Klondex Mines Ltd.: Exhibit 10.5 - Filed by newsfilecorp.com







  NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[REDACTED FOR PROPRIETARY REASONS]” ARE SUBJECT TO A CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT.  COMPLETE, UNREDACTED COPIES OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

EXECUTION VERSION 

 

 

GOLD PURCHASE AGREEMENT 

 

Between 

 

KLONDEX MINES LTD. 

- and - 

FRANCO-NEVADA GLW HOLDINGS CORP. 

 

 

____________________________________

February 11, 2014 
____________________________________

 

 

 




TABLE OF CONTENTS 

	1. 	Definitions 	1 
	 	 	 
	2. 	Interpretation.
    	15 
	 	 	 
	3. 	Purchase and Sale
      of Purchased Gold Ounces 	16 
	 	 	 
	4. 	Conditions for
      Payment of Purchase Price 	18 
	 	 	 
	5. 	Taxes 	19 
	 	 	 
	6. 	Reporting
      Obligations 	20 
	 	 	 
	7. 	Books and
      Records; Audits; Inspections 	22 
	 	 	 
	8. 	Maintenance of
      Existence and Property 	22 
	 	 	 
	9. 	Management of
      Mining Operations 	23 
	 	 	 
	10. 	Royalty and
      Stream Interests 	24 
	 	 	 
	11. 	Financing Matters
    	26 
	 	 	 
	12. 	Insurance Matters
    	27 
	 	 	 
	13. 	Security Matters
    	27 
	 	 	 
	14. 	Events of Default
    	28 
	 	 	 
	15. 	Effect of Event
      of Default 	32 
	 	 	 
	16. 	Representations
      and Warranties of the Buyer 	32 
	 	 	 
	17. 	Representations
      and Warranties of the Seller 	32 
	 	 	 
	18. 	Indemnities 	33 
	 	 	 
	19. 	Term 	33 
	 	 	 
	20. 	Restricted
      Transfer Rights of the Seller Entities 	34 
	 	 	 
	21. 	Transfer Rights
      of the Buyer 	34 
	 	 	 
	22. 	Governing Law 	35 
	 	 	 
	23. 	Notices 	35 
	 	 	 
	24. 	General
      Provisions 	36 


-i- 




TABLE OF CONTENTS 
(continued) 


SCHEDULES:

	SCHEDULE A – DESCRIPTION OF MIDAS PROPERTY
    
	 
	SCHEDULE B – DESCRIPTION OF FIRE CREEK
      PROPERTY 
	 
	SCHEDULE C – DESCRIPTION OF OTHER
      PROPERTIES 
	 
	SCHEDULE D – MONTHLY DELIVERY REQUIREMENTS
    
	 
	SCHEDULE E – CONDITIONS FOR PAYMENT OF
      PURCHASE PRICE 
	 
	SCHEDULE F – REPRESENTATIONS AND WARRANTIES
      OF THE BUYER 
	 
	SCHEDULE G – REPRESENTATIONS AND WARRANTIES
      OF THE SELLER 


-ii- 




GOLD PURCHASE AGREEMENT 

GOLD PURCHASE AGREEMENT dated February 11, 2014. 

BETWEEN: 

KLONDEX MINES LTD., a
corporation existing under the laws of British Columbia (the “Seller”)


- and - 

FRANCO-NEVADA GLW HOLDINGS
CORP., a corporation incorporated under the laws of Canada (the
“Buyer”) 

WHEREAS: 

	(A) 	
      In order to finance the Acquisition of the Midas Mine by
      the Seller, the Seller has agreed to sell the Purchased Gold Ounces to the
      Buyer, on and subject to the terms and conditions set out in this
      Agreement.

	 	 
	(B) 	
      Upon completion of the Acquisition, the Midas Owner,
      which owns and has the right to operate and mine 100% of the Midas Mine,
      will be an indirect, wholly-owned Subsidiary of the Seller.

	 	 
	(C) 	
      The Fire Creek Owner, which owns and has the right to
      develop, operate and mine 100% of the Fire Creek Project, is an indirect,
      wholly-owned Subsidiary of the Seller.

	 	 
	(D) 	
      The Seller has agreed to cause the Seller Entities to
      enter into the Security Agreements, for the purpose of guaranteeing and
      securing the Delivery Obligations of the Seller due to the Buyer under
      this Agreement.



NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements herein contained and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties agree as follows: 

	1. 	
      Definitions

	 	 
		
      For the purposes of this Agreement (including the
      recitals), unless the context otherwise requires, each of the following
      terms shall have the meaning given to it, as set out below, and
      grammatical variations of such term shall have a corresponding
    meaning:

	 	 
		
      “Accounts” means: (i) all “accounts” as such term
      is used in the applicable Personal Property Securities Legislation, and
      (ii) all existing and hereafter arising rights to payment of a monetary
      obligation, whether or not earned by performance.

	 	 
		
      “Acquisition” means the indirect acquisition of
      the Midas Mine by the Seller from Newmont USA Limited through the purchase
      by Klondex Holdings of all of the issued and outstanding shares of capital
      stock of Midas Holdings pursuant to the Acquisition Agreement.

	 	 
		
      “Acquisition Agreement” means the stock purchase
      agreement dated December 4, 2013 between Newmont USA Limited, Klondex
      Holdings and the Seller, as amended on February 10,
2014.







- 2 - 

“Affiliate” means, with respect
to any Person, any other Person which directly or indirectly, through one or
more intermediaries, controls, or is controlled by, or is under common control
with, such Person. For the purposes of this definition and the definitions of
“Change of Control” and “Subsidiary”, “control” (including, with
correlative meanings, the terms “controlled by” and “under common control
with”), as applied to any Person, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
that Person, whether through the ownership of voting securities, by contract or
otherwise. 

“Agreement” means this Gold
Purchase Agreement and all attached schedules, as such may be amended, restated,
modified or superseded from time to time in accordance with the terms hereof.


“Annual Compliance Certificate”
means a certificate signed by an authorized senior officer of the Seller
certifying that as of the date of such certificate: 

	 	(a) 	
      all of the representations and warranties made by the
      Seller Entities pursuant to the Transaction Documents are true and
      accurate in all material respects (other than those representations and
      warranties which are subject to a materiality qualifier, which
      representations and warranties shall be true and accurate in all respects)
      as if made on and as of the date of such certificate;

	 	 	 
	 	(b) 	
      no Event of Default or Material Adverse Effect has
      occurred and is continuing as of the date of such certificate;
  and

	 	 	 
	 	(c) 	
      no event which with notice or lapse of time or both would
      become an Event of Default has occurred and is continuing as of the date
      of such certificate;



in each case, except as specified in
such certificate, together with all material information relating to such
exception, including, if applicable, any action which the Seller Entities have
taken or propose to take with respect thereto. 

“Annual Forecast Report” means a
written report in relation to a fiscal year, with respect to each of the Midas
Mine and the Fire Creek Project, to be prepared by or on behalf of the Seller,
including with reasonable detail a forecast, based on the current development or
mine plan, as applicable, of the quantity of gold, silver and other Minerals
expected to be produced during such fiscal year on a month-by-month basis and
over the remaining life of the mine on a year-by-year basis, including: 

	 	(a) 	
      the amount and a description of planned operating and
      capital expenditures;

	 	 	 
	 	(b) 	
      types, tonnes and grade of Minerals to be
mined;

	 	 	 
	 	(c) 	
      types, tonnes and grade of Minerals to be stockpiled;
      and

	 	 	 
	 	(d) 	
      with respect to the processing facilities, the types,
      tonnes and grade of Minerals to be processed; expected recoveries for
      gold, silver and other Minerals; and expected doré weight and gold and
      silver grade.



“Annual Operational Report”
means a written report in relation to a fiscal year with respect to each of the
Midas Mine and the Fire Creek Project, to be prepared by or on behalf of the
Seller, which shall include all of the information pertaining to the
construction, commissioning or operations contained in annual reports
prepared and provided to the board of directors of any of the Seller Entities
and, to the extent not contained in such reports, will also contain, for such
year: 




- 3 - 

	 	(a) 	
      types, tonnes and grade of Minerals mined;

	 	 	 
	 	(b) 	
      types, tonnes and grade of Minerals stockpiled;

	 	 	 
	 	(c) 	
      with respect to the processing facilities, the types,
      tonnes and grade of Minerals to be processed; recoveries for gold, silver
      and other Minerals; and doré weight and gold and silver grade;

	 	 	 
	 	(d) 	
      the number of ounces of gold and silver and the quantity
      of other Minerals contained in the material processed during such year,
      but not delivered to a purchaser by the end of such year;

	 	 	 
	 	(e) 	
      the number of ounces of gold and silver and the quantity
      of other Minerals delivered to a purchaser;

	 	 	 
	 	(f) 	
      the amount and a description of operating and capital
      expenditures;

	 	 	 
	 	(g) 	
      a statement setting out the mineral reserves and mineral
      resources (by category) prepared in accordance with National Instrument
      43-101 (with the assumptions used, including cut-off grade, metal prices
      and metal recoveries);

	 	 	 
	 	(h) 	
      a review of the development or operating activities for
      the year and a report on any material issues or departures from that
      contemplated by the development or mine plan, as applicable as of the
      first day of the fiscal year;

	 	 	 
	 	(i) 	
      variances from projected operating and capital
      expenditures and any actual or expected adverse impact on development or
      production or recovery of gold, silver and other Minerals, whether as to
      quantity or timing, together with the details of the plans to resolve or
      mitigate such matters;

	 	 	 
	 	(j) 	
      if applicable, the percentage completion compared to the
      initial development plan of the major elements of construction and the
      anticipated date of commencement of commercial production, if it has not
      yet then occurred; and

	 	 	 
	 	(k) 	
      details of any material health or safety violations
      and/or material violations of any Applicable Laws (including Environmental
      Laws).



The Annual Operational Report shall
also contain a report on any Encumbrances, other than customary liens, placed on
the assets or properties of the Seller Entities with respect to liabilities or
obligations greater than $1,000,000 (in the aggregate). 

“Applicable Law” means any law
(including common law and equity), any international or other treaty, any
domestic or foreign constitution or any multinational, federal, provincial,
territorial, state, municipal, county or local statute, law, ordinance, code,
rule, regulation, Order (including any securities laws or requirements of stock
exchanges and any consent decree or administrative Order), or Authorization of a
Governmental Body in any case applicable to any specified Person, property,
transaction or event, or any such Person’s property or assets. 




- 4 - 

“Authorization” means any
authorization, approval, consent, concession, exemption, license, lease, grant,
permit, franchise, right, privilege or no-action letter from any Governmental
Body having jurisdiction with respect to any specified Person, property,
transaction or event, or with respect to any of such Person’s property or
business and affairs (including any zoning approval, mining permit, development
permit or building permit) or from any Person in connection with any easements,
contractual rights or other matters. 

“Bankruptcy Code” means any of
the Bankruptcy Reform Act, Title 11 of the United States Code, the
Bankruptcy and Insolvency Act (Canada), the Companies Creditors
Arrangement Act (Canada) and the Winding-Up and Restructuring Act
(Canada) or any similar legislation, each as amended or recodified from time to
time, including (unless the context otherwise requires) any rules or regulations
promulgated thereunder. 

“Business Day” means any day
(other than a Saturday or Sunday) on which banks are open for business in
Toronto, Ontario, and Elko, Nevada. 

“Buyer” has the meaning set out
on the first page of this Agreement. 

“Capital Lease” means, as to any
Person, (i) any lease of property by such Person as lessee to the extent the
obligations of such Person thereunder are required to be classified and
accounted for as capital lease obligations or finance lease obligations on a
balance sheet of such Person in accordance with GAAP, or (ii) any synthetic
lease, tax retention operating lease or any other lease having substantially the
same economic effect as a conditional sale, title retention agreement or similar
arrangement. 

“Change of Control” means, with
respect to any Person, the consummation of any transaction, including any
consolidation, amalgamation, arrangement or merger or any issue, transfer or
acquisition of securities, the result of which is that any other Person or group
of Persons acting jointly or in concert for purposes of such transaction
directly or indirectly (A) becomes the beneficial owner of more than 50% of the
voting securities of such Person, measured by voting power rather than number of
securities, or (B) controls such Person. 

“Collateral” means all of the
property and rights of the Seller Entities in and to assets, rights and
property, including: (a) all Accounts, instruments, chattel paper, deposit
accounts, documents, intangibles, goods (including inventory, equipment and
fixtures), money, letter of credit rights, supporting obligations, claims,
causes of action and other legal rights and investment property; (b) all of the
Properties and Other Properties; (c) all products, proceeds, rents and profits
of the foregoing; (d) all books and records of the Seller Entities related to
any of the foregoing; and (e) all of the foregoing, whether now owned or
existing or hereafter acquired or arising or in which any of the Seller Entities
now has or hereafter acquires any rights. 

“Contaminant” means any solid,
liquid, gas, odor, heat, sound, vibration, radiation, or combination of any of
them, that does or is reasonably expected to: 

	 	(a) 	
      impair the quality of the Environment for any use that
      can be made of it;

	 	 	 
	 	(b) 	
      injure or damage property or plant or animal
  life;

	 	 	 
	 	(c) 	
      adversely affect the health of any individual;

	 	 	 
	 	(d) 	
      impair the safety of any
individual;







- 5 - 

	 	(e) 	
      render any plant or animal life unfit for use by man;
      or

	 	 	 
	 	(f) 	
      create a liability under any Environmental
  Law;



and includes any “contaminant” within
the meaning ascribed to such term in any Environmental Law.

“Deductions” means any and all
refining, treatment and other charges, penalties, insurance, deductions,
transportation, settlement, financing, price participation charges and/or other
charges, penalties, deductions, set-offs, Taxes and expenses pertaining to
and/or in respect of the Purchased Gold Ounces delivered under this Agreement
(or payments in lieu thereof). 

[redacted for proprietary
reasons]

“Delivery Date” means the last
Business Day of each calendar month during the Delivery Period. 

“Delivery Obligations” means the
obligation of the Seller to deliver the Purchased Gold Ounces to the Buyer under
this Agreement and each and all of the Seller Entities’ related covenants and
obligations under this Agreement (for greater certainty, including Monthly
Delivery Requirements) and any Security Agreement to which it is a party, as
applicable. 

“Delivery Period” means the
period commencing on June 1, 2014 and ending on the Final Delivery Date. 

“Designated Jurisdiction” means
Canada, the United Kingdom or such other location as may be agreed between the
Buyer and the Seller. 

“Disclosure Schedule” means the
disclosure schedule delivered on the date hereof by the Seller to the Buyer
setting forth exceptions to, and disclosures with respect to, the
representations and warranties set forth in Section 17 and Schedule G. 

“Effective Date” means the date
on which the Buyer pays the Purchase Price to the Seller, or such Person as
directed by the Seller, which, subject to the satisfaction of the conditions set
out in Section 4, shall be the date on which the Acquisition is completed, or
such other date as may be agreed to in writing by the Seller and the Buyer. 

“Encumbrance” means any
mortgage, deed of trust, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge, security interest, priority or
other security agreement, preferential arrangement or encumbrance of any kind or
nature whatsoever, including any conditional sale or other title retention
agreement or the interest of a lessor under a Capital Lease or prior claims or
royalties of any nature whatsoever, whether registered or recorded or
unregistered or unrecorded. 

“Environment” means the ambient
air, all layers of the atmosphere, surface water, underground water, all land
(surface and underground), all living organisms and the interacting natural
systems that include components of air, land, water, organic and inorganic
matter and living organisms, and includes indoor and underground spaces. 

“Environmental Laws” means any
Applicable Law relating to the Environment, occupational health or safety,
industrial hygiene, product liability or any past, present or future activity,
event or circumstance in respect of any Hazardous Materials (including the use,
handling, transportation, production, disposal,
discharge or storage thereof or the terms of any Authorization issued in
connection therewith) or the environmental conditions on, under or about any
real property (including soil, groundwater and indoor, underground and ambient
air conditions). 




- 6 - 

“Event of Default” has the
meaning set forth in Section 14.

“Facility Agreement” means the
senior secured facility agreement dated February 11, 2014 among the Seller, the
guarantors party thereto, Royal Capital Management Inc., as security Agents', and
the lenders party thereto, as amended, restated, modified, supplemented or
replaced from time to time in accordance with the terms of this Agreement. 

“Final Delivery Date” means the
date on which all of the Purchased Gold Ounces have been delivered to the Buyer
in accordance with this Agreement. 

“Fire Creek Owner” means Klondex
Gold & Silver Mining Company, a corporation existing under the laws of
Nevada. 

“Fire Creek Project” means the
Fire Creek gold project located in the State of Nevada, U.S.A., including the
Fire Creek Property, the mining production, processing, recovery, sale,
transportation, storage and delivery operations and related assets and other
assets located on or at or used in connection with the Fire Creek Property or to
mine Minerals from the Fire Creek Property, including all Minerals,
Authorizations, Other Rights, tailings, fixtures, mines, facilities, equipment
and inventory, existing or to be developed, constructed, and operated at or in
respect of the Fire Creek Property, including infrastructure assets, tailings
management facilities and other plants.

“Fire Creek Property” means all
right, title and interest of any of the Seller Entities to: 

	 	(a) 	
      patented claims, fee title and unpatented mining and
      millsite claims and all accessions and successions thereto, whether
      created privately or through government action, mineral rights and surface
      rights, whether owned or leased, in each case used in connection with the
      Fire Creek Project, including any of the foregoing described in Schedule
      B;

	 	 	 
	 	(b) 	
      all water, water rights and the permits and other
      evidence of authority or approval to appropriate and/or use ground or
      surface water in connection with the properties and rights referred to
      above, including the water rights described in Schedule B;

	 	 	 
	 	(c) 	
      all Minerals, Authorizations and Other Rights, all other
      property, tailings, buildings, structures, facilities and fixtures used,
      affixed or situated thereon, Utility Commitments and other rights or
      assets in each case relating to the interests referred to in (a) and (b)
      above; and

	 	 	 
	 	(d) 	
      any of the foregoing subsequently
  acquired.



“GAAP” means generally accepted
accounting principles for publicly accountable enterprises at the relevant time
determined with reference to The Handbook of the Canadian Institute of Chartered
Accountants, as amended from time to time, which for certainty, for financial
periods beginning on or after January 1, 2011, are International Financial
Reporting Standards; provided that, with respect to the Midas Entities for
periods prior to completion of the Acquisition, “GAAP” means United States
generally accepted accounting principles. 




- 7 - 

“Governmental Body” means the
government of Canada, the United States of America or any other nation, or of
any political subdivision thereof, whether state, provincial or local, and any
agency, authority, instrumentality, regulatory body, court, arbitrator or
arbitrators, tribunal, central bank or other entity exercising executive,
legislative, judicial or arbitral, taxing, regulatory or administrative powers
or functions (including any applicable stock exchange). 

“Hazardous Materials” means any
pollutant or Contaminant, including any hazardous, dangerous, registrable or
toxic chemical, material or other substance within the meaning of any
Environmental Law. 

“Indebtedness” of any Person
means, without duplication: 

	 	(a) 	
      all obligations of such Person for borrowed money and all
      obligations of such Person evidenced by bonds, debentures, notes, bills or
      other similar instruments;

	 	 	 
	 	(b) 	
      all obligations, contingent or otherwise, relative to the
      face amount of all letters of credit, whether or not drawn, and banker’s
      acceptances issued for such Person’s account;

	 	 	 
	 	(c) 	
      all obligations under any Capital Lease of such
      Person;

	 	 	 
	 	(d) 	
      all obligations of such Person in respect of the deferred
      purchase price of property or services (excluding current accounts payable
      incurred in the ordinary course of business);

	 	 	 
	 	(e) 	
      all obligations secured by (or for which the holder of
      such obligations has an existing right, contingent or otherwise, to be
      secured by) any Encumbrance upon or in property owned by such Person, even
      if such Person has not assumed or become liable for the payment of such
      obligations or such obligations are limited in recourse;

	 	 	 
	 	(f) 	
      all obligations of such Person created or arising under
      any conditional sale or other title retention agreement with respect to
      property acquired by such Person (even if the rights and remedies of the
      seller or lender under such agreement in the event of default are limited
      to repossession or sale of such property);

	 	 	 
	 	(g) 	
      all guarantees, indemnities and other obligations
      (contingent or otherwise) of such Person in respect of Indebtedness of
      another Person; and

	 	 	 
	 	(h) 	
      all obligations of such Person to purchase, redeem,
      retire, defease or otherwise acquire for value any equity, ownership or
      profit interests in such Person within ten years from the date of issuance
      thereof.



“Intercreditor Agreement” means
the priority agreement entered into between, among others, the Seller, the Buyer
and Royal Capital Management Corp. on the date of this Agreement. 

“Klondex BC Holdco” means
0985472 BC Ltd., a corporation existing under the laws of British Columbia. 

“Klondex Entities” means the
Seller Entities other than, prior to the completion of the Acquisition, the
Midas Entities. 

“Klondex Holdings” means Klondex
Holdings (USA) Inc., a corporation existing under the laws of Nevada. 




- 8 - 

“Loan” means the loan in the
aggregate principal amount of $25,000,000 provided to the Seller pursuant to the
Facility Agreement by the lenders thereunder. 

“Losses” means any and all
damages, claims, losses, lost profits, liabilities, fines, injuries, costs,
penalties and expenses (including reasonable legal fees). 

“Material Adverse Effect” means
any change, event, occurrence, condition, circumstance, effect, fact or
development that has, or could reasonably be expected to have, a material and
adverse effect on: 

	 	(a) 	
      the operations, results of operations, business, affairs,
      properties, assets, liabilities and obligations (contingent or otherwise),
      capitalization or condition (financial or otherwise) of the Seller
      Entities taken as a whole;

	 	 	 
	 	(b) 	
      the Midas Mine (including the ability of the Seller
      Entities to operate the Midas Mine as currently operated and substantially
      in accordance with the mine plan for the Midas Mine in effect at the time
      of the occurrence of the Material Adverse Effect);

	 	 	 
	 	(c) 	
      the Fire Creek Project (including the ability of the
      Seller Entities to construct, develop or operate the Fire Creek Project
      substantially in accordance with the applicable development or mine plan
      for the Fire Creek Project in effect at the time of the occurrence of the
      Material Adverse Effect);

	 	 	 
	 	(d) 	
      the ability of any Seller Entity to perform its
      obligations under any Transaction Document to which it is a
  party;

	 	 	 
	 	(e) 	
      the legality, validity, binding effect or enforceability
      of any Transaction Document or the rights and remedies of the Buyer or any
      of its Affiliates under any of the Transaction Documents; or

	 	 	 
	 	(f) 	
      the validity, perfection or priority of security under
      any Security Agreement.



“Midas Entities” means Midas
Holdings and the Midas Owner. 

“Midas Holdings” means Newmont
Midas Holdings Limited, a corporation existing under the laws of Nevada. 

“Midas Mine” means the Midas
mine and related ore milling facility located in the State of Nevada, U.S.A.,
including the Midas Property, the mining production, processing, recovery, sale,
transportation, storage and delivery operations and related assets and other
assets located on or at or used in connection with the Midas Property or to mine
Minerals from the Midas Property, including all Minerals, Authorizations, Other
Rights, tailings, fixtures, mines, facilities, equipment and inventory, existing
or to be developed, constructed, and operated at or in respect of the Midas
Property, including infrastructure assets, tailings management facilities and
other plants.

“Midas Owner” means Newmont
Midas Operations Inc., a corporation existing under the laws of Nevada. 

“Midas Property” means all
right, title and interest of any of the Seller Entities to: 




- 9 - 

	 	(a) 	
      patented claims, fee title and unpatented mining and
      millsite claims and all accessions and successions thereto, whether
      created privately or through government action, mineral rights and surface
      rights, whether owned or leased, in each case used in connection with the
      Midas Mine, including any of the foregoing described in Schedule
  A;

	 	 	 
	 	(b) 	
      all water, water rights and the permits and other
      evidence of authority or approval to appropriate and/or use ground or
      surface water in connection with the properties and rights referred to
      above, including the water rights described in Schedule A;

	 	 	 
	 	(c) 	
      all Minerals, Authorizations and Other Rights, all other
      property, buildings, structures, facilities and fixtures used, affixed or
      situated thereon, Utility Commitments and other rights or assets, in each
      case relating to the interests referred to in (a) and (b) above;
  and

	 	 	 
	 	(d) 	
      any of the foregoing subsequently
  acquired.



“Minerals” means any and all
metals, minerals and mineral rights of every nature and kind, including metals,
precious metals, base metals, gems, diamonds, industrial minerals, commercially
valuable rock, aggregate, clays, and diatomaceous earth, hydrocarbons, oil, gas,
and other materials in whatever form or state. 

“Monthly Average Gold Price”
means, for any given calendar month, the monthly average of the London p.m. fix
for gold as quoted in United States dollars by the London Bullion Market
Association (or any successor metals exchange) for such month, calculated by
dividing the sum of all such quotations during such month by the number of such
quotations. 

“Monthly Delivery Requirements”
means, for each calendar month ending during and including the last day of the
Delivery Period, the applicable number of ounces of Refined Gold for such month
set out in Schedule D. 

“Monthly Operational Report”
means a written report in relation to a calendar month with respect to each of
the Midas Mine and the Fire Creek Project, to be prepared by or on behalf of the
Seller for each month, which shall include all of the information contained in
the monthly operating reports prepared and provided to the board of directors of
any of the Seller Entities and, to the extent not contained in such reports,
will also contain, for such month: 

	 	(a) 	
      types, tonnes and grade of Minerals mined;

	 	 	 
	 	(b) 	
      types, tonnes and grade of Minerals stockpiled;

	 	 	 
	 	(a) 	
      with respect to the processing facilities, the types,
      tonnes and grade of processed Minerals; recoveries for gold, silver and
      other Minerals; and doré weight and gold and silver grade;

	 	 	 
	 	(b) 	
      the number of ounces of gold and silver and the quantity
      of other Minerals contained in the material processed during such month,
      but not delivered to a purchaser by the end of such month;

	 	 	 
	 	(c) 	
      the number of ounces of gold and silver and the quantity
      of other Minerals produced and delivered to a purchaser;

	 	 	 
	 	(c) 	
      the amount and a description of operating and capital
      expenditures; and







- 10 - 

	 	(d) 	
      any material changes from the most recent production
      forecasts provided to the Buyer.



“National Instrument 43-101”
means National Instrument 43-101 – Standards of Disclosure for Mineral Projects
of the Canadian Securities Administrators (or any successor instrument, rule or
policy). 

“Notice of Offer” has the
meaning set out in Section 10(b). 

“Offered Interest” has the
meaning set out in Section 10(b). 

“Other Properties” means, except
to the extent constituting part of the Properties, all right, title and interest
of any of the Seller Entities to: 

	 	(a) 	
      patented claims, fee title and unpatented mining and
      millsite claims and all accessions and successions thereto, whether
      created privately or through government action, mineral rights and surface
      rights, whether owned or leased, including any of the foregoing described
      in Schedule C;

	 	 	 
	 	(b) 	
      all water, water rights and the permits and other
      evidence of authority or approval to appropriate and/or use ground or
      surface water in connection with the properties and rights referred to
      above, including the water rights described in Schedule C;

	 	 	 
	 	(c) 	
      all Minerals, Authorizations and Other Rights, all other
      property, buildings, structures, facilities and fixtures used, affixed or
      situated thereon, Utility Commitments and other rights or assets, in each
      case relating to the interests referred to in (a) and (b) above;
  and

	 	 	 
	 	(d) 	
      any of the foregoing subsequently
  acquired.



“Other Rights” means all
licenses, approvals, authorizations, consents, rights (including surface rights,
access rights and rights of way), privileges, concessions or franchises held by
the Seller Entities or required to be obtained from any Person (other than a
Governmental Body), for the construction, development and operation of the Midas
Mine and/or Fire Creek Project, as applicable, as such construction, development
and operation is contemplated by the current or then applicable development or
mine plan, as the case may be. 

“Order” means any order,
directive, decree, judgment, ruling, award, injunction, direction or request of
any Governmental Body or other decision-making authority of competent
jurisdiction.

 “Parties” means the
parties to this Agreement and “Party” means any one of the Parties. 

“Permitted Encumbrances”
means:

	 	(a) 	
      Encumbrances arising by operation of law for Taxes,
      assessments or governmental charges not yet due or being contested in good
      faith by appropriate proceedings diligently conducted and for which
      reserves satisfactory to the Buyer have been established and provided that
      the Encumbrance is released prior to any enforcement action against any
      property of the Seller Entities;

	 	 	 
	 	(b) 	
      statutory liens of mechanics, materialmen, shippers,
      warehousemen, carriers, and other similar Persons for services or
      materials arising in the ordinary course of business for which: (i)
      payment is not past due; or (ii) payment is due but is being contested in
      good faith by appropriate and lawful proceedings diligently
      conducted and for which reserves satisfactory to the Buyer have been
      established and provided that the Encumbrance is released prior to any
  enforcement action against any property of the Seller Entities;







- 11 - 

	 	(c) 	
      nonconsensual liens incurred or deposits made in the
      ordinary course of business in connection with workers’ compensation,
      unemployment insurance and other types of social security;

	 	 	 
	 	(d) 	
      Encumbrances specifically identified and listed on the
      Disclosure Schedules;

	 	 	 
	 	(e) 	
      Encumbrances granted in the Transaction
  Documents;

	 	 	 
	 	(f) 	
      Encumbrances granted pursuant to the Facility
      Agreement;

	 	 	 
	 	(g) 	
      Purchase Money Liens securing Indebtedness referred to in
      Section 11(c)(ii);

	 	 	 
	 	(h) 	
      Permitted Working Capital Security securing Indebtedness
      referred to in Section 11(c)(i);

	 	 	 
	 	(i) 	
      Encumbrances arising from the right of distress enjoyed
      by landlords or Encumbrances otherwise granted to landlords, in either
      case, to secure the payment of arrears of rent in respect of leased
      properties and customarily granted in the applicable jurisdiction;
      provided that such rent is not then overdue and the Seller Entities are
      then in compliance in all material respects with the terms of the lease or
      sublease in respect of such leased properties and provided further that
      any such Encumbrances are limited to property of the Seller Entities
      located at the premises subject to the applicable lease or
  sublease;

	 	 	 
	 	(j) 	
      zoning restrictions, easements, rights of way, survey
      exceptions, encroachments, covenants, licenses, reservations, leasehold
      interests, restrictions on the use of real property or minor
      irregularities incident thereto which do not (i) secure obligations for
      the repayment of money, or (ii) in the aggregate materially detract from
      the value or use of the property or assets of the Seller Entities or
      impair, in any material manner, the use of such property for the purposes
      for which such property is held or intended to be used by the Seller
      Entities;

	 	 	 
	 	(k) 	
      the paramount title of the United States as to any
      unpatented mining claims and millsite claims and any rights of third
      parties to the lands within such unpatented mining claims and millsite
      claims pursuant to Multiple Mineral Development Act of 1954 and the
      Surface Resources and Multiple Use Act of 1955 and the regulations
      of the Department of the Interior promulgated in accordance with the
      foregoing statutes;

	 	 	 
	 	(l) 	
      Encumbrances of a depository institution arising solely
      by virtue of any statutory or common law provision relating to banker’s
      liens, rights of setoff, or similar rights and remedies as to deposit
      accounts or other funds maintained with such institution, provided that
      (i) such deposit account is not a dedicated cash collateral account and is
      not subject to restrictions against access by a Seller Entity in excess of
      those set forth by regulations promulgated by any Governmental Body, and
      (ii) such deposit account is not intended by the applicable Seller
      Entities to provide collateral to the depository institution;

	 	 	 
	 	(m) 	
      Encumbrances consisting of pledges of cash or near cash
      assets made to secure or facilitate the provision of security for the
      performance of bids, trade contracts, leases, public or statutory
      obligations (including but not limited to environmental, reclamation
    or other similar obligations) or other obligations of a like
      nature (including surety, appeal or performance bonds), in each case
      incurred in the ordinary course of business (other than for
    Indebtedness);








- 12 - 

	 	(n) 	
      any undetermined or inchoate lien or privilege incidental
      to current operations that has not been filed pursuant to law or that
      relates to obligations not due or delinquent;

	 	 	 
	 	(o) 	
      any right reserved to or vested in any Governmental Body
      by the terms of any Authorization held or acquired by a Person in the
      ordinary course of its business, or by any statutory provision, to
      terminate the Authorization or to require annual or other periodic
      payments as a condition of the continuance thereof;

	 	 	 
	 	(p) 	
      any Encumbrance created or assumed by a Person in favor
      of a public utility or Governmental Body when required by the utility or
      Governmental Body in connection with the operations of such Person in the
      ordinary course;

	 	 	 
	 	(q) 	
      any reservations, limitations, provisos and conditions
      expressed in original grants from any Governmental Body;

	 	 	 
	 	(r) 	
      any Encumbrance arising from court or arbitral
      proceedings, provided that the claims secured thereby or the amount
      thereof do not exceed [redacted for proprietary reasons] and
      are being contested at the time in good faith by proper legal proceedings,
      execution thereon has been stayed and the same is not, in the opinion of
      the Buyer, acting reasonably, expected to result in a Material Adverse
      Effect;

	 	 	 
	 	(s) 	
      deposits of cash or securities in connection with any
      appeal or contestation of any Encumbrance; and

	 	 	 
	 	(t) 	
      such other Encumbrances as may be approved in writing by
      the Buyer from time to time, whether or not such Encumbrances are
      registered against the Collateral or otherwise.



“Permitted Refinancing
Indebtedness” means Indebtedness of any Seller Entity the net proceeds of
which are used to replace, refinance, defease or discharge the Loan (or any
other Permitted Refinancing Indebtedness), in whole but not in part, provided
that (i) the principal amount of such Permitted Refinancing Indebtedness does
not exceed the principal amount of the Indebtedness so replaced, refinanced,
defeased or discharged (plus the amount of all fees, and expenses and premiums
incurred in connection therewith); (ii) such Indebtedness has a maturity date
which is after the date of the Indebtedness being replaced, refinanced, defeased
or discharged, and a weighted average life to maturity equal to or greater than
the Indebtedness being replaced, refinanced, defeased or discharged, and (iii)
such Indebtedness is either (a) unsecured or (b) secured only against the
Collateral and, in the case of (b), the lenders thereunder have agreed to be
bound by an intercreditor agreement with the Buyer which is at least as
favourable to the Buyer (as determined by it, acting reasonably) as the
Intercreditor Agreement.

“Permitted Working Capital Debt”
has the meaning set forth in Section 11(c).

“Permitted Working Capital
Security” has the meaning set forth in Section 11(c). 

“Person” means and includes
individuals, corporations, bodies corporate, limited or general partnerships,
joint stock companies, limited liability companies, joint ventures,
associations, companies, trusts, banks, trust
companies, Governmental Bodies or any other type of organization or entity,
whether or not a legal entity. 




- 13 - 

“Personal Property Security
Legislation” means with respect to the State of Nevada, Article 9 of the
Uniform Commercial Code to the extent adopted in such State from time to time,
and with respect to other applicable jurisdictions, the personal property
security legislation in effect therein from time to time. 

“Properties” means,
collectively, the Midas Property and the Fire Creek Property. 

“Purchased Gold Ounces” has the
meaning set out in Section 3(a). 

“Purchase Money Lien” means an
Encumbrance created or incurred by a Person securing Indebtedness incurred to
finance the acquisition of personal property (including the costs of
installation thereof), provided that: 

	 	(a) 	
      such lien is created substantially simultaneously with
      the acquisition of such property;

	 	 	 
	 	(b) 	
      such lien does not at any time encumber any property
      other than the property financed by such Indebtedness;

	 	 	 
	 	(c) 	
      the amount of Indebtedness secured thereby is not
      increased subsequent to such acquisition; and

	 	 	 
	 	(d) 	
      the principal amount of Indebtedness secured by such lien
      at no time exceeds 100% of the original purchase price of such property
      and the cost of installation thereof; and

	 	 	 
	 	(e) 	
      for the purposes of this definition, the term
      “acquisition” includes a Capital Lease.



“Purchase Price” means
$33,763,640, being the purchase price for the Purchased Gold Ounces. 

“Records” means all of the
Seller Entities’ present and future books, records and data of every kind or
nature, including books of account, purchase and sale agreements, invoices,
ledger cards, bills of lading and other shipping evidence, statements,
correspondence, memoranda, credit files, electronically stored data and other
data, together with the tapes, disks, diskettes, drives and other data and
software storage media and devices, file cabinets or containers in or on which
the foregoing are stored (including any rights of a Seller Entity with respect
to the foregoing maintained with or by any other Person). 

“Refined Gold” means marketable
metal bearing material in the form of gold bars or coins that is refined to a
minimum 995 parts per 1,000 fine gold. 

“ROFR Exercise Notice” has the
meaning set out in Section 10(d).

“Sales Taxes” means sales,
transfer, turnover, VAT or value added Taxes of any nature or kind. 

“Security” means the
Encumbrances on the Collateral created by the Security Agreements. 

“Security Agreements” means the
guarantees and security documents listed on Schedule E hereto, together with
such other agreements made in favour of the Buyer from time to time guaranteeing
or securing or intending to guarantee or secure the obligations of the Seller
due to the Buyer under this Agreement. 




- 14 - 

“SEDAR” means the System for
Electronic Document Analysis and Retrieval. 

“Seller” has the meaning set out
on the first page of this Agreement. 

“Seller Entity” means the
Seller, Klondex BC Holdco, Klondex Holdings, the Fire Creek Owner, Midas
Holdings, the Midas Owner and each of their Subsidiaries. 

“Solvent” means, when used with
respect to a Person, that: 

	 	(a) 	
      the fair saleable value of the assets of such Person is
      in excess of the total amount of the current value of its liabilities
      (including for purposes of this definition all liabilities (including loss
      reserves), whether or not reflected on a balance sheet prepared in
      accordance with GAAP and whether direct or indirect, fixed or contingent,
      secured or unsecured, disputed or undisputed);

	 	 	 
	 	(b) 	
      such Person is able to pay its debts or obligations in
      the ordinary course as they mature;

	 	 	 
	 	(c) 	
      such Person has capital sufficient to carry on its
      business; and

	 	 	 
	 	(d) 	
      such Person is not otherwise insolvent as defined by any
      Applicable Law;



and “Insolvent” shall have a
correlative meaning. 

“Subsidiary” means with respect
to any Person, any other Person which is controlled directly or indirectly by
that Person. 

“Taxes” means all taxes of any
kind or nature whatsoever including corporation taxes, capital taxes, realty
taxes (including utility charges which are collectible like realty taxes), net
proceeds of mines tax, privilege taxes, excise taxes, business taxes, property
transfer taxes, income taxes, Sales Taxes, customs duties, payroll taxes,
levies, stamp taxes, royalties, duties, and all fees, including claim fees,
deductions, compulsory loans and withholdings imposed, levied, collected,
withheld or assessed as of the date hereof or at any time in the future, by any
Governmental Body of any jurisdiction whatsoever having power to tax, together
with penalties, fines, additions to tax and interest thereon. 

“Term Notes” means the senior
secured term notes issued by the Seller under the Facility Agreement. 

“Third Party Offer” has the
meaning set out in Section 10(b).

“Third Party Offeror” has the
meaning set out in Section 10(b). 

“Threshold Amount” means
[redacted for proprietary reasons]. 

“Time of Delivery” has the
meaning set forth in Section 3(e). 

“Transaction Documents” means,
collectively, this Agreement, the Intercreditor Agreement, the Security
Agreements, the Disclosure Schedule and each other agreement, document,
instrument or certificate delivered for the benefit of the Buyer and its
Affiliates pursuant to or otherwise in connection with any of this Agreement,
the Intercreditor Agreement, the Security Agreements and the Disclosure
Schedule. 




- 15 - 

“Transfer”, when used as a verb,
means to sell, grant, assign, encumber, hypothecate, pledge or otherwise dispose
of or commit to dispose of, directly or indirectly, including through mergers,
arrangements, amalgamations, consolidations, asset sales or spin out
transactions. When used as a noun, “Transfer” means a sale, grant,
assignment, pledge or disposal or the commitment to do any of the foregoing,
directly or indirectly, including through mergers, arrangements, amalgamations,
consolidations, asset sales or spin out transactions. “Transfer” shall
not include any relocation or reconfiguration of unpatented mining claims in the
ordinary course of business, or the abandonment of claims to be so relocated or
reconfigured; provided, however, that in each case all modifications to the
Security Agreements reasonably necessary to ensure a valid lien and encumbrance
on the relocated or reconfigured unpatented mining claims are promptly executed
and delivered to the Buyer in form suitable for recordation. 

“TSX” means the Toronto Stock
Exchange. 

“Utility Commitment” means any
water service commitments and agreements, transmission or electrical service
commitments and agreements and other utility commitments and agreements
including the infrastructure, rights of way and easements necessary to provide
the aforementioned utility services. 

	2. 	
      Interpretation.

	 	 	 
		(a) 	
      Interpretation of Certain Matters. In this
      Agreement, unless otherwise specifically provided or unless the context
      otherwise requires:




	 	(i) 	
      the terms “Agreement”, “this Agreement”, “the Agreement”,
      “hereto”, “hereof”, “herein”, “hereby”, “hereunder” and similar
      expressions refer to this Agreement in its entirety and not to any
      particular provision hereof;

	 	 	 
	 	(ii) 	
      references to a “Section” or “Schedule” followed by a
      number or letter refer to the specified Section of or Schedule to this
      Agreement;

	 	 	 
	 	(iii) 	
      references to a Party in this Agreement mean the Party or
      its successors or permitted assigns;

	 	 	 
	 	(iv) 	
      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 construction or interpretation of this
    Agreement;

	 	 	 
	 	(v) 	
      the words “including”, “includes” and “include” shall be
      deemed to be followed by the words “without limitation”;

	 	 	 
	 	(vi) 	
      any time period within which a payment is to be made or
      any other action is to be taken hereunder shall be calculated excluding
      the day on which the period commences and including the day on which the
      period ends;

	 	 	 
	 	(vii) 	
      whenever any payment is required to be made, action is
      required to be taken or period of time is to expire on a day other than a
      Business Day, such payment shall be made, action shall be taken or period
      shall expire on the next following Business
Day;







- 16 - 

	 	(viii) 	
      references to agreements and other contractual
      instruments shall be deemed to include all subsequent amendments and other
      modifications thereto, but only to the extent such amendments and other
      modifications are not prohibited by the terms of the Transaction
      Documents; and

	 	 	 
	 	(ix) 	
      references to statutes or regulations are to be construed
      as including all statutory and regulatