price |  | 2000 
        Options |   | Average 
      Price | 
|----------------- |  | --------------------- | - | ---------------------- |  | --------------------- | - | -------------------- | 
|                 
|Beginning of year |  | 1,600,000             |   | $   1.35               |  | 1,624,000             |   | $   1.47             | 
|Options granted   |  | 760,000               |   | .53                    |  | 236,000               |   | .56                  | 
|Options exercised |  | -                     |   | -                      |  | -                     |   | -                    | 
|Options cancelled |  | (100,000              | ) | .60                    |  | -                     |   | -                    | 
|Options expired   |  | -                     |   | -                      |  | (260,000              | ) | 1.35                 | 
|                  | 
|End of year       |  | 2,260,000             |   | $   1.11               |  | 1,600,000             |   | $   1.35             | 
|                  | 
|Exercisable       |  | 2,250,000             |   | $   1.11               |  | 1,530,000             |   | $   1.37             | 
|                  | 



|For options outstanding at December 31,
2001 the range of exercise prices, the weighted average exercise price and the
weighted average remaining contractual life are as follows:
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Options 
        Price 
        Per Share |  | Number    |  | Weighted 
        Average 
        Exercise 
        Price |  | Weighted 
        Average 
        Remaining 
        Life
|----------------------------------------- |  | --------- |  | ---------------------------------------------------------- |  | ----------------------------------------------------------
|                                         
|$0.53-$1.06                               |  | 946,000   |  | 0.56                                                       |  | 9.68 years                                                
|$1.30-$3.05                               |  | 1,314,000 |  | 1.50                                                       |  | 6.93 years                                                
|                                         
|                                          |  | 2,260,000 |  | $    1.11                                                  |  | 8.08 years                                                
|                                         



|(c) MADSEN GOLD CORP. ACQUISITION
|---------------------------------



|During 1999, 49,852 common shares with
an attributed value of $2.48 per share were issued as partial payment of share
issue costs with respect to the 1998 Madsen Gold Corp. acquisition.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---







|(d) ISSUED FOR MINERAL PROPERTIES
|---------------------------------



|During 1999, the Company acquired  rights on
mineral properties in exchange for 10,000 common shares of the Company  having an
attributed value of $18,000 ($1.80 per share).
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(e) FLOW-THROUGH SHARES
|-----------------------



|During 1998, the Company fulfilled the  terms of
the flow-through share agreement entered into in 1997. This agreement  required the
Company to expend $2,900,000 in qualifying Canadian Exploration  Expenses as defined in
the Income Tax Act (Canada) prior to December 31, 1998.  In return, the Company issued
1,000,000 special warrants at $2.90 per special  warrant for proceeds of $2,900,000. Each
special warrant entitled the subscriber  to acquire, without additional payment, one
common share of the Company for each  special warrant. These warrants expired in December
1999. As at December 31,  1999, 1,000,000 common shares were issued.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(f) FLOW-THROUGH SHARES
|-----------------------



|During 1998, the Company fulfilled the  terms of
the flow-through special warrant investee agreements for the issue of  909,091 special
warrants at a price of $1.65 per special warrant for proceeds of  $1,500,000. The
agreements required the Company to expend $1,500,000 in  qualifying Canadian Exploration
Expenses as defined in the Income Tax Act  (Canada) prior to December 31, 1999. Each
special warrant entitled the  subscriber to acquire, without additional payment, one
common share of the  Company for each special warrant. These warrants expired in December
1999. As at  December 31, 1999, 909,091 common shares were issued.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(g) PUBLIC OFFERING
|-------------------



|During 1999, the Company completed a  public
offering for the issue of 5,350,000 special warrants at an issue price of  $1.50 per
special warrant. Upon exercise and for no additional consideration,  each special warrant
entitles the holder to receive one common share in the  capital of the Company and
one-half of one common share purchase warrant. Each  whole warrant shall entitle the
holder thereof to acquire one common share up to  April 12, 2002, on payment of an
additional $1.85. As at December 31, 1999,  5,350,000 common shares were issued.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(h) PURCHASE OF ROYALTY INTEREST
|--------------------------------



|By agreement dated June 24, 1999,
between the Company and Metal Royalties Corporation (Metal
Royalties), Claude purchased a 1.35% net smelter royalty from Metal
Royalties for $1,100,025. The purchase price was satisfied by the issuance to
Metal Royalties of 628,586 special warrants each convertible, for no additional
consideration upon exercise, into one common share of the Company. As at
December 31, 2000, 628,586 common shares were issued.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---







|(i) EMPLOYEE AWARDS
|-------------------



|During 1999, as a result of the success  in the
mine rescue competition, the team was awarded 5,000 common shares with an  attributed
value of $7,000.
|------------------------------------------------------------------------------------------------------------------------------------------------------



|(j) OPTION AGREEMENT
|--------------------



|Pursuant to the agreement with Placer  Dome
(CLA) Limited (See Note 5), Placer subscribed for 1,000,000 common shares  at an issue
price of $.75 per share.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------



|(k) REDUCTION IN STATED CAPITAL
|-------------------------------



|At the annual meeting of shareholders  on May
23, 2001, a special resolution was passed reducing the stated capital of  the Company by
$40 million.
|---------------------------------------------------------------------------------------------------------------------------------------------------



|(l) FLOW-THROUGH SHARES
|-----------------------



|During 2001 the Company entered into a
flow-through share agreement for the issue of 2,500,000 common shares at a price
of $.55 per share for proceeds of $1,375,000. The Company must expend $1,375,000
in a qualifying Canadian Exploration Expenses as defined in the Income Tax Act
(Canada) prior to December 31, 2002.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|10. Interest and Other:
|-----------------------

|                                |  | 2001     | 2000 | 1999   
|------------------------------- |  | -------- | ---- | -------
|Interest expense                |  | $   176  |      | $   301
|Less: interest and other income |  | (206     | )    | (134   
|                                | 
|Interest and other              |  | $    (30 | )    | $   167
|                                | 



|11. Income Taxes:
|-----------------



|The significant components of future income tax
assets at December 31, are as  follows:
|---------------------------------------------------------------------------------------

|                                                          |                                |         | 2001              | 2000   
|--------------------------------------------------------- | ------------------------------ | ------- | ----------------- | -------
|Future income tax assets:                                
|                                                          | Mineral properties             |         | $    36,009       |        
|                                                          | Non-capital loss carryforwards |         | 8,485             |        
|                                                          | Provision for reclamation      |         | 1,159             |        
|                                                          | Share issue costs              |         | 359               |        
|                                                          |                               
|Future
      income tax assets before valuation allowance |                                | 46,012  |                   | 45,762 
|Valuation allowance                                       |                                | (46,012 | )                 | (45,762
|                                                          |                               
|                                                          | Future income tax assets       |         | $               - |        
|                                                          |                               



|The provision for income taxes differs
from the amount computed by applying the combined expected federal and
provincial income tax rate to earnings before income taxes. The reasons for
these differences are as follows:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---



|                                             |  | 2001         | 2000 | 1999          
|-------------------------------------------- |  | ------------ | ---- | --------------
|Earnings (loss) before income taxes          |  | $   (2,157   | )    | $   (48,691   
|Combined federal and provincial tax rate     |  | 45%          |      | 45%           
|Expected tax expense (recovery)              |  | (971         | )    | (21,911       
|Increase (decrease) in taxes resulting from: |  |              |      |               
|Crown royalties                              |  | 1,202        |      | 1,132         
|Alberta Royalty
          Tax Credit         |  | (279         | )    | (263          
|Resource allowance                           |  | (1,088       | )    | (1,289        
|Valuation allowance                          |  | 1,136        |      | 22,331        
|                                             | 
|                                             |  | -            |      | -             
|Large corporations
          tax             |  | 26           |      | 32            
|                                             | 
|Provision for income
          taxes         |  | $         26 |      | $           32
|                                             | 



|At December 31, 2001, the Company and
its subsidiary had operating losses for income tax purposes approximating
$18,800,000 which are available to reduce taxes in future years and expire over
the period to the year 2007.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|12. Per Share Amounts:
|----------------------



|Effective January 1, 2001, the Company
changed its policy for computing and disclosing earnings per share by adopting
the new standard of the Canadian Institute of Chartered Accountants. This
standard is required to be applied retroactively and accordingly diluted
earnings per share for prior years have been restated. Pursuant to this
standard, the treasury stock method is used which computes the number of
incremental shares by assuming the outstanding stock options are i) exercised
and ii) then reduced by the number of shares assumed to be repurchased from the
issuance proceeds, using the weighted average market price of our common stock
for the year Per share amounts have been calculated based on the weighted
average number of shares outstanding during the year ended December 31, 2001 of
40,622,346 shares (2000  38,963,975 shares; 1999  31,309,553
shares).
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                     |  | 2001        | 2000 | 1999         
|-------------------------------------------------------------------- |  | ----------- | ---- | -------------
|Basic earnings (loss) per share                                      |  |             |      |              
|Net earnings (loss)
        available to common                      |  |             |      |              
|shareholders                                                         |  | $   (2,183  | )    | $   (48,723  
|Weighted average number of common                                    |  |             |      |              
|shares outstanding                                                   |  | 40,622      |      | 38,964       
|                                                                     | 
|                                                                     |  | $     (0.05 | )    | $       (1.25
|                                                                     | 
|Diluted earnings (loss) per share                                    |  |             |      |              
|Net earnings (loss) available to common                              |  |             |      |              
|shareholders                                                         |  | $   (2,183  | )    | $   (48,723  
|Weighted average number of common 
               shares outstanding |  | 40,622      |      | 38,964       
|                                                                     | 
|                                                                     |  | $     (0.05 | )    | $       (1.25
|                                                                     | 



| |  | 
| |  | 



---





|Excluded from the computation of
diluted earnings per share were:
|-----------------------------------------------------------------



|i) Options outstanding of 1,364,000
common shares with an average exercise price of $1.49 (2000  1,414,000 @
$1.49; 1999  300,000 @ $2.18) as the options exercise prices were greater
than the average market price of the Companys common stock.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ii) Options outstanding of 896,000
common shares with an average exercise price of $0.53 (2000  186,000 @
$.55) as they were anti-dilutive.
|--------------------------------------------------------------------------------------------------------------------------------------------



|iii) Pursuant to a 1999 offering
2,675,000 warrants with a $1.85 exercise price have been excluded from
computation of diluted earnings per share as this exercise price was greater
than the average market price of the Companys common stock.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Other per share amounts:
|------------------------

|                     |  | 2001    |  | 2000    |  | 1999   
|-------------------- |  | ------- |  | ------- |  | -------
|Cash from operations |  | $  0.08 |  | $  0.19 |  | $  0.21



|13. Financial Instruments:
|--------------------------



|The Companys financial results are affected by the
        normal risks and capital expenditure requirements associated with exploration,
        development and production of mineral and oil and gas properties. Financial
        results are also affected by market prices for gold and oil and gas, changes
        in foreign currency exchange rates, interest rates and other operating
        risks.
      To manage risks associated with prices for gold, oil and
        gas and changes in foreign currency, the Company may use commodity and
        foreign currency instruments.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Financial assets which are subject to
credit risks include cash and receivables and commodity and currency
instruments. The Company minimizes risks on its financial assets by holding
positions with credit worthy entities. Sales of commodities are to entities
considered to be credit worthy.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Except as discussed below, the fair
market value of the Companys financial assets and liabilities approximate
net book value.
|------------------------------------------------------------------------------------------------------------------------------



|As at December 31, 2001 the Company had
outstanding forward gold contracts related to 2002 production of 2,250 ounces at
an average price of US $292 per ounce with a market value gain inherent in these
contracts of US $34,000. As at December 31, 2000, the Company had no outstanding
gold derivative contracts. As at December 31, 2001, the Company had outstanding
foreign exchange contracts to sell US $5.3 million at an average exchange rate
of 1.5844 $CDN/$US with a market value loss inherent in these contracts of US
$27,000. As at December 31, 2000, the Company had no outstanding foreign
currency derivative contracts.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|14. Commitments:
|----------------



|During 1995, the Company entered into
an agreement with Cameco and Husky Oil to explore the Amisk Lake region located
15 kilometres west of Flin Flon, Manitoba. Under this option agreement, the
Company was required to spend $2.5 million by October, 1999, to earn a 35%
working interest in the property. The Company has the option to earn an
additional 35% interest by either spending a further $14 million on exploration
and development or by bringing the property into production by October, 2007.
Should the Company successfully complete this earn-in, the optionors must either
elect to participate in the project and each repurchase a 5% interest for
$2,357,500 or each sell 15% to the Company for $800,000. The Company can, at any
time, lock in its working interest and elect to participate in the Amisk Lake
Joint Venture. To December 31, 2001, the Company has spent approximately $3.4
million on this property. The Company has earned the right to aquire 35% of the
property, but has not excercised that option at December 31, 2001.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|15. Recently Issued Standards Not Yet
Implemented:
|--------------------------------------------------



|i) Stock-based compensation:
|----------------------------



|Handbook Section 3870, Stock-Based
Compensation and Other Stock-Based Payments establishes new standards for the
recognition, measurement and disclosure of stock-based compensation and other
stock-based payments made to employees and non-employees in exchange for goods
and services. The standard sets out a fair value based method of accounting,
which is required for certain, but not all, stock-based transactions including
awards granted to non-employees. For all other types of awards the enterprise
may elect not to apply the fair value based method as a matter of policy.
Management will review the impact of the transitional provisions of Section 3870
for purposes of applying this Section effective January 1, 2002 to its share
option plans.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ii) Hedging relationships:
|--------------------------



|Accounting Guideline 13
(AcG-13) establishes new criteria for hedge accounting and will
apply to all hedging relationships in effect on or after January 1, 2003. To
qualify for hedge accounting, the hedging relationship must be appropriately
documented at the inception of the hedge and there must be reasonable assurance,
both at the inception and throughout the term of the hedge, that the hedging
relationship will be effective. Effectiveness requires a high correlation of
changes in fair values or cash flows between the hedged item and the hedge.
Management will review the impact of the transitional provision of AcG-13 for
purposes of applying this guideline effective January 1, 2003 to its derivatives
used for asset liability management.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|16. Comparative Figures:
|------------------------



|Certain prior year balances have been
reclassified to conform to the current  financial statement presentation.
|---------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|17. Differences From United States Accounting
Principles:
|---------------------------------------------------------



|These consolidated financial statements
have been prepared in accordance with accounting principles generally accepted
in Canada. The Company monitors differences between generally accepted
accounting principles (GAAP) in Canada and the United States
(U.S.), none of which have a material effect on the financial
statements except as summarized below:
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|a) Balance Sheets
|-----------------

|                                                                    |  | 2001      | 2000
|------------------------------------------------------------------- |  | --------- | ----
|Mineral Properties  under Canadian GAAP                            |  | $13,834   |     
|Cumulative exploration
      expenditures expensed                  |  |           |     
|under U.S. GAAP (ii)                                                |  | (85       | )   
|Cumulative depreciation and depletion
        adjustment (iii)      |  | 617       |     
|Cumulative write-down adjustment
        (iii)                      |  | (1,825    | )   
|                                                                    | 
|Mineral Properties  under U.S. GAAP                                |  | 12,541    |     
|                                                                    | 
|Investments  under Canadian GAAP                                   |  | 684       |     
|Unrealized gain on available-for-sale
        securities (v)        |  | 44        |     
|                                                                    | 
|Investments  under U.S. GAAP                                       |  | 728       |     
|                                                                    | 
|Payables and accrued liabilities  under Canadian
        GAAP      |  | 2,355     |     
|Cumulative stock compensation
        costs (vi)                    |  | 374       |     
|Cumulative unrealized gain on
        derivative                    |  |           |     
|instruments (viii)                                                  |  | (11       | )   
|                                                                    | 
|Payables and accrued liabilities  under U.S. GAAP                  |  | $   2,718 |     
|                                                                    | 
|Shareholders equity                                                |  |           |     
|Share capital  under Canadian GAAP                                 |  | $ 18,362  |     
|Reduction of stated capital (vii)                                   |  | 55,000    |     
|                                                                    | 
|Share capital  under U.S. GAAP                                     |  | 73,362    |     
|                                                                   
|Retained earnings (deficit)  under Canadian GAAP                   |  | 5,181     |     
|Reduction of stated capital (vii)                                   |  | (55,000   | )   
|Cumulative exploration expenses
        (ii)                        |  | (85       | )   
|Cumulative depreciation and depletion
        adjustment (iii)      |  | 617       |     
|Cumulative write-down adjustment
        (iii)                      |  | (1,825    | )   
|Cumulative unrealized gain on
        derivative instruments (viii) |  | 11        |     
|Cumulative stock compensation
        costs (vi)                    |  | (374      | )   
|                                                                    | 
|Deficit  under U.S. GAAP                                           |  | (51,475   | )   
|Other comprehensive income                                          |  |           |     
|Unrealized gain on available for
        sale securities (v)        |  | 44        |     
|                                                                    | 
|Shareholders equity - under U.S. GAAP                              |  | $ 21,931  |     
|                                                                    | 



| |  | 
| |  | 



---





|b) Statements of Loss
|---------------------

|                                                    |  | 2001      | 2000
|--------------------------------------------------- |  | --------- | ----
|Loss under Canadian GAAP                            |  | $ (2,183  | )   
|Exploration expenditures (ii)                       |  | (85       | )   
|Write-down of mineral properties
        (iii)      |  | -         |     
|Depreciation and depletion adjustment
        (iii) |  | 617       |     
|Stock compensation costs (vi)                       |  | (57       | )   
|Derivative instruments (viii)                       |  | 11        |     
|                                                    | 
|Net loss under U.S. GAAP                            |  | (1,697    | )   
|Available-for-sale securities
        (v)           |  | (452      | )   
|                                                    | 
|Comprehensive loss under U.S. GAAP                  |  | (2,149    | )   
|Net loss per share under U.S. GAAP                  |  |           |     
|Basic and diluted                                   |  | $   (0.04 | )   
|                                                    | 



|i) Cash
|-------



|Under U.S. GAAP, cash amounts
restricted against future use as a result of commitments related to flow-through
share agreements must be separately classified in the financial statements. As a
result, proceeds of $1.375 million from our December 2001 flow-through share
issue would be classified separately as reserved cash.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ii) Mineral Property Exploration Expenditures
|---------------------------------------------



|Mineral property exploration
expenditures are accounted for in accordance with Canadian GAAP as disclosed in
Note 1. For U.S. GAAP purposes, the Company expenses, as incurred, exploration
expenditures relating to unproven mineral properties. When proven and probable
reserves are determined for a property and a final feasibility study determines
the economic recoverability of these reserves, subsequent development costs of
the property are capitalized.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|iii) Write down of Mineral Properties
|-------------------------------------



|Under both Canadian and U.S. GAAP,
property, plant and equipment must be assessed for potential impairment. Under
Canadian GAAP, the impairment loss is the difference between the carrying value
of the asset and its recoverable amount calculated on an undiscounted estimated
future cash flow basis. Under U.S. GAAP, if the undiscounted cash flows are less
than the carrying value of the asset, the impairment loss is calculated as the
amount by which the carrying value of the asset exceeds its fair value. Fair
value has been calculated as the present value of estimated future net cash
flows. Under both Canadian and U.S. GAAP impairment tests are calculated with
cash flows determined using only proven and probable reserves. The resulting
difference in the write-down between Canadian and U.S. GAAP also results in a
difference in the amount of depreciation and depletion charged to earnings.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|iv) Oil and Gas Properties
|--------------------------



|Under both Canadian and U.S. GAAP,
property, plant and equipment must be assessed for potential impairment. Under
Canadian GAAP, the impairment loss is the difference between the carrying value
of the asset and its recoverable amount calculated on an undiscounted estimated
future cash flow basis. Under U.S. GAAP, the impairment loss is calculated as
the amount by which the carrying value of the asset exceeds the present value of
estimated future net cash flows applying a discount rate of 10%. Under both
Canadian and U.S. GAAP impairment tests are calculated using only proved
producing reserves with oil, natural gas liquids and gas prices at the year end
date.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|v) Available-for-Sale Securities
|--------------------------------



|Under Canadian GAAP, portfolio
investments are accounted for using the cost method. Under U.S. GAAP, portfolio
investments classified as available-for-sale securities, are carried at market
values with unrealized gains or losses reflected as a separate component of
shareholders equity and included in comprehensive income.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|vi) Stock-Based Compensation
|----------------------------



|Employees
|---------



|Statement of Financial Accounting
Standards No. 123, Accounting for Stock-Based Compensation establishes financial
accounting and reporting standards for stock-based employee compensation plans.
This statement defines a fair value based method of accounting for employee
stock options. However, it also allows an entity to continue to measure
compensation cost for those plans using the intrinsic value based method of
accounting prescribed by APB Opinion No. 25, which is similar to the method
applied under Canadian GAAP and followed by Claude. Companies that continue to
follow the intrinsic value based method must disclose pro-forma earnings and
earnings per share information under the fair value method. This fair value was
estimated using the Black-Scholes model with assumptions of 5 year expected
terms, 56.5 to 57.4% volatility and interest rates ranging from 4.66 to 5.99%.
Under U.S. GAAP the cost of stock compensation for the year ended December 31,
2001 would be $158,872 (2000  $7,355). The resulting pro forma net loss
and loss per share for the year ended December 31, 2001 is $1.9 million and
$0.06, respectively (2000  net loss and loss per share of $25.6 million
and $0.66 per share, respectively).
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Non-employees
|-------------



|U.S. GAAP requires that all
transactions in which services are the consideration received for the issuance
of equity instruments be accounted for based on the fair value of the
consideration received or the fair value of the equity instruments issued,
whichever is more reliably measurable. This fair value was estimated using the
Black-Scholes model with assumptions of a 5 to 10 year expected term, 54.7 to
57.4% volatility and interest rates ranging from 4.66% to 5.99%.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|vii) Reduction of Stated Capital
|--------------------------------



|Under Canadian GAAP and by special
resolution at the annual meeting of shareholders, the Company reduced its stated
captital account by $40,000,000 in 2001 and $15,000,000 in 1994. This reduction
in stated capital is not allowed under U.S. GAAP and accordingly, has resulted
in a cumulative increase in the share capital account of $55,000,000 in 2001
(2000  $15,000,000) with a corresponding increase in the Companys
deficit balance.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|viii) Accounting for Derivative Instruments
and Hedging Activities
|------------------------------------------------------------------



|In accordance with Financial Accounting
Standards Board (FASB) Statement 133, Accounting for Derivative
Instruments and Hedging Activities, Claude is required to recognize all
derivatives on the balance sheet at fair value. Under U.S. GAAP, the derivatives
have not been documented as hedges and accordingly, gains and losses have been
recorded in earnings.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ix) New Accounting Pronouncements
|---------------------------------



|Effective for fiscal years beginning
after June 15, 2002, SFAS Statement No. 143 Accounting for Asset
Retirement Obligations is applicable for U.S. GAAP purposes. FAS 143
addresses financial accounting and reporting standards for obligations
associated with the retirement of tangible long-lived assets and the associated
asset retirement costs. As at December 31, 2001, the Company has not yet
determined the impact of adopting FAS 143 on its financial statements.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Effective for fiscal years beginning
after December 15, 2001, SFAS Statement No. 144 Accounting for the
Impairment or Disposal of Long-Lived Assets is applicable for U.S. GAAP
purposes. FAS 144 requires that long-lived assets that are to be disposed of by
sale be measured at the lower of book value or fair value less cost to sell. As
at December 31, 2001, the Company has determined there will be no significant
impact of adopting FAS 144 on its financial statements.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|May 21, 2002
|------------



|FIRST QUARTER REPORT  For the
Three Months Ended March 31, 2002
|---------------------------------------------------------------



|Overview
|--------



|Bullion markets continued to firm
during the first quarter of 2002, with the price of gold moving from US $278 to
US $302 by quarter end. This improved market tone was reflected in gold producer
share prices, with Claude shareholders experiencing an 80% increase in their
share values during the quarter.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Seabee mine re-supply of fuel,
chemicals, parts and other materials was achieved in a smooth and efficient
manner due to ideal ice road conditions.
|-------------------------------------------------------------------------------------------------------------------------------------------------------



|Seabee gold production was low by
historical standards, the result of continued disappointing low-grade ore from
the D zone, the primary source for mill feedstock. While these results were not
unexpected, the current mine plan indicates that higher-grade ore will begin to
be accessed, on schedule, early in the third quarter.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Claudes winter exploration
program in the Seabee mine area was activated during the quarter. Discussions
were commenced with Placer Dome in respect to the exploration program at the
Madsen property in Red Lake, Ontario, under option to Placer.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Financial Highlights
|--------------------

|                                                       | Three Months Ended 
          March 31, 2002 | Three Months Ended 
          March 31, 2001
|------------------------------------------------------ | -------------------------------------------- | --------------------------------------------
|                                                       |                                              |                                             
|Revenue ($ millions)                                   | 5.20                                         | 7.90                                        
|Net loss ($ millions)                                  | 1.98                                         | .42                                         
|Loss per share ($)                                     | .05                                          | .01                                         
|Cash from (used in) operations ($ millions)            | (.6)                                         | .8                                          
|Cash from (used in) operations per share ($)           | (.01)                                        | .02                                         
|Average realized gold price for the period (US$/ounce) | 290                                          | 259                                         
|Total cash operating costs (US$/ounce)                 | 294                                          | 217                                         
|Working capital ($ millions)                           | 6.20                                         | 8.80                                        



|Financial
|---------



|Claude recorded a net loss of $2.0
million ($.05 per share) for the first quarter of 2002 compared to a net loss of
$.4 million ($.01 per share) for the same period in 2001.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Total revenue generated for the quarter
was $5.2 million, 34% lower than that reported in the 2001 period. Gold revenues
decreased 12% over the comparative quarter last year, the result of decreased
production offset by the higher bullion price realized. The 62% decrease in oil
and gas revenues was a result of normal production decline rates and lower
averaged realized petroleum prices.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Seabee mine contributed $3.8  million to
revenue for the first quarter of 2002 compared to $4.4 million for  the same period last
year. Production for the period decreased 25% from 11,100  ounces in 2001 to 8,300 ounces
in 2002. As expected, most of the mill throughput  for the first quarter originated from
the low grade 2D zone between the 190 and  390 levels, resulting in reduced production.
Gold
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|revenues were impacted by a  higher average
realized price (2002  US $290/CDN $462; 2001  US  $259/CDN $396).
|---------------------------------------------------------------------------------------------------------------



|Gross oil, natural gas liquids and gas
revenues totaled $1.3 million for the current period compared to $3.5 million
last period. First quarter oil and NGLs production of 20,700 barrels was
14% lower than the 24,100 barrels produced the previous period. The average
realized price was US $18.26 (CDN $29.12) per barrel versus an average price of
US $28.15 (CDN $43.01) per barrel last period. Gas production fell 24% from 246
MMCF in 2001 to 187 MMCF in 2002. The average realized price this quarter was US
$2.19 (CDN $3.49) per MCF compared to the US $6.37 (CDN $9.73) per MCF realized
in 2001.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Total operating and administrative
costs increased from $4.5 million for the first quarter of 2001 to $4.9 million
this period. Total mine cash costs were $3.9 million for this quarter versus
$3.7 million last period. The mining of smaller stoping blocks contributed to
this slight increase. As a result of the lower gold production during the first
quarter, cash operating costs per ounce increased from US $217 in 2001 to US
$294 this period. As higher-grade ore is milled during the second half of 2002,
the per ounce cost should fall and better reflect expected US $200-210 cash
costs per ounce.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|General and administrative costs
increased by 50% from $.4 million in the first quarter of 2001 to $.6 million
this period. This increase is attributable to the settlement of a prior year
property tax assessment at the Madsen property.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Depreciation and depletion of the
Companys gold assets was $1.3 million for the first three months of 2002,
compared with $1.1 million in the corresponding 2001 period. Again, as a result
of decreased production, depreciation and depletion costs per ounce for the 2002
period were US $95 versus US $67 last period.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Cash flows used in operations for the
quarter were $.6 million ($.01 per share) compared to 2001 first quarter cash
flows provided of $.8 million ($.02 per share). This reduction in cash flows
from operations was due to the combination of lower gold production, slight
increases in costs and decreased contribution from our oil and gas operations.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Capital expenditures for the 2002
quarter were $2.0 million, a 54% increase over the $1.3 million recorded last
period. This increase is primarily a result of increased exploration and
development costs incurred at the Seabee mine.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Operations
|----------



|Gold - Seabee mine
|------------------



|Year to date the mine has processed
64,200 tonnes of ore, grading 4.26 grams per tonne and yielding 8,300 ounces of
gold. The current ore grade is substantially below the Seabee mines 10
year average of approximately 8.4 grams per tonne.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The ore grade in the D zone
of the mine on the Currie Rose property was significantly over estimated. When
this error was identified, a revised mine plan was initiated which provides for
a return to normalized ore grades and production during the third quarter of the
year.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|At the end of March 2002, Ray Gagnon
was appointed as Chief Operating Officer of the Company. His mandate is to
return Seabee to its long-term production averages.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|Underground drilling and development on
the 2B structure have been accelerated with very encouraging results. The annual
ACA Howe International Limited independent review of the Seabee reserves
indicates an increase, over the prior years results, in both reserve
tonnage and average grade of ore.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                    | Proven Mineral 
          Reserve | Proven Mineral 
          Reserve | Proven and Probable 
          Mineral Reserves
|------------------- | --------------------------------- | --------------------------------- | -----------------------------------------------
|Tonnes              | 123,357                           | 486,645                           | 610,002                                        
|Grade (grams/tonne) | 5.76                              | 8.49                              | 7.93                                           
|Ounces              | 22,844                            | 132,834                           | 155,523                                        



|The review also identified an
additional 1,620,000 tonnes at 7.90 grams per tonne in the mineral resource
category.
|-------------------------------------------------------------------------------------------------------------------



|Oil & Gas
|---------



|Although oil and gas operations
continue to positively affect cash flows, the impact was minimized as petroleum
prices fell sharply compared to the first quarter of 2001. Improving oil and
NGLs prices should mitigate the impact of the 66% decrease in natural gas
prices realized quarter over quarter.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Exploration
|-----------



|Exploration activities in the first
quarter proved dynamic, with diamond drill programs being completed on four
target areas. In total, 7,760 metres of BQ core were drilled in 45 holes.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Drilling in the West Porky Lake area
led to the discovery of a new shear-hosted, gold-bearing system associated with
a metavolcanic-metasedimentary contact. With assay intervals spiking as high as
55 grams per tonne and averaging 2 to 15 grams per tonne over 1-3 metre widths,
this composite mineralized system should be considered as a potential satellite
feed source for the nearby Seabee mill. Follow-up delineation drilling is a near
term pre-requisite.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|To the east of the Seabee mine, three
target areas were tested. In the Munro/Portage Lakes area, two sulfide-bearing
zones aligned in the altered northern contact of a quartz monzonite were
drilled. Wide intervals of silicified, stockwork mineralization assaying 1 to 3
grams per tonne with individual assays up to 8 grams per tonne were cut in a
number of holes. The pervasive nature of this mineralization is cause for a
follow-up program.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Derivative Instruments and Hedging Activities
|---------------------------------------------



|To mitigate the effects of price fluctuations on revenues,
      the Company may undertake hedging transactions in respect of foreign exchange
      rates and the price of gold. 
      As at March 31, 2002, the Company had outstanding forward gold contracts
      related to 2002 production of 10,250 ounces at an average price of US $295
      per ounce with a market value loss inherent in these contracts of US $63,715.
      As at March 31, 2002, the Company had outstanding foreign exchange contracts
      to sell US $4.4 million at an average exchange rate of 1.5928 CDN$/US$ with
      a market value loss inherent in these contracts of US $1,900.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|For further information please contact:
|---------------------------------------

|Neil McMillan, President  Phone: (306)
668-7505
|-----------------------------------------------



| |  | 
| |  | 



---





|Transfer Agent and Registrar:
|-----------------------------

|                        | 
|----------------------- | 
|Valiant Trust Company   | 
|510, 550-6th Avenue S.W | 
|Calgary, Alberta        | 
|T2P 0S2                 | 



| |  | 
| |  | 



---





|CONSOLIDATED BALANCE SHEETS (Canadian
Dollars in Thousands)
|-----------------------------------------------------------

|                                                           |  | March 31 
      2002 | December 31 
      2001
|---------------------------------------------------------- |  | -------------------- | -----------------------
|Assets                                                     |  |                      |                        
|Current assets:                                            |  |                      |                        
|Cash                                                       |  | $               -    |                        
|Short-term investments                                     |  | 657                  |                        
|Receivables                                                |  | 1,650                |                        
|Inventories                                                |  | 7,347                |                        
|Shrinkage stope platform costs                             |  | 3,163                |                        
|Prepaids                                                   |  | 294                  |                        
|                                                           | 
|                                                           |  | 13,111               |                        
|Oil and gas properties                                     |  | 3,108                |                        
|Mineral properties                                         |  | 14,480               |                        
|Investments                                                |  | 684                  |                        
|                                                           | 
|                                                           |  | $     31,383         |                        
|                                                           | 
|Liabilities and Shareholders Equity                       |  |                      |                        
|Current liabilities:                                       |  |                      |                        
|Bank indebtedness                                          |  | $          475       |                        
|Payables and accrued liabilities                           |  | 6,032                |                        
|Demand loan                                                |  | 356                  |                        
|Current portion of obligations
        under capital lease |  | 46                   |                        
|                                                           | 
|                                                           |  | 6,909                |                        
|Obligations under capital lease                            |  | 150                  |                        
|Future site reclamation costs                              |  | 2,590                |                        
|                                                           |  |                      |                        
|Shareholders Equity:                                      |  |                      |                        
|Share capital (Note 2)                                     |  | 18,527               |                        
|Retained earnings                                          |  | 3,207                |                        
|                                                           | 
|                                                           |  | 21,734               |                        
|                                                           | 
|Subsequent event (Note 3)                                  |  | $     31,383         |                        
|                                                           | 



| |  | 
| |  | 



---





|CONSOLIDATED STATEMENTS OF LOSS (Canadian
Dollars in Thousands)
|---------------------------------------------------------------

|                                                      |  | Three Months Ended 
      March 31
|----------------------------------------------------- |  | ----------------------------------
|                                                      |  | 2002                              
|Revenues                                              |  |                                   
|Gold                                                  |  | $3,830                            
|Oil and gas:                                          |  |                                   
|Gross revenue                                         |  | 1,339                             
|Crown royalties                                       |  | (397                              
|Alberta Royalty Tax
        Credit                    |  | 95                                
|Overriding royalties                                  |  | (557                              
|                                                      | 
|Net oil and gas revenue                               |  | 480                               
|                                                      | 
|                                                      |  | 4,310                             
|Expenses                                              |  |                                   
|Gold                                                  |  | 3,890                             
|Oil and gas                                           |  | 352                               
|General and administrative                            |  | 634                               
|Interest and other                                    |  | 21                                
|Provision for income taxes                            |  | 43                                
|                                                      | 
|                                                      |  | 4,940                             
|                                                      | 
|Earnings (loss) before the undernoted items           |  | (630                              
|Depreciation, depletion and reclamation:              |  |                                   
|Gold                                                  |  | 1,256                             
|Oil and gas                                           |  | 88                                
|                                                      | 
|Net loss                                              |  | $ (1,974                          
|                                                      | 
|Net loss per share                                    |  |                                   
|Basic and diluted                                     |  | $ (0.05                           
|                                                      | 
|Weighted average number of shares outstanding (000's) |  | 43,329                            
|                                                      | 



| |  | 
| |  | 



---





|CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(DEFICIT)  (Canadian Dollars in Thousands)
|---------------------------------------------------------------------------------------

|                                               |  | Three Months Ended 
      March 31
|---------------------------------------------- |  | ----------------------------------
|                                               |  | 2002                              
|                                               |  |                                   
|Retained earnings (deficit), beginning of year |  | $    5,181                        
|Net loss                                       |  | (1,974                            
|                                               | 
|Retained earnings (deficit), end of year       |  | $    3,207                        
|                                               | 



|CONSOLIDATED STATEMENTS OF CASH FLOWS 
(Canadian Dollars in Thousands)
|----------------------------------------------------------------------

|                                                |  | Three Months Ended 
      March 31
|----------------------------------------------- |  | ----------------------------------
|                                                |  | 2002                              
|Cash provided from (used in):                   |  |                                   
|Operations:                                     |  |                                   
|Net loss                                        |  | $ (1,974                          
|Non cash items:                                 |  |                                   
|Depreciation, depletion
        and reclamation |  | 1,344                             
|                                                | 
|                                                |  | (630                              
|                                                |  |                                   
|Net change in non-cash working
        capital: |  |                                   
|Receivables                                     |  | (710                              
|Inventories                                     |  | (2,701                            
|Shrinkage stope platform
        costs          |  | (332                              
|Prepaids                                        |  | 6                                 
|Payables and accrued
        liabilities        |  | 3,677                             
|                                                | 
|                                                |  | (690                              
|Investing:                                      |  |                                   
|Mineral properties                              |  | (1,887                            
|Oil and gas properties                          |  | (76                               
|                                                | 
|                                                |  | (1,963                            
|                                                |  |                                   
|Financing:                                      |  |                                   
|Issue of common shares                          |  | 165                               
|Demand loan                                     |  | (82                               
|Obligations under capital lease                 |  | 196                               
|                                                | 
|                                                |  | 279                               
|                                                |  |                                   
|Decrease in cash position                       |  | (2,374                            
|Cash position, beginning of period              |  | 1,899                             
|                                                | 
|Cash position, end of period                    |  | $ (475                            
|                                                | 
|Cash from (used in) operations per share        |  | $ (0.01                           
|                                                | 



| |  | 
| |  | 



---





|Notes to Consolidated Financial Statements
|------------------------------------------



|Note 1 - General
|----------------



|The accompanying unaudited consolidated
financial statements should be read in conjunction with the notes to the
Companys audited consolidated financial statements for the year ended
December 31, 2001.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The unaudited consolidated financial
statements include the financial statements of the Company and its subsidiary.
The unaudited interim consolidated financial statements reflect all normal and
recurring adjustments which are, in the opinion of management, necessary for a
fair presentation of the respective interim periods presented.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Stock-based Compensation
|------------------------



|Effective January 1, 2002, Claude
adopted new CICA Handbook Section 3870, Stock-based Compensation and other
Stock-based Payments. This section requires that a fair value based method
of accounting be applied to direct awards of stock to employees. This standard
allows the Company to continue its existing policy, the intrinsic value based
method, of recording no compensation cost on the grant of stock options to
employees. However, pro forma information is required which reflects the
difference between compensation cost recorded under the intrinsic based method
and costs that would have been recorded under the fair value based method. This
statement had no impact on the Company for the three months ended March 31, 2002
as no options were issued during the quarter.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Note 2 - Share Capital
|----------------------



|At March 31, 2002 there were 43,356,784
common shares outstanding.
|------------------------------------------------------------------



|Options in respect of 2,260,000 shares
are outstanding under the stock option plan. These options have exercise prices
ranging from $.53 to $3.05 with expiration dates between April, 2006 and August,
2010.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Note 3 - Subsequent Event
|-------------------------



|On April 23, 2002, Claude completed and
closed the issuance of 5,000,000 units at a price of $1.00 per unit for
aggregate gross proceeds of $5,000,000 (the Offering). The Offering
was made through Canaccord Capital Corporation and First Associates Investments
Inc. (the Underwriters), which acted as underwriters and arranged
for the private placement of all units directly by Claude to a total of fourteen
purchasers.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Each unit consists of one common share
and one-half of one common share purchase warrant. Each whole common share
purchase warrant entitles the holder to acquire one common share at an exercise
price of $1.25 for a period of twelve months from the closing date.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|In partial consideration for the
services provided to Claude in connection with the Offering, the Underwriters
were issued an aggregate of 63,463 common share purchase warrants, each of which
entitles the holder to acquire one common share at an exercise price of $1.00
for a period of twelve months from the closing date.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|Note 4 - Comparative Figures
|----------------------------



|Certain prior year balances have been
reclassified to conform to the current  financial statement presentation.
|---------------------------------------------------------------------------------------------------------------



|Note 5 - Differences from United States
Accounting Principles
|-------------------------------------------------------------



|These consolidated financial statements
have been prepared in accordance with accounting principles generally accepted
in Canada. See Note 17 of the Companys audited financial statements for
the year ended December 31, 2001, for a narrative explanation of the difference
in Canadian and U.S. GAAP accounting principles.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|ARTICLES OF AMALGAMATION
|------------------------

|1. | Name of amalgamated
      Corporation:
|-- | --------------------------------------



| | CLAUDE
RESOURCES INC./LES  RESSOURCES CLAUDE INC.
| | -------------------------------------------------

|2. | The place in
      Canada where the registered office is to be situated:
|-- | ------------------------------------------------------------------------



| | Saskatoon,
Saskatchewan
| | -----------------------

|3. | The classes
      and any maximum number of shares that the corporation is authorized to issue:
|-- | -----------------------------------------------------------------------------------------------



| | The attached
Schedule A is incorporated into and  forms part of these Articles of
Amalgamation.
| | -------------------------------------------------------------------------------------------------

|4. | Restrictions,
      if any, on share transfers:
|-- | -----------------------------------------------



| | None
| | ----

|5. | Number (or
      minimum and maximum number) of directors:
|-- | ----------------------------------------------------------



| | Not less
than three (3) directors and not more than fifteen (15) directors.
| | ---------------------------------------------------------------------------

|6. | Restrictions,
      if any, on business the Corporation may carry on:
|-- | ---------------------------------------------------------------------



| | None
| | ----

|7. | Other provisions,
      if any:
|-- | -------------------------------



| | The
directors of the Corporation may appoint one or  more persons as directors of the
Corporation, who  shall hold office for a term expiring not later than  the close of the
next annual meeting of shareholders,  but the total number of directors appointed may not
exceed one-third (1/3) of the number of the directors  elected at the previous annual
meeting of  shareholders.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|8. | The amalgamation
      has been approved pursuant to that section or subsection of the Act which
      is indicated as follows:
|-- | -------------------------------------------------------------------------------------------------------------------------------



| | 183
| | ---



|X | 184(1)
|- | ------



| | 184(2)
| | ------



| |  | 
| |  | 



---



|                                                         
|---------------------------------------------------------
|9. Name of Amalgamating 
             Corporations       
|                                                         
|Claude Resources Inc./Les 
        Ressources Claude Inc.
|                                                         
|3377474 Canada Inc.                                      
|                                                         
|Madsen Gold Corp.                                        
|                                                         



| |  | 
| |  | 



---





|SCHEDULE A 
      TO THE ARTICLES OF AMALGAMATION OF 
       CLAUDE RESOURCES INC./LES RESOURCES CLAUDE INC.
|--------------------------------------------------------------------------------------------------------------



|The share capital of the
Corporation shall consist of:
|------------------------------------------------------

|(a) |  | an
unlimited number of common voting shares without nominal or par  value;
|--- |  | --------------------------------------------------------------------------

|(b) |  | an
unlimited number of First Preferred Shares issuable in series with  the issue price per
share of the shares of each series to be fixed by  the Board of Directors, without
limitation as to the aggregate amount  of the consideration for which all the First
Preferred Shares or any  series thereof may be issued; and
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) |  | an
unlimited number of Second Preferred Shares issuable in series with  the issue price per
share of the shares of each series to be fixed by  the Board of Directors, without
limitation as to the aggregate amount  of the consideration for which all the Second
Preferred Shares or any  series thereof may be issued.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The First Preferred Shares, as a class,
shall carry and be subject to the following rights, privileges, restrictions and
conditions:
|------------------------------------------------------------------------------------------------------------------------------------

|1. |  |  | Directors
Right to Issue in One or More Series
|-- |  |  | -----------------------------------------------



|The First Preferred Shares may at any
time or from time to time be issued in one (1) or more series, each series to
consist of such number of shares as may before the issue thereof be determined
by the directors; the directors of the Corporation may (subject as hereinafter
provided) by resolution fix, from time to time before the issue thereof, the
designation, rights, privileges, restrictions and conditions attaching to the
shares of each such series including, without limiting the generality of the
foregoing, the issue price, the rate, amount or method of calculation of
preferential dividends (if any) and whether such rate, amount or method of
calculation shall be subject to change or adjustment in the future, the date of
payment thereof, the redemption and/or purchase prices and terms and conditions
of redemption and/or purchase, conversion rights (if any), voting rights, (if
any), any sinking fund or other provisions and the rights of retraction, (if
any), vested in the holders of First Preferred Shares of any such series and the
prices and the other terms and conditions of any rights of retraction and
whether any additional rights of retraction may be vested in such holders in the
future, the whole subject to the following provisions and to the issue of
Articles of Amendment setting forth such designation, issue price, rights,
privileges, restrictions and conditions attaching to the shares of each series.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---



|2. |  | Ranking
of First Preferred Shares
|-- |  | ---------------------------------



|The First Preferred Shares of each
series shall rank on a parity with the First Preferred Shares of every other
series with respect to priority in payment of dividends, (if any) and in the
distribution of assets in the event of the liquidation, dissolution or
winding-up of the Corporation, whether voluntary or involuntary, or any other
distribution of the assets of the Corporation among its shareholders for the
purposes of winding-up its affairs, When any dividends or amounts payable on a
repayment of capital are not paid in full, the First Preferred Shares of all
series shall participate ratably in respect of such dividends, including
accumulations, if any, in accordance with the sums that would be payable on such
shares if all such dividends were declared and paid in full and on any repayment
of capital in accordance with the sums that would be payable on such repayment
of capital if all sums so payable were paid in full; provided, however, that in
the event of there being insufficient assets to satisfy in full all such claims
as aforesaid, the claims of the holders of such shares with respect to return of
capital shall first be paid and satisfied and any assets remaining thereafter
shall be applied towards the payment and satisfaction of claims in respect of
dividends.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The First Preferred Shares shall be
entitled to preference over the common shares of the Corporation and over any
other shares ranking junior to the First Preferred Shares with respect to
payment of dividends, (if any) and distribution of assets in the event of
liquidation, dissolution or winding-up of the corporation whether voluntary or
involuntary, or any other distribution of the assets of the Corporation among
its shareholders for the purpose of winding-up its affairs and may also be given
such other preferences over the common shares of the Corporation and over any
other shares ranking junior to the First Preferred Shares authorized to be
issued. Nothing in this paragraph shall limit the right of the Corporation to
pay a dividend on its common shares to the holders of its common shares or any
other shares ranking junior to the First Preferred Shares without participation
therein by the holders of the First Preferred Shares.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. |  | No
Pre-Emptive Rights
|-- |  | ---------------------



|The holders of the
First Preferred Shares shall not be  entitled as such to subscribe for, purchase or
receive any part of any issue of  shares, bonds, debentures or other securities of the
Corporation now or  hereafter authorized, or any rights to acquire the same, otherwise
than in  accordance with the conversion, exchange or other rights, if any, which may from
time to time be attached to any series of the First Preferred Shares.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Second
Preferred Shares, as a class, shall carry and be  subject to the following rights,
privileges, restrictions and conditions:
|--------------------------------------------------------------------------------------------------------------------------------------

|1. |  | Directors
Right to Issue in One or More Series
|-- |  | -----------------------------------------------



|The Second Preferred Shares may at any  time or
from time to time be issued in one (1) or more series, each series to  consist of such
number of shares as may before the issue thereof be determined  by the directors; the
directors of the Corporation may (subject as hereinafter
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|provided) by resolution fix, from time to time
before the issue thereof, the  designation, rights, privileges, restrictions and
conditions attaching to the  shares of each such series including, without limiting the
generality of the  foregoing, the issue price, the rate, amount or method of calculation
of  preferential dividends (if any) and whether such rate, amount or method of
calculation shall be subject to change or adjustment in the future, the date of  payment
thereof, the redemption and/or purchase prices and terms and conditions  of redemption
and/or purchase, conversion rights (if any), voting rights, (if  any), any sinking fund
or other provisions and the rights of retraction, (if  any), vested in the holders of
Second Preferred Shares of any such series and  the prices and the other terms and
conditions of any rights of retraction and  whether any additional rights of retraction
may be vested in such holders in the  future, the whole subject to the following
provisions and to the issue of  Articles of Amendment setting forth such designation,
issue price, rights,  privileges, restrictions and conditions attaching to the shares of
each series.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. |  | Ranking
of Second Preferred Shares
|-- |  | ----------------------------------



|The Second
Preferred Shares shall rank junior to the First  Preferred Shares of the Corporation with
the respect to payment of dividends,  (if any), and distribution of assets in the event
of liquidation, dissolution or  winding-up of the Corporation whether voluntary or
involuntary or any other  distribution of the assets of the Corporation amongst its
shareholders for the  purposes of winding-up its affairs and shall be subject to any
preferences and  other rights, privileges, restrictions and conditions which are attached
to the  First Preferred Shares as a class, to any other class of shares of the
Corporation that ranks senior to the Second Preferred Shares with respect to  priority in
the payment of dividends or liquidation distributions, and to each  series of First
Preferred Shares and of any other senior ranking class of shares  created hereafter.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Second
Preferred Shares of each series shall rank on a  parity with the Second Preferred Shares
of every other series with respect to  priority in payment of dividends and in the
distribution of assets in the event  of the liquidation, dissolution or winding-up of the
Corporation, whether  voluntary or involuntary, or any other distribution of the assets
of the  Corporation among its shareholders for the purpose of winding-up its affairs.
When any dividends or amounts payable on a repayment of capital are not paid in  full,
the Second Preferred Shares of all series shall participate ratably in  respect of such
dividends, including accumulations, if any, in accordance with  the sums that would be
payable on such shares if all such dividends were  declared and paid in full and on any
repayment of capital in accordance with the  sums that would be payable on such repayment
of capital if all sums so payable  were paid in full; provided, however, that in the
event of there being  insufficient assets to satisfy in full all such claims as
aforesaid, the claims  of the holders of such shares with respect to return of capital
shall first be  paid and satisfied and any assets remaining thereafter shall be applied
towards  the payment and satisfaction of claims in respect of dividends.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Second
Preferred Shares shall be entitled to preference  over the common shares of the
Corporation and over any other shares ranking  junior to the Second Preferred Shares with
respect to payment of dividends and  distribution of assets in the event of liquidation,
dissolution or winding-up of  the Corporation whether voluntary or involuntary, or any
other distribution of  the assets of the Corporation among its shareholders for the
purpose of  winding-up
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|its affairs and may also be given such other
preferences over the  common shares of the Corporation and over any other shares ranking
junior to the  Second Preferred Shares as may be determined in the case of each series of
Second Preferred Shares authorized to be issued. Nothing in this paragraph shall  limit
the rights of the Corporation to pay a dividend in its common shares to  the holders of
its common shares or any other shares ranking junior to the  Second Preferred Shares
without participation therein by the holders of the  Second Preferred Shares.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. |  | No
Pre-Emptive Rights
|-- |  | ---------------------



|The holders of the
Second Preferred Shares shall not be  entitled as such to subscribe for, purchase or
receive any part of any issue of  shares, bonds, debentures or other securities of the
Corporation now or  hereafter authorized, or any rights to acquire the same, otherwise
than in  accordance with the conversion, exchange or other rights, if any, which may from
time to time be attached to any series of the Second Preferred Shares.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|PROVISIONS ATTACHING TO 7.5%
CONVERTIBLE REDEEMABLE  FIRST PREFERRED SHARES, SERIES I
|-------------------------------------------------------------------------------------



|The first series
of the First Preferred Shares shall consist  of 650,000 shares, which shall be designated
as the 7.5% Convertible Redeemable  First Preferred Shares, Series I (the
Series I Shares) and in addition to the  rights, restrictions, conditions and
limitations attached to the First Preferred  Shares as a class, shall have attached
thereto the following rights,  restrictions, conditions and limitations:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|1.0 | DEFINITIONS
|--- | -----------

|1.01In
      these provisions attaching to the Series I Shares, including this paragraph,
      the following terms shall have the meanings hereinafter set forth:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(a) | Common
      Shares means the Common Shares of the Corporation as constituted
      on the date these provisions became effective or as subsequently consolidated
      or subdivided and any other share resulting from reclassification or change
      of such Common Shares or that the holders of such Common Shares are entitled
      to receive as a result of an
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---



| | amalgamation, consolidation, merger,
      statutory arrangement or sale, as referred to in paragraph 7.06;
| | -----------------------------------------------------------------------------------------------------------

|(b) | Basic
      Conversion Price means the price per Common Share as provided
      in paragraph 7.04;
|--- | ----------------------------------------------------------------------------------------------------

|(c) | Current
      Conversion Price means as at any particular time the Basic Conversion
      Price unless an adjusted conversion price is in effect under the provision
      of paragraph 7.05 in which case it means such adjusted conversion price;
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(d) | Current
      Conversion Basis means the number of Common Shares into which
      each Series I Share is convertible, which number is equal at any particular
      time to the result obtained (expressed to the nearest thousandth of a Common
      Share) by dividing the Current Conversion Price into $10.00;
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(e) | Current
      Market Price per Common Share at any date means the price expressed
      in Canadian currency per share equal to the weighted average price at which
      the Common Share s have traded on The Toronto Stock Exchange during the
      period of 20 consecutive trading days ending on a date not earlier than
      the fifth day preceding such date. IN the event the Common Shares are not
      listed on The Toronto Stock Exchange on such date, but are listed on another
      stock exchange or other stock exchanges the foregoing reference to The Toronto
      Stock Exchange shall be deemed to be reference to such other stock exchange,
      or, if more than one, to such one as shall be designated by the Board of
      Directors. In the event Common Shares are not listed on any stock exchange
      in Canada on such date the said Current Market Price shall be
      determined by the Board of Directors;
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(f) | Accrued
      and unpaid dividendsmeans an amount computed at the rate of dividend
      attaching to the Series I Shares as though dividends on such shares had
      been accruing on
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---



| | a day to day
      basis from the date of issue to the date to which the computation of accrued
      dividends is to be made, after deducting all dividend payments made on such
      shares; and
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(g) | Dividends
      paid in the ordinary coursemeans cash dividends to the extent
      that the aggregate amount of cash dividends paid by the Corporation on its
      Common Shares in any fiscal year of the Corporation does not exceed the
      greater of:
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | i. | 100% of the aggregate net income of the Corporation
      plus depletion, depreciation and amortization for the immediately preceding
      fiscal year as disclosed in the Corporations financial statements,
      less cash dividends paid on any of its Common Shares during such immediately
      preceding fiscal year of the Corporation; or
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ii. | 200% of the total amount of dividends paid by
      the Corporation on its Common Shares in such immediately preceding fiscal
      years.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------

|2.0 | STATED
      VALUE
|--- | ------------------

|2.01 | The Series
      I Shares of the Corporation shall have a stated value for stated capital
      account purposes of $10.00 each.
|---- | --------------------------------------------------------------------------------------------------------------------------------

|3.0 | LIQUIDATION
|--- | -----------



|3.01 In  the event of the liquidation,
dissolution or winding-up of the Corporation or other  distribution of assets or
property of the Corporation among its shareholders for the  purpose of winding up  its
affairs, the holders of the Series I Shares shall be entitled  to receive  $10.00 per
such share, together with an amount equal to all accrued and  unpaid  dividends thereon
to and including the date of payment whether or not such  dividends have been declared
and whether or not the Corporation has monies  properly  applicable to the payment of
dividends. The holders of Series I Shares  shall be entitled  to be paid all such amounts
before any assets or property of  the Corporation shall be  distributed to the holders of
any Common Shares, or  other shares of the capital of the  Corporation ranking junior to
the Series I  Shares.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3.02 After  payment to the holders of  the
Series I Shares of the amounts so payable to them, they  shall not be  entitled to share
in any further distribution of the property or assets of  the  Corporation.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|4.0 |  | REDEMPTION
|--- |  | ----------



|4.01 The Series I Shares are not
redeemable on or prior to January 1, 1990. Thereafter and until January 1, 1991,
if the Corporation shall have filed with the transfer agent for the Series I
Shares on the day that the requisite notice of redemption is first given, a
certificate of the Corporation certifying that the Current Market Price for the
Common Shares on the business day preceding the date on which the notice of
redemption is given was not less than 140% of the Current Conversion Price in
effect on such date, the Corporation may redeem at any time all of the
outstanding Series I Shares or, subject to the provisions of Article 9.00, from
time to time any part thereof selected by lot in such manner as the Board of
Directors may determine, or, if the Board of Directors so determines, pro rata,
on payment of $10.00 for each such share to be redeemed, together with an amount
equal to all accrued and unpaid dividends up to and including the date fixed for
redemption whether or not such dividends have been declared and whether or not
the Corporation has monies properly applicable to the payment of such dividends.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4.02 After January 1, 1991, and
thereafter until January 1, 1993 if the Corporation shall have filed with the
transfer agent for the Series I Shares on the day that the requisite notice of
redemption is first given, a certificate of the Corporation certifying that the
Current Market Price on the business day preceding the date on which the notice
of redemption is given was not less than 125% of the Current Conversion Price in
effect on such date, the Corporation may redeem at any time all of the
outstanding Series I Shares or, subject to the provisions of Article 9.00, from
time to time any part thereof selected by lot in such manner as the Board of
Directors may determine, or, if the Board of Directors so determines, pro rata,
on payment of $10.00 of each such Series I Share to be redeemed, together with
an amount equal to all accrued and unpaid dividends up to and including the date
fixed for redemption whether or not such dividends have been declared and
whether or not the Corporation has monies properly applicable to the payment of
such dividends.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4.03 After January 1, 1993, if the
Corporation shall have filed with the transfer agent for the Series I Shares on
the day that the requisite notice of redemption is first given, a certificate of
the Corporation certifying that the Current Market Price on the business day
preceding that date on which the notice of redemption is given was greater than
100% of the Current Conversion Price in effect on such date, the Corporation may
redeem at any time all of the outstanding Series I Shares or, subject to the
provisions of Article 9.00, from time to time any part thereof selected by lot
in such manner as the Board of Directors may determines, or, if the Board of
Directors so determines, pro rata, on payment of $10.00 for each such Series I
Share to be redeemed, together with an amount equal to all accrued and unpaid
dividends up to and including the date fixed for redemption, whether or not such
dividends have been declared and whether or not the Corporation has monies
properly applicable to the payment of such dividends.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4.04 On any redemption of Series I  Shares under
this Article 4.00, the Corporation shall give, in the manner  provided in Article 11.00,
at least 30 days prior notice to each person who, at  the date of giving such notice, is
the holder of Series I Shares to be redeemed,  of the intention of the Corporation to
redeem such shares. Such notice shall set  out the amount payable on redemption, the date
on which the redemption is to  take place and, unless all the Series I
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|Shares held by the holder to whom it is
addressed are to be redeemed, shall also set out the number of such shares so  held which
are to be redeemed and, shall contain a brief statement of the  conditions, as provided
in Article 7.00, on which the Series I Shares may be  converted into Common Shares of the
Corporation, including a statement as to the  then Current Conversion Price. On or after
the date so specified for redemption,  the Corporation shall pay or cause to be paid to
each holder of Series I Shares  to be redeemed the amount payable on redemption on
presentation and surrender at  any office of any transfer agent of the Corporation, or at
any other place or  places within Canada designated by such notice, of the certificate or
certificates for such Series I Shares for such Series I Shares so called for  redemption.
Such payment shall be made by cheque payable at par at any branch in  Canada of the
Corporations bankers. If a part only of the Series I Shares  represented by any
certificate shall be redeemed, a new certificate for the  balance shall be issued at the
expense of the Corporation. From and after the  date specified in any such notice, the
Series I Shares called for redemption  shall cease to be entitled to dividends and the
holders thereof shall not be  entitled to exercise any of the rights of shareholders in
respect thereof unless  payment of the amount payable on redemption shall not be duly
made by the  Corporation, in which case the rights of the holders shall remain
unimpaired. At  any time after the notice of redemption is given the Corporation shall
have the  right to deposit the amount payable on redemption of any or all Series I Shares
called for redemption with any chartered bank or banks or with any trust company  or
trust companies in Canada named for such purpose in the notice of redemption  to the
credit of a special account or accounts in trust for the respective  holders of such
shares, to be paid to them respectively upon surrender to such  banks or trust company or
trust companies of the certificate or certificates  representing the same. Upon such
deposit or deposits being made, or upon the  date fixed for redemption, whichever is
later, such shares shall be deemed to be  redeemed, and the rights of the holders of such
shares shall be limited to  receiving the proportion of the amounts so deposited
applicable to their  respective shares without interest. Any interest earned or otherwise
received on  such deposit or deposits shall belong to the Corporation.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4.05  Series  I Shares which are redeemed or
deemed to be redeemed in accordance with this Article 4.00  shall  be and be deemed to be
cancelled and shall not be reissued.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|5.00 |  | VOTING
PROVISION
|---- |  | ----------------



|5.01 Subject to the provisions of the
Canada Business Corporations Act (the Act), the holders of the
Series I Shares shall not as such be entitled (except as hereinafter
specifically provided) to receive notice of or to attend any meeting of the
shareholders of the Corporation or to vote at any such meeting unless the
Corporation from time to time shall fail to pay eight consecutive quarterly
dividend payments in respect of the Series I Shares on the dates on which the
same should be paid according to the provisions hereof whether or not such
dividends have been declared and whether or not there are monies of the
Corporation properly applicable to the payment of dividends. Thereafter, but
only so long as any such dividends remain in arrears, the holders of the Series
I Shares shall be entitled to receive notice of and to attend all meetings of
shareholders of the Corporation (other than separate meetings of holder of
another class or another series of a class of shares) shall be entitled to one
vote in respect of each Series I Share held and shall be entitled to vote,
together with holders of any other series of First Preferred Shares bearing
similar rights to vote, to elect two directors.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|6.0 |  | DIVIDENDS
|--- |  | ---------



|6.01 The holders of Series I Shares
shall be entitled to receive fixed cumulative preferential cash dividends, as
and when declared by the Board of Directors, out of monies properly applicable
to the payment of dividends at a rate of $0.75 per share per annum, to accrue
from the date of issue of the Series I Shares and the first dividend, if
declared, shall be payable on March 31, 1988, thereafter dividends shall be
payable in quarterly amounts of $0.1875 per share on June 30, September 30,
December 31, and March 31 in each year. Dividends shall be paid by cheque
payable at par in lawful money of Canada at any branch in Canada of the
Corporations bankers. If on any dividend payable date the dividend payable
on such date, is not paid in full on all of the Series I shares then
outstanding, such dividend or the unpaid part thereof shall be paid on a
subsequent date or dates prior to the payment of subsequent dividends, such date
or dates to be determined by the Board of Directors after they have determined
that the Corporation shall have sufficient monies properly applicable to the
payment of dividends.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|6.02 The Board of Directors is entitled
in its discretion to determine with respect to any dividend on the Series I
Shares that all holders of Series I Shares or all holders of Series I Shares
resident in Canada, or resident in Canada and in specified jurisdictions outside
Canada, shall have the right to elect to receive such dividend in the form of a
stock dividend. The manner of distribution of any such stock dividend, the
details of the implementation of any program or plan relating thereto and the
determination of the value of the stock dividend shall be fixed and determined
by the Board of Directors at or prior to the declaration thereof.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|7.0 |  | CONVERSION
PRIVILEGE
|--- |  | --------------------



|7.01 A holder of Series I Shares has
the right, at his option, at any time prior to the redemption of his Series I
Shares to convert, subject to the terms and provisions hereof, such Series I
Shares into fully paid and non-assessable Common Shares on the then Current
Conversion Basis.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.02 The conversion of Series I Shares
may be effected by the surrender of the certificate or certificates representing
the same at any time during usually business hours while such Series I Shares
are outstanding at the option of the holder at any office of any transfer agent
of the Corporation at which the Series I Shares are transferable, accompanied
by, (i) payment or evidence of payment of the tax, (if any) payable as provided
in paragraph 7.12, and (ii) a written instrument of surrender in form
satisfactory to the Corporation duly executed by the registered holder or his
attorney duly authorized in writing, which instrument shall, specify the number
of Series I Shares which the holder desires to have converted. If less than all
of the Series I Shares are presented by the certificate or certificates so
surrendered are to be converted, the holder shall be entitled to receive, at the
expense of the Corporation, a new certificate representing the Series I Shares
comprised in the certificate or certificates surrendered as aforesaid which are
not to be converted.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|As promptly as
practicable after the surrender  of any Series I  Shares for conversion, the Corporation
shall issue and deliver, or cause  to b  delivered to or upon the written
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|order of the holder of the Series I Shares s
surrendered, a certificate or certificates issued in the name of, or in such  name or
names as may be directed by, such holder representing the number of  Common Shares to
which such holder is entitled. Such conversion shall be deemed  to have been made at the
close of business on the date such Series I Shares  shall have been surrendered for
conversion, so that the rights of the holder of  such Series I Shares, as the holder
thereof, shall cease at such time and the  person or persons entitled to receive Common
Shares upon such conversion shall  be treated for all purposes as having become the
holder or holders of record of  such Common Shares at such time, and such conversion
shall be on the Current  Conversion Basis as at such time; provided that no such
surrender on any date  when the Corporations register of transfers of Common Shares
shall be properly  closed shall be effective to constitute the person or persons entitled
to  receive such Common Shares upon such conversion as the holder or holders of  record
of such Common Shares on such date, but such surrender shall be effective  to constitute
the person or persons entitled to receive such Common Shares as  the holder or holders of
record thereof for all purposes at, and such conversion  shall be on the Current
Conversion Basis as at the close of business on the next  succeeding day on which such
register of transfers is open. The date of  surrender of any Series I Shares for
conversion shall be deemed to be the date  when the certificate or certificates
representing such Series I Shares are  received by a transfer agent of the Corporation.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.03 The registered holder of any
Series I Share on the record date for any dividend declared payable on such
shares shall be entitled to such dividend notwithstanding that such shares are
converted after such record date and before the payment date of such dividend
and the registered holder of any Common Shares resulting from any conversion
shall be entitled to rank equally with the registered holders of all other
Common Shares in respect of all dividends declared payable to holders of Common
Shares of record on any date on or after the date of conversion. Subject as
aforesaid and subject to the provisions hereof, upon the conversion of any
Series I Shares the Corporation shall make no payment or adjustment on account
of any dividends on the Series I Shares so converted or on account of any
dividends on the Common Shares issuable upon such conversion.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.04 The Basic Conversion Price shall
be $6.25 per Common Share so that, until adjusted as provided herein, the
initial Current Conversion Basis shall be one and six-tenths Common Shares for
each Series I Share.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.05  The Current Conversion Price shall be
subject to adjustment from time to time as follows:
|-----------------------------------------------------------------------------------------------



|(a) | In case the Corporation shall (i) subdivide its
      outstanding Common Shares into a greater number of shares, (ii) consolidate
      its outstanding Common Shares into a smaller number of shares, or (iii)
      issue Common Shares (or securities convertible into Common Shares) to all
      or substantially all of the holders of its Common Shares by way of a stock
      dividend (other than an issue of Common Shares to shareholders who exercise
      a right or an option to receive dividends in the form of Common Shares in
      lieu of receiving cash dividends paid in the ordinary course by the Corporation
      on its Common Shares), the Current Conversion Price in effect on the effective
      date of such subdivision or consolidation or on the record date for such
      issue of Common Shares
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| | (or securities convertible in Common Shares)
      by way of a stock dividend, as the case may be, shall be adjusted effective
      immediately after such effective date or such record date by multiplying
      the Current Conversion Price in effect on such effective date or record
      date by a fraction, the numerator of which shall be the number of Common
      Shares outstanding on such effective date or record date, and the denominator
      of which shall be the number of Common Shares outstanding after the completion
      of such subdivision, consolidation, or issue including in the case where
      securities convertible into Common Shares are issued, the maximum umber
      of Common Shares that would have been outstanding had such securities been
      converted into Common Shares on such record date; such adjustment shall
      be made successively whenever any event referred to in this subparagraph
      7.05(a) shall occur; if all such convertible securities are not converted
      into Common Shares prior to the expiration of the conversion right, the
      Current Conversion Price shall be readjusted effective as at the date of
      such expiration based on the number of Common Shares actually delivered
      on exercise of such conversion right and any such issue of Common Shares
      by way of a stock dividend shall be deemed to have been made on the record
      date for the stock dividend for the purpose of calculating the number of
      outstanding Common Shares under subparagraphs 7.05(b) and 7.05(c).
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | In
case the Corporation shall fix a record date for the issuance of rights, options or
warrants to all  or substantially all the holders of its outstanding Common Shares
entitling them, for a period  expiring not more than 45 days after such record date, to
subscribe for or purchase Common Shares  (or securities convertible into Common Shares)
at a price per share (or having a conversion price  per share) less than 95% of the
Current Market Price of a Common Share on such record date, the  Current Conversion Price
shall be adjusted effective immediately after such record date so that it  shall equal a
price determined by multiplying the Current Conversion Price in effect on such record
date by a fraction, of which the numerator shall be the aggregate of:
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | i. | The
total number of Common Shares outstanding on such  record date; plus
| | -- | ------------------------------------------------------------------------

| | ii. | A
number of Common Shares equal to the number arrived  at by dividing the aggregate price
of the total  number of additional Common Shares offered for  subscription or purchase
(or the aggregate conversion  price of the convertible securities so offered) by  the
Current Market Price of a Common Share on such  record date;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|and of which the denominator shall be the
aggregate of:
|-------------------------------------------------------

| | i. | the
total number of Common Shares outstanding on  such record date; plus
| | -- | ------------------------------------------------------------------------

| | ii. | the maximum number of additional Common Shares
      offered for subscription or purchase (or into which the convertible securities
      so offered are convertible);
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|any Common Shares owned by or  held for the
account of the Corporation  shall be deemed not to be outstanding for the  purpose of any
such  computation; such adjustment shall be made successively whenever  such a  record
date referred to in this subparagraph 7.05(b) is fixed; to the  extent  that all such
rights, options or warrants are not so issued or  such rights, options or  warrants are
not exercised prior to the  expiration thereof, the Current Conversion Price  shall be
readjusted  immediately after the expiry date for the exercise of such rights,  options
or warrants to the Current Conversion Price which would then be  in effect based  upon
the number of Common Shares (or securities  convertible into Common Shares) actually
delivered upon the exercise of  such rights, options or warrants as the case may be.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | In
case the Corporation shall fix a record date for the making of a distribution (including
a  distribution by way of a stock dividend) to all or substantially all the holders of
its outstanding  Common Shares of (i) shares of any class other than Common Shares
(excluding shares convertible  into Common Shares referred to in subparagraph 7.05(a)
hereof), or (ii) rights, options or warrants  (excluding those referred to in
subparagraph 7.05(b) hereof), or (iii) evidences of indebtedness  (excluding indebtedness
convertible into Common Shares referred to in subparagraph 7.05(a) hereof),  or (iv)
assets (excluding Common Shares issued by way of stock dividend and cash dividends paid
in  the ordinary course), then in each such case the Current Conversion Price shall be
adjusted  effective immediately after such record date so that it shall equal the price
determined by  multiplying the Current Conversion Price in effect on such record date by
a fraction, of which the  numerator shall be:
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | i. | The
total number of Common Shares outstanding on such  record date multiplied by the Current
Market Price  per Common Share on such record date; less
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------

| | ii. | The
fair market value (as determined by the Board of  Directors, whose determination shall be
conclusive)  of such shares or rights, options or warrants or  evidences or indebtedness
or assets so distributed;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|and of which the denominator shall be the total
number of Common Shares  outstanding on such record date multiplied by such Current
Market Price  per Common Share; any Common Shares owned by or held for the account of
the Corporation shall be deemed not to be outstanding for the purpose  of any such
computation; such adjustment shall be made successively  whenever such a record date
referred to in this subparagraph 7.05(c) is  fixed; to the extent that such distribution
of shares, evidences of  indebtedness or assets is not so made or to the extent that any
rights,  options or warrants so distributed are not exercised, the Current  Conversion
Price shall be readjusted to the Current Conversion Price  which would then be in effect
based upon such shares, evidences of  indebtedness or assets actually distributed, or
based upon the number  of rights, options or warrants exercised as the case may be.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|In this subparagraph 7.05(c) the term cash
dividends shall include  the value of any shares or other property distributed to
shareholders  who exercise a right or an option to receive substantially equivalent
dividends in shares or other property in lieu of cash dividends.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.06 In case of any reclassification
of, or other change in (other than a change resulting only from consolidation or
subdivision), the outstanding Common Shares, or in case of any amalgamation,
consolidation, merger or statutory arrangement of the Corporation with or into
any other corporation, or in case of any sale of the properties and assets of
the Corporation as, or substantially as, an entirety to any other corporation,
each Series I Share shall, after such reclassification, change, amalgamation,
consolidation, merger, statutory arrangement or sale, be convertible into the
number of shares or other securities or property of the Corporation, or such
continuing, successor or purchasing corporation, as the case may be, to which a
holder of the number of Common Shares as would have been issued if such Series I
Shares had been converted immediately prior to such reclassification, change,
amalgamation, consolidation, merger, statutory arrangement or sale would have
been entitled upon such reclassification, change, amalgamation, merger,
statutory arrangement or sale. The Board of Directors may accept the certificate
of any firm of independent chartered accountants (who may be the auditors of the
Corporation) as to the foregoing calculation, and the Board of Directors may
determine such entitlement on the basis of such certificate. Any such
determination shall be conclusive and binding on the Corporation, the transfer
agent for the Series I Shares and the holders of the Series I Shares. No such
reclassification, change, amalgamation, consolidation, merger, statutory
arrangement or sale shall be carried into effect unless, in the opinion of the
Board of Directors, all necessary steps shall have been taken to ensure that the
holders of the Series I Shares shall thereafter be entitled to receive such
number of shares or other securities or properties of the Corporation, or such
continuing, successor or purchasing corporation, as the case may be, subject to
adjustment thereafter in accordance with provisions similar, as nearly as may
be, to those contained in this Article 7.00.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.07 No adjustment of the Current
Conversion Price shall be made in any case in which the resulting increase or
decrease in the Current Conversion Price would be less than 1% of the then
Current Conversion Price, but in such case any adjustment that would otherwise
have been required then to be made shall be carried forward and made at the time
of, and together with, the next subsequent adjustment to the Current Conversion
Price which together with any and all such adjustments so carried forward, shall
result in an increase or de crease in the Current Conversion Price by not less
than 1%
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.08 No adjustments of the Current
Conversion Price shall be made pursuant to subparagraphs 7.05(b) or 7.05(c) in
respect of any rights, options or warrants if identical rights, options or
warrants are issued to the holders of the Series I Shares as though and to the
same effect as if they had converted their Series I Shares into Common Shares
prior to the issue of such rights, options or warrants.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.09 In any case in which this Article  7.00
shall require that an adjustment shall become effective immediately after a  record date
for an event referred to herein, the Corporation may defer, until  the occurrence of such
event, issuing to the holder of any Series I Shares
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|converted after such record date and before the
occurrence of such event the  additional Common Shares issuable upon such conversion by
reason of the  adjustment required by such event in addition to the Common Shares
issuable upon  such conversion before giving effect to such adjustment, provided however,
that  the Corporation shall deliver to such holder an appropriate instrument  evidencing
such holders right to receive such additional Common Shares  upon the occurrence of
the event requiring such adjustment and the right to  receive any distributions on such
additional Common Shares declared in favor of  holders or record of Common Shares on or
after the relevant date of conversion.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.10 Forthwith after any adjustment of
the Current Conversion Price under paragraph 7.05, the Corporation shall file
with its transfer agent for the Series I Shares a certificate for the
Corporation setting fort the details of the adjustment and the resulting
adjusted Current Conversion Basis. The transfer agent shall be under no duty to
make any investigation or inquiry as to the statements contained in any such
certificate of the Corporation or the manner in which any computation was made,
but the transfer agent may accept such certificate as conclusive evidence of the
statements therein contained and shall be fully protected with respect to any
and all acts done or actions taken or suffered by it in reliance thereon. The
Corporation shall exhibit a copy of such certificate of the Corporation from
time to time to any holder of Series I Shares desiring to inspect the same, and
shall give notice of any such adjustment of the Current Conversion Price and the
resulting adjustment of the Current Conversion Basis to the holders of he Series
I Shares in the manner provided in Ariticle11.00. The Corporation may retain a
firm of independent chartered accountants (who may be the auditors of the
Corporation) to make any computation required under paragraph 7.05 and any
computation so made shall be final and binding on the Corporation, the transfer
agent for the Series I Shares and the holders of the Series I Shares. Such firm
of independent chartered accountants may as to any question of law, request and
rely upon an opinion of counsel (who may be counsel for the Corporation).
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.11 Upon the surrender of any Series I
Shares for conversion, the number of full Common Shares issuable upon conversion
thereof shall be computed on the basis of the aggregate number of such Series I
Shares to be converted; in any case where a fraction of a Common Share is
involved the Corporation shall issue an additional Common Share.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.12 The issuance of certificates for
Common Shares upon the conversion of Series I Shares shall be made without
charge to the holders of the Series I Shares so converted for any fee or tax
imposed on the Corporation in respect of the issuance of such certificates or
the Common Shares represented thereby; provided that the Corporation shall mot
be required to pay any tax which may be imposed upon the person or persons to
whom such Common Shares are issued in respect of the issuance of such Common
Shares or the certificates therefore or which may be payable in respect of any
transfer involved in the issuance and delivery of any such certificate in a name
or names other than that of the holder of the Series I Shares converted, and the
Corporation shall not be required to issue or deliver such certificate unless
the person or persons requesting the issuance thereof shall have paid to the
Corporation the amount of such tax or shall have established to the satisfaction
of the Corporation that such tax has been paid.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.13 The Corporation shall give to the  holders
of Series I Shares at least 15 days notice of the record date fixed for,  or the
effective date for, any action which the Corporation intends to
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|take  which would require an adjustment to the
Current Conversion Price pursuant to  paragraph 7.05 (other than the subdivision or
consolidation or the outstanding  Common Shares of the Corporation). Any such notice
shall be sufficiently given  if given in accordance with the provisions of Article 11.00
or otherwise, if  necessary, to comply with the regulations of The Toronto Stock
Exchange, or, if  the Common Shares are not then listed on The Toronto Stock Exchange, of
any  recognized stock exchange upon which the Common Shares of the Corporation are
listed from time to time in force with respect to required disclosures to the  public by
corporations whose securities are listed on such exchange.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|8.0 |  | NO
PRE-EMPTIVE RIGHTS
|--- |  | ---------------------



|8.01 Holders of Series I Shares shall
not be entitled as of right to subscribe for or purchase or receive any shares,
bonds, debentures or other securities of the Corporation now or hereafter
authorized, except as provided for in these provisions.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|9.0 |  | RESTRICTIONS
|--- |  | ------------



|9.01 So long as any Series I Shares are
outstanding the Corporation shall not, without approval of the holders of the
Series I Shares:
|--------------------------------------------------------------------------------------------------------------------------------------

|(a) | declare,
pay or set aside for payment any dividends on any shares of  the Corporation ranking on a
parity with or junior to the Series I  Shares with respect to payment of dividends;
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | call
for redemption, redeem, purchase or otherwise retire or make any  capital distribution in
respect of any shares of the Corporation  ranking junior to or on a parity with the
Series I Shares with respect  to distribution of assets in the event of liquidation,
dissolution or  winding-up of the Corporation or with respect to payment of dividends;
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | call
for redemption, redeem, purchase or retire or otherwise pay off  less than all of the
Series I Shares
|--- | ----------------------------------------------------------------------------------------------------------

|(d) | issue
any shares of a class ranking in priority of or on a parity with  the Series I Shares; or
|--- | -----------------------------------------------------------------------------------------------

|(e) | set
aside any money or make any payments for any sinking fund or other  retirement fund
applicable to any shares of the Corporation ranking  junior to or on a parity with the
Series I Shares,
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|unless all dividends, up to and
including the dividends for the last completed period for which dividends shall
be payable, shall have been declared and paid or set apart for payment in
respect of the Series I Shares and all other shares ranking on a parity with or
in priority to the Series I Shares.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---



|10.0 |  | APPROVAL
BY HOLDERS  OF SERIES I SHARES
|---- |  | ---------------------------------------



|10.01 For the purposes hereof, any
consent or approval given by the holders of Series I Shares shall be deemed to
have been sufficiently given if it shall have been given in writing by the
holders of all the outstanding Series I Shares or by a resolution passed at a
meeting of holders of Series I Shares duly called an held upon not less than 21
days notice to the holders and carried by the affirmative vote of not less than
two-thirds of the votes cast at such meeting. For the purposes of such meeting,
two holders of Series I Shares present in person or represented by duly
appointed proxy representing not less than 25% of the then issued and
outstanding Series I Shares shall constitute a quorum. If at any such meeting a
quorum is not present within one-half hour after the time appointed for such
meeting, then the meeting shall be adjourned to such date not less than 21 nor
more than 28 days thereafter and to such time and place as may be designated by
the chairman, and not less than 10 days written notice shall be given of such
adjourned meeting. At such adjourned meeting the holders of Series I Shares
present or represented by proxy may transact the business for which the meeting
was originally convened and a resolution passed thereat by the affirmative vote
of not less than two-thirds of the votes cast at such meeting shall constitute
the consent or approval of the holders of Series I Shares. On every poll taken
at every meeting every holder of Series I Shares shall be entitled to one vote
in respect of each Series I Share held.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|11.0 |  | NOTICES
|---- |  | -------



|11.01 Any notice required to be given
under the provisions attaching to the Series I Shares to the holders thereof
shall be given by posting the same in a postage paid envelope addressed to each
holder at the last address of such holder as it appears on the books of the
Corporation or in the event of the address of any such holder not so appearing,
then to the address of such holder last known to the Corporation; provided that
accidental failure or omission to give any notice as aforesaid to one or more of
such holders shall not invalidate any action or proceeding founded thereon. In
the event of a threatened or actual disruption in the mail service, notice as
aforesaid shall be given to registered holders of Series I Shares by means of
publication once a week for two successive weeks in a daily newspaper of general
circulation in each of the cities of Toronto, Saskatoon, Winnipeg, Calgary and
Vancouver. Publication in each week in each newspaper shall be made within a
period of seven days of publication in each other newspaper. If at any time any
notice is required under the provisions of this paragraph 11.01 to be published
in a particular city and no newspaper of general circulation is then being
published and circulated on a weekly or more often basis in that city, the
Corporation shall not be required to publish in that city. Any notice given by
mail shall be deemed to be given on the day on which it is mailed. Any notice
given by publication shall be deemed to be given on the day on which the first
publication is completed in all of the cities in which publication is required.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|12.0 |  | INCOME
TAX ELECTION
|---- |  | -------------------



|Assuming that the
Notice of Ways and Means Motion tabled in  the House of Commons on June 18, 1987 in
connection with the White Paper on Tax  Reform is enacted substantially in the form
proposed, the Corporation shall  elect under subsection 191.2(1) of the Income Tax Act
(Canada) and shall file  the election, in prescribed form, with the Minister of National
Revenue within  the time provided for in the said subsection 191.2(1).
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| | SCHEDULE A TO THE RESTATED ARTICLES
      OF INCORPORATION OF CLAUDE RESOURCES INC./LES RESOURCES CLAUDE INC.
| | ---------------------------------------------------------------------------------------------------------------





| | The share
capital of the Corporation shall consist of:
| | ------------------------------------------------------



|(a) | an
unlimited number of common voting shares without nominal or par  value;
|--- | --------------------------------------------------------------------------

|(b) | an
unlimited number of First Preferred Shares issuable in series with  the issue price per
share of the shares of each series to be fixed by  the Board of Directors, without
limitation as to the aggregate amount  of the consideration for which all the First
Preferred Shares or any  series thereof may be issued; and
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | an
unlimited number of Second Preferred Shares issuable in series with  the issue price per
share of the shares of each series to be fixed by  the Board of Directors, without
limitation as to the aggregate amount  of the consideration for which all the Second
Preferred Shares or any  series thereof may be issued.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The First
Preferred Shares, as a class, shall carry and be  subject to the following rights,
privileges, restrictions and conditions:
|-------------------------------------------------------------------------------------------------------------------------------------

|1. |  | Directors
Right  to Issue in One or More Series
|-- |  | ------------------------------------------------



|The First Preferred Shares may at any
time or from time to time be issued in one (1) or more series, each series to
consist of such number of shares as may before the issue thereof be determined
by the directors; the directors of the Corporation may (subject as hereinafter
provided) by resolution fix, from time to time before the issue thereof, the
designation, rights, privileges, restrictions and conditions attaching to the
shares of each such series including, without limiting the generality of the
foregoing, the issue price, the rate, amount or method of calculation of
preferential dividends (if any) and whether such rate, amount or method of
calculation shall be subject to change or adjustment in the future, the date of
payment thereof, the redemption and/or purchase prices and terms and conditions
of redemption and/or purchase, conversion rights (if any), voting rights, (if
any), any sinking fund or other provisions and the rights of retraction, (if
any), vested in the holders of First Preferred Shares of any such series and the
prices and the other terms and conditions of any rights of retraction and
whether any additional rights of retraction may be vested in such holders in the
future, the whole subject to the following provisions and to the issue of
Articles of Amendment setting forth such designation, issue price, rights,
privileges, restrictions and conditions attaching to the shares of each series.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. |  | Ranking
of First Preferred  Shares
|-- |  | ----------------------------------



|The First Preferred Shares of each  series shall
rank on a parity with the First Preferred Shares of every other  series with respect to
priority in payment of dividends, (if any) and in the  distribution of assets in the
event of the liquidation, dissolution or  winding-up of the Corporation, whether
voluntary or involuntary, or any other  distribution of the assets of the Corporation
among its
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|shareholders for the  purposes of winding-up its
affairs, When any dividends or amounts payable on a  repayment of capital are not paid in
full, the First Preferred Shares of all  series shall participate ratably in respect of
such dividends, including  accumulations, if any, in accordance with the sums that would
be payable on such  shares if all such dividends were declared and paid in full and on
any repayment  of capital in accordance with the sums that would be payable on such
repayment  of capital if all sums so payable were paid in full; provided, however, that
in  the event of there being insufficient assets to satisfy in full all such claims  as
aforesaid, the claims of the holders of such shares with respect to return of  capital
shall first be paid and satisfied and any assets remaining thereafter  shall be applied
towards the payment and satisfaction of claims in respect of  dividends
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The First Preferred Shares shall be
entitled to preference over the common shares of the Corporation and over any
other shares ranking junior to the First Preferred Shares with respect to
payment of dividends, (if any) and distribution of assets in the event of
liquidation, dissolution or winding-up of the corporation whether voluntary or
involuntary, or any other distribution of the assets of the Corporation among
its shareholders for the purpose of winding-up its affairs and may also be given
such other preferences over the common shares of the Corporation and over any
other shares ranking junior to the First Preferred Shares authorized to be
issued. Nothing in this paragraph shall limit the right of the Corporation to
pay a dividend on its common shares to the holders of its common shares or any
other shares ranking junior to the First Preferred Shares without participation
therein by the holders of the First Preferred Shares.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. |  | No
Pre-Emptive Rights
|-- |  | ---------------------



|The holders of the
First Preferred Shares shall not be  entitled as such to subscribe for, purchase or
receive any part of any issue of  shares, bonds, debentures or other securities of the
Corporation now or  hereafter authorized, or any rights to acquire the same, otherwise
than in  accordance with the conversion, exchange or other rights, if any, which may from
time to time be attached to any series of the First Preferred Shares.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Second
Preferred Shares, as a class, shall carry and be  subject to the following rights,
privileges, restrictions and conditions:
|--------------------------------------------------------------------------------------------------------------------------------------

|1. |  | Directors
Right  to Issue in One or More Series
|-- |  | ------------------------------------------------



|The Second Preferred Shares may at any  time or
from time to time be issued in one (1) or more series, each series to  consist of such
number of shares as may before the issue thereof be determined  by the directors; the
directors of the Corporation may (subject as hereinafter  provided) by resolution fix,
from time to time before the issue thereof, the  designation, rights, privileges,
restrictions and conditions attaching to the  shares of each such series including,
without limiting the generality of the  foregoing, the issue price, the rate, amount or
method of calculation of  preferential dividends (if any) and whether such rate, amount
or method of  calculation shall be subject to change or adjustment in the future, the
date of  payment thereof, the redemption and/or purchase prices and terms and conditions
of redemption and/or purchase, conversion rights (if any), voting rights, (if  any), any
sinking fund or other provisions and the rights of retraction, (if  any), vested in the
holders of Second Preferred Shares of any such series
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|and  the prices and the other terms and
conditions of any rights of retraction and  whether any additional rights of retraction
may be vested in such holders in the  future, the whole subject to the following
provisions and to the issue of  Articles of Amendment setting forth such designation,
issue price, rights,  privileges, restrictions and conditions attaching to the shares of
each series.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. |  | Ranking
of Second Preferred  Shares
|-- |  | -----------------------------------



|The Second
Preferred Shares shall rank junior to the First  Preferred Shares of the Corporation with
the respect to payment of dividends,  (if any), and distribution of assets in the event
of liquidation, dissolution or  winding-up of the Corporation whether voluntary or
involuntary or any other  distribution of the assets of the Corporation amongst its
shareholders for the  purposes of winding-up its affairs and shall be subject to any
preferences and  other rights, privileges, restrictions and conditions which are attached
to the  First Preferred Shares as a class, to any other class of shares of the
Corporation that ranks senior to the Second Preferred Shares with respect to  priority in
the payment of dividends or liquidation distributions, and to each  series of First
Preferred Shares and of any other senior ranking class of shares  created hereafter.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Second
Preferred Shares of each series shall rank on a  parity with the Second Preferred Shares
of every other series with respect to  priority in payment of dividends and in the
distribution of assets in the event  of the liquidation, dissolution or winding-up of the
Corporation, whether  voluntary or involuntary, or any other distribution of the assets
of the  Corporation among its shareholders for the purpose of winding-up its affairs.
When any dividends or amounts payable on a repayment of capital are not paid in  full,
the Second Preferred Shares of all series shall participate ratably in  respect of such
dividends, including accumulations, if any, in accordance with  the sums that would be
payable on such shares if all such dividends were  declared and paid in full and on any
repayment of capital in accordance with the  sums that would be payable on such repayment
of capital if all sums so payable  were paid in full; provided, however, that in the
event of there being  insufficient assets to satisfy in full all such claims as
aforesaid, the claims  of the holders of such shares with respect to return of capital
shall first be  paid and satisfied and any assets remaining thereafter shall be applied
towards  the payment and satisfaction of claims in respect of dividends.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Second
Preferred Shares shall be entitled to preference  over the common shares of the
Corporation and over any other shares ranking  junior to the Second Preferred Shares with
respect to payment of dividends and  distribution of assets in the event of liquidation,
dissolution or winding-up of  the Corporation whether voluntary or involuntary, or any
other distribution of  the assets of the Corporation among its shareholders for the
purpose of  winding-up its affairs and may also be given such other preferences over the
common shares of the Corporation and over any other shares ranking junior to the  Second
Preferred Shares as may be determined in the case of each series of  Second Preferred
Shares authorized to be issued. Nothing in this paragraph shall  limit the rights of the
Corporation to pay a dividend in its common shares to  the holders of its common shares
or any other shares ranking junior to the  Second Preferred Shares without participation
therein by the holders of the  Second Preferred Shares.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---



|3. |  | No
Pre-Emptive Rights
|-- |  | ---------------------



|The holders of the
Second Preferred Shares shall not be  entitled as such to subscribe for, purchase or
receive any part of any issue of  shares, bonds, debentures or other securities of the
Corporation now or  hereafter authorized, or any rights to acquire the same, otherwise
than in  accordance with the conversion, exchange or other rights, if any, which may from
time to time be attached to any series of the Second Preferred Shares.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|PROVISIONS ATTACHING TO 7.5%
CONVERTIBLE REDEEMABLEFIRST PREFERRED SHARES, SERIES I
|-----------------------------------------------------------------------------------



|The first series
of the First Preferred Shares shall consist  of 650,000 shares, which shall be designated
as the 7.5% Convertible Redeemable  First Preferred Shares, Series I (the
Series I Shares) and in addition to the  rights, restrictions, conditions and
limitations attached to the First Preferred  Shares as a class, shall have attached
thereto the following rights,  restrictions, conditions and limitations:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|1.0 |  | DEFINITIONS
|--- |  | -----------



|1.01 In these provisions attaching to
the Series I Shares, including this paragraph, the following terms shall have
the meanings hereinafter set forth:
|-------------------------------------------------------------------------------------------------------------------------------------------------------

|(a) | Common
Shares means the Common Shares of the Corporation as constituted on the date these
provisions became effective or as subsequently consolidated or subdivided and any other
share resulting from reclassification or change of such Common Shares or that the
holders of such Common Shares are entitled to receive as a result of an amalgamation,
consolidation, merger, statutory arrangement or sale, as referred to in paragraph 7.06;
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | Basic
Conversion Price means the price per Common Share as provided in paragraph 7.04;
|--- | ----------------------------------------------------------------------------------------



| |  | 
| |  | 



---



|(c) | Current
Conversion Price means as at any particular time the Basic Conversion Price unless
an adjusted conversion price is in effect under the provision of paragraph 7.05 in
which case it means such adjusted conversion price;
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(d) | Current
Conversion Basis means the number of Common Shares into which each Series I Share
is convertible, which number is equal at any particular time to the result obtained
(expressed to the nearest thousandth of a Common Share) by dividing the Current
Conversion Price into $10.00;
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(e) | Current
Market Price per Common Share at any date means the price expressed in Canadian
currency per share equal to the weighted average price at which the Common Share s
have traded on The Toronto Stock Exchange during the period of 20 consecutive
trading days ending on a date not earlier than the fifth day preceding such date. In
the event the Common Shares are not listed on The Toronto Stock Exchange on such date,
but are listed on another stock exchange or other stock exchanges the foregoing
reference to The Toronto Stock Exchange shall be deemed to be reference to such
other stock exchange, or, if more than one, to such one as shall be designated by
the Board of Directors. In the event Common Shares are not listed on any stock
exchange in Canada on such date the said Current Market Price shall be
determined by the Board of Directors;
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(f) | Accrued
and unpaid dividends means an amount computed at the rate of dividend attaching to
the Series I Shares as though dividends on such shares had been accruing on a day to
day basis from the date of issue to the date to which the computation of accrued
dividends is to be made, after deducting all dividend payments made on such shares; and
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(g) | Dividends
paid in the ordinary course means cash dividends to the extent that the aggregate
amount of cash dividends paid by the Corporation on its Common Shares in any fiscal
year of the Corporation does not exceed the greater of:
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---



| | i. | 100%
of the aggregate net income of the Corporation  plus depletion, depreciation and
amortization for the  immediately preceding fiscal year as disclosed in the
Corporations financial statements, less cash  dividends paid on any of its Common Shares
during  such immediately preceding fiscal year of the  Corporation; or
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ii. | 200%
of the total amount of dividends  paid by the  Corporation  on its Common Shares in such
immediately  preceding fiscal year.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------

|2.0 |  | STATED
VALUE
|--- |  | ------------



|2.01 The Series I Shares of the
Corporation shall have a stated value for stated capital account purposes of
$10.00 each.
|-------------------------------------------------------------------------------------------------------------------------

|3.0 |  | LIQUIDATION
|--- |  | -----------



|3.01 In the event of the liquidation,
dissolution or winding-up of the Corporation or other distribution of assets or
property of the Corporation among its shareholders for the purpose of winding up
its affairs, the holders of the Series I Shares shall be entitled to receive
$10.00 per such share, together with an amount equal to all accrued and unpaid
dividends thereon to and including the date of payment whether or not such
dividends have been declared and whether or not the Corporation has monies
properly applicable to the payment of dividends. The holders of Series I Shares
shall be entitled to be paid all such amounts before any assets or property of
the Corporation shall be distributed to the holders of any Common Shares, or
other shares of the capital of the Corporation ranking junior to the Series I
Shares.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3.02 After payment to the holders of
the Series I Shares of the amounts so payable to them, they shall not be
entitled to share in any further distribution of the property or assets of the
Corporation.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.0 |  | REDEMPTION
|--- |  | ----------



|4.01 The Series I Shares are not  redeemable on
or prior to January 1, 1990. Thereafter and until January 1, 1991,  if the Corporation
shall have filed with the transfer agent for the Series I  Shares on the day that the
requisite notice of redemption is first given, a  certificate of the Corporation
certifying that the Current Market Price for the  Common Shares on the business day
preceding the date on which the notice of  redemption is given was not less than 140% of
the Current Conversion Price in  effect on such date, the Corporation may redeem at any
time all of the  outstanding Series I Shares or, subject to the provisions of Article
9.00, from  time to time any
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|part thereof selected by lot in such manner as
the Board of  Directors may determine, or, if the Board of Directors so determines, pro
rata,  on payment of $10.00 for each such share to be redeemed, together with an amount
equal to all accrued and unpaid dividends up to and including the date fixed for
redemption whether or not such dividends have been declared and whether or not  the
Corporation has monies properly applicable to the payment of such dividends.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4.02 After January 1, 1991, and
thereafter until January 1, 1993 if the Corporation shall have filed with the
transfer agent for the Series I Shares on the day that the requisite notice of
redemption is first given, a certificate of the Corporation certifying that the
Current Market Price on the business day preceding the date on which the notice
of redemption is given was not less than 125% of the Current Conversion Price in
effect on such date, the Corporation may redeem at any time all of the
outstanding Series I Shares or, subject to the provisions of Article 9.00, from
time to time any part thereof selected by lot in such manner as the Board of
Directors may determine, or, if the Board of Directors so determines, pro rata,
on payment of $10.00 of each such Series I Share to be redeemed, together with
an amount equal to all accrued an unpaid dividends up to and including the date
fixed for redemption whether or not such dividends have been declared and
whether or not the Corporation has monies properly applicable to the payment of
such dividends.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4.03 After January 1, 1993, if the
Corporation shall have filed with the transfer agent for the Series I Shares on
the day that the requisite notice of redemption is first given, a certificate of
the Corporation certifying that the Current Market Price on the business day
preceding that date on which the notice of redemption is given was greater than
100% of the Current Conversion Price in effect on such date, the Corporation may
redeem at any time all of the outstanding Series I Shares or, subject to the
provisions of Article 9.00, from time to time any part thereof selected by lot
in such manner as the Board of Directors may determines, or, if the Board of
Directors so determines, pro rata, on payment of $10.00 for each such Series I
Share to be redeemed, together with an amount equal to all accrued and unpaid
dividends up to and including the date fixed for redemption, whether or not such
dividends have been declared and whether or not the Corporation has monies
properly applicable to the payment of such dividends.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4.04 On any redemption of Series I  Shares under
this Article 4.00, the Corporation shall give, in the manner  provided in Article 11.00,
at least 30 days prior notice to each person who, at  the date of giving such notice, is
the holder of Series I Shares to be redeemed,  of the intention of the Corporation to
redeem such shares. Such notice shall set  out the amount payable on redemption, the date
on which the redemption is to  take place and, unless all the Series I Shares held by the
holder to whom it is  addressed are to be redeemed, shall also set out the number of such
shares so  held which are to be redeemed and, shall contain a brief statement of the
conditions, as provided in Article 7.00, on which the Series I Shares may be  converted
into Common Shares of the Corporation, including a statement as to the  then Current
Conversion Price. On or after the date so specified for redemption,  the Corporation
shall pay or cause to be paid to each holder of Series I Shares  to be redeemed the
amount payable on redemption on presentation and surrender at  any office of any transfer
agent of the Corporation, or at any other place or  places within Canada designated by
such notice, of the certificate or  certificates for such Series I Shares so called for
redemption. Such payment  shall be made by cheque payable at par at any branch in Canada
of the  Corporations bankers. If a part only of the Series I Shares
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|represented by  any certificate shall be
redeemed, a new certificate for the balance shall be  issued at the expense of the
Corporation. From and after the date specified in  any such notice, the Series I Shares
called for redemption shall cease to be  entitled to dividends and the holders thereof
shall not be entitled to exercise  any of the rights of shareholders in respect thereof
unless payment of the  amount payable on redemption shall not be duly made by the
Corporation, in which  case the rights of the holders shall remain unimpaired. At any
time after the  notice of redemption is given the Corporation shall have the right to
deposit  the amount payable on redemption of any or all Series I Shares called for
redemption with any chartered bank or banks or with any trust company or trust  companies
in Canada named for such purpose in the notice of redemption to the  credit of a special
account or accounts in trust for the respective holders of  such shares, to be paid to
them respectively upon surrender to such banks or  trust company or trust companies of
the certificate or certificates representing  the same. Upon such deposit or deposits
being made, or upon the date fixed for  redemption, whichever is later, such shares shall
be deemed to be redeemed, and  the rights of the holders of such shares shall be limited
to receiving the  proportion of the amounts so deposited applicable to their respective
shares  without interest. Any interest earned or otherwise received on such deposit or
deposits shall belong to the Corporation.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4.05 Series I Shares which are redeemed
or deemed to be redeemed in accordance with this Article 4.00 shall be and be
deemed to be cancelled and shall not be reissued.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5.00 |  | VOTING
PROVISION
|---- |  | ----------------



|5.01 Subject to the provisions of the
Canada Business Corporations Act (the Act), the holders of the
Series I Shares shall not as such be entitled (except as hereinafter
specifically provided) to receive notice of or to attend any meeting of the
shareholders of the Corporation or to vote at any such meeting unless the
Corporation from time to time shall fail to pay eight consecutive quarterly
dividend payments in respect of the Series I Shares on the dates on which the
same should be paid according to the provisions hereof whether or not such
dividends have been declared and whether or not there are monies of the
Corporation properly applicable to the payment of dividends. Thereafter, but
only so long as any such dividends remain in arrears, the holders of the Series
I Shares shall be entitled to receive notice of and to attend all meetings of
shareholders of the Corporation (other than separate meetings of holder of
another class or another series of a class of shares) shall be entitled to one
vote in respect of each Series I Share held and shall be entitled to vote,
together with holders of any other series of First Preferred Shares bearing
similar rights to vote, to elect two directors.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|6.0 |  | DIVIDENDS
|--- |  | ---------



|6.01 The holders of Series I Shares  shall be
entitled to receive fixed cumulative preferential cash dividends, as  and when declared
by the Board of Directors, out of monies properly applicable  to the payment of dividends
at a rate of $0.75 per share per annum, to accrue  from the date of issue of the Series I
Shares and the first dividend, if  declared, shall be payable on March 31, 1988,
thereafter dividends shall be  payable in quarterly amounts of $0.1875 per share on June
30, September 30,  December 31, and March 31 in each year. Dividends shall be paid by
cheque  payable at par in lawful money of Canada at any branch in Canada of the
Corporations bankers. If on any dividend payable date the dividend payable  on such
date, is not
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|paid in full on all of the Series I shares then
outstanding, such dividend or the unpaid part thereof shall be paid on a  subsequent date
or dates prior to the payment of subsequent dividends, such date  or dates to be
determined by the Board of Directors after they have determined  that the Corporation
shall have sufficient monies properly applicable to the  payment of dividends.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|6.02 The Board of Directors is entitled
in its discretion to determine with respect to any dividend on the Series I
Shares that all holders of Series I Shares or all holders of Series I Shares
resident in Canada, or resident in Canada and in specified jurisdictions outside
Canada, shall have the right to elect to receive such dividend in the form of a
stock dividend. The manner of distribution of any such stock dividend, the
details of the implementation of any program or plan relating thereto and the
determination of the value of the stock dividend shall be fixed and determined
by the Board of Directors at or prior to the declaration thereof.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|7.0 |  | CONVERSION
PRIVILEGE
|--- |  | --------------------



|7.01 A holder of Series I Shares has
the right, at his option, at any time prior to the redemption of his Series I
Shares to convert, subject to the terms and provisions hereof, such Series I
Shares into fully paid and non-assessable Common Shares on the then Current
Conversion Basis.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.02 The conversion of Series I Shares
may be effected by the surrender of the certificate or certificates representing
the same at any time during usually business hours while such Series I Shares
are outstanding at the option of the holder at any office of any transfer agent
of the Corporation at which the Series I Shares are transferable, accompanied
by, (i) payment or evidence of payment of the tax, (if any) payable as provided
in paragraph 7.12, and (ii) a written instrument of surrender in form
satisfactory to the Corporation duly executed by the registered holder or his
attorney duly authorized in writing, which instrument shall, specify the number
of Series I Shares which the holder desires to have converted. If less than all
of the Series I Shares are presented by the certificate or certificates so
surrendered are to be converted, the holder shall be entitled to receive, at the
expense of the Corporation, a new certificate representing the Series I Shares
comprised in the certificate or certificates surrendered as aforesaid which are
not to be converted.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|As promptly as
practicable after the surrender of any Series I  Shares for conversion, the Corporation
shall issue and deliver, or cause to b  delivered to or upon the written order of the
holder of the Series I Shares so  surrendered, a certificate or certificates issued in
the name of, or in such  name or names as may be directed by, such holder representing
the number of  Common Shares to which such holder is entitled. Such conversion shall be
deemed  to have been made at the close of business on the date such Series I Shares
shall have been surrendered for conversion, so that the rights of the holder of  such
Series I Shares, as the holder thereof, shall cease at such time and the  person or
persons entitled to receive Common Shares upon such conversion shall  be treated for all
purposes as having become the holder or holders of record of  such Common Shares at such
time, and such conversion shall be on the Current  Conversion Basis as at such time;
provided that no such surrender on any date  when the Corporations register of transfers
of Common Shares shall be properly  closed shall be effective to constitute the person or
persons entitled to  receive such Common Shares upon such conversion as the
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|holder or  holders of  record of such Common
Shares on such date, but such surrender shall be  effective  to constitute the person or
persons entitled to receive such Common Shares as  the holder or holders of record
thereof for all purposes at, and such conversion  shall  be on the Current Conversion
Basis as at the close of business on the next  succeeding  day on which such register of
transfers is open. The date of  surrender of any Series I  Shares for conversion shall be
deemed to be the date  when the certificate or  certificates representing such Series I
Shares are  received by a transfer agent of the  Corporation.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.03 The registered holder of any
Series I Share on the record date for any dividend declared payable on such
shares shall be entitled to such dividend notwithstanding that such shares are
converted after such record date and before the payment date of such dividend
and the registered holder of any Common Shares resulting from any conversion
shall be entitled to rank equally with the registered holders of all other
Common Shares in respect of all dividends declared payable to holders of Common
Shares of record on any date on or after the date of conversion. Subject as
aforesaid and subject to the provisions hereof, upon the conversion of any
Series I Shares the Corporation shall make no payment or adjustment on account
of any dividends on the Series I Shares so converted or on account of any
dividends on the Common Shares issuable upon such conversion.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.04 The Basic Conversion Price shall
be $6.25 per Common Share so that, until adjusted as provided herein, the
initial Current Conversion Basis shall be one and six-tenths Common Shares for
each Series I Share.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.05  The Current Conversion Price shall be
subject to adjustment from time to time as follows:
|-----------------------------------------------------------------------------------------------

|(a) | In
case the Corporation shall (i) subdivide its outstanding Common Shares into a greater
number of  shares, (ii) consolidate its outstanding Common Shares into a smaller number
of shares, or (iii) issue  Common Shares (or securities convertible into Common Shares)
to all or substantially all of the holders  of its Common Shares by way of a stock
dividend (other than an issue of Common Shares to shareholders  who exercise a right or
an option to receive dividends in the form of Common Shares in lieu of receiving  cash
dividends paid in the ordinary course by the Corporation on its Common Shares), the
Current  Conversion Price in effect on the effective date of such subdivision or
consolidation or on the record  date for such issue of Common Shares (or securities
convertible in Common Shares) by way of a stock  dividend, as the case may be, shall be
adjusted effective immediately after such effective date or such  record date by
multiplying the Current Conversion Price in effect on such effective date or record date
by a fraction, the numerator of which shall be the number of Common Shares outstanding on
such effective  date or record date, and the denominator of which shall be the number of
Common Shares outstanding after  the completion of such subdivision, consolidation, or
issue including in the case where securities  convertible into Common Shares are issued,
the maximum umber of Common Shares that would have been  outstanding had such securities
been converted into Common Shares on such record date; such adjustment  shall be made
successively whenever any event referred to in this subparagraph 7.05(a) shall occur; if
all such convertible securities are not converted into Common Shares prior to
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---



| | the expiration
of the  conversion right, the Current Conversion Price shall be readjusted  effective as
at the date of such  expiration based on the number of Common Shares  actually delivered
on exercise of such conversion right  and any such issue of Common  Shares by way of a
stock dividend shall be deemed to have been made on the  record date  for the stock
dividend for the purpose of calculating the number of outstanding Common  Shares under
subparagraphs 7.05(b) and 7.05(c).
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | In
case the Corporation shall fix a record date for the issuance of rights, options or
warrants to all  or substantially all the holders of its outstanding Common Shares
entitling them, for a period expiring  not more than 45 days after such record date, to
subscribe for or purchase Common Shares (or securities  convertible into Common Shares)
at a price per share (or having a conversion price per share) less than  95% of the
Current Market Price of a Common Share on such record date, the Current Conversion Price
shall be adjusted effective immediately after such record date so that it shall equal a
price determined  by multiplying the Current Conversion Price in effect on such record
date by a fraction, of which the  numerator shall be the aggregate of:
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | i. | the
total number of Common Shares outstanding on such  record date; plus
| | -- | ------------------------------------------------------------------------

| | ii. | a
number of Common Shares equal to the number arrived  at by dividing the aggregate price
of the total  number of additional Common Shares offered for  subscription or purchase
(or the aggregate conversion  price of the convertible securities so offered) by  the
Current Market Price of a Common Share on such  record date;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | and of
which the denominator shall be the aggregate of:
| | -------------------------------------------------------

| | i. | the
total number of Common Shares outstanding on  such record date; plus
| | -- | ------------------------------------------------------------------------

| | ii. | the
maximum number of additional Common Shares  offered for subscription or purchase (or into
which  the convertible securities so offered are  convertible);
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------

| | any Common
      Shares owned by or held for the account of the Corporation shall be deemed
      not to be outstanding for the purpose of any such computation; such adjustment
      shall be made successively whenever such a record date referred to in this
      subparagraph 7.05(b) is fixed; to the extent that all such rights, options
      or warrants are not so issued or such rights, options or warrants are not
      exercised prior to the expiration thereof, the Current Conversion Price
      shall be readjusted immediately after the expiry date for the exercise of
      such rights, options or warrants to the Current Conversion Price which would
      then be in effect based upon the number of Common Shares (or securities
      convertible into Common Shares) actually delivered upon the exercise of
      such rights, options or warrants as the case may be.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---



|(c) | In
case the Corporation shall fix a record date for the making of a distribution (including
a  distribution by way of a stock dividend) to all or substantially all the holders of
its outstanding  Common Shares of (i) shares of any class other than Common Shares
(excluding shares convertible into  Common Shares referred to in subparagraph 7.05(a)
hereof), or (ii) rights, options or warrants  (excluding those referred to in
subparagraph 7.05(b) hereof), or (iii) evidences of indebtedness  (excluding indebtedness
convertible into Common Shares referred to in subparagraph 7.05(a) hereof), or  (iv)
assets (excluding Common Shares issued by way of stock dividend and cash dividends paid
in the  ordinary course), then in each such case the Current Conversion Price shall be
adjusted effective  immediately after such record date so that it shall equal the price
determined by multiplying the  Current Conversion Price in effect on such record date by
a fraction, of which the numerator shall be:
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | i. | The
total number of Common Shares outstanding on such  record date multiplied by the Current
Market Price  per Common Share on such record date; less
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------

| | ii. | The
fair market value (as determined by the Board of  Directors, whose determination shall be
conclusive)  of such shares or rights, options or warrants or  evidences or indebtedness
or assets so distributed;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | and of which
      the denominator shall be the total number of Common Shares outstanding on
      such record date multiplied by such Current Market Price per Common Share;
      any Common Shares owned by or held for the account of the Corporation shall
      be deemed not to be outstanding for the purpose of any such computation;
      such adjustment shall be made successively whenever such a record date referred
      to in this subparagraph 7.05(c) is fixed; to the extent that such distribution
      of shares, evidences of indebtedness or assets is not so made or to the
      extent that any rights, options or warrants so distributed are not exercised,
      the Current Conversion Price shall be readjusted to the Current Conversion
      Price which would then be in effect based upon such shares, evidences of
      indebtedness or assets actually distributed, or based upon the number of
      rights, options or warrants exercised as the case may be.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In this subparagraph
      7.05(c) the term cash dividends shall include the value of any
      shares or other property distributed to shareholders who exercise a right
      or an option to receive substantially equivalent dividends in shares or
      other property in lieu of cash dividends.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.06 In case of any reclassification  of, or
other change in (other than a change resulting only from consolidation or  subdivision),
the outstanding Common Shares, or in case of any amalgamation,  consolidation, merger or
statutory arrangement of the Corporation with or into  any other corporation, or in case
of any sale of the properties and assets of  the Corporation as, or substantially as, an
entirety to any other corporation,  each Series I Share shall, after such
reclassification, change, amalgamation,  consolidation, merger, statutory arrangement or
sale, be convertible into the  number of shares or other securities or property of the
Corporation, or such  continuing, successor or purchasing corporation, as the case may
be, to which a  holder of the
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|number of Common Shares as would have been
issued if such Series I  Shares had been converted immediately prior to such
reclassification, change,  amalgamation, consolidation, merger, statutory arrangement or
sale would have  been entitled upon such reclassification, change, amalgamation, merger,
statutory arrangement or sale. The Board of Directors may accept the certificate  of any
firm of independent chartered accountants (who may be the auditors of the  Corporation)
as to the foregoing calculation, and the Board of Directors may  determine such
entitlement on the basis of such certificate. Any such  determination shall be conclusive
and binding on the Corporation, the transfer  agent for the Series I Shares and the
holders of the Series I Shares. No such  reclassification, change, amalgamation,
consolidation, merger, statutory  arrangement or sale shall be carried into effect
unless, in the opinion of the  Board of Directors, all necessary steps shall have been
taken to ensure that the  holders of the Series I Shares shall thereafter be entitled to
receive such  number of shares or other securities or properties of the Corporation, or
such  continuing, successor or purchasing corporation, as the case may be, subject to
adjustment thereafter in accordance with provisions similar, as nearly as may  be, to
those contained in this Article 7.00.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.07 No adjustment of the Current Conversion Price shall
      be made in any case in which the resulting increase or decrease in the Current
      Conversion Price would be less than 1% of the then Current Conversion Price,
      but in such case any adjustment that would otherwise have been required
      then to be made shall be carried forward and made at the time of, and together
      with, the next subsequent adjustment to the Current Conversion Price which
      together with any and all such adjustments so carried forward, shall result
      in an increase or decrease in the Current Conversion Price by not less than
      1%
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.08 No adjustments of the Current
Conversion Price shall be made pursuant to subparagraphs 7.05(b) or 7.05(c) in
respect of any rights, options or warrants if identical rights, options or
warrants are issued to the holders of the Series I Shares as though and to the
same effect as if they had converted their Series I Shares into Common Shares
prior to the issue of such rights, options or warrants.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.09 In any case in which this Article
7.00 shall require that an adjustment shall become effective immediately after a
record date for an event referred to herein, the Corporation may defer, until
the occurrence of such event, issuing to the holder of any Series I Shares
converted after such record date and before the occurrence of such event the
additional Common Shares issuable upon such conversion by reason of the
adjustment required by such event in addition to the Common Shares issuable upon
such conversion before giving effect to such adjustment, provided however, that
the Corporation shall deliver to such holder an appropriate instrument
evidencing such holders right to receive such additional Common Shares
upon the occurrence of the event requiring such adjustment and the right to
receive any distributions on such additional Common Shares declared in favor of
holders or record of Common Shares on or after the relevant date of conversion.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.10 Forthwith after any adjustment of  the
Current Conversion Price under paragraph 7.05, the Corporation shall file  with its
transfer agent for the Series I Shares a certificate for the  Corporation setting fort
the details of the adjustment and the resulting  adjusted Current Conversion Basis. The
transfer agent shall be under no duty to  make any investigation or inquiry
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|as to the statements contained in any such
certificate of the Corporation or the manner in which any computation was made,  but the
transfer agent may accept such certificate as conclusive evidence of the  statements
therein contained and shall be fully protected with respect to any  and all acts done or
actions taken or suffered by it in reliance thereon. The  Corporation shall exhibit a
copy of such certificate of the Corporation from  time to time to any holder of Series I
Shares desiring to inspect the same, and  shall give notice of any such adjustment of the
Current Conversion Price and the  resulting adjustment of the Current Conversion Basis to
the holders of he Series  I Shares in the manner provided in Ariticle11.00. The
Corporation may retain a  firm of independent chartered accountants (who may be the
auditors of the  Corporation) to make any computation required under paragraph 7.05 and
any  computation so made shall be final and binding on the Corporation, the transfer
agent for the Series I Shares and the holders of the Series I Shares. Such firm  of
independent chartered accountants may as to any question of law, request and  rely upon
an opinion of counsel (who may be counsel for the Corporation).
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.11 Upon the surrender of any Series I
Shares for conversion, the number of full Common Shares issuable upon conversion
thereof shall be computed on the basis of the aggregate number of such Series I
Shares to be converted; in any case where a fraction of a Common Share is
involved the Corporation shall issue an additional Common Share.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.12 The issuance of certificates for
Common Shares upon the conversion of Series I Shares shall be made without
charge to the holders of the Series I Shares so converted for any fee or tax
imposed on the Corporation in respect of the issuance of such certificates or
the Common Shares represented thereby; provided that the Corporation shall mot
be required to pay any tax which may be imposed upon the person or persons to
whom such Common Shares are issued in respect of the issuance of such Common
Shares or the certificates therefore or which may be payable in respect of any
transfer involved in the issuance and delivery of any such certificate in a name
or names other than that of the holder of the Series I Shares converted, and the
Corporation shall not be required to issue or deliver such certificate unless
the person or persons requesting the issuance thereof shall have paid to the
Corporation the amount of such tax or shall have established to the satisfaction
of the Corporation that such tax has been paid.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.13 The Corporation shall give to the
holders of Series I Shares at least 15 days notice of the record date fixed for,
or the effective date for, any action which the Corporation intends to take
which would require an adjustment to the Current Conversion Price pursuant to
paragraph 7.05 (other than the subdivision or consolidation or the outstanding
Common Shares of the Corporation). Any such notice shall be sufficiently give if
given in accordance with the provisions of Article 11.00 or otherwise, if
necessary, to comply with the regulations of The Toronto Stock Exchange, or, if
the Common Shares are not then listed on The Toronto Stock Exchange, of any
recognized stock exchange upon which the Common Shares of the Corporation are
listed from time to time in force with respect to required disclosures to the
public by corporations whose securities are listed on such exchange.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---



|8.0 |  | NO
PRE-EMPTIVE RIGHTS
|--- |  | ---------------------



|8.01 Holders of Series I Shares shall
not be entitled as of right to subscribe for or purchase or receive any shares,
bonds, debentures or other securities of the Corporation now or hereafter
authorized, except as provided for in these provisions.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|9.0 |  | RESTRICTIONS9.01 So long as any Series I Shares are  outstanding the Corporation shall not,
without approval of the holders of the  Series I Shares:
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------

|(a) | declare,
pay or set aside for payment any dividends on any shares of  the Corporation ranking on a
parity with or junior to the Series I  Shares with respect to payment of dividends;
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | call
for redemption, redeem, purchase or otherwise retire or make any  capital distribution in
respect of any shares of the Corporation  ranking junior to or on a parity with the
Series I Shares with respect  to distribution of assets in the event of liquidation,
dissolution or  winding-up of the Corporation or with respect to payment of dividends;
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | call
for redemption, redeem, purchase or retire or otherwise pay off  less than all of the
Series I Shares
|--- | ----------------------------------------------------------------------------------------------------------

|(d) | issue
any shares of a class ranking in priority to or on a parity with  the Series I Shares; or
|--- | -----------------------------------------------------------------------------------------------

|(e) | set
aside any money or make any payments for any sinking fund or other  retirement fund
applicable to any shares of the Corporation ranking  junior to or on a parity with the
Series I Shares,
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|unless all dividends, up to and
including the dividends for the last completed period for which dividends shall
be payable, shall have been declared and paid or set apart for payment in
respect of the Series I Shares and all other shares ranking on a parity with or
in priority to the Series I Shares.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.0 |  | APPROVAL
BY HOLDERS OF  SERIES I SHARES
|---- |  | ---------------------------------------



|10.01 For the purposes hereof, any  consent or
approval given by the holders of Series I Shares shall be deemed to  have been
sufficiently given if it shall have been given in writing by the  holders of all the
outstanding Series I Shares or by a resolution passed at a  meeting of holders of Series
I Shares duly called an held upon not less than 21  days notice to the holders and
carried by the affirmative vote of not less than  two-thirds of the votes cast at such
meeting. For the purposes of such meeting,  two holders of Series I Shares present in
person or represented by duly  appointed proxy representing not less than 25% of the then
issued and  outstanding Series I Shares shall constitute a quorum. If at any such meeting
a  quorum is not present within one-half hour after the time appointed for such  meeting,
then the meeting shall be adjourned to such date not less than 21 nor  more than 28 days
thereafter and to such time and place as may be designated by  the chairman, and not less
than 10 days written notice shall be given of such  adjourned meeting. At such adjourned
meeting the holders of Series I Shares  present or
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|represented by proxy may transact the business
for which the meeting  was originally convened and a resolution passed thereat by the
affirmative vote  of not less than two-thirds of the votes cast at such meeting shall
constitute  the consent or approval of the holders of Series I Shares. On every poll
taken  at every meeting every holder of Series I Shares shall be entitled to one vote  in
respect of each Series I Share held.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|11.0 |  | NOTICES
|---- |  | -------



|11.01 Any notice required to be given
under the provisions attaching to the Series I Shares to the holders thereof
shall be given by posting the same in a postage paid envelope addressed to each
holder at the last address of such holder as it appears on the books of the
Corporation or in the event of the address of any such holder not so appearing,
then to the address of such holder last known to the Corporation; provided that
accidental failure or omission to give any notice as aforesaid to one or more of
such holders shall not invalidate any action or proceeding founded thereon. In
the event of a threatened or actual disruption in the mail service, notice as
aforesaid shall be given to registered holders of Series I Shares by means of
publication once a week for two successive weeks in a daily newspaper of general
circulation in each of the cities of Toronto, Saskatoon, Winnipeg, Calgary and
Vancouver. Publication in each week in each newspaper shall be made within a
period of seven days of publication in each other newspaper. If at any time any
notice is required under the provisions of this paragraph 11.01 to be published
in a particular city and no newspaper of general circulation is then being
published and circulated on a weekly or more often basis in that city, the
Corporation shall not be required to publish in that city. Any notice given by
mail shall be deemed to be given on the day on which it is mailed. Any notice
given by publication shall be deemed to be given on the day on which the first
publication is completed in all of the cities in which publication is required.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|12.0 |  | INCOME
TAX ELECTION
|---- |  | -------------------



|Assuming that the
Notice of Ways and Means Motion tabled in  the House of Commons on June 18, 1987 in
connection with the White Paper on Tax  Reform is enacted substantially in the form
proposed, the Corporation shall  elect under subsection 191.2(1) of the Income Tax Act
(Canada) and shall file  the election, in prescribed form, with the Minister of National
Revenue within  the time provided for in the said subsection 191.2(1).
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|SCHEDULE A
|------------



|PROVISION ATTACHING TO 7.5%
CONVERTIBLE REDEEMABLEFIRST PREFERED SHARES, SERIES IOF CLAUDE RESOURCES INC.(the
Corporation)
|----------------------------------------------------------------------------------------------------------------------------



|The first series
of the First Preferred Shares shall consist  of 650,000 shares, which shall be designated
as the 7.5% Convertible Redeemable  First Preferred Shares, Series I (the
Series I Shares) and in addition to the  rights, restrictions, conditions and
limitations attached to the First Preferred  Shares as a class, shall have attached
thereto the following rights,  restrictions, conditions and limitations:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|1.0 |  | DEFINITIONS
|--- |  | -----------



|1.01 In these provisions attaching to
the Series I Shares, including this paragraph, the following terms shall have
the meanings hereinafter set forth:
|-------------------------------------------------------------------------------------------------------------------------------------------------------

|(a) | Common Shares means the Common
      Shares of the Corporation as constituted on the date these provisions became
      effective or as subsequently consolidated or subdivided and any other share
      resulting from reclassification or change of such Common Shares or that
      the holders of such Common Shares are entitled to receive as a result of
      an amalgamation, consolidation, merger, statutory arrangement or sale, as
      referred to in paragraph 7.06;
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | Basic Conversion Price means
      the price per Common Share as provided in paragraph 7.04;
|--- | ----------------------------------------------------------------------------------------------

|(c) | Current Conversion Price
      means as at any particular time the Basic Conversion Price unless an adjusted
      conversion price is in effect under the provision of paragraph 7.05 in which
      case it means such adjusted conversion price;
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---



|(d) | Current Conversion Basis
      means the number of Common Shares into which each Series I Share is convertible,
      which number is equal at any particular time to the result obtained (expressed
      to the nearest thousandth of a Common Share) by dividing the Current Conversion
      Price into $10.00;
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(e) | Current Market Price per
      Common Share at any date means the price expressed in Canadian currency
      per share equal to the weighted average price at which the Common Share
      s have traded on The Toronto Stock Exchange during the period of 20 consecutive
      trading days ending on a date not earlier than the fifth day preceding such
      date. IN the event the Common Shares are not listed on The Toronto Stock
      Exchange on such date, but are listed on another stock exchange or other
      stock exchanges the foregoing reference to The Toronto Stock Exchange shall
      be deemed to be reference to such other stock exchange, or, if more than
      one, to such one as shall be designated by the Board of Directors. In the
      event Common Shares are not listed on any stock exchange in Canada on such
      date the said Current Market Price shall be determined by the
      Board of Directors;
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(f) | accrued and unpaid dividends
      means an amount computed at the rate of dividend attaching to the Series
      I Shares as though dividends on such shares had been accruing on a day to
      day basis from the date of issue to the date to which the computation of
      accrued dividends is to be made, after deducting all dividend payments made
      on such shares; and
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(g) | dividends paid in the ordinary course
      means cash dividends to the extent that the aggregate amount of cash dividends
      paid by the Corporation on its Common Shares in any fiscal year of the Corporation
      does not exceed the greater of:
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | i. | 100%
of the aggregate net income of the Corporation  plus depletion, depreciation and
amortization for the  immediately preceding fiscal year as disclosed in the
Corporations financial statements, less cash  dividends
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---



| |  | paid on
any of its Common Shares  during  such immediately preceding fiscal year of the
Corporation; or
| |  | -------------------------------------------------------------------------------------------------------

| | ii. | 200%
of the total amount of dividends  paid by the  Corporation  on its Common Shares in such
immediately  preceding fiscal year.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------

|2.0 |  | STATED
VALUE
|--- |  | ------------



|2.01 The Series I Shares of the
Corporation shall have a stated value for stated capital account purposes of
$10.00 each.
|-------------------------------------------------------------------------------------------------------------------------

|3.0 |  | LIQUIDATION
|--- |  | -----------



|3.01 In the event of the liquidation,
dissolution or winding-up of the Corporation or other distribution of assets or
property of the Corporation among its shareholders for the purpose of winding up
its affairs, the holders of the Series I Shares shall be entitled to receive
$10.00 per such share, together with an amount equal to all accrued and unpaid
dividends thereon to and including the date of payment whether or not such
dividends have been declared and whether or not the Corporation has monies
properly applicable to the payment of dividends. The holders of Series I Shares
shall be entitled to be paid all such amounts before any assets or property of
the Corporation shall be distributed to the holders of any Common Shares, or
other shares of the capital of the Corporation ranking junior to the Series I
Shares.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3.02 After payment to the holders of
the Series I Shares of the amounts so payable to them, they shall not be
entitled to share in any further distribution of the property or assets of the
Corporation.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.0 |  | REDEMPTION
|--- |  | ----------



|4.01 The Series I Shares are not
redeemable on or prior to January 1, 1990. Thereafter and until January 1, 1991,
if the Corporation shall have filed with the transfer agent for the Series I
Shares on the day that the requisite notice of redemption is first given, a
certificate of the Corporation certifying that the Current Market Price for the
Common Shares on the business day preceding the date on which the notice of
redemption is given was not less than 140% of the Current Conversion Price in
effect on such date, the Corporation may redeem at any time all of the
outstanding Series I Shares or, subject to the provisions of Article 9.00, from
time to time any part thereof selected by lot in such manner as the Board of
Directors may determine, or, if the Board of Directors so determines, pro rata,
on payment of $10.00 for each such share to be redeemed, together with an amount
equal to all accrued and unpaid dividends up to and including the date fixed for
redemption whether or not such dividends have been declared and whether or not
the Corporation has monies properly applicable to the payment of such dividends.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|4.02 After January 1, 1991, and
thereafter until January 1, 1993 if the Corporation shall have filed with the
transfer agent for the Series I Shares on the day that the requisite notice of
redemption is first given, a certificate of the Corporation certifying that the
Current Market Price on the business day preceding the date on which the notice
of redemption is given was not less than 125% of the Current Conversion Price in
effect on such date, the Corporation may redeem at any time all of the
outstanding Series I Shares or, subject to the provisions of Article 9.00, from
time to time any part thereof selected by lot in such manner as the Board of
Directors may determine, or, if the Board of Directors so determines, pro rata,
on payment of $10.00 of each such Series I Share to be redeemed, together with
an amount equal to all accrued an unpaid dividends up to and including the date
fixed for redemption whether or not such dividends have been declared and
whether or not the Corporation has monies properly applicable to the payment of
such dividends.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4.03 After January 1, 1993, if the
Corporation shall have filed with the transfer agent for the Series I Shares on
the day that the requisite notice of redemption is first given, a certificate of
the Corporation certifying that the Current Market Price on the business day
preceding that date on which the notice of redemption is given was greater than
100% of the Current Conversion Price in effect on such date, the Corporation may
redeem at any time all of the outstanding Series I Shares or, subject to the
provisions of Article 9.00, from time to time any part thereof selected by lot
in such manner as the Board of Directors may determines, or, if the Board of
Directors so determines, pro rata, on payment of $10.00 for each such Series I
Share to be redeemed, together with an amount equal to all accrued and unpaid
dividends up to and including the date fixed for redemption, whether or not such
dividends have been declared and whether or not the Corporation has monies
properly applicable to the payment of such dividends.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4.04 On any redemption of Series I  Shares under
this Article 4.00, the Corporation shall give, in the manner  provided in Article 11.00,
at least 30 days prior notice to each person who, at  the date of giving such notice, is
the holder of Series I Shares to be redeemed,  of the intention of the Corporation to
redeem such shares. Such notice shall set  out the amount payable on redemption, the date
on which the redemption is to  take place and, unless all the Series I Shares held by the
holder to whom it is  addressed are to be redeemed, shall also set out the number of such
shares so  held which are to be redeemed and, shall contain a brief statement of the
conditions, as provided in Article 7.00, on which the Series I Shares may be  converted
into Common Shares of the Corporation, including a statement as to the  then Current
Conversion Price. On or after the date so specified for redemption,  the Corporation
shall pay or cause to be paid to each holder of Series I Shares  to be redeemed the
amount payable on redemption on presentation and surrender at  any office of any transfer
agent of the Corporation, or at any other place or  places within Canada designated by
such notice, of the certificate or  certificates for such Series I Shares so called for
redemption. Such payment  shall be made by cheque payable at par at any branch in Canada
of the  Corporations bankers. If a part only of the Series I Shares represented by
any certificate shall be redeemed, a new certificate for the balance shall be  issued at
the expense of the Corporation. From and after the date specified in  any such notice,
the Series I Shares called for redemption shall cease to be  entitled to dividends and
the holders thereof shall not be entitled to exercise  any of the rights of shareholders
in respect thereof unless payment of the  amount payable on redemption shall not be duly
made by the Corporation, in which  case the
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|rights of the holders shall remain unimpaired.
At any time after the  notice of redemption is given the Corporation shall have the right
to deposit  the amount payable on redemption of any or all Series I Shares called for
redemption with any chartered bank or banks or with any trust company or trust  companies
in Canada named for such purpose in the notice of redemption to the  credit of a special
account or accounts in trust for the respective holders of  such shares, to be paid to
them respectively upon surrender to such banks or  trust company or trust companies of
the certificate or certificates representing  the same. Upon such deposit or deposits
being made, or upon the date fixed for  redemption, whichever is alter, such shares shall
be deemed to be redeemed, and  the rights of the holders of such shares shall be limited
to receiving the  proportion of the amounts so deposited applicable to their respective
shares  without interest. Any interest earned or otherwise received on such deposit or
deposits shall belong to the Corporation.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4.05 Series I Shares which are redeemed
or deemed to be redeemed in accordance with this Article 4.00 shall be and be
deemed to be cancelled and shall not be reissued.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5.00 |  | VOTING
PROVISION
|---- |  | ----------------



|5.01 Subject to the provisions of the
Canada Business Corporations Act (the Act), the holders of the
Series I Shares shall not as such be entitled (except as hereinafter
specifically provided) to receive notice of or to attend any meeting of the
shareholders of the Corporation or to vote at any such meeting unless the
Corporation from time to time shall fail to pay eight consecutive quarterly
dividend payments in respect of the Series I Shares on the dates on which the
same should be paid according to the provisions hereof whether or not such
dividends have been declared and whether or not there are monies of the
Corporation properly applicable to the payment of dividends. Thereafter, but
only so long as any such dividends remain in arrears, the holders of the Series
I Shares shall be entitled to receive notice of and to attend all meetings of
shareholders of the Corporation (other than separate meetings of holder of
another class or another series of a class of shares) shall be entitled to one
vote in respect of each Series I Share held and shall be entitled to vote,
together with holders of any other series of First Preferred Shares bearing
similar rights to vote, to elect two directors.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|6.0 |  | DIVIDENDS
|--- |  | ---------



|6.01 The holders of Series I Shares
shall be entitled to receive fixed cumulative preferential cash dividends, as
and when declared by the Board of Directors, out of monies properly applicable
to the payment of dividends at a rate of $0.75 per share per annum, to accrue
from the date of issue of the Series I Shares and the first dividend, if
declared, shall be payable on March 31, 1988, thereafter dividends shall be
payable in quarterly amounts of $0.1875 per share on June 30, September 30,
December 31, and March 31 in each year. Dividends shall be paid by cheque
payable at par in lawful money of Canada at any branch in Canada of the
Corporations bankers. If on any dividend payable date the dividend payable
on such date, is not paid in full on all of the Series I shares then
outstanding, such dividend or the unpaid part thereof shall be paid on a
subsequent date or dates prior to the payment of subsequent dividends, such date
or dates to be determined by the Board of Directors after they have determined
that the Corporation shall have sufficient monies properly applicable to the
payment of dividends.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|6.02 The Board of Directors is entitled
in its discretion to determine with respect to any dividend on the Series I
Shares that all holders of Series I Shares or all holders of Series I Shares
resident in Canada, or resident in Canada and in specified jurisdictions outside
Canada, shall have the right to elect to receive such dividend in the form of a
stock dividend. The manner of distribution of any such stock dividend, the
details of the implementation of any program or plan relating thereto and the
determination of the value of the stock dividend shall be fixed and determined
by the Board of Directors at or prior to the declaration thereof.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|7.0 |  | CONVERSION
PRIVILEGE
|--- |  | --------------------



|7.01 A holder of Series I Shares has
the right, at his option, at any time prior to the redemption of his Series I
Shares to convert, subject to the terms and provisions hereof, such Series I
Shares into fully paid and non-assessable Common Shares on the then Current
Conversion Basis.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.02 The conversion of Series I Shares
may be effected by the surrender of the certificate or certificates representing
the same at any time during usually business hours while such Series I Shares
are outstanding at the option of the holder at any office of any transfer agent
of the Corporation at which the Series I Shares are transferable, accompanied
by, (i) payment or evidence of payment of the tax, (if any) payable as provided
in paragraph 7.12, and (ii) a written instrument of surrender in form
satisfactory to the Corporation duly executed by the registered holder or his
attorney duly authorized in writing, which instrument shall, specify the number
of Series I Shares which the holder desires to have converted. If less than all
of the Series I Shares are presented by the certificate or certificates so
surrendered are to be converted, the holder shall be entitled to receive, at the
expense of the Corporation, a new certificate representing the Series I Shares
comprised in the certificate or certificates surrendered as aforesaid which are
not to be converted.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|As promptly as
practicable after the surrender of any Series I  Shares for conversion, the Corporation
shall issue and deliver, or cause to b  delivered to or upon the written order of the
holder of the Series I Shares so  surrendered, a certificate or certificates issued in
the name of, or in such  name or names as may be directed by, such holder representing
the number of  Common Shares to which such holder is entitled. Such conversion shall be
deemed  to have been made at the close of business on the date such Series I Shares
shall have been surrendered for conversion, so that the rights of the holder of  such
Series I Shares, as the holder thereof, shall cease at such time and the  person or
persons entitled to receive Common Shares upon such conversion shall  be treated for all
purposes as having become the holder or holders of record of  such Common Shares at such
time, and such conversion shall be on the Current  Conversion Basis as at such time;
provided that no such surrender on any date  when the Corporations register of transfers
of Common Shares shall be properly  closed shall be effective to constitute the person or
persons entitled to  receive such Common Shares upon such conversion as the holder or
holders of  record of such Common Shares on such date, but such surrender shall be
effective  to constitute the person or persons entitled to receive such Common Shares as
the holder or holders of record thereof for all purposes at, and such conversion  shall
be on the Current Conversion Basis as at the close of business on the next  succeeding
day on which such register of transfers is open. The date of  surrender of any Series I
Shares for conversion shall be
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|deemed to be the date  when the certificate or
certificates representing such Series I Shares are  received by a transfer agent of the
Corporation.
|---------------------------------------------------------------------------------------------------------------------------------------------------



|7.03 The registered holder of any
Series I Share on the record date for any dividend declared payable on such
shares shall be entitled to such dividend notwithstanding that such shares are
converted after such record date and before the payment date of such dividend
and the registered holder of any Common Shares resulting from any conversion
shall be entitled to rank equally with the registered holders of all other
Common Shares in respect of all dividends declared payable to holders of Common
Shares of record on any date on or after the date of conversion. Subject as
aforesaid and subject to the provisions hereof, upon the conversion of any
Series I Shares the Corporation shall make no payment or adjustment on account
of any dividends on the Series I Shares so converted or on account of any
dividends on the Common Shares issuable upon such conversion.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.04 The Basic Conversion Price shall
be $6.25 per Common Share so that, until adjusted as provided herein, the
initial Current Conversion Basis shall be one and six-tenths Common Shares for
each Series I Share.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.05  The Current Conversion Price shall be
subject to adjustment from time to time as follows:
|-----------------------------------------------------------------------------------------------

|(a) | In
case the Corporation shall (i) subdivide its outstanding Common Shares into a greater
number of  shares, (ii) consolidate its outstanding Common Shares into a smaller number
of shares, or (iii) issue  Common Shares (or securities convertible into Common Shares)
to all or substantially all of the holders  of its Common Shares by way of a stock
dividend (other than an issue of Common Shares to shareholders  who exercise a right or
an option to receive dividends in the form of Common Shares in lieu of receiving  cash
dividends paid in the ordinary course by the Corporation on its Common Shares), the
Current  Conversion Price in effect on the effective date of such subdivision or
consolidation or on the record  date for such issue of Common Shares (or securities
convertible in Common Shares) by way of a stock  dividend, as the case may be, shall be
adjusted effective immediately after such effective date or such  record date by
multiplying the Current Conversion Price in effect on such effective date or record date
by a fraction, the numerator of which shall be the number of Common Shares outstanding on
such effective  date or record date, and the denominator of which shall be the number of
Common Shares outstanding after  the completion of such subdivision, consolidation, or
issue including in the case where securities  convertible into Common Shares are issued,
the maximum umber of Common Shares that would have been  outstanding had such securities
been converted into Common Shares on such record date; such adjustment  shall be made
successively whenever any event referred to in this subparagraph 7.05(a) shall occur; if
all such convertible securities are not converted into Common Shares prior to the
expiration of the  conversion right, the Current Conversion Price shall be readjusted
effective as at the date of such  expiration based on the number of Common Shares
actually delivered on exercise of such conversion right  and any such issue of Common
Shares by way of a stock dividend shall be deemed to have been made on the  record date
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---



| | for the
stock dividend for the purpose of calculating the number of outstanding Common  Shares
under subparagraphs 7.05(b) and 7.05(c).
| | ---------------------------------------------------------------------------------------------------------------------------------------

|(b) | In
case the Corporation shall fix a record date for the issuance of rights, options or
warrants to all  or substantially all the holders of its outstanding Common Shares
entitling them, for a period expiring  not more than 45 days after such record date, to
subscribe for or purchase Common Shares (or securities  convertible into Common Shares)
at a price per share (or having a conversion price per share) less than  95% of the
Current Market Price of a Common Share on such record date, the Current Conversion Price
shall be adjusted effective immediately after such record date so that it shall equal a
price determined  by multiplying the Current Conversion Price in effect on such record
date by a fraction, of which the  numerator shall be the aggregate of:
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | i. | the
total number of Common Shares outstanding on such  record date; plus
| | -- | ------------------------------------------------------------------------

| | ii. | a
number of Common Shares equal to the number arrived  at by dividing the aggregate price
of the total  number of additional Common Shares offered for  subscription or purchase
(or the aggregate conversion  price of the convertible securities so offered) by  the
Current Market Price of a Common Share on such  record date;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | and of
which the denominator shall be the aggregate of:
| | -------------------------------------------------------

| | i. | the
total number of Common Shares outstanding on such  record date; plus
| | -- | ------------------------------------------------------------------------

| | ii. | the
maximum number of additional Common Shares  offered for subscription or purchase (or into
which  the convertible securities so offered are  convertible);
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------

| | any Common
Shares owned by or held for the account of the Corporation  shall be deemed not to be
outstanding for the purpose of any such  computation; such adjustment shall be made
successively whenever such a  record date referred to in this subparagraph 7.05(b) is
fixed; to the  extent that all such rights, options or warrants are not so issued or
such rights, options or warrants are not exercised prior to the  expiration thereof, the
Current Conversion Price shall be readjusted  immediately after the expiry date for the
exercise of such rights,  options or warrants to the Current Conversion Price which would
then be  in effect based upon the number of Common Shares (or securities  convertible
into Common Shares) actually delivered upon the exercise of  such rights, options or
warrants as the case may be.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | In
case the Corporation shall fix a record date for the making of a distribution (including
a  distribution by way of a stock dividend) to all or substantially all the holders of
its outstanding  Common Shares of (i) shares of any class other than Common Shares
(excluding shares convertible into  Common Shares referred to in subparagraph 7.05(a)
hereof), or (ii) rights, options or warrants  (excluding those referred to in
subparagraph 7.05(b) hereof), or (iii) evidences of indebtedness  (excluding indebtedness
convertible
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---



| | into Common
Shares referred to in subparagraph 7.05(a) hereof), or  (iv)  assets (excluding Common
Shares issued by way of stock dividend and cash dividends paid  in the  ordinary course),
then in each such case the Current Conversion Price shall be  adjusted effective
immediately after such record date so that it shall equal the price  determined by
multiplying the  Current Conversion Price in effect on such record date by  a fraction,
of which the numerator shall be:
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | i. | the
total number of Common Shares outstanding on such  record date multiplied by the Current
Market Price  per Common Share on such record date; less
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------

| | ii. | the
fair market value (as determined by the Board of  Directors, whose determination shall be
conclusive)  of such shares or rights, options or warrants or  evidences or indebtedness
or assets so distributed;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | and of
which the denominator shall be the total number of Common Shares  outstanding on such
record date multiplied by such Current Market Price  per Common Share; any Common Shares
owned by or held for the account of  the Corporation shall be deemed not to be
outstanding for the purpose  of any such computation; such adjustment shall be made
successively  whenever such a record date referred to in this subparagraph 7.05(c) is
fixed; to the extent that such distribution of shares, evidences of  indebtedness or
assets is not so made or to the extent that any rights,  options or warrants so
distributed are not exercised, the Current  Conversion Price shall be readjusted to the
Current Conversion Price  which would then be in effect based upon such shares, evidences
of  indebtedness or assets actually distributed, or based upon the number  of rights,
options or warrants exercised as the case may be.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In this
subparagraph 7.05(c) the term cash dividends shall include  the value of any
shares or other property distributed to shareholders  who exercise a right or an option
to receive substantially equivalent  dividends in shares or other property in lieu of
cash dividends.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.06 In case of any reclassification  of, or
other change in (other than a change resulting only from consolidation or  subdivision),
the outstanding Common Shares, or in case of any amalgamation,  consolidation, merger or
statutory arrangement of the Corporation with or into  any other corporation, or in case
of any sale of the properties and assets of  the Corporation as, or substantially as, an
entirety to any other corporation,  each Series I Share shall, after such
reclassification, change, amalgamation,  consolidation, merger, statutory arrangement or
sale, be convertible into the  number of shares or other securities or property of the
Corporation, or such  continuing, successor or purchasing corporation, as the case may
be, to which a  holder of the number of Common Shares as would have been issued if such
Series I  Shares had been converted immediately prior to such reclassification, change,
amalgamation, consolidation, merger, statutory arrangement or sale would have  been
entitled upon such reclassification, change, amalgamation, merger,  statutory arrangement
or sale. The Board of Directors may accept the certificate  of any firm of independent
chartered accountants (who may be the auditors of the  Corporation) as to the foregoing
calculation, and the Board of Directors may  determine
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|such entitlement on the basis of such
certificate. Any such  determination shall be conclusive and binding on the Corporation,
the transfer  agent for the Series I Shares and the holders of the Series I Shares. No
such  reclassification, change, amalgamation, consolidation, merger, statutory
arrangement or sale shall be carried into effect unless, in the opinion of the  Board of
Directors, all necessary steps shall have been taken to ensure that the  holders of the
Series I Shares shall thereafter be entitled to receive such  number of shares or other
securities or properties of the Corporation, or such  continuing, successor or purchasing
corporation, as the case may be, subject to  adjustment thereafter in accordance with
provisions similar, as nearly as may  be, to those contained in this Article 7.00.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.07 No adjustment of the Current
Conversion Price shall be made in any case in which the resulting increase or
decrease in the Current Conversion Price would be less than 1% of the then
Current Conversion Price, but in such case any adjustment that would otherwise
have been required then to be made shall be carried forward and made at the time
of, and together with, the next subsequent adjustment to the Current Conversion
Price which together with any and all such adjustments so carried forward, shall
result in an increase or de crease in the Current Conversion Price by not less
than 1%
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.08 No adjustments of the Current
Conversion Price shall be made pursuant to subparagraphs 7.05(b) or 7.05(c) in
respect of any rights, options or warrants if identical rights, options or
warrants are issued to the holders of the Series I Shares as though and to the
same effect as if they had converted their Series I Shares into Common Shares
prior to the issue of such rights, options or warrants.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.09 In any case in which this Article
7.00 shall require that an adjustment shall become effective immediately after a
record date for an event referred to herein, the Corporation may defer, until
the occurrence of such event, issuing to the holder of any Series I Shares
converted after such record date and before the occurrence of such event the
additional Common Shares issuable upon such conversion by reason of the
adjustment required by such event in addition to the Common Shares issuable upon
such conversion before giving effect to such adjustment, provided however, that
the Corporation shall deliver to such holder an appropriate instrument
evidencing such holders right to receive such additional Common Shares
upon the occurrence of the event requiring such adjustment and the right to
receive any distributions on such additional Common Shares declared in favor of
holders or record of Common Shares on or after the relevant date of conversion.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.10 Forthwith after any adjustment of  the
Current Conversion Price under paragraph 7.05, the Corporation shall file  with its
transfer agent for the Series I Shares a certificate for the  Corporation setting fort
the details of the adjustment and the resulting  adjusted Current Conversion Basis. The
transfer agent shall be under no duty to  make any investigation or inquiry as to the
statements contained in any such  certificate of the Corporation or the manner in which
any computation was made,  but the transfer agent may accept such certificate as
conclusive evidence of the  statements therein contained and shall be fully protected
with respect to any  and all acts done or actions taken or suffered by it in reliance
thereon. The  Corporation shall exhibit a copy of such certificate of the Corporation
from  time to time to any holder of Series I Shares desiring to inspect the same, and
shall give notice of any such adjustment of the Current
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|Conversion Price and the  resulting adjustment
of the Current Conversion Basis to the holders of he Series  I Shares in the manner
provided in Ariticle11.00. The Corporation may retain a  firm of independent chartered
accountants (who may be the auditors of the  Corporation) to make any computation
required under paragraph 7.05 and any  computation so made shall be final and binding on
the Corporation, the transfer  agent for the Series I Shares and the holders of the
Series I Shares. Such firm  of independent chartered accountants may as to any question
of law, request and  rely upon an opinion of counsel (who may be counsel for the
Corporation).
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.11 Upon the surrender of any Series I
Shares for conversion, the number of full Common Shares issuable upon conversion
thereof shall be computed on the basis of the aggregate number of such Series I
Shares to be converted; in any case where a fraction of a Common Share is
involved the Corporation shall issue an additional Common Share.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.12 The issuance of certificates for
Common Shares upon the conversion of Series I Shares shall be made without
charge to the holders of the Series I Shares so converted for any fee or tax
imposed on the Corporation in respect of the issuance of such certificates or
the Common Shares represented thereby; provided that the Corporation shall mot
be required to pay any tax which may be imposed upon the person or persons to
whom such Common Shares are issued in respect of the issuance of such Common
Shares or the certificates therefore or which may be payable in respect of any
transfer involved in the issuance and delivery of any such certificate in a name
or names other than that of the holder of the Series I Shares converted, and the
Corporation shall not be required to issue or deliver such certificate unless
the person or persons requesting the issuance thereof shall have paid to the
Corporation the amount of such tax or shall have established to the satisfaction
of the Corporation that such tax has been paid.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.13 The Corporation shall give to the
holders of Series I Shares at least 15 days notice of the record date fixed for,
or the effective date for, any action which the Corporation intends to take
which would require an adjustment to the Current Conversion Price pursuant to
paragraph 7.05 (other than the subdivision or consolidation or the outstanding
Common Shares of the Corporation). Any such notice shall be sufficiently give if
given in accordance with the provisions of Article 11.00 or otherwise, if
necessary, to comply with the regulations of The Toronto Stock Exchange, or, if
the Common Shares are not then listed on The Toronto Stock Exchange, of any
recognized stock exchange upon which the Common Shares of the Corporation are
listed from time to time in force with respect to required disclosures to the
public by corporations whose securities are listed on such exchange.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|8.0 |  | NO
PRE-EMPTIVE RIGHTS
|--- |  | ---------------------



|8.01 Holders of Series I Shares shall
not be entitled as of right to subscribe for or purchase or receive any shares,
bonds, debentures or other securities of the Corporation now or hereafter
authorized, except as provided for in these provisions.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|9.0 |  | RESTRICTIONS
|--- |  | ------------



|9.01 So long as any Series I Shares are
outstanding the Corporation shall not, without approval of the holders of the
Series I Shares:
|--------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---



|(a) | declare,
pay or set aside for payment any dividends on any shares of  the Corporation ranking on a
parity with or junior to the Series I  Shares with respect to payment of dividends;
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | call
for redemption, redeem, purchase or otherwise retire or make any  capital distribution in
respect of any shares of the Corporation  ranking junior to or on a parity with the
Series I Shares with respect  to distribution of assets in the event of liquidation,
dissolution or  winding-up of the Corporation or with respect to payment of dividends;
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | call
for redemption, redeem, purchase or retire or otherwise pay off  less than all of the
Series I Shares;
|--- | -----------------------------------------------------------------------------------------------------------

|(d) | issue
any shares of a class ranking in priority of or on a parity with  the Series I Shares; or
|--- | -----------------------------------------------------------------------------------------------

|(e) | set
aside any money or make any payments for any sinking fund or other  retirement fund
applicable to any shares of the Corporation ranking  junior to or on a parity with the
Series I Shares,
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|unless all dividends, up to and
including the dividends for the last completed period for which dividends shall
be payable, shall have been declared and paid or set apart for payment in
respect of the Series I Shares and all other shares ranking on a parity with or
in priority to the Series I Shares.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.0 |  | APPROVAL
BY HOLDERS OF  SERIES I SHARES
|---- |  | ---------------------------------------



|10.01 For the purposes hereof, any
consent or approval given by the holders of Series I Shares shall be deemed to
have been sufficiently given if it shall have been given in writing by the
holders of all the outstanding Series I Shares or by a resolution passed at a
meeting of holders of Series I Shares duly called an held upon not less than 21
days notice to the holders and carried by the affirmative vote of not less than
two-thirds of the votes cast at such meeting. For the purposes of such meeting,
two holders of Series I Shares present in person or represented by duly
appointed proxy representing not less than 25% of the then issued and
outstanding Series I Shares shall constitute a quorum. If at any such meeting a
quorum is not present within one-half hour after the time appointed for such
meeting, then the meeting shall be adjourned to such date not less than 21 nor
more than 28 days thereafter and to such time and place as may be designated by
the chairman, and not less than 10 days written notice shall be given of such
adjourned meeting. At such adjourned meeting the holders of Series I Shares
present or represented by proxy may transact the business for which the meeting
was originally convened and a resolution passed thereat by the affirmative vote
of not less than two-thirds of the votes cast at such meeting shall constitute
the consent or approval of the holders of Series I Shares. On every poll taken
at every meeting every holder of Series I Shares shall be entitled to one vote
in respect of each Series I Share held.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---



|11.0 |  | NOTICES
|---- |  | -------



|11.01 Any notice required to be given
under the provisions attaching to the Series I Shares to the holders thereof
shall be given by posting the same in a postage paid envelope addressed to each
holder at the last address of such holder as it appears on the books of the
Corporation or in the event of the address of any such holder not so appearing,
then to the address of such holder last known to the Corporation; provided that
accidental failure or omission to give any notice as aforesaid to one or more of
such holders shall not invalidate any action or proceeding founded thereon. In
the event of a threatened or actual disruption in the mail service, notice as
aforesaid shall be given to registered holders of Series I Shares by means of
publication once a week for two successive weeks in a daily newspaper of general
circulation in each of the cities of Toronto, Saskatoon, Winnipeg, Calgary and
Vancouver. Publication in each week in each newspaper shall be made within a
period of seven days of publication in each other newspaper. If at any time any
notice is required under the provisions of this paragraph 11.01 to be published
in a particular city and no newspaper of general circulation is then being
published and circulated on a weekly or more often basis in that city, the
Corporation shall not be required to publish in that city. Any notice given by
mail shall be deemed to be given on the day on which it is mailed. Any notice
given by publication shall be deemed to be given on the day on which the first
publication is completed in all of the cities in which publication is required.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|12.0 |  | INCOME
TAX ELECTION
|---- |  | -------------------



|Assuming that the
Notice of Ways and Means Motion tabled in  the House of Commons on June 18, 1987 in
connection with the White Paper on Tax  Reform is enacted substantially in the form
proposed, the Corporation shall  elect under subsection 191.2(1) of the Income Tax Act
(Canada) and shall file  the election, in prescribed form, with the Minister of National
Revenue within  the time provided for in the said subsection 191.2(1).
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|ARTICLES OF AMENDMENT
      Claude Resources Inc.
|-------------------------------------------------



|Article 3 of the Article of the Compay
is amended to read as follows: The share capital of the Company shall consist
of:
|------------------------------------------------------------------------------------------------------------------------

|(a) | an
unlimited number of common voting shares without nominal or par  value;
|--- | --------------------------------------------------------------------------

|(b) | an
unlimited number of First Preferred Shares issuable in series with  the issue price per
share of the shares of each series to be fixed by  the Board of Directors, without
limitation as to the aggregate amount  of the consideration for which all the First
Preferred Shares or any  series thereof may be issued; and
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | an
unlimited number of Second Preferred Shares issuable in series with  the issue price per
share of the shares of each series to be fixed by  the Board of Directors, without
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---



| | limitation as
to the aggregate amount  of the consideration for which all the Second  Preferred Shares
or any  series thereof may be issued.
| | --------------------------------------------------------------------------------------------------------------------------------------------



|The First Preferred Shares, as a class,
shall carry and be subject to the following rights, privileges, restrictions and
conditions:
|------------------------------------------------------------------------------------------------------------------------------------



|1.  Directors Right to Issue in One or More
Series
|---------------------------------------------------

| | The First
Preferred Shares may at any time or from time to time be  issued in one (1) or more
series, each series to consist of such number  of shares as may before the issue thereof
be determined by the  directors; the directors of the Corporation may (subject as
hereinafter  provided) by resolution fix, from time to time before the issue  thereof,
the designation, rights, privileges, restrictions and  conditions attaching to the shares
of each such series including,  without limiting the generality of the foregoing, the
issue price, the  rate, amount or method of calculation of preferential dividends (if
any) and whether such rate, amount or method of calculation shall be  subject to change
or adjustment in the future, the date of payment  thereof, the redemption and/or purchase
prices and terms and conditions  of redemption and/or purchase, conversion rights (if
any), voting  rights, (if any), any sinking fund or other provisions and the rights  of
retraction, (if any), vested in the holders of First Preferred  Shares of any such series
and the prices and the other terms and  conditions of any rights of retraction and
whether any additional  rights of retraction may be vested in such holders in the future,
the  whole subject to the following provisions and to the issue of Articles  of Amendment
setting forth such designation, issue price, rights,  privileges, restrictions and
conditions attaching to the shares of each  series.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|2.  Ranking of First Preferred Shares
|-------------------------------------

| | The First
Preferred Shares of each series shall rank on a parity with  the First Preferred Shares
of every other series with respect to  priority in payment of dividends, (if any) and in
the distribution of  assets in the event of the liquidation, dissolution or winding-up of
the Corporation, whether voluntary or involuntary, or any other  distribution of the
assets of the Corporation among its shareholders  for the purposes of winding-up its
affairs, When any dividends or  amounts payable on a repayment of capital are not paid in
full, the  First Preferred Shares of all series shall participate ratably in  respect of
such dividends, including accumulations, if any, in  accordance with the sums that would
be payable on such shares if all  such dividends were declared and paid in full and on
any repayment of  capital in accordance with the sums that would be payable on such
repayment of capital if all sums so payable were paid in full;  provided, however, that
in the event of there being insufficient assets  to satisfy in full all such claims as
aforesaid, the claims of the  holders of such shares with respect to return of capital
shall first be  paid and satisfied and any assets remaining thereafter shall be applied
towards the payment and satisfaction of claims in respect of dividends
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The First
Preferred Shares shall be entitled to preference over the  common shares of the
Corporation and over any other shares ranking  junior to the First Preferred Shares with
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---



| | respect to
payment of  dividends, (if any) and distribution of assets in the event of  liquidation,
dissolution or winding-up of the corporation whether  voluntary or  involuntary, or any
other distribution of the assets of  the Corporation among its  shareholders for the
purpose of winding-up  its affairs and may also be given such other  preferences over the
common shares of the Corporation and over any other shares ranking  junior to the First
Preferred Shares authorized to be issued. Nothing  in this paragraph  shall limit the
right of the Corporation to pay a  dividend on its common shares to the  holders of its
common shares or  any other shares ranking junior to the First Preferred  Shares without
participation therein by the holders of the First Preferred Shares.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3.  No Pre-Emptive Rights
|-------------------------

| | The holders
of the First Preferred Shares shall not be entitled as such  to subscribe for, purchase
or receive any part of any issue of shares,  bonds, debentures or other securities of the
Corporation now or  hereafter authorized, or any rights to acquire the same, otherwise
than  in accordance with the conversion, exchange or other rights, if any,  which may
from time to time be attached to any series of the First  Preferred Shares.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Second
Preferred Shares, as a class, shall carry and be  subject to the following rights,
privileges, restrictions and conditions:
|--------------------------------------------------------------------------------------------------------------------------------------



|1.  Directors Right to Issue in One or More
Series
|---------------------------------------------------

| | The Second
Preferred Shares may at any time or from time to time be  issued in one (1) or more
series, each series to consist of such number  of shares as may before the issue thereof
be determined by the  directors; the directors of the Corporation may (subject as
hereinafter  provided) by resolution fix, from time to time before the issue  thereof,
the designation, rights, privileges, restrictions and  conditions attaching to the shares
of each such series including,  without limiting the generality of the foregoing, the
issue price, the  rate, amount or method of calculation of preferential dividends (if
any) and whether such rate, amount or method of calculation shall be  subject to change
or adjustment in the future, the date of payment  thereof, the redemption and/or purchase
prices and terms and conditions  of redemption and/or purchase, conversion rights (if
any), voting  rights, (if any), any sinking fund or other provisions and the rights  of
retraction, (if any), vested in the holders of Second Preferred  Shares of any such
series and the prices and the other terms and  conditions of any rights of retraction and
whether any additional  rights of retraction may be vested in such holders in the future,
the  whole subject to the following provisions and to the issue of Articles  of Amendment
setting forth such designation, issue price, rights,  privileges, restrictions and
conditions attaching to the shares of each  series.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|2.  Ranking of Second Preferred Shares
|--------------------------------------

| | The Second Preferred Shares shall rank junior
      to the First Preferred Shares of the Corporation with the respect to payment
      of dividends, (if any), and distribution of assets in the event of liquidation,
      dissolution or winding-up of the Corporation whether voluntary or involuntary
      or any other distribution of the assets of the Corporation
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---



| | amongst its
shareholders for the purposes of winding-up its affairs and  shall be subject to any
preferences and other rights, privileges,  restrictions and conditions which are attached
to the First Preferred  Shares as a class, to any other class of shares of the
Corporation that  ranks senior to the Second Preferred Shares with respect to priority in
the payment of dividends or liquidation distributions, and to each  series of First
Preferred Shares and of any other senior ranking class  of shares created hereafter.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Second
Preferred Shares of each series shall rank on a parity with  the Second Preferred Shares
of every other series with respect to  priority in payment of dividends and in the
distribution of assets in  the event of the liquidation, dissolution or winding-up of the
Corporation, whether voluntary or involuntary, or any other  distribution of the assets
of the Corporation among its shareholders  for the purpose of winding-up its affairs.
When any dividends or  amounts payable on a repayment of capital are not paid in full,
the  Second Preferred Shares of all series shall participate ratably in  respect of such
dividends, including accumulations, if any, in  accordance with the sums that would be
payable on such shares if all  such dividends were declared and paid in full and on any
repayment of  capital in accordance with the sums that would be payable on such
repayment of capital if all sums so payable were paid in full;  provided, however, that
in the event of there being insufficient assets  to satisfy in full all such claims as
aforesaid, the claims of the  holders of such shares with respect to return of capital
shall first be  paid and satisfied and any assets remaining thereafter shall be applied
towards the payment and satisfaction of claims in respect of dividends.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Second
Preferred Shares shall be entitled to preference over the  common shares of the
Corporation and over any other shares ranking  junior to the Second Preferred Shares with
respect to payment of  dividends and distribution of assets in the event of liquidation,
dissolution or winding-up of the Corporation whether voluntary or  involuntary, or any
other distribution of the assets of the Corporation  among its shareholders for the
purpose of winding-up its affairs and  may also be given such other preferences over the
common shares of the  Corporation and over any other shares ranking junior to the Second
Preferred Shares as may be determined in the case of each series of  Second Preferred
Shares authorized to be issued. Nothing in this  paragraph shall limit the rights of the
Corporation to pay a dividend  in its common shares to the holders of its common shares
or any other  shares ranking junior to the Second Preferred Shares without  participation
therein by the holders of the Second Preferred Shares.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3.  No Pre-Emptive Rights
|-------------------------

| | The holders
of the Second Preferred Shares shall not be entitled as  such to subscribe for, purchase
or receive any part of any issue of  shares, bonds, debentures or other securities of the
Corporation now or  hereafter authorized, or any rights to acquire the same, otherwise
than  in accordance with the conversion, exchange or other rights, if any,  which may
from time to time be attached to any series of the Second  Preferred Shares.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|CLAUDE RESOURCES INC.
|---------------------



|BE IT ENACTED as a bylaw of the
Corporation as follows:
|-------------------------------------------------------



|SECTION ONE
|-----------



|INTERPRETATION
|--------------

|1.01 |  | DEFINITIONS
|---- |  | -----------



|In the bylaws of the Corporation,
unless the context otherwise requires:
|------------------------------------------------------------------------

|a. | articles
means the articles attached to the certificate of  incorporation dated March 26, 1980 of
the Corporation as from time to  time amended or restated;
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------

|b. | board
means the board of directors of the Corporation;
|-- | --------------------------------------------------------

|c. | by-laws
means this bylaw and all other bylaws of the Corporation from  time to time in force and
effect;
|-- | ----------------------------------------------------------------------------------------------------------

|d. | Corporation
means the corporation incorporated by certificate of  incorporation under the Act named
Claude Resources Inc.;
|-- | ----------------------------------------------------------------------------------------------------------------------------

|e. | meeting
of shareholders includes an annual meeting of shareholders  and a special meeting of
shareholders; special meeting of  shareholders includes a meeting of any
class of classes of  shareholders and a special meeting of all shareholders entitled to
vote  at an annual meeting of shareholders;
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|f. | non-business
day means Saturday, Sunday and any other day that is a  holiday as defined in the
Interpretation Act (Canada);
|-- | -----------------------------------------------------------------------------------------------------------------------------

|g. | recorded
address means in the case of a shareholder his address as  recorded in the
securities register; and in the case joint shareholders  the address appearing in the
securities register in respect of such  joint holding or the first address so appearing
if there are more than  one; and in the case of a director, officer, auditor or member of
a  committee of the board, his latest address as recorded in the records  of the
Corporation;
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|h. | signing
officer means, in relation to any instrument, any person  authorized to sign the
same on behalf of the Corporation by section  2.04 or by a resolution passed pursuant
thereto;
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|i. | unanimous
shareholder agreement means a written agreement among all  the shareholders of the
Corporation, or among all such shareholders and  a person who is not a shareholder, that
restricts, in whole or in part,  the powers of the directors to manage the business and
affairs of the  Corporation, as from time to time amended;
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|Save as aforesaid, words and expressions defined
in the Act have the same  meanings when used herein; and
|---------------------------------------------------------------------------------------------------------



|Words importing the singular number
include the plural and vice versa; words importing gender include the masculine,
feminine and neuter genders; and words importing persons include individuals,
bodies, corporate, partnerships, trusts and unincorporated organizations.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|SECTION TWO
|-----------



|BUSINESS OF THE CORPORATION
|---------------------------

|2.01 |  | Registered
Office
|---- |  | -----------------



|Until changed in accordance with the
Act, the registered office of the Corporation shall be at the City of Calgary in
the Province of Alberta and at such location therein as the board may from time
to time determine.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2.02 |  | Corporate
Seal
|---- |  | --------------



|Until changed by the board, the corporate seal
of the Corporation shall be in  the form impressed hereon.
|---------------------------------------------------------------------------------------------------------



|[SEAL]
|------

|2.03 |  | Financial
Year
|---- |  | --------------



|Until changed by the board, the
financial year of the Corporation shall end on the last day of March in each
year.
|------------------------------------------------------------------------------------------------------------------

|2.04 |  | Execution
of Instruments
|---- |  | ------------------------



|Deeds, transfers, assignments,
contracts, obligations, certificates and other instruments may be signed on
behalf of the Corporation by two persons, one of whom holds the office of
chairman of the board, managing director, president, vice-president or director
and the other of whom holds one of the said offices or the office of secretary,
treasurer, assistant secretary of assistant treasurer or any other office
created by bylaw or by resolution of the board. In addition, the board may from
time to time direct the manner in which and the person or persons by whom any
particular instrument or class of instruments may or shall be signed. Any
signing officer may affix the corporate seal to any instrument requiring the
same.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2.05 |  | Banking
Arrangements
|---- |  | --------------------



|The banking business of the Corporation
including, without limitation, the borrowing of money and the giving of security
therefore, shall be transacted with such banks, trust companies or other bodies
corporate or organizations as may from time to time be designated by or under  the
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|authority of the board. Such banking business or
any part thereof shall be  transacted under such agreements, instructions and delegations
of powers as the  board may from time to time prescribe or authorize
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2.06 |  | Voting
Rights In Other  Bodies Corporate
|---- |  | ----------------------------------------



|The signing officers of the Corporation
may execute and deliver proxies and arrange for the issuance of voting
certificates or other evidence of the right to exercise the voting rights
attaching to any securities held by the Corporation. Such instruments,
certificates or other evidence shall be in favor of such person or persons as
may be determined by the officers executing such proxies or arranging for the
issuance of voting certificates or such other evidence of the right to exercise
such voting rights. In addition, the board may from time to time direct the
manner in which and the person or persons by whom any particular voting rights
or class of voting rights may or shall be exercised.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|SECTION THREE
|-------------



|BORROWING AND SECURITIES
|------------------------

|3.01 |  | Borrowing
Power
|---- |  | ---------------



|Without limiting the borrowing powers
of the Corporation as set forth in the Act, the board may from time to time:
|------------------------------------------------------------------------------------------------------------------

|h. | borrow
money upon the credit of the Corporation
|-- | -----------------------------------------------

|i. | issue,
reissue, sell or pledge bonds, debentures, notes or other  evidences or indebtedness of
guarantee of the Corporation, whether  secured or unsecured; and
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

|j. | charge,
mortgage, hypothecate, pledge or otherwise create a security  interest in all or any
currently owned or subsequently acquired real or  personal, movable or immovable property
of the Corporation, including  book debts, rights, powers, franchises and undertaking, to
secure any  such bonds, debentures, notes or other evidences of indebtedness or
guarantee or any other present or future indebtedness of liability of  the Corporation
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Nothing in this section limits or
restricts the borrowing of money by the Corporation on bills of exchange or
promissory notes made, drawn, accepted or endorsed by or on behalf of the
Corporation.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.02 |  | Delegation
|---- |  | ----------



|The board may from time to time
delegate to such one or more of the directors and officers of the Corporation as
may be designated by the board all or any of the powers conferred on the board
by section 3.01 or by the Act to such extent and in such manner as the board
shall determine at the time of each such delegation.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|SECTION FOUR
|------------



|DIRECTORS
|---------

|4.01 |  | Number
of Directors and  Quorum
|---- |  | -------------------------------



|Until changed in accordance with the
Act, the board shall consist of not fewer than two and not more than seven
directors. Subject to section 4.08, the quorum for the transaction of business
at any meeting of the board shall consist of 2 directors or such greater number
of directors as the board may from time to time determine.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.02 |  | Qualification
|---- |  | -------------



|No person shall be qualified for
election as a director if he is less than 18 years of age; if he is of unsound
mind and has been so found by a court in Canada or elsewhere; if he is not an
individual; or if he has the status of a bankrupt. A director need not be a
shareholder. A majority of the directors shall be resident Canadians. At least
two directors shall not be officers or employees of the Corporation or its
affiliates.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.03 |  | Election
and Term
|---- |  | -----------------



|The election of directors shall take
place at each annual meeting of shareholders and all of the directors then in
office shall retire, but, if qualified, shall be eligible for re-election. The
number of directors to be elected at any such meeting shall be the number of
directors then in office unless the directors or the shareholders otherwise
determine. Where the shareholders adopt an amendment to the Articles to increase
the minimum number of directors, the shareholders may, at the meeting at which
they adopt the amendment, elect the additional number of directors authorized by
the amendment. The election shall be by resolution. If an election of directors
is not held at the proper time, the incumbent directors shall continue in office
until their successors are elected.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.04 |  | Removal
of Directors
|---- |  | --------------------



|Subject to the provisions of the Act,
the shareholders may by resolution passed at a meeting specially called for such
purpose remove any director from office and the vacancy created by such removal
may be filled at the same meeting failing which it may be filled by the
directors.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.05 |  | Vacation
of Office
|---- |  | ------------------



|A director ceases to hold office when
he dies; he is removed from office by the shareholders; he ceases to be
qualified for election as a director, or his written resignation is sent or
delivered to the Corporation, or, if a time is specified in such resignation, at
the time so specified, whichever is later.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---



|4.06 |  | Vacancies
|---- |  | ---------



|Subject to the Act, a quorum of the
board may fill a vacancy in the board, except a vacancy resulting from an
increase in the minimum number of directors or from a failure of the
shareholders to elect the minimum number of directors. In the absence of a
quorum of the board, or if the vacancy has arisen from a failure of the
shareholders to elect the minimum number of directors, the board shall forthwith
call a special meeting of shareholders to fill the vacancy. If the board fails
to call such meeting or if there are no directors then in office, any
shareholder may call the meeting.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.07 |  | Action
by the Board
|---- |  | -------------------



|Subject to any unanimous shareholder
agreement, the board shall manage the business and affairs of the Corporation.
Subject to sections 4.08 and 4.09, the powers of the board may be exercised by a
meeting at which the quorum is present or by resolution in writing signed by all
the directors entitled to vote on that resolution at a meeting of the board.
Where there is a vacancy in the board the remaining directors may exercise all
the power of the board so long as a quorum remains in office.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.08 |  | Canadian
Majority
|---- |  | -----------------



|The board shall not transact business
at a meeting, other than filling a vacancy in the board, unless a majority of
the directors present are resident Canadians, except where
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|a. | a
resident Canadian director who is unable to be present approves in  writing or by
telephone or other communications facilities the business  transacted at the meeting; and
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|b. | a
majority of resident Canadians would have been present had that  director been present at
the meeting.
|-- | --------------------------------------------------------------------------------------------------------

|4.09 |  | Meeting
by Telephone
|---- |  | --------------------



|If all the directors of the Corporation
consent, a director may participate in a meeting of the board or of a committee
of the board by means of such telephone or other communications facilities as
permit all persons participating in the meeting to hear each other, and a
director participating in such a meeting by such means is deemed to be present
at the meeting. Any such consent shall be effective whether given before or
after the meeting to which it relates and may be given with respect to all
meetings of the board and of committees of the board.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.10 |  | Place
of Meetings
|---- |  | -----------------



|Meetings of the board may be held at
any place in or outside Canada.
|--------------------------------------------------------------------



| |  | 
| |  | 



---



|4.11 |  | Calling
of Meetings
|---- |  | -------------------



|Meetings of the board shall be held
from time to time at such time and at such place as the board, the chairman of
the board, the managing director, the president or any two directors may
determine.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.12 |  | Notice
of Meeting
|---- |  | -----------------



|Notice of the time and place of such
meeting of the board shall be given in the manner provided in section12.01 to
each director not less than 48 hours before the time when the meeting is to be
held. A notice of a meeting of directors need not specify the purpose of or the
business to be transacted at the meeting except where the Act requires such
purpose or business to be specified, including, if required by the Act, any
proposal to:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|a. | submit
to the shareholders any question or matter requiring approval of the  shareholders;
|-- | ------------------------------------------------------------------------------------------

|b. | fill
a vacancy among the directors or in the office of auditor;
|-- | ---------------------------------------------------------------

|c. | issue
securities;
|-- | -----------------

|d. | declare
dividends
|-- | -----------------

|e. | purchase,
redeem or otherwise acquire shares issued by the Corporation;
|-- | -----------------------------------------------------------------------

|f. | pay
a commission for the sale of shares;
|-- | ----------------------------------------

|k. | approve
a management proxy circular;
|-- | ------------------------------------

|l. | approve
a takeover bid circular or directors circular
|-- | ------------------------------------------------------

|m. | approve
any annual financial statements; or
|-- | -------------------------------------------

|n. | adopt,
amend or repeal bylaws
|-- | -----------------------------



|A director may in any manner waive
notice of or otherwise consent to a meeting of the board.
|--------------------------------------------------------------------------------------------

|4.13 |  | First
Meeting of New Board
|---- |  | --------------------------



|Provided a quorum of directors is
present, each newly elected board may without notice hold its first meeting
immediately following the meeting of shareholders at which such board is
elected.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.14 |  | Adjourned
Meeting
|---- |  | -----------------



|Notice of an adjourned meeting of the
board is not required if the time and place of the adjourned meeting is
announced at the original meeting.
|------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---



|4.15 |  | Regular
Meetings
|---- |  | ----------------



|The board may appoint a day or days in
any month or months for regular meetings of the board at a place and hour
to be named. A copy of any resolution of the board fixing the place and time of
such regular meetings shall be sent to each director forthwith after being
passed, but no other notice shall be required for any such regular meeting
except where the Act requires the purpose thereof or the business to be
transacted thereat to be specified.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.16 |  | Chairman
|---- |  | --------



|The chairman of any meeting of the
board shall be the first mentioned of such of the following officers as have
been appointed and who is a director and is present at the meeting: chairman of
the board, managing director, president, or a vice-president. If no such officer
is present, the directors present shall choose one of their number to be
chairman.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.17 |  | Votes
to Govern
|---- |  | ---------------



|At all meetings of the board every
question shall be decided by a majority of the votes cast on the question. In
case of an equality of votes the chairman of the meeting shall be entitled to a
second or casting vote.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.18 |  | Conflict
of Interest
|---- |  | --------------------



|A director or officer who is a party
to, or who is a director or officer of or has a material interest in any person
who is a party to, a material interest in any person who is a party to, a
material contract or proposed material contract with the Corporation shall
disclose the nature and extent of his interest at the time and in the manner
provided by the Act. Any such contract or proposed contract shall be referred to
the board or shareholders for approval even if such contract is one that in the
ordinary course of the Corporations business would not require approval by
the board or shareholders, and a director interested in a contract so referred
to the board shall not vote on any resolution to approve the same except as
provided by the Act.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.19 |  | Remuneration
and Expenses
|---- |  | -------------------------



|Subject to any unanimous shareholder
agreement, the directors shall be paid such remuneration for their service as
the board may from time to time determine. The directors shall also be entitled
to be reimbursed for traveling and other expenses properly incurred by them in
attending meetings of the board or any committee thereof. Nothing herein
contained shall preclude any director form serving the Corporation in any other
capacity and receiving remuneration therefore.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|SECTION FIVE
|------------



|COMMITTEES
|----------

|5.1 |  | Committee
of Directors
|--- |  | ----------------------



|The board may appoint a committee of
directors, however designated, and delegate to such committee any of the powers
of the board except those which pertain to items which, under the Act, a
committee of directors has no authority to exercise. A majority of the members
of such committee shall be resident Canadians.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5.2 |  | Transaction
of Business
|--- |  | -----------------------



|Subject to the provisions of Section
4.09, the powers of a committee of directors may be exercised by a meeting at
which a quorum is present or by resolution in writing signed by all members of
such committee who would have been entitled to vote on that resolution at a
meeting of the committee. Meetings of such committee may be held at any place in
or outside of Canada.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5.03 |  | Advisory
Committees
|---- |  | -------------------



|The board may from time to time appoint such
other committees as it may deem  advisable, but the functions of any such other
committees shall be advisory  only.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------

|5.04 |  | Procedure
|---- |  | ---------



|Unless otherwise determined by the
board, each committee shall have the power to fix its quorum at not less than a
majority of its members, to elect its chairman and to regulate its procedure.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5.05 |  | Audit
Committee
|---- |  | ---------------



|If required by the Act the board shall
elect annually from among the members an audit committee to be composed of not
fewer than 3 directors of whom a majority shall not be officers or employees of
the corporation or its affiliates. The audit committee shall have the powers and
duties provided in the Act.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|SECTION SIX
|-----------



|OFFICERS
|--------

|6.01 |  | Appointment
|---- |  | -----------



|Subject to any unanimous shareholder
agreement, the board may from time to time appoint a president, one or more
vice-presidents (to which title may be added words indicating seniority or
function), a secretary, a treasurer and such other officers as the board may
determine, including one or more assistants to any of the officers so appointed.
The board may specify the duties of and, in accordance with this by-law and
subject to the provisions of the Act, delegate to such officers powers to manage
the business and affairs of the Corporation. Subject to Section 6.02 and 6.03,
an officer may but need not be a director and one person may hold more than one
office.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---



|6.02 |  | Chairman
of the Board
|---- |  | ---------------------



|The board may from time to time also
appoint a chairman of the board who shall be a director. If appointed, the board
may assign to him any of the powers and duties that are by any provisions of
this by-law assigned to the managing director or to the president, and he shall,
subject to the provisions of the Act, have such other powers and duties as the
board may specify. During the absence or disability of the chairman of the
board, his duties shall be performed and his power exercised by the managing
director, if any, or by the president.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|6.03 |  | Managing
Director
|---- |  | -----------------



|The board may from time to time also
appoint a managing director who shall be a resident Canadian and a director. If
appointed, he shall be the chief executive officer and, subject to the authority
of the board, shall have general supervision of the business and affairs of the
Corporation; and he shall, subject to the provisions of the Act, have such other
powers and duties as the board may specify. During the absence or disability of
the president, or if no president has been appointed the managing director shall
also have the powers and duties of that office.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|6.04 |  | President
|---- |  | ---------



|If appointed, the president shall be
the chief operating officer and subject to the authority of the board, shall
have general supervision of the business of the Corporation; and he shall have
such other powers and duties as the board may specify. During the absence or
disability of the managing director, or if no managing director has been
appointed, the president shall also have the powers and duties of that office.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|6.05 |  | Vice-President
|---- |  | --------------



|A vice-president shall have such powers and
duties as the board or the chief  executive officer may specify.
|------------------------------------------------------------------------------------------------------------

|6.06 |  | Secretary
|---- |  | ---------



|The secretary shall attend and be the
secretary of all meetings of the board, shareholders and committees of the board
and shall enter or cause to be entered in records kept for that purpose minutes
of all proceedings thereat; he shall give or cause to be given, as and when
instructed, all notices to shareholders, directors, officers, auditors and
members of committees of the board; he shall be the custodian of the stamp or
mechanical device generally used for affixing the corporate seal of the
Corporation and of all books, papers, records, documents and instruments
belonging to the Corporation, except when some other officer or agent has been
appointed for that purpose; and he shall have such other powers and duties as
the board or the chief executive officer may specify.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|6.07 |  | Treasurer
|---- |  | ---------



|The treasurer shall keep proper
accounting records in compliance with the Act and shall be responsible for the
deposit of money, the safe-keeping of securities and the disbursement of the
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|funds of the  Corporation; he shall render to
the board whenever required an  account of all his  transactions as treasurer and of the
financial position of  the Corporation; and he shall  have such other powers and duties
as the board or  the chief executive officer may  specify.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|6.08 |  | Powers
and Duties of Other Officers
|---- |  | -----------------------------------



|The powers and  duties of all other officers
shall be such as the terms of their  engagement call for or  as the board or the chief
executive officer may specify.  Any of the powers and duties of  an officer to whom an
assistant has been  appointed may be exercised and performed by  such assistant, unless
the board or  the chief executive officer otherwise directs.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|6.09 |  | Variation
of Powers and Duties
|---- |  | ------------------------------



|The board may  from time to time and subject to
the provisions of the Act, vary,  add to or limit the  powers and duties of any officer.
|----------------------------------------------------------------------------------------------------------------------------------------



|6.10 |  | Term
of Office
|---- |  | --------------



|The board, in  its discretion, may remove any
officer of the Corporation, without  prejudice to such  officers rights under any
employment contract. Otherwise each  officer appointed by the  board shall hold office
until his successor is  appointed, or until his earlier  resignation.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|6.11 |  | Terms
of Employment and Remuneration
|---- |  | ------------------------------------



|The terms of  employment and the remuneration of
an officer appointed by the  board shall be settled by  it from time to time.
|------------------------------------------------------------------------------------------------------------------------------



|6.12 |  | Conflict
of Interest
|---- |  | --------------------



|An officer  shall disclose his interest in any
material contract or proposed  material contract with  the Corporation in accordance with
section 4.18.
|------------------------------------------------------------------------------------------------------------------------------------------------------



|6.13 |  | Agents
and Attorneys
|---- |  | --------------------



|The board shall  have power form time to time to
appoint agents or attorneys for  the Corporation in or  outside Canada with such powers
of management or otherwise  (including the powers to  subdelegate) as may be thought fit.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|6.14 |  | Fidelity
Bonds
|---- |  | --------------



|The board may  require such officers, employees
and agents of the Corporation as  the board deems  advisable to furnish bonds for the
faithful discharge of their  powers and duties, in  such form and with such surety as the
board may from time  to time determine.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|SECTION SEVEN
|-------------



|PROTECTION OF DIRECTORS,
OFFICERS AND OTHERS
|--------------------------------------------



|7.01 |  | Limitation
of Liability
|---- |  | -----------------------



|Every director and officer of the Corporation in
exercising his powers and  discharging his duties shall act honestly and in good faith
with a view to the  best interest of the Corporation and exercise the care, diligence and
skill that  a reasonably prudent person would exercise in comparable circumstances.
Subject  to the foregoing, no director or officer shall be liable for the acts, receipts,
neglects or defaults of any other director or officer or employee, or for  joining in any
receipt or other act for conformity, or for any loss, damage or  expense happening to the
Corporation through the insufficiency or deficiency of  title to any property acquired
for or on behalf of the Corporation, or for the  insufficiency or deficiency of any
security in or upon which any of the moneys  of the Corporation shall be invested, or for
any loss or damage arising form the  bankruptcy, insolvency or tortious acts of any
person with whom any of the  moneys, securities or effects of the Corporation shall be
deposited, or for any  loss occasioned by any error of judgment or oversight on his part,
or for any  other loss, damage or misfortune whatever which shall happen in the execution
of  the duties of his office or in relation thereto; provided that nothing herein  shall
relieve any director or officer from the duty to act in accordance with  the Act and the
regulations thereunder or from liability for any breach thereof.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.02 |  | Indemnity
|---- |  | ---------



|Subject to the limitations contained in the Act,
the Corporation shall indemnify  a director or officer, a former director or officer, or
a person who acts or  acted at the Corporations request a s director or officer of a
body corporate  of which the Corporation is or was a shareholder or creditor, and his
heirs and  legal representatives, against all costs charges and expenses, including an
amount paid to settle an action or satisfy a judgment, reasonably incurred by  him in
respect of any civil, criminal or administrative action or proceeding to  which he is
made a party by reason of being or having been a director or officer  of the Corporation
or such body corporate, if
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|a. | he
acted  honestly and in good faith with a view to the best interests  of the Corporation;
and
|-- | -----------------------------------------------------------------------------------------------





|b. | in
the  case of a criminal or administrative action or proceeding that  is enforced by a
monetary  penalty, he had reasonable grounds for  believing that his conduct was lawful.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|The corporation shall also indemnify such person
in such other circumstances as  the Act permits or requires.
|-------------------------------------------------------------------------------------------------------------



|7.03 |  | Insurance
|---- |  | ---------



|The Corporation may purchase and maintain
insurance for the benefit of any  person referred to in section 7.02 against such
liabilities and in such amounts  as the board may from time to time determine and are
permitted by the Act.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|SECTION EIGHT
|-------------



|SHARES
|------



|8.01 |  | Allotment
|---- |  | ---------



|The board may from time to time allot or grant
options to purchase the whole or  any part of the authorized and unissued shares of the
Corporation at such times  and to such persons and for such consideration as the board
shall determine,  provided that no share shall be issued until it is fully paid as
provided by the  Act.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|8.02 |  | Commissions
|---- |  | -----------



|The board may from time to time authorize the
Corporation to pay a commission to  any person in consideration of his purchasing or
agreeing to purchase shares of  the Corporation, whether from the Corporation or from any
other person, or  procuring or agreeing to procure purchasers for any such shares.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|8.03 |  | Registration
of Transfers
|---- |  | -------------------------



|Subject to the provisions of the act, no
transfer of shares shall be registered  in a securities register except upon presentation
of the certificate  representing such shares with an endorsement, which complies with the
Act, made  thereon or delivered therewith duly executed by an appropriate person as
provided by the Act, together with such reasonable assurance that the  endorsement is
genuine and effective as the board may from time to time  prescribe, upon payment of all
applicable taxes and any fees prescribed by the  board, upon compliance with such
restrictions on transfer as are authorized by  the articles and upon satisfaction of any
fees prescribed by the board and upon  satisfaction of any lien referred to in section
8.05. *
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|8.04 |  | Transfer
Agents and Registrars
|---- |  | ------------------------------



|The board may from time to time appoint one or
more agents to maintain, in  respect of each class of securities of the Corporation
issued by it in  registered form, a central securities register and one or more branch
securities  registers. Such a person may be designated as transfer agent or registrar
according to his functions and one person may be designated both registrar and  transfer
agent. The board may at any time terminate such appointment.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|8.05 |  | Lien
for Indebtedness
|---- |  | ---------------------



|If the articles provide that the Corporation
shall have a lien on shares  registered in the name of a shareholder indebted to the
Corporation, such lien  may be enforced, subject to any other provision of the articles
and to any  unanimous shareholder agreement, by the sale of the shares thereby affected
or  by any other action, suit, remedy or proceeding authorized or permitted by law  or by
equity and, pending such enforcement, the Corporation may refuse to  register a transfer
of the whole or any part of such shares.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|8.06 |  | Non-recognition
of Trusts
|---- |  | -------------------------



|Subject to the provisions of the Act, the
Corporation may treat as absolute  owner of any share the person in whose name the share
is registered in the  securities register as if that person had full legal capacity and
authority to  exercise all rights of ownership, irrespective of any indication to the
contrary  through knowledge or notice or description in the Corporations records or on
the share certificate.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|8.07 |  | Share
Certificates
|---- |  | ------------------



|Every holder of one or more shares of the
Corporation shall be entitled, at his  option, to a share certificate, or to a
non-transferable written acknowledgment  of this right to obtain a share certificate,
stating the number and class or  series of shares held by him as shown on the securities
register. Share  certificates and acknowledgments of a shareholders right to a share
certificate, respectively, shall be in such form as the board shall from time to  time
approve. Any share certificate shall be signed in accordance with section  2.04 and need
not be under the corporate seal; provided that, unless the board  otherwise determines,
certificates representing shares in respect of which a  transfer agent and/or registrar
has been appointed shall not be valid unless  countersigned by or on behalf of such
transfer agent and /or registrar. The  signature of one of the signing officers or, in
the case of share certificates  which are not valid unless countersigned by or on behalf
of a transfer agent  and/or registrar, the signatures of both signing officers, may be
printed or  mechanically reproduced in facsimile upon share certificates and every such
facsimile signature shall for all purposes be deemed to be the signature of the  officer
whose signature it reproduces and shall be binding upon the Corporation.  A share
certificate executed as aforesaid shall be valid notwithstanding that  one or both of the
officers whose facsimile signature appears thereon no longer  holds office at the date of
issue of the certificate.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|8.08 |  | Replacement
of Share Certificates
|---- |  | ---------------------------------



|The board or any officer or agent designated by
the board may in its or his  discretion direct the issue of a new share certificate in
lieu of and upon  cancellation of a share certificate that has been mutilated or in
substitution  for a share certificate claimed to have been lost, destroyed or wrongfully
taken  on payment of such fee, net exceeding $3, and on such terms as to indemnity
reimbursement of expenses and evidence of loss and of title as the board may  from time
to time prescribe, whether generally or in any particular case.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|8.09 |  | Joint
Shareholders
|---- |  | ------------------



|If two or more persons are registered as joint
holders of any share, the  Corporation shall not be bound to issue more than one
certificate in respect  thereof, and delivery of such certificate to one of such persons
shall be  sufficient delivery to all of them. Any one of such persons may give effectual
receipts for the certificate issued in respect thereof or for any dividend,  bonus,
return of capital or other money payable or warrant issuable in respect  of such share.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|8.10 |  | Deceased
Shareholders
|---- |  | ---------------------



| |  | 
| |  | 



---





|In the event of the death of a holder, or of one
of the joint holders, of any  share, the Corporation shall not be required to make any
entry in the securities  register in respect thereof or to make payment of any dividends
thereon except  upon production of all such documents as may be required by law and upon
compliance with the reasonable requirements of the Corporation and its transfer  agents.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|SECTION NINE
|------------



|DIVIDENDS AND RIGHTS
|--------------------



|9.01 |  | Dividends
|---- |  | ---------



|Subject to the provisions of the Act, the board
may from time to time declare  dividends payable to the shareholders according to their
respective rights and  interest in the Corporation. Dividends may be paid in money or
property or by  issuing fully paid shares of the Corporation.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|9.02 |  | Dividend
Cheques
|---- |  | ----------------



|A dividend payable in cash shall be paid by
cheque drawn on the Corporations  bankers or one of them to the order of each registered
holder of shares of the  class or series in respect of which it has been declared and
mailed by prepaid  ordinary mail to such registered holder at his recorded address,
unless such  holder otherwise directs. In the case of joint holders the cheque shall,
unless  such joint holders otherwise direct, be made payable to the order of all of such
joint holders and mailed to them at their recorded address. The mailing of such  cheque
as aforesaid, unless the same is not paid on due presentation, shall  satisfy and
discharge the liability for the dividend to the extent of the sum  represented thereby
plus the amount of any tax which the Corporation is required  to and does withhold.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|9.03 |  | Non-receipt
of Cheques
|---- |  | ----------------------



|In the event of non-receipt of any dividend
cheque by the person to whom it is  sent as aforesaid, the Corporation shall issue to
such person a replacement  cheque for a like amount on such terms as to indemnity,
reimbursement of  expenses and evidence of non-receipt and of title as the board may from
time to  time prescribe, whether generally or in any particular case.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|9.04 |  | Record
Date for Dividends and Rights
|---- |  | ------------------------------------



|The board may fix in advance a date, preceding
by not more than 50 days the date  for the payment of any dividend or the date for the
issue of any warrant or  other evidence of the right to subscribe for securities of the
Corporation, as a  record date for the determination of the persons entitled to receive
payment of  such dividend or to exercise the right to subscribe for such securities, and
notice of any such record date shall be give not less than 14 days before such  record
date in the manner provided by the Act. If no record date is so fixed,  the record date
for the determination of the persons entitled to receive payment  of any dividend or to
exercise the
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|right to subscribe for securities of the
Corporation shall be at the close  of business on the day on which the resolution
relating to such dividend or right to  subscribe is passed by the board.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|9.05 |  | Unclaimed
Dividends
|---- |  | -------------------



|Any dividend unclaimed after a period of 6 years
form the date on which the same  has been declared to be payable shall be forfeited and
shall revert to the  Corporation.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|SECTION TEN
|-----------



|MEETINGS OF SHAREHOLDERS
|------------------------



|10.01 |  | Annual
Meetings
|----- |  | ---------------



|The annual meeting of shareholders shall be held
at such time in each year and,  subject to section 10.03, at such place as the board, the
chairman of the board,  the managing director or the president may from time to time
determine, for the  purpose of considering the financial statements and reports required
by the Act  to be placed before the annual meeting, electing directors, appointing an
auditor and for the transaction of such other business as may properly be  brought before
the meeting.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|10.02 |  | Special
Meetings
|----- |  | ----------------



|The board, the chairman of the board, the
managing director or the president  shall have power to call a special meeting of share
holders at any time.
|------------------------------------------------------------------------------------------------------------------------------------------------------



|10.03 |  | Place
of Meetings
|----- |  | -----------------



|Meetings of shareholders shall be held at the
registered office of the  Corporation or elsewhere in the municipality in which the
registered office is  situate or, if the board shall so determine, at some other place in
Canada or,  if all the share holders entitled to vote at the meeting so agree, at some
place  outside Canada.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|10.04 |  | Notice
of Meetings
|----- |  | ------------------



|Notice of the time and place of each meeting of
shareholders shall be give in  the manner provided in section 12.01 not less than 21 not
more than 50 days  before the date of the meeting to each director, to the auditor and to
each  shareholder who at the close of business on the record date for notice is  entered
in the securities register as the holder of one or more shares carrying  the right to
vote at the meeting. Notice of a meeting of shareholders called for  any purpose other
than consideration of the financial statements and auditors  report, election of
directors and reappointment of the incumbent auditor shall  state the nature of such
business in sufficient detail to permit the shareholder  to form a reasoned judgment
thereon and shall state the text of any special  resolution to be submitted to the
meeting. A shareholder and any other person  entitled to attend a meeting of shareholders
may in any manner waive notice of  or otherwise consent to a meeting of shareholders.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|10.05 |  | List
of Shareholders Entitled to Notice
|----- |  | ---------------------------------------



|For every meeting of shareholders, the
Corporation shall prepare a list of  shareholders entitled to receive notice of the
meeting, arranged in alphabetical  order and showing the number of shares held by each
shareholder entitled to vote  at the meeting. If a record date for the meeting is fixed
pursuant to section  10.06, the shareholders listed shall be those registered at the
close of  business on such record date. If no record date is fixed, the shareholders
listed shall be those registered at the close of business on the day immediately
preceding the day on which notice of the meeting is given , or where no such  notice is
given, the day on which the meeting is held. The list shall be  available for examination
by any shareholder during usual business hours at the  registered office of the
Corporation or at the place where the central  securities register is maintained and at
the meeting for which the list was  prepared. Where a separate list of shareholders has
not been prepared, the names  of persons appearing in the securities register at the
requisite time as the  holder of one or more shares carrying the right to vote at such
meeting shall be  deemed to be a list of shareholders.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|10.06 |  | Record
Date for Notice
|----- |  | ----------------------



|The board may fix in advance a date, preceding
the date of any meeting of  shareholders by not more than 50 days and not less than 21
days, as a record  date for the determination of the shareholders entitled to notice of
the  meeting, and notice of any such record date shall be given not less than 14 days
before such record date, but newspaper advertisement in the manner provided in  the Act.
If no record date is so fixed, the record date for the determination of  the shareholders
entitled to notice of the meeting shall be at the close of  business on the day
immediately preceding the day on which the notice is given  or, if no notice is given,
the day on which the meeting is held.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|10.07 |  | Meetings
without Notice
|----- |  | -----------------------



|A meeting of shareholders may be held without
notice at any time and place  permitted by the Act (a) if all the shareholders entitled
to vote thereat are  present in person or represented by proxy or if those not present or
represented  by proxy waive notice of or otherwise consent to such meeting being held,
and  (b) if the auditors and the directors are present or waive notice of or  otherwise
consent to such meeting being held; so long as such shareholders,  auditors or directors
present are not attending for the express purpose of  objecting to the transaction of any
business on the grounds that the meeting is  not lawfully called. At such a meeting any
business may be transacted which the  Corporation at a meeting of shareholders may
transact. If the meeting is held at  a place outside Canada, shareholders not present or
represented by proxy, but  who have waived notice of or otherwise consented to such
meeting, shall also be  deemed to have consented to the meeting being held at such place.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|10.08 |  | Chairman,
Secretary and Scrutineers
|----- |  | -----------------------------------



|The chairman of any meeting of shareholders
shall be the first mentioned of such  of the following officers as have been appointed
and who is present at the  meeting: president,
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|managing director, chairman of the board,  or a
vice-president who is a shareholder. If no such officer is present within 15  minutes
from the time fixed for holding the meeting, the persons present and  entitled to  vote
shall choose one of their number to be chairman. If the  secretary of the  Corporation is
absent, the chairman shall appoint some person,  who need not be a  shareholder, to act
as secretary of the meeting. If desired,  one or more scrutineers,  who need not be
shareholders, may be appointed by a  resolution or by the chairman with  the consent of
the meeting.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|10.09 |  | Persons
Entitled to be Present
|----- |  | ------------------------------



|The only persons entitled to be present at a
meeting of shareholders shall those  entitled to vote thereat, the directors and auditor
of the Corporation and  others who, although not entitled to vote are entitled or
required under any  provision of the act or the articles or by-laws to be present at the
meeting.  Any other person may be admitted only on the invitation of the chairman of the
meeting or with the consent of the meeting.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|10.10 |  | Quorum
|----- |  | ------



|The quorum for the transaction of business at
any shareholders meeting of any  class or of any shareholders meeting of any series of
any class of share shall,  subject to the Articles, be two persons present in person,
each being a  shareholder entitled to vote thereat or a duly appointed proxyholder for an
absent shareholder so entitled, and together holding or representing by proxy  not less
than 5% of the outstanding share of the Corporation entitled to vote at  the meeting. If
a quorum is present at the opening of any meeting of  shareholders, the shareholders
present or represented by a proxy may proceed  with the business of the meeting
notwithstanding that a quorum is not present  throughout the meeting. If a quorum is not
present at the opening of any meeting  of shareholders, the shareholders present or
represented by proxy may adjourn  the meeting to affix time and place but may not
transact any other business.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|10.11 |  | Right
to Vote
|----- |  | -------------



|Subject to the provisions of the act as to
authorized representatives of any  other body corporate or association, at any meeting of
shareholders for which  the Corporation has prepared the list referred to in section
10.05, every person  who is named in such list shall be entitled to vote the shares shown
opposite  his name except to the extent that, where the Corporation has fixed a record
date in respect of such meeting pursuant to section 10.06, such person has  transferred
any of his shares after such record date and the transferee, having  produced properly
endorsed certificates evidencing such shares or having  otherwise established that he
owns such shares, has demanded not later than 10  days before the meeting that his name
be included in such list. In any such case  the transferee shall be entitled to vote the
transferred shares at the meeting.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|10.12 |  | Proxies
|----- |  | -------



|Every shareholder entitled to vote at a meeting
of shareholders may appoint a  proxyholder, or one or more alternate proxyholders, who
need not be  shareholders, to attend and act at the meeting in the manner and to the
extent  authorized and with the authority conferred by the
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|proxy. A proxy shall be in  writing executed by
the shareholder or his attorney and shall conform with the  requirements of the Act.
|------------------------------------------------------------------------------------------------------------------------------------



|10.13 |  | Time
for Deposit of Proxies
|----- |  | ---------------------------



|The board may specify in a notice calling a
meeting of shareholders a time,  preceding the time of such meeting by not more than 48
hours exclusive of  non-business days, before which time proxies to be used at such
meeting must be  deposited. A proxy shall be acted upon only if, prior to the time so
specified,  it shall have been deposited with the Corporation or an agent thereof
specified  in such notice or, if no such time is specified in such notice, unless it has
been received by the secretary of the Corporation or by the chairman of the  meeting or
any adjournment thereof prior to the time of voting.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|10.14 |  | Joint
Shareholders
|----- |  | ------------------



|If two or more persons hold shares jointly, any
one of them present in person or  represented by proxy at a meeting of shareholders may,
in the absence of the  other or others, vote the shares; but if two or more of those
persons are  present in person or represented by proxy and vote, they shall vote as one
the  shares jointly held by them.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|10.15 |  | Votes
to Govern
|----- |  | ---------------



|At any meeting of shareholders every question
shall, unless otherwise required  by the articles or by-laws or by law, be determined by
a majority of the votes  cast on the question. In case of an equality of votes either
upon a show of  hands or upon a poll, the chairman of the meeting shall be entitled to a
second  or casting vote.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|10.16 |  | Show
of Hands
|----- |  | -------------



|Subject to the provisions of the Act any
question at a meeting of shareholders  shall be decided by a show of hands unless a
ballot thereon is required or  demanded as hereinafter provided. Upon a show of hands
every person who is  present and entitled to vote shall have one vote. Whenever a vote by
show of  hands shall have been taken upon a question, unless a ballot thereon is so
required or demanded, a declaration by the chairman of the meeting that the vote  upon
the question has been carried or carried by a particular majority or not  carried and an
entry to that effect in the minutes of the meeting shall be prima  facie evidence of the
fact without proof of the number or proportion of the  votes recorded in favor of or
against any resolution or other proceeding in  respect of the said question, and the
result of the vote so taken shall be the  decision of the shareholders upon the said
question.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|10.17 |  | Ballots
|----- |  | -------



|On any question proposed for consideration at a
meeting of shareholders, and  whether or not a show of hands has been taken thereon, any
shareholder or proxy  holder entitled to vote at the meeting may require or demand a
ballot. A ballot  so required or demanded shall be taken in such manner as the chairman
shall  direct. A requirement or demand for a ballot may be withdrawn at
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|any time prior  to the taking of the ballot. If
a ballot is taken each person present shall be  entitled  in respect of the shakes which
he is entitled to vote at the meeting  upon the question,  to that number of votes
provided by the Act or the articles,  and the result of the  ballot so taken shall be the
decision of the shareholders  upon the said question.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|10.18 |  | Adjournment
|----- |  | -----------



|If a meeting of shareholders is adjourned for
less than 30 days, it shall not be  necessary to give notice of the adjourned meeting,
other than by announcement at  the earliest meeting that is adjourned. If a meeting of
shareholders is  adjourned by one or more adjournments for an aggregate of 30 days or
more,  notice of the adjourned meeting shall be given as for an original meeting.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|10.19 |  | Resolution
in Writing
|----- |  | ---------------------



|A resolution in writing signed by all the
shareholders entitled to vote on that  resolution at a meeting of shareholders is as
valid as if it had been passed at  a meeting of the shareholders unless a written
statement with respect of the  subject matter of the resolution is submitted by a
director or the auditors in  accordance with the Act.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|10.20 |  | Only
One Shareholder
|----- |  | --------------------



|Where the Corporation has only one shareholder
or only one holder of any class  or series of shares, the shareholder present in person
or by proxy constitutes a  meeting.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|SECTION ELEVEN
|--------------



|DIVISIONS AND DEPARTMENTS
|-------------------------



|11.01 |  | Creation
and Consolidation of Divisions
|----- |  | ---------------------------------------



|The board may cause the business and operations
of the Corporation or any part  thereof to be divided or to be segregated into one or
more divisions upon such  basis, including without limitation, character or type of
operation,  geographical territory, product manufactured or service rendered, as the
board  may consider appropriate in each case. The board may also cause the business and
operations of any such division to be further divided into sub-units and the  business
and operations of any such divisions or sub-units to be consolidated  upon such basis as
the board may consider appropriate in each case.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|11.02 |  | Name
of Division
|----- |  | ----------------



|Any division or its sub-units may be designated
by such name as the board may  from time to time determine and may transact business
under such name, provided  that the Corporation shall set out its name in legible
characters in all  contracts, invoices, negotiable instruments and order for goods or
services  issued or made by or on behalf of the Corporation.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|11.03 |  | Officers
of Division
|----- |  | --------------------



|From time to time the board or, if authorized by
the board, the chief executive  officer, may appoint one or more officers for any
division, prescribe their  powers and duties and settle their terms of employment and
remuneration. The  board or, if authorized by the board, the chief executive officer, may
remove at  its or his pleasure any officer so appointed, without prejudice to such
officers rights under any employment contract. Officers of divisions or their  sub-units
shall not, as such, be officers of the Corporation.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|SECTION TWELVE
|--------------



|NOTICES
|-------



|12.01 |  | Method
of Giving Notices
|----- |  | ------------------------



|Any notice (which term includes any
communication or document) to be given  (which term includes sent, delivered or served)
pursuant to the Act, the  regulations thereunder, the articles, the by-laws or otherwise
to a shareholder,  director, officer, auditor or member of a committee of the board shall
be  sufficiently given if delivered personally to the person to whom it is to be  given
or if delivered to his recorded address or if mailed to him at his  recorded address by
prepaid ordinary or air mail or if sent to him at his  recorded address by any means of
prepaid transmitted or recorded communication.  A notice so delivered shall be deemed to
have been give when it is delivered  personally or to the recorded address as aforesaid;
a notice so mailed shall be  deemed to have been given when deposited in a post office or
public letter box;  and a notice so sent by any means of transmitted or recorded
communication shall  be deemed to have been given when dispatched or delivered to the
appropriate  communication company or agency or its representative for dispatch. The
secretary may change or cause to be changed the recorded address of any  shareholder,
director, officer, auditor or member of a committee of the board in  accordance with any
information believed by him to be reliable.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|12.02 |  | Notice
to Joint Shareholders
|----- |  | ----------------------------



|If two or more persons are registered as joint
holders of any share, any notice  shall be addressed to all of such joint holders but
notice to one of such  persons shall be sufficient notice to all of them.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|12.03 |  | Computation
of Time
|----- |  | -------------------



|In computing the date when notice must be given
under any provision requiring a  specified number of days notice of any meeting or other
event, the date of  giving the notice shall be excluded and the date of the meeting or
other event  shall be included.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|12.04 |  | Undelivered
Notices
|----- |  | -------------------



|If any notice given to a shareholder pursuant to
section 12.01 is returned on  three consecutive occasions because he cannot be found, the
Corporation shall  not be required to give any further notices to such shareholder until
he informs  the Corporation in writing of his new address.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|12.05 |  | Omissions
and Errors
|----- |  | --------------------



|The accidental omission to give a notice to any
shareholder, director, officer  auditor or member of a committee of the board or the
non-receipt of any notice  by any such persons or any error in any notice not affecting
the substance  thereof shall not invalidate any action taken at any meeting held pursuant
to  such notice or otherwise founded thereon.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|12.06 |  | Persons
Entitled by Death or Operation of  Law
|----- |  | ----------------------------------------------



|Every person who, by operation of law, transfer,
death of a shareholder or any  other means whatsoever, shall become entitled to any
share, shall be bound by  every notice in respect of such share which shall have been
duly given to the  shareholder from whom he derives his title to such share prior to his
name and  address being entered on the securities register (whether such notice as given
before or after the happening of the event upon which he became so entitled) and  prior
to his furnishing to the Corporation the proof of authority or evidence of  his
entitlement prescribed by the Act.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|12.07 |  | Waive
of Notice
|----- |  | ---------------



|Any shareholder (or his duly appointed
proxyholder), director, officer, auditor  or member of a committee of the board may at
any time waive any notice, or waive  or abridge the time for any notice, required to be
given to him under any  provision of the Act, the regulations thereunder, the articles,
the by-laws or  otherwise and such waiver or abridgment, whether given before or after
the  meeting or other event of which notice is required to be given, shall cure any
default in the giving or in the time of such notice, as the case may be. Any  such waiver
or abridgment shall be in writing except a waiver of notice of a  meeting of shareholders
or of the board or of a committee of the board which may  be given in any manner.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|SECTION THIRTEEN
|----------------



|EFFECTIVE DATE
|--------------



|13.01 |  | Effective
Date
|----- |  | --------------



|This by-law shall come into force when confirmed
by the shareholders in  accordance with the Act.
|-------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---



| | MADE by
the board the 3rd day of April, 1980.
| | ---------------------------------------------



|President            signed
|-----------------------------



|Secretary            signed
|-----------------------------

| | CONFIRMED by the shareholders in accordance with
      the Act the 3rd day of April, 1980.
| | ------------------------------------------------------------------------------------------



|Secretary            signed
|-----------------------------



|BY-LAW NO. 2
|------------

| | A by-law respecting the borrowing
      of money, the Issuing of securities and the securing of liabilities by Claude
      Resources Inc.A by-law respecting the borrowing of
      money, the Issuing of securities and the securing of liabilities by Claude
      Resources Inc. | 
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | 

| | BE IT ENACTED as a by-law of the Corporation
      as follows:
| | --------------------------------------------------------------



|1.  Without limiting the borrowing powers of the
Corporation as set forth  in the Act, the board may form time to time:
|-----------------------------------------------------------------------------------------------------------------------



|a. | borrow
money upon the credit of the Corporation;
|-- | ------------------------------------------------





|b. | issue,
reissue, sell or pledge bonds, debentures, notes or other  evidence of indebtedness or
guarantee of the Corporation, whether  secured or unsecured; and
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------





|c. | mortgage,
hypothecate, pledge or otherwise create an interest in or  charge upon all or any
property (including the undertaking and rights)  or the Corporation, owned or
substantially acquired, by way of  mortgage, hypothec, pledge or otherwise, to secure
payment of any such  evidence of indebtedness or guarantee of the Corporation.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|Nothing in this section limits or restricts the
borrowing of money by the  Corporation on bills of exchange or promissory notes made,
drawn, accepted or  endorsed by or on behalf of the Corporation
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|2. The Board may from time to time delegate to
such one or more of the directors  and officers of the Corporation as may be designated
by the board all or any of  the powers conferred on the board by section 1 or by the Act
to such extent and  in such manner as the board shall determine at the time of each such
delegation.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| | ENACTED by the board the 3rd day of April, 1980.
| | ------------------------------------------------



|President                      signed | Secretary                        
      signed
|--------------------------------------- | ------------------------------------------------



| | CONFIRMED by the shareholders in accordance with
      the Act the 3rd day of April, 1980.
| | ------------------------------------------------------------------------------------------



| | Secretary                        
      signed
| | ------------------------------------------------



| |  | 
| |  | 



---





|OPTION AGREEMENT
|----------------



|THIS AGREEMENT made as of the 15th day of November,
      1994, with an effective date as of the 1st day of August, 1994.
|-------------------------------------------------------------------------------------------------------------------------



|BETWEEN:
|--------



| | CLAUDE
RESOURCES INC., a body corporate with offices at the City of Saskatoon, in the Province
of Saskatchewan
| | --------------------------------------------------------------------------------------------------------------



| | (the
Optionee)
| | ----------------



| | OF THE FIRST PART
| | -----------------



|AND
|---



| | CURRIE ROSE RESOURCES INC., a body corporate with
      offices at the City of St. Catherines, in the Province of Ontario
| | -------------------------------------------------------------------------------------------------------------------------



| | (the Optionor)
| | ----------------



| | OF THE SECOND PART
| | ------------------



|WHEREAS:
|--------



|1. The Optionor is the recorded and beneficial
holder of a 100% undivided  interest in certain property (the Property)
situated near Laonil Lake,  Saskatchewan, more particularly described in Schedule
A; and
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|2. The Optionee wishes to option the Property
from the Optioner;
|----------------------------------------------------------------



|NOW THEREFORE, for good and valuable
consideration (the receipt and sufficiency  of which is acknowledged), the Optioner and
Optionee agree as follows:
|-------------------------------------------------------------------------------------------------------------------------------------------------------



|1. Interpretation
|-----------------



|1.1 Definitions. The
      following terms, wherever used in this agreement, shall have the meanings
      set forth below:
|---------------------------------------------------------------------------------------------------------------------------



|(a) | Acts means
all legislation, as amended from time to  time, of the jurisdiction in which the
Property is  located, applicable to the Property, including title to,  and Mining
Operations on, the Property;
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---









|(b) | Affiliate shall have the
      meaning attributed to it in theCanada Business Corporations Act,
      R.S.C. 1985, c. C-44, as amended;
|--- | -----------------------------------------------------------------------------------------------------------------------------------------





|(c) | Commencement
Date of Commercial Production means the  date after the Optionee has made the
determination  pursuant to paragraph 4.1 hereof to proceed with  commercial production of
the Property, in the first year  that Minerals are produced from the Property at a
production level equal to or exceeding the production  level described in section 4.3 (d)
(i) hereof, which is  the first day of the first month in which Minerals are  produced
from the Property;
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|(d) | Expenditures means
all costs, expenses and charges,  direct or indirect, of or incidental to the  Mining
Operations incurred by the Optionee prior to the  Commencement Date of Commercial
Production including  without limiting the generality of the foregoing:
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | i. | all
capital costs and charges for any reconfiguration of  the Goldmill or the construction of
a new Goldmill; and
| | -- | -----------------------------------------------------------------------------------------------------------------

| | ii. | a
charge for administrative services of the Optionee not  exceeding 10% of the amount of
the costs, expenses and  charges;
| | --- | --------------------------------------------------------------------------------------------------------------------------

| | whichcosts,
      expenses and charges shall be determined in accordance with the Optionees
      accounting practices applicable from time to time to the extent that those
      practices are not inconsistent with Canadian generally accepted accounting
      principles;
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(e) | Feasibility
Study means a study of the feasibility of  operating the Property as a mine,
conducted at the sole option  of the Optionee, by either the Optionee or a qualified
independent professional retained by the Optionee, which  feasibility study may, if
deemed necessary by the Optionee, be  a bankable feasibility study;
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|(f) | First
Issue Date means the date that the first issue of  eight thousand, five hundred
(8,500) of the Shares shall be  issued by the Optionee to the Optionor, which date shall
be on  or before December 31, 1994, unless extended pursuant to  paragraph 2.3 (d) hereof;
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|(g) | 
Goldmill means the mill owned by the Optinee used to mill  Minerals from the
Property and may in the sole discretion of  the Optionee, but based on the Feasibility
Study, consist of  the existing goldmill owned by the Optionee at its Seabee  goldmine
and mill, a reconfigured goldmill at the Optionees  Seabee goldmine and mill, or a new
goldmill;
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|(h) | Minerals
shall mean the end products derived from operating  the Property as a mine;
|--- | --------------------------------------------------------------------------------------



| |  | 
| |  | 



---









|(i) | Mining
Operations means every kind of work done on or in respect of the Property or the
products  derived from the Property both before and after the Commencement Date of
Commercial Production,  by or under the direction of the Optionee including, without
limiting the generality of the  foregoing, the work of assessment, geophysical,
geochemical and geological surveys, studies and  mapping, investigating, drilling,
designing, examining, equipping, improving, surveying,  shaft-sinking, raising,
cross-cutting and drifting, searching for, digging, trucking, sampling,  working and
procuring minerals, ores and metals, surveying and bringing any mining claims to  lease
or parent, and all other work usually considered to be prospecting, exploration,
development, mining work and milling work; in paying wages and salaries or workers
engaged in  the work and in supplying food, lodging, transportation and other reasonable
needs of the  workers; in paying assessments or premiums for workers compensation
insurance, contributions  for unemployment insurance or other pay allowances or benefits
customarily paid in the district  to those workers; in paying rentals, license renewal
fees,, taxes and other governmental  charges required to keep the Property in good
standing; in purchasing or renting plant,  buildings, machinery, tools, appliances,
equipment or supplies and in installing, erecting,  detaching and removing them; mining,
milling, concentrating, rehabilitation, reclamation, and  environmental protection and in
the management of any work which may be done on the Property or  in any other respect
necessary for the due carrying out of the prospecting, exploration and  development work,
mining, and milling work;
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|(j) | Net
Profits Interest means an entitlement to profits from  the Property from and after the
Commencement Date of  Commercial Production, calculated and payable in accordance  with
the procedures set out in Schedule B attached hereto;
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|(k) | Option
shall have the meaning attributed to it in paragraph  2.2;
|--- | -------------------------------------------------------------------





|(l) | Processing
Fee means the fee to be charged by the Optionee  for the use of the Goldmill and
related capital facilities  pursuant to subparagraphs (e) or (f), as the case may be, of
paragraph 4.3 hereof, in connection with milling ore from the  Property;
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|(m) | Property
means all of the mineral claims more particularity  described in Schedule A
|--- | ----------------------------------------------------------------------------------------





|(n) | Shares
means 34,000 shares in the capital of the Optionee,  to be issued by the Optionee to the
Optionor pursuant to  Section 2.3 hereof;
|--- | -------------------------------------------------------------------------------------------------------------------------------------------





|(o) | this
Agreement refers to and collectively includes this  agreement and every schedule
attached to this agreement.
|--- | -------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---









|1.2 Headings. The
headings of this Agreement and the schedules are solely for convenience of reference and
do not affect the interpretation of it or define, limit or construe the contents of any
provision of this Agreement.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|1.3 Number and
gender. Words importing the singular number shall include the plural and vice versa,
words importing the neuter gender shall include the masculine and feminine genders, and
words importing persons shall include firms and corporations and vice versa.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|1.4 Governing law.
This Agreement and the rights and obligations and relations of the parties shall be
governed by and construed in accordance with the laws of the Province of Saskatchewan
and the federal laws of Canada applicable therein (but without giving effect to any
conflict of law rules). The parties agree that subject to paragraph 5.4 of this
Agreement, the courts of Saskatchewan shall have jurisdiction to entertain any action or
other legal proceedings based on any provisions of this Agreement. Each party attorns to
the jurisdiction of the courts of the Province of Saskatchewan.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|1.5 Currency. All
references to currency in this Agreement are references to Canadian currency.
|-----------------------------------------------------------------------------------------------



|2. Title to and Option of the Property
|--------------------------------------



|2.1 Optionors
representations and warranties. The Optionor represents and warrants to the Optionee
that:
|---------------------------------------------------------------------------------------------------------



|(a) | it
is beneficial and registered or recorded owner of a 100%  interest in the Property;
|--- | --------------------------------------------------------------------------------------





|(b) | the
Property is in good standing, free and clear of all  encumbrances;
|--- | ----------------------------------------------------------------------





|(c) | to
the best of the Optionors information and belief, all of  the claims comprising the
property have been validly and  properly located, staked, tagged and recorded in
accordance  with the laws of the jurisdiction in which the Property is  located;
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|(d) | it
has the full and undisputed right to deal with the Property  as provided for in this
Agreement;
|--- | --------------------------------------------------------------------------------------------------





|(e) | subject
to the provisions of this Agreement, the Optionor  agrees that during the currency of
this Agreement, the  Optionee shall have quiet enjoyment of the Property; and
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|(f) | the
Optionor is not a non-resident for the purposes of s. 116 of the Income Tax Act (Canada);
|--- | ---------------------------------------------------------------------------------------------





|2.2 Grant of Option to
      earn interest. The Optionor grants to the Optionee the sole and immediate
      working right and option (the Option)) with respect to the Property,
      for the period of
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---







|seven years and five months from the effective date of
      this Agreement (which period of time, if the Optionee is constructing a
      new Goldmill or reconfiguring the existing Seabee Goldmill, to properly
      mine the Property pursuant to the terms of the Feasibility Study, shall
      be automatically extended by the period of time that it takes the Optionee
      to construct or reconfigure, as the case may be, and make operational, such
      a new or reconfigured Goldmill), to earn a one hundred (100%) per cent ownership
      interest in the Property, subject only to the Net Profits Interest in favor
      of the Optionor. This right may be exercised in the manner referred to in
      paragraph 4.2. Concurrent with the execution of this Agreement the Optionor
      shall deliver to the Optionee a conveyance in proper registerable form in
      favor of the Optionee of all right, title and interest of the Optionor in
      the property, duly executed by the Optionor, to be held by the Optionee
      for the purposes of this Agreement. The Optionee may register or record
      any such conveyance in its name for these purposes. The Optionor may file
      this Agreement with Saskatchewan energy and Mines.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2.3 Option
Obligations. In order to maintain in force the working right and option granted to it,
and to exercise the Option, the Optionee must:
|------------------------------------------------------------------------------------------------------------------------------------------------



|(a) | Incur
expenditures of at least $75,000 on or before  December 31, 1994;
|--- | -----------------------------------------------------------------------





|(b) | Incur
Expenditures of at least $100,000 per year for each  of the years 1995, 1996, 1997, and
1998, unless the  Commencement Date of Commercial Production is during this  period and
if the Commencement Date of Commercial  Production is during this period then no
Expenditures are  required to be incurred during or subsequent to the year  in which the
Commencement Date of Commercial Production  occurs;
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|(c) | If
the Commencement Date of Commercial Production has not  occurred on or before December
31, 1998, incur  Expenditures of at least $100,000 per year for each of the  years 1999,
2000, and 2001 and in addition pay the  Optionor the sum of $100,000 per year for each of
years  1999, 2000, and 2001, unless the Commencement Date of  Commercial Production is
during this period. If the  Commencement Date of Commercial Production is during this
period, then no Expenditures are required to be incurred  and no cash payments are
required to be made during or  subsequent to the year in which the Commencement Date of
Commercial Production occurs;
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|(d) | Issue
the Shares to the Optionor as follows:
|--- | --------------------------------------------





| | i. | Eight
Thousand Five Hundred (8,500) shares on or before December 31, 1994 (the  First
Issue Date);
| | -- | ----------------------------------------------------------------------------------------------------



| | ii. | Eight
Thousand Five Hundred (8,500) shares on or before the date that is six (6) months  after
the First  Issue Date;
| | --- | ---------------------------------------------------------------------------------------------------------------------



| | iii. | Eight
Thousand Five Hundred (8,500) shares on or before the date that is twelve (12)  months
after the  First Issue Date; and
| | ---- | -----------------------------------------------------------------------------------------------------------------------------





| |  | 
| |  | 



---



| | iv. | Eight
Thousand Five Hundred (8,500) shares on or before the date that is eighteen (18)  months
after the  First Issue Date;
| | --- | ---------------------------------------------------------------------------------------------------------------------------



| | all on the condition that all consents to such
      issuance (including any consents required from the applicable Securities
      Commission and the Alberta Stock exchange) have been given prior to December
      15, 1994. If all such required consents have not been given prior to December
      15, 1994, then the First Issue Date shall be extended to the date that is
      fifteen days after the date that the last required consent has been given,
      and the Optionee shall have until such extended First Issue Date to issue
      the first issue of Eight Thousand Five Hundred (8,500) Shares to the Optionor.
      The Optionee will use its best efforts to obtain all necessary consents
      or waivers from the applicable Securities Commission and the Alberta Stock
      Exchange.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Expenditures incurred in any year in excess of
the minimum required to maintain  the Optionees interest hereunder shall carry forward
to the following years.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------



|2.4 Lapse or
acceleration of Option. The Optionee may let the working right and Option lapse by
failing to incur any of the Expenditures, by failing to incur any of the Expenditures,
by failing to issue the Shares to the Optionor, or by failing to make any of the
payments referred to in paragraph 2.3, whereupon the Optionee will forthwith reconvey
the Property to the Optionor free and clear of all encumbrances arising through the
Optionee. The Optionee may accelerate any or all of these payments or Expenditures.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|2.5 Working right.
During the currency of the Option and prior to the Commencement Date of Commercial
Production, the Optionee shall have the sole and exclusive working right to enter on and
conduct the Mining Operations on the Property as the Optionee in its sole discretion may
decide. The Optionee shall have quiet and exclusive possession during the currency of
the Option, with full power and authority to the Optionee, its servants, agents, workers
or contractors, to carry on Mining Operations in such manner as the Optionee in its
discretion may determine, including the right to erect, bring and install on the
Property all buildings, plant, machinery, equipment, tools, appliances or supplies as
the Optionee shall deem necessary and proper and the right to remove therefrom
reasonable quantities of rocks, ores and minerals and to transport them for the purposes
of sampling, metallurgical testing and assaying. All Mining Operations conducted by the
Optionee shall be in accordance with good exploration, development and mining practice,
and in compliance with all applicable legislation. The Mining Operations conducted by
the Optionee pursuant to this paragraph 2.5 shall be at the cost of the Optionee, and
the Optionor shall not incur or be liable for any costs whatsoever in respect of capital
or operating expenses in connection with the Mining Operations.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3. Activities Prior to the Commencement Date
of Commercial Production
|---------------------------------------------------------------------



|3.12 Maintenance of Property.
      During the currency of the Option and prior to the Commencement Date of
      Commercial Production, the Optionee shall carry out sufficient
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---



|assessment work to maintain the Property in good standing
      and pay all taxes, assessments and other charges lawfully levied or assessed
      against the Property, except for any part of the Property abandoned pursuant
      to paragraph 3.2. The Optionor shall transmit promptly to the Optionee any
      notices pertaining to taxes, assessments and other chargers.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3.2 Abandonment.
The Optionee may at any time, during the currency of the Option and prior to the
Commencement Date of Commercial Production, abandon any one or more claims which
comprise the Property. The Optionee shall give the Optionor notice in writing of any
abandonment. In the event that any of the claims comprising the Property are abandoned,
the Optionee will retransfer the claims to the Optioner, which shall be in good standing
for a period of at least one year from the notice of abandonment.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3.3 Assessment
work. During the currency of the Option and prior to the Commencement Date of Commercial
Production, the Optionee shall file within the required time frames, the assessment
credits as may become available from Mining Operations conducted on the Property.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3.4 Indemnity.
During the currency of the Option and prior to the Commencement Date of Commercial
Production , the Optionee shall indemnify and save the Optionor harmless from and
against all losses, liabilities, claims, demands, damages, expenses, suits, injury or
death in any way referable to Mining Operations; provided, the Optionor shall not be
indemnified for any loss, liability, claim, demand, damage, expense, injury or death
resulting from the negligence or willful misconduct of the Optionor, and the Optionee
shall cause to be paid all workers and wage earners employed by it or its contractor on
the Property and all materials purchased in connection with it.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3.5 Access to
Mining Operations. During the currency of the Option and prior to the Commencement Date
of Commercial Production, the Optionee shall provide the Optionor on a timely basis with
all technical and cost data and reports relating to Mining Operations performed on the
Property and to Mining Operations at all times. The Optionor will exercise this right at
its own risk and in a manner which will not unduly inconvenience or inhibit the
Optionees Mining Operations on the Property.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3.6 Limitation of
obligations of Optionee. It is understood and agreed that:
|----------------------------------------------------------------------------



|(a) | nothing
contained in this Agreement, nor any payment made,  Mining Operations conducted or
Expenditure incurred by the  Optionee on or in connection with the Property or part of
it,  nor the doing of any act or thing by the Optionee under the  terms of this Agreement
shall obligate the Optionee to do  anything else under this Agreement other than to make
payment  and incur Expenditures to the extent that it may have  expressly undertaken to
do so pursuant to the terms of this  Agreement;
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|(b) | subject
to the terms of this Agreement, the Optionee may at  any time abandon the working right
and option granted to it  under paragraph 2.2 and the Optionee may abandon all or part
of the Property; and
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---







|(c) | in
the event that the Optionee abandoned the working right and  option granted to it under
paragraph 2.2 or abandons all or  part of the Property pursuant to paragraph 3.6(b), the
liabilities and obligations of the Optionee shall cease with  respect to the Property or
the part of it so abandoned and the  Optionee shall reconvey to the Optionor the Property
or part  of it so abandoned, which reconveyance shall be accepted by  the Optionor, with
the Optionee to ensure that the claims are  in good standing for a period of at least one
year from the  notice of abandonment.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|3.7 Equipment. In
the event that the Optionee abandons the working right and option granted to it under
paragraph 2.2, all buildings, plant, equipment, machinery, tools, appliances and
supplies which the Optionee may have brought on the Property, either before or during
the period of the working right and option, may be removed by the Optionee at any time
not later than one year after the abandonment of the working right and option. Any
buildings, plant, equipment, machinery, tools, appliances and supplies left on the
Property during the one year period shall be at the Optionees sole risk and, if not
removed after the one year period, shall become the property of the Optionor.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3.8 Information.
If the Optionee abandons the working right and option granted to it under paragraph 2.2
on all or any portion of the Property, the Optionee shall on request provide the
Optionor with a copy of all non-interpretative reports, maps, plans, drill logs and
surveys of all work pertaining to that portion of the Property on which the Optionee has
abandoned the working right and option. Provided however that the Optionee does not
warrant the accuracy of those reports, maps, plans, drill logs and surveys and shall not
be liable for any inaccuracies contained in them.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4. Commercial Production
|------------------------



|4.1 Commercial
Production Decision. The Optionee shall have the sole and exclusive right, based on the
Feasibility Study, to determine whether to proceed with commercial production of the
Property. The Feasibility Study shall determine, based on the discovered and delineated
reserves of the Property, the economic maximization of extracting the ore given the
tonnage and grade of reserves.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4.2 Interest
earned. If the Commencement Date of Commercial Production is prior to December 31, 2001
(or if the Commencement Date of Commercial Production is later than December 31, 2001,
because the Optionee has or is constructing a new Goldmill or reconfiguring the existing
Seabee Goldmill to properly mine the Property, pursuant to the terms of the Feasibility
Study), then as long as the Optionee shall, pursuant to paragraph 2.3 have incurred the
Expenditures, issued the Shares, and made any payment required by it up to the
Commencement Date of Commercial Production, the Option shall be deemed to have been
fully and properly exercised as at the Commencement Date of Commercial Production and
the Optionee shall remain as the one hundred (100%) per cent vested owner of that part
or parts of the Property as the Optionee may elect, subject only to the Net Profits
Interest in favor of the Optionor.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|4.3 Mining
Operations. If the Optionee exercises its right under paragraph 4.2, and becomes the
owner of a one hundred (100%) per cent ownership interest in the Property, then the
following provisions shall apply to all Mining Operations conducted by the Optionee on
the property from and after the Commencement Date of Commercial Production:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(a) | All
Mining Operations conducted by the Optionee shall be in  accordance with good
exploration, development and mining  practice, and in compliance with all applicable
legislation.  If the Optionee abandons Mining Operations on the Property, it  shall leave
the Property in compliance with all environmental  laws applicable to the Property;
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|(b) | The
Optionee shall provide the Optionor on a timely basis with  all technical and cost data
and reports relating to Mining  Operations performed on the Property, and the Optionor
shall  have access to all data relating to Mining Operations, to the  Property and to
Mining Operations at all times. The Optionor  will exercise this right at its own risk
and in a manner which  will not unduly inconvenience or inhibit the Optionees Mining
Operations on the Property;
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|(c) | The
Optionee shall provide to the Optionor Income and expense  statements respecting Mining
Operations from the Property for  each month, but the twenty-first day of the immediately
following month.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|(d) | Following
the Commencement Date of Commercial Production and  subsequent to January 1, 1999, or at
such earlier date as the  Optionee may deem appropriate, the Optionee shall, as long as
it is economic to mine the ore, as determined by the  Feasibility Study, either:
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





| | i. | mine
and mill from the Property a minimum of 30,000 tonnes of  ore annually; or
| | -- | -------------------------------------------------------------------------------



| | ii. | in
lieu of such production, pay to the Optionor the sum of  $100,000 per year.
| | --- | ------------------------------------------------------------------------------



| | If for any consecutive two year period, the Optionee
      has failed to perform its obligations set out in this paragraph 4.3 (d),
      the Optionee shall transfer the Property to the Optionor free and clear
      of any encumbrances arising through the Optionee, and such transfer shall
      be accepted by the Optionor in full settlement of any claims which the Optionor
      may have against the Optionee for the Optionees failure to perform such
      obligations.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(e) | The
ore from the Property will be processed at the Goldmill  using the other necessary
capital facilities owned by the  Optionee at the Goldmill. The Processing Fee to be
charged by  the Optionee:
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| | i. | for
the use of the Optionees existing or reconfigured  goldmill at its Seabee goldmine
and mill and for the  related capital facilities of the Optionee existing as at  June 30,
1994, shall be ten ($10.00) dollars per tonne of  ore milled; and
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ii. | for
the use of a new Goldmill, shall be nil.
| | --- | --------------------------------------------



|(f) | Notwithstanding
subparagraph (e) (i) of this paragraph 4.3 if the related capital facilities of the
Optionee used in connection with processing the ore from the Property are different than
those  existing as at June 30, 1994, then the Processing Fee shall be an amount as agree
to by the  Optionor and the Optionee, but in no event shall be less than then ($10.00)
dollars per tonne  of ore milled. If no agreement on the amount of the Processing Fee
pursuant to this  subparagraph (f) has been reached between the Optionor and the Optionee
on or before the  Commencement Date of Commercial Production, then the Processing Fee
shall be determined by  arbitration in accordance with paragraph 5.4 hereof, provided
however that in no event shall  the Processing Fee be less than ten ($10.00) dollars per
tonne of ore milled. Until the  arbitrators determine such Processing Fee, the Optionee
shall be entitled to charge a  Processing Fee of Ten ($10.00) Dollars per tonne of ore
milled, which amount shall be adjusted  after the arbitrators have made their
determination;
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|(g) | In
addition to any Processing Fee, the Optionee shall be  entitled to charge a reclamation
fee of $2.00 per tonne of ore  milled and an administration/management fee of $3.50 per
tonne  of ore milled, whether the ore is processed at the existing, a  reconfigured, or a
new Goldmill, with no other  administration/management fees for processing the ore to be
charged by the Optionee; and
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|(h) | All
Expenditures incurred by the Optionee in connection with  the Mining Operations prior to
the Commencement Date of  Commercial Production, including an administration fee of 10%,
plus interest thereon from the date that the Expenditures are  incurred at the prime rate
of interest of Bank of Montreal ply  1.5% per annum, shall be recouped by the Optionee
from the  profits of the Mining Operations, prior to the Optionor being  entitled to the
Net Profits Interest. In calculating this  amount, the Optionee shall offset any revenues
earned prior to  the Commencement Date of Commercial Production, against the
Expenditures.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|5.  General
|-----------



|5.1 Time. Time
shall be of the essence of this Agreement and of every part of it and no extension or
variation of this Agreement shall operate as a waiver of this provision.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|5.2 Confidentiality of Information.
      There shall be no public release by either party of any information concerning
      Mining Operations on the Property without the prior written consent of the
      other party (consent not to be unreasonably withheld or delayed) unless
      the information is
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|required by a lawful authority or other
regulatory body having  jurisdiction, in which case the other party shall have the right
to approve the  information to be disclosed. Each party shall notify the other party
prior to any public  release of material information concerning Mining Operations on the
Property.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|5.3 Force majeure.
Notwithstanding anything contained in this Agreement to the contrary, if the Optionee is
prevented from or delayed in performing any obligation under this Agreement and failure
is occasioned by any cause beyond its reasonable control, excluding only lack of
finances then the time for the observance of the condition or performance of the
obligation in question shall be extended for a period equivalent to the total period the
cause of the prevention or delay persists or remains in effect regardless of the length
of the total period.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|5.4 Arbitration. If
      the parties have any disputes in connection with this Agreement which cannot
      be resolved between them, or if the parties are unable to agree on the amount
      of the Processing Fee pursuant to subparagraph (f) of paragraph 3.4 hereof,
      then the dispute or issue, as the case may be, shall be settled by arbitration
      pursuant to the provisions of The Arbitration Act, 1992 (Saskatchewan)
      as provided in this paragraph. Any party desiring arbitration shall make
      a written demand for the same and within 30 days after such written demand
      is received by the other party, the parties hereto shall agree upon and
      point a single arbitrator. In the event the parties shall fail to agree
      upon and appoint a single arbitrator within the time period set forth herein,
      each party shall within seven (7) days thereafter designate an arbiter,
      and both arbitrators shall within thirty days after their designation, jointly
      designate a third arbitrator satisfactory to them who shall be chairman
      of the arbitration panel. If a party fails to appoint an arbitrator or the
      arbitrators designated by the parties are unable to agree upon the selection
      of the third arbitrator within the time periods set forth above, such arbitrator
      shall be appointed by a Judge of the Court of Queens Bench of Saskatchewan.
      The expenses of the arbitrators shall be paid as the arbitrators shall decide
      in the award. All arbitration proceedings shall be in the City of Saskatoon,
      Saskatchewan, Canada, or elsewhere as the arbitrators shall decide. The
      decision of the arbitrators shall be final and binding on the parties hereto.
      Any and all arbitrators appointed to resolve a dispute pursuant to this
      paragraph 5.4 shall be suitable professionals, having regard to the nature
      of the dispute.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|5.5 Costs. The
Optionor shall reimburse the Optionee for one-half of the legal costs charged by
Optionees solicitors, Messrs. Macpherson Leslie & Tyerman, in connection with the
preparation of this Agreement for the Optionee up to a maximum contribution of the
Optionor of Two Thousand, Five Hundred ($2,500.00) Dollars.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|5.6 No
Partnership. Nothing contained in this Agreement shall be construed as creating a
partnership of any kind or as imposing on any party any partnership duty, obligation or
liability to any other party.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|5.7 Entire
agreement. With respect to the subject-matter of this Agreement, this Agreement:
|-------------------------------------------------------------------------------------------



|(a) | sets
forth the entire agreement between the parties and any  persons who have in the past or
who are now representing  either of the parties;
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------





| |  | 
| |  | 



---





|(b) | supersedes
all prior understandings and communications between  the parties or any of them, oral or
written; and
|--- | ----------------------------------------------------------------------------------------------------------------





|(c) | constitutes
the entire agreement between the parties.
|--- | -----------------------------------------------------





|Each party acknowledges that this Agreement is
entered into after full  investigation and that no party is relying on any statement or
representation  made by any other which is not embodied in this Agreement. Each party
acknowledges that it shall have no right to rely on any amendment, promise,
modification, statement or representation made or occurring subsequent to the  execution
of this Agreement unless it is in writing and executed by each of the  parties.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|5.8 Notices. All
payments and communications which may be or are required to be given by either party to
the other shall (in the absence of any specific provision to the contrary) be in writing
and delivered or sent by prepaid registered mail to the parties, at their following
respective addresses;
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Optionee: | Claude Resources Inc.
      #200, 224 - 4th Avenue South 
      Saskatoon, Saskatchewan 
      S7K 5M5
|--------- | ------------------------------------------------------------------------------------------------------





|Optionor: | Currie Rose Resources Inc. 
      P.O. Box 1134 
      80 King Street St. 
      Catherines, Ontario 
      L2R 7A3
|--------- | -------------------------------------------------------------------------------------------------------------------





|and if any payment or communication is sent by
prepaid registered mail, it shall  ,subject to the following sentence, be conclusively
deemed to have been received  on the third business day following the mailing of it and,
if delivered, it  shall be conclusively deemed to have been received at the time of
delivery.  Notwithstanding the foregoing provisions with respect to mailing, in the event
that it may be reasonably anticipated that, due to any strike, lock-out or  similar event
involving an interruption in postal service, any payment or  communication will not be
received by the addressee by no later than the third  business day following the mailing
of it, then the mailing of any payment or  communication as mentioned shall not be an
effective means of sending it but  rather any payment or communication must then be sent
by an alternative means of  transportation which it may reasonably be anticipated will
cause the payment or  communication to be received reasonably expeditiously be the
addressee. Either  party may from time to time change its address by notice in accordance
with this  paragraph.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|5.9 Benefit of
successors. This Agreement shall ensure to the benefit of and be binding on the parties
and their respective heirs, executors, administrators, successors and assigns.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





| |  | 
| |  | 



---





|IN WITNESS WHEREOF
the parties have hereunto affixed their corporate  seals attested to by the hands of its
duly authorized offers the day and year  set forth above.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------



|       | CLAUDE RESOURCES INC.     
|------ | --------------------------
|(seal) | Per:                      
|       | Per:                      
|       | CURRIE ROSE RESOURCES INC.
|(seal) | Per:                      
|       | Per:                      
|       |                           



| |  | 
| |  | 



---





| | This is Schedule A to the Agreement
      between Claude Resources Inc. and Currie Rose Resources Inc. made as of
      the 15th day of November, 1994
| | --------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                         
|



|Claim Block | Record Date     
|----------- | ----------------
|CBS 7057    | February 8. 1980
|CBS 7058    | February 8, 1980
|CBS 7076    | March 3, 1980   



|All located in the Northern Mining District of
Saskatchewan.
|------------------------------------------------------------



| |  | 
| |  | 



---





| | This is schedule B to the Agreement
      between Claude Resources Inc. And Currie Rose Resources Inc. made as of
      the _________________ day of November, 1994
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                      





|Net Profits
|-----------

|1. | For
the purposes of this Agreement,
|-- | -----------------------------------

| | (a) | Fiscal
Period shall mean each calendar year or other period  of twelve consecutive months
adopted by the Optionee for tax  purposes during the term of this Agreement;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | Net
Profits shall mean that amount by which Revenues  exceed Costs. If Costs exceed
Revenues in any calendar  year, the excess Costs shall be carried forward into the  next
succeeding calendar years.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. | The
Net Profits from the Mining Operations from and after  the Commencement Date of
Commercial Production for any  Fiscal Period shall be allocated seventy (70%) per cent to
the Optionee and thirty (30%) per cent to the Optionor,  until the Optionor has received
Net Profits of One Million  ($1,000,000) Dollars in that Fiscal Period, whereupon the
Net Profits for the balance of that Fiscal Period will be  allocated seventy-five (75%)
percent to the Optionee and  Twenty-five (25%) to the Optionor.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. | For
the purpose of computing Net Profits from and after  the Commencement Date of Commercial
Production under this  Agreement:
|-- | ------------------------------------------------------------------------------------------------------------------------------

| | (a) | Revenues shall mean the total
      proceeds, calculated at the point of sale derived from the sale of ore,
      minerals or other products extracted from the Property, from and after the
      Commencement Date of Commercial Production including revenues from any hedging
      activities, plus all net amounts received from the sale of plant, machinery,
      equipment or other assets on the property prior to the cessation of Mining
      Operations from the Property, if the capital cost for such items have been
      earlier included in Costs in determining Net Profits, but excluding proceeds
      of any sale of the Goldmill; and
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | Costs shall mean all expenditures,
      whether current or capital, incurred on or in connection with the Property
      and related to the exploration, development and placing of the Property
      into production, and all operating, mining, smelting, refining, marketing
      and transportation costs including, without limitations:
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | i. | taxes
(other than income taxes), government royalties and  other like charges, necessary to
maintain the Property in  good standing or otherwise imposed, charged or levied on  the
Property or any production therefrom;
| |  | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| |  | ii. | all
moneys required for the purchase, installation or  construction of buildings, machinery
and equipment;
| |  | --- | ----------------------------------------------------------------------------------------------------------

| |  | iii. | the
Processing Fee;
| |  | ---- | -------------------

| |  | iv. | the
reclamation fee and the administration/management fee,  in accordance with subparagraph
(g) of paragraph 4.3 of  this Agreement;
| |  | --- | ------------------------------------------------------------------------------------------------------------------------------------

| |  | v. | interest
on money borrowed by the Optionee at a rate per  annum equal to the prime rate of
interest of the Bank of  Montreal plus 1.5%;
| |  | -- | ---------------------------------------------------------------------------------------------------------------------------------------

| |  | vi. | all
salaries, remuneration and fringe benefits, shipping  expenses, legal expenses, audit
fees, costs associated  with shut-down once Mining Operations cease; and
| |  | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | vii. | all
other chargers and expenses usually made or incurred  for a like operation and accounted
for in accordance with  generally accepted accounting principles.
| |  | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------

| | i. | outlays
of a capital nature shall not be amortized; and
| | -- | -------------------------------------------------------

| | ii. | if
any expenditure incurred in connection with the Property is  also incurred in connection
with other property, the Optionee  shall allocate on a pro rata basis, the amount of such
expenditure that is incurred on or in connection with the  Property.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4. | The
estimated portion of the Net Profits due hereunder shall  be paid in four quarterly
installments with a final adjustment  to be made when the final amount of Net Profits is
determined  for the Fiscal Period in question. Final determination of  audited Net
Profits shall be completed for any particular  Fiscal Period on or before May1 in the
next Fiscal Period and  any adjustment required by such final determination shall be
made in the following quarterly installments.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5. | Nothing
contained in this Schedule B or this Agreement to  which it is attached shall
be construed as conferring upon the  Optionor any right to or beneficial interest in the
Property.  The right to receive the Net Profits Interest from the  Optionee as and when
due shall be and shall be deemed to be a  contractual right only.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|[Logo]                   
|-------------------------
|PLACER DOME (CLA) Limited
|                         
|                         



|December 15, 2000
|-----------------



|Claude Resources Inc.  Suite 200, 224 - 4th
Avenue South Saskatoon, Saskatchewan  S7K 5M5
|-----------------------------------------------------------------------------------------



|Dear Sirs:
|----------



|Re: | Amendment No. 1 to Agreement between
      Placer Dome (CLA) Limited and Claude Resources Inc.
|--- | ----------------------------------------------------------------------------------------------





|This letter (the Amendment) modifies the
      terms of the letter agreement dated November 8, 2000 (the Letter
      Agreement) between Placer Dome (CLA) Limited (Placer)
      and Claude Resources Inc. (Claude), pursuant to which
      Placer acquired an option (the Option) to earn an undivided
      55% interest in the Property, and thereafter participate in a joint venture
      with Claude for the purpose of the development and operation of a mine thereon.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Capitalised terms used herein and not otherwise
defined shall have the same  meaning as in the Letter Agreement.
|----------------------------------------------------------------------------------------------------------------



|Notwithstanding paragraphs 4.7(c) and 4.10(c) of
the Letter Agreement and any  other provision therein to the contrary, if during the
Option Period, a work  order, charge, or similar notification, from a governmental or
regulatory  authority (collectively the Work Order), in relation to the shaft
or its  operation, is issued or made as a result of:
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|i) | any
violation or contravention of federal, provincial or local laws,  rules, regulations,
ordinances or orders; or
|-- | ------------------------------------------------------------------------------------------------------------------

|ii) | the
failure to be in compliance with all material authorizations,  licenses, permits,
consents, certificates and orders of any  governmental or regulatory body,
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



|which result from or relate to any condition or
state of facts in existence on  the Effective Date and in Placers estimate, acting
reasonably, the cumulative  costs including applicable taxes (the Rectification
Costs) to rectify the  deficiencies set out in the Work Order (the
Deficiencies), would be in excess  of $200,000.00, and Placer is not prepared
to pay all of the Rectification  Costs, then the following conditions will be applicable:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|1. | Placer
shall  forthwith give a notice to Claude (the Work Order Notice) which shall
contain  the following information:
|-- | -------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---



| | (a) | a
copy of the Work Order;
| | --- | -------------------------

| | (b) | the
budget prepared by Placer outlining the Rectification Costs; and
| | --- | --------------------------------------------------------------------

| | (c) | a
statement that Placer is not prepared to pay all of the  Rectification Costs.
| | --- | -------------------------------------------------------------------------------

|2. | Claude
shall have thirty (30) days after the Work Order Notice within  which to notify Placer
whether or not Claude is prepared to pay the  Rectification Costs in excess of $200,000.00
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. | If
Claude provides Placer with a notice that it is not prepared to pay  the Rectification
Costs in excess of $200,000.00, then Placer shall  have the right to switch off the pumps
on the Shaft.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4. | If
Claude provides Placer with a notice that it is prepared to pay the  Rectification Costs
in excess of $200,000.00, the Placer and Claude  shall jointly rectify the Deficiencies,
with Placer to pay the first  $200,000.00 in Rectification Costs and Claude to pay any
Rectification  Costs in excess of $200,000.00. In such event, notwithstanding any
provision in the Letter Agreement to the contrary, Claude shall, at it  own risk and
expense, have full access to the Property to the extent  necessary to perform its share
of the rectification of the  Deficiencies.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|If Placer and Claude do not agree on whether the
Work Order results from or  relates to any condition or state of facts in existence on
the Effective Date,  then, notwithstanding any provision in the Letter Agreement to the
contrary, the  matter will be determined by arbitration pursuant to the Commercial
Arbitrations  Act (Ontario) by a single arbitrator, with the location of such arbitration
to  be in Toronto, Ontario.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Paragraph 4.7(b) of the Letter Agreement is
hereby deleted and replaced with the  following phrase, complete remediation and
reclamation of the Property to  regulatory standards in respect of any work performed by
Placer on the  Property:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|This Amendment may be executed by facsimile and
in any number of counterparts,  and it will not be necessary that the signatures of both
parties be contained on  any counterpart. Each counterpart will be deemed to be an
original, but all  counterparts together will constitute one and the same instrument.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|If the terms of this Amendment are acceptable to
you, please sign the enclosed  copies of this letter and return one fully signed copy of
the same to the  undersigned at your earliest convenience. This Amendment will then
constitute a  binding agreement and will, together with the Agreement, serve as the basis
for  a detailed Option and Joint Venture Agreement.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Yours truly,             
| | -------------------------
| |                          
| | PLACER DOME (CLA) LIMITED
| |                          
| | By:s/s G. Pirie, CFO     



| |  | 
| |  | 



---





|Accepted and agreed to this 15th day of
December, 2000
|------------------------------------------------------

| | Yours truly,                                    
| | ------------------------------------------------
| |                                                 
| | CLAUDE RESOURCES INC.                           
| |                                                 
| | By:/s/ Arnie E. Hillier, Vice Chairman, CEO, CFO



| |  | 
| |  | 



---





|[Logo]                   
|-------------------------
|PLACER DOME (CLA) Limited
|                         
|                         





|December 15, 2000
|-----------------



|Claude Resources Inc. 
      Suite 200, 224 - 4th Avenue South 
      Saskatoon, Saskatchewan 
      S7K 5M5
|------------------------------------------------------------------------------------------------------------



|Dear Sirs:
|----------



|Re: | Amendment No. 2 to Agreement between
      Placer Dome (CLA) Limited and Claude Resources Inc.
|--- | ----------------------------------------------------------------------------------------------





|This letter (the Amendment) modifies
the terms of the letter agreement dated  November 8, 2000 (the letter
Agreement), between Placer Dome (CLA) Limited  (Placer) and Claude
Resources Inc. (Claude), as amended by Amendment No. 1,  dated December 15,
2000, pursuant to which Placer acquired an option (the  Option) to earn an
undivided 55% interest in the Property, and thereafter  participate in a joint venture
with Claude for the purpose of the development  and operation of a mine thereon.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Capitalized terms used herein and not otherwise
defined shall have the same  meaning as in the Letter Agreement.
|----------------------------------------------------------------------------------------------------------------



|Placer and Claude hereby agree as follows:
|------------------------------------------

| | 1. | Paragraph
1.1 of the Letter Agreement is deleted and replace with  paragraph 1.1 set out in the
Schedule A attached to this  Amendment; and
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------

| | 2. | Schedule A-1 to the Letter Agreement
      is deleted and replaced with Schedule A-1 to this Amendment.
| | -- | -----------------------------------------------------------------------------------------------------------

| | 3. | The 26 (twenty six) patented mining claims comprising
      the Buffalo Property and more specifically described in Schedule
      B attached hereto, are excluded from the terms of the Letter
      Agreement pending confirmation of the terms of an underlying agreement between
      Madsen Gold Mines and Wilanour Resources.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4. | Claude
will use its best efforts to resolve the terms of the  underlying agreement and
specifically the right of first refusal  held by Wilanour (now Goldcorp Inc.) on the
Buffalo propery.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5. | Should
it be confirmed that the right of first refusal does not  exist, Claude will immediately
notify) Placer and both parties  will amend the Letter Agreement to again include the
Buffalo  Property. The terms and conditions of the Letter Agreement will  then apply to
the Buffalo Property.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|This Amendment may be executed by facsimile and
in any number of counterparts,  and it will not be necessary that the signature of both
parties be contained on  any counterpart. Each counterpart will be deemed to be an
original, but all  counterparts together will constitute one and the same instrument.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|If the terms of this Agreement are acceptable to
you, please sign the enclosed  copies of this letter and return one fully signed copy of
the same to the  undersigned at your earliest convenience. This Amendment will then
constitute a  binding agreement.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                             | Yours truly,                                    
|------------------------------------------------------------ | ------------------------------------------------
|                                                             |                                                 
|                                                             | PLACER DOME (CLA) LIMITED                       
|                                                             |                                                 
|                                                             | By: /s/ G. Pirie, CFO                           
|                                                             |                                                 
|Accepted and agreed to this 15th day
      of December, 2000
|                                                             |                                                 
|                                                             | CLAUDE RESOURCES INC.                           
|                                                             |                                                 
|                                                             | By:/s/ Arnie E. Hillier, Vice Chairman, CEO, CFO















| |  | 
| |  | 



---





|SCHEDULE A
|------------

|1.1 | The
Property consists of:
|--- | -------------------------

| | (a) | a 100% interest in 63 patented mining claims
      and 1 License of Occupation encompassing an area of approximately 3159,656
      acres in the Red Lake District of Ontario (the Madsen Property)
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | a 100% interst in 35 patented mining claims
      encompassing an area of approximately 1730.89 acres in the Red Lake District
      of Ontario (the Starratt-Olson Property)
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c) | a 100% interest in 50 patented mining claims
      encompassing approximately 2458.03 acres in the Red Lake District of Ontario
      (the Aiken-Russet Property)
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d) | a 100% interest in 31 patented mining claims
      encompassing approximately 1654.80 acres in the Red Lake District of Ontario
      (the Exploration Property)
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (e) | a 100% interest in 1 mining lease and 3 unpatented
      mining claims encompassing an area of approximately 330.82 acres in the
      Red Lake District of Ontario (the Hagar Property)
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (f) | a 20% interest in 14 patented mining claims
      encompassing an area of approximately 677.10 acres in Red Lake District
      of Ontario (the Redaurum Property) (g) the surface rights
      of Claude located in the Red Lake District of Ontario (the Surface
      Rights); and (h) the shaft and hoist located on the Property,
      as described in Schedule A-3 of the Agreement;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | all as more particularly described and subject
      to the royalties set out in Schedule A-1, A-2 and A-3 to this Agreement,
      and any Crown royalties and subject to the terms and conditions of the agreements
      (the Underlying Agreements) set out in Schedule
      A-4 to this Agreement.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---



|Schedule A-1 
      Madsen Property
|-----------------------------------

|Claim No. | Parcel         | Area (ac.) | Township | Patent      
|--------- | -------------- | ---------- | -------- | ------------
|KRL       | 11502          | 1291       | 45.67    | Baird       
|KRL       | 11503          | 1292       | 46.64    | Baird       
|KRL       | 11504          | 1293       | 49.31    | Baird       
|KRL       | 11505          | 1294       | 66.14    | Baird       
|KRL       | 11506          | 1295&5259  | 67.35    | Baird       
|KRL       | 11507          | 1296       | 25.42    | Baird       
|KRL       | 11508          | 1297       | 46.02    | Baird       
|KRL       | 11509&A        | 1298&5259  | 82.38    | Baird       
|KRL       | 12521          | 1299&5259  | 41.05    | Baird       
|KRL       | 12522          | 1300&5259  | 55.03    | Baird       
|KRL       | 12523          | 1301&5259  | 30.69    | Baird       
|KRL       | 12524          | 1278       | 38.12    | Baird       
|KRL       | 12525          | 1279       | 46.86    | Baird       
|KRL       | 12526          | 1280       | 45.50    | Baird       
|KRL       | 12527          | 1303+5259  | 110.51   | Baird       
|KRL       | 12528          | 1281+5259  | 31.42    | Baird       
|KRL       | 12529          | 1304       | 47.46    | Baird       
|KRL       | 12601          | 1282       | 63.96    | Baird       
|KRL       | 12602          | 1283       | 34.36    | Baird       
|KRL       | 12603          | 1284       | 76.66    | Baird       
|KRL       | 12604          | 1285       | 67.05    | Baird       
|KRL       | 12605          | 1286       | 49.19    | Baird       
|KRL       | 12638          | 1287       | 54.15    | Baird       
|KRL       | 12639          | 1288       | 59.43    | Heyson      
|KRL       | 12640          | 1289       | 64.47    | Heyson      
|KRL       | 12641          | 1290       | 50.19    | Heyson      
|KRL       | 12658(KRL13)   | 1015       | 35.53    | Baird       
|KRL       | 12659          | 1004       | 42.90    | Baird       
|KRL       | 12660          | 1005       | 48.00    | Baird       
|KRL       | 12661          | 1020       | 49.97    | Baird       
|KRL       | 12662          | 1021       | 41.50    | Baird       
|KRL       | 12663          | 1022       | 65.48    | Baird       
|KRL       | 12664(KRL4)    | 1006       | 39.27    | Baird&Heyson
|KRL       | 12665(KRL14)   | 1016       | 42.74    | Baird       
|KRL       | 12666          | 1023       | 44.19    | Heyson      
|KRL       | 12667(KRL5)    | 1007       | 40.89    | Baird       
|KRL       | 12668(KRL13)   | 1008       | 44.82    | Heyson      
|KRL       | 12669          | 1009       | 51.66    | Heyson      
|KRL       | 12673(KRL1191) | 1522       | 20.30    | Heyson      
|KRL       | 12674          | 1523       | 41.70    | Baird&Heyson
|KRL       | 12675(KRL15)   | 1524       | 55.55    | Baird&Heyson
|KRL       | 12676(KRL1190) | 1521       | 58.20    | Heyson      



| |  | 
| |  | 



---





|KRL | 12677(KRL1189) | 1520 | 50.30 | Heyson | 10345 | MR+RemSR
|--- | -------------- | ---- | ----- | ------ | ----- | --------
|KRL | 12678          | 1525 | 47.00 | Heyson | 10346 | MR+RemSR
|KRL | 12679          | 1526 | 38.80 | Heyson | 10347 | MR+RemSR
|KRL | 12680          | 1527 | 78.15 | Heyson | 10348 | MR+SR   
|KRL | 12681          | 1528 | 36.90 | Heyson | 10349 | MR+SR   
|KRL | 12682          | 1529 | 50.30 | Heyson | 10350 | MR+SR   
|KRL | 12683          | 1530 | 50.25 | Heyson | 9583  | MR+RemSR
|KRL | 12684          | 1531 | 30.39 | Heyson | 9582  | MR+RemSR
|KRL | 12836          | 1276 | 76.28 | Baird  | 9612  | MR+SR   
|KRL | 12837          | 1275 | 53.84 | Baird  | 9119  | MR+SR   
|KRL | 12838          | 1302 | 71.38 | Heyson | 96129 | MR+SR   
|KRL | 12921          | 1010 | 17.31 | Baird  | 91199 | MR+SR   
|KRL | 12922          | 1011 | 22.57 | Baird  | 9120  | MR+SR   
|KRL | 13024          | 1012 | 50.04 | Baird  | 9121  | MR+SR   
|KRL | 36016          | 4271 | 43.19 | Baird  | 16021 | MR      
|KRL | 36017          | 4272 | 41.10 | Baird  | 16022 | MR      
|KRL | 36018          | 4273 | 41.19 | Baird  | 16023 | MR      
|KRL | 36019          | 4274 | 39.30 | Baird  | 16024 | MR      
|KRL | 38091          | 4275 | 21.57 | Baird  | 16025 | MR      
|KRL | 38092          | 4276 | 49.89 | Baird  | 16026 | MR      
|KRL | 38094          | 4277 | 39.51 | Baird  | 16027 | MR      
|    |                |      |       |        |       |         

| |  | Total Patent Area:   3067.00
      acres |          
| |  | ---------------------------------------- | ---------
| |  |                                          |          
| |  | License No.                              | Issued   
| |  | 13528                                    | 20-Mar-63
| |  |                                          |          
| |  | Total License Area
        92.656 acres  |          
| |  |                                          |          
| |  | Total Area:   3159.656
      acres       |          



| |  | 
| |  | 



---



|Schedule A-1 
      Hager Property
|----------------------------------



|Lease No. | Parcel | Issued    | Expiry    | Area (ac.) | Township | MNR No.     
|--------- | ------ | --------- | --------- | ---------- | -------- | ------------
|123519    | 560 PL | 12-May-77 | 16-Dec-19 | 130.82     | Baird    | 103228 MR+SR
|          |        |           |           |            |          |             



|Claim No.   | Staked                     | Expiry    | Area (ac.) | Township
|----------- | -------------------------- | --------- | ---------- | --------
|KRL 1184229 | 16-Feb-95                  | 16-Feb-02 | 40.00      | Baird   
|KRL 1184231 | 4-May-95                   | 4-May-02  | 80.00      | Baird   
|KRL 1184902 | 4-May-99                   | 4-May-01  | 80.00      | Baird   
|            |                            |           |            |         
|            | Total Area:   330.82 acres |           |           



| |  | 
| |  | 



---



|Schedule A-1 
      Aiken-Russet Property
|-----------------------------------------

|Claim No.   | Parcel | Area (ac.) | Township | Patent |      
|----------- | ------ | ---------- | -------- | ------ | -----
|KRL 12726   | 1513   | 54.83      | Baird    | 10322  | MR+SR
|KRL 12727   | 1514   | 50.54      | Baird    | 10323  | MR+SR
|KRL 12728   | 1496   | 51.46      | Baird    | 10289  | MR+SR
|KRL 12820   | 1497   | 29.50      | Baird    | 10290  | MR+SR
|KRL 12821   | 1498   | 32.58      | Baird    | 10291  | MR+SR
|KRL 12822   | 1499   | 27.74      | Baird    | 10292  | MR+SR
|KRL 12823   | 1500   | 42.91      | Baird    | 10293  | MR+SR
|KRL 12824   | 1501   | 46.65      | Baird    | 10294  | MR+SR
|KRL 18728   | 2248   | 68.33      | Baird    | 11660  | MR+SR
|KRL 18729   | 2249   | 75.55      | Baird    | 11661  | MR+SR
|KRL 18778   | 2250   | 57.56      | Baird    | 11662  | MR+SR
|KRL 19181   | 1909   | 51.67      | Baird    | 11015  | MR+SR
|KRL 19182   | 1910   | 53.11      | Baird    | 11016  | MR+SR
|KRL 19235   | 1911   | 61.29      | Baird    | 11017  | MR+SR
|KRL 19236   | 1907   | 39.26      | Baird    | 11007  | MR+SR
|KRL 19237   | 1908   | 33.62      | Baird    | 11008  | MR+SR
|KRL 19238   | 1912   | 60.68      | Baird    | 11018  | MR+SR
|KRL 19278   | 2251   | 65.57      | Baird    | 11663  | MR+SR
|KRL 19279   | 2252   | 45.24      | Baird    | 11664  | MR+SR
|KRL 19280   | 2253   | 65.64      | Baird    | 11665  | MR+SR
|KRL 19281   | 2254   | 50.25      | Baird    | 11666  | MR+SR
|KRL 19367   | 2255   | 45.64      | Baird    | 11667  | MR+SR
|KRL 19368   | 2256   | 34.88      | Baird    | 11668  | MR+SR
|KRL 19684   | 2434   | 45.59      | Baird    | 12198  | MR+SR
|KRL 19685   | 2243   | 45.05      | Baird    | 11652  | MR+SR
|KRL 19686   | 2257   | 37.18      | Baird    | 11669  | MR+SR
|KRL 19687   | 2239   | 66.91      | Baird    | 11648  | MR+SR
|KRL 19688   | 2240   | 37.34      | Baird    | 11649  | MR+SR
|KRL 19719   | 2258   | 35.05      | Baird    | 11670  | MR+SR
|KRL 19720   | 2259   | 49.01      | Baird    | 11671  | MR+SR
|KRL 19788   | 2435   | 16.60      | Baird    | 12199  | MR+SR
|KRL 20169   | 2260   | 55.82      | Baird    | 11672  | MR+SR
|KRL 20170   | 2241   | 57.30      | Baird    | 11650  | MR+SR
|KRL 20171   | 2242   | 51.41      | Baird    | 11651  | MR+SR
|KRL 20585&A | 2261   | 113.81     | Baird    | 11673  | MR+SR
|KRL 20586&A | 2262   | 95.43      | Baird    | 11674  | MR+SR
|KRL 20587&A | 2263   | 101.36     | Baird    | 11675  | MR+SR
|KRL 20588   | 2264   | 61.45      | Baird    | 11676  | MR+SR
|KRL 21273   | 2265   | 17.87      | Baird    | 11677  | MR+SR
|KRL 21274   | 2266   | 17.51      | Baird    | 11678  | MR+SR
|KRL 21275   | 2267   | 18.71      | Baird    | 11679  | MR+SR
|KRL 21276   | 2268   | 24.17      | Baird    | 11680  | MR+SR
|KRL 21277   | 2269   | 20.95      | Baird    | 11681  | MR+SR
|KRL 21278   | 2270   | 26.56      | Baird    | 11682  | MR+SR
|KRL 21280   | 2271   | 26.41      | Baird    | 11683  | MR+SR
|KRL 21281   | 2272   | 35.22      | Baird    | 11684  | MR+SR
|KRL 21316   | 2273   | 125.67     | Baird    | 11685  | MR+SR



| |  | 
| |  | 



---



|KRL 21317 | 2274                        | 43.66 | Baird | 11686 | MR+SR
|--------- | --------------------------- | ----- | ----- | ----- | -----
|KRL 21318 | 2275                        | 30.48 | Baird | 11687 | MR+SR
|KRL 21378 | 2276                        | 57.01 | Baird | 11688 | MR+SR
|          |                             |       |       |       |      
|          | Total Area:   2458.03 acres |       |       |      



| |  | 
| |  | 



---







|Schedule A-1 
      Exploration Property
|----------------------------------------

|Claim No.         | Parcel                                   | Area (ac.) | Township | Patent |         
|----------------- | ---------------------------------------- | ---------- | -------- | ------ | --------
|KRL 19247         | 1792                                     | 37.99      | Heyson   | 10828  | MR+RemSR
|KRL 19248         | 1793                                     | 39.44      | Heyson   | 10829  | MR+SR   
|KRL 19249         | 1794                                     | 40.01      | Heyson   | 10830  | MR+SR   
|KRL 19250         | 1795                                     | 44.64      | Heyson   | 10831  | MR+SR   
|KRL 19251         | 1796                                     | 40.83      | Heyson   | 10832  | MR+SR   
|KRL 19252         | 1797                                     | 43.16      | Heyson   | 10833  | MR+SR   
|KRL 19253         | 1798                                     | 34.33      | Heyson   | 10834  | MR+SR   
|KRL 19254         | 1799                                     | 34.66      | Heyson   | 10835  | MR+SR   
|KRL 19306         | 1800                                     | 40.78      | Heyson   | 10836  | MR+SR   
|KRL 19307         | 1801                                     | 34.32      | Heyson   | 10837  | MR+SR   
|KRL 19308         | 1802                                     | 30.69      | Heyson   | 10838  | MR+SR   
|KRL 19430         | 1803                                     | 60.14      | Heyson   | 10839  | MR+SR   
|KRL 19309         | 1821                                     | 25.69      | Heyson   | 10865  | MR+SR   
|KRL 19310         | 1822                                     | 26.56      | Heyson   | 10866  | MR+SR   
|KRL 19311         | 1823                                     | 31.11      | Heyson   | 10867  | MR+SR   
|KRL19312          | 1824                                     | 29.92      | Heyson   | 10868  | MR+SR   
|KRL 19313         | 1825                                     | 39.71      | Heyson   | 10869  | MR+SR   
|KRL 19428         | 1826                                     | 48.15      | Heyson   | 10870  | MR+SR   
|KRL 19429         | 1827                                     | 44.92      | Heyson   | 10871  | MR+SR   
|KRL 12759 (K1456) | 1615                                     | 51.70      | Heyson   | 10510  | MR+SR   
|KRL 12758 (K1457) | 1616                                     | 34.90      | Heyson   | 10511  | MR+SR   
|KRL 12764         | 1617                                     | 29.00      | Heyson   | 10512  | MR+SR   
|KRL 12765         | 1618                                     | 25.39      | Heyson   | 10513  | MR+SR   
|KRL 12766         | 1619                                     | 33.98      | Heyson   | 10514  | MR+SR   
|KRL 12760 (K5447) | 1625                                     | 26.10      | Heyson   | 10524  | MR+SR   
|KRL 19223         | 1629                                     | 31.06      | Heyson   | 10531  | MR+SR   
|KRL 19224         | 1630                                     | 26.31      | Heyson   | 10532  | MR+SR   
|KRL 19225         | 1631                                     | 40.35      | Heyson   | 10533  | MR+SR   
|KRL 19226         | 1632                                     | 29.56      | Heyson   | 10534  | MR+SR   
|KRL 16672         | 1633                                     | 39.96      | Heyson   | 10535  | MR+RemSR
|KRL 16673         | 1634                                     | 54.71      | Heyson   | 10536  | MR+RemSR
|                  |                                          |            |          |        |         
|                  | Total Patent Area:   1150.07
      acres |            |         



|Lease No. | Parcel                                 | Issued    | Expiry    | Area (ac.) | Township | MNR No.     
|--------- | -------------------------------------- | --------- | --------- | ---------- | -------- | ------------
|109229    | 455 PL                                 | 21-Dec-73 | 26-Jun-16 | 236.98     | Heyson   | 102907 MR+SR
|109990    | 435 PL                                 | 1-Feb-72  | 26-Jun-16 | 267.75     | Heyson   | 102670 MR   
|          |                                        |           |           |            |          |             
|          | Total Lease Area:   504.73
      acres |           |           |           
|          | Total Area:   1654.80 acres            |           |           |           





| |  | 
| |  | 



---



|Schedule A-1 
      Redaurum Property
|-------------------------------------

|Claim No. | Parcel                     | Area (ac.) | Township | Patent |      
|--------- | -------------------------- | ---------- | -------- | ------ | -----
|KRL 12499 | 1770                       | 26.40      | Baird    | 10787  | MR+SR
|KRL 12450 | 1771                       | 36.70      | Baird    | 10788  | MR+SR
|KRL12253  | 1772                       | 59.60      | Baird    | 10789  | MR+SR
|KRL 12249 | 1773                       | 47.50      | Baird    | 10790  | MR+SR
|KRL 12252 | 1774                       | 57.70      | Baird    | 10791  | MR+SR
|KRL 13063 | 1494                       | 46.28      | Baird    | 9396   | MR+SR
|KRL 13064 | 1494                       | 54.01      | Baird    | 9397   | MR+SR
|KRL 13078 | 1494                       | 71.80      | Baird    | 9401   | MR+SR
|KRL 13079 | 1494                       | 49.25      | Baird    | 9398   | MR+SR
|KRL 13080 | 1494                       | 43.72      | Baird    | 9402   | MR+SR
|KRL 13081 | 1494                       | 52.01      | Baird    | 9403   | MR+SR
|KRL13085  | 1494                       | 61.17      | Baird    | 9405   | MR+SR
|KRL 13086 | 1494                       | 43.31      | Baird    | 9406   | MR+SR
|KRL 13087 | 1494                       | 48.65      | Baird    | 9400   | MR+SR
|          |                            |            |          |        |      
|          | Total Area:   697.10 acres |            |          |       



| |  | 
| |  | 



---



|Schedule A-1 
      Starratt-Olsen Property
|-------------------------------------------

|Claim No.   | Parcel                      | Area (ac.) | Township | Patent |         
|----------- | --------------------------- | ---------- | -------- | ------ | --------
|KRL 12642&A | 7119 1433                   | 78.12      | Baird    | 9970   | MR+SR   
|KRL 12643&A | 7119 1434                   | 113.53     | Baird    | 9971   | MR+SR   
|KRL 12644&A | 7119 1435                   | 91.91      | Baird    | 9972   | MR+SR   
|KRL 12645   | 7119 1436                   | 58.13      | Baird    | 9973   | MR+SR   
|KRL 12646   | 7119 1424                   | 25.15      | Baird    | 9961   | MR+SR   
|KRL 12647   | 7119 1425                   | 52.20      | Baird    | 9962   | MR+RemSR
|KRL 12648   | 7119 1432                   | 38.74      | Baird    | 9969   | MR+SR   
|KRL 12704   | 7119 1423                   | 44.16      | Baird    | 9956   | MR+RemSR
|KRL 12705   | 7119 1415                   | 66.39      | Baird    | 9946   | MR+RemSR
|KRL 12706   | 7119 1416                   | 19.71      | Baird    | 9947   | MR+SR   
|KRL 12730   | 1417                        | 57.44      | Baird    | 9948   | MR      
|KRL 12858   | 7119 1659                   | 35.92      | Baird    | 10604  | MR+SR   
|KRL 12859   | 7119 1660                   | 28.15      | Baird    | 10605  | MR+SR   
|KRL 12860   | 7119 1661                   | 24.64      | Baird    | 10606  | MR+SR   
|KRL 12861   | 7119 1662                   | 27.22      | Baird    | 10607  | MR+SR   
|KRL 12862   | 7119 1673                   | 36.09      | Baird    | 10620  | MR+SR   
|KRL 12863   | 7119 1663                   | 37.26      | Baird    | 10608  | MR+SR   
|KRL 12864   | 7119 1674                   | 34.86      | Baird    | 10621  | MR+SR   
|KRL 12865   | 7119 1675                   | 29.81      | Baird    | 10622  | MR+SR   
|KRL 12866   | 7119 1664                   | 23.66      | Baird    | 10609  | MR+SR   
|KRL 12875   | 7119 1668                   | 42.49      | Baird    | 10613  | MR+SR   
|KRL 12876   | 7119 1665                   | 56.11      | Baird    | 10610  | MR+SR   
|KRL 12877   | 7119 1676                   | 37.05      | Baird    | 10623  | MR+SR   
|KRL 12878   | 7119 1669                   | 20.34      | Baird    | 10614  | MR+SR   
|KRL 12879   | 7119 1670                   | 38.41      | Baird    | 10615  | MR+SR   
|KRL 12880   | 7119 1666                   | 54.97      | Baird    | 10611  | MR+SR   
|KRL 12881&A | 7119 1667                   | 85.32      | Baird    | 10612  | MR+SR   
|KRL 12882&A | 7119 1671                   | 71.73      | Baird    | 10616  | MR+SR   
|KRL 12883   | 7119 1672                   | 42.84      | Baird    | 10617  | MR+SR   
|KRL 12953   | 7119 1426                   | 70.51      | Baird    | 9963   | MR+RemSR
|KRL 12954   | 7119 1427                   | 78.43      | Baird    | 9964   | MR+RemSR
|KRL 12955   | 7119 1428                   | 70.32      | Baird    | 9965   | MR+SR   
|KRL 12963   | 7119 1429                   | 58.93      | Baird    | 9966   | MR+SR   
|KRL 12964   | 7119 1430                   | 28.39      | Baird    | 9967   | MR+SR   
|KRL 12965   | 7119 1431                   | 51.96      | Baird    | 9968   | MR+SR   
|            |                             |            |          |        |         
|            | Total Area:   1730.89 acres |            |          |       



| |  | 
| |  | 



---



|Schedule B 
      Buffalo Property
|----------------------------------

|Claim No. | Parcel                                   | Area (ac.) | Township | Patent |         
|--------- | ---------------------------------------- | ---------- | -------- | ------ | --------
|K 1423    | 1351 6108                                | 41.50      | Heyson   | 9751   | MR+RemSR
|K 1424    | 1352 6108                                | 39.80      | Heyson   | 9752   | MR+RemSR
|K 1425    | 1353 6108                                | 52.20      | Heyson   | 9753   | MR+RemSR
|K 1426    | 1354 6108                                | 54.90      | Heyson   | 9754   | MR+RemSR
|K 1427    | 1355 6108                                | 42.20      | Heyson   | 9755   | MR+RemSR
|K 1428    | 1356 6108                                | 41.50      | Heyson   | 9756   | MR+SR   
|K 1429    | 1357 6108                                | 36.80      | Heyson   | 9757   | MR+SR   
|K 1430    | 1358 6108                                | 50.00      | Heyson   | 9758   | MR+SR   
|K 1431    | 1359 6108                                | 31.40      | Heyson   | 9759   | MR+RemSR
|K 1432    | 1360 6108                                | 39.00      | Heyson   | 9760   | MR+RemSR
|K 1433    | 353 6108                                 | 37.10      | Heyson   | 8068   | MR+RemSR
|K 1434    | 354  6108                                | 64.20      | Heyson   | 8069   | MR+SR   
|K 1435    | 355  6108                                | 40.90      | Heyson   | 8070   | MR+RemSR
|K 1436    | 356  6108                                | 70.70      | Heyson   | 8071   | MR+SR   
|K 1437    | 357  6108                                | 53.70      | Heyson   | 8072   | MR+SR   
|K 1438    | 358  6108                                | 47.10      | Heyson   | 8073   | MR+SR   
|K 1439    | 1361 6108                                | 70.00      | Heyson   | 9761   | MR+SR   
|K 1440    | 1362  6108                               | 49.10      | Heyson   | 9762   | MR+SR   
|K 1441    | 1363 6108                                | 28.60      | Heyson   | 9763   | MR+SR   
|K 1474    | 6108                                     | 84.70      | Heyson   | 8074   | MR      
|K 1475    | 360 6108                                 | 67.80      | Heyson   | 8075   | MR+RemSR
|K 1585    | 256 6108                                 | 28.30      | Heyson   | 8065   | MR+SR   
|K 1586    | 361 6108                                 | 12.90      | Heyson   | 8076   | MR+SR   
|K 1587    | 362 6108                                 | 28.10      | Heyson   | 8077   | MR+SR   
|K 1588    | 363 6108                                 | 21.40      | Heyson   | 8078   | MR+SR   
|K 1589    | 364 6108                                 | 7.70       | Heyson   | 8079   | MR+SR   
|          |                                          |            |          |        |         
|          | Total Patent Area:   1141.60
      acres |            |          |       



| |  | 
| |  | 



---





|[Logo]                   
|-------------------------
|PLACER DOME (CLA) Limited
|                         
|                         





|November 8, 2000
|----------------



|Claude Resources Inc. 
      Suite 200, 224 - 4th Avenue South 
      Saskatoon, Saskatchewan 
      S7K 5M5
|------------------------------------------------------------------------------------------------------------

|Dear Sirs:
|----------



|Re: | Agreement between Placer Dome (CLA)
      Limited and Claude Resources Inc.
|--- | ---------------------------------------------------------------------------





|This letter sets out the terms pursuant to which Placer Dome
      (CLA) Limited (Placer) will acquire from Claude Resources
      Inc. (Claude), an option (the Option)
      to earn an undivided 55% interest in the Madsen Property, as herein defined,
      and five other contiguous blocks of properties located in the Red Lake District
      of Ontario, certain surface rights associated therewith, and the shaft and
      hoist located thereon (all as more particularly described in paragraphs
      1.1(a) through (h) and Schedules A-1, A-2, and A-3 hereof and collectively
      referred to herein as the Property), and thereafter participate
      in a joint venture with Claude for the purpose of the development and operation
      of a mine thereon. This letter, when accepted by Claude, constitutes a binding
      agreement (the Agreement) between Placer and Claude respecting
      the matters set out in this Agreement.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|All currency amounts in this Agreement are in
Canadian dollars.
|---------------------------------------------------------------



|ARTICLE 1: THE PROPERTY
|-----------------------

|1.1 | The
Property consists of:
|--- | -------------------------

| | (a) | a 100% interest in 64 patented mining claims
      encompassing an area of approximately 1,035 hectares in the Red Lake District
      of Ontario (the Madsen Property);
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | a 100% interest in 26 mining claims encompassing
      an area of approximately 459 hectares in the Red Lake District of Ontario
      (the Buffalo Property);
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c) | a 100% interest in 35 patented mining claims
      encompassing an area of approximately 700 hectares in the Red Lake District
      of Ontario (the Starratt Olsen Property);
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d) | a 100% interest in 50 patented mining claims
      encompassing an area of approximately 1252 hectares in the Red Lake District
      of Ontario (the Aiken-Russet Property);
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---



| | (e) | a 20% interest in 14 mining claims encompassing
      an area of approximately 282 hectares in the Red Lake District of Ontario
      (the Redaurum Property);
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (f) | a 100% interest in 4 mining leases and 3 unpatented
      claims encompassing an area of approximately 100 hectares in the Red Lake
      District of Ontario (the Hagar Option Property);
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (g) | the surface rights of Claude located in the
      Red Lake District of Ontario (the Surface Rights); and
| | --- | ----------------------------------------------------------------------------------------------------------

| | (h) | the
shaft and hoist located on the Property, as described in  Schedule A-3 of this Agreement;
| | --- | ---------------------------------------------------------------------------------------------

| | all as more particularly described and subject
      to the royalties set out, in Schedules A-1, A-2, and A-3 to this Agreement,
      and any Crown royalties, and subject to the terms and conditions of the
      agreements (the Underlying Agreements) set out in Schedule
      A-4 to this Agreement.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|1.2 | No
other real or personal property of Claude (whether or not it may  have been used in
conjunction with or in relation to the property  described in section 1.1 of this
Agreement) shall form part of the  Property, other than as specifically described in
section 1.1 of this  Agreement. For greater certainty, it is agreed that none of the
following shall be included in the Property:
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (a) | the
Madsen goldmill and associated surface improvements and  facilities, no matter whether
they may be affixed, and the nature  and degree of any affixation, to the Surface Rights;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | the
steel building located on the Buffalo property, no matter  whether it may be affixed, and
the nature and degree of any  affixation to the Surface Rights, and all rents payable to
Claude  in connection therewith; and
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c) | all
personal property including without limitation exploration and  mining equipment, rolling
stock, and parts;
| | --- | ---------------------------------------------------------------------------------------------------------------

| |  | (the real and personal property of Claude owned
      by Claude in the Red Lake District of Ontario that is not included in the
      Property is herein referred to as the Excluded Property).
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | For
purposes of certainty, it is acknowledged and agreed by Claude that  Placer shall have no
responsibility to undertake or to pay for  dismantling or removal from the Property of
the Excluded Property or  for remediation of any of the Property required in respect of
such  dismantling or removal. All such costs shall be the responsibility of  and borne by
Claude.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|ARTICLE 2: REPRESENTATIONS AND
WARRANTIES
|-----------------------------------------

|2.1 | Claude
represents and warrants to Placer as follows:
|--- | ----------------------------------------------------

| | (a) | to
the best of the knowledge of Claude, all mineral claims and  leases comprising the
Property are currently in good standing  and:
| | --- | -----------------------------------------------------------------------------------------------------------------------------------

| |  | (i) | have
been duly, validly and properly laid out and staked;
| |  | --- | ---------------------------------------------------------

| |  | (ii) | all
mineral claims have been properly recorded and filed  with appropriate governmental
agencies;
| |  | ---- | -------------------------------------------------------------------------------------------------

| |  | (iii) | all
leases have been duly granted, issued or entered  into and are in good standing;
| |  | ----- | ------------------------------------------------------------------------------------

| |  | (iv) | all
affidavits of  assessment work and other filings required to maintain the  Property  in
good standing have been properly and timely  recorded and filed with all appropriate
governmental  agencies; and
| |  | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | (v) | all
taxes, rents, charges and other payments in respect of the  Property have been duly paid
on a timely basis (except for the  non-payment of certain property taxes respecting the
Surface  Rights, the amount of which Claude is currently disputing and  which amount does
not exceed $500,000, including accrued  interest and penalties, if any);
| |  | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | all
necessary filings have been filed with all appropriate  governmental authorities to
maintain the Property in good  standing at least until the expiry of the Evaluation
Period,  as herein defined, and Claude knows of no reason why same  should not be
accepted, and no person has protested and there  is no basis for protesting the recording
of the Property, or  any portion thereof;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c) | except:
| | --- | -------

| |  | (i) | for
the Underlying Agreements;
| |  | --- | ------------------------------

| |  | (ii) | for
a general security agreement to be granted in  favour of Canadian Western Bank (a copy of
which  shall be provided to Placer upon execution thereof by  Claude); and
| |  | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | (iii) | as
may be disclosed elsewhere in this Agreement;
| |  | ----- | ------------------------------------------------

| |  | the
Property is 100% legally and beneficially owned by Claude,  free and clear of any
charges, liens, encumbrances created by,  through or under Claude or, to the best of the
knowledge of  Claude, adverse claims of third parties, surface rights  restrictions,
easements or licences, and, to the best of the  knowledge of Claude, there are no
royalties, options or other  agreements or arrangements in effect by which any third
party  has any present, future or contingent right to acquire any  interest in the
Property;
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d) | to the knowledge of Claude, after due inquiry,
      except for the Underlying Agreements and except as may be disclosed elsewhere
      in this Agreement, there is
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---



| |  | no basis for any claim which may be made by
      any third party against title to the Property;
| |  | ------------------------------------------------------------------------------------------------

| | (e) | Claude
has provided Placer with access to true and correct  copies of all agreements which have
a direct and material  effect on the Property and all operations conducted thereon
including, without limitation, the Underlying Agreements;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (f) | Claude
is a corporation duly incorporated, continued or  amalgamated and organized, and is
validly subsisting and in  good standing under the laws of Canada and is duly qualified
to do business and is in good standing under the laws of the  Province of Ontario;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (g) | the
only subsidiaries of Claude are 574095 Alberta Ltd. and 228262  Alberta Ltd.;
| | --- | ---------------------------------------------------------------------------------

| | (h) | Claude
has  full right and authority to enter into this  Agreement and to carry out the
transactions contemplated herein and all consents or approvals required to  be obtained
in order for Claude to do so have been obtained;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (i) | this
Agreement and any other agreement, certificate, document  or instrument executed and
delivered pursuant hereto has been  or will have been duly executed and delivered and all
such  agreements, certificates, documents or instruments are or will  be valid, binding,
and enforceable obligations in accordance  with their respective terms, except as may be
limited with  respect to enforcement under bankruptcy, insolvency or other  similar laws
affecting creditors rights generally and subject  to the qualification that equitable
remedies may only be  granted in the discretion of a court;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (j) | there
are no material actions, suits, proceedings, or to the  best of the knowledge of Claude,
investigations before any  court, arbitrator, administrative agency or other tribunal or
governmental authority, whether current, pending or to the  best of the knowledge of
Claude, after due inquiry,  threatened, which directly or indirectly relate to or affect
the Property (including the ownership and existing or past  uses thereof and the
compliance with laws of the lands  comprising the Property) nor is Claude aware of any
facts  which would lead Claude to suspect that the same might be  initiated or threatened;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (k) | to
the best of the knowledge of Claude, neither Claude nor any  other person, has:
| | --- | ----------------------------------------------------------------------------------

| |  | (i) | since
April 7, 1998; and
| |  | --- | ------------------------

| |  | (ii) | except
as disclosed in Schedule B hereto, prior to April  7, 1998;
| |  | ---- | ------------------------------------------------------------------

| |  | directly or indirectly caused, permitted or
      allowed any contaminants, including without limitation, contaminants, pollutants,
      wastes or toxic substances (collectively Hazardous Substances)
      to be released, discharged, placed, escaped, leached or disposed of on,
      into, under or through the lands (including watercourses, improvements thereon
      and contents thereof) comprising the
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---



| |  | Property in excess of that permitted by law,
      regulations, permits, or licences, and, so far as Claude is aware:
| |  | ---------------------------------------------------------------------------------------------------------------------

| |  | (i) | since
April 7, 1998; and
| |  | --- | ------------------------

| |  | (ii) | except
as disclosed in Schedule B hereto, prior to April  7, 1998;
| |  | ---- | ------------------------------------------------------------------

| |  | no
Hazardous Substances or underground storage tanks have been  placed on or constructed, as
the case may be, in or upon such  lands (including watercourses, improvements thereon and
contents thereof), except in accordance with that permitted by  laws, regulations,
permits or licences;
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (l) | Claude
has obtained all permits, licences, approvals,  authorizations and qualifications of all
federal, provincial  and local authorities required for it to carry on its  operations at
or on the Property. Claude is not in violation  of and has no liability (other than
liability for compliance  with existing permits and laws, including but not limited to
performance of reclamation) under any statute, rule or  regulation of any governmental
authority applicable to the  Property, other than violations or liabilities, if any,
which  have not resulted and will not at any time result in any  material loss or
liability;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (m) | Claude
is in compliance in all material  respects with all  applicable  federal,  provincial
and  local laws,  rules and  regulations  relating to or  affecting  the  Property  and
has  obtained,  maintained  in full force and  effect,  and  operated in material
compliance  with all  material  authorizations,  licenses,  permits,  easements,
consents,  certificates  and  orders  of  any  governmental  or regulatory  body relating
to or affecting  the Property;  and the  operations of  Claude and its  employees  or
agents on, at or related to the  Property  have not resulted in any  violations  of
federal,  provincial  or local laws,  rules,  regulations,  ordinances  or orders,
except for one charge  under The  Occupational  Health and  Safety  Act  (Ontario)
described  in  Schedule C hereto, which has been resolved;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (n) | to the best of the knowledge of Claude, each
      of the agreements (each a Property Agreement) relating
      to the ownership, exploration, development or exploitation of the Property
      is presently in good standing and is in full force and effect, unamended;
      and to the best of the knowledge of Claude, Claude is not in violation or
      default thereunder and Claude knows of no reason why any such violation
      or default would or could be alleged by any party thereto thereunder or
      why any of the Property Agreements would not be a valid and enforceable
      obligation of the parties thereto in accordance with the terms thereof;
      and
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (o) | to
the best of the knowledge of Claude, Claude has fully and  in a timely manner performed
each and every one of its  respective obligations under the Property Agreements and
applicable laws as required to be performed prior to the date  hereof, and to the best of
the knowledge of Claude, Claude has  not waived any rights or requirements thereunder.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2.2 | Placer
represents and warrants to Claude as follows:
|--- | ----------------------------------------------------



| |  | 
| |  | 



---



| | (a) | Placer
is a corporation duly incorporated, continued or  amalgamated and organized, and is
validly subsisting and in  good standing under the laws of Canada, and is duly qualified
to do business and is in good standing under the laws of the  Province of Ontario;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | Placer
has full right and authority to enter into this Agreement and to carry out the
transactions contemplated herein and all consents or approvals required to be  obtained
in  order for Placer to do so have been obtained; and
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c) | this
Agreement and any other agreement, certificate, document  or instrument executed and
delivered pursuant hereto has been  or will have been duly executed and delivered and all
such  agreements are or will be valid, binding, and enforceable  obligations in
accordance with their respective terms, except  as may be limited with respect to
enforcement under  bankruptcy, insolvency or other similar laws affecting  creditors
rights generally and subject to the qualification  that equitable remedies may only be
granted in the discretion  of a court.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2.3 | All
of the representations and warranties contained in this Agreement  will survive for a
period of two years from the Effective Date, as  herein defined. However, the
representations and warranties shall  survive in respect of any claim or proceeding
commenced prior to the  end of the period which ends two years after the Effective Date.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2.4. | Notwithstanding
any other provision of this Agreement, Placer will not be  able to rely on any covenant,
representation or warranty of Claude in this  Agreement if, prior to Placer providing
Claude with an Option Notice, as herein  defined, Placer has been advised in writing by
Claude or otherwise has actual  knowledge, of the inaccuracy, non- performance,
non-fulfilment, or breach of any  such covenant, representation or warranty of Claude and
Placer provides Claude  with the Option Notice, notwithstanding such inaccuracy,
non-performance,  non-fulfilment, or breach.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ARTICLE 3: DUE DILIGENCE AND
ECONOMIC EVALUATION
|------------------------------------------------

|3.1 | Upon both parties signing this Agreement, Placer
      will have until 5:00 p.m. (Toronto time) on December 15, 2000 (the Evaluation
      Period) to conduct a property evaluation and due diligence investigation
      (the Evaluation), the extent of which will be at Placers
      sole discretion and which may include, among other things:
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (a) | an
investigation of the title and environmental condition of the  Property;
| | --- | ---------------------------------------------------------------------------

| | (b) | a
review of all agreements and financial records relating  to the Property; and
| | --- | -------------------------------------------------------------------------------

| | (c) | a
technical review and additional economic  evaluation of the Property including, without
limitation, assaying, relogging of core, surface sampling,  mapping, drilling, geological
interpretation and modelling and  cash flow studies.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Subject
to section 2.4 hereof, such Evaluation will not diminish Placers  ability to rely on the
representations and warranties in paragraph 2.1.
| | --------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|3.2 | Within
3 business days after the execution of this Agreement, Claude  will provide to Placer
access during normal business hours throughout  the Evaluation Period to all information
and data in the possession or  control of Claude, including, without limitation, all
agreements and  other documents which have a direct and material effect on the Property
and all operations conducted thereon, all historical documentation with  respect to title
and Underlying Agreements, all geological, geophysical  and assay results, maps,
environmental studies, tests, assessments,  permits, approvals and notifications from
regulatory authorities,  concerning the Property and prior exploration, development,
reclamation  and remediation work carried out thereon and within its knowledge.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3.3 | During
the Evaluation Period, Placer will at its own risk, have full  exclusive (with the
exception of Claude) access to the Property and to  the drill core and may conduct
airborne surveys, drilling, trenching  and other exploration work on the Property. All
costs incurred by  Placer in respect of the Property during the Evaluation Period will be
borne by Placer at its sole expense. Placer shall promptly provide to  Claude, all
information about the Property obtained by Placer during  the Evaluation Period which in
Placers opinion, acting reasonably,  would be material to Claude.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3.4 | In
exercising its rights under paragraph 3.1 and 3.3 hereof, Placer will:
|--- | -------------------------------------------------------------------------



| | (a) | comply
with all applicable laws, rules and regulations,  and will carry out any activities on
the Property in a good and workmanlike  manner and in accordance with generally accepted
mining practice;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | indemnify
and save Claude harmless from and  against all losses, liabilities, claims, demands,
damages, expenses, suits,  injury or death in connection with or resulting from the
activities of Placer  respecting the Property; and
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | maintain
insurance coverage in respect of the  Evaluation commensurate with generally accepted
mining practice as conducted  by senior mining companies.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------



|3.5 | Prior to the end of the Evaluation Period, Placer
      will notify Claude in writing either that Placer will proceed with the Option
      (the Option Notice) (in which case the date of the Option
      Notice will be the Effective Date) or that Placer elects
      not to proceed with the Option (in which case this Agreement will be terminated
      and of no further force and effect and the parties will have no further
      rights against or liability to one another hereunder except with respect
      to any rights and liabilities which have accrued to the date of termination).
      If Placer elects not to proceed with the Option, Placer will ensure that
      any drilling, trenching, exploration, or other work which Placer has performed
      on the Property during the Evaluation Period, will be remediated in conformity
      to regulatory standards. Placers decision to proceed with the Option
      is subject to the Evaluation of the Property being satisfactory to Placer,
      in its sole discretion, and without waiver of any rights it may otherwise
      have in this regard.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3.6 | If
Placer provides Claude with the Option Notice:
|--- | -------------------------------------------------



| |  | 
| |  | 



---





| | (a) | Claude
and Placer will, as soon as practicable thereafter, enter  into a preferred relationship
agreement on mutually agreeable  terms; and
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | conditional upon Claude obtaining all requisite
      stock exchange and regulatory approvals, Placer shall, as soon as practicable
      thereafter, subscribe, on a private placement basis, for 1,000,000 common
      shares of Claude having an aggregate purchase price of $750,000 (the Private
      Placement).
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ARTICLE 4: OPTION
|-----------------



|4.1 | Claude irrevocably grants to Placer the sole
      and exclusive right and option, conditional upon Placer providing Claude
      with the Option Notice, to earn an undivided 55% beneficial and working
      joint venture interest in the Property, including all rights of Claude with
      respect thereto, on the terms and conditions described in this Agreement
      (with the time period between the date of the Option Notice and the date
      that Placer has earned a joint venture interest in the Property, being herein
      called the Option Period).
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4.2 | Claude
grants to Placer during the Option  Period, the sole and  exclusive right (subject to
Claudes remaining rights during  the Option  Period as set out in this Agreement)
for Placer, its employees, agents  and  contractors to:
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) | enter
upon and have immediate access to the Property for  purposes of Operations (as defined
below);
| | --- | ----------------------------------------------------------------------------------------------------



| | (b) | devise, plan and engage in exploration, development
      and exploitation activities and all other operations (from the surface or
      underground) related to the exploration for, development of and exploitation
      of minerals on the Property (the Operations);
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | bring
and install on the Property such buildings, plants,  machinery, equipment, tools,
appliances and supplies as Placer  may deem necessary for the conduct of exploration,
development  and exploitation activities and all other operations (from the  surface or
underground) related to the Operations and remove  from time to time such buildings,
plants, machinery,  equipment, tools, appliances and supplies as Placer may have  brought
to or installed on the Property; and
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | remove
from the Property such rock, ores, minerals and metals  and transport the same for the
purposes of sampling, testing  and assaying.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------



|4.3 | During
the Option Period, Placer will:
|--- | --------------------------------------



| | (a) | comply
with all applicable laws, rules and regulations,  including applicable bonding
requirements, and carry out all  Operations in a good and workmanlike manner in
accordance with  generally accepted mining practice;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| | (b) | maintain
insurance coverage in respect of Operations on the  Property commensurate with generally
accepted mining practice  as conducted by senior mining companies;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | carry
out sufficient assessment work to maintain the Property  in good standing and pay all
taxes and other charges lawfully  levied or assessed against the Property, except for any
part  of the Property abandoned pursuant to paragraph 4.10 hereof;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | pay
all other costs and expenses respecting the Property  including without limitation, tax
assessments respecting the  Surface Rights (except any portion of the tax assessment that
relates to the buildings and improvements that are part of the  Excluded Property
pursuant to subparagraphs (a) and (b) of  paragraph 1.2 hereof), and all payments
required to be made  pursuant to the Property Agreements, as herein defined;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (e) | file
within the required time frames, the assessment credits  as may become available from
Operations, with Claude to advise  Placer respecting Claudes activities on the
Property, to the  extent required in order to file the assessment credits; and
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (f) | provide
the following access and information to Claude  respecting the Operations and the
Property:
| | --- | ---------------------------------------------------------------------------------------------------



| |  | (i) | full
access on reasonable notice at any time during  normal business hours to all data and
material  information relating to Operations and the Property;
| |  | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | (ii) | full
access on reasonable notice at any time during  normal business hours to Operations for
purposes of  observation;
| |  | ---- | ----------------------------------------------------------------------------------------------------------------------



| |  | (iii) | information
which may be material to Claude  respecting the Operations or the Property, in an
expeditious manner;
| |  | ----- | -----------------------------------------------------------------------------------------------------------------



| |  | (iv) | assay
results in a timely manner;
| |  | ---- | ---------------------------------



| |  | (v) | quarterly
reports on Operations and the Property and  the results obtained therefrom including
details of  costs incurred and conclusions and technical  information such as current
maps, assay results, and  calculations of tonnage of ore and rock; and
| |  | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | (vi) | annual
reports on Work Costs, as herein defined.
| |  | ---- | ------------------------------------------------



| | Notwithstanding
the foregoing, Placer will not be obliged to  disclose to Claude any proprietary
information or trade  secrets. Claude acknowledges that Placer will not be deemed to
have made any representation or warranty in respect of the
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| | accuracy,
completeness, or  validity of any information  provided to Claude pursuant to this
paragraph 4.3 (f).
| | ---------------------------------------------------------------------------------------------------------------



|4.4 | During
the Option Period, Placer shall rent from Claude that portion of the Excluded Property
consisting of the property of Claude described in Schedule A-5 hereto (the Rental
Property), on the following terms and conditions:
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) | rent
for the Rental  Property  shall be $1.00,  the  receipt of which is hereby  acknowledged
by  Claude;
| | --- | ---------------------------------------------------------------------------------------------------------



| | (b) | Placer
shall operate, maintain, repair, and replace the Rental  Property during the Option
Period in a proper manner and in  accordance with good Canadian mining practice and shall
return  the Rental Property to Claude at the end of the Option Period  in as good a
condition as at the commencement of the Option  Period; and
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | Placer
shall maintain insurance on the Rental Property in  accordance with good Canadian mining
practice as conducted by  senior mining companies, with loss made payable to Claude.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4.5 | Placer
shall indemnify and save Claude  harmless from and against all  losses, liabilities,
claims, demands, damages, expenses,  suits,  injuries or deaths in connection with or
resulting from Operations or  access of  Placer to the Property during the Option Period,
and Placer  shall fully pay all  contractors, suppliers, agents and workers involved  in
connection with the Operations.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4.6 | In
order to maintain the Option and thereby  earn a 55% undivided  interest in the
Property,  Placer shall  perform all of the  following conditions:
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) | complete
the Private Placement and make a payment of $150,000  to Claude forthwith upon completion
of the Evaluation Period;
| | --- | ----------------------------------------------------------------------------------------------------------------------------



| | (b) | on
or before the first anniversary of the Effective Date,  incur minimum Work Costs (as
defined in Schedule D to this  Agreement) of $1,200,000;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | in
addition to the Work Costs referred to in paragraph 4.6 (b)  hereof, on or before the
second anniversary of the Effective  Date, incur minimum Work Costs of at least
$1,500,000.00;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | on
or before the third anniversary of the Effective Date,  incur total cumulative Work Costs
of $8,200,000.00;
| | --- | --------------------------------------------------------------------------------------------------------------



| | (e) | deliver,
on or before the fifth anniversary of the Effective  Date, a Bankable Feasibility Study,
as herein defined.
| | --- | --------------------------------------------------------------------------------------------------------------------



| | For the purposes of this Agreement, the term
      Bankable Feasibility Study shall mean a report containing
      a description and analysis of the methods and costs of bringing into
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| | production and operation a mine on the Property
      and associated facilities related thereto, which report, in the opinion
      of the person preparing or commissioning same, would be in a form acceptable
      to a financial institution for the purposes of financing a mine on the Property
      and associated facilities related thereto and would result in a positive
      decision by such financial institution to provide financing for such a mine
      and associated facilities; and, without limiting the generality of the foregoing,
      shall include:
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | (i) | the
estimated recoverable reserves of minerals and  the estimated average composition and
content thereof  which may be produced from the Property;
| |  | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------



| |  | (ii) | procedures
for developing, mining, and producing ore  from the Property;
| |  | ---- | ------------------------------------------------------------------------



| |  | (iii) | results
of metallurgical tests;
| |  | ----- | -------------------------------



| |  | (iv) | the
nature and extent of the machinery,  equipment and other  facilities  proposed to be
acquired  for the purposes of  producing  and  marketing  ore or  concentrates  from the
Property,  which may include mill or  beneficiation  facilities for processing  such ore
if in the judgement of the person  conducting or  commissioning  the  feasibility  study
the size,  extent,  and location of the  deposits(s)  of minerals on the Property  which
will be available for  processing  in such mill or  beneficiation  facilities  appear to
make such mill or beneficiation  facilities  feasible,  in which event such person shall
also include a preliminary  design for any such mill or beneficiation  facilities in the
feasibility study;
| |  | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | (v) | the
total costs, including capital budget, which the  person conducting or commissioning the
feasibility  study reasonably estimates will be required to  purchase, construct and
install all machines and  equipment referred to in the preceding subparagraph,  including
a schedule of the timing of the capital  requirements for such purchases; and
| |  | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | (vi) | a
total economic feasibility report, taking into  account subparagraphs (i) to (v) above
and all other  matters the person conducting or commissioning the  feasibility study
deems relevant and materials. Such  total economic feasibility report shall include an
estimate of the financial return for the mine based  on the estimated market price of the
product, as  determined by the person conducting or commissioning  such feasibility study.
| |  | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4.7 | Placer
will be obliged to perform the conditions set out in paragraphs  4.6 (a) and (b) of this
Agreement prior to any abandonment by it of the  Option. Placer has the right, after it
has performed the conditions set  out in paragraphs 4.6 (a) and (b) of this Agreement, to
abandon the  Option. In the event that Placer abandons the Option, Placer shall:
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) | re-convey
the Property to Claude (if Claude had earlier  transferred the Property to Placer
pursuant to paragraph 4.9  hereof);
| | --- | -------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| | (b) | complete
remediation and reclamation of the Property to regulatory  standards;
| | --- | ------------------------------------------------------------------------------



| | (c) | ensure
that the Property is in at least the same condition as at  the Effective Date including,
without limitation, ensuring that  the shaft remains dewatered to the 16th level and
ensuring that  the rehabilitation of the shaft is in at least as good a condition  as at
the Effective Date; and
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | ensure
that the Property is in good standing with all taxes and  assessments paid, for a period
of at least one year from the  notice of abandonment.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------



|4.8 | If
Placer abandons the Option, Placer will have one year to remove all  of its equipment
from the Property and will do so if requested by  Claude. Thereafter, Placers
interest in any equipment left on the  Property will be deemed to have been quitclaimed
by Placer to Claude.  Placer will have access to the Property following abandonment of
the  Option to the extent required by Placer to carry out its reclamation  and
remediation obligations hereunder.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4.9 | After
the first anniversary of the Effective Date, Claude shall, upon  written request from
Placer, transfer title to Placer for all or parts  of the Property as determined by
Placer, to be held by Placer in trust  for the purposes of this Agreement.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4.10 | Placer
may at any time during the currency of the Option Period,  abandon any one or more of the
mining properties which comprise the  Property. Placer shall provide Claude with notice
of any abandonment.  In the event that any of the mining properties comprising the
Property  are abandoned, Placer shall:
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) | complete
remediation and reclamation of the abandoned Property to  regulatory standards in respect
of any work performed by Placer on  the abandoned Property;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | retransfer
such abandoned Property to Claude (if such abandoned  Property had earlier been
transferred by Claude to Placer pursuant  to paragraph 4.9 hereof);
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | ensure
that the abandoned Property is in at least the same  condition as at the Effective Date
including, without limitation,  ensuring that if the Property including the shaft is
abandoned,  the shaft remains dewatered to the 16th level and the  rehabilitation of the
shaft is in at least as good a condition as  at the Effective Date; and
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | keep
the abandoned Property in good standing with all taxes and  assessments paid for a period
of at least one year from the notice  of abandonment.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------



|4.11 | Placers
obligations to incur Work Costs are subject to the following:
|---- | ----------------------------------------------------------------------



| | (a) | Work
Costs incurred by Placer by any date in excess of the amount of Work Costs  required  to
be  incurred by any date will be carried forward to the succeeding  period or  periods
and  qualify as  Work Costs for such succeeding period or  periods.  If Work  Costs are
less than the  amount of  Work Costs required to be  incurred by any date,  Placer may
pay the  deficiency  to Claude in  cash within 60
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| |  | days thereafter
in order to  maintain  the Option.  Such  payments of cash in  lieu  will be deemed to be
Work Costs;
| |  | ---------------------------------------------------------------------------------------------------------------------



| | (b) | if,
subsequent to the date or dates on or before which Work Costs are required to  be
incurred  by  Placer (or cash paid in lieu thereof), it is determined upon  examination
or  audit  by  either  party that such Work Costs have not been incurred  or  paid,
Placer  will  not lose any of its  rights hereunder and the Option will not  terminate,
provided  that Placer pays to Claude 115%  of such deficiency in Work  Costs within 30
days  following  such  determination  (if determined by  Placer) or  within 30 days
following notice to Placer of such deficiency (if determined by  Claude), and 100% of
such deficiency in Work Costs will be deemed to be Work  Costs; and
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | the
force majeure provisions set out in paragraph 7.10 hereof.
| | --- | --------------------------------------------------------------



|ARTICLE 5: JOINT VENTURE
|------------------------



|5.1 | Immediately
upon completing all of the steps set out in paragraph 4.6 hereof, Placer will have
earned a 55% undivided beneficial interest in the Property, including all rights of
Claude with respect thereto, and the parties will be deemed to have formed a joint
venture (the Joint Venture) for the purpose of exploration and the
development and operation of a mine on the Property (with the period of time after the
date of the formation of the Joint Venture to the date of any termination of the Joint
Venture being herein called the Joint Venture Period).
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|5.2 | At
the time the Joint Venture is formed, the respective interests of the parties in the
Joint Venture (the Joint Venture Interests) will be:
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------



| | Placer | 55%
| | ------ | ---
| | Claude | 45%



|5.3 | Forthwith
upon the formation of the Joint Venture, the Joint Venture  will, subject to the force
majeure provisions set out in paragraph 7.10  hereof, proceed with the development and
operation of a mine on the  Property in accordance with the recommendations contained in
the  Bankable Feasibility Study, in a timely fashion consistent with good  Canadian
mining practice.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|5.4 | If
Claude is unable to provide, within 90 days after the Joint Venture has finalized its
program for the development and operation of a mine on the Property, written
confirmation satisfactory to Placer, acting reasonably, of the availability of Claudes
share of the project financing required for the development of a mine on the Property (Claudes
Share of the Construction Financing), Claude will have the right to require
Placer  to advance, within 90 days of notice from Claude, Claudes Share of the
Construction Financing in return for which Placer shall acquire an additional 5% Joint
Venture Interest (the Additional Interest) such that the Joint Venture
interests of the
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| | parties will
then be held 60% as to Placer and 40% as to Claude. The  Additional Interest will vest
upon Placer advancing Claudes Share of the  Construction Financing and providing
evidence reasonably satisfactory to Claude thereof.  Placer will be entitled to recover
from ninety (90%) per cent of Claudes share of  the Cash Flow (as herein defined)
from the Property: (i) an amount equal to Claudes  Share of the Construction
Financing; plus (ii) interest at a floating rate equal to the  prime rate of interest
charged from time to time by Placers principal lender plus  1% per annum. There
shall be no recourse by Placer against Claude for the recovery of  Claudes Share of
the Constructing Financing and interest thereon, as aforesaid,  beyond ninety (90%) per
cent of Claudes share of the Cash Flow from the Property.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|5.5 | For
the purpose of this Agreement, Cash Flow shall mean the total  proceeds,
calculated at the point of sale, derived from the sale of  ore, minerals or other
products extracted from the Property, from and  after the formation of the Joint Venture,
plus all net amounts received  from the sale of plant, machinery, equipment or other
assets on the  Property if the capital costs for such items have been earlier included
in Work Costs as defined in Schedule D of this Agreement, less Work  Costs
incurred.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|5.6 | Notwithstanding
any other provision of this Agreement or standard joint venture practice to the
contrary, there shall be no obligation on Claude to provide any financing for any
exploration, development, construction, operating or other costs of the Joint Venture,
beyond an amount equivalent to 90% of Claudes share of the Cash Flow generated
from the Property (Claudes Maximum Amount). If the Joint Venture
decides to proceed with expenditures in connection with the Property and the Joint
Venture Interest of Claude would result in Claude otherwise being required to pay in
excess of Claudes Maximum Amount, (with the amount that is in excess of Claudes
Maximum Amount being herein called the Excess Amount) then Placer will fund
the Excess Amount, and the Excess Amount together with interest thereon at a floating
rate of interest equal to the prime rate of interest charged from time to time by Placers
principal lender plus 1% per annum, shall be repaid from, and there shall be no recourse
by Placer to Claude beyond, 90% of Claudes share of the Cash Flow from the
Property.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|5.7 | If
and for so long as:
|--- | ----------------------



| | (a) | Placer
has advanced Claudes Share of the Construction  Financing pursuant to paragraph 5.4
hereof and any amount is  outstanding to Placer for Claudes Share of the
Construction  Financing; or
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | Placer
has funded the Excess Amount pursuant to paragraph 5.6  hereof and any amount is still
outstanding to Placer for the  Excess Amount;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------



|then the Joint Venture has the option,
exercisable from time to time by notice  to Claude, to market Claudes share of
production of minerals from the Property,  whereupon all proceeds from production of
minerals from the Property will accrue  to the account of the Manager, as herein defined,
from which all costs,  including any amounts remaining outstanding to Placer for Claudes
Share of the  Construction Financing and/or the Excess Amount (subject to the maximum of
90%  of Claudes Share of the Cash Flow as set out in paragraphs 5.4 and 5.6
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|hereof),  will be paid prior to disbursing to
Claude any of Claudes share of the  proceeds  in excess of 10% of Claudes
share of the Cash Flow.
|-------------------------------------------------------------------------------------------------------------------------------------------------



|5.8 | The
Joint Venture shall have the option, exercisable on notice to  Claude within 90 days
after the Joint Venture has finalized its program  for the development and operation of a
mine on the Property, to rent  and/or purchase whatever Rental Property it may choose
(the Applicable  Rental Property). If:
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) | the
rental option is exercised, the terms of the rental of the  Applicable Rental Property
shall be as set out in paragraph  4.4 hereof, except for the rental rate which shall be
the fair  market rental rate thereof, to be agreed upon between Placer  and Claude and
failing agreement, to be determined by  arbitration in accordance with paragraph 7.9
hereof;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | the
purchase option is exercised, the purchase price of the  Applicable Rental Property shall
be the fair market value  thereof, to be agreed upon between Placer and Claude and
failing agreement, to be determined by arbitration in  accordance with paragraph 7.9
hereof.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|5.9 | Except
as provided in paragraph 5.4 and 5.6 hereof, each party will be  responsible for payment
of its proportionate share (based on its Joint  Venture Interest) of all exploration,
development, construction and  operating costs of the Joint Venture from and after its
formation,  including without limitation, reclamation and remediation obligations  and
any security therefor.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|5.10 | Upon
formation of the Joint Venture, a Management Committee, represented by the members from
each party and holding voting rights in accordance with the partys Joint Venture
Interest, will be established which, subject to the terms of this Agreement, will make
all decisions, on a simple majority vote, which are required to be made by the joint
venture parties with respect to the Joint Ventures operation. The manager (the
Manager) will be appointed by and subject to the direction and control of,
the Management Committee. The Manager shall provide the parties to the Joint Venture
with monthly reports on its operations.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|5.11 | If
any party holds in excess of 50% of the Joint Venture Interest, that  party will have the
right to be the Manager of the Joint Venture and to  manage all Operations on the
Property during the period of time that it  holds greater than a 50% Joint Venture
Interest.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|5.12 | The
Manager will be entitled to charge the Joint Venture an amount for  general overhead and
administrative costs and management fees equal to:
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------



| | (a) | from
the date of the formation of  the Joint Venture until the  commencement of commercial
production, one and one-half percent (1.5%) of any Work Costs,  including capital and
construction costs;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | thereafter,
two percent (2%) of any Work Costs.
| | --- | -----------------------------------------------



| |  | 
| |  | 



---





| | In calculating
the percentages referred to in paragraphs 5.12 (a) and  (b) of this Agreement, there
shall be excluded from Work Costs:
| | --------------------------------------------------------------------------------------------------------------------------------------



| | (a) | any
Work Costs payable to an Affiliate of the Manager or Placer;  and
| | --- | ---------------------------------------------------------------------



| | (b) | any
taxes and royalties payable.
| | --- | --------------------------------



|5.13 | The
Manager will propose the work programs and budgets following the formation of the Joint
Venture.
|---- | ----------------------------------------------------------------------------------------------------



|5.14 | (a) | During the Joint Venture Period, the parties
      shall conduct their activities respecting the Property, and shall cause
      the Manager to conduct its activities respecting the Property, in such a
      manner that the overall economic returns of the Property will be maximized.
|---- | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | Subject
to the provisions of paragraph 5.14 (a) hereof, the  Manager, in its capacity as owner or
operator of another  mining property, mill or other facility, and any affiliate of  the
Manager, may contract or enter into arrangements with the  Joint Venture provided that:
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | (i) | such
contracts and arrangements and the accounting  and financial procedures established
therein for  determining charges and credits shall be fair and  equitable as between the
Joint Venture and the  Manager, it being intended that the Manager will  maximize the
overall economic returns from the  Property;
| |  | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | (ii) | any
charges made by the Manager or its affiliates to  the Joint Venture under such contracts
or  arrangements do not exceed the normal market rates  therefor; and
| |  | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | (iii) | the
charges made by the Manager or its affiliates to  the Joint Venture under such contracts
or  arrangements do not exceed the costs of the Manager  or its affiliates, plus 10%.
| |  | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | Nothing
in this Agreement will be deemed to constitute either  party, in its capacity as a party
to the Joint Venture, the  partner, agent or legal representative of the other party to
the Joint Venture or to create any fiduciary relationship  between them, for any purpose
whatsoever.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|5.15 | Subject
to paragraph 5.14 hereof, upon the Property being brought into  commercial production,
the Property may be operated as a single  operation with other mining properties owned by
third parties or in  which the Manager has an interest, in which event the parties agree
that (notwithstanding separate ownership thereof) ores mined from the  mining properties
(including the Property) may be blended at the time  of mining or at any time thereafter,
provided, however, that the  respective mining properties will bear and have allocated to
them their  proportionate part of costs incurred relating to the bringing of
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| | such single
operation into commercial production and thereafter operating  the same, and will have
allocated to each of them the proportionate  part of the revenues earned relating to such
single operation. In  making any such allocation, effect will be given to the tonnage and
location of ore and other material mined and beneficiated and the  characteristics of
such material including the metal content of ore  removed from, and to any special
charges relating particularly to ore,  concentrates or other products or the treatment
thereof derived from,  any such mining properties. The Manager will ensure that
reasonable  practices and procedures are adopted and employed for weighing,  determining
moisture content, sampling and assaying and determining  recovery factors.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|5.16 | Upon
the formation of the Joint Venture, all reclamation and  remediation obligations
respecting the Property, then or thereafter  existing, shall become the obligations of
the Joint Venture. Upon  commencement of commercial production from the Property, a
reclamation  fund will be established to which, subject to the provisions of  paragraphs
5.4 and 5.6 hereof, the parties to the Joint Venture will be  obliged to contribute. The
Manager will in its reasonable discretion  accept security in lieu of such payment being
made in cash. The fund  need not be maintained if either party has or acquires a 100%
interest  in the Property.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ARTICLE 6: TRANSFER OF
INTERESTS AND PREEMPTIVE RIGHTS
|------------------------------------------------------



|6.1 | During
the Option Period and the Joint Venture Period, each partys  interest in the
Property and in this Agreement will be subject to the  restrictions on transfer set out
in Schedule E.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|6.2 | Notwithstanding
the foregoing and the restrictions on transfer set out  in Schedule E hereto,
either party may mortgage, charge, or encumber  its interest in this Agreement and the
Property and its Joint Venture  Interest on the condition that the mortgagee, chargee, or
encumbrancer  agrees with the other party to this Agreement that, upon any  enforcement
of such mortgage, charge or other encumbrance, the  mortgagee, chargee, or encumbrancer
will be bound by the terms of this  Agreement.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ARTICLE 7: GENERAL
|------------------



|7.1 | Claude
acknowledges that, during the Evaluation Period and the Option  Period, Placer will have
discussions and correspondence with government  and Claude representatives and with other
stakeholders concerning the  Property, and Claude will co-operate with Placer in this
process by  assisting in the identification of key contacts and by consenting to  full
disclosure to Placer of information relating to the Property.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.2 | During
the Option Period and the Joint Venture Period, Placer and the  Manager shall keep proper
books and records of Operations on the  Property. Claude and its auditors shall have the
right, at Claudes  cost and on reasonable notice to Placer or the Manager, as the
case may  be, to inspect and audit such books and records.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|7.3 | Each
Party has the right at its own risk and expense, at any time and  from time to time
during the Option Period and the Joint Venture  Period, upon reasonable notice to the
other party, to remove from the  Property their respective property, including in the
case of Claude,  the Excluded Property (except for the Rental Property during the Option
Period and the Applicable Rental Property when it is rented during the  Joint Venture
Period). Either party, its respective employees, agents  and contractors, at their sole
risk and expense, and subject to  reasonable safety regulations, will, during the Option
Period and the  Joint Venture Period, have access to the Property, at all reasonable
times on reasonable notice to the other party, for the purpose of  removal from the
Property of property so long as such removal does not  interfere with Operations. Each
party agrees to indemnify and save the  other party harmless from any and all loss or
damage of any kind  whatsoever resulting in any way from the entry, presence or
activities  of the party removing property and/or its employees, agents and  contractors
on the Property.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.4 | During
the Option Period and the Joint Venture Period, the lessee from  Claude of the building
referred to in paragraph 1.2 (b) hereof, shall  have the right to the use of such
building in accordance with its lease  of such building and shall have unrestricted
access over the Surface  Rights to the extent necessary to exercise such right.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.5 | The
parties acknowledge that either of them may, due to the proximity  of certain of its
other properties to the Property, possess or come  into possession of information which
may be relevant to the other party  or the Joint Venture, but except as provided for in
this Agreement,  neither party will have any obligation to disclose to the other party
and neither party will have any right to obtain any such information  from the other
party, any such information obtained from its operations  on property other than the
Property.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.6 | The
parties further acknowledge that:
|--- | -------------------------------------



| | (a) | neither
party may publicly disclose the terms of this Agreement  except (i) with the consent of
the other party or (ii) as may be  necessary in the opinion of counsel to the party
making such  disclosure to comply with the requirements of any governmental  authority,
stock exchange or securities regulatory body having  jurisdiction;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | no
public statement or press release may be made by either party  in respect of exploration
results or other information about the  Property except (i) with the consent of the other
party or (ii) as  may be necessary in the opinion of counsel to the party making  such
disclosure to comply with the requirements of any  governmental authority, stock exchange
or securities regulatory  body having jurisdiction;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | Notwithstanding
the foregoing, disclosure of the terms of this  Agreement may be made:
| | --- | --------------------------------------------------------------------------------------



| |  | (i) | as
required by a financial institution or other  similar entity in connection with any
financing  required for purposes of this Agreement or otherwise;  or
| |  | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | (ii) | as
may reasonably required by a third party or  parties in connection with the negotiation
for the  sale or transfer of any Joint Venture Interest or
| |  | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| |  |  | other interest in the Property or the acquisition
      of an entity or other interest in a party.
| |  |  | --------------------------------------------------------------------------------------------------



|7.7 | Claude
will indemnify Placer and its directors, officers, employees,  agents, representatives
and subcontractors with respect to any  misrepresentation or untrue warranty of Claude
including without  limitation, any misrepresentation or untrue warranty of Claude
pursuant  to paragraph 2.1 (k) hereof, respecting Hazardous Substances (subject  to the
two year limitation set out in paragraph 2.3 hereof). Placer  will indemnify Claude and
its directors, officers, employees, agents,  representatives and subcontractors with
respect to any  misrepresentation or untrue warranty of Placer (subject to the two year
limitation set out in paragraph 2.3 hereof).
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.8 | Each
party waives and renounces the benefit of all provisions of law  relating to actions of
partition of real or personal property subject  to this Agreement.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.9 | This
Agreement will be governed by and construed in accordance with the  laws of the Province
of Ontario and the laws of Canada applicable  therein. The parties hereto agree that any
suit, action or proceeding  arising out of or relating to this Agreement shall be brought
in a  court in the Province of Ontario, and the parties hereby irrevocably  and
unconditionally attorn and submit to the jurisdiction of such  court. The parties
irrevocably waive and agree not to raise any  objection they might now or hereafter have
to the bringing of any such  suit, action or proceeding in a court in Ontario including,
without  limitation, any objection that the place where such court is located is  an
inconvenient forum or that there is any other suit, action or  proceeding in any other
place relating in whole or in part to the same  subject matter. Notwithstanding the
above, any dispute relating to  paragraph 5.8 of this Agreement or paragraph 5 (c) of
Schedule E to  this Agreement shall be finally determined pursuant to the Commercial
Arbitrations Act (Ontario) by a single arbitrator. The location of any  such arbitration
shall be Toronto unless the parties agree otherwise.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.10 | No
party will be  liable to any other party hereto and no party will be  deemed in  default
under the  Agreement for any delay in performing any  of its covenants and  agreements,
or  in  incurring Work Costs (including  committed Work Costs), caused by or  arising out
of  any  act beyond the  reasonable control of such party, excluding lack of  funds but
including,  without limitation, lack of rights or permission by First  Nations  or
indigenous peoples groups  to enter upon the Property to  conduct exploration,
development and mining operations  thereon, war or  war conditions, actual or potential,
earthquake, fire, storm, flood,  explosion, strike, labour trouble, accident, riot,
unavoidable  casualty, act of  restraint, present or future, of any lawful authority,
act  of God, protests or  demonstrations by environmental lobbyists,  First Nations or
indigenous peoples groups,  acts of the public enemy,  delays in transportation,
breakdown of machinery, inability  to obtain  necessary materials in the open market,
unavailability of equipment, or  any  federal or territorial laws, regulations or
requirements (expressly  including inability  to obtain in a timely manner, after
diligent  efforts, necessary governmental approvals,  licences and permits on  terms
reasonably  acceptable to Placer or the imposition of  material new  requirements for
approvals,  licences or permits that did not exist on  the  date of this Agreement). No
right of a  party will be affected for  delay of a party to  perform any of its
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| | covenants
and agreements or to incur Work Costs, if the  failure or delay is caused by one of the
events referred to above. All times  provided for in this Agreement will be extended for
the period commensurate  with the period of the delay and, so far as possible, the party
affected  will take all reasonable steps to remedy the cause of the delay attributable
to the events referred to above; provided, however, that nothing contained  in this
section will require any party to settle any labour dispute, protest  or demonstration,
or to question or test the validity or constitutionality  of any provincial, federal or
other governmental order, regulation or law  or claim of right by First Nations or
indigenous peoples groups. The  party affected will give notice to the other party
of the commencement and  termination of each period of force majeure.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.11 | This
Agreement contains the entire understanding between the parties  dealing with the subject
matter hereof and supersedes all negotiations,  correspondence, letters of intent and
prior agreements or  understandings relating thereto including the Confidentiality
Agreement  between the parties dated November 19, 1999.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.12 | This
Agreement may be executed by facsimile and in any number of  counterparts, and it will
not be necessary that the signatures of both  parties be contained on any counterpart.
Each counterpart will be  deemed to be an original, but all counterparts together will
constitute  one and the same instrument.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.13 | Unless
herein otherwise expressly provided, any notice, request,  direction, consent, waiver,
extension, agreement or other communication  that is required to or may be given or made
hereunder shall be in  writing and either personally delivered to a responsible officer
of the  addressee or sent by telecopy to:
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | In the case of Placer:
| | ----------------------
| |                       
| |                       
| |                       
| |                       
| |                       
| |                       
| |                       
| |                       
| |                       
| |                       
| |                       
| |                       
| |                       
| | With a copy to:       
| |                       
| |                       
| |                       
| |                       
| |                       
| |                       
| |                       
| |                       
| |                       
| |                       
| |                       



| |  | 
| |  | 



---





| |                            |                                 |                  
| | -------------------------- | ------------------------------- | -----------------
| | With a copy to:           
| |                            |                                 |                  
| |                            |                                
| |                            | Fasken Martineau DuMoulin LLP  
| |                            | Toronto Dominion Bank Tower    
| |                            | Toronto Dominion Centre        
| |                            | Toronto, Ontario               
| |                            | M5K 1N6                        
| |                            |                                 |                  
| |                            |                                 |                  
| |                            | Attention:                      | John S. M. Turner
| |                            | Telecopier:                     | (416) 364-7813   
| |                            |                                 |                  
| |                            |                                 |                  
| | In the case of the Claude:
| |                            |                                 |                  
| |                            |                                
| |                            | Claude Resources Inc.          
| |                            | Suite 200, 224-4th Avenue South
| |                            | Saskatoon, Saskatchewan        
| |                            | SK7 5M5                        
| |                            |                                 |                  
| |                            |                                 |                  
| |                            | Attention:                      | President        
| |                            | Telecopier:                     | (306) 668-7500   
| |                            |                                 |                  
| |                            |                                 |                  
| | With a copy to            
| |                            |                                 |                  
| |                            |                                
| |                            | MacPherson Leslie & Tyerman    
| |                            | 1500, 410  22nd Street East   
| |                            | Saskatoon, Saskatchewan        
| |                            | S7K 5T6                        
| |                            |                                 |                  
| |                            |                                 |                  
| |                            | Attention:                      | R. Neil MacKay   
| |                            | Telecopier:                     | (306) 975-7145   



| | or
to such other address as any of the parties may designate by notice given to the others.
| | -------------------------------------------------------------------------------------------



| | Each
notice shall be personally delivered to the addressee or sent by  facsimile transmission
to the addressee and (i) a notice which is  personally delivered shall, if delivered on a
Business Day, be deemed  to be given and received on that day and, in any other case, be
deemed  to be given and received on the first Business Day following the day on  which it
is delivered; and (ii) a notice which is sent by facsimile  transmission shall be deemed
to be given and received on the Business  Day sent if transmitted prior to 2:00 p.m. on
that day or the next  Business Day following the day on which it is sent if transmitted
on a  day other than a Business Day or after 2:00 p.m. on a Business Day. For  the
purposes of this Subscription Agreement, a Business Day means a  day which is
not: (i) a Saturday or Sunday; (ii) a statutory or civic  holiday in the City of Toronto
or the City of Saskatoon.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|7.14 | This
Agreement will enure to the benefit of and be binding on the  parties hereto and their
respective successors and permitted assigns.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------



|7.15 | Each
party hereto will promptly do and provide all acts and things and  will promptly execute
and deliver such deeds, assignments, endorsements  and instruments and evidences of
transfer and other documents and will  give such further assurances as will be necessary
or appropriate in  connection with the performance of this Agreement.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.16 | When used in this Agreement and the Schedules
      hereto, the terms Affiliate or affiliate
      shall have the meaning set out in the Business Corporations Act (Ontario).
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|If the terms of this Agreement are acceptable to
you, please sign the enclosed  copies of this letter and return one fully signed copy of
the same to the  undersigned at your earliest convenience. This Agreement will then
constitute a  binding agreement and will serve as the basis for a detailed Option and
Joint  Venture Agreement between Placer and Claude on the Property. The terms of this
offer will remain confidential until the Claude has executed this Agreement.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Promptly following the first anniversary of the
Effective Date, Placer will  prepare the detailed Option and Joint Venture Agreement, and
present the same to  Claude for its review and approval. Upon presentation the parties
will  diligently attempt to settle the terms of the same in a timely manner. If the
detailed Option and Joint Venture Agreement is not settled and executed by both  parties
this Agreement will remain binding on the parties.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|This offer is open for acceptance by you until November
          10, 2000.
|---------------------------------------------------------------------------
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Accepted and agreed to this 8th day of November, 2000                      
|                                                                           
|                                                                           
|                                                                           



| |  | 
| |  | 



---





|This is Schedule A-1 to
the Letter Agreement between  Placer Dome (CLA) Limited and Claude Resources Inc.
|-----------------------------------------------------------------------------------------------------------



|Claims
|--------



|Aiken Russet |         |        |      |       |       |            |          | 
|------------ | ------- | ------ | ---- | ----- | ----- | ---------- | -------- | 
|             |         |        |      |       |       |            |          | 
|Claim #      |         | Parcel |      | Pat.# |       | Area (Ha.) | Township
|             |         |        |      |       |       |            |          | 
|KRL          | 18728   |        | 2248 |       |       |            | 27.652   | 
|KRL          | 18729   |        | 2249 |       |       |            | 30.574   | 
|KRL          | 18778   |        | 2250 |       |       |            | 23.294   | 
|KRL          | 19278   |        | 2251 |       | 11663 |            | 26.535   | 
|KRL          | 19279   |        | 2252 |       | 11664 |            | 18.308   | 
|KRL          | 19280   |        | 2253 |       | 11665 |            | 26.564   | 
|KRL          | 19281   |        | 2254 |       | 11666 |            | 20.335   | 
|KRL          | 19367   |        | 2255 |       | 11667 |            | 18.470   | 
|KRL          | 19368   |        | 2256 |       | 11668 |            | 14.115   | 
|KRL          | 19684   |        | 2434 |       | 12198 |            | 18.450   | 
|KRL          | 19685   |        | 2243 |       | 11652 |            | 18.231   | 
|KRL          | 19686   |        | 2257 |       | 11649 |            | 15.046   | 
|KRL          | 19687   |        | 2239 |       | 11648 |            | 27.078   | 
|KRL          | 19688   |        | 2240 |       | 11649 |            | 15.111   | 
|KRL          | 19719   |        | 2258 |       | 11670 |            | 14.184   | 
|KRL          | 19720   |        | 2259 |       | 11671 |            | 19.834   | 
|KRL          | 19788   |        | 2435 |       | 12199 |            | 6.718    | 
|KRL          | 20169   |        | 2260 |       | 11672 |            | 22.590   | 
|KRL          | 20170   |        | 2241 |       | 11650 |            | 23.188   | 
|KRL          | 20171   |        | 2242 |       | 11651 |            | 20.805   | 
|KRL          | 20585/A |        | 2261 |       | 11673 |            | 46.057   | 
|KRL          | 20586/A |        | 2262 |       | 11674 |            | 38.619   | 
|KRL          | 20587/A |        | 2263 |       | 11675 |            | 41.019   | 
|KRL          | 20588   |        | 2264 |       | 11676 |            | 24.868   | 
|KRL          | 21273   |        | 2265 |       | 11677 |            | 7.232    | 
|KRL          | 21274   |        | 2266 |       | 11678 |            | 7.086    | 
|KRL          | 21275   |        | 2267 |       | 11679 |            | 7.572    | 
|KRL          | 21276   |        | 2268 |       | 11680 |            | 9.781    | 
|KRL          | 21277   |        | 2269 |       | 11682 |            | 8.478    | 
|KRL          | 21278   |        | 2270 |       | 11682 |            | 10.748   | 
|KRL          | 21280   |        | 2271 |       | 11683 |            | 10.688   | 
|KRL          | 21281   |        | 2272 |       | 11684 |            | 14.253   | 
|KRL          | 21316   |        | 2273 |       | 11685 |            | 50.857   | 
|KRL          | 21317   |        | 2274 |       | 11686 |            | 17.669   | 
|KRL          | 21378   |        | 2276 |       | 11687 |            | 23.071   | 
|KRL          | 21318   |        | 2275 |       | 11688 |            | 12.335   | 
|KRL          | 12726   |        | 1513 |       | 10322 |            | 22.189   | 
|KRL          | 12727   |        | 1514 |       | 10323 |            | 20.453   | 
|KRL          | 12728   |        | 1496 |       | 10289 |            | 20.825   | 
|KRL          | 12820   |        | 1497 |       | 10290 |            | 11.938   | 
|KRL          | 12821   |        | 1498 |       | 10291 |            | 13.185   | 
|KRL          | 12822   |        | 1499 |       | 10292 |            | 11.226   | 
|KRL          | 12823   |        | 1500 |       | 10293 |            | 17.365   | 
|KRL          | 12824   |        | 1501 |       | 10294 |            | 18.879   | 
|KRL          | 19181   |        | 1909 |       | 11015 |            | 20.910   | 
|KRL          | 19182   |        | 1910 |       | 11016 |            | 21.493   | 
|KRL          | 19235   |        | 1911 |       | 11017 |            | 24.803   | 
|KRL          | 19236   |        | 1907 |       | 11007 |            | 15.888   | 
|KRL          | 19237   |        | 1908 |       | 11008 |            | 13.606   | 
|KRL          | 19238   |        | 1912 |       | 11018 |            | 24.556   | 



| |  | 
| |  | 



---





|Madsen  |            |        |           |       |       |            |          |       
|------- | ---------- | ------ | --------- | ----- | ----- | ---------- | -------- | ------
|        |            |        |           |       |       |            |          |       
|Claim # |            | Parcel |           | Pat.# |       | Area (Ha.) | Township
|        |            |        |           |       |       |            |          |       
|KRL     | 11502      |        | 1291      |       | 9601  |            | 18.482   |       
|KRL     | 11503      |        | 1292      |       | 9602  |            | 18.875   |       
|KRL     | 11504      |        | 1293      |       | 9603  |            | 19.955   |       
|KRL     | 11505      |        | 1294      |       | 9604  |            | 26.766   |       
|KRL     | 11506      |        | 5259      |       | 9605  |            | 27.256   |       
|KRL     | 11507      |        | 1296      |       | 9606  |            | 10.287   |       
|KRL     | 11508      |        | 1297      |       | 9607  |            | 18.624   |       
|KRL     | 11509&A    |        | 5259      |       | 9608  |            | 33.338   |       
|KRL     | 12521      |        | 5259      |       | 9609  |            | 16.612   |       
|KRL     | 12522      |        | 3578&5259 |       | 9610  |            | 22.270   |       
|KRL     | 12523      |        | 5259      |       | 9611  |            | 12.420   |       
|KRL     | 12524      |        | 1278      |       | 9588  |            | 15.427   |       
|KRL     | 12525      |        | 1279      |       | 9589  |            | 18.964   |       
|KRL     | 12526      |        | 1280      |       | 9590  |            | 18.413   |       
|KRL     | 12527      |        | 3578&5259 |       | 9613  |            | 44.722   |       
|KRL     | 12528      |        | 5259      |       | 9591  |            | 12.715   |       
|KRL     | 12529      |        | 1304      |       | 9614  |            | 19.206   |       
|KRL     | 12601      |        | 1282      |       | 9592  |            | 25.884   |       
|KRL     | 12602      |        | 1283      |       | 9593  |            | 13.905   |       
|KRL     | 12603      |        | 1284      |       | 9594  |            | 10.789   |       
|KRL     | 12604      |        | 1285      |       | 9595  |            | 27.134   |       
|KRL     | 12605      |        | 1286      |       | 9596  |            | 19.906   |       
|KRL     | 12638      |        | 1287      |       | 9597  |            | 21.914   |       
|KRL     | 12639      |        | 1288      |       | 9598  |            | 24.050   |       
|KRL     | 12640      |        | 1289      |       | 9599  |            | 26.090   |       
|KRL     | 12641      |        | 1290      |       | 9600  |            | 20.311   |       
|KRL     | 12836      |        | 1276      |       | 10338 |            | 30.869   |       
|KRL     | 12837      |        | 1275      |       | 9582  |            | 21.788   |       
|KRL     | 12658      |        | 1015      |       | 9112  |            | 14.378   |       
|KRL     | 12659      |        | 1004      |       | 9113  |            | 17.361   |       
|KRL     | 12660      |        | 1005      |       | 9114  |            | 19.425   |       
|KRL     | 12661      |        | 1020      |       | 9135  |            | 20.222   |       
|KRL     | 12662      |        | 1021      |       | 9136  |            | 16.794   |       
|KRL     | 12663      |        | 1022      |       | 9137  |            | 26.499   |       
|KRL     | 4/12664    |        | 1006      |       | 9115  |            | 15.892   |       
|KRL     | 12665      |        | 1016      |       |       |            | 17.296   |       
|KRL     | 12666      |        | 1023      |       | 9138  |            | 17.883   |       
|KRL     | 5/12667    |        | 1007      |       |       |            | 16.548   |       
|KRL     | 12668      |        | 1008      |       | 9117  |            | 18.138   |       
|KRL     | 12669      |        | 1009      |       | 9118  |            | 20.906   |       
|KRL     | 12921      |        | 1010      |       | 9199  |            | 7.005    |       
|KRL     | 12922      |        | 1011      |       | 9120  |            | 9.134    |       
|KRL     | 12838      |        | 1302      |       | 9612  |            | 28.886   |       
|KRL     | 13024      |        | 1012      |       | 9121  |            | 20.250   |       
|KRL     | 1191/12673 | 1522   |           | 10341 |       | 8.106      |          | Heyson
|KRL     | 1192/12674 | 1523   |           | 10342 |       | 16.875     |          | Heyson
|KRL     | 15/12675   |        | 1524      |       | 10343 |            | 22.480   |       
|KRL     | 1190/12676 | 1521   |           | 10338 |       | 23.553     |          | Heyson
|KRL     | 1189/12677 | 1520   |           | 10337 |       | 20.246     |          | Heyson
|KRL     | 12678      |        | 1525      |       | 10344 |            | 19.020   |       
|KRL     | 12679      |        | 1526      |       | 10345 |            | 15.702   |       
|KRL     | 12680      |        | 1527      |       | 10346 |            | 31.626   |       
|KRL     | 12681      |        | 1528      |       | 10347 |            | 14.933   |       
|KRL     | 12682      |        | 1529      |       | 10348 |            | 20.246   |       
|KRL     | 12683      |        | 1530      |       | 10349 |            | 20.335   |       
|KRL     | 12684      |        | 1531      |       | 10350 |            | 12.298   |       
|KRL     | 36016      |        | 4271      |       | 16021 |            | 17.480   |       
|KRL     | 23017      |        | 4272      |       | 16022 |            | 16.631   |       
|KRL     | 36018      |        | 4273      |       | 16023 |            | 16.670   |       
|KRL     | 36019      |        | 4274      |       | 16024 |            | 15.904   |       
|KRL     | 38091      |        | 4275      |       | 16025 |            | 8.730    |       
|KRL     | 38092      |        | 4276      |       | 16026 |            | 20.191   |       
|KRL     | 38093      |        | LO 13528  |       |       |            |          |       
|KRL     | 38094      |        | 4277      |       | 16027 |            | 15.989   |       



| |  | 
| |  | 



---





|Starratt-Olsen |                                       |        |      |       |       |       |            |          | 
|-------------- | ------------------------------------- | ------ | ---- | ----- | ----- | ----- | ---------- | -------- | 
|               |                                       |        |      |       |       |       |            |          | 
|Claim #        |                                       | Parcel |      |       | Pat.# |       | Area (Ha.) | Township
|               |                                       |        |      |       |       |       |            |          | 
|KRL            | 12642                                 |        | 1433 | SR    |       | 9970  |            | 31.614   | 
|KRL            | 12643                                 |        | 1434 | SR    |       | 9971  |            | 45.944   | 
|KRL            | 12644                                 |        | 1435 | SR    |       | 9972  |            | 37.191   | 
|KRL            | 12645                                 |        | 1436 | SR    |       | 9973  |            | 23.524   | 
|KRL            | 12646                                 |        | 1424 | SR    |       | 9961  |            | 10.178   | 
|KRL            | 12647                                 |        | 1425 | SR    |       | 9962  |            | 21.125   | 
|KRL            | 12648                                 |        | 1432 | SR    |       | 9969  |            | 15.678   | 
|KRL            | 12704                                 |        | 1423 | SR    |       | 9956  |            | 17.871   | 
|KRL            | 12705                                 |        | 1415 | SR    |       | 9946  |            | 26.867   | 
|KRL            | 12706                                 |        | 1416 | SR    |       | 9947  |            | 7.976    | 
|KRL            | 12730                                 |        | 1417 | SR&MR |       | 9948  |            | 23.245   | 
|KRL            | 12858                                 |        | 1659 | SR    |       | 10604 |            | 14.536   | 
|KRL            | 12859                                 |        | 1660 | SR    |       | 10605 |            | 11.392   | 
|KRL            | 12860                                 |        | 1661 | SR    |       | 10606 |            | 9.971    | 
|KRL            | 12861                                 |        | 1662 | SR    |       | 10607 |            | 11.016   | 
|KRL            | 12862                                 |        | 1673 | SR    |       | 10608 |            | 14.605   | 
|KRL            | 12863                                 |        | 1663 | SR    |       | 10620 |            | 15.087   | 
|KRL            | 12864                                 |        | 1674 | SR    |       | 10621 |            | 14.107   | 
|KRL            | 12865                                 |        | 1675 | SR    |       | 10622 |            | 12.064   | 
|KRL            | 12875                                 |        | 1664 | SR    |       | 10609 |            | 17.195   | 
|KRL            | 12866                                 |        | 1668 | SR    |       | 10613 |            | 9.575    | 
|KRL            | 12876                                 |        | 1665 | SR    |       | 10610 |            | 22.707   | 
|KRL            | 12877                                 |        | 1676 | SR    |       | 10623 |            | 14.994   | 
|KRL            | 12878                                 |        | 1669 | SR    |       | 10614 |            | 8.231    | 
|KRL            | 12879                                 |        | 1670 | SR    |       | 10615 |            | 15.540   | 
|KRL            | 12880                                 |        | 1666 | SR    |       | 10611 |            | 22.246   | 
|KRL            | 12881                                 |        | 1667 | SR    |       | 10612 |            | 34.528   | 
|KRL            | 12882                                 |        | 1671 | SR    |       | 10616 |            | 29.028   | 
|KRL            | 12883                                 |        | 1672 | SR    |       | 10617 |            | 17.337   | 
|KRL            | 12953                                 |        | 1426 | SR    |       | 9963  |            | 28.530   | 
|KRL            | 12954                                 |        | 1427 | SR    |       | 9964  |            | 31.739   | 
|KRL            | 12955                                 |        | 1428 | SR    |       | 9965  |            | 28.457   | 
|KRL            | 12963                                 |        | 1429 | SR    |       | 9966  |            | 23.848   | 
|KRL            | 12964                                 |        | 1430 | SR    |       | 9967  |            | 11.489   | 
|KRL            | 12965                                 |        | 1431 | SR    |       | 9968  |            | 21.027   | 
|               |                                       |        |      |       |       |       |            |          | 
|               | NB: MR consolidated under parcel 7119 |        |      |       |       |      



| |  | 
| |  | 



---





|Unpatented Claims |          |           |           |       |                   
|----------------- | -------- | --------- | --------- | ----- | ------------------
|                  |          |           |           |       |                   
|Claim #           | Recorded | Expiry    | Township  | Units | Area
        (ac.)
|                  |          |           |           |       |                   
|KRL               | 1184229  | 16-Feb-95 | 16-Feb-02 | Baird | 1                 
|KRL               | 1184231  | 4-May-95  | 4-May-02  | Baird | 2                 
|KRL               | 1184902  | 4-May-99  | 4-May-01  | Baird | 2                 

|Exploration Properties
|----------------------
|                      
|Claim #               
|                      
|KRL                   
|KRL                   
|KRL                   
|KRL                   
|KRL                   
|KRL                   
|KRL                   
|KRL                   
|KRL                   
|KRL                   
|KRL                   
|KRL                   
|KRL                   
|KRL                   
|KRL                   
|KRL                   
|KRL                   
|KRL                   
|KRL                   
|KRL                   
|KRL                   
|KRL                   
|KRL                   
|KRL                   
|KRL                   
|KRL                   
|KRL                   
|KRL                   
|KRL                   
|KRL                   
|KRL                   
|K                     
|K                     
|K                     
|K                     
|K                     
|K                     
|K                     
|K                     
|K                     
|K                     
|K                     
|K                     
|K                     
|K                     
|K                     
|K                     
|K                     
|K                     
|K                     
|K                     
|K                     
|K                     
|K                     
|K                     
|K                     
|K                     
|                      
|                      
|KRL                   
|KRL                   



| |  | 
| |  | 



---





|This is Schedule A-2 to
the Letter Agreement between  Placer Dome (CLA) Limited and Claude Resources Inc.
|-----------------------------------------------------------------------------------------------------------



|Licenses and Leases
|---------------------



|License of Occupation |           |  |             |      |        
|--------------------- | --------- |  | ----------- | ---- | -------
|                      |           |  |             |      |        
|                      | License # |  | Anniversary | Area |        
|                      |           |  |             |      |        
|                      | 13528     |  | 1-Mar-64    |      | 37.497 
|                      |           |  |             |      |        
|                      |           |  |             |      |        
|Lease                 |           |  |             |      |        
|                      |           |  |             |      |        
|                      | Lease #   |  | Anniversary | Area |        
|                      |           |  |             |      |        
|                      | 106887    |  | 1-Feb-93    |      | 108.355
|                      | 106886    |  | 1-Jan-95    |      | 95.902 
|                      |           |  |             |      |        
|                      |           |  |             |      |        
|                      | 107157    |  | 1-Apr-98    |      | 52.941 



| |  | 
| |  | 



---





|This is Schedule A-3 to the
      Letter Agreement 
      between Placer Dome (CLA) Limited and Claude Resources Inc.
|-----------------------------------------------------------------------------------------------------------------------



|Shaft and Hoist Property
|------------------------



| |  |  | Head
frame
| | - |  | ----------

| |  |  | Hoist
house
| | - |  | -----------

| |  |  | Ore
bin building
| | - |  | ----------------

| |  |  | Shaft
house contents
| | - |  | --------------------

| |  |  | Mine
shaft
| | - |  | ----------



| |  | 
| |  | 



---





|This is Schedule A-4 to
the Letter Agreement between  Placer Dome (CLA) Limited and Claude Resources Inc.
|-----------------------------------------------------------------------------------------------------------



|Underlying Agreements
|-----------------------



|1. | The
Madsen Mine
|-- | ---------------



|The Madsen Mine is not subject to any royalties
in favour of any other party.
|-----------------------------------------------------------------------------



|2. | The
Buffalo Property
|-- | --------------------



|The Buffalo Property is subject to a possible 12
1⁄2% net proceeds of production  royalty in favour of Wilanour Resources Limited.
|--------------------------------------------------------------------------------------------------------------------------------



|3. | The
Starratt Olson Property
|-- | ---------------------------



|The Starratt Olson Property is not subject to
any royalties in favour of any  other party.
|------------------------------------------------------------------------------------------



|4. | The
Aiken-Russet Property
|-- | -------------------------



|Pursuant to an agreement dated December 2, 1993
between Claude and United Reef  Limited and Canhorn Mining Corporation, the Aiken-Russet
Property is subject to  2% net smelter return royalty in favour of United Reef Limited
and Canhorn  Mining Corporation. The maximum amount payable under this royalty is
$2,000,000.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|5. | The
Redaurum Property
|-- | ---------------------



|Pursuant to an agreement dated September 11,
1995, between Claude and Redaurum  Limited, Claudes interest in the Redaurum
Property is subject to a 0.4% net  smelter return royalty in favour of Redaurum Limited.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|6. | The
Hagar Option Property
|-- | -------------------------



|The Hagar Option Property is not subject to any
royalties in favour of any other  party.
|----------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|This is Schedule A-5 to
the Letter Agreement between  Placer Dome (CLA) Limited and Claude Resources Inc.
|-----------------------------------------------------------------------------------------------------------



|Rental Property
|-----------------



|Mine Dry Building/Office Complex  Cold Storage
ShedElectrical Shop Building and Contents  Electrical Substation  GatehouseShop/Air
Compressor Building and Contents  Tailings Dams
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|This is Schedule B to
the Letter Agreement between  Placer Dome (CLA) Limited and Claude Resources Inc.
|---------------------------------------------------------------------------------------------------------



|Hazardous Substances Prior to
April 7, 1998
|-------------------------------------------



|There are 123 drums of PCB contaminants at the
Property, broken down as follows:
|--------------------------------------------------------------------------------

|       | 39  |  | Drums of oil containing greater than 10,000 ppm  
|------ | --- |  | -------------------------------------------------
|       | 22  |  | Drums of oil containing between 50 and 10,000 ppm
|       | 14  |  | Drums of oil containing between 2 and 50 ppm     
|       | 46  |  | Drums of soil containing less than 10,000 ppm    
|       | 2   |  | Drums containing tools, clothing, debris, etc    
|       |     |  |                                                  
|Total: | 123 |  | Drums                                            
|       |     |  |                                                  



| |  | 
| |  | 



---





|This is Schedule C to
the Letter Agreement between  Placer Dome (CLA) Limited and Claude Resources Inc.
|---------------------------------------------------------------------------------------------------------



|Description of Charge under the
Occupational Health and Safety Act (Ontario)
|----------------------------------------------------------------------------



| |  | Claude was subject to four charges under the
      Occupational Health and Safety Act (Ontario). Claude entered a guilty
      plea to one charge and the other three charges were withdrawn. Claude was
      fined $60,000 plus a 25% victim surcharge.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|This is Schedule D to
the Letter Agreement between  Placer Dome (CLA) Limited and Claude Resources Inc.
|---------------------------------------------------------------------------------------------------------



|Work Costs
|------------



|Work Costs are costs incurred for exploration
and / or development work,  including any reclamation or remediation, on or for the
benefit of the Property.
|----------------------------------------------------------------------------------------------------------------------------------------------------------



|For the purpose of this Agreement, Work Costs
will include, without limitation, all amounts incurred: in doing geophysical,
geochemical, land, airborne, environmental and/or geological examinations, studies,
assessments, assays, audits and/or surveys; in linecutting, mapping, trenching, and
staking; in searching for, digging, trucking, sampling, working, developing, mining
and/or extracting ores, minerals and metals; in doing diamond and other drilling; in
obtaining, providing, erecting, installing and operating mining plant, milling or other
treatment plant, ancillary facilities, buildings, machinery, tools, appliances and/or
equipment; in construction of access roads and other facilities on or for the benefit of
the Property, in transporting personnel, supplies, mining, milling or other treatment
plant, buildings, machinery, tools, appliances or equipment in, to or from the Property
or any part thereof; in wages and salaries (including fringe benefits) of
personnel directly engaged in performing work on or with respect to the Property; in
assessments or contributions under the Workers Compensation Act, the Unemployment
Insurance Act and other applicable legislation or ordinances relating to such personnel;
in supplying food, lodging and other reasonable needs for such personnel; in obtaining
and maintaining any insurance; in the management of and accounting for such work and
providing consulting and other contract or professional services or facilities relating
to work performed or to be performed hereunder (except for supervisory, legal and
accounting services, which shall be excluded from Work Costs); in taxes, fees, charges,
payments or rentals (including payments made in lieu of assessment or representation
work) or otherwise incurred to transfer the Property pursuant to this agreement and to
keep the Property or any part thereof in good standing; in acquiring access and surface
rights to the Property; in carrying out any negotiations and preparing, settling and
executing any agreements or other documents relating to environmental or indigenous
peoples claims, requirements or matters; in carrying out any requirements or
prerequisites in order to obtain and obtaining all necessary or appropriate approvals,
permits, consents or permissions relating to the carrying out of work, including,
without limitation, environmental permits, approvals or consents; in carrying out
reclamation or remediation; in improving, protecting or perfecting title in the Property
or any part thereof; in carrying out mineral, soil, water, air or other testing; in
preparing engineering, geological, financing, marketing or environmental studies and/or
reports and test work related thereto; and in preparing a feasibility study and/or any
work or reports preliminary or supplementary thereto.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The certificate of an officer of Placer setting forth the
      Work Costs incurred by Placer in reasonable detail will be prima facie
      evidence of the same.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|This is Schedule E to
the Letter Agreement  between Placer Dome (CLA) Limited and Claude Resources Inc.
|---------------------------------------------------------------------------------------------------------



|Restrictions on Transfer
|--------------------------



|1. | Definitions
- In this Schedule, X will mean the party which is subject to the
restrictions on transfer contained herein, and Y will mean the other party
to the Agreement.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|2. | Restrictions
on Transfer - No sale, assignment, transfer or other disposition of the whole or any
part of X `s interest in the Property or its rights, interests or benefits under the
Agreement (including without limitation any royalty rights) may be made by contract,
gift, operation of law or otherwise except upon the conditions set out in this Schedule.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3. | Qualifications
of Transferee - Any transferee hereunder must be qualified under all applicable laws to
own any interest in the Property which may be acquired by a party hereto and must have
obtained all requisite government approvals and provided that such transfer does not
result in any loss of rights with respect to the Property.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4. | Transfer to Wholly Owned Subsidiary, Holding
      Company or Sister Company - X may at any time, subject to delivery of
      the agreement referred to in paragraph 6 of this Schedule, transfer the
      whole or any part of its interest in the Property to:
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) | a
body corporate all the issued and outstanding shares in the  capital of which are owned
directly or indirectly by X; or
| | --- | -------------------------------------------------------------------------------------------------------------------------



| | (b) | a
body corporate which owns directly or indirectly all of the  issued and outstanding
shares in the capital of X; or
| | --- | --------------------------------------------------------------------------------------------------------------------



| | (c) | a
body corporate all the issued and outstanding shares in the  capital of which are owned
directly or indirectly by a body  corporate referred to in subparagraph 4(b) of this
Schedule;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | provided that prior
      to such body corporate thereafter ceasing to have the relationship with
      X which is described in subparagraph 4(a), 4(b) or 4(c) of this Schedule
      as the case may be, such interest must be either:
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | transferred
back to X ; or
| | --- | --------------------------



| | (e) | transferred
to another body corporate having the relationship  with X described in subparagraph 4(a),
4(b) or 4(c) of this  Schedule; or
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------



| | (f) | offered
for sale to Y in accordance with this Schedule.
| | --- | -------------------------------------------------------



|5. | Right
of First Refusal
|-- | ----------------------



| | (a) | Except
as otherwise provided in this Schedule, if X desires  to sell, assign, transfer or
otherwise dispose of all or any part of  Xs interest in the Property or the whole
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| |  | or any part of the rights, interest or benefits
      of X under the Agreement to a proposed purchaser (herein called the Purchaser)
      from whom X will have received a bona fide written offer which it is prepared
      to accept, X will first offer (the Offer) the same in
      writing to Y at the same price and on the same terms as are offered by the
      Purchaser (subject to subparagraphs 5(b) and 5(c) of this Schedule) and
      will therein identify such Purchaser. X will also provide Y with a copy
      of the bona fide written offer that it has received from the Purchaser.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | Subject
to subparagraph 5(c) of this Schedule, if the Offer  is accepted, X will forthwith
transfer to Y the interest specified,  upon Y paying the purchase price. If the Offer is
not accepted by Y  within sixty (60) days of receipt of the Offer, then at any time
during the further period of sixty (60) days immediately thereafter X  may sell, assign,
transfer or otherwise dispose of to the Purchaser  the subject matter of the Offer at the
same or at a higher price but  otherwise on substantially the same terms and conditions
as the  original offer received from the Purchaser under this paragraph;  provided,
however, that prior to consummation of such sale,  assignment, transfer or other
disposition X will first obtain in  writing from the Purchaser the agreement referred to
in paragraph 6 of  this Schedule, acceptable to Y, under which the Purchaser assumes all
(in the event of a total sale) or a pro rata part (in the event of a  partial sale) of
the obligations and liabilities of X under the  Agreement and will cause a duly executed
counterpart thereof to be  delivered to Y. To the extent only that the Purchaser has
agreed to  assume the obligations and liabilities of X under the Agreement, X  shall,
following the completion of the aforesaid sale, be released  from the obligations and
liabilities thereafter due or accruing due  pursuant to the Agreement, but will not be
released from any such  obligations or liabilities theretofore due.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | If
the offer received by X from the Purchaser provides for  any consideration payable to X
otherwise than in cash, the Offer will  include Xs good faith estimate of the cash
equivalent of the  non-cash consideration. If within a period of sixty (60) days of the
receipt of the Offer Y notifies X in writing that it has accepted the  Offer, X will be
bound to sell the subject matter of the Offer to Y on  the terms of the Offer, including Xs
good faith estimate of the  cash equivalent of the non-cash consideration. If, however, Y
disagrees with Xs estimate of the cash equivalent of the  non-cash consideration, Y
will so notify X within the same sixty (60)  day period and Y shall, in such notice,
specify what it considers, in  good faith, the fair cash equivalent to be and the
resulting total  purchase price. If Y so notifies X, X will have ten (10) days from
receipt of such notice to notify Y of its acceptance or rejection of  Ys good faith
estimate of the cash equivalent of the non-cash  consideration. If X accepts Ys
estimate within said ten (10) day  period then Y will be deemed to have accepted the
Offer subject to  adjustment of the cash equivalent portion thereof to conform to  Ys
good faith estimate. If X rejects Ys estimate or fails  to respond within said ten
(10) day period the cash equivalent of the  non-cash consideration will be determined by
arbitration pursuant to  paragraph 7.9 of the agreement to which this Schedule is
attached and  the Offer will remain open during the arbitration and for a period of
thirty (30)
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| |  | days
following the decision of the arbitrator. If the  Offer (adjusted to  reflect the
arbitrators determination of the  cash equivalent of the non-cash  consideration)
is not accepted by Y  within thirty (30) days following the decision of  the arbitrator,
then  at any time during the further period of sixty (60) days  immediately  thereafter X
may sell, assign, transfer or otherwise dispose of to the  Purchaser the subject matter
of the Offer subject to the conditions  set out in  subparagraph 5(b) of this Schedule.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|6. | Rights
and Liabilities - Any sale, assignment, transfer or other disposal by X of its
interest or portion thereof pursuant to the provisions of this Schedule will carry the
rights, and will delegate and make the interest subject to, all the liabilities
and obligations of X under the Agreement. The transferee of such interest shall,
by written agreement with and for the benefit of Y, assume and agree to pay and
perform such liabilities and obligations. Such assumption will not serve to
release or discharge the transferring party from any of the said liabilities or
obligations theretofore accrued with respect to the interest or portion thereof
being transferred, but will release and discharge the transferring party from all of
the said liabilities and obligations thereafter accruing with respect to the interest
or portion thereof being transferred. The transferee will appoint a single agent
for service and all communication to and from the transferee will be made through this
agent.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7. | Improper
Transfer is Void - Any sale, assignment, transfer or other disposition of the Property
or any interest therein or of the rights, interests or benefits under the Agreement
which violates the terms of this Schedule will be void.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|AMISK LAKE OPTION AGREEMENT
|---------------------------



|This Agreement is made with an effective date as
of the 1st day of October, 1995
|--------------------------------------------------------------------------------



|BETWEEN:
|--------



| |  | HUSKY
OIL OPERATIONS LTD., a body corporate, incorporated under the laws of Alberta,
carrying on business in Saskatchewan (hereinafter sometimes referred to as Husky),
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|OF THE FIRST PART
|-----------------

|AND:
|----



| |  | CAMECO
CORPORATION, a body corporate, incorporated under the laws of Canada and registered to
carry on business in the Province of Saskatchewan (hereinafter sometimes referred to as
Cameco),
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|OF THE SECOND PART
|------------------

|AND:
|----



| |  | CLAUDE
RESOURCES INC., a body corporate, with its head office at Saskatoon, Saskatchewan,
carrying on business in Saskatchewan (hereinafter referred to as Claude),
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



|OF THE THIRD PART
|-----------------

|WHEREAS:
|--------



|A. | Husky
and Cameco hold an interest and rights in certain mineral  dispositions in the Province
of Saskatchewan, each as to an undivided  fifty (50%) per cent interest, which interest
and rights are held  pursuant to the Joint Venture Agreement, as hereinafter defined;
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|B. | Husky
and Cameco have agreed to grant to Claude an option to acquire up  to an undivided
seventy (70%) per cent interest in such mineral  dispositions and to become a party to
the
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| | Joint
Venture Agreement, as  hereinafter defined, on the terms and conditions  hereinafter set
forth:
| | -----------------------------------------------------------------------------------------------------



|NOW THEREFORE THIS
AGREEMENT witnesseth that in consideration of the  premises, the mutual covenants and
agreements herein contained and the sum of  Ten ($10.00) Dollars of lawful money of
Canada now paid by each of the parties  hereto to each of the others and other good and
valuable consideration (the  receipt and sufficiency of which is hereby acknowledged by
the parties hereto),  the parties hereto agree as follows:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ARTICLE I  INTERPRETATION AND
DEFINITIONS
|-----------------------------------------



|Section 1.01 Definitions
|------------------------



|As used in this Agreement, the following words
and phrases shall have the  following meanings:
|----------------------------------------------------------------------------------------------



|(a) | Affiliate means
any corporation, partnership, joint venture or other form of enterprise which directly
or indirectly, controls, is controlled by, or is under common control of a party to this
Agreement where control means possession, directly or indirectly, of the
power to elect the majority of the directors of such corporation or other entity, or to
direct or cause the direction of the management and policies of such corporation or
other entity through ownership of voting securities, voting units, a voting trust or
otherwise;
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | Approved
Development Program means the program for Development Work and Production
described in a Feasibility Study approved in accordance with Section 4.08 of this
Agreement;
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) | Beginning
of Commercial Production means the first day of the month following the first
three consecutive months of the operation of a Mine in which the Mine first produces
sixty (60%) per cent of one-quarter of its yearly design capacity for Product with a
recovery rate of at least eighty (80%) per cent of its designed recovery rate;
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(d) | Commercial
Quantities shall have the same meaning given to it in the Joint Venture Agreement;
|--- | -----------------------------------------------------------------------------------------------



|(e) | Counterpart
Date shall have the meaning attributed to it in Section 7.01 hereof;
|--- | ----------------------------------------------------------------------------------



| |  | 
| |  | 



---





|(f) | Development
Work means all work necessary for further exploration of any identified
mineralization in the Mineral Dispositions, to develop such mineralization and to bring
it into Production including the construction and installation of all buildings, plant
and equipment required for the Production of Commercial Quantities;
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(g) | Direct
Costs are restricted to proper expenditures and costs which are incurred by Claude
directly in, or are incidental but unavoidably related to Exploration Work, Development
Work, or Production of the Mineral Dispositions.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(h) | Effective
Date means October 1, 1995;
|--- | ---------------------------------------



|(i) | Election shall
have the meaning attributed to it in Section 5.01 hereof;
|--- | --------------------------------------------------------------------------



|(j) | Election
Notice shall have the meaning attributed to it in Section 5.02 hereof;
|--- | ---------------------------------------------------------------------------------



|(k) | Exploration
Work means all prospecting, ground and airborne geophysical and radiometric work,
geochemical surveys, diamond and percussion drilling, bulldozing, trenching, underground
exploration work, and all other work commonly regarded as exploration work in
accordance with good Canadian mining practice, in connection with the Mineral
Dispositions;
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(l) | Feasibility
Study means a study conducted by an Independent Consultant or, with the approval
or deemed approval of both Cameco and Husky, by Claude, in relation to a deposit or
deposits on or in the Mineral Dispositions and recommending for each deposit the optimum
development and mining techniques through an analysis of the following:
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) | reasonable
estimates of capital costs for the development and  start up of the Mine, mill and other
processing and ancillary  facilities required (based on flowsheets, piping and
instrumentation diagrams and other major engineering  diagrams), which cost estimates
shall include reasonable  estimates of:
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | (i) | capitalized
pre-stripping expenditures;
| |  | --- | ---------------------------------------



| |  | 
| |  | 



---





| |  | (ii) | expenditures
required to purchase, construct and  install all machinery, equipment and other
facilities  and infrastructure (including contingencies) required  to bring a Mine into
commercial production including  an analysis of costs of equipment leasing;
| |  | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | (iii) | expenditures
required to perform all other  related work required to commence commercial  production
(including reasonable estimates of working  capital requirements); and
| |  | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | (iv) | all
other direct and indirect costs and general and  administrative expenses that may be
required for a  proper evaluation of the development and mining  technique and associated
annual production levels  analyzed;
| |  | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | with
such  capital cost estimates including a schedule of the  timing of the estimated capital
requirements;
| |  | ------------------------------------------------------------------------------------------------------------



| | (b) | a
review of the nature, extent and rated capacity of the Mine,  machinery, equipment and
other facilities required for the purpose  of Production;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | a
reasonable  estimate of the annual  expenditures  required for the first year  of
Production after the Beginning of Commercial Production,  and for subsequent  years  of
mining  operations,  including  estimates  of  annual  Production,  personnel required,
expenditures for processing, administration,  operating and  maintenance,  taxes  (other
than  income  taxes),  working  capital  funding  requirements,  work commitments,
environmental  compliance costs, reserves for  reclamation  and  shut-down  costs  and
all  other  anticipated  costs  of such  operations; and
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| | (d) | a
comparison of the cost of mining operations conducted by  contract miners to mining
operations conducted by Claude using  its own personnel;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------



| | which
      study shall be in form and substance standard to the mining industry.
| | ---------------------------------------------------------------------------------



|(m) | Fiscal
Year means the one year period commencing on the Effective Date and continuing
until the first anniversary of the Effective Date, and each such period of one year
thereafter;
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(n) | Force
Majeure includes strikes, lockouts, acts of God, actions of elements, laws, rules,
and regulations of governmental bodies or agencies thereof, unavoidable accidents,
delays in transportation, inability to obtain or delay in obtaining necessary materials,
facilities, and equipment in the open market, or any other cause, except financial,
whether similar or dissimilar to those specifically enumerated, which are beyond the
reasonable control of Claude or the party so affected;
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(o) | Independent
Consultant means a consultant or firm of consultants whose experience shall have
included projects similar in size and scope who are able and willing to give an expert
opinion or provide a requested report on matters submitted within a reasonable time and
in accordance with the instructions received;
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(p) | Joint
Venture Agreement means the Amisk Lake Joint Venture Agreement dated November 1,
1987, entered into between Husky and Saskatchewan Mining Development Corporation (to
which Cameco was made a party by way of a novation agreement dated November 8, 1988) as
amended by an amending agreement entered into between Husky and Cameco dated September
4, 1991;
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(q) | Mine shall
have the same meaning given to it in the Joint Venture Agreement;
|--- | ------------------------------------------------------------------------------



|(r) | Mineral
Dispositions means all of the mineral claims and mineral interests listed in
Schedule A to this Agreement, and any mineral claims or other mineral
interests in substitution for or replacement of such interests and shall include any
Mineral Dispositions becoming subject to this Agreement pursuant to Section 10.01 of
this Agreement;
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(s) | Operator shall
have the same meaning given to it in the Joint Venture Agreement;
|--- | ----------------------------------------------------------------------------------



| |  | 
| |  | 



---





|(t) | Option shall
have the meaning attributed to it in Section 4.01 hereof;
|--- | ------------------------------------------------------------------------



|(u) | Option
Expenditures means all Direct Costs, plus an annual management fee rendered by
Claude not exceeding:
|--- | -------------------------------------------------------------------------------------------------------------



| | (i) | with
respect to Exploration Work, Fifteen (15%) of the amount  of all Direct Costs (other than
those established in this  section 1.01 (u)); and
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | with
respect to  Development  Work,  an amount to be agreed upon by Claude and  the Optionors,
based on the principle that the purpose of such  management fee  is that  Claude  should
not  experience  profit  or loss for  conducting  such  Development Work. Based on the
above-referenced  principle,  if the management  fee were to be  established  as at the
Effective Date the parties agree that it  would be not less than 2.5% nor more than 6% of
all Direct  Costs  (other  than  those  established  in this section 1.01 (u)),  but the
management fee is to be  based on the  circumstances  existing  as at the time of
establishment  of the  management fee, based on the  above-referenced  principle.  If the
parties fail  to  agree  on such  management  fee by the date  that an  Approved
Development  Program is  established  pursuant to Section  4.08  hereof,  the issue shall
be  determined by arbitration pursuant to Section 14.08 hereof;
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|which costs, expenses and charges shall be
determined in accordance  with Claudes accounting practices applicable from time to
time to the extent  that those practices are not inconsistent with generally accepted
accounting  principles.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(v) | Optionor shall
mean either Husky or Cameco;
|--- | ---------------------------------------------



|(w) | Optionors shall
mean collectively Husky and Cameco;
|--- | -----------------------------------------------------



|(x) | Optionors
Information shall have the meaning attributed to it in Section 4.08 hereof;
|--- | ----------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|(y) | Participating
Interest shall have the same meaning given to it in the Joint Venture Agreement;
|--- | ------------------------------------------------------------------------------------------------



|(z) | Product means
the end result of Production from a Mine which brings a mineral to its highest state of
refinement at a Mine;
|--- | -----------------------------------------------------------------------------------------------------------------------------



|(aa) | Production means
mining, extracting, processing and handling the ores of minerals or concentrates derived
therefrom which are discovered or developed on or in the Mineral Dispositions and any
other work related thereto as may be incidental or reasonably required;
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(bb) | Shares means
one hundred twenty-five thousand (125,000) common shares in the capital of Claude, to be
issued by Claude to the Optionors pursuant to Section 4.02(a) hereof, which shares shall
be freely tradeable (subject to any hold period established pursuant to applicable
securities legislation) free and clear of encumbrances and listed for trading on the
Alberta Stock Exchange.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Section 1.02 Schedules
|----------------------



|The following schedules are attached to and form
part of this Agreement:
|------------------------------------------------------------------------



|(a)  Schedule A - List of Mineral
Dispositions
|------------------------------------------------



|(b) Schedule B - Royalties and Other
Interests in the Mineral Dispositions
|----------------------------------------------------------------------------



|(c)  Schedule C - Mineral
Dispositions excluded from Area of Interest
|-----------------------------------------------------------------------



|(d) Schedule  D - Authorized Capital
and Issued Shares of Claude
|------------------------------------------------------------------



|Section 1.03 Entire Agreement
|-----------------------------



|This Agreement and the attached schedules are
hereinafter collectively referred  to as this Agreement. This Agreement
constitutes the entire agreement between  the parties and supersedes all previous
agreements and undertakings relating to  the subject matter hereof. The parties
acknowledge that there are no agreements,  undertakings, representations, warranties or
conditions collateral to this  Agreement except as specifically stated otherwise in this
Agreement.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Section 1.04 Caption and Headings
|---------------------------------



| |  | 
| |  | 



---





|The division of this Agreement into articles and
sections and the insertion of  headings are for convenience of reference only and shall
not affect the  interpretation of this Agreement. Any reference to a clause, section or
article  shall be a reference to a section or article of this Agreement unless
specifically stated otherwise.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Section 1.05 Extended Meanings
|------------------------------



|In this Agreement, where the context so requires
or permits, the masculine  gender shall include the feminine and neuter genders, the
plural shall include  the singular and vice versa, and the words person and
persons shall include  corporations, partnerships, and all other entities of
whatever description.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Section 1.06 Currency
|---------------------



|In this Agreement all statements of and
references to currency shall mean  Canadian currency.
|---------------------------------------------------------------------------------------------



|Section 1.07 Governing Law
|--------------------------



|This Agreement shall be governed by and
interpreted in accordance with the laws  of the Province of Saskatchewan and the federal
laws of Canada applicable  therein. Each party attorns to the jurisdiction of the Courts
of the Province of  Saskatchewan, provided however that in the event of a conflict
between this  section and section 14.08 of this Agreement, section 14.08 of the Agreement
shall govern.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Section 1.08 Severability
|-------------------------



|If any provision of this Agreement is found to
be invalid, illegal, or incapable  of enforcement by any Court of competent jurisdiction,
such provision shall  continue to be enforceable to the extent permitted by such Court
against any  person(s) and in any circumstance(s) other than those in which it has been
found  invalid, illegal or incapable of enforcement.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Section 1.09 Amendments
|-----------------------



|No amendments to this Agreement shall be of any
force and effect unless executed  in writing by all the parties to this Agreement.
|----------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|Section 1.10 No Waiver
|----------------------



|The failure of a party to insist on the strict
performance of any provision of  this Agreement, or to exercise any right, power, or
remedy consequent upon a  breach of this Agreement, shall not constitute a waiver of any
provisions of  this Agreement nor limit such partys rights to thereafter enforce
any provision  of the Agreement or exercise any such right, power, or remedy.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ARTICLE II 
      HUSKY AND CAMECO REPRESENTATIONS AND WARRANTIES
|-----------------------------------------------------------------



|Section 2.01 Representations and Warranties
|-------------------------------------------



|Husky and Cameco severally represent and warrant
to Claude that:
|----------------------------------------------------------------



|(a) | they
have been duly incorporated and are validly  subsisting corporations under the laws of
Alberta and  Canada respectively, are properly registered to carry on  business and own
property in Saskatchewan, and have all  corporate power and authority to perform their
obligations  under this Agreement;
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | all
necessary corporate action has been taken by Husky and  Cameco to authorize the
execution, delivery and  performance of this Agreement, and this Agreement  constitutes a
valid and binding obligation of Husky and  Cameco enforceable against each of them in
accordance with  its terms;
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) | to
the best of their knowledge (the parties acknowledging  that no investigations have been
done on the matter):
|--- | ----------------------------------------------------------------------------------------------------------------



| | (i) | the
location of each of the Mineral Dispositions upon the  ground conforms to the description
appearing on the  records in the appropriate records office;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | the Mineral Dispositions were properly located
      according to the laws of the Province of Saskatchewan; and
| | ---- | ---------------------------------------------------------------------------------------------------------------



| | (iii) | the Mineral Dispositions will be in good standing
      for ninety (90) days after the execution of this Agreement;
| | ----- | -------------------------------------------------------------------------------------------------------------------



|(d) | to
the best of their knowledge and except for those matters disclosed  in the letter dated
September 15, 1989 from Saskatchewan Environment  and Public Safety, Husky and
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| | Cameco
have not received notice of any  violation of or investigation relating to any federal,
provincial, or  local environmental law or pollution law, regulation or ordinance with
respect to the Mineral Dispositions.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(e) | their
interest in the Mineral Dispositions is free and clear of any  mortgages, liens, charges,
pledges, security interests, royalties,  encumbrances or other adverse claims of any
description created by,  through or under Husky and Cameco except as set out in Schedule
B and, upon exercise of the Option by Claude, Claude will acquire up to a
seventy (70%) percent undivided interest in the Mineral Dispositions  free and clear of
any mortgages, liens, charges, pledges, security  interests, royalties, encumbrances or
other adverse claims of any  description created by, through, or under Husky and Cameco
other than  those interests more specifically described in Schedule B hereto;
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(f) | no
person has any right or agreement, option, understanding, prior  commitment or privilege
capable of becoming an agreement for the  purchase or acquisition from Husky or Cameco of
any interest in the  Mineral Dispositions except for rights of first refusal given to
both  Cameco and Husky pursuant to the Joint Venture Agreement (which have  been waived
pursuant to Section 4.01 of this Agreement);
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(g) | with
respect to Cameco, Cameco represents and warrants to Claude that  any assessment work
required to maintain the Mineral Dispositions in  full force and effect has been
performed as of the date of the  execution of this Agreement and, with respect to Husky,
Husky  represents and warrants to Claude that, to the best of its knowledge,  any
assessment work required to maintain the Mineral Dispositions in  full force and effect
has been performed as of the date of the  execution of this Agreement;
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (h)except
      for the amending agreement entered into between Husky and Cameco dated September
      4, 1991, the Joint Venture Agreement has not been amended; and
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (i) | Husky and Cameco are not non-residents for the
      purposes of s. 116 of the Income Tax Act (Canada).
| | --- | -------------------------------------------------------------------------------------------------------



|Section 2.02 Survival
|---------------------



| |  | 
| |  | 



---





|Husky and Cameco acknowledge that Claude is
relying on the representations and  warranties contained in Section 2.01 hereof in
entering into this Agreement and  that such representations and warranties are continuing
and will survive the  execution of this Agreement.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Section 2.03 No Other Representations
|-------------------------------------



|Husky and Cameco make no representations or
warranties to Claude other than  those expressly enumerated in Section 2.01. Except and
to the extent provided in  Section 2.01 of this Agreement, Husky and Cameco do not
warranty or represent  title to the Mineral Dispositions or make representations or
warranties with  respect to:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (i) | the
quantity, quality or recoverability of Product;
| | --- | ---------------------------------------------------



| | (ii) | any
estimates of the value of the Mineral Dispositions or the  revenues applicable to future
Production from the Mineral Dispositions;
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------



| | (iii) | any
engineering, geological or other interpretations or economic  evaluations respecting the
Mineral Dispositions;
| | ----- | ------------------------------------------------------------------------------------------------------------------



| | (iv) | the
rates of Production of Product from the Mine;
| | ---- | -------------------------------------------------



| | (v) | the
quality  or condition of the Product, or
| | --- | --------------------------------------------



| | (vi) | the
suitability of the Product for any purpose.
| | ---- | -----------------------------------------------



|Claude acknowledges that it has conducted its
own review and that, except as  expressly set forth in section 2.01 of this Agreement, it
is acquiring its  interests in the Mineral Dispositions on an as-is, where-is basis.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ARTICLE III  CLAUDES
REPRESENTATIONS AND WARRANTIES
|----------------------------------------------------



|Section 3.01 Representations and Warranties
|-------------------------------------------



|Claude represents and warrants to each of Husky
and Cameco that:
|----------------------------------------------------------------



|(a) | it
has been duly incorporated and is a validly subsisting  corporation under the laws of
Canada, is properly registered to  carry on business and own property in Saskatchewan,
and has all  corporate power and authority to perform its obligations under this
Agreement;
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|(b) | all
necessary corporate action has been taken by Claude to authorize  the execution, delivery
and performance of this Agreement, and this  Agreement constitutes a valid and binding
obligation of Claude  enforceable in accordance with its terms.; and
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) | the
authorized capital of Claude consists of the number of and class  of shares shown in
Schedule D hereto under the column entitled  Authorized Capital.
The issued and outstanding shares of Claude  consists of the number and class of shares
shown in Schedule D hereto under the column entitled Issued Shares which
shares have  been duly issued and are currently outstanding and such shares  constitute
all of the outstanding shares of Claude;
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(d) | no
entity other than the Optionors have any agreement, option,  right, warrant or privilege
to purchase or otherwise acquire any of  the Shares;
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------



|(e) | the
Shares will be freely tradeable (subject to any hold period  established pursuant to
applicable securities legislation) and will  be free and clear of any mortgages, liens,
charges, pledges,  security interest, royalties, encumbrances or other adverse claims
and will be listed for trading on the Alberta Stock Exchange;
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(f) | Claude is not in default of any requirement
      of The Securities Act, 1988 (Saskatchewan) and regulations thereto;
      and
|--- | -------------------------------------------------------------------------------------------------------------------------------



|(g) | Claude
is not a party to any action, suit, or other legal  administrative or arbitration
proceeding or governmental  investigation, actual or threatened, which might reasonably
be  expected to impair Claudes ability to perform its obligations under  this
Agreement.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(h) | Claude
is not currently subject to a notice of default from Western  Canadian Shopping Centres
Inc. (WCSC) with respect to any  provision of the participation agreement
dated September 29, 1993  (the Participation Agreement) between Claude and
WCSC, and WCSCs  right to receive future cash flows under the Participation
Agreement  is restricted to the Seabee Gold Mine; and
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(i) | Any
security interest granted by Claude to WCSC or any other party  will not
|--- | ----------------------------------------------------------------------------



| |  | 
| |  | 



---





| | encumber
the  interests of Cameco or Husky.
| | -------------------------------------------



|Section 3.02 Survival
|---------------------



|Claude acknowledges that Husky and Cameco are
relying on the representations and  warranties contained in Section 3.01 hereof in
entering into this Agreement and  that such representations and warranties are continuing
and will survive the  execution of this Agreement.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ARTICLE IV  OPTION RIGHTS
|-------------------------



|Section 4.01 Grant of Option
|----------------------------



|The Optionors hereby grant to Claude the sole
and exclusive irrevocable option  (the Option) subject to compliance with the
provisions of this Agreement, to  earn and acquire from the Optionors up to an undivided
seventy (70%) per cent  ownership interest in the Mineral Dispositions subject only to
the interests set  out in Schedule B hereto and to become a party to the
Joint Venture Agreement,  as hereinafter provided.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Husky and Cameco acknowledge that the undivided
seventy (70%) per cent ownership  interest in the Mineral Dispositions that Claude may
acquire under this  Agreement shall be acquired in equal shares from Cameco and Husky.
Cameco and  Husky:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) | acknowledge
that each of them has waived its right of first  refusal pursuant to the Joint Venture
Agreement in connection  with the potential transfer and assignment by the other of an
ownership interest in the Mineral Dispositions to Claude under  this Agreement;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | agree
that the provisions of this Agreement regarding the  execution of a counterpart of the
Joint Venture Agreement by  Claude satisfies Section 13.03 of the Joint Venture
Agreement;  and
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | agree
that Cameco will be relieved of any obligations as  Operator under the Joint Venture
Agreement until Cameco  resumes such obligations in accordance with this Agreement;  and
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| | (d) | agree
that Cameco shall immediately resume its duties as Operator under the  Joint Venture
Agreement upon:
| | --- | ----------------------------------------------------------------------------------------------------------



| |  | (i) | the
Option lapsing or terminating, whether as  a result of Claudes  failure to exercise
or as a result of  the operation of Section 12.03; or
| |  | --- | ----------------------------------------------------------------------------------------------------------------------------------------------



| |  | (ii) | as
contemplated by Section 7.03.
| |  | ---- | --------------------------------



|Section 4.02 Shares and Initial Expenditures
|--------------------------------------------



|In order to maintain in force the Option granted
to it and to exercise the  Option, Claude must:
|------------------------------------------------------------------------------------------------



| | (a) | issue
the Shares to the Optionors, to be issued fifty (50%)  percent to Husky and fifty (50%)
per cent to Cameco, upon the  execution of this Agreement;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | incur
Option Expenditures in connection with Exploration Work  of at least Five Hundred
Thousand ($500,000) Dollars, during  the First Fiscal Year; and
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | incur
Option Expenditures in connection with Exploration Work  of at least Five Hundred
Thousand ($500,000) Dollars, during  the Second Fiscal Year.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------



|Following the issuance of the Shares as set
forth above and the incurring of the  Option Expenditures in connection with Exploration
Work in the manner set forth  above, Claude shall have earned and acquired from the
Optionors a ten (10%) per  cent ownership interest in the Mineral Dispositions. If Claude
does not issue  the Shares and incur the Option Expenditures in connection with
Exploration Work  in the manner set forth above, Claude shall not acquire any interest in
the  Mineral Dispositions.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Section 4.03 Option Expenditures During the
Third Fiscal Year
|-------------------------------------------------------------



|Upon Claude having earned a 10% ownership
interest in the Mineral Dispositions  pursuant to Section 4.02 hereof, it shall further
have the right, at its  election, to incur additional Option Expenditures in connection
with Exploration  Work of at least $750,000 during the Third Fiscal Year. Following the
expenditure of the aforesaid sum of $750,000 in Option Expenditures in  connection with
Exploration Work during the Third Fiscal Year, Claude shall have  earned and acquired
from the Optionors an additional ten (10%) per cent  ownership interest in the Mineral
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|Dispositions and will then hold an aggregate
twenty (20%) per cent ownership interest in  the Mineral Dispositions. If Claude  fails
to incur such additional Option Expenditures  in connection with  Exploration Work, the
Option shall terminate and Claude shall not  acquire any  portion of such additional ten
(10%) per cent ownership interest in the  Mineral  Dispositions, but Claude shall retain
its initial 10% ownership interest in the  Mineral Dispositions and shall execute a
counterpart of the Joint Venture  Agreement  pursuant to Section 7.01 hereof, respecting
its 10% ownership interest  in the Mineral  Dispositions.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Section 4.04 Option Expenditures During the
Fourth Fiscal Year
|--------------------------------------------------------------



|Upon Claude having earned a 20% ownership
interest in the Mineral Dispositions  pursuant to Sections 4.02 and 4.03 hereof, it shall
further have the right, at  its election, to incur additional Option Expenditures in
connection with  Exploration Work of at least $750,000 during the Fourth Fiscal Year.
Following  the expenditure of the aforesaid sum of $750,000 in Option Expenditures in
connection with Exploration Work during the Fourth Fiscal Year, Claude shall  have earned
and acquired from the Optionors an additional fifteen (15%) per cent  ownership interest
in the Mineral Dispositions and will then hold an aggregate
thirty-five (35%) per cent ownership interest in the Mineral Dispositions. If  Claude
fails to incur such additional Option Expenditures in connection with  Exploration Work,
the Option shall terminate and Claude shall not acquire any  portion of such additional
fifteen (15%) per cent ownership interest in the  Mineral Dispositions, but Claude shall
retain its initial 20% ownership interest  in the Mineral Dispositions and shall execute
a counterpart of the Joint Venture  Agreement pursuant to Section 7.01 hereof, respecting
its 20% ownership interest  in the Mineral Dispositions.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Section 4.05 Additional Thirty-five Percent
|-------------------------------------------



|Upon Claude having earned a thirty-five (35%)
per cent ownership interest in the  Mineral Dispositions pursuant to sections 4.02, 4.03,
and 4.04 hereof, it shall  further have the right, at its election, to earn and acquire
from the Optionors,  an additional thirty-five (35%) per cent ownership interest in the
Mineral  Dispositions by either:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) | incurring
additional Option Expenditures of at least Fourteen  Million ($14,000,000) Dollars by the
end of the Tenth Fiscal  Year, with the minimum amount of Option Expenditures to be
incurred in any one Fiscal Year after Claude has earned its  initial 35% ownership
interest being the amount of Seven  Hundred Fifty Thousand ($750,000.00) Dollars; or
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| | (b) | achieving
the Beginning of Commercial Production within three  months after the end of the Tenth
Fiscal Year for a Mine based  on an Approved Development Program established in
accordance  with Section 4.08 hereof. Provided however that Claude will  not proceed with
Development Work under an Approved  Development Program until it has provided notice to
the  Optionors that a Feasibility Study has become an Approved  Development Program
pursuant to Section 4.08 hereof and has  obtained all necessary regulatory approvals.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|If Claude fails to
either incur the additional Option Expenditures of  Fourteen Million ($14,000,000)
Dollars or achieve the Beginning of Commercial  Production in the manner set forth above,
the Option shall terminate and Claude  shall not acquire any portion of the additional
thirty-five (35%) percent  ownership interest in the Mineral Dispositions, but Claude
shall retain its  initial thirty-five (35%) per cent ownership interest in the Mineral
Dispositions and shall execute a counterpart of the Joint Venture Agreement  pursuant to
Section 7.01 hereof respecting its thirty-five (35%) per cent  ownership interest in the
Mineral Dispositions.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Section 4.06 Reports
|--------------------



|Within ninety (90) days following the end of
each Fiscal Year during which the  Option is outstanding, Claude shall provide Cameco and
Husky with a written  report describing the Exploration Work or Development Work, as the
case may be,  conducted by Claude on the Mineral Dispositions during such immediately
preceding Fiscal Year and the amount of Claudes Option Expenditures expended in
connection therewith and a breakdown of such Option Expenditures sufficient for  audit
purposes. Husky and Cameco shall have the right to conduct, within ninety  days after
receipt of each such written report from Claude, an audit of the  Option Expenditures
incurred by Claude during the immediately preceding Fiscal  Year. The amount of such
Option Expenditures so claimed by Claude in such Fiscal  Year shall be deemed to be
accepted by Cameco and Husky unless Cameco or Husky,  or both, provide Claude with a
written notice of objection within ninety (90)  days following the receipt of such
written report from Claude. If the parties  are unable to resolve the objection within
thirty (30) days following receipt by  Claude of such notice of objection, the matter
shall be resolved by arbitration  pursuant to Section 14.08 hereof.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Section 4.07 Carry Over
|-----------------------



| |  | 
| |  | 



---





|Option Expenditures incurred in any Fiscal Year
in excess of the minimum  required to maintain the Option hereunder may be carried
forward to any future  years. If on the last day of any Fiscal Year the applicable Option
Expenditures  have not been incurred, Claude may either:
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) | pay
the deficiency in cash to the Optionors on or before the  last day of such Fiscal Year; or
| | --- | ----------------------------------------------------------------------------------------------



| | (b) | carry
over the deficiency to the following Fiscal Year and  make additional Option Expenditures
in the following Fiscal  Year in the amount of such deficiency, if Cameco and Husky
provide their consent to this.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|and such payment made in the Fiscal Year or such
Option Expenditures made in the  following Fiscal Year shall be deemed to be Option
Expenditures incurred by  Claude in the Fiscal Year for the purposes of this Agreement.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|For the purposes
of Section 4.07 (b) hereof, it is the intention of the  parties that monies payable by
Claude pursuant to this Agreement should be paid  by way of Option Expenditures, rather
than by way of cash payments to Cameco and  Husky pursuant to Section 4.07 (a) hereof. If
it is impractical or difficult for  technical reasons for Claude to incur Option
Expenditures in a Fiscal Year and  Claude requests the consent of the Optionors to carry
over the deficiency to the  following Fiscal Year pursuant to Section 4.07 (b) hereof,
the Optionors will  not unreasonably withhold their consent.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Section 4.08 Approved Development Program
|-----------------------------------------



|At any time after Claude has earned a
thirty-five (35%) per cent ownership  interest in the Mineral Dispositions pursuant to
Sections 4.02, 4.03, and 4.04  hereof, Claude may present to the Optionors one or more
proposals to commission  a Feasibility Study. A meeting of the parties shall be held to
review each such  proposal. Such meeting shall be convened not less than forty-five (45)
days nor  more than ninety (90) days after receipt by Husky and Cameco of Claudes
proposal for a Feasibility Study. Claude acknowledges and agrees that each  proposal to
commission a Feasibility Study shall:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) | evaluate,
at a minimum, a Mine and mill complex capable of processing 200 tons of ore per day;
| | --- | ----------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| | (b) | describe
the terms of reference for evaluating the proposed  Mine and mill complex; and
| | --- | ---------------------------------------------------------------------------------------



| | (c) | identify
the Independent Consultant which Claude wishes to  have conduct such Feasibility Study or
request the consent of  the Optionors pursuant to Section 1.01 (l) hereof for
Claude,rather than an Independent Consultant, to conduct the  Feasibility Study.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|If Claude requests the consent of the  Optionors
pursuant to section 1.01 (l) hereof for Claude to conduct a  Feasibility Study, the
Optionors shall have thirty (30) days after notice of  such request, to refuse consent.
If neither Optionor provides to Claude within  the said thirty (30) day period, a notice
of refusal of Consent, the Optionors  shall be deemed to have consented to Claude
conducting the Feasibility Study. If  either Optionor refuses consent, Claude shall not
be approved to conduct the  Feasibility Study pursuant to section 1.01 (l) hereof, and
the Feasibility Study  must be conducted by an Independent Consultant.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|In support of each proposal to commission a
Feasibility Study, Claude  shall provide to the Optionors all pertinent information and
data regarding the  relevant Mineral Dispositions. Claude shall be entitled to commission
a  Feasibility Study if the proposal meets the above-noted terms of reference.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|When Claude commissions a Feasibility Study, it
shall request that the  Independent Consultant conduct such additional analyses requested
by either or  both of Cameco and Husky (the Optionor's Information), based on
various target  rates of return and price assumptions requested by Cameco or Husky, of
whether  and when it would be commercially feasible to place the Mineral Dispositions
into Production, including a discounted cash flow rate of return investment  analysis and
net present value estimate using various discount rates requested  by either Cameco or
Husky. The Optionors Information shall not become part of  the Feasibility Study.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Once a Feasibility Study has been conducted, a
copy shall be provided  to each of Cameco and Husky. At the same time, the Optionors
Information shall  also be provided to each of Cameco and Husky.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Claude shall convene a meeting of the parties
not less than forty-five  (45) days and not more than ninety (90) days after delivery of
the Feasibility  Study to Cameco and Husky. The
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|purpose of such meeting shall be to discuss the findings
      and recommendations contained in such Feasibility Study and in the Optionors
      Information. At such meeting the Feasibility Study shall become an Approved
      Development Program upon the approval of the Optionors, which approval shall
      not be unreasonably withheld and shall be deemed to be given if such Feasibility
      Study projects a rate of return for the Mine of at least twelve (12%) percent
      in constant dollar terms. For clarity, the date of the establishment of
      any Approved Development Program shall be the date of such meeting regardless
      of whether the Approved Development Program comes into existence as a result
      of the approval of the Optionors or the deemed approval of the Optionors,
      as the case may be.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ARTICLE V
|---------

|HUSKY AND CAMECO ELECTIONS
|--------------------------



|Section 5.01 Elections
|----------------------



|Upon the establishment of an Approved
Development Program pursuant to section 4.08 hereof, each of the Optionors must
make an election (the Election) to do one of the following:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) | maintain
its fifteen (15%) percent Participating Interest and  participate in the Mine pursuant to
and in accordance with the  provisions of the Joint Venture Agreement with such
participation to commence upon the Counterpart Date;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | maintain its fifteen (15%) percent Participating
      Interest and participate in the Mine pursuant to and in accordance with
      the provisions of the Joint Venture Agreement, with such participation to
      commence upon the Counterpart Date, and to also purchase from Claude a five
      (5%) percent Participating Interest in the Joint Venture Agreement free
      and clear of any encumbrances or other claims except as set out in Schedule
      B hereto, for the sum of Two Million, Three Hundred Fifty-Seven
      Thousand, Five Hundred ($2,357,500.00) Dollars, with the purchase of such
      five (5%) percent Participating Interest to be completed within sixty (60)
      days following the Counterpart Date established by Subsection 7.01 (d) or
      7.01 (e) hereof and the Optionor shall purchase such five per cent Participating
      Interest on an as-is, where-is basis, except that the
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| |  | five (5%)
per  cent Participating Interest shall  be free and clear of  any  encumbrances  or other
claims created by, through, or under  Claude.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------



|If either Optionor exercises this
option, its Cost Share, as defined in the Joint Venture Agreement, shall, as of
the Counterpart Date, be calculated including such additional five (5%) percent
Participating Interest; or
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | sell
to Claude its fifteen (15%) per cent  Participating Interest in the Mineral Dispositions
for the sum of Eight Hundred Thousand ($800,000.)  Dollars, with the sale to be completed
ninety (90)  days after receipt by Claude of an Election Notice,  as hereinafter defined,
and Claude shall:
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | (i) | Purchase
such fifteen (15%) per cent Participating  Interest on an as-is, where-is basis,
except that  the fifteen (15%) per cent Participating Interest  shall be free and  clear
of any encumbrances or other  claims created by, through, or under the Optionor  except
as set out in Schedule B hereto;
| |  | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | (ii) | With
respect to such fifteen (15%) per cent  Participating Interest, in addition to
sub-section  (iii), both be liable for, and in addition indemnify  the Optionor from and
against, all actions, suits,  claims and demands whatsoever arising out of or  resulting
from any acts or ormissions of Claude, its  servants, agents or employees, in regards to
the said  fifteen (15%) per cent Participating Interest from  and after the date of the
establishment of an  Approved Development Program; and
| |  | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | (iii) | Both
be liable for, and in addition indemnify the  Optionor from and against, any and all
environmental  liabilities and obligations respecting the Mineral  Dispositions (whether
arising or accruing before, on,  or after the establishment of an Approved Development
Program) including, without
| |  | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| |  |  | limitation, any
responsibility for environmental clean up or  reclamation.
| |  |  | --------------------------------------------------------------------------



|Provided however that if either or both
of the Optionors make an Election under either subsection (a) or (b) of this
Section 5.01, and Claude does not ultimately earn an additional thirty-five
(35%) per cent ownership interest in the Mineral Dispositions pursuant to
Section 4.05 hereof, then any Optionor who made an election under either
subsection (a) of (b) of this Section 5.01 may, at their option, revoke such
Election which revocation shall be effective as of the Counterpart Date.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Section 5.02 Election Notice
|----------------------------



|Each of the Optionors shall provide
Claude with a notice (herein called the Election Notice) of each of
their Elections within two months of notice to them of the establishment of an
Approved Development Program pursuant to Section 4.08 hereof.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Section 5.03 No Election
|------------------------



|If either of the Optionors has not
provided an Election Notice to Claude within the period specified in Section
5.02 hereof, that Optionor shall be deemed to have made an election under
Section 5.01 (c) hereof.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Section 5.04 Information
|------------------------



|In order to provide the Optionors with
sufficient information with which to  assess which of the Elections each of them may wish
to make, Claude covenants  and agrees to:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) | furnish
the Optionors with annual (or more frequent, if  reasonably requested by the Optionors)
written reports  summarizing the operations carried out by Claude on the  Mineral
Dispositions and the results of Claude's exploration  work;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | regularly
consult with the Optionors concerning the operations  carried out by Claude on the
Mineral Dispositions and keep the  Optionors currently advised of all important matters
arising  in connection therewith;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| | (c) | consult
freely with the Optionors and meet with the Optionors,  upon every reasonable request of
the Optionors, concerning  operations hereunder;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | permit
the Optionors and each of their authorized  representatives access, at the Optionors own
risk and  expense, to the Mineral Dispositions at all reasonable times  and with access
to books, accounts, and records of operations  maintained by Claude and its agents in
connection with the  carried out by Claude in connection with the Mineral  Dispositions;
and
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | provide
all information available to Claude which may reasonably  be requested by the Optionors
relating to any Option Expenditures  made pursuant hereto.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------



|ARTICLE VI
|----------

|TITLE AND POSSESSION
|--------------------



|Section 6.01 Title and Possession
|---------------------------------



|Concurrent with the execution of this
Agreement, the Optionors shall deliver to Claude a conveyance in proper
registerable form in favour of Claude of the title of the Optionors in the
Mineral Dispositions, duly executed by the Optionors. Claude shall expeditiously
register or record any such conveyance in its name, and shall hold title to the
Mineral Dispositions in trust for the parties hereto in accordance with their
respective beneficial interests therein, and shall maintain all of the Mineral
Dispositions in good standing while the Option is outstanding, including making
all payments relating to the Mineral Dispositions required pursuant to any
agreements set out in Schedule B hereto.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Section 6.02 Information
|------------------------



|Upon the Effective Date, the Optionors
shall provide to Claude all drill logs, exploration information, assays, maps,
metallurgical studies and other information which they have in their possession,
relating to any exploration and development activities respecting the Mineral
Dispositions con ducted prior to the date of execution of this Agreement.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|Section 6.03 Possession
|-----------------------



|From the Effective Date and while this
Agreement is in effect, Claude shall:
|----------------------------------------------------------------------------



| | (a) | have
the sole and exclusive possession,  supervision, management and control of  the  Mineral
Dispositions,  including  any  water,  surface  or  other  rights  appurtenant  thereto
or associated  therewith  with full power and authority to  its  servants,  agents  and
contractors  to  prospect,  explore,  and do other  investigation  work on the  Mineral
Dispositions  in  search of  minerals  and  conduct all development  work,  mining work
and milling work in connection with  the Mineral  Dispositions  in such manner as Claude
may in its sole  discretion  determine,  including the right to erect,  bring and install
thereon and remove  therefrom  all such  buildings,  machinery,  equipment  and  supplies
as Claude  shall deem reasonable and proper and to remove therefrom reasonable
quantities  of ores, minerals or metals for assay, or testing purposes; and
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | perform
all work on the Mineral Dispositions in a good and  workmanlike fashion and in accordance
with good Canadian  mining practice and with all applicable laws, regulations,  orders
and ordinances of any governmental authority;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | conduct
diligently and prudently all operations in accordance  with modern, scientific and good
mining and engineering  practices and perform the operations in an efficient and
economic manner with good and sufficient machinery and  equipment;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | purchase
or otherwise provide all necessary material and  supplies;
| | --- | -------------------------------------------------------------------



| | (e) | purchase,
lease or otherwise provide all necessary machinery  and equipment (which may be acquired
or leased from any party  hereto, provided that the price is competitive);
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (f) | comply,
and require compliance of others doing work on the  Mineral Dispositions, with the
requirements of federal,  provincial,
| | --- | --------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| |  | and local laws and, without restricting the generality
      of the foregoing, laws relating to workers' compensation, unemployment insurance,
      income tax, fair employment, and other similar applicable laws with respect
      to any work or operation conducted Claude;
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





| | (g) | take
all proper and reasonable steps for the protection of  rights of surface owners against
damage occasioned by  operations and pay such damages resulting from operations as
agreed and adjudged;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (h) | provide
the Optionors with access, upon written request, to  all the Mineral Dispositions at
reasonable times in order to  observe the conduct of operations or to run tests an
assays,  take samples, and make copies of any data related to the  Mineral Dispositions.
Such access shall be at the Optionor's  expense and risk and must not obstruct or
interfere with the  operations conducted by Claude.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (i) | review
all invoices for approval, pay all approved invoices,  maintain in Canada records in
accordance with generally  accepted accounting principles, and make available such
records for the inspection of any party;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (j) | keep
the Mineral Dispositions free of liens and encumbrances  arising from operations, and
proceed with all diligence to  contest or pay an lien;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------



| | (k) | prosecute
or defend all litigation arising out of operations  hereunder, provided that any party
may also join in the  prosecution or defence of such litigation at its expense;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (l) | duly
pay all taxes (other than royalties and any taxes on  income) rightly levied against the
Mineral Dispositions;
| | --- | -------------------------------------------------------------------------------------------------------------------



| | (m) | maintain
insurance in a minimum amount of three million  dollars in the name of Claude, with the
Optionors as named  insured covering public liability bodily liability bodily  injury and
property damage coverage, automobile public bodily  injury and property damage coverage;
and
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| | (n) | comply
with all terms and conditions of title documents  relating to the Mineral Dispositions
and perform all acts  necessary to maintain them in good standing and in full force  and
effect.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Section 6.04 Failure to Complete
|--------------------------------



|If Claude fails to complete the matters
necessary to exercise the Option or lets the Option lapse, Claude shall:
|----------------------------------------------------------------------------------------------------------------



| | (a) | forthwith
transfer title to the Mineral Dispositions to Cameco  and Husky as their interest may
appear and Claude hereby  constitutes the Optionors as its power of attorney to effect
such registration;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | surrender
possession of the Mineral Dispositions to Cameco;  and
| | --- | ----------------------------------------------------------------



| | (c) | ensure
that there are sufficient assessment credits, royalties  or other payments of any kind
relating to the Mineral  Dispositions to maintain them in good standing for a period of
ninety (90) days from the date of expiration or lapsing of the  Option.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Section 6.05 Information After Election
|---------------------------------------



|Claude shall provide to any Optionor
which has made an Election pursuant to either Section 5.01 (a) or Section 5.01
(b) hereof regular monthly written reports within thirty days after the end of
each month, commencing with the first full month after the receipt of an
Election Notice, detailing the development activities on the Mineral
Dispositions during the preceding month.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ARTICLE VII
|-----------

|JOINT VENTURE AGREEMENT
|-----------------------



|Section 7.01 Joint Venture Agreement
|------------------------------------



| |  | 
| |  | 



---





|Claude shall execute a counterpart of
the Joint Venture Agreement thereby making Claude a party thereto, after Claude
has earned at least an undivided 10% interest in the Mineral Dispositions, on
the earlier of the following dates if on the earlier of such dates at least one
of the Optionors still has a Participating Interest (with the earlier of such
dates being hereinafter referred to as the Counterpart Date):
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) | within
sixty (60) days after Claude exercises its right to  terminate the Option under Section
12.01 hereof, or the  Optionors exercise their rights to terminate the Option under
Section 12.03 hereof, if Claude has earned at least a ten  (10%) percent ownership
interest in the Mineral Dispositions;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | within
sixty (60) days of the end of the Third Fiscal Year if  Claude does not earn an
additional ten (10%) percent interest  under Section 4.03 hereof;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | within
sixty (60) days of the end of the Fourth Fiscal Year if  Claude does not earn an
additional fifteen (15%) percent  ownership interest under Section 4.04 hereof;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | within
sixty (60) days of the end of the Tenth Fiscal Year if  Claude has not earned an
additional thirty-five (35%) percent  ownership interest in the Mineral Dispositions
under Section  4.05 hereof; and
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (e) | within
sixty (60) days after the date that Claude earns an  additional thirty-five (35%) percent
ownership interest in the  Mineral Dispositions pursuant to Section 4.05 hereof;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|with Claudes Participating  Interest under
the Joint Venture Agreement deemed to be equivalent to its  ownership interest in the
Mineral Dispositions. All activity with respect to the  Mineral Dispositions from and
after the Counterpart Date, including the  appointment of the Operator, shall be governed
by the provisions of the Joint  Venture Agreement and any Approved Development Program
under this Agreement  shall become the Approved Development Program for the purposes of
the Joint  Venture Agreement. On the Counterpart Date this Agreement shall be superseded
by  the Joint Venture Agreement, and the parties shall be released from any and all
obligations and
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|liabilities arising out of this Agreement except
for such  obligations which arose or accrued on or before the Counterpart Date and except
for section 9.02(c) hereof.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Section 7.02 No Amendment
|-------------------------



|Following the execution of this
Agreement, the Optionors shall not amend the Joint Venture Agreement without the
prior written consent of Claude.
|-------------------------------------------------------------------------------------------------------------------------------------------------



|Section 7.03 Operator
|---------------------



|On the Counterpart Date, Claude shall
automatically become the Operator if it owns at least a seventy (70%) per cent
interest in the Mineral Dispositions. If Claude owns less than a seventy (70%)
per cent interest in the Mineral Dispositions on the Counterpart Date, the terms
of the Joint Venture Agreement shall govern the appointment of the Operator
under the Joint Venture Agreement.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Section 7.04 Amendment of Joint Venture
Agreement on Counterpart Date
|---------------------------------------------------------------------



|Cameco, Husky, and Claude hereby agree
that the Joint Venture Agreement shall be amended as follows, effective from and
after the Counterpart Date:
|---------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) | The words If there is an equal division
      within the Management Committee upon whether or not the plans and budgets
      should be approved in the first and second lines of section 7.02 (3)
      of the Joint Venture Agreement shall be deleted and replaced with the following
      words - If less than seventy-one (71%) per cent of the Participating
      Interests on the Management Committee agree that the plans and budget should
      be approved;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | The words If fifty (50) per cent or more
      but less than sixty (60%) per cent in line 1 of section 9.04 (3) of
      the Joint Venture Agreement shall be deleted and replaced with the following
      words - If fifteen (15%) per cent or more but less than seventy-one
      (71%) per cent;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| | (c) | The words and number sixty (60%) percent
      in the first line of section 9.04 (4) of the Joint Venture Agreement shall
      be deleted and replaced with the words and number seventy-one (71%)
      percent; and
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | The words instruction, or with the concurrence
      of, the Management Committee in lines 9 and 10 of section 12.06 of
      the Joint Venture Agreement shall be deleted and replaced with the following
      words - the unanimous instruction, or with the unanimous concurrence of,
      all the Parties".
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ARTICLE VIII
|------------

|RIGHT OF FIRST REFUSAL
|----------------------



|Section 8.01 Right of First Refusal
|-----------------------------------



|The parties agree that they intend to
grant each other a right of first refusal on any assignments of their rights and
obligations under this Agreement pursuant to Section 11.01 of this Agreement
substantially in accordance with Section 13.01 of the Joint Venture Agreement
and subject to the exemptions thereto set forth in 13.02 of the Joint Venture
Agreement. Accordingly, Sections 13.01 and 13.02 of the Joint Venture Agreement
and any definitions referred to therein are hereby incorporated into this
Agreement by this reference and shall apply, mutatis mutandis. For such
purposes, Claudes interest under this Agreement and any interest it earns
in the Mineral Dispositions, under this Agreement shall be deemed to be
Claudes Participating Interest for purposes of Section 13.01 of the Joint
Venture Agreement and, for the purposes of the operation of Section 13.01 of the
Joint Venture Agreement, Claudes Participating Interest shall be equal to
the ownership interest in the Mineral Dispositions it has earned from time to
time under this Agreement.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ARTICLE IX
|----------

|MISCELLANEOUS OBLIGATIONS
|-------------------------



|Section 9.01 Drill Logs Assays and Maps
|---------------------------------------



|Claude shall maintain all customary  drill logs,
exploration information, assays, maps, metallurgical studies and  other information
relating to its Exploration Work or Development Work on or  from
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|the Mineral Dispositions, and provide copies to
the other parties in  accordance with the provisions of this Agreement.
|-----------------------------------------------------------------------------------------------------------------------



|Section 9.02 Environmental Matters
|----------------------------------



|(a) | Subject
to section 5.01 (c) (iii) hereof, Cameco and Husky shall  maintain whatever
responsibility they have at law for any reclamation  work or other environmental
liabilities incurred in connection with the  Mineral Dispositions prior to the Effective
Date. Claude shall be  solely responsible for any reclamation work or other environmental
liabilities incurred in connection with its Exploration Work,  Development Work, or any
other action of or work conducted by Claude,  its employees, agents, or servants, from
the Effective Date until the  Counterpart Date. Subject to section 5.01 (c) (iii) hereof:
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (i) | from
and after the Counterpart Date, such reclamation work or other  environmental liabilities
after the Counterpart Date shall be shared by  the parties in accordance with the
provisions of the Joint Venture  Agreement ; but
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | no
party shall be released from any such liabilities arising before the  Counterpart Date;
| | ---- | ------------------------------------------------------------------------------------------



|(b) | Claude
is aware of those matters disclosed in the letter from  Saskatchewan Environment and
Public Safety to Cameco dated September  15, 1989. On September 14, 1995, a
representative of Claude inspected  the surface area of the former Laurel Lake site
referred to in the said  letter and, based on such inspection, to the best of Claude's
knowledge, there are no material obligations set out in the said letter  that remain
unsatisfied by Cameco and Husky relating to the surface  area of the former Laurel Lake
site.; and
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) | No
later than ninety (90) days after the Counterpart Date, Claude shall  conduct a site
assessment and submit a copy of this assessment to  Cameco and Husky.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------



|Section 9.03 Waiver of Rights of First Refusal
|----------------------------------------------



|The Optionors hereby waive in favour of
Claude any rights of first refusal given to them in connection with any
disposition or intended disposition to Claude of all or any portion of the
underlying interests set out in Schedule B hereof, by the owner of
such interest. Any monies expended by Claude in connection with the acquisition
by Claude of all or any portion of the underlying interests set out in Schedule
B hereof, shall not form part of Option Expenditures.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|ARTICLE X
|---------

|AREA OF INTEREST
|----------------



|Section 10.01 Area of Interest
|------------------------------



|If at any time prior to the Counterpart
Date, Claude, or any of its Affiliates, or either Optionor, or any of their
respective Affiliates, acquire ownership, either directly or indirectly, of any
mineral dispositions of any description within an area defined by extending the
boundaries of the Mineral Dispositions as of the date of this Agreement two (2)
kilometres outwards, such additional Mineral Dispositions shall be subject to
the terms and conditions of this Agreement as if they were Mineral Dispositions
hereunder. However, the foregoing shall not be applicable to:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) | any mineral dispositions in such area which
      are now owned by Claude or either Optionor (the Mineral Dispositions within
      such area that are now owned by Claude are shown on Schedule C
      attached hereto;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | the acquisition by Claude or either Optionor
      of any interest set out in Schedule B attached hereto from the
      holder of any such interests; or
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | the acquisition by Claude of any interest in
      the mineral disposition set out and described in Schedule C
      attached hereto.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------



|Cameco and Husky acknowledge and agree that:
|--------------------------------------------



| | (d) | Section
8.03 of the Joint Venture Agreement is superseded by  this Section during the period of
time from after the  effective date of this Agreement to the Counterpart Date;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (e) | their
respective ownership interests in any Mineral  Disposition so acquired shall, subject to
Claude's rights  hereunder, equal their participating interests under the Joint  Venture
Agreement from time to time.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|Section 10.02 Area of Interest after the
Counterpart Date
|---------------------------------------------------------



|Cameco, Husky and Claude hereby agree that
Section 8.03 of the Joint Venture  Agreement shall be amended as follows, effective from
and after the Counterpart  Date:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Section 8.03 Area of Common Interest
|--------------------------------------



|If a Party or its subsidiaries,
agents or any other party with whom it is related or associated during such time
as that Party hereto holds a Participating Interest hereunder acquires
ownership, either directly or indirectly, of any mineral claims, mineral leases
or other interest in minerals (the Mineral Dispositions) within an
area defined by extending the boundaries of the Program Lands as of the
effective date of that certain Option Agreement between Cameco Corporation,
Husky Oil Operations Ltd. and Claude Resources Inc. dated July 20, 1995 (the
Option Agreement) two kilometres outwards, such Mineral Dispositions
shall for all purposes be deemed to be held in trust as a new Project Area for
the Parties hereto, and the acquiring party shall notify the other parties
hereto of its acquisition and its cost thereof. Such notification shall be made
as soon as possible after the acquisition and shall provide a description of the
property acquired, a statement of the cost in connection therewith and all other
pertinent information. The other Parties shall be entitled to participate
therein by furnishing written notice of their decision to participate, which
notice shall contain the undertaking by such Parties to pay their proportionate
share of the acquisition costs thereof. If any or all of the Parties have
elected to participate by written notice to the Party having acquired such
property within thirty (30) days from receipt of notification regarding the
acquisition, then the Party receiving such election notice shall forthwith
transfer and assign the property to the Parties having elected to participate in
proportion to their Participating Interests, or as the Parties may otherwise
mutually agree. Failure by a Party hereto to give written notice of its decision
to participate within thirty (30) days of its receipt of such notice of
acquisition shall, for all purposes, be deemed to be a decision by it not to
participate therein. Notwithstanding the foregoing, this right of first refusal
shall not apply to any Mineral Dispositions or other interests which are
exempted from the application of Section 10.01 of the Option Agreement. 
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ARTICLE XI
|----------

|ASSIGNMENTS
|-----------



|Section 11.01 Assignments
|-------------------------



| |  | 
| |  | 



---





|Subject to the right of first refusal
set out in Section 8.01 hereof, this Agreement may not be assigned either in
whole or in part by Claude without Claude first having obtained the written
consent of the Optionors, which consent shall not be unreasonably withheld. It
shall be reaonsable for either Optionor to withhold its consent to a disposition
unless such disposition is made subject to this Agreement and the proposed
assignee has agreed with the Optionors to be bound by the terms of this
Agreement, or if either Optionor believes that the proposed assignee does not
have the financial capability to meet prospective obligations arising hereunder.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Subject to the right of first refusal
set out in Section 8.01 hereof, this Agreement may not be assigned either in
whole or in part by either Optionor without either Optionor first having
obtained the written consent of Claude, which consent shall not be unreasonably
withheld. It shall be reaonsable for Claude to withhold its consent to a
disposition unless such disposition is made subject to this Agreement and the
proposed assignee has agreed with Claude to be bound by the terms of this
Agreement, or if Claude believes that the proposed assignee does not have the
financial capability to meet prospective obligations arising hereunder.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Any Party assigning its interest in this
Agreement and in the Mineral  Dispositions hereunder shall be relieved from any further
obligations under this  Agreement from and after the effective date of any such
assignment other than  its obligations to satisfy any accrued obligations or liabilities,
whether or  not known to such Parties as of the date of such assignment and transfer.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Claude may at any time propose to Cameco and
Husky to divide up the  Mineral Dispositions into a number of smaller project areas.
Forthwith upon  receipt of such proposal, Cameco and Husky shall decide whether to accept
or  reject such proposal in whole or in part.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ARTICLE XII
|-----------

|TERMINATION
|-----------



|Section 12.01 Claudes Right to Terminate
|-----------------------------------------



|Claude shall have the right to  terminate the
Option at any time upon written notice to the Optionors. Upon  termination of the Option,
if Claude has earned at least an undivided 10%  interest in the Mineral Dispositions, the
parties shall execute a counterpart of  the Joint Venture Agreement pursuant to Section
7.01 hereof. Upon termination of  the Option, Claude shall surrender to the Operator
under the Joint Venture  Agreement possession of the Mineral
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|Dispositions, and shall have no further
obligations under this Agreement other than to satisfy any accrued obligations  or
liabilities whether or not known to Claude as of the date of such assignment  and
transfer.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Section 12.02 Assessment Credits
|--------------------------------



|If Claude exercises its right to
terminate the Option in accordance with Section 12.01 hereof, Claude shall
ensure that there are sufficient assessment credits, royalties or other payments
of any kind relating to the returned Mineral Dispositions to maintain them in
good standing for a period of ninety (90) days from the date of notice to the
Optionors by Claude advising of such termination.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Section 12.03 Termination for Default
|-------------------------------------



|If at any time during the period that
the Option is outstanding, Claude fails to cure any material breach of this
Agreement within a period of sixty days after receipt of a notice from the
Optionors advising that the Optionors intend to terminate this Agreement because
of such material breach, then, subject to the right of Claude to dispute the
matter and submit the matter for determination by arbitration pursuant to
Section 14.08 hereof, the Optionors may terminate the Option. Exercise of such
right by the Optionors shall be without prejudice to any other rights or
remedies the Optionors may have at law or in equity as a result of such material
breach of this Agreement by Claude. If the Optionors exercise their rights under
this Section 12.03 after Claude has earned an interest in the Mineral
Dispositions pursuant to Sections 4.02, 4.03, 4.04, or 4.05 hereof, the interest
earned by Claude in the Mineral Dispositions shall be retained by Claude and
Claude shall execute a counterpart of the Joint Venture Agreement in accordance
with Section 7.01 of this agreement, within thirty (30) days of termination of
the Option.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Section 12.04 Liens
|-------------------



|In any reconveyance of the Mineral
Dispositions by Claude to the Operator under the Joint Venture Agreement, Claude
shall ensure that the Mineral Dispositions are conveyed free of any
builders lien created by, through or under Claude.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ARTICLE XIII
|------------

|FORCE MAJEURE
|-------------



|Section 13.01 Suspension of Obligations
|---------------------------------------



| |  | 
| |  | 



---





|If Claude is prevented by Force Majeure
from timely performance of any of its obligations under this Agreement (other
than the payment of any of the Option Expenditures), such failure shall be
excused and the time period for exercising the Option shall be extended for an
additional period of time equal to the duration of such Force Majeure. Claude
shall promptly notify the Optionors in writing of both the occurrence of a Force
Majeure and termination of such Force Majeure. Claude shall use reasonable
efforts to remedy any Force Majeure, but shall not hereunder be obligated to
contest the validity of any law or regulation, nor any action of inaction of any
civil or military authority.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ARTICLE XIV
|-----------

|MISCELLANEOUS
|-------------



|Section 14.01 Notices
|---------------------



|Any notice under this Agreement will be
given in writing, by delivery in person to a named representative or by mail,
except during an actual or anticipated postal disruption, or telecopier,
properly addressed to each party. A notice given will be deemed given only when
received by the party to whom such notice is directed; except that any notice
given by telecopier properly addressed to the party to whom given shall be
deemed given to and received by the party to whom directed 24 hours after such
notice is successfully telecopied or five days after it is mailed. Each
partys address will be the following until such party specifies another
address by written notice:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|To Husky at:  |  | Husky Oil Operations Ltd.             
|------------- |  | --------------------------------------
|              |  | 707 - 8th Avenue S.W.                 
|              |  | P.O. Box 6525, Station D              
|              |  | Calgary, Alberta                      
|              |  | K2P 3G7                               
|              |  | Telecopier: (403) 298-6798            
|              |  | Attention: Land Manager               
|              |  |                                       
|To Cameco at: |  | Cameco Corporation                    
|              |  | 2121 - 11th Street West               
|              |  | Saskatoon, Saskatchewan               
|              |  | S7M 1J3                               
|              |  | Telecopier: (306) 956-6390            
|              |  | Attention: Vice-President, Exploration
|              |  |                                       
|To Claude at: |  | Claude Resources Inc.                 
|              |  | 200, 224 - 4th Avenue South           
|              |  | Saskatoon, Saskatchewan               
|              |  | S7K 5M5                               
|              |  | Telecopier: (306) 668-7500            
|              |  | Attention: President                  

| |  | 
| |  | 



---





|Section 14.02 Payments
|----------------------



|Payments shall be made by certified
cheque made payable to the payee and mailed to the payee at the address set out
in Section 14.01 hereof.
|--------------------------------------------------------------------------------------------------------------------------------------------



|Section 14.03 Waiver of Statutes
|--------------------------------



|(1) The parties agree that The Land Contracts
(Actions) Act (Saskatchewan) shall have no application to this Agreement or to any
agreement contemplated by or required to implement any provision of this Agreement,
including, without limitation, any agreement by a party to purchase the interest of any
other party in the Mineral Dispositions;
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) The parties agree that The Limitation of
Civil Rights Act (Saskatchewan) shall have no application to:
|----------------------------------------------------------------------------------------------------------



| | (a) | this
Agreement;
| | --- | ---------------



| | (b) | any
agreement or instrument renewing or extending or  collateral to this Agreement including
without limitation, any  agreement by a party to purchase any interest in the Mineral
Dispositions of any other party; and
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | the
rights, powers of remedies of any party under this  Agreement and under any of the
agreements or instruments  referred to in clause (b) of this Section 14.03 (2).
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|Section 14.04 Other Interests
|-----------------------------



|The rights and obligations of the
parties under this Agreement are strictly limited to the subject matter of this
Agreement. Subject to Section 10.01, each of the parties shall have the free and
unrestricted right to enter into, conduct and benefit from any and all other
business ventures of any kind whatsoever, whether or not competitive with the
activities undertaken under this Agreement, without disclosing such activities
to the other party or inviting or allowing the other party to participate
therein.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Section 14.05 Relationship of Parties
|-------------------------------------



|It is not the intention of the parties
to create a mining, commercial, or other partnership or agency relationship
between the parties, and this agreement shall not be construed so as to render
the parties liable as partners or as creating a mining, commercial, or other
partnership, and no party shall be or shall deemed to be, or shall hold itself
out to be an agent of any party.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Section 14.06 Shares
|--------------------



|The Optionors shall provide to the
Optionee five (5) business days notice of intended disposition prior to any
disposition by them of any of the Shares. Claude agrees that it will not take
any actions, within such five day Notice period, to materially affect the price
of the Shares.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Section 14.07 Further Assurances
|--------------------------------



|Each party hereto shall do and provide  all acts
and things and shall execute such deeds, assignments, endorsements and  instruments and
evidences of transfer and shall give such
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|assurances as shall be  necessary or appropriate
in connection with the performance of this Agreement.
|------------------------------------------------------------------------------------------------------



|Section 14.08 Arbitration
|-------------------------



|If the parties have any disputes in
connection with this Agreement which cannot be resolved between them, then the
dispute shall be settled by arbitration pursuant to the provisions of The
Arbitration Act, 1992 (Saskatchewan) as provided in this paragraph. Any party
desiring arbitration shall make a written demand for the same and within 30 days
after such written demand is received by the other party, all parties hereto
shall agree upon and appoint a single arbitrator. In the event the parties shall
fail to agree upon and appoint a single arbitrator within the time period set
forth herein, Claude and the Optionors shall within seven (7) days thereafter
each designate an arbitrator, and both arbitrators shall within thirty days
after their designation, jointly designate a third arbitrator satisfactory to
them who shall be chairman of the arbitration panel. If either Claude or the
Optionors fail to appoint an arbitrator or the arbitrators designated by Claude
and the Optionors are unable to agree upon the selection of the third arbitrator
within the time periods set forth above, such arbitrators shall be appointed by
a Judge of the Court of Queens Bench of Saskatchewan. The expenses of the
arbitrators shall be paid as the arbitrators shall decide in the award. All
arbitration proceedings shall be in the City of Saskatoon, Saskatchewan, Canada,
or elsewhere as the arbitrators shall decide. The decision of the arbitrators
shall be final and binding on the parties hereto. Any and all arbitrators
appointed to resolve a dispute pursuant to Section 14.08 shall be suitable
professionals, having regard to the nature of the dispute.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Section 14.09 Successors and Assigns
|------------------------------------



|This Agreement shall be binding upon
and enure to the benefit of the respective successors and permitted assigns of
the parties.
|--------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|Section 14.10 Confidentiality
|-----------------------------



|During the term of this Agreement, all
parties shall take all reasonable steps to preserve the secrecy and
confidentiality of the terms of this Agreement. Claude shall not disclose any
technical data, reports, records, or other information relating to the Mineral
Dispositions to any third parties except as required by law or with the written
consent of the Optionors, such consent not to be unreasonably withheld. Where a
party releases information based on a requirement at law or under the rules and
regulations of any regulatory agency or stock exchange having jurisdiction, it
will deliver a copy to the other party for content approval at least one (1)
full business day prior to release.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Section 14.11 Perpetuities
|--------------------------



|Notwithstanding anything contained in
this Agreement, the right of any party to acquire any interest in the Mineral
Dispositions from any other party shall not extend beyond either the period
prescribed by the applicable perpetuities regulations or, in the absence of
these regulations, twenty-one (21) years after the lifetime of the last survivor
of the lawful descendants now living of Her Majesty Queen Elizabeth II.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Section 14.12 Counterparts
|--------------------------



|This agreement may be executed by any
party hereto, by its signing a counterpart hereof, each of which counterpart so
executed shall be deemed to be an original, and such counterparts.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|IN  WITNESS WHEREOF the parties make  this
Agreement effective as of the  date first above written.
|---------------------------------------------------------------------------------------------------

|       |  | HUSKY OIL OPERATIONS LTD.
|------ |  | -------------------------
|       |  |                          
|       |  | Per:                     
|       |  |                          
|       |  |                          
|(seal) |  | Per:                     
|       |  |                          
|       |  |                          
|       |  | CAMECO CORPORATION       
|       |  |                          
|       |  | Per:                     
|(seal) |  |                          
|       |  |                          
|       |  | Per:                     
|       |  |                          
|       |  |                          
|       |  | CLAUDE RESOURCES INC.    
|       |  |                          
|       |  | Per:                     
|(seal) |  |                          
|       |  |                          
|       |  | Per:                     
|       |  |                          



| |  | 
| |  | 



---





|SCHEDULE A
|------------



|AMISK LAKE
Schedule of Land Holdings
|------------------------------------

|Mineral Disposition: |  | Expiry Date:     
|-------------------- |  | -----------------
|                     |  |                  
|CBS 3102             |  | August 3, 2002   
|CBS 3235             |  | October 7, 2002  
|CBS 3694             |  | July 5, 2004     
|CBS 6716             |  | January 10, 2002 
|CBS 6919             |  | June 28, 1997    
|CBS 7365             |  | April 13, 2002   
|CBS 7366             |  | April 13, 2002   
|CBS 7367             |  | August 8, 1997   
|S 95636              |  | June 16, 2002    
|S 95637              |  | June 16, 2002    
|S 95638              |  | June 16, 2002    
|S 95639              |  | June 16, 2002    
|S 95827              |  | July 12, 1002    
|S 95828              |  | July 12, 2002    
|S 96091              |  | June 20, 2002    
|S 96092              |  | June 20, 2002    
|S 96093              |  | June 20, 2002    
|S 96094              |  | June 20, 2002    
|S 96114              |  | November 14, 2002
|S 96115              |  | November 14, 2002
|S 96116              |  | November 14, 2002
|S 96117              |  | November 14, 2002
|S 96120              |  | November 14, 2002
|S 96121              |  | November 14, 2002
|S 96122              |  | November 14, 2002
|S 96123              |  | November 14, 2002
|S 96124              |  | November 14, 2002
|S 96125              |  | November 14, 2002
|S 96126              |  | November 14, 2002
|S 96127              |  | November 14, 2002
|S 96128              |  | November 14, 2002
|S 96129              |  | November 14, 2002
|S 96130              |  | November 14, 2002
|S 96167              |  | November 15, 2002
|S 96168              |  | November 15, 2002
|S 96169              |  | November 15, 2002



| |  | 
| |  | 



---



|Mineral Disposition: |  | Expiry Date:      
|-------------------- |  | ------------------
|                     |  |                   
|S 96170              |  | November 15, 2004 
|S 96210              |  | June 6, 2002      
|S 96211              |  | June 6, 2002      
|S 96212              |  | June 6, 2002      
|S 96232              |  | June 6, 2002      
|S 96233              |  | June 6, 2002      
|S 96235              |  | June 6, 2002      
|S 96237              |  | August 10, 1999   
|S 98843              |  | June 16, 2002     
|S 98847              |  | June 16, 2006     
|S 98848              |  | June 16, 1997     
|S 100190             |  | September 26, 1997
|S 100385             |  | August 23, 1997   
|S 102583             |  | June 30, 2002     
|S 102584             |  | June 30, 2002     
|S 102585             |  | June 30, 2002     
|S 102586             |  | June 30, 2002     
|S 102587             |  | June 30, 2002     
|S 102588             |  | June 30, 2002     
|S 102589             |  | March 23, 2002    
|S 102590             |  | March 23, 2002    
|S 102591             |  | March 23, 2002    
|S 102592             |  | March 23, 2002    
|S 102593             |  | March 23, 2002    
|S 102594             |  | March 23, 2002    
|S 102915             |  | June 20, 2002     
|S 102916             |  | June 20, 2002     
|S 102917             |  | June 20, 2002     
|S 102918             |  | June 20, 2002     
|S 102919             |  | June 20, 2002     
|S 102920             |  | June 20, 2002     
|S 102923             |  | November 15, 2004 
|S 102924             |  | November 15, 2002 
|S 102925             |  | November 15, 2004 
|S 102926             |  | November 15, 2002 
|                     |  |                   
|Mineral Disposition: |  | Renewal Date:     
|                     |  |                   
|ML 5274              |  | September 9, 2001 
|ML 5275              |  | May 6, 2000       

| |  | 
| |  | 



---





|SCHEDULE B
|------------



|AMISK LAKE
|----------



|Schedule of Royalties and Other Interests
|-----------------------------------------



|Mineral Dispositions Subject to 5% Net Profit
Interest to Morley Brown:
|-----------------------------------------------------------------------



| | S 95636
S 95637
S 95638
S 95639
ML 5274
| | ---------------------------------------



|Mineral Dispositions Subject to 10% Net
Profit Interest to Greenstone Resources:
|--------------------------------------------------------------------------------



| | S 96114
S 96115
S 96116
S 96117
S 96120
S 96121
S 96122
S 96123
S 96124
S 96125
S 96126
S 96127
S 96128
S 96129
S 96130
| | -----------------------------------------------------------------------------------------------------------------------



|Mineral Dispositions Subject to 5% Net Profit
Interest to Hudson Bay Exploration & Development
|----------------------------------------------------------------------------------------------



|All Mineral Dispositions excepting:
|-----------------------------------



| | S 98843
S 98847
S 98848
S 100190
S 100385
| | -----------------------------------------



| |  | 
| |  | 



---





|SCHEDULE C
|------------



|Area of Interest
|----------------



|A. | List
of mineral dispositions owned by Claude:
|-- | ---------------------------------------------





| | Claim No.
| | ---------



| | S 98061
S 98062
S 98063
S 98064
S 98065
S 98657
S 98658
S 98659
S 98660
S 98661
S103053
S102281
S102297
S103254
S103255
S104452
S101709
S102296
CBS 3812
CBS 3813
S102295
CBS 3815
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|B. | List
of mineral dispositions which Claude may be interested in acquiring:
|-- | -------------------------------------------------------------------------





| | S 98897
S 98898
S 98889
CBS 3732
CBS 3753
CBS 3753 (since re-staked by Hudson Bay)
| | ----------------------------------------------------------------------------------



| | ML 5314
ML 5239
ML 5241
ML 5262
| | -------------------------------



| |  | 
| |  | 



---





| | S 95864
S 95845
S 95938
S 95965 through S 95970
S 96070 through S 96080
| | -----------------------------------------------------------------------



| | S 99730
| | -------



|C. | List
of mineral dispositions owned by Cameco:
|-- | ---------------------------------------------





| | CBS 8867
CBS 3674
CBS 7370
CBS 3160
S 94232 to S 94238, inclusive
S 95689 to S 95691, inclusive
| | -----------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|SCHEDULE D
|------------



|AUTHORIZED CAPITAL:
|-------------------



|The authorized share capital of Claude
consists of an unlimited number of common shares, without nominal or par value
and two classes of unlimited preferred shares, issuable in series. The First
Preferred Shares issuable in series and rank ahead of the Second Preferred
Shares and the common shares in respect of dividend payment, dissolution or any
other distribution of assets. The First Preferred Shares are non-voting unless
eight consecutive dividends are missed. The Second Preferred Shares are issuable
in series and rank ahead of the common shares in respect of dividend payment,
dissolution or any other distribution of assets.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ISSUED SHARES:
|--------------



|10,899,354 common shares have been issued
(excluding the shares to be issued  pursuant to this Agreement).
|----------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|SEABEE PROJECT SURFACE LEASE
AGREEMENT
|--------------------------------------



|Between
|-------



|Her Majesty the Queen
|---------------------



|And
|---



|Claude Resources Inc.
|---------------------



| |  | 
| |  | 



---





|Please note that the following table of contents
      page numbers reflect the
      original copy but not this electronic version.
|------------------------------------------------------------------------------------------------------------------------------------



|Table of Contents
|-----------------

|                                          | PAGE
|----------------------------------------- | ----
|                                          |     
|Preamble                                  | 1   
|                                          |     
|PART I                                    |     
|                                          |     
|Rent or Charges                           | 3   
|Use of Lands                              | 3   
|Payment of Taxes                          | 4   
|Improvements and Roadways                 | 5   
|Access to Lease Lands                     | 5   
|Place of Business                         | 6   
|                                          |     
|PART II                                   |     
|                                          |     
|Safety Measures                           | 7   
|Environmental Protection                  | 7   
|                                          |     
|PART III                                  |     
|                                          |     
|Intent                                    | 8   
|Employment Policies and Practices         | 8   
|Training and Development Program          | 8   
|Commercial Opportunities                  | 9   
|Monitoring                                | 10  
|                                          |     
|PART IV                                   |     
|                                          |     
|Compliance with Certain Selected Statutes | 11  
|Scope of Covenant                         | 11  
|Termination of Agreement                  | 11  
|Arbitration                               | 13  
|Assignments                               | 15  
|Indemnity                                 | 15  
|Force Majeure                             | 16  
|Notices                                   | 16  
|Term of Agreement                         | 18  
|Interpretation                            | 19  
|Other Leases                              | 20  
|Confidentiality                           | 20  
|Entire Agreement                          | 21  
|Binding Effect                            | 21  

| |  | 
| |  | 



---





|LEASE AGREEMENT
|---------------



|THIS AGREEMENT made this 5th day of July,
      A.D. 1990.
|----------------------------------------------------------



|BETWEEN:
|--------



| | HER MAJESTY
THE QUEEN, in right of the province of Saskatchewan, herein represented by the Minister
of the Northern Affairs Secretariat, and the Minister of the Department of Parks and
Renewable Resources, (hereinafter called the Minister)
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|OF THE FIRST PART
|-----------------



|- AND -
|-------



| | Claude
Resources Inc., a company incorporated under the laws of Canada and registered to carry
on  business in the Province of Saskatchewan, (hereinafter called the lessee)
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|OF THE SECOND PART
|------------------



|WHEREAS, the
Lessee has conducted exploration activities and is now planning to establish a gold
mining and milling facility;
|-----------------------------------------------------------------------------------------------------------------------------



|AND WHEREAS, the
Lessee has obtained the written approval of Bec International Corporation, the holder of
ML 4781 to ML 4790 inclusive, to apply for and be granted land tenure for these purposes;
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|AND WHEREAS, the Minister
      is the owner of and has the right to enter into a lease agreement involving
      the following land in the Province of Saskatchewan, that is to say the land
      as described on the map entitled Plan showing survey of PARCEL A for
      the surface lease Latitude 55 41 Longitude 103 37 LAONIL LAKE SASKATCHEWAN,
      May 15th, A.D. 1990, attached hereto as Appendix A and
      all containing 312 hectares more or less (which area is hereinafter called
      the lease lands);
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|AND WHEREAS, the
Lessee, by reason of the foregoing has applied for a lease of the surface rights to
certain lands;
|-------------------------------------------------------------------------------------------------------------------



|AND WHEREAS, the
Minister has agreed to grant such application for a surface lease under the terms and
conditions herein contained;
|-----------------------------------------------------------------------------------------------------------------------------------



|NOW THEREFORE THIS
INDENTURE WITNESSETH that by the authority of The Forest Act, The Provincial Lands Act
and all Saskatchewan legislation regarding the disposition of surface rights, and the
regulations made thereunder, and in consideration of the rents and subject to the terms,
covenants, provisos, conditions, restrictions and stipulations hereinafter expressed and
contained, the Minister hereby grants, demises and leases unto the
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|Lessee surface  rights,  including the right to
enter upon, use and occupy the lease lands or any part or  parts thereof for the purposes
described in Article 2.0 hereof;
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|TO HAVE AND TO
HOLD the lease lands for the term set out in Articles 22.1 hereof;
|---------------------------------------------------------------------------------



|YIELDING AND
PAYING therefore to the Minister during the term of this agreement, including any
extensions thereof, in respect of the lands leased hereunder, amounts for rent and any
additional charges as are prescribed for provincial lands by the Resource Lands
Regulations in force as amended from time to time under The Provincial Lands Act, such
amounts and charges being payable yearly in advance on the first day of June, the first
of such payments to be made on the effective date of this Agreement as first above
written and shall be prorated to the first day of June next following the effective date
of this agreement;
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|PROVIDED ALWAYS
that this demise is granted upon and subject to the following terms, covenants,
provisos, conditions, restrictions, and stipulations, that is to say:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|PART 1
|------



|Article 1.0 Rent or Charges
|---------------------------



|1.1 | The
Lessee shall and will pay to the Minister at the Resource Lands  Branch of the Department
of Parks and Renewable Resources at Prince  Albert, Saskatchewan, the amounts for rent or
other charges as are  herein expressly provided without any deductions whatsoever.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|1.2 | The Lessee shall within one year following
      the date of execution of this Agreement, prepare and deliver to the Minister
      a registered, legal plan of survey to more precisely define the lease lands
      which are the subject of this Agreement. Such legal plan of survey, registered
      at the Land Titles Office, shall become Appendix A hereto in
      the place and stead of the current Appendix A.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|1.3 | The
Lessee shall provide to the Minister on the first day of April each  year a description
of the extent of development of the lease lands in  such detail as is necessary to
calculate rent or other charges.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|1.4 | Should
the Lessee fail to comply with Article 1.3, the Minister may  determine the extent of
development of the lease lands for purposes of  calculating amounts for rent or other
charges.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|Article 2.0 Use of Lands
|------------------------



|2.1 | The
Lessee agrees to obtain and to comply with the terms of any Ministerial Approval issued
pursuant to The Environmental Assessment Act or any other permit, license approval,
permission or consent issued pursuant to any and all other laws in force in the Province
of Saskatchewan in respect of the use of the lease lands pursuant to this Agreement and
further agrees not to use the lands for any purpose other than for:
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





| | (a) | the
mining of gold bearing ore including any by-products and  incuding all dewatering
activities related thereto;
| | --- | -----------------------------------------------------------------------------------------------------------------



| | (b) | the
operation of a mill for processing mineral ore;
| | --- | ---------------------------------------------------



| | (c) | the
construction and use of tailings ponds and waste management areas;
| | --- | ----------------------------------------------------------------------



| | (d) | the
construction and use of campsites and ancillary facilities  required for the operations
of the Lessee on the lease lands;
| | --- | -----------------------------------------------------------------------------------------------------------------------------



| | (e) | the
construction, modification, and use of all buildings,  structures, facilities, machinery,
equipment, supplies, power,  fuel and water supply, roads and all other support and
service  facilities, relating to the construction and operation of the  mine, mill or
other permitted site activities; and
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| | (f) | the
reclamation and decommissioning of the lease lands, and  facilities located thereon.
| | --- | ----------------------------------------------------------------------------------------



|2.2 | Without
restricting the generality of the foregoing, any buildings or  structures not required
for the works authorized under Article 2.1  shall only be constructed on the lease lands
with the prior written  approval of the Minister.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|2.3 | The
Minister acknowledges that there is no merchantable timber or wood  standing on the lease
lands and that the Lessee shall, subject to  obtaining and complying with any necessary
permits, have the right to  remove such growth therefrom as may be necessary in the
conduct of its  operations.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|2.4 | The
Lessee shall, subject to the written approvals required by The  Water Corporation Act and
all Saskatchewan legislation, have the right  to construct and operate water works, and
to use, drain or remove water  from any lake, pond or other body of water located in
whole or in part  on the lease lands.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|2.5 | The
Lessee agrees to commence commercial mining and milling operations  by May 1, 1992, to
diligently continue its operations, and thereafter  to carry out the reclamation of the
lease lands and facilities located  thereon.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|Article 3.0 Payment of Taxes
|----------------------------



|The Lessee will pay all charges, taxes,
rates and assessments, whatsoever, whether municipal, provincial or otherwise,
which may at any time during the continuance of this Agreement be charged upon
or become payable in respect of the occupation thereof by the Lessee, or of any
business or operations conducted by the Lessee, on the lease lands.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Article 4.0 Improvements and Roadways
|-------------------------------------



|The Minister acknowledges that at the
present time there are no roads or improvements of any nature or kind on the
lease lands except as heretofore constructed by the Lessee. With respect to all
future road construction the Lessee agrees to avoid unnecessary road
construction and agrees to comply with the terms, conditions and requirements of
the Guidelines for Environmental Protection During Road Development,
Saskatchewan Environment, September, 1981, Minor Revisions, October, 1989, and
the Guidelines for Environmental Protection During Development and
Restoration of Sand and Gravel Pits, Saskatchewan environment, September,
1983, reprinted November, 1987.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Article 5.0 Access to Lease Lands
|---------------------------------



|5.1 | In
this Article employees means:
|--- | ----------------------------------





| | (a) | employees
of the Department of human Resources Labour and  Employment, Province of Saskatchewan;
| | --- | ------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| | (b) | employees
of the Department of Environment and Public Safety,  Province of Saskatchewan
| | --- | ---------------------------------------------------------------------------------------



| | (b) | employees
of the Northern Affairs Secretariat, Province of Saskatchewan;
| | --- | ------------------------------------------------------------------------



| | (c) | employees
of the Department of Parks and Renewable Resources, Province of  Saskatchewan;
| | --- | ----------------------------------------------------------------------------------------



| | (d) | employees
of Saskatchewan Education, Northern Division, Province of  Saskatchewan;
| | --- | ----------------------------------------------------------------------------------



| | (e) | any
other person designated by the Minister for such purposes, in  consultation with the
Lessee
| | --- | -----------------------------------------------------------------------------------------------



|5.2 | The
Lessee agrees to provide the Minister and his employees with access  to the lease lands
with or without prior notice and the right to take  equipment on the lease lands for the
purpose of monitoring compliance  by the Lessee with the provisions of this Agreement.
The Lessee further  agrees to furnish the Minister and his employees with such
information  as may be required in order to enable the Minister and his employees to
perform the said monitoring for compliance
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|5.3 | It
is further agreed by the Lessee that official of the Department of  Parks and renewable
Resources shall have access to the lease lands at  any reasonable time for resource
management purposes.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|5.4 | Where
access is utilized pursuant to Article 5.2, the Lessee agrees to  provide the Minister,
and a reasonable number of employees, utilization  of any landing strip which may be
constructed, owned and operated by  the Lessee at the mine site, and to provide, on
reasonable notice, site  transportation and meals to him and employees and in each
instance to  provide reasonable accommodation to him and the employees as necessary.  The
Lessee shall be entitled to charge the Minister and his employees  for any such flights,
meals and accommodation at rates established by  the Lessee each year.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|5.5 | The Lessee agrees to provide Currie
      Rose Resources Incorporated and Placre Dome Incorporated with access to
      the lease lands for the purposes and under the conditions, described in
      Appendix B attached hereto, title "Access to Lease Lands".
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|Article 6.0 Place of Business
|-----------------------------



|The Lessee shall maintain the office
and place of business of the operator of the Seabee Project in the Province of
Saskatchewan, and shall at such office make available to the Minister or his
representative on reasonable notice any and all books and record which the
Minister or his authorized representative may require pursuant to the provisions
of this Agreement.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|PART II
|-------



|SAFETY OF WORKERS AND
ENVIRONMENTAL PROTECTION
|----------------------------------------------



|Article 7.0 Safety Measures
|---------------------------



|The Lessee agrees to co-operate with
the Department of Human Resources, Labour and Employment of Saskatchewan in
order for the Department to be satisfied that the operations of the Lessee on
and in respect of the lease lands are in accordance with all laws and
regulations.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.1 | The Lessee agrees that its safety program
      will be monitored, administered and controlled by the Lessee in compliance
      with The Saskatchewan Occupational Health and Safety Act and all
      applicable regulations thereunder.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|7.2 | The
Lessee has agreed to adopt the following objective for its Safety Program:
|--- | ------------------------------------------------------------------------------





| | (a) | protect
employees against health and accident hazards in their work  environment; and
| | --- | -------------------------------------------------------------------------------------



| | (b) | ensure
adequate medical care which in any event reflects current good  Canadian mining practice.
| | --- | ------------------------------------------------------------------------------------------------



|Article 8.0 Environmental Protection
|------------------------------------



|8.1 | The
Lessee agrees to comply with any requirements of the Department of  Environment and
Public Safety regarding construction and operation of  the project and decommissioning of
the lease lands and facilities  located thereon.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





| |  | 
| |  | 



---





|PART III
|--------



|DIRECT EMPLOYMENT AND ECONOMIC
BENEFITSFOR PEOPLE LIVING IN NORTHERN SASKATCHEWAN
|---------------------------------------------------------------------------------



|Article 9.0 Intent
|------------------



|9.1 | The
fundamental intent of this part of the Agreement is to enhance the positive economic
climate in  northern communities.
|--- | --------------------------------------------------------------------------------------------------------------------------





|9.2 | Further,
it is the intent of the parties to provide a co-operative  atmosphere for the Lessee to
maximize the employment and economic  opportunities for the people in northern
communities.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|9.3 | The
Minister and the Lessee agree that the provisions of this part of  the Agreement are to
establish a mutually agreed upon framework of  reasonable expectations on both parties.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|Article 10.0 Employment Policies and Practices
|----------------------------------------------



|10.1 | The
Lessee agrees in consultation with the Northern Affairs Secretariat  and the Northern
Division of Saskatchewan Education to implement  northern employment policies (social and
economic factors considered),  through the following practices;
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





| | (a) | negotiation
and submission of a Human Resource Development  Agreement prior to commencement of
operations on the lease  lands;
| | --- | ------------------------------------------------------------------------------------------------------------------------------



| | (b) | special
recruiting efforts in northern communities will be  undertaken in co-operation with local
governments, Indian  Bands, and federal and provincial agencies.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



|10.2 | The
Lessee agrees that where practical it will cause all contractors  working on site to
adopt similar policies of employment, Article 9.0.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------





|Article 11.0 Training and Development Program
|---------------------------------------------



|11.1 | Both
parties agree that the Lessee ahs the ultimate responsibility for  the training of
employees to the extent necessary to meet its needs.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------





|11.2 | The
Lessee agrees to the extent possible to upgrade, educate and  protect its employees and
to proved a healthy and rewarding work  environment.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------





|11.3 | The
parties to this Agreement agree that an effective training  mechanism is continuous and
progressive on-the-job training.
|---- | ----------------------------------------------------------------------------------------------------------------------------





|11.4 | The
Minister agrees that every reasonable effort on the part of the  Government will be made
to provide industrial English and general  educational upgrading courses in
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------





| |  | 
| |  | 



---





| | appropriate
northern communities which  would make the transfer of skills on the job more effective.
The  provision of opportunities for technical education in northern  communities would
assist northern people to compete for a wider range  of jobs.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|11.5 | Where it is mutually advantageous and
      agreeable to the Lessee and an employee, the Lessee will take those steps
      that are necessary to record the details of employment with Saskatchewan
      Education, Northern Division, according to The Apprenticeship and Tradesman
      Qualifications Act.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|Article 12.0 Commercial Opportunities
|-------------------------------------



|12.1 | Both
parties to this agreement recognize that it is reasonable to  expect economic
opportunities for businesses based or operating in  northern communities to arise as a
result of this operation.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|12.2 | The
Lessee agrees that, where it is consistent with the intent of this  Agreement, the
economics of the project and good Canadian mining  practice, it will encourage the
participation of local northern  businesses through the following practices:
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





| | (a) | prepare
annual forecasts of economic opportunities for local  northern and Saskatchewan
enterprises pertaining to the  construction, operation and reclamation phases of the
project;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | identify
potential opportunities for northern businesses and  make efforts to foster these;
| | --- | -------------------------------------------------------------------------------------------



| | (c) | maintain
ongoing contact with the northern Saskatchewan  business community and the Department of
Economic  Diversification and Trade;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------



| | (d) | wherever
feasible to give local northern businesses the  opportunity to bid or quote on contracts
on an invitational  basis;
| | --- | ----------------------------------------------------------------------------------------------------------------------------



| | (e) | fragmentation
of contracts or purchase packages where  reasonable and feasible;
| | --- | -------------------------------------------------------------------------------



| | (f) | provision
of tender documents at one or more locations in  northern Saskatchewan.
| | --- | ---------------------------------------------------------------------------------



|12.3 | The
Lessee agrees that it is desirable and it will use its best efforts  to require all
permanent contractors working at the project site to  adopt similar policies toward
northern business, so as to contribute to  the achievement of the intent of this Part of
the Agreement.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|Article 13.0 Monitoring
|-----------------------



|13.1 | The
Minister and the Lessee agree that the Government of Saskatchewan  is responsible for
monitoring the success of the intent of Part III of  this Agreement.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------





| |  | 
| |  | 



---





|13.2 | In
light of this and in a spirit of co-operation, both parties to this  Agreement will
establish and maintain an open dialogue for timely and  relevant exchange of information.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|13.3 | The
Lessee will file employment and business statistics and information  with the Government
of Saskatchewan necessary to reflect effectively  the degree of achievement of its
objectives.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|13.4 | The
Lessee will file with the Government of Saskatchewan similar  information detailing the
success and achievement of on-site  contractors.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------





|13.5 | The
Lessee on an annual basis will submit its forecast of economic  opportunities for local
northern and Saskatchewan enterprises to the  Government of Saskatchewan, the first of
such forecasts to be provided  within eight weeks of execution of this Agreement.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





| |  | 
| |  | 



---





|PART IV
|-------



|MISCELLANEOUS PROVISIONS
|------------------------



|Article 14.0 Compliance with Certain Selected
Statutes
|------------------------------------------------------



|The Lessee agrees to perform, observe
and comply with all laws in force from time to time in the Province of
Saskatchewan including, without limiting the generality of the foregoing,
provisions of The Provincial Lands Act, The Forest Act, The Wildlife Act, The
Occupational Health and Safety Act, The Government Organization Consequential
Amendment Act, The Mineral Resources Act 1985, The Groundwater Conservation Act,
The Litter Control Act 1985, The Clean Air Act, The Environmental Assessment
Act, The Boiler and Pressure Vessel Act, The Electrical Inspection Act, The Fire
Prevention Act, The Gas Inspection Act, The Passenger and Freight Elevator Act,
The Radiation Health and Safety Act, The Public Health Act, The Environmental
Management and Protection Act, The Water Corporation Act, and The Crown Minerals
Act.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Article 15.0 Scope of Covenant
|------------------------------



|Except as provided for in Articles 6.0
and 14.0, the covenants of the Lessee in this Agreement have reference only to
the operations of the Lessee to be conducted on the lease lands and not to any
other operation of the Lessee.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Article 16.0 Termination of Agreement
|-------------------------------------



|16.1 | In
the event of the Lessee failing to pay the said rent or any part  thereof when due,
whether formally demanded or not, or failing to  observe or perform any of the covenants,
conditions, provisos and  stipulations herein agreed to be observed and performed in
Articles  1.0, 2.0, 3.0, 5.0, 7.0, 8.0, 14.0, 18.0 and 19.0, the Minister may  give
written notice (hereinafter called the default notice) thereof  to the Lessee
specifying the alleged failure. The Lessee shall  thereupon:
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





| | (a) | remedy
such failure within thirty (30) days after receiving  the default notice; or
| | --- | -----------------------------------------------------------------------------------



| | (b) | if
the failure is such that it cannot be remedied within the  thirty (30) day period,
promptly and in any event within the  thirty (30) day period, commence and diligently
continue  thereafter to remedy such failure and take as appropriate any  steps required
to ensure that the failure will not again  occur.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|16.2 | If
a default notice is given and if the Lessee does not proceed in the  manner contemplated
in Article 16.1, the Minister may by notice to the  Lessee, terminate this Agreement on
such date as may be specified in  the notice and, notwithstanding the termination of this
agreement, the  Lessee shall be required to carry out all reclamation activities
required under the Mineral Industry Pollution Prevention Regulations of  the Province of
Saskatchewan, and in such event shall keep harmless and  indemnify the Minister against
any claims arising from such activities.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





| |  | 
| |  | 



---





|16.3 | Notwithstanding
the foregoing provisions of this Article 16.0, the  Lessee may, prior to the expiration
of the thirty (30) days referred to  in Article 16.1 apply to the Minister for relief
from the requirements  which have given rise to the failure set out in default notice.
The  Minister may grant relief from any of the said requirements if he is of  the opinion
that the Lessee has used or instituted its best efforts to  meet the requirements and in
granting such relief the Minister may  establish alternative procedures and requirements
that the Lessee shall  fulfill. If the Lessee fails to comply with the decision of the
Minister within a further thirty (30) days, the minister may, by notice  to the Lessee,
terminate this Agreement.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|16.4 | The
Minister shall be entitled to waive all rights of termination and  forfeiture arising
under this Agreement by reasons of any default if,  in his opinion, the cause of such
default justifies the waiving of such  rights, and thereupon this Lease shall be
construed and the Lessee's  rights hereunder shall continue as though no such default had
occurred.  All such waivers must be in writing and signed by the Minister and  shall not
prejudice any right of the minister in the case of any other  default.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|16.5 | It
is agreed that this Agreement does not restrict the Lessee from  commencing legal action
in a court of law should the Minister terminate  this Agreement.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------





|Article 17.0 Arbitration
|------------------------



|17.1 | Without
limiting the requirements, provisions and powers conferred on  any minister or official
as contained in any Statute of the Province of  Saskatchewan or Regulation thereunder,
disputes arising out of the  interpretation, performance or breach of Articles of this
Agreement,  other than Article 8.0 of this Agreement, may be submitted by either  party
to arbitration.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|17.2 | The
Arbitration Act of Saskatchewan (except Articles 16 and 17 thereof) shall apply to any
arbitration hereunder.
|---- | -----------------------------------------------------------------------------------------------------------------





|17.3 | The
arbitrator shall be such person as may be agreed upon by the  parties. Failing such
agreement within ten (10) days after the giving  of the arbitration notice, the
arbitration shall be conducted by a  three (3) person board of arbitration and both
parties shall, within  seven days from the expiration of the said ten (10) day period,
appoint  one nominee thereto and inform the other party of the name of its  arbitrator.
The parties' nominees shall all within seven (7) days of  their respective appointments
agree upon a third arbitrator who shall  be the chairman of the arbitration board. In the
event either party  fails within the time specified to select an arbitrator or the
nominees  of the two parties fail to agree upon a third arbitrator then the third
arbitrator or any arbitrator to represent the party in default or both  such arbitrators
may be appointed by the Chief Justice of the Court of  Queen's Bench for the Province of
Saskatchewan. The arbitrator (or the  third arbitrator, in the case of an arbitration
board) shall be a  person who, by education and experience, is qualified to adjudicate
the  matter in issue.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





| |  | 
| |  | 



---





|17.4 | The
place of the arbitration shall be the Town of La Ronge, Province of  Saskatchewan, or
such other place as the chairman may determine, and  the arbitrator or board of
arbitration shall hear and dispose of the  dispute, difference or question submitted in
such manner as he (it) in  his (its) discretion shall determine, but in so doing he (it)
shall be  required to receive the submissions of the parties hereto in respect of  the
said question, dispute or difference. The arbitrator or arbitration  board in the conduct
of the proceedings shall not be bound by the Rules  of Court of the Province of
Saskatchewan or by the traditional rules of  evidence.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|17.5 | The
decision of the single arbitrator or a simple majority of the  arbitration board shall be
binding upon the parties. In the even the  arbitration board is unable to arrive at a
simple majority decision,  the decision of the chairman shall be binding.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|17.6 | The
arbitrator or the arbitration board shall have the authority to include in an award any
of the  following:
|---- | --------------------------------------------------------------------------------------------------------------





| | (a) | a
finding that there has been a breach of the Agreement;
| | --- | --------------------------------------------------------



| | (b) | a
finding that there has been no breach of the Agreement;
| | --- | ---------------------------------------------------------



| | (c) | an
order for specific performance as could be awarded by a  Judge of the Court of Queen's
Bench;
| | --- | ------------------------------------------------------------------------------------------------



| | (d) | an
order to pay a penalty for a breach of the Agreement;
| | --- | --------------------------------------------------------



| | (e) | an
order to pay a fixed sum daily by way of penalty until the  party to pay discontinues or
remedies the breach of this  Agreement;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------



| | (f) | a
direction to pay damages;
| | --- | ---------------------------



| | (g) | a
finding that although there has been a breach of the  Agreement the circumstances were
such that the parties should  be excused;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------



| | (h) | an
order confirming termination of this agreement; and
| | --- | ------------------------------------------------------



| | (i) | such
other direction or order as the board deems necessary and  equitable to ensure compliance
with the spirit, intent and  provisions of this Agreement.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------



|17.7 | The
right to appeal is reserved to each of the parties provided a  written notice of appeal
is served on the respondent by the appellant  within fifteen (15) days of receipt of the
decision of the arbitration  board.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|17.8 | Where
a dispute has been submitted to arbitration, in addition to all  the powers contained in
Article 17.6 the arbitrator or the arbitration  board may make such interim orders as it
considers appropriate pending  resolution of the dispute.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





| |  | 
| |  | 



---





|17.9 | Where
any matter is referred to a board of arbitration, the provisions  of this Agreement shall
continue in full force until a final  determination has been made by the said board of
arbitration and the  period for commencing an appeal under Article 17.7 has expired, or
if  an appeal is made, until a final court decision is issued.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|17.10 | Where
the Lessee fails to comply with an order of a board of  arbitration or, where an appeal
is taken, and the Lessee fails to  comply with the final decision of a court, this
Agreement shall  terminate forthwith and the provisions of Articles 8.0, 19.0 and 22.2
shall apply mutatis mutandis.
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|Article 18.0 Assignments
|------------------------



|The Lessee will not assign, transfer or
sublet this Lease or any part thereof or any of the rights or privileges
contained herein without consulting with the holder of any mineral rights
underlying the lease lands, and without the written consent of the Minister
which shall not be unreasonably withheld, and in the event an assignment is
made, the assignee shall become a party to this Agreement.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Article 19.0 Indemnity
|----------------------



|The Lessee agrees to keep harmless and
indemnify the Minister form and against all actions, suits, claims and demands
arising out of or in connection with the operations carried on by the Lessee,
its servants, employees, agents, licensees and contractors, in, under or upon
the lease lands. If any claim comes to the attention of the Minister which could
give rise to a right of indemnity hereunder, the Minister shall promptly give
notice to the Lessee and the Lessee may, if the Minister has not elected to do
so, defend such claim, in which event the minister shall, at the Lessees
expense, co-operate with the Lessee in any reasonable way including providing
such information as the Lessee may reasonably request and allowing the Lessee to
act for, on behalf and in the name of the Minister for such purposes. If the
Minister elects to defend such claim, the Lessee shall only be liable in respect
of the costs and expenses of such defense for those costs and expenses which,
reasonably viewed, would have been incurred in such defense by a lesser other
than Her Majesty.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Article 20.0 Force Majeure
|--------------------------



|The Lessee shall not be liable for  failure to
perform any of its obligations hereunder during periods in which  performance is
prevented by any cause reasonably beyond the Lessees  control which causes are
hereinafter called force majeure. Without  limiting the generality of the
foregoing, for purposes of this Agreement, the  term force majeure shall
include: wars, riots, fire, floods, acts of  God, natural disaster, tempest, earthquake,
acts of the federal government and  its agencies, compliance with which has the effect of
causing the Lessee to  breech its obligations hereunder, industrial disputes, it being
understood that  no affected employer shall be required to settle any industrial dispute
contrary  to its wishes, or any reason whether or not of the foregoing nature beyond the
reasonable control of the Lessee (whether affecting any of the Corporations  constituting
the Lessee or any of its or their contractors). In such  circumstances the period for the
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|performance of the Lessees obligations
hereunder shall, subject to the limitations set out in Article 22.1, be extended  for a
period equivalent to the period of delay.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Article 21.0 Notices
|--------------------



|Unless otherwise provided herein or
agreed to in writing between the parties, any notices required or permitted
shall be in writing and delivered personally to the designated officer or
representative of the party or sent by registered mail, postage prepaid, return
receipt requested or by telex or electronic facsimile transmission, confirmation
of receipt requested. Any such notice shall be deemed received seven (7) days
after the mailing date thereof or on the first business day after being sent by
telex or facsimile or on the first day of personal delivery. In the event that
at the time a notice is mailed as aforesaid or at any time during the period of
three (3) business days following such mailing, postal, airline or airport
employees are engaged in a strike, work slowdown or other work stoppage at the
place at which the notice is mailed or at any point through which such notice
must pass, such notice shall be deemed to have been given and received at the
time when such notice would be received in the ordinary course of mails,
allowing for such strike, slowdown or other stoppage. Any notices shall be
addressed to the party to whom directed at the following addresses:
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) | in
the case of the Minister
| | --- | ---------------------------

| | Legislative Building
Regina, Saskatchewan
Canada
S4S OB3
| | --------------------------------------------------------

| | Attention: Minister of the
Northern Affairs Secretariat
| | -------------------------------------------------------

| | with
a copy forwarded to:
| | -------------------------

| | Legislative Building
Regina, Saskatchewan
S4S OB3
| | -------------------------------------------------

| | Attention: Minister of the Department of Parks
and Renewable Resources
| | ----------------------------------------------------------------------



| | (b) | and
in the case of the Lessee:
| | --- | ------------------------------

| | Claude Resources Inc.
P.O. Box 7380
200-224 4th Avenue South
Saskatoon, Saskatchewan
S7K 4E4
| | --------------------------------------------------------------------------------------------

| | Attention: Mr. P.K. Gummer
| | --------------------------



| |  | 
| |  | 



---





|Any party may at any time change its
address of designated office or representative by giving written notice of such
change, which shall, if mailed, be effective seven (7) days after the mailing
date thereof, and, if given by personal delivery, shall be effective on the day
of delivery and if sent by telex or electronic facsimile transmission shall be
effective on the first business day after the transmission thereof.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Article 22.0 Term of Agreement
|------------------------------



|22.1 | Subject
to the rights hereunder of the Minister to terminate this  Agreement, and subject to the
earlier surrender of this lease, the term  of this Agreement shall be for ten (10) years,
commencing on the date  of execution of this Agreement, or such longer period as is
necessary  to allow the Lessee to construct and operate its mine and mill, and to  engage
in any other activity for which the Agreement is intended and  for which the Lessee is
entitled to engage in under the laws of  Saskatchewan, and thereafter to carry out the
reclamation of the lands  involved. I no case shall the full term of this lease exceed
the  maximum term set out in The Forest Act.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|22.2 | The
Lessee may, on the termination of the agreement for whatever cause  (including expiration
of the term) and within six (6) months, if all  claims for rent and charges, if any, have
been duly satisfied, remove  from the lease lands all real and personal property of the
Lessee of  whatsoever nature or kind, including all which the Lessee may have  placed or
erected thereon, provided however, that:
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





| | (a) | if
the Lessee does not conform to abandonment procedures which  have been agreed upon
between the Lessee and the department of  the Environment and Public Safety or, if no
such agreement  exists, as may be established by the province of Saskatchewan  by statute
or regulations thereunder; or
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | if
the Lessee has not removed the real and personal property within six (6) months of the
termination of  this Agreement;
| | --- | -------------------------------------------------------------------------------------------------------------------------



| | the real and
personal property remaining on the lease lands shall be  forfeited to the Crown in right
of Saskatchewan and shall become and be  the property of the crown in right of
Saskatchewan. The Minister may  recover from the Lessee any reasonable costs incurred for
the cleanup  or removal of such real and personal property. Notwithstanding the  above,
the Minister may, at the request of the Lessee, and subject to  the limitations set out
in Article 22.1, grant an extension to allow  the Lessee sufficient time to remove all
real and personal property of  the Lessee upon the Lessee showing due cause for such
extension.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Article 23.0 Interpretation
|---------------------------



|23.1 | In
this Agreement, unless there is something in the subject matter or contest inconsistent
therewith:
|---- | -----------------------------------------------------------------------------------------------------





| |  | 
| |  | 



---





| | (a) | the
singular shall include the plural and the plural shall include the  singular; and
| | --- | -------------------------------------------------------------------------------------



| | (b) | the
masculine shall include the feminine or neuter where the context so  requires
| | --- | ---------------------------------------------------------------------------------



|23.2 | The
Appendix attached hereto and forming part of this Lease Agreement as of the date hereof
is as  follows:
|---- | -----------------------------------------------------------------------------------------------------------



| | Appendix
A: - PLAN showing survey of PARCEL A for surface  lease, Latitude 55 41',
Longitude 103 37', LAONIL LAKE,  Saskatchewan, May 15th, A.D. 1990.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------

| | Appendix B  Access to Lease
      Lands
| | --------------------------------------------



| | To the extent that any provision of the Appendix
      is inconsistent herewith, the provisions of this Agreement, excluding the
      Appendix, shall prevail.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



|23.3 | The
division of this Agreement into Parts and Articles, the provision  of a Table of
Contents, and the insertion of headings are for  convenience of reference only and shall
not affect the construction or  interpretation hereof.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|23.4 | I
the event that any other legal entity(s) owned, directed or  controlled by the Lessee or
any of the corporations referred to herein  as the Lessee, directly or indirectly, shall
operate the mine and/or  mill for the Lessee, the Lessee agrees:
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





| | (a) | that
it shall ensure that the said entity(s) assumes and  performs all the obligations and
responsibilities of the  Lessee hereunder as would have been assumed and performed by
the Lessee had the Lessee operated the mine and/or mill; and
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | that
any and all references applicable to the Lessee hereunder  shall be interpreted as
referring to the said entity(s) where  necessary to fulfill the intention of this
Agreement or any of  its provisions in the same manner as would have been the case  had
the Lessee operated the mine and/or mill.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|23.5 | The
Lessee will ensure that any third party undertaking any of the  functions of the Lessee
under this Agreement complies with the spirit  and intent of this Agreement and all
requirements imposed on the Lessee  as may be applicable to the third parties.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|23.6 | Any
reference herein:
|---- | ---------------------





| | (a) | to
any Act or to any regulation made under any Act includes a  reference to all orders to
statutory instruments made pursuant  to that Act or regulations; and,
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | to
any Act or to any regulations made under any Act includes a  reference thereto as may
from time to time be re-enacted,  amended, revised or consolidated, or to any Act or
regulations  from time to time passed in substitution therefore or in  relation to like
matters.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|Article 24.0 Other Leases
|-------------------------



|The Minister shall not, without
consulting with the Lessee, grant or permit any other surface leases or other
agreement granting easement, tenement or other rights upon any of the lands
above Mineral Lease 4781 to Mineral Lease 4790 inclusive for the currency of
this Lease Agreement.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Article 25.0 Confidentiality
|----------------------------



|All information exchanged between the
parties hereto which is agreed by reciprocal letters between the parties to be
confidential, shall be kept confidential, except insofar as may be necessary to
enforce the terms of this Agreement or except as required by law.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Article 26.0 ENTIRE AGREEMENT
|-----------------------------



|This Agreement together with all
documents and agreements incorporated by reference constitutes and contains the
entire and only Surface Lease Agreement between the Minister and the Lessee
concerning the use of the lease lands and supercedes and cancels any and all
pre-existing agreements and understanding relevant thereto. It is agreed that
this Articles does not affect interests provided in any mineral disposition.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Article 27.0 Binding Effect
|---------------------------



|This Agreement and everything herein
contained shall enure to the benefit of and be binding upon the respective
successors and assignees of the parties thereto and the expression
Minister shall be construed as including the successors and office
of the Minster of the Northern Affairs Secretariat and the minister of the
Department of Parks and Renewable Resources and shall include such other members
of the Executive Council for the Province of Saskatchewan that are designated by
the Lieutenant Governor in Council as being the Ministers responsible for this
Agreement, and includes the successors and office of such other members of the
Executive Council.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|IN WITNESS WHEREOF the parties have executed
this Agreement as of the day and year first above written.
|-------------------------------------------------------------------------------------------------------

|MINISTER OF THE
      NORTHER AFFAIRS SECRETARIAT          |          | IN THE PRESENCE OF
|---------------------------------------------------------- | -------- | ------------------
|                                                           |          |                   
|Per:                                                       | signed |                   
|                                                           |          |                   
|                                                           |          |                   
|Per:                                                       |          |                   
|                                                           |          |                   
|                                                           |          |                   
|MINISTER OF THE DEPARTMENTOF PARKS AND RENEWABLE RESOURCES |          |                   
|                                                           |          |                   
|Per:                                                       | signed |                   
|                                                           |          |                   
|                                                           |          |                   
|Per:                                                       |          |                   
|                                                           |          |                   
|                                                           |          |                   
|CLAUDE RESOURCES INC.                                      |          |                   
|                                                           |          |                   
|Per: /s/ William R. MacNeill                               |          | Witness:          
|                                                           |          |                   
|                                                           |          |                   
|Per: /s/ Gary Billingsley                                  |          | Witness:          
|                                                           |          |                   



| |  | 
| |  | 



---





|APPENDIX B
|------------



|ACCESS TO LEASE LANDS
|---------------------



|1. | Placer
Dome and Currie Rose Resources support the issuance of the  Surface Lease over part of
CBS 7057 and S-99942 to Claude Resources in  order that Claude Resources may utilize Ease
Lake and East Pond for  tailing disposal and mine effluent settling pond respectively for
the  potential Seabee mine operations.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|2. | Placer
Dome and Currie Rose Resources are desirous of continuing  mineral exploration projects
on CBS 7057 in accordance to terms of the  Opportunities Clause in the Placer Dome/Currie
Rose Joint Venture  Agreement. With respect to this proposal, the exploration will be
centered around and beneath East Lake and East Pond. Placer Dome and  Currie Rose
Resources will make their best efforts to expeditiously  schedule and proceed with the
exploration underlying these two areas to  assess the mineral potential.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|3. | Upon
the acquisition of the Surface Lease, Claude resources will allow  free access to Placer
Dome and Currie Rose Resources to continue with  future exploration programs on both CBS
7057 and S-99942. Access routes  and other exploration sites, such as drill sites,
buildings, trenches  and survey monuments, will be carefully selected so as to not unduly
interfere or disrupt facilities such as pipelines and containment dams
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|4. | If
an economically viable mineral deposit is discovered beneath a  planned or existing
tailing pone or mine-water settling pond, placer  Dome and Currie Rose Resources will
deliver to Claude Resources, an  independent engineering study or feasibility report
stating that the  use of East Lake as a tailing pond, or East Pond a s a mine-water
settling pond would impede the development and production of any ore  from beneath East
Lake and East Pond, and that Placer Dome and Currie  Rose Resources may request Claude
Resources to relocate its facilities  to an alternate site. The triangular-shaped lake
500 meters east of  East Lake and due south of Pine Lake is a possible alternate site.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|5. | In
the event that production from a deposit beneath East Lake or East  pond requires the
removal of Claude Resources' tailing or mine sediment  material, the cost for removal of
this material will be borne by Placer  Dome and Currie Rose Resources.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|6. | If
no economic mineral deposit is discovered beneath the planned  tailing pond or mine-water
setting pond, then Placer Dome and Currie  Rose Resources will relinquish the rights to
these areas for  development or mine facilities.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|7. | In
return for Placer Dome and Currie Rose relinquishing the surface  rights for the Seabee
Mine facilities, Claude Resources will consider  in the future to providing toll milling
arrangements of potential ore  from CBS 7057 at the Seabee mine.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|8. | Claude
Resources will acquire and maintain necessary permits to operate  the mine facilities.
|-- | ---------------------------------------------------------------------------------------------





| |  | 
| |  | 



---





|9. | Claude
Resources will take all precautions to indemnify Placer Dome and  Currie Rose Resources
against any possible liability from possible  environmental damages such as tailings or
effluent spills, vegetation  kills, and fires, that are directly caused by Claude
Resources.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





| |  | 
| |  | 



---





|UNDERWRITING AGREEMENT
|----------------------



|April 23, 2002
|--------------



|Claude Resources Inc.  200, 224- 4th Avenue
South  Saskatoon, Saskatchewan  S7K 5M5
|-----------------------------------------------------------------------------------



|Attention: | Neil McMillan 
      President
|---------- | ------------------------------





|Dear Sirs:
|----------



|Canaccord Capital Corporation (the
Underwriter) hereby offers to purchase from Claude Resources Inc.
(the Company) an aggregate of 5,000,000 units (individually a
Unit and collectively, the Units) of the Company at a
price of $1.00 per Unit for aggregate gross proceeds of $5,000,000. Each Unit
shall consist of one common share in the capital of the Company (individually a
Unit Share and collectively, the Unit Shares) and
one-half of one common share purchase warrant (individually a
Warrant and collectively, the Warrants). The Unit Shares
and the Warrants comprising the Units shall have the terms and conditions set
forth in Schedule A to this Agreement. The offering of Units by the
Company is hereinafter referred to as the Offering.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Company agrees that the Underwriter
will be permitted to appoint other registered dealers (or other dealers duly
licensed in their respective jurisdictions) as its agents to assist in the
Offering and that the Underwriter may determine the remuneration payable to such
other dealers appointed by it. Such remuneration shall be payable by the
Underwriter.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|At the Time of Closing (as hereinafter
defined), the Company shall pay to the Underwriter the Underwriting Fee (as
hereinafter defined) in consideration of the services to be rendered by the
Underwriter in connection with the Offering. Such services shall include,
without limitation: (i) acting as financial advisor to the Company in the
preparation of documentation relating to the sale of the Units; (ii) forming and
managing banking, selling and other groups for the sale of the Units; (iii)
distributing the Units to the Purchasers (as hereinafter defined), both directly
and through other registered dealers and brokers; (iv) performing administrative
work in connection with the foregoing matters; and (v) all other services
arising out of the agreement resulting from the Companys acceptance of
this offer. This offer is subject to the additional terms and conditions set
forth below. The Company and the Underwriter acknowledge and agree that if a
separate fee were to have been charged to the Company for the underwriting
services described in items (ii) and (iii) of this paragraph, such separate fee
would represent more than 50% of the consideration to be received by the
Underwriter pursuant to this Agreement, and the Company further acknowledges and
agrees that the Underwriter will rely on the foregoing in not charging GST on
the Underwriting Fee.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|SECTION 1  DEFINITIONS
|----------------------



|1.1In this Agreement, in addition to the terms
      defined above, the following terms shall have the following meanings:
|--------------------------------------------------------------------------------------------------------------------------

|Agreement                                                            | means the agreement resulting
      from the acceptance by the parties of the terms set forth herein including
      the schedules attached hereto;                                                                                                                                                                        
|-------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Applicable Securities 
      Laws                                    | means, collectively, the applicable
      securities laws of the Designated Provinces, the regulations, rules, rulings
      and orders made thereunder, the applicable policy statements issued by the
      Securities Commissions and the securities legislation and policies of each
      other relevant jurisdiction;
|Articles                                                             | means the articles of incorporation
      of the Company;                                                                                                                                                                                                                                                                  
|Business Day                                                         | means a day which is not a Saturday,
      Sunday or statutory or civic holiday in the City of Toronto, Canada;                                                                                                                                                                                                            
|Broker Warrants                                                      | means the Common Share purchase
      warrants to be issued to the Underwriter as additional consideration for
      the services provided under this Agreement, the particulars of which are
      set out in Schedule A hereto;                                                                                        
|Closing Date                                                         | means the date on which the Offering
      is to be completed, as specified in Schedule A hereto;                                                                                                                                                                                                                        
|Common Shares                                                        | means the common shares without
      par value in the capital of the Company;                                                                                                                                                                                                                                             
|Company                                                              | means Claude Resources Inc.;                                                                                                                                                                                                                                                                                               
|Companys 
      Information Record                                  | means all press releases, material
      change reports, financial statements and other documents of the Company
      which have been publicly disseminated by or with the consent of the Company,
      whether pursuant to Applicable Securities Laws or otherwise;                                                     
|Designated Provinces                                                 | means the provinces of Ontario,
      Alberta and British Columbia as well as any other provinces of Canada which
      may be mutually agreed to between the Company and the Underwriter;                                                                                                                                 
|Exchange                                                             | means the Toronto Stock Exchange;                                                                                                                                                                                                                                                                                          
|Indemnified Party                                                    | has the meaning ascribed to it
      in Section 8.1;                                                                                                                                                                                                                                                                       
|misrepresentation,material fact,material 
      change,distribution, | have the respective meanings
      ascribed to them in the Securities Act (Ontario);                                                                                                                                                                                                                                       
|Material Subsidiaries                                                | means the material subsidiaries
      of the Company, the particulars of which are set out in Schedule C
      hereto                                                                                                                                                                                                   
|Offering                                                             | has the meaning ascribed to it
      in the first paragraph of this Agreement;                                                                                                                                                                                                                                             
|Outstanding 
      Convertible Securities                            | means all convertible securities
      and exchangeable securities of the Company (excluding the Warrants and also
      excluding options issued to officers, director and employees of the Company
      pursuant to established stock option plans) which are outstanding as of
      the date of this Agreement;       
|persons                                                              | includes any individual, corporation,
      limited partnership, general partnership, joint stock company or association,
      joint venture association, company, trust, bank, trust company, land trust,
      investment                                                                                               





| |  | 
| |  | 



---





|                                                                             | trust, society or any other entity,
      organization or syndicate whether incorporated or not, trustee, executor
      or other legal personal representative and governments and agencies and
      political subdivisions thereof;                                                                                                                                                    
|---------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Private Placement 
      Exemptions                                          | means the prospectus exemptions
      pursuant to which the Units are to be issued in the Designated Provinces,
      as more specifically set out in Schedule A hereto;                                                                                                                                                                                                                
|Purchasers                                                                   | means, collectively, each of
      the purchasers of Units pursuant to the Offering (including, if applicable,
      the Underwriter if it is purchasing Units);                                                                                                                                                                                                                          
|Qualifying Issuer                                                            | has the meaning ascribed thereto
      in Multilateral Instrument 45-102-Resale of Securities of the Canadian Securities
      Administrators;                                                                                                                                                                                                                                            
|Securities Commissions                                                       | means, collectively, the securities
      commissions or similar regulatory authorities in each of the Designated
      Provinces;                                                                                                                                                                                                                                                        
|Selling Group                                                                | means, collectively, those registered
      dealers appointed by the Underwriter to assist in the Offering as contemplated
      in the second paragraph of this Agreement;                                                                                                                                                                                                               
|Subscription 
      Agreements                                               | means the agreements entered
      into among the Purchasers, the Company and the Underwriter in respect of
      the Offering;                                                                                                                                                                                                                                                           
|Time of Closing                                                              | means the time on the Closing
      Date at which the Offering is to be completed;                                                                                                                                                                                                                                                                                                        
|to the best of the 
      Companys knowledge, 
      information and belief | means that no information has
      come to the Companys attention which has given the Companys actual knowledge
      to the contrary concerning the existence or absence of the facts or circumstances
      referred to. However, the Company has not undertaken any special or independent
      investigation to determine the existence or absence of such facts or circumstances;
|Underwriter                                                                  | means Canaccord Capital Corporation;                                                                                                                                                                                                                                                                                                                                                      
|Underwriting Fee                                                             | means the fee payable to the
      Underwriter at the Time of Closing in consideration of the services rendered
      by the Underwriter in connection with the Offering, being an amount equal
      to 6.5% of the aggregate gross proceeds of the Units sold pursuant to the
      Offering;                                                                                           
|                                                                             |                                                                                                                                                                                                                                                                                                                                                                                           
|Unit Shares                                                                  | means the Common Shares in the
      capital of the Company forming part of the Units.                                                                                                                                                                                                                                                                                                    
|Warrants                                                                     | means the Common Share purchase
      warrants forming part of the Units, as more particularly described in Schedule
      A hereto; and                                                                                                                                                                                                                                                
|Warrant Shares                                                               | means, collectively, the Common
      Shares issuable upon the exercise of whole Warrants and upon the exercise
      of the Broker Warrants, as more particularly described in Schedule A
      hereto.                                                                                                                                                                                



|1.2  The division of this Agreement into sections,
      subsections, paragraphs and other subdivisions and the insertion of headings
      are for convenience of reference only and shall not affect the construction
      or the interpretation of this Agreement. Unless something in the subject
      matter or context is inconsistent therewith, references herein to sections,
      subsections, paragraphs
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|and other subdivisions are to sections,
subsections, paragraphs and other subdivisions of this Agreement.
|---------------------------------------------------------------------------------------------------------



|1.3 This Agreement shall be governed by and
      construed in accordance with the laws of the Province of Saskatchewan and
      the federal laws of Canada applicable therein.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|1.4  Time shall be of the essence in this Agreement.
|----------------------------------------------------



|1.5  Unless otherwise expressly provided, all
      amounts expressed herein in terms of money refer to the lawful currency
      of Canada and all payments to be made hereunder shall be made in such currency.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|1.6  The following are the schedules attached
      to this Agreement, which schedules (including the representations, warranties
      and covenants set out therein) are deemed to be a part hereof and are hereby
      incorporated by reference herein:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Schedule A:- | Details of the Offering
| | -------------- | -----------------------

| | Schedule B | Terms and Conditions for United States Offers
      and Sales
| | ------------ | -------------------------------------------------------------

| | Schedule C:- | Details as to Material Subsidiaries
| | -------------- | -----------------------------------

| | Schedule D:- | Details as to Outstanding Convertible Securities
| | -------------- | ------------------------------------------------



|SECTION 2  NATURE OF TRANSACTION
|--------------------------------



|2.1  Each Purchaser who is resident in a Designated
      Province shall purchase under one or more Private Placement Exemptions so
      that the purchases will be exempt from the prospectus requirements of the
      Applicable Securities Laws. Each other Purchaser shall purchase in accordance
      with such procedures as the Company and the Underwriter may mutually agree,
      acting reasonably, in order to fully comply with Applicable Securities Laws.
      The Company hereby agrees to use its commercially reasonable best efforts
      to secure compliance with all securities regulatory requirements on a timely
      basis in connection with the distribution of the Units to the Purchasers,
      including, without limitation, by filing within the time periods stipulated
      under Applicable Securities Laws and at the Companys expense all private
      placement forms required to be filed by the Company and the Purchasers (pursuant
      to instructions received from the Underwriter), respectively, in connection
      with the Offering and paying all filing fees required to be paid in connection
      therewith so that the distribution of the Units may lawfully occur without
      the necessity of filing a prospectus or any similar document under Applicable
      Securities Laws. The Underwriter agrees to assist the Company in all reasonable
      respects to secure compliance with all regulatory requirements in connection
      with the Offering. The Underwriter will notify the Company with respect
      to the identity of each Purchaser as soon as practicable and with a view
      to leaving sufficient time to allow the Company to secure compliance with
      all relevant regulatory requirements under Applicable Securities Laws relating
      to the sale of the Units.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|2.2  Any offer and sale of Units in the United
      States of America shall be made in accordance with the terms and conditions
      set out in Schedule B to this Agreement, which terms and conditions
      and the representations, warranties and covenants of the parties are hereby
      incorporated by reference.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|SECTION 3  COVENANTS
|--------------------



|3.1  The Underwriter covenants with the Company
      that it will (and will use its commercially reasonable best efforts to cause
      the members of the Selling Group to ensure that they will): (i) conduct
      activities in connection with arranging for the sale of the Units in compliance
      with Applicable Securities Laws; (ii) not solicit offers to purchase or
      sell the Units so as to require registration thereof or the filing of any
      prospectus, offering memorandum or similar disclosure document with respect
      thereto under the laws of any jurisdictions including the United States
      of America or any state thereof or the United Kingdom and not solicit offers
      to purchase or sell the Units in any jurisdiction outside of Canada where
      the solicitation or sale of the Units would result in any ongoing disclosure
      requirements in such jurisdiction, any registration requirements in such
      jurisdiction (except for the filing of a notice or report of the solicitation
      or the sale), or where the Company may be subject to liability in connection
      with the sale of the Units which is materially more onerous than its liability
      under the Applicable Securities Laws to which it is subject as at the date
      of this Agreement; (iii) obtain from each Purchaser an executed Subscription
      Agreement in a form which is reasonably acceptable to the Company and to
      the Underwriter relating to the transactions herein contemplated, together
      with all documentation as may be necessary in connection with subscriptions
      for Units; (iv) refrain from advertising the Offering in (A) printed media
      of general and regular paid circulation, (B) radio, or (C) television; (v)
      not make use of any green sheet or other internal marketing document without
      the consent of the Company, such consent to be promptly considered and not
      to be unreasonably withheld; and (vi) comply with, and ensure that its directors,
      officers, employees and affiliates comply with all pre-marketing and applicable
      marked stabilization rules and requirements of the Securities Commissions
      and the Exchange.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|SECTION 4  REPRESENTATIONS, WARRANTIES AND COVENANTS
      OF THE COMPANY
|-------------------------------------------------------------------------



|4.1 The Company hereby represents,
warrants and covenants to and with the Underwriter, on its own behalf and on
behalf of the Purchasers that:
|----------------------------------------------------------------------------------------------------------------------------------------------

|(1) | General Matters
|--- | ---------------

| | (a) | the Company: (i) has been duly
      incorporated and organized and is validly existing and in good standing
      under the laws of Canada; (ii) has all requisite corporate power and authority
      to carry on its business as presently conducted and to own, lease and operate
      its properties and assets; and (iii) has all required corporate power and
      authority to create, issue and sell the Units, the Broker Warrants and the
      Warrant Shares, to enter into this Agreement and to carry out the provisions
      of this Agreement;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | attached as Schedule B
      hereto is a list of each Material Subsidiary and the particulars of the
      types and percentage of securities owned by the Company in each such Material
      Subsidiary; the Company holds all such securities free and clear of all
      mortgages, liens, charges, pledges, security interests, encumbrances, claims
      and demands whatsoever except as otherwise disclosed in such Schedule;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| | (c) | each of the Material Subsidiaries:
      (i) has been duly incorporated and organized and is validly existing and
      in good standing under the laws of its jurisdiction of incorporation; and
      (ii) has the requisite corporate power and authority to carry on its business
      as presently conducted and to own, lease and operate its properties and
      assets;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d) | the
Company and each of the Material Subsidiaries is in all material respects conducting its
business in  compliance with all applicable laws, rules and regulations of each
jurisdiction in which its  business is carried on and is duly licensed, registered or
qualified in all jurisdictions in  which it owns, leases or operates its property or
carries on business to enable its business to  be carried on as presently conducted and
its property and assets to be owned, leased and  operated and all such licenses,
registrations and qualifications are and will at the Time of  Closing be valid,
subsisting and in good standing, except in respect of matters which do not  and will not
result in any material adverse change to the business, business prospects or  condition
(financial or otherwise) of the Company and its subsidiaries on a consolidated basis,
and except for the failure to be so qualified or the absence of any such license,
registration  or qualification which does not and will not have a material adverse effect
on the assets or  properties, business, results of operations, prospects or condition
(financial or otherwise) of  the Company and its subsidiaries, on a consolidated basis;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (e) | all
necessary corporate action has been taken or will have  been taken prior to the Time of
Closing by the Company so as  to validly issue and sell the Units to the Purchasers and
upon  receipt by the Company of the purchase price as consideration  for the issue of the
Unit Shares and the Warrant Shares  respectively, such Unit Shares and Warrant Shares
will be  validly issued as fully paid and non-assessable shares in the  capital of the
Company;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (f) | as
of the date hereof, the authorized capital of the Company  consists solely of an
unlimited number of Common Shares, and  an unlimited number of First and Second Preferred
Shares, each  issuable in series, and the outstanding capital of the Company  as of April
22, 2002 consists solely of no First or Second  Preferred Shares and 43,356,784 Common
Shares;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (g) | attached
as Schedule C hereto is a complete list of all  Outstanding Convertible
Securities of the Company and each of  the Material Subsidiaries and, except as provided
under this  Agreement, as disclosed in Schedule C or under the Companys
stock option plan and options granted or to be granted  thereunder, no person now has any
agreement or option or right  or privilege capable of becoming an agreement for the
purchase, subscription or issuance of any unissued Shares,  securities or warrants of the
Company or any of its Material  Subsidiaries;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (h) | the
Company has procured and maintains adequate insurance  against all insurable risks which
are material to the Company;
| | --- | -------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| | (i) | since December 31, 2001, other
      than as disclosed in the Companys Information Record:
| | --- | -------------------------------------------------------------------------------------------

| |  | (i) | there has not been any material
      adverse change in the assets, liabilities or obligations (absolute, accrued,
      contingent or otherwise) of the Company or its subsidiaries, on a consolidated
      basis;
| |  | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | (ii) | there has not been any material
      change in the capital stock or long-term debt of the Company and its subsidiaries,
      on a consolidated basis;
| |  | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | (iii) | there has not been any material
      adverse change in the business, business prospects, condition (financial
      or otherwise) or results of operations of the Company and its subsidiaries,
      on a consolidated basis; and
| |  | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | (iv) | each of the Company and its Material
      Subsidiaries has carried on business in the ordinary course;
| |  | ---- | -------------------------------------------------------------------------------------------------------

| | (j) | the audited consolidated financial
      statements of the Company for the last fiscal year-end in respect of which
      the Company has delivered financial statements to its securityholders prior
      to the Closing Date and the unaudited consolidated financial statements
      of the Company for any subsequent period in respect of which such statements
      have been delivered by the Company to its securityholders prior to the Closing
      Date present fairly the financial condition of the Company and its subsidiaries,
      on a consolidated basis, for the respective periods then ended;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (k) | no portion of the Companys
      Information Record contained a misrepresentation as at its date of public
      dissemination (provided that the foregoing representation is not intended
      to extend to information and statements in reliance upon and in conformity
      with information furnished to the Company by or on behalf of the Underwriter
      specifically for use therein);
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (l) | there is no action, proceeding
      or investigation (whether or not purportedly by or on behalf of the Company
      or any subsidiary) pending or, to the best of the Companys and its
      respective directors and officers knowledge, information and belief, threatened
      against or affecting the Company or any of its Material Subsidiaries at
      law or in equity (whether in any court, arbitration or similar tribunal)
      or before or by any federal, provincial, state, municipal or other governmental
      department, commission, board or agency, domestic or foreign, which in any
      way materially adversely affects the Company and its subsidiaries, on a
      consolidated basis, or the condition (financial or otherwise) of the Company
      and its subsidiaries, on a consolidated basis, or which questions the validity
      of the Units or the issuance of the Unit Shares or the Warrant Shares as
      fully paid and non-assessable shares or any action taken or to be taken
      by the Company pursuant to or in connection with this Agreement;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (m) | neither the Company nor any Material
      Subsidiary is in default or in breach in any material respect of, and the
      execution and delivery of this Agreement by the Company, the performance
      and compliance with the terms of this Agreement and
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| |  | the sale of the Units by the Company
      will not result in any material breach of, or be in conflict with or constitute
      a default under, or create a state of facts which, after notice or lapse
      of time, or both, would constitute a default either directly or indirectly
      under any term or provision of the constating documents, by-laws or resolutions
      of the Company or any of its Material Subsidiaries, or any material mortgage,
      note, indenture, contract, agreement, instrument, lease or other document
      to which the Company or any of its Material Subsidiaries is a party or by
      which any of them is bound or any judgment, decree, order, statute, rule
      or regulation applicable to any of them;
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (n) | to the best of the Companys
      knowledge, information and belief, no other party is in default in the observance
      or performance of any term or obligation to be performed by it under any
      contract entered into by the Company or any of its Material Subsidiaries
      which is material to the business of the Company and its subsidiaries, on
      a consolidated basis, and no event has occurred which, with notice or lapse
      of time or both would directly or indirectly constitute such a default,
      in any case which default or event would have a material adverse effect
      on the assets or properties, business, results of operations, prospects
      or condition (financial or otherwise) of the Company and its subsidiaries,
      on a consolidated basis;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (o) | the Company is a reporting
      issuer (or its equivalent) in the Provinces of Ontario, British Columbia,
      Alberta, Saskatchewan, Manitoba, Quebec and Nova Scotia and is not in default
      in any material respect under the Applicable Securities Laws of any such
      jurisdiction;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (p) | the
Company will use its commercially reasonable best efforts  to become a Qualifying Issuer
prior to the Time of Closing
| | --- | -------------------------------------------------------------------------------------------------------------------------

| | (q) | the auditors who audited the consolidated
      financial statements of the Company most recently delivered to the securityholders
      of the Company (or delivered to securityholders prior to the Closing Date)
      and delivered their report with respect thereto are independent public accountants
      as required by Applicable Securities Laws;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (r) | there has never been any reportable
      disagreement (within the meaning of National Policy Statement No. 31 of
      the Canadian Securities Administrators) with the present or any former auditor
      of the Company;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (s) | the Company and, to the best of
      the Companys knowledge, information and belief, each of the Material
      Subsidiaries, has filed all federal, provincial, state, local and foreign
      tax returns that are required to be filed or has requested extensions thereof
      (except in any case in which the failure to so file would not have a material
      adverse effect on the financial position of the Company and its subsidiaries
      on a consolidated basis, and has paid all taxes required to be paid by it
      and any other assessment, fine, penalty levied against it, to the extent
      that any of the foregoing is due and payable, except for any such assessment,
      fine or penalty
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| |  | that has
been  disclosed to the Underwriter and is currently being contested in good faith;
| |  | -------------------------------------------------------------------------------------------

| | (t) | the net proceeds of the Offering
      will be used in the manner specified in Schedule A hereto and
      for no other purpose;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------

| | (u) | this Agreement, the Subscription
      Agreements and all other contracts required in connection with the issue
      and sale of the Units and the distribution of the Warrant Shares shall be,
      prior to the Closing Date, duly authorized, executed and delivered by the
      Company and will be valid and binding obligations of the Company enforceable
      in accordance with their respective terms, subject to the usual qualifications;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (v) | the attributes of the securities
      comprising the Units, the Broker Warrants and the Warrant Shares will conform
      in all material respects with the description thereof included in Schedule
      A hereto;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (w) | the form of the certificates representing
      the Common Shares, the Broker Warrants and the Warrants has been, or prior
      to the Time of Closing will be, duly approved by the directors of the Company
      and complies (or will comply, as the case may be) with the provisions of
      all applicable laws and the regulations of the Exchange;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (x) | except as disclosed in the Companys
      Information Record, neither the Company nor any Material Subsidiary owes
      any money to, nor has the Company or any Material Subsidiary any outstanding
      loans (in a material amount) to, or borrowed any monies from, or is otherwise
      indebted to any officer, director, employee, shareholder or any other person
      not dealing at arms-length (as defined in the Income Tax
      Act (Canada), as amended) with the Company except for usual employee,
      director or officer reimbursements and compensation paid in the ordinary
      and normal course of business of the Company and its Material Subsidiaries;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (y) | except as disclosed in the Companys
      Information Record, neither the Company nor any Material Subsidiary is party
      to any contract, agreement or understanding which is material to the Company
      and its subsidiaries, on a consolidated basis with any officer, director,
      employee or any other person not dealing at arms-length (as
      defined in theIncome Tax Act (Canada), as amended) with the Company;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (z) | the Company will use its commercially
      reasonable best efforts to obtain the necessary regulatory consents from
      the Exchange to the sale of the Units and the Warrant Shares on such conditions
      as are acceptable to the Company and the Underwriter, acting reasonably;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (aa) | the minute books and corporate
      records of the Company to be made available to the Underwriter and its local
      counsel in the Province of Saskatchewan in connection with its due diligence
      investigation of the Company for the period from its incorporation to the
      date of examination thereof are the original minute
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| |  | books and
records of the Company and contain copies of all  proceedings (or certified copies
thereof) of the shareholders, the board of directors and all  committees of the board of
directors of the Company and there have been no other meetings,  resolutions or
proceedings of the shareholders, board of directors or any committee of the  board of
directors of the Company to the date of such corporate records and minute books not
reflected in such minute books and other records, other than those which have been
disclosed to  the Underwriter or which are not material in the context of the Company; and
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (bb) | other than the Underwriter pursuant
      to this Agreement, there is no person acting or purporting to act at the
      request of the Company who is entitled to any brokerage or agency fee or
      any other royalty in connection with the transactions contemplated herein.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2)  Mining and Environmental Matters:
|--------------------------------------

| | (a) | to the best of the Companys
      knowledge, information and belief, the Company and its subsidiaries, taken
      as a whole, owns, controls or has legal rights to, through mining tenements
      of various types and descriptions, all of the rights, titles and interests
      materially necessary or appropriate to authorize and enable it to carry
      on the material mineral exploration and/or mining activities as currently
      being undertaken and has obtained or, upon performance of the conditions
      precedent will be able to obtain such rights, titles and interests as may
      be required to implement its respective plans on properties which are material
      to the Company and its subsidiaries taken as a whole and is not in material
      default of such rights, titles and interests;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | to the best of the Companys
      knowledge, information and belief, all assessments or other work required
      to be performed in relation to the material mining claims and the mining
      rights of the Company and its subsidiaries taken as a whole in order to
      maintain its interest therein, if any, have been performed to date and each
      of the Company and its subsidiaries, as applicable, has complied in all
      material respects with all applicable governmental laws, regulations and
      policies in this connection as well as with regard to legal, contractual
      obligations to third parties in this connection except in respect if mining
      claims and mining rights that the Company or any of its subsidiaries intends
      to abandon or relinquish and except for any non-compliance which would not,
      either individually or in the aggregate, have a material adverse effect
      on the Company and its subsidiaries, on a consolidated basis. All such mining
      claims and mining rights are in good standing in all material respects as
      of the date of this Agreement;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c) | there are no expropriations or
      similar proceedings or any material challenges to title or ownership, actual
      or threatened, of which the Company or any of its subsidiaries has received
      notice against their respective mining claims and mining rights or any part
      thereof as of the date of this Agreement;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| | (d) | to the best of the Companys
      knowledge, information and belief, all mining operations on the properties
      of the Company and its subsidiaries have been conducted in all respects
      in accordance with good mining and engineering practices and all applicable
      workers compensation and health and safety and workplace laws, regulations
      and policies have been duly complied with except where the failure to conduct
      operations would not have a material adverse effect on the Company and its
      subsidiaries, on a consolidated basis;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (e) | to the best of the Companys
      knowledge, information and belief, each of the Company and its subsidiaries
      has been and is in compliance with all applicable federal, state, municipal
      and local laws, statutes, ordinances, by-laws and regulations, orders, directives
      and decisions rendered by any ministry, department or administrative or
      regulatory agency, domestic or foreign (the Environmental Laws)
      relating to the protection of the environment, occupational health and safety
      or the processing, use, treatment, storage, disposal, discharge, transport
      or handling of any pollutants, contaminants, chemicals or industrial, toxic
      or hazardous wastes or substances (Hazardous Substances) other
      than any non-compliance which would not either individually or in the aggregate
      have a material adverse effect on the Company and its subsidiaries, on a
      consolidated basis;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (f) | to the best of the Companys
      knowledge, information and belief, the Company and its subsidiaries have
      obtained all material licenses, permits, approvals, consents, certificates,
      registrations and other authorizations under applicable Environmental Laws
      (the Environmental Permits) necessary for the operation of their
      projects at the present time and each Environmental Permit is valid, subsisting
      and in good standing and the holders of the Environmental Permits are not
      in default or breach of the terms thereof and no proceeding is pending or
      threatened to revoke or limit any Environmental Permit other than any breach
      or default which would not either individually or in the aggregate have
      a material adverse effect on the Company and its subsidiaries, on a consolidated
      basis;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (g) | to the best of the Companys
      knowledge, information and belief, neither the Company nor any of its subsidiaries
      has used, except in material compliance with all Environmental Laws or except
      to the extent that the consequences would not be materially adverse to the
      Company and its subsidiaries, on a consolidated basis, any property or facility
      which it owns or leases or previously owned or leased, to generate, manufacture,
      process, distribute, use, treat, store, dispose of, transport or handle
      any Hazardous Substance;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (h) | neither the Company nor any of
      its subsidiaries (including, if applicable, any predecessor companies) has
      received notice of, or been prosecuted for an offence alleging non-compliance
      with any Environmental Laws in circumstances that would have a material
      adverse effect on the Company and its subsidiaries, on a consolidated basis,
      and neither the Company nor any of its subsidiaries (including, if applicable,
      any predecessor companies) has settled any material allegation of non-compliance
      short of prosecution. There are no orders or
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| |  | directions relating
to environmental matters requiring any material work, repairs, construction or capital
expenditures to be made with respect to any of the assets of the Company or any of its
subsidiaries, nor has the Company or  any of its subsidiaries received notice of any of
the  same;
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (i) | except as ordinarily or customarily
      required by applicable permits, neither the Company nor any of its subsidiaries
      has received any notice that it is potentially responsible for any federal,
      state, provincial, municipal, or local clean-up site or corrective action
      under any Environmental Laws that will subject any of the Company or any
      of its subsidiaries to material expense except for notices of incidents
      for which legal counsel to the Company is of the opinion that the Company
      and/or its subsidiaries will incur no material liability. To the best of
      the Companys knowledge, information and belief, neither the Company
      nor any of its subsidiaries has received any request for information in
      connection with any federal, state, provincial, municipal or local inquiries
      as to disposal sites; and
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (j) | to the best of the Companys
      knowledge, information and belief, there are no environmental audits, evaluations,
      assessments, studies or tests relating to the Company or any of its subsidiaries
      except for ongoing assessments conducted in the ordinary course of business.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(3)  Employment Matters
|-----------------------

| | (a) | other than usual and customary
      health and related benefit plans for employees, the Company has made public
      disclosure to the extent required by applicable laws as to each material
      plan for retirement, bonus, stock purchase, profit sharing, stock option,
      deferred compensation, severance or termination pay, insurance, medical,
      hospital, dental, vision care, drug, sick leave, disability, salary continuation,
      legal benefits, unemployment benefits, vacation, incentive or otherwise
      contributed to, or required to be contributed to, by the Company for the
      benefit of any current or former director, officer, employee or consultant
      of the Company (the Employee Plans). Each Employee Plan has
      been maintained in all material respects in compliance with its terms and
      with the requirements prescribed by any and all statutes, orders, rules
      and regulations that are applicable to such Employee Plans;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | all material accruals for unpaid
      vacation pay, premiums for unemployment insurance, health premiums, federal,
      provincial or state pension plan premiums, accrued wages, salaries and commissions
      and employee benefit plan payments have been reflected on the books and
      records of the Company; and
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c) | there is not currently any employment
      or labour trouble which is adversely effecting or could adversely effect,
      in a material manner, the carrying on of any of the mining projects of the
      Company or any of its subsidiaries.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|SECTION 5  CONDITIONS TO PURCHASE OBLIGATION
|--------------------------------------------



|5.1  The following are conditions of the Underwriters
      obligations to complete the purchase of the Units from the Company as contemplated
      hereby, which conditions may be waived in writing in whole or in part by
      the Underwriter:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (a) | the Company shall be a Qualifying
      Issuer;
| | --- | -----------------------------------------------

| | (b) | the Company shall have made and/or
      obtained the necessary filings, approvals, consents and acceptances of the
      appropriate regulatory authorities in the Designated Provinces and the Exchange
      in connection with the Offering, on terms which are acceptable to the Company
      and the Underwriter, acting reasonably, prior to the Closing Date, it being
      understood that the Underwriter shall do all that is reasonably required
      to assist the Company to fulfil this obligation;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c) | the Unit Shares and the Warrant
      Shares to be issued on the exercise of the Warrants and Broker Warrants
      shall have been conditionally accepted for listing and will, as soon as
      possible following their issue, be posted for trading on the Exchange (subject
      to the usual conditions of the Exchange);
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d) | the Companys board of directors
      shall have authorized and approved this Agreement and the other agreements
      and instruments pursuant to which the Units are to be sold and issued, the
      form of certificate representing the Warrants, the Broker Warrants and the
      issuance of same, the issuance of the Unit Shares and Warrant Shares upon
      the due exercise of the Warrants and Broker Warrants as fully-paid and non-assessable
      shares and all matters relating to the foregoing;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (e) | the Company shall deliver a certificate
      of the Company under its corporate seal and signed on behalf of the Company
      by such senior officers or directors of the Company as may be acceptable
      to the Underwriter, acting reasonably, addressed to the Underwriter and
      dated the Closing Date, in form and content satisfactory to the Underwriters
      counsel, acting reasonably, certifying that:
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | (i) | no order ceasing or suspending
      trading in any securities of the Company or prohibiting the sale of the
      Units, the issuance of the Broker Warrants or any of the Companys
      issued securities has been issued and no proceeding for such purpose is
      pending or, to the knowledge of such officers (after due inquiry), threatened;
| |  | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | (ii) | to the knowledge of such officers
      or directors, there has been no adverse material change (actual, proposed
      or prospective, whether financial or otherwise) in the business, affairs,
      operations, assets, liabilities (contingent or otherwise) or capital of
      the Company or its subsidiaries, on a consolidated basis since December
      31, 2001, which has not otherwise been disclosed in the Companys Information
      Record or this Agreement;
| |  | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | (iii) | the Company is a Qualifying Issuer,
      and is a reporting issuer (or its equivalent) in good standing
      under the securities laws of each of the
| |  | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| |  |  | provinces of
British Columbia,  Alberta, Saskatchewan, Manitoba, Ontario, Quebec and Nova  Scotia and,
except for the Offering, no material change  relating to the Company and its
subsidiaries, on a  consolidated basis has occurred with respect to which the  requisite
material change statement or report has not been  filed and no such disclosure has been
made on a confidential  basis;
| |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | (iv) | the audited consolidated financial
      statements for the year ended December 31, 2001 and for any subsequent period
      in respect of which such statements has been delivered by the Company to
      its securityholders prior to the Closing Date present fairly the financial
      condition of the Company and its subsidiaries for the respective periods
      then ended;
| |  | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | (v) | except for the Outstanding Convertible
      Securities, there exist no agreements, options or rights capable of becoming
      an agreement for the purchase, subscription or issuance of any unissued
      shares in the capital of the Company except as have been publicly disclosed
      or issued to employees, directors or officers of the Company pursuant to
      the existing share compensation arrangements of the Company;
| |  | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | (vi) | the execution and delivery of this
      Agreement and the other agreements pursuant to which the Units and Broker
      Warrants are to be issued, the fulfillment of the terms hereof and thereof
      and the issue, sale and delivery on the Closing Date of Units and Broker
      Warrants, do not and will not result in a breach of, and do not create a
      state of facts which, after notice or lapse of time or both, will result
      in a breach of or conflict with any of the terms, conditions or provisions
      of the constating documents of the Company or any material trust indenture,
      agreement or instrument to which the Company is a party or by which the
      Company is bound on the Closing Date; and
| |  | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | (vii) | the representations and warranties
      of the Company contained in this Agreement are true and correct at the Time
      of Closing, with the same force and effect as if made by the Company as
      at the Time of Closing after giving effect to the transactions contemplated
      hereby;
| |  | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (f) | the Company will have caused a
      favorable legal opinion to be delivered by its Canadian counsel, addressed
      to the Underwriter and McMillan Binch, the Underwriters counsel, with
      respect to such matters as the Underwriter may reasonably request relating
      to this transaction, acceptable in all reasonable respects to the Underwriters
      counsel. In giving such opinions, counsel to the Company shall be entitled
      to rely, to the extent appropriate in the circumstances, upon local counsel
      and shall be entitled as to matters of fact not within their knowledge,
      to rely upon a certificate of fact from responsible persons in a position
      to have knowledge of such facts and their accuracy;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| | (g) | the Company will have caused a
      favourable legal opinion to be delivered by its local counsel in the jurisdiction
      in which each of its Material Subsidiaries is incorporated or organized
      to the effect that each Material Subsidiary has been incorporated and is
      validly subsisting under the laws of its respective jurisdiction of incorporation
      or organization; as to the registered holdings of the voting securities
      of each such Material Subsidiary; and that each Material Subsidiary has
      all requisite corporate capacity to own its properties and to carry on its
      business as presently carried on;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (h) | the Company will have caused a
      favourable legal opinion to be delivered by United States Counsel to the
      Company with respect to such matters as the Underwriter and the Company
      may reasonably request and acceptable in all reasonable respects to the
      Underwriters Counsel and the Company including an opinion to the effect
      that no registration of the Unit Shares, Warrants, Broker Warrants or Warrant
      Shares is required under the United States Securities Act of 1933, as amended;
      and
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (i) | the Company will have caused its
      register and transfer agent to deliver a certificate as to the issued and
      outstanding Common Shares of the Company.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



|SECTION 6  CLOSING
|------------------



|6.1  The Offering will be completed on the
      Closing Date at the offices of MacPherson Leslie & Tyerman LLP in the
      city of Saskatoon, Saskatchewan at the Time of Closing or at such other
      place, date or time as may be mutually agreed to; provided that if the Company
      has not been able to comply with any of the covenants or conditions set
      out herein required to be complied with by the Time of Closing, the respective
      obligations of the parties will terminate without further liability or obligation
      except for payment of expenses, indemnity and contribution provided for
      in this Agreement.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|6.2  At the Time of Closing on the Closing
      Date, the Company shall deliver to the Underwriter:
|----------------------------------------------------------------------------------------------------

| | (a) | certificates duly registered as
      the Underwriter may direct representing the Unit Shares and the Warrants
      comprising the Units being purchased at the closing;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | a certificate registered in the
      name of the Underwriter representing the Broker Warrants;
| | --- | -----------------------------------------------------------------------------------------------

| | (c) | the requisite legal opinions and
      certificates (or bring-down versions thereof for subsequent
      closings) as contemplated above; and
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------

| | (d) | such further documentation as may
      be contemplated herein or as counsel to the Underwriter or the applicable
      regulatory authorities may reasonably require,
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------



|against payment of the purchase price
by certified cheque or bank draft dated the Closing Date payable to the Company,
less the Underwriting Fee and the Underwriters estimated expenses relating
to the Offering which the Underwriter is hereby directed to deduct therefrom.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|With respect to
any certificates representing Unit Shares and Warrants  comprising the Units purchased
and with respect to the certificate representing  the Broker Warrants in respect of which
delivery is to be made to Purchasers in  any Canadian city other than the city in which
the place of closing of the  Offering is to occur and in which the Underwriter and the
Companys registrar  and transfer agent each have an office, the Company shall take all
reasonable  steps to have enabled the Underwriter to effect delivery to each such
Purchaser  on the Closing Date provided that reasonable notice is given by the
Underwriter  to the Company.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|6.3  All terms and conditions of this Agreement
      shall be construed as conditions and any breach or failure to comply with
      any such terms and conditions in favour of the Underwriter shall entitle
      the Underwriter to terminate its obligations to purchase Units by written
      notice to that effect given to the Company prior to the Time of Closing
      (but, for greater certainty, not thereafter). It is understood that the
      Underwriter may waive in whole or in part, or extend the time for compliance
      with, any of such terms and conditions without prejudice to its rights in
      respect of any such terms and conditions or any subsequent breach or non-compliance,
      provided that, to be binding on the Underwriter any such waiver or extension
      must be in writing.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|SECTION 7  TERMINATION OF PURCHASE OBLIGATION
|---------------------------------------------



|7.1  Without limiting any of the foregoing
      provisions of this Agreement, and in addition to any other remedies which
      may be available to it, the Underwriter shall be entitled, at its option,
      to terminate and cancel, without any liability on the part of the Underwriter,
      its obligations under this Agreement to purchase the Units, by giving written
      notice to the Company at any time prior to the Time of Closing if:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (a) | any inquiry, investigation or other
      proceeding is commenced or any other order is issued under or pursuant to
      any statute of Canada or any province of Canada or there is any change of
      law or the interpretation or administration thereof by a securities regulator
      or other public authority, which in the reasonable opinion of the Underwriter,
      operates to prevent or materially restrict the trading in or distribution
      of the Unit Shares or Warrants;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | there shall occur any material
      change or change in a material fact or occurrence of a material fact or
      event specifically relating to the Company (or its Material Subsidiaries)
      which, in the Underwriters opinion, would reasonably be expected to
      have a significant adverse effect on the market price of or value of any
      of the Unit Shares or Warrants; or
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c) | there should develop, occur or
      come into effect any incident of national or international consequence,
      any law, regulation or inquiry or any other event, action or occurrence
      of any nature whatsoever which, in the Underwriters reasonable opinion,
      materially and adversely effects or would be expected to materially and
      adversely effect the financial markets in Canada or the United States or
      the business of the Company and its subsidiaries, on a consolidated basis;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|the occurrence or non-occurrence of any
of the foregoing events or circumstances to be determined in the sole discretion
of the Underwriter, acting reasonably.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|7.2The Underwriter shall make reasonable
      efforts to give notice to the Company (in writing or by other means) of
      the occurrence of any of the events or circumstances referred to in Section
      7.1 provided that neither the giving nor the failure to give such notice
      shall in any way affect the Underwriters entitlement to exercise this
      right at any time prior to or at the Time of Closing.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.3  The Underwriters rights of termination
      in Section 7.1 are in addition to any other rights or remedies it may have
      in respect of any default, act or failure to act or non-compliance by the
      Company in respect of any matters contemplated by this Agreement.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7.4  If the obligations of the Underwriter
      under this Agreement are terminated pursuant to the termination right described
      in this Section, the Companys liabilities to the Underwriter shall
      be limited to the Companys obligations under the Indemnity,
      Contribution and Expenses provisions of this Agreement.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|SECTION 8  INDEMNITY
|--------------------



|8.1  The Company covenants and agrees to indemnify
      and save harmless the Underwriter and its affiliates, shareholders, directors,
      officers, and employees (each being referred to herein as an Indemnified
      Party and collectively, the Indemnified Parties) from
      and against any and all expenses, losses (other than a loss of profits),
      claims, actions, damages or liabilities, whether joint or several (including
      the aggregate amount paid in reasonable settlement of any actions, suits,
      proceedings or claims) and the reasonable fees and expenses of its counsel
      that may be incurred in advising with respect to and/or defending any claim
      that may be made against an Indemnified Party, to which an Indemnified Party
      may become subject or otherwise involved in any capacity under any statute
      or common law or otherwise insofar as such expenses, losses, claims, damages,
      liabilities or actions arise out of or are based, directly or indirectly,
      upon the performance of professional services rendered to the Company by
      the Underwriter hereunder or otherwise in connection with the matters referred
      to herein provided, however, that this indemnity shall not apply to the
      extent that a court of competent jurisdiction in a final judgment that has
      become non-appealable shall determine that:
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | (i) | the Underwriter or any of the other
      Indemnified Parties has been grossly negligent or dishonest or has committed
      any fraudulent act in the course of such performance; and
| |  | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | (ii) | the expenses, losses, claims, damages
      or liabilities, as to which indemnification is claimed, were directly caused
      by the gross negligence, dishonesty or fraud referred to in clause (i).
| |  | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|8.2  If for any reason (other than the occurrence
      of any of the events itemized in clauses 8.1(i) and (ii) above), the foregoing
      indemnification is unavailable to an Indemnified Party or insufficient to
      hold it harmless, then the Company shall contribute to the amount paid or
      payable by the Indemnified Party as a result of such expense, loss, claim,
      damage or liability in such proportion as is appropriate to reflect not
      only the relative benefits received by the Company on the one hand and the
      Underwriter on the other hand but also the relative fault of the Company
      and the Underwriter as well as any relevant equitable considerations; provided
      that the Company shall, in any event, contribute to the amount paid or payable
      by the Indemnified Party as a result of such expense, loss, claim, damage
      or liability, any excess of such amount over the amount of the fees received
      by the Underwriter pursuant to the terms of this Agreement.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---







|8.3 (a) The Company agrees that in case any
      legal proceeding shall be brought against the Company and/or an Indemnified
      Party by any governmental commission or securities regulatory authority
      or any stock exchange or other entity having regulatory authority, either
      domestic or foreign, shall investigate the Company and/or the Underwriter
      and any personnel of the Underwriter shall be required to testify in connection
      therewith or shall be required to respond to procedures designed to discover
      information regarding, in connection with, or by reason of the performance
      of professional services rendered to the Company by the Underwriter, the
      Indemnified Party shall have the right to employ its own counsel in connection
      therewith, and the reasonable fees and expenses of such counsel as well
      as the reasonable costs (including an amount to reimburse the Underwriter
      for time spent by its personnel in connection therewith) and out-of-pocket
      expenses incurred by the personnel of the Underwriter in connection therewith
      shall be paid by the Company as they occur.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) Promptly after
      receipt of notice of the commencement of any legal proceeding against an
      Indemnified Party or after receipt of notice of the commencement of any
      investigation, which is based, directly or indirectly, upon any matter in
      respect of which indemnification may be sought from the Company, the Indemnified
      Party will notify the Company in writing of the commencement thereof and,
      throughout the course thereof, will provide copies of all relevant documentation
      to the Company, will keep the Company advised of the progress thereof and
      will discuss with the Company all significant actions proposed.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|8.4  The indemnity and contribution obligations
      of the Company contained in this Section 8 shall be in addition to any liability
      which the Company may otherwise have, shall extend upon the same terms and
      conditions to an Indemnified Party and shall be binding upon and enure to
      the benefit of any successors, assigns, heirs and personal representatives
      of the Company and any Indemnified Party. The foregoing provisions shall
      survive the completion of services rendered hereunder or any termination
      of this Agreement.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|8.5  To the extent that any Indemnified Party
      is not a party to this Agreement, the Underwriter shall obtain and hold
      the right and benefit of the foregoing indemnity in trust for and on behalf
      of such Indemnified Party.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|8.6  If any action or claim shall be asserted
      against an Indemnified Party in respect of which indemnity may be sought
      from the Company pursuant to the provisions of this Section 8 or if any
      potential claim contemplated hereby shall come to the knowledge of an Indemnified
      Party, the Indemnified Party shall promptly notify the Company in writing;
      but the omission to so notify the Company will not relieve the Company from
      any liability it may otherwise have to the Indemnified Party pursuant to
      this Section 8. The Company shall be entitled, but not obligated, to participate
      in or assume the defence thereof provided, however, that the defence shall
      be through legal counsel acceptable to the Indemnified Party, acting reasonably.
      In addition, the Indemnified Party shall also have the right to employ separate
      legal counsel in any such action and participate in the defence thereof,
      and the fees and expenses of such counsel shall be borne by the Indemnified
      Party unless:
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (a) | the employment thereof has been
      specifically authorized in writing by the Company;
| | --- | ----------------------------------------------------------------------------------------

| | (b) | the Indemnified Party has been
      advised by counsel that representation of the Company and the Indemnified
      Party by the same legal counsel would be inappropriate due to actual or
      potential differing interests between them; or
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| | (c) | the Company has failed within a
      reasonable time after receipt of such written notice to assume the defence
      of such action or claim;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------



|provided that in no event shall the  Company be
required to assume the fees and expenses of more than one legal  counsel for all
Indemnified Parties. Neither the Company nor any Indemnified  Party shall effect any
settlement of any such action or claim or make any  admission of liability without the
written consent of the other party, such  consent to be promptly considered and not to be
unreasonably withheld. The  indemnity herein provided shall remain in full force and
effect and shall not be  limited to or affected by any other indemnity in respect of any
other matters  specified herein obtained by the Indemnified Party from any other person.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|SECTION 9  CONTRIBUTION
|-----------------------



|9.1  In the event that the indemnity provided
      for above is, for any reason, illegal or unenforceable as being contrary
      to public policy or for any other reason, the Underwriter and the Company
      shall contribute to the aggregate of all losses, claims, costs, damages,
      expenses or liabilities (including any legal or other expenses reasonably
      incurred by the Indemnified Party in connection with investigating or defending
      any action or claim which is the subject of this section but excluding loss
      of profits or consequential damages) of the nature provided for above such
      that the Underwriter shall be responsible for that portion represented by
      the percentage that the Underwriting Fee payable by the Company to the Underwriter
      bears to the gross proceeds from the sale of the Units and the Company shall
      be responsible for the balance, provided that, in no event, shall any Underwriter
      be responsible for any amount in excess of the amount of the Underwriting
      Fee actually received by it. In the event that the Company may be held to
      be entitled to contribution from the Underwriter under the provisions of
      any statute or law, the Company shall, in respect of the Underwriter, be
      limited to contribution in an amount not exceeding the lesser of: (i) the
      portion of the full amount of losses, claims, costs, damages, expenses and
      liabilities, giving rise to such contribution for which the Underwriter
      is responsible, as determined above, and (ii) the amount of the Underwriting
      Fee actually received by the Underwriter. Notwithstanding the foregoing,
      a party guilty of fraudulent misrepresentation shall not be entitled to
      contribution from the other party. Any party entitled to contribution will,
      promptly after receiving notice of commencement of any claim, action, suit
      or proceeding against such party in respect of which a claim for contribution
      may be made against the other party under this section, notify such party
      from whom contribution may be sought. In no case shall such party from whom
      contribution may be sought be liable under this agreement unless such notice
      has been provided, but the omission to so notify such party shall not relieve
      the party from whom contribution may be sought from any other obligation
      it may have otherwise than under this section. The right to contribution
      provided in this section shall be in addition and not in derogation of any
      other right to contribution which the Underwriter or the Company may have
      by statute or otherwise by law.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|9.2  The Company waives its right to recover
      contribution from the Underwriter or any other Indemnified Party with respect
      to any liability of the Company solely by reason of or arising out of any
      misrepresentation (other than a misrepresentation included in reliance upon
      and in conformity with information furnished to the Company by or on behalf
      of the Underwriter specifically for use therein) contained in the Companys
      Information Record.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|SECTION 10  EXPENSES
|--------------------



|10.1  All expenses, including the reasonable
      fees of the Underwriters legal counsel up to a maximum of $50,000
      (exclusive of disbursements and GST) incurred from time to time in connection
      with the Offering of, or incidental to the sale, issuance or distribution
      of the Units and to all matters in connection with the transactions herein
      set forth shall be borne by the Company. The Company covenants and agrees
      to fully reimburse the Underwriter from time to time for all such expenses
      immediately upon the receipt of one or more invoices.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|SECTION 11  SURVIVAL OF REPRESENTATIONS AND WARRANTIES
|------------------------------------------------------



|11.1  All warranties, representations, covenants
      and agreements of the Company herein contained or contained in documents
      submitted or required to be submitted pursuant to this Agreement shall survive
      the purchase of the Units and shall continue in full force and effect for
      the benefit of the Underwriter and the Purchasers for a period of two years
      from the Closing Date regardless of the closing of the sale of the Units
      and regardless of any investigation which may be carried on by the Underwriter
      or on the Underwriters behalf. Notwithstanding the foregoing, the
      provisions contained in this Agreement in any way related to the indemnification
      of the Underwriter by the Company, or the contribution obligations of the
      Underwriter or those of the Company, shall survive and continue in full
      force and effect, indefinitely.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|SECTION 12  ADDITIONAL ISSUANCES
|--------------------------------



|12.1  The Company will not, without the prior
      written consent of the Underwriter, issue, authorize or agree to issue or
      approve for issuance any equity or quasi-equity securities for the period
      commencing on the date of execution of this Agreement and concluding 90
      days after the closing of the Offering except in conjunction with: (i) the
      grant or exercise of stock options and share compensation arrangements;
      (ii) Outstanding Convertible Securities; (iii) obligations in respect of
      existing mineral property agreements; and (iv) the issuance of securities
      in connection with property or share acquisitions in the normal course of
      business, such consent not to be unreasonably withheld.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|SECTION 13  NOTICE
|------------------



|13.1  Any notice or other communication to
      be given hereunder shall be in writing and shall be given by delivery or
      by telecopier, as follows:
|----------------------------------------------------------------------------------------------------------------------------------------------------------



|If to the Company at:
|---------------------

| | Claude
      Resources Inc. 
      200, 224- 4th Avenue South 
      Saskatoon, Saskatchewan 
      S7K 5M5
| | -----------------------------------------------------------------------------------------------------------

| | Attention:
      Neil McMillan 
      Telecopier:  (306) 668-7500
| | -----------------------------------------------------------------



|with a copy to:
|---------------



| |  | 
| |  | 



---





| | MacPherson
      Leslie & Tyerman LLP 
      1500 - 410 - 22nd Street East 
      Saskatoon, Saskatchewan 
      S7K 5T6
| | ------------------------------------------------------------------------------------------------------------------------

| | Attention:
        Danny Anderson 
      Telecopier:  (306) 975-7145
| | --------------------------------------------------------------------



|or to the Underwriter:
|----------------------

| | Canaccord
      Capital Corporation 
      Suite 1200 
      320 Bay Street 
      Toronto, Ontario 
      M5H 4A6
| | ------------------------------------------------------------------------------------------------------------------

| | Attention:
        Jens Mayer 
      Telecopier:  (416) 869-3876
| | ----------------------------------------------------------------



|with a copy to:
|---------------

| | McMillan
      Binch 
      Suite 3800 
      South Tower, Royal Bank Plaza 
      Toronto, Ontario M5J 2J7
| | -----------------------------------------------------------------------------------------------------------

| | Attention:
      W.S. (Steve) Vaughan 
      Telecopier:  (416) 865-7048
| | ------------------------------------------------------------------------



|and if so given, shall be deemed to
have been given and received upon receipt by the addressee or a responsible
officer of the addressee if delivered, or four hours after being telecopied and
receipt confirmed during normal business hours at the location of the recipient,
as the case may be. Any party may, at any time, give notice in writing to the
others in the manner provided for above of any change of address or telecopier
number.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|SECTION 14  GENERAL
|-------------------



|14.1 This Agreement, the engagement letter
      between the Company and the Underwriter dated March 27, 2002 and the other
      documents herein referred to constitute the entire agreement between the
      Underwriter and the Company relating to the subject matter hereof and supersede
      all prior agreements between the Underwriter and the Company with respect
      to their respective rights and obligations in respect of the Offering.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|14.2  This Agreement may be executed by telecopier
      and in one or more counterparts which, together, shall constitute an original
      copy hereof as of the date first noted above.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|14.3The terms and provisions of this Agreement
      shall be binding upon and enure to the benefit of the Company, the Underwriter
      and their respective heirs, executors, administrators, successors and permitted
      assigns.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|14.4  Each of the parties hereto shall do or
      cause to be done all such acts and things and shall execute or cause to
      be executed all such documents, agreements and other instruments as may
      reasonably be necessary or desirable for the purpose of carrying out the
      provisions and intent of this Agreement.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|14.5  If this agreement accurately reflects
      the terms of the transaction which we are to enter into and if such terms
      are agreed to by the Company, please communicate your acceptance by executing
      where indicated below and returning one originally executed copy to the
      Underwriter.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|14.6  This Agreement is intended to and shall
      take effect as of the date first set forth above, notwithstanding its actual
      date of execution or delivery.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Yours very truly,
|-----------------



|CANACCORD CAPITAL CORPORATION
|-----------------------------



|Per: __________________________________
|---------------------------------------
|                                       





|The foregoing is hereby accepted on the
terms and conditions therein set forth. DATED the day of April, 2002 CLAUDE
RESOURCES INC.
|----------------------------------------------------------------------------------------------------------------------------------

|Per: __________________________________
|---------------------------------------
|                                       



| |  | 
| |  | 



---





|SCHEDULE A  DETAILS
OF THE OFFERING
|-------------------------------------



|This is Schedule A to the
Underwriting Agreement between Claude Resources Inc. and Canaccord Capital
Corporation, made as of April 23, 2002. All capitalized terms used in this
Schedule which are not defined shall have the meaning ascribed thereto in the
Underwriting Agreement.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Issuer:              | Claude Resources Inc. (the Company).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Offering:            | An aggregate of 5,000,000 units
      (the Units) of the Company. Each Unit will consist of one common
      share (the Unit Shares) in the capital of the Company and one-half
      of one common share purchase warrant (the Warrants). Each whole
      Warrant will entitle the holder to acquire one Share of the Company for
      the period commencing on the Closing Date and ending at 5:00 p.m. (Toronto
      time) on the first Business Day which is not less than one year from the
      Closing Date at an exercise price of $1.25 per Share.
|Form of offering:    | Bought-deal, private placement
      of Units.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Amount:              | $5,000,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Price:               | $1.00 per Unit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Designated Provinces | The designated provinces for
      the Offering will be Ontario, Alberta, British Columbia and such other provinces
      of Canada as mutually agreed to between the Company and the Underwriter.
      Units may also be sold in the United States pursuant to available exemptions
      as mutually agreed to between the Company and the Underwriter.                                                                                                                                                                                                           
|Minimum Subscription | Pursuant to available private
      placement exemptions, subscribers must invest the following amounts: 
            Alberta and British Columbia: $97,000; and
      
            Ontario: $25,000 (to accredited investors
      only).                                                                                                                                                                                                                                                                                                                           
|Exchange Listing:    | The Company shall obtain the
      necessary approvals to list the Unit Shares and the Warrant Shares on the
      Exchange, which listing shall be conditionally approved prior to the Closing
      Date.                                                                                                                                                                                                                                                                                                                                                          
|Eligibility:         | The Company is eligible under
      the usual statutes and for RRSPs, RRIFs and DPSPs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Underwriting Fee:    | 6.5% of the gross proceeds of
      the Offering of Units, payable at the Time of Closing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Broker Warrants      | The Underwriter will receive
      63,463 warrants, each of which will entitle the holder thereof to acquire
      one Common Share at an exercise price of $1.00 per share on or before the
      date which is 12 months following the Closing Date.                                                                                                                                                                                                                                                                                                               
|Closing Date:        | April 23, 2002 or such other
      date as may be mutually agreed to between the Company and the Underwriter.                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Underwriter(s):      | Canaccord Capital Corporation
      (minimum 75% participation) together with such other duly registered investment
      dealers as                                                                                                                                                                                                                                                                                                                                                                                                                                 





| |  | 
| |  | 



---





|                 | may be mutually agreed to between
      the Company and Canaccord Capital Corporation.                                                                                                                                                                      
|---------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Use of Proceeds: | The net proceeds received by
      the Company from the sale of the Units will be used for general corporate
      purposes (including, without limitation, further development of the Seabee
      mine and considering potential mergers and acqusitions).





| | -A2- | 
| | ---- | 



---





|SCHEDULE B  TERMS
AND CONDITIONS FOR  UNITED STATES OFFERS AND SALES
|----------------------------------------------------------------------



|This is Schedule B to the
Underwriting Agreement between Claude Resources Inc. and Canaccord Capital
Corporation, made as of April 23, 2002. All capitalized terms which are used in
this Schedule and not otherwise defined shall have the meaning ascribed thereto
in the Underwriting Agreement.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|As used in this schedule, the following
terms shall have the meanings indicated:
|--------------------------------------------------------------------------------

|Directed Selling Efforts                 | means directed selling efforts
      as that term is defined in Regulation S. Without limiting the foregoing,
      but for greater clarity in this schedule, it means, subject to the exclusions
      from the definition of directed selling efforts contained in Regulation
      S, any activity undertaken for the purpose of, or that could reasonably
      be expected to have the effect of, conditioning the market in the United
      States for any of the Units or Warrant Shares, and includes the placement
      of any advertisement in a publication with a general circulation in the
      United States that refers to the offering of any of the Units or Warrant
      Shares;                                                                                                                                                                                                                                                                                                                      
|---------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Foreign Issuer                           | means a foreign issuer as that
      term is defined in Regulation S. Without limiting the foregoing, but for
      greater clarity in this Schedule, it means any issuer which is: (a) the
      government of any foreign country or of any political subdivision of a foreign
      country; or (b) a corporation or other organization incorporated under the
      laws of any foreign country, except an issuer meeting the following conditions:
      (1) more than 50 percent of the outstanding voting securities of such issuer
      are held of record either directly or through voting trust certificates
      or depositary receipts by residents of the United States; and (2) any of
      the following; (i) the majority of the executive officers or directors are
      United States citizens or residents, (ii) more than 50 percent of the assets
      of the issuer are located in the United States, or (iii) the business of
      the issuer is administered principally in the United States;
|Institutional Accredited 
      Investor | means an institutional accredited
      investor as defined in Rule 501(a)(1), (2), (3), (7) or (8) of Regulation
      D;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|U.S. Placement Agent                     | means Canaccord Capital USA;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Qualified Institutional Buyer            | means a qualified institutional
      buyer as the term is defined in Rule 144A.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Regulation D                             | means Regulation D under the
      U.S. Securities Act;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Regulation S                             | means Regulation S under the
      U.S. Securities Act;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Rule 144A                                | means Rule 144A under the U.S.
      Securities Act;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|SEC                                      | means the Securities and Exchange
      Commission of the United States of America;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          





| |  | 
| |  | 



---





|Substantial U.S. Market 
      Interest | means substantial U.S. market
      interest as that term is defined in Regulation S;                                                         
|--------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------
|United States                           | means the United States of America,
      its territories and possessions, any state of the United States, and the
      District of Columbia;
|U.S. Exchange Act                       | means the United States Securities
      Exchange Act of 1934, as amended;                                                                    
|U.S. Person                             | means a U.S. person as that term
      is defined in Regulation S; and                                                                        
|U.S. Securities Act                     | means the United States Securities
      Act of 1933, as amended.                                                                             





|All other capitalized terms used but
not otherwise defined in this Schedule B shall have the meanings
assigned to them in the Underwriting Agreement to which this Schedule
B is attached.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Representations, Warranties and
Covenants of the Underwriter
|------------------------------------------------------------



|The Underwriter acknowledges that the
Units and the Warrant Shares have not been and will not be registered under the
U.S. Securities Act and may not be offered or sold to any person within the
United States or to, or for the account or benefit of, U.S. Persons, except in
accordance with Regulation S or pursuant to an exemption from the registration
requirements of the U.S. Securities Act. Accordingly, the Underwriter
represents, warrants and covenants to the Company that:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|1. | The
Underwriter has offered and sold, and will offer and sell the Units only in accordance
with Rule 903  of Regulation S or as provided in paragraphs 2 through 7 below.
Accordingly, neither the Underwriter,  its affiliates nor any persons acting on its
behalf, has made or will make (except as permitted in  paragraphs 2 through 7 below): (i)
any offer to sell or any solicitation of an offer to buy, any Units  to any person in the
United States, (ii) any sale of Units to any purchaser unless, at the time the buy  order
was or will have been originated, the purchaser was outside the United States, or the
Underwriter,  affiliates or persons acting on its behalf either reasonably believed that
such purchaser was outside  the United States, or (iii) any Directed Selling Efforts in
the United States with respect to the Units  or Warrant Shares.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Other than any banking and selling
group agreement, it has not entered and will not enter into any contractual
arrangement with respect to the distribution of the Units, except with its
affiliates or with the prior written consent of the Company.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. | Any
offer, sale or solicitation of an offer to buy the Units  that has been made or will be
made in the United States was or  will be made only to Institutional Accredited Investors
in  transactions that are exempt from legislation under applicable  federal and state
securities laws.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. | Immediately
prior to soliciting such offerees, the Underwriter  had reasonable grounds to believe and
did believe that each  offeree was an Institutional Accredited Investor.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4. | No
form of general solicitation or general advertising (as  those terms are used in
Regulation D) has been or will be  used, including advertisements, articles, notices or
other  communications published in any newspaper, magazine, or  similar media or
broadcast over
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| | radio or
television, or any  seminar or meeting whose attendees had been invited by general
solicitation or general advertising, in connection with the  offer or sale of the Units
in the United States.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5. | All
offers and sales of Units in the United States will be  effected by the U.S. Placement
Agent in accordance with  applicable U.S. broker-dealer requirements.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

|6. | The
Underwriter shall cause the U.S. Placement Agent to agree,  for the benefit of the
Company, to the same provisions  contained in this Schedule B.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------

|7. | Prior to completion of any sale of Units in
      the United States, each U.S. purchaser thereof (a Subscriber)
      will be required to represent, warrant and covenant to the Company, the
      Underwriter and the U.S. Placement Agent selling the Units to such Subscriber,
      that:
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (a) | Authorization and Effectiveness.
      If the Subscriber is a corporation, the Subscriber is a valid and subsisting
      corporation, has the necessary corporate capacity and authority to execute
      and deliver the Subscription Agreement for U.S. purchasers of Units (the
      U.S. Subscription Agreement) and to observe and perform
      its covenants and obligations thereunder and has taken all necessary corporate
      action in respect thereof. If the Subscriber is a partnership, syndicate
      or other form of unincorporated organization, the Subscriber has the necessary
      legal capacity and authority to execute and deliver the U.S. Subscription
      Agreement and to observe and perform its covenants and obligations thereunder
      and has obtained all necessary approvals in respect thereof. If the Subscriber
      is a natural person, he or she has obtained the age of majority and is legally
      competent to execute the U.S. Subscription Agreement and to take all actions
      required pursuant thereto.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Whether the
Subscriber is a natural person or a corporation,  partnership or other entity, upon
acceptance by the Company,  the Underwriter and the U.S. Placement Agent, the U.S.
Subscription Agreement will constitute a legal, valid and  binding contract of the
Subscriber, and any beneficial  purchaser for whom it is purchasing, enforceable against
the  Subscriber and any such beneficial purchaser in accordance  with its terms.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | The entering
into of the U.S. Subscription Agreement and the  transactions contemplated thereby will
not result in the  violation of any terms or provisions of any law applicable to  or the
constating documents of, the Subscriber or of any  agreement, written or oral, to which
the Subscriber may be a  party or by which it, he or she is or may be bound.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | Residence. The Subscriber,
      or any beneficial purchaser as to which the Subscriber exercises sole investment
      discretion and for whom it is purchasing, is a resident of the jurisdiction
      referred to under Name and Address of Subscriber on the signature
      page of the U.S. Subscription Agreement, which address is the residence
      or place of business of the Subscriber, and was not created or used solely
      for the purpose of acquiring the Units.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| | (c) | Investment Intent.
      The Subscriber, or each beneficial purchaser as to which the Subscriber
      exercises sole investment discretion and for whom it is purchasing, is acquiring
      Units having an aggregate purchase price of at least Cdn$100,000 for its
      own account or for one or more accounts as to which it exercises sole investment
      discretion and each such account is purchasing Units having such an aggregate
      purchase price to be held for investment only and not with a view to resale
      or distribution of the Units or Warrant Shares.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d) | Purchasing as Underwriter
      or Trustee. In the case of the purchase by the Subscriber of Units
      as Underwriter or trustee for any principal whose identity is disclosed
      or undisclosed or identified by account number only, the Subscriber has
      due and proper authority to act as Underwriter or trustee for and on behalf
      of such beneficial purchaser in connection with the transactions contemplated
      thereby and the Subscriber exercises sole investment discretion with respect
      to such beneficial purchaser. The Subscriber is duly authorized to execute
      and deliver the U.S. Subscription Agreement and all other necessary documentation
      in connection with such purchase on behalf of such principal and the U.S.
      Subscription Agreement has been duly authorized, executed and delivered
      by or on behalf of, and constitutes the legal, valid and binding agreement
      of, such principal.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (e) | No Offering Memorandum, etc.
      The Subscriber has not (nor, if applicable, has any other on whose behalf
      the Subscriber is contracting) received an offering memorandum or similar
      document in connection with the Offering and has not received, nor has the
      Subscriber requested, nor does the Subscriber (or, if applicable, any other
      on whose behalf the Subscriber is contracting) need to receive, any other
      document.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (f) | No Undisclosed Information.
      The Units are not being purchased by the Subscriber as a result of any material
      information concerning the Company that has not been publicly disclosed
      and the Subscribers decision to tender this offer and acquire Units
      has not been made as a result of any verbal or written representation as
      to fact or otherwise made by or on behalf of the Company, the Underwriter,
      the U.S. Placement Agent or any other person and is based entirely upon
      the representations of the Company stated or referred to in this Agreement
      or the U.S. Subscription Agreement.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (g) | Investment Suitability. The Subscriber, and any beneficial purchaser referred to in paragraph
      (d) above, has such knowledge and experience in financial and business affairs
      as to be capable of evaluating the merits and risks of the investment hereunder
      in the Units (and the Warrant Shares in respect of the Warrants forming
      a part thereof) and it (and any account for which it is acquiring the Units)
      is able to bear the economic risk of loss of such investment. The Subscriber
      acknowledges and agrees that it is responsible for obtaining such legal
      advice as it considers appropriate in connection with the execution, delivery
      and performance by it of the U.S. Subscription Agreement and the transactions
      contemplated thereunder.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| | (h) | No Registration in U.S.The Subscriber is aware that the Units and the Warrant Shares have not
      been and will not be registered under the U.S. Securities Act and the sale
      contemplated hereby is being made in reliance on a private placement exemption
      to Institutional Accredited Investors;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (i) | Institutional Accredited
      Investor. The Subscriber is an Institutional Accredited Investor,
      is acquiring the Units for its own account or for one or more investor accounts
      for which it is acting as a fiduciary or agent, in each case for investment
      and not with a view to, or for offer or sale in connection with, any resale,
      distribution or other disposition of the Units or the Warrant Shares in
      violation of United States federal and state securities laws.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | The Subscriber
satisfies one or more of the categories  indicated below (please place an X
on the appropriate  lines):
| |  | ------------------------------------------------------------------------------------------------------------------------

|________ Category 1. | An organization described in
      Section 501 (c)(3) of the United States Internal Revenue Code, a corporation,
      a Massachusetts or similar business trust or partnership, not formed for
      the specific purpose of acquiring the Offered Securities, with total assets
      in excess of US$5,000,000;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|________ Category 2. | A trust that (a) has total assets
      in excess of US$5,000,000, (b) was not formed for the specific purpose of
      acquiring the Offered Securities and (c) is directed in its purchases of
      securities by a person who has such knowledge and experience in financial
      and business matters that he/she is capable of evaluating the merits and
      risks of an investment in the Offered Securities;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|________ Category 3. | A bank as defined in Section
      3(a)(2) of the U.S. Securities Act, or a savings and loan association or
      other institution as defined in Section 3(a)(5)(A) of the U.S. Securities
      Act whether acting in its individual or fiduciary capacity; any broker or
      dealer registered pursuant to Section 15 of the United States Securities
      Exchange Act of 1934; an insurance company as defined in Section 2(13) of
      the U.S. Securities Act; an investment company registered under the Investment
      Company Act of 1940 or a business development company as defined in Section
      2(a)(48) of that Act; a Small Business Investment Company licensed by the
      U.S. Small Business Administration under Section 301(c) or (d) of the Small
      Business Investment Act of 1958; a plan established and maintained by a
      state, its political subdivision, or any agency or instrumentality of a
      state or its political subdivisions, for the benefit of its



| |  | 
| |  | 



---





|                     | employees, if such plan has total
      assets in excess of US$5,000,000; or an employee benefit plan within the
      meaning of the Employee Retirement Income Security Act of 1974 (ERISA),
      if the investment decision is made by a plan fiduciary, as defined in Section
      3(21) of ERISA, which is either a bank, savings and loan association, insurance
      company or registered investment adviser, or if the employee benefit plan
      has total assets in excess of $5,000,000 or if a self-directed plan, with
      investment decisions made solely by persons that are Institutional Accredited
      Investors;
|-------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|________ Category 4. | A Small Business Investment Company
      licensed by the U.S. Small Business Administration under Section 301 (c)
      or (d) of the Small Business Investment Act of 1958;                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|________ Category 5. | A private business development
      as defined in Section 202(a)(22) of the Investment Advisors Act of
      1940; or                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|________ Category 6. | An entity in which all of the
      equity owners satisfy the requirements of one or more of the foregoing categories.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

| | (j) | Adequate Information.
      The Subscriber has had access to all information concerning the Company
      as it has considered necessary in connection with its investment decision
      to acquire the Units.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (k) | No Solicitation or Advertising.
      The Subscriber acknowledges that it has not purchased the Units as a result
      of any general solicitation or general advertising as those terms are used
      in Regulation D, including advertisements, articles, notices or other communications
      published in any newspaper, magazine or similar media or broadcast over
      radio or television, or any seminar or meeting whose attendees have been
      invited by any general solicitation or general advertising.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (l) | Resales. The Subscriber
      understands that if it decides to offer, sell or otherwise transfer the
      Units, the Warrant Shares, or any of them, such securities may be offered,
      sold or otherwise transferred only:(1) (A) to the Company, (B) outside the
      United States in accordance with Rule 904 of Regulation S and in compliance
      with applicable local laws and regulations; (2) in accordance with the exemption
      from registration provided by Rule 144 under the U.S. Securities Act, if
      available; (3)(i) to an Institutional Accredited Investor and the sale is
      of a number of units having an aggregate market value at the time of such
      sale of not less than Cdn$100,000; (ii) a purchasers letter containing
      representations, warranties and agreements substantially similar to those
      contained in this Schedule B and satisfactory to the Company,
      the Underwriter and the U.S. Placement Agent is executed by the purchaser
      and delivered to the Company, the Underwriter and the U.S. Placement Agent
      prior to such sale; and (iii) all offers or solicitations in connection
      with the sale are arranged and conducted solely by the Company or the U.S.
      Placement
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| |  | Agent; or
(4) in a transaction that does not otherwise require  registration under the U.S.
Securities Act or any applicable United States state laws and  regulations governing the
offer and sale of securities, and an opinion of counsel, of  recognized standing
reasonably satisfactory to the Company, has been provided to the Company to  that effect.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (m) | Legend on Certificates.
      The Subscriber understands that all certificates representing the Unit Shares
      and the Warrants comprising the Units sold in the United States as part
      of the Offering, as well as all certificates issued in exchange for or in
      substitution of the foregoing securities, will bear a legend to the following
      effect:
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | THE SECURITIES
REPRESENTED HEREBY [FOR WARRANTS  INCLUDE AND THE SECURITIES ISSUED UPON EXERCISE
OF  THE WARRANTS] HAVE NOT BEEN REGISTERED UNDER THE  UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE  U.S. SECURITIES ACT). THE HOLDER HEREOF, BY
PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF  THE COMPANY THAT SUCH SECURITIES
MAY BE OFFERED, SOLD  OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B)  OUTSIDE THE
UNITED STATES IN ACCORDANCE WITH RULE 904  OF REGULATION S UNDER THE U.S.
SECURITIES ACT, (C)  PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE  U.S.
SECURITIES ACT PROVIDED BY RULE 144 OR RULE 144A  THEREUNDER, IF AVAILABLE OR (D) IN
COMPLIANCE WITH  CERTAIN OTHER PROCEDURES SATISFACTORY TO THE COMPANY.
| |  |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | and that
all certificates representing the Unit Shares and  Warrant Shares, as well as all
certificates issued in exchange  for or in substitution of the foregoing securities,
issued  upon exercise of any security so legended shall bear the  foregoing legend and
shall bear the following additional  legend:
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | DELIVERY OF
THIS CERTIFICATE MAY NOT CONSTITUTE `GOOD DELIVERY IN  SETTLEMENT OF TRANSACTIONS ON
STOCK EXCHANGES IN CANADA.  A NEW  CERTIFICATE, BEARING NO LEGEND, DELIVERY OF WHICH WILL
CONSTITUTE  `GOOD DELIVERY MAY BE OBTAINED FROM THE COMPANY UPON DELIVERY OF  THIS
CERTIFICATE AND A DULY EXECUTED DECLARATION, IN A FORM  SATISFACTORY TO THE COMPANY, TO
THE EFFECT THAT THE SALE OF THE  SECURITIES REPRESENTED HEREBY IS BEING MADE IN
COMPLIANCE WITH RULE  904 OF REGULATION S UNDER THE U.S. SECURITIES ACT;
| |  |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| |  | provided  that,
if any such securities are being sold outside  the United States in accordance with Rule
904 of Regulation S,  the legend may be removed by providing a declaration to the
registrar and transfer agent of the Company, to the following  effect (or as the Company
may prescribe from time to time):
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | The undersigned
(A) acknowledges that the sale of the  securities to which this declaration relates is
being  made in reliance on Rule 904 of Regulation S under  the United States Securities
Act of 1933, as amended  (the U.S. Securities Act), and (B) certifies that
(1) it is not an affiliate (as defined in Rule 405  under the U.S. Securities
Act) of Claude Resources  Inc., (2) the offer of such securities was not made  to a
person in the United States and either (a) at  the time the buy order was originated, the
buyer was  outside the United States, or the seller and any  person acting on its behalf
reasonably believe that  the buyer was outside the United States or (b) the  transaction
was executed on or through the facilities  of the applicable Canadian stock exchanges
designated  in Regulation S and neither the seller nor any person  acting on its behalf
knows that the transaction has  been prearranged with a buyer in the United States  and
(3) neither the seller nor any person acting on  its behalf engaged in any directed
selling efforts in  connection with the offer and sale of such  securities. Terms used
herein have the meanings given  to them by Regulation S under the U.S. Securities  Act;
| |  |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | provided, further,
that, if any such securities are being sold  pursuant to Rule 144 of the U.S. Securities
Act, the legend  may be removed by delivery to the registrar and transfer agent  of the
Company of an opinion of counsel, of recognized  standing reasonably satisfactory to the
Company, to the effect  that such legend is no longer required under applicable
requirements of the U.S. Securities Act or state securities  laws.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (n) | Notation. The Subscriber
      consents to the Company making a notation on its records or giving instructions
      to any transfer agent of the Company in order to implement the restrictions
      on transfers set forth and described in the U.S. Subscription Agreement.
      The Subscriber understands and acknowledges that the Company may refuse
      to record a transfer without first being satisfied that such transfer is
      exempt from or not subject to registration under the U.S. Securities Act.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| | (o) | Tax Matters. The
      Subscriber understands and agrees that there may be material tax consequences
      to the Subscriber of an acquisition or disposition of the Units or the Warrant
      Shares. The Company, the Underwriter and the U.S. Placement Agent give no
      opinion and make no representations with respect to the tax consequences
      to the Subscriber under United States, state, local or foreign tax law of
      the undersigneds acquisition or disposition of such securities;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (p) | Company Financial Statements.
      The Subscriber understands and agrees that the financial statements of the
      Company have been prepared in accordance with Canadian generally accepted
      accounting principals which differ in some respects from United States generally
      accepted accounting principals, and thus may not be comparable to financial
      statements of United States companies;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (q) | Subscription Agreement.
      The Subscriber, (on its own behalf and, if applicable, on behalf of the
      others for whom it is contracting hereunder) has read and understands the
      contents of the U.S. Subscription Agreement and agrees to be legally bound
      thereby; and
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|8. | At
the time of Closing, the Underwriter, together with the U.S.  Placement Agent, will
provide a certificate substantially in the form  of Exhibit 1 to this Agreement, relating
to the manner of the offer and  sale of the Units in the United States.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Representations, Warranties and Covenants of
the Company
|--------------------------------------------------------



|The Company represents, warrants,  covenants and
agrees that:
|-------------------------------------------------------------

|1. | The
Company is a Foreign Issuer with no  Substantial U.S. Market  Interest in the Units and
Warrant Shares.
|-- | -----------------------------------------------------------------------------------------------------------

|2. | During
the period in which the Units are  offered for sale and during  the period that any Units
are outstanding, neither the  Company nor any  of its affiliates, nor any person acting
on their behalf has made or  will make any Directed Selling Efforts in the United States,
or has  taken or will take  any action that would cause the exemption afforded  by
Section 4(2) of the U.S.  Securities Act or Regulation S to be  unavailable for offers
and sales of the Units,  pursuant to this  Agreement.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. | None
of the Company, its affiliates or any  person acting on its or  their behalf have engaged
or will engage in any form of general  solicitation or general advertising (as those
terms are used in  Regulation D) with  respect to offers or sales of the Units in the
United States, including advertisements,  articles, notices or other  communications
published in any newspaper, magazine or  similar media,  or broadcast over radio, or
television, or any seminar or meeting whose  attendees have been invited by general
solicitation or general  advertising.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4. | Except
as disclosed to the Underwriter with  respect to the offer and  sale of the Units offered
hereby, the Company has not, for a  period of  six months prior to the date hereof sold,
offered for sale or solicited  any  offer to buy any of its securities in the United
States.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|5. | The
Company is not an open-end investment company, closed-end investment company, unit
investment trust or face-amount certificate company that is or is required to be
registered under Section 8 of the  United States Investment Company Act of 1940, as
amended.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|6. | Neither
the Company, nor any of its affiliates, nor any person acting  on its or their behalf,
has paid or will pay any commission or other  remuneration, directly or indirectly for
soliciting the conversion of  the Units.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|EXHIBIT 1
|---------



|UNDERWRITERS CERTIFICATE
|-------------------------



|In connection with
the private placement of the Units of Claude  Resources Inc. (the Company),
with U.S. institutional investors (each, a U.S.  Private Placee) pursuant to
U.S. Subscription Agreements dated as of April 23,  2002, the undersigned Canaccord
Capital Corporation (the Underwriter) and  Canaccord Capital USA in its
capacity as placement agent in the United States  for the Underwriter (the U.S.
Placement Agent), do hereby certify that:
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(1)  Canaccord Capital USA is a duly registered broker
      or dealer with the United States Securities and Exchange Commission and
      is a member of, and in good standing with, the National Association of Securities
      Dealers, Inc. on the date hereof;
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2)  all offers and sales of the Units in the United
      States were made to a maximum of 50 institutional institutional accredited
      investors (as defined below) by the Underwriter;
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3)  all offers and sales of the Units in the United
      States have been effected in accordance with all applicable U.S. broker-dealer
      requirements;
|-------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4)  no written material was used in connection with
      the offer or sale of the Units in the United States;
|---------------------------------------------------------------------------------------------------------------



|(5)  immediately prior to our transmitting the U.S.
      Subscription Agreement to such U.S. Private Placees, we had reasonable grounds
      to believe and did believe that each U.S. Private Placee was an institutional
      accredited investor as defined in Rule 501(a)(1), (2), (3) or (7)
      under the Securities Act of 1933, as amended (the 1933 Act),
      and, on the date hereof, we continue to believe that each U.S. Private Placee
      is an institutional accredited investor within the meaning of Regulation
      D under the 1933 Act (Regulation D);
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(6)  no form of general solicitation or general advertising
      (as those terms are used in Regulation D) was used by us, including advertisements,
      articles, notices or other communications published in any newspaper, magazine
      or similar media or broadcast over radio or television, or any seminar or
      meeting whose attendees had been invited by general solicitation or general
      advertising, in connection with the offer or sale of the Units in the United
      States or to U.S. Persons; and
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(7)  prior to any sale of Units in the United States,
      we caused each U.S. Private Placee to sign a U.S. Subscription Agreement
      containing representations, warranties and agreements to the Company substantially
      similar to those set forth in paragraph 7 of Schedule D of the
      underwriting agreement made as of April 23, 2002, between the Company and
      the Underwriter (the Underwriting Agreement)
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|Terms used in this certificate
      have the meanings given to them in the Underwriting Agreement unless otherwise
      defined herein. Dated this _____ day of April, 2002.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|CANACCORD CAPITAL 
      CORPORATION | CANACCORD CAPITAL USA
|------------------------------------ | ---------------------

|By:___________________________ | By:___________________________
|------------------------------ | ------------------------------
|Name:Title:                    | Name:Title:                   



| |  | 
| |  | 



---





|SCHEDULE C
|------------



|DETAILS AS TO MATERIAL
SUBSIDIARIES
|-----------------------------------



|This is Schedule C to the
Underwriting Agreement between Claude Resources Inc. and Canaccord Capital
Corporation, made as of April 23, 2002. All capitalized terms used in this
Schedule which are not defined shall have the meaning ascribed thereto in the
Underwriting Agreement.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|
|
|
|
|



| |  | 
| |  | 



---





|SCHEDULE D
|------------



|DETAILS AS TO OUTSTANDING
CONVERTIBLE SECURITIES
|------------------------------------------------



|This is Schedule D to the
Underwriting Agreement between Claude Resources Inc. and Canaccord Capital
Corporation, made as of April 23, 2002. All capitalized terms used in this
Schedule which are not defined shall have the meaning ascribed thereto in the
Underwriting Agreement.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|
|
|
|
|



| |  | 
| |  | 



---







|[LOGO] 
      A C A HOWE INTERNATIONAL LIMITEDGeological Consultants
|--------------------------------------------------------------------





|254 High Street, Berkhamsted, Hertfordshire,
      HP4 1AQ, UKTelephone: UK+1442 873398 | Telephone: UK+1442 873398
|--------------------------------------------------------------------------------------- | -------------------------
|                                                                                        |                          

|E-mail: howe@easynet.co.
|------------------------



|9th December 2002-12-09
|-----------------------



|The Diriectors  Claude Resources Inc, 
200,224-4th Ave.S.  Saskatoon,  Saskatchewan,  Canada S7K 5M5
|----------------------------------------------------------------------------------------------------



|Dear Sirs,
|----------



|With reference to the classification of
broken underground reserves in the proven category, the broken material is
contained within surveyed stopes, the tonnage of material, including initial
swell drawn from the stopes is known, together with mill reconciliations, and
the grade of the broken material is established from face samples every round
which give both width of round and face grade at every advance, including
dilution. In my view, the material therefore falls within the confidence limits
of the proven category as used at the mine.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Yours faithfully,
|-----------------



|/s/ D. J. Patrick
|-----------------
|Dr D Patrick     



| |  | 
| |  | 



---





|[LOGO]NRG NRG ENGINEERING LTD. 515, 505 - 8 Avenue S.W., Calgary, Alberta T2P 1G2 
      Telephone (403) 262-3346  Fax (403) 237-5047
|--------------------------------------------------------------------------------------------------------------------------------------



|July 3, 2003
|------------



|United States Securities and Exchange Commission 
Division of Corporate Finance  450 Fifth Street, N.W.  Washington, DC  20549-0405
|-----------------------------------------------------------------------------------------------------------------------------------



|Dear Sirs:
|----------



|Re: | Claude Resources Inc. Form 20F
|--- | ------------------------------





|We refer to our
reports  entitled:  Economic  Evaluation  of the  Petroleum  and Natural Gas
Interests of  Claude  Resources  Inc.  in the Tenco  Properties  and
Economic  Evaluation  of  Petroleum  Interests  of Claude  Resources Inc. in
Gainsborough, Saskatchewan (the Reports), effective January 1, 2002 and
dated March 13, 2002.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|We hereby consent
to the use of our name and references to the excerpts  from the Reports in Form 20F of
Claude Resources Inc.
|------------------------------------------------------------------------------------------------------------------------------



|We have read Form
20F and have no reason to believe  that there are any  misrepresentations in the
information contained therein that is derived from the  Reports  and that is  within  our
knowledge  as a result of our  providing  the  Reports.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Yours very truly,              
| | -------------------------------
| |                                
| | NRG ENGINEERING LTD.           
| |                                
| | /s/ R.K. Agrawal,
      P. Eng.
| | President                      



| |  | 
| |  | 



---





|PRIVATE AND CONFIDENTIAL 
      The Board of Directors 
Claude Resources Inc.  200, 224 - 4th Avenue S.  Saskatoon SK  S7K 5M5
|------------------------------------------------------------------------------------------------------------------------------



|May 15, 2002
|------------



|Dear Sir or Madam
|-----------------



|Accountants Consent
|-------------------



|We  consent  to the use of our  report  dated
March  1,  2002  included  in the  Registration Statement on Form 20-F of Claude
Resources Inc.
|---------------------------------------------------------------------------------------------------------------------------------------------



|Yours very truly
|----------------



|KPMG LLP 
      Chartered Accountants
|-------------------------------------



|Saskatoon, Saskatchewan
|-----------------------



| |  | 
| |  | 



---





|CLAUDE RESOURCES INC.
|---------------------



|Information Circular
|--------------------



|For the Annual General &
      Special Meeting of Shareholders
|--------------------------------------------------------------



|to be held on May 22, 2002
|--------------------------



|SOLICITATION OF PROXIES BY MANAGEMENT
|-------------------------------------



|This Information Circular is furnished in
connection with the solicitation of proxies by or on behalf of the management of
Claude Resources Inc. (the Corporation) for use at the Annual General & Special
Meeting (the Meeting) of the shareholders of the Corporation. The
information contained herein is current as of April 11, 2002, unless otherwise
indicated. The Meeting will be held at the Sheraton Cavalier Hotel, Top Of The Inn,
612 Spadina Crescent East, Saskatoon, Saskatchewan, on Wednesday May 22, 2002, 10:00
a.m. (Saskatoon time) for the purposes set forth in the accompanying Notice of
Annual General & Special Meeting of Shareholders (the Notice). It is
expected that the solicitation of proxies will be primarily by mail. Management of the
Corporation may also solicit proxies in person, by telephone, telecopier, e-mail or
other electronic or telecommunication devices. The cost of solicitation by or on
behalf of management will be borne by the Corporation.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Corporation has distributed copies of the
Notice, this Information  Circular  and the Form of Proxy  (collectively,  the
Documents)  to clearing  agencies,  securities  dealers,  banks  and  trust
companies  or  their  nominees  (Intermediaries),  for onward  distribution
to shareholders of the Corporation  whose  shares  are  held  by  or  in  the  custody
of  those  Intermediaries  (Non-Registered Shareholders).  The Intermediaries
are required to forward the  Documents to Non-Registered Shareholders.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The solicitation of proxies from Non-Registered
Shareholders will be carried out  by  Intermediaries  or  by  the  Corporation  if  the
names  and  addresses  of  Non-Registered  Shareholders  are  provided by the
Intermediaries.  The cost of  solicitation will be borne by the Corporation.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Non-Registered  Shareholders  who  wish  to
file  proxies  should  follow  the  directions  of the  Intermediary  with respect to the
procedure to be followed.  Generally, Non-Registered Shareholders will either:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(a) | be
provided  with a form of proxy  executed by the  Intermediary,  but  otherwise
uncompleted.  The Non-Registered Shareholder may complete the  proxy and return it
directly to the Corporation; or
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | be
provided with a request for voting instructions. The Intermediary is  required to send to
the Corporation an executed form of proxy completed  in accordance with any voting
instructions received by it.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|APPOINTMENT OF PROXIES
|----------------------



|The persons named in the enclosed form of proxy
are directors and/or officers of  the Corporation.  A shareholder has the right to
appoint a person,  who need not  be a shareholder,  as nominee to attend and act for him
and on his behalf at the  Meeting,  other than the persons  designated  in the enclosed
form of proxy.  A  shareholder  desiring to appoint  some other person as a
representative  at the  Meeting  may do so either by  inserting  such  persons  name in
the blank space  provided in the form of proxy or by completing another proper form of
proxy and,  in either case, delivering the completed form of proxy to Valiant Trust
Company,  Suite 510,  550 - 6th Avenue SW,  Calgary,  Alberta,  T2P 0S2,  in the
enclosed  self-addressed envelope or to the Chairman of the Corporation at Suite 200 -
224  - 4th Avenue  South,  Saskatoon,  Saskatchewan,  S7K 5M5, not less than 24 hours
prior  to the  time of the  Meeting  or any  adjournment  thereof.  Proxies  not
delivered by the time  specified may not be treated as valid for purposes of the  Meeting.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|REVOCABILITY OF PROXIES
|-----------------------



|A shareholder may revoke a proxy:
|---------------------------------

|(a) | by
depositing  a  written  notice  of  revocation  executed  by  the  shareholder or the
shareholders attorney authorized in writing:
|--- | --------------------------------------------------------------------------------------------------------------------------------------

| | (i) | at the registered office of the
      Corporation at any time up to and including the last business day preceding
      the day of the Meeting, or any adjournment thereof; or
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii) | with the chairman of the Meeting
      on the day of the Meeting or any adjournment thereof; or
| | ---- | -----------------------------------------------------------------------------------------------

|(b) | in
any other manner permitted by law.
|--- | -------------------------------------



|EXERCISE OF DISCRETION WITH RESPECT TO PROXIES
|----------------------------------------------



|The persons named in the enclosed form of proxy
will vote the shares in respect of which they are appointed in accordance with the
direction of the shareholders appointing them. In the absence of such direction, such
shares will be voted FOR the matters referred to in the Notice.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The enclosed form of proxy confers a
discretionary  authority  upon the persons  named therein to vote the shares  represented
thereby as such persons  consider  best with respect to  amendments  or  variations  to
matters  identified  in the  Notice,  and with respect to other  matters  which may
properly  come before the  Meeting.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|VOTING SECURITIES AND PRINCIPAL HOLDERS OF
VOTING SECURITIES
|------------------------------------------------------------



|On April 11, 2002,  there were 43,356,784
common shares in the capital stock of  the  Corporation  (Common  Shares)
issued and  outstanding.  Each Common Share  carries the right to one vote. No other
voting securities of the Corporation are  currently issued and outstanding.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The  directors  have fixed April 11,  2002,  as
the record date for  determining  shareholders  entitled to receive  notice of the
Meeting.  A person  shown as a  shareholder  of record as of the close of business on
April 11,  2002,  shall be  entitled to vote the Common Shares  registered in his name on
that date,  except  to the extent that the person has transferred the ownership of any of
his shares  after  April 11, 2002 and the  transferee  of those  shares  produces a
properly  endorsed share certificate(s) or otherwise  establishes that he owns such
shares  and  demands,  not  later  than 10 days  before  the  Meeting,  that his name be
included in the list of shareholders for purposes of the Meeting, in which event  the
transferee shall be entitled to vote such shares at the Meeting.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|DIRECTORS AND OFFICERS LIABILITY INSURANCE
|--------------------------------------------



|The Corporation maintains a directors and
officers liability insurance policy.  Coverage is limited to $5 million per occurrence
and to an aggregate total of $5  million in each policy year subject to a $100,000
deductible  to be paid by the  Corporation. The annual premium is $23,500.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The Corporation has agreed to indemnify each director and
      officer against all costs, charges and expenses reasonably incurred in respect
      of any action or proceeding to which any such person is made a party by
      reason of being a director or officer of the Corporation, subject to the
      limitations as contained in the Canada Business Corporations Act.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ELECTION OF DIRECTORS
|---------------------



|Management of the Corporation proposes to nominate, and the
      persons named in the accompanying form of proxy intend to vote in favour
      of the election, as directors of the Corporation, of the persons named below.
      Unless otherwise indicated, all of the nominees are now directors and have
      been for the periods indicated. Each director elected will hold office until
      the next annual meeting or until his successor is elected or appointed,
      unless his office is vacated in accordance with the by-laws of the Corporation
      or the Canada Business Corporations Act.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Management  does not anticipate  that any of the
proposed  nominees will, at the  time of the Meeting, be unable to stand for election as
a director.  However, if  any  proposed  nominee is unable to stand for  election as a
director,  then the  representatives of management named in the enclosed proxy have the
right to vote  for any other alternate nominees in their sole discretion.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                     
|-------------------------------------
|Name and Place of 
      Residence   
|                                     
|William R. MacNeill(3)  Saskatoon, SK
|                                     



| |  | 
| |  | 



---





|                                                   
|---------------------------------------------------
|Ronald G. Walker(2)  Victoria, BC                  
|                                                   
|Jon R. MacNeill(2)  Calgary, AB                    
|                                                   
|Arnie E. Hillier(2)
      (3)
        Saskatoon, SK
|                                                   
|Neil McMillan(3)  Saskatoon, SK                    
|                                                   

|(1) |  | These
shares  are  owned,  directly  or  indirectly,  by  BEC  International  Corporation, a
private corporation controlled by William  R. MacNeill.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | Member
of the  Audit  Committee.
|--- |  | --------------------------------

|(3) |  | Member
of  the  Executive  Committee.
|--- |  | -------------------------------------



|All of the  director  nominees  set forth above
have been  engaged for more than  five years in their present  principal  occupations  or
executive  positions set  forth  above  except  for Mr.  J.  MacNeill,  who  prior to
February,  1998 was  Secretary and Treasurer of the Corporation.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|STATEMENT OF EXECUTIVE COMPENSATION
|-----------------------------------



|The  Corporation  had six executive  officers
during the year ended December 31,  2001.  The  aggregate  cash  compensation  paid to
the  Corporations  executive  officers  including  salaries,  fees,  commissions  and
bonuses  (but  excluding  directors  fees)  during the year ended  December  31, 2001
was  $630,065.  The  Corporation  does not have any formal  written  contracts of
employment in place  with its executive officers.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The  following  table  sets  forth the
compensation  paid to the  Corporations  executive  officers  during the last three
fiscal years where such  compensation  exceeds $100,000 in any one year.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                             
|---------------------------------------------
|                                             
|                                             
|                                             
|Name and 
        Principal 
        Position
|                                             
|W.R. MacNeill(1)Chairman                     
|                                             
|                                             
|                                             



| |  | 
| |  | 



---





|                                                      | 
|----------------------------------------------------- | 
|                                                      | 
|                                                     
|A.E. Hillier 
        Vice Chairman 
        CEO, CFO | 
|                                                      | 
|                                                      | 
|                                                      | 
|                                                      | 
|                                                      | 
|                                                      | 
|                                                     
|A. N. McMillan 
        President                     | 
|                                                      | 
|                                                      | 
|                                                      | 
|                                                      | 
|                                                     
|B.D. Levesque 
        V.P. Operations(2)             | 
|                                                      | 
|                                                      | 
|                                                      | 
|                                                      | 
|                                                     

|Notes:
|------

|(1) |  | The
salary  reported  for Mr.  W.  R.  MacNeill  is the sum of  annual  management fees paid
to BEC International Corporation. Mr. MacNeill and  his  spouse  are the  beneficial
owners  of all of the  shares  of BEC  International Corporation.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | Mr.
Levesque assumed the office and responsibilities of Vice-President,  Operations
effective  November 1, 1999 following the retirement of Mr.  R.G.  Gagnon.  Prior to
November  1,  1999 Mr.  Levesque  was the Mine  Manager of the Companys  Seabee mine and
prior to April,  1998 was the  Assistant Mine Manager at the Seabee mine.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|OPTIONS GRANTED DURING THE MOST
RECENTLY COMPLETED FINANCIAL YEAR(1)
|--------------------------------------------------------------------

|Name          |  | Securities 
      Under 
      Options 
      Granted(2) (#) | % of Total 
      Options granted 
      to Employees 
      in 
      Financial Year | Exercise or 
      Base Price 
      ($/Security) |  | Market Value of 
      Securities 
      Underlying 
      Options on the 
      Date of Grant 
      ($/Security) |  | Expiration 
      Date
|------------- |  | ------------------------------------------------------------ | ------------------------------------------------------------------------------------- | ------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------ |  | ----------------------
|             
|W.R. MacNeill |  | 200,000                                                      |                                                                                       | 26%                                               |  | $0.53                                                                                                              |  | $0.53                 
|A.E. Hillier  |  | 200,000                                                      |                                                                                       | 26%                                               |  | $0.53                                                                                                              |  | $0.53                 
|A.N. McMillan |  | 200,000                                                      |                                                                                       | 26%                                               |  | $0.53                                                                                                              |  | $0.53                 
|P.E. Olson    |  | 50,000                                                       |                                                                                       | 7%                                                |  | $0.53                                                                                                              |  | $0.53                 
|D.B. Levesque |  | 20,000                                                       |                                                                                       | 3%                                                |  | $0.53                                                                                                              |  | $0.53                 
|V.L. Michasiw |  | 20,000                                                       |                                                                                       | 3%                                                |  | $0.53                                                                                                              |  | $0.53                 
|             



| |  | 
| |  | 



---





|Notes:
|------

|(1) |  | The
Corporation  has not  issued  any share  appreciation  rights.  (2) All  securities under
option are Common Shares.
|--- |  | -----------------------------------------------------------------------------------------------------------------------



|AGGREGATED OPTIONS EXERCISED
DURING THE MOST RECENTLY COMPLETED FINANCIAL YEAR AND FINANCIAL YEAR-END OPTION VALUES(1)
|----------------------------------------------------------------------------------------------------------------------

|Name          |  | Securities Acquired 
      On Exercise 
      (#) |  | Aggregate Value Realized 
      ($) |  | Unexercised 
      Options at FY-End 
      (#) 
      Exercisable/Unexercisable |   | Value of Unexercised 
      In-the-Money 
      Options at FY-End 
      ($) 
      Exercisable/Unexercisable
|------------- |  | ------------------------------------------------- |  | ----------------------------------- |  | -------------------------------------------------------------------------------- | - | -------------------------------------------------------------------------------------------------------------
|             
|W.R. MacNeill |  | -                                                 |  | -                                   |  | 600,000                                                                          | - |                                                                                                              
|A.E. Hillier  |  | -                                                 |  | -                                   |  | 600,000                                                                          | - |                                                                                                              
|N. McMillan   |  | -                                                 |  | -                                   |  | 600,000                                                                          | - |                                                                                                              
|B.D. Levesque |  | -                                                 |  | -                                   |  | 70,000                                                                           | - |                                                                                                              
|P.E. Olson    |  | -                                                 |  | -                                   |  | 100,000                                                                          | - |                                                                                                              
|V.L. Michasiw |  | -                                                 |  | -                                   |  | 70,000                                                                           | - |                                                                                                              

|Notes:
|------

|(1) |  | The
Corporation has not issued any share appreciation rights.
|--- |  | -------------------------------------------------------------



|COMPOSITION OF THE COMPENSATION COMMITTEE
|-----------------------------------------



|The Compensation Committee is composed of Mr.
W.R. MacNeill, Mr. R.G. Walker and Mr. J.R. MacNeill.  Mr. W.R.  MacNeill is the Chairman
of the Corporation and Mr. J.R. MacNeill was, prior to February, 1998, the Secretary and
Treasurer of the Corporation.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|REPORT ON EXECUTIVE COMPENSATION
|--------------------------------



|Compensation  for  the  Chief  Executive
Officer  and  President  is  primarily  incentive  based  including  a  base  salary  as
cash  compensation  with  the  opportunity  for  bonus  cash  payments  based on
corporate  performance.  This  compensation  is  supplemented  with  stock  options
consistent  with  industry  practice.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Other executive officers receive cash
compensation at market rates together with  stock options consistent with industry
practise.
|----------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|COMPENSATION OF DIRECTORS
|-------------------------



|The Corporation pays each of its outside
directors a yearly stipend of $5,000 as  well as $500 per meeting for attendance
personally or by telephone conference at  directors  and/or board  committee  meetings.
In addition,  all  directors are  entitled to be reimbursed  for expenses  incurred in
attending  board  meetings.  During the year ended December 31, 2001, the  Corporation
paid  directors fees  totalling $16,500.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|INDEBTEDNESS OF DIRECTORS AND SENIOR OFFICERS
|---------------------------------------------



|No director or senior officer or proposed
director and none of their associates  or affiliates is or has been at any time since
January 1, 2001,  indebted to the  Corporation or its subsidiary.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|FINANCIAL STATEMENTS
|--------------------



|It is necessary at annual  meetings  that the
shareholders  of the  Corporation  receive and consider the financial  statements  for
the most recently  completed  fiscal  year of the  Corporation  together  with the
auditors  report  on such  financial  statements.  Reference  is  made  to  the
financial  statements  and  auditors  report with respect to the fiscal year ended
December 31, 2001 which
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|accompanies this Information  Circular.  Receipt
and review, at the Meeting,  of  the  auditors  report  and the  Corporations
financial  statements  will  not  constitute approval or disapproval of any matters
referred to therein.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|APPOINTMENT OF AUDITORS
|-----------------------



|Management of the Corporation recommends the reappointment
      of KPMG LLP Chartered Accountants as auditors of the Corporation. KPMG LLP
      Chartered Accountants were first appointed auditors in 1993. The persons
      named in the enclosed form of proxy intend to vote FOR the reappointment
      of KPMGLLP Chartered Accountants as auditors of the Corporation, to hold
      office until the next annual general meeting of the shareholders, at a remuneration
      to be approved by the Board.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|AMENDMENT TO MANAGEMENT STOCK OPTION
INCENTIVE PLAN
|---------------------------------------------------



|Subject to shareholder and regulatory approval,
the directors of the Corporation  have approved an amendment to the  Management  Stock
Option  Incentive Plan (the  Plan) which would increase the number of Common
Shares authorized for issuance  under the Plan by an additional  1,500,000  Common
Shares.  If  shareholder  and  regulatory approval is obtained for such amendment,
4,066,000 Common Shares will  be reserved for issuance pursuant to the Plan.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|In the opinion of management of the
Corporation,  the increase in the number of  Common Shares authorized for issuance under
the Plan is necessary to ensure that  the Plan will  continue to be available to provide
an incentive  for  directors,  officers and key employees to directly  participate in the
Corporations  growth  and development.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The shareholders will be asked at the Meeting to
pass an ordinary  resolution in  the following terms:
|------------------------------------------------------------------------------------------------------

| | BE IT
      RESOLVED that
| | --------------------------

| | 1. | The amendment to the Corporations
      Management Stock Option Incentive Plan (the Plan) to increase
      the number of Common Shares authorized for issuance under the Plan by an
      additional 1,500,000 Common Shares be and is hereby authorized and approved.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2. | Any director or officer of the
      Corporation be and is hereby authorized, in the name and on behalf of the
      Corporation, to execute and deliver all such certificates, documents, deeds,
      agreements and other instruments, under its corporate seal or otherwise,
      and to do all such further acts, as such director or officer may consider
      to be necessary or desirable to give effect to the foregoing.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Management of the Corporation  believes the
passing of this ordinary  resolution  is in the best interests of the Corporation and
recommends that the shareholders  vote in favour of the resolution.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|In order to be effective, the foregoing
resolution requires the approval of a majority of the votes cast by the shareholders
who vote in respect of such resolution. The persons named in the enclosed form of
proxy intend to vote FOR this resolution, unless otherwise directed by the
shareholder submitting the proxy.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|CORPORATE GOVERNANCE PRACTICES
|------------------------------



|This statement of corporate  governance is made
pursuant to the requirements and  guidelines  (the  Guidelines)  of  The
Toronto  Stock  Exchange  relating  to  disclosure of corporate governance practices.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Mandate of the Board
|--------------------



| | The board of directors (Board) has
      the duty to direct the management of the business and affairs of the Corporation
      pursuant to the powers vested in it by the Canada Business Corporations
      Act and by the articles and bylaws of the Corporation, and in accordance
      with obligations imposed by law generally. The Board delegates authority
      to the officers of the Corporation and expects management to take responsibility
      for the implementation of decisions taken by the Board and for all aspects
      of the day-to-day management of the Corporations business.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | In
furtherance  of the discharge of such duties and  obligations,  the  Board,  either as an
entire body or acting through its  committees,  is  called upon to:
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (i) | approve the Corporations annual operating and capital budgets, all
      material acquisitions and divestitures and define the scope of its business
      activities;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii) | ensure that appropriate systems are in place to manage the Corporations
      principal business risks, including financial, environmental, and regulatory
      risks;
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iii) | monitor and approve the strategic planning process and corporate goals;
| | ----- | -----------------------------------------------------------------------

| | (iv) | review the performance of senior officers; and
| | ---- | ----------------------------------------------

| | (v) | monitor and assess the integrity of the Corporations internal controls
      and management information systems.
| | --- | -----------------------------------------------------------------------------------------------------------------



|Board Composition
|-----------------



| | As of April
11, 2002 five directors comprised the Board; of that number  two were  outside  directors
(a  director  that is not an  officer  or  employee of the  Corporation or its
affiliates) and who were unrelated  (a director  independent from management and free
from any relationship  with the Corporation  which could, or could reasonably be
perceived to,  materially  interfere with the directors ability to act with a view to
the  best  interests  of  the  Corporation,  other  than  arising  from  shareholding).
In  determining  whether  directors  were  related  or  unrelated the Board applied the
test set forth in the Guidelines.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| | The
Corporation does not have a significant shareholder in the sense of  one that is able to
exercise a majority  of votes for the  election of  the board of  directors.  The
Chairman of the Board,  Chief  Executive  Officer and President are each a related
director.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | One  of the
outside  directors  provides  consulting  services  to the  Corporation on a limited
basis at the direction of the Chief  Executive  Officer.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| | The Board
considers that a board size of 6 members is appropriate  for  the  Corporation  and
intends to recruit  and  appoint  one  additional  unrelated  director in due course.
For  2002/2003,  5 individuals  are  being nominated for election as directors.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Committees
|----------



| | Executive
Committee
| | -------------------



| | The Executive
Committee is composed of three  directors,  namely,  the  Chairman, the Chief Executive
Officer and the President.  The Executive  Committee  has such powers as from time to
time are vested in it by the  Board.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Audit & Corporate Governance Committee
| | --------------------------------------



| | The Audit & Corporate
Governance  Committee  is composed of the Chief  Executive  Officer  (who is also  the
Chief  Financial  Officer  and a  director) and two unrelated directors.  The mandate of
the committee in  respect of audit matters is to ensure that controls are  implemented to
safeguard  assets,  to ensure that financial  reporting  systems are in  place  and
functioning  properly,  and  to  approve  the  financial  statements.  The  committee
meets  with  the  Corporations  financial  management personnel and external auditors as
necessary and reviews the  Corporations  annual financial statements prior to their
submission to  the Board for approval.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | In respect of
corporate  governance  matters,  the committee adopts and  monitors  compliance of
various  corporate  government  principles  and  guidelines.  The  committee  also
ensures  corporate  compliance  with  applicable  legislation with respect to the
environment,  occupational  health and safety as well as licensing and permitting.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | The Audit & Corporate
Governance Committee also assumes  responsibility  for the  approval  to engage  outside
advisors  should  an  individual  director request such services.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Compensation
Committee
| | ----------------------



| | The
Compensation  Committee  is  composed  of  the  Chairman  and  two  unrelated  directors.
The  mandate of the  committee  is to review the  senior management  organization and
reporting  structure  together with  contingency  plans  in the  event  of the
disability,  termination  or  retirement  of  key  executives.  The  committee  reviews
executive  compensation  philosophy and guidelines and reviews the  performance of  and
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





| | compensation
paid to all officers.  The compensation committee also  reviews the remuneration and
benefits provided to directors.
| | ---------------------------------------------------------------------------------------------------------------------------------



|Decisions Requiring Board Approval
|----------------------------------



| | The Board is
responsible for all decisions  relating to the Corporation  which, by law, cannot be
delegated to Board committees or management.
| | ----------------------------------------------------------------------------------------------------------------------------------------------



| | The Board
reviews and approves,  among other things,  the Corporations  annual  budget,  debt  and
equity  financings,  changes  to  capital  structure,  material lease  commitments,
acquisitions and divestitures  and any plan which may significantly change the future
direction of the  Corporation.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | The Chief
Executive  Officers  limits of authority are clearly defined  although formal position
descriptions for the Chief Executive Officer,  President  and other board members have
not been  developed,  nor has a  succession plan been developed.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Director Recruitment and Board Effectiveness
|--------------------------------------------



| | The Board does
not have a Nominating Committee.  The Board, as a whole,  assumes responsibility for
these duties.
| | -----------------------------------------------------------------------------------------------------------------



| | The Board has
not established any formal measures for assessing  Board,  committee and individual
effectiveness.
| | ----------------------------------------------------------------------------------------------------------------



| | The
Corporation  does not have a formal  orientation  program  for new  directors,  however
the  necessary  and  appropriate  programs  can be  readily prepared when required.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Corporate Communications
|------------------------



| | The Board is
responsible for setting overall  corporate  communications  policy.  Management  is
charged  with  carrying  out  this  policy.  Accordingly,  the Corporation has appointed
certain  individuals  with  specific  responsibilities  for  all  corporate
communications.  These  people have access to support  professionals such as securities
lawyers  and regulators in connection with any and all corporate communications.  All
communications  are subject to an approval  process.  The level of  approval depends on
the sensitivity of the communications,  accordingly  the most sensitive  transactions,
and therefore  communication,  would  receive approvals at the Board level.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Shareholder
concerns are addressed by  management  as they arise.  The  Corporations policy is for
senior management to respond to shareholder  and investment dealer queries as soon as
practicable.  Shareholders are  free to  address  concerns  to the  Corporation  by
phone,  at  annual  meetings, in written form, or by internet.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 



---





|OTHER MATTERS
|-------------



|Management  of the  Corporation  knows  of no
amendments,  variations  or other  matters to come  before the Meeting  other than the
matters  referred to in the  Notice.  However,  if any matters other than those  referred
to herein should be  presented at the Meeting, the persons named in the enclosed proxy
are authorized  to vote the  shares  represented  by the proxy in  accordance  with
their  best  judgement.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|DIRECTORS APPROVAL
|-------------------



|The contents and the sending of this Information
Circular have been approved by  the Board of Directors.
|--------------------------------------------------------------------------------------------------------



|The foregoing  contains no untrue statement of a
material fact and does not omit  to state a material  fact that is required to be stated
or that is  necessary to  make a statement not  misleading in the light of the
circumstances  in which it  was made.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|BY ORDER OF THE BOARD OF DIRECTORS
|----------------------------------



|/s/ William R. MacNeill | /s/ Arnie E. Hillier                                                         
|----------------------- | -----------------------------------------------------------------------------
|Chairman                | Vice Chairman, Chief Executive Officer &
      
      Chief Financial Officer



|Saskatoon, Saskatchewan  April 11, 2002
|---------------------------------------



| |  | 
| |  | 



---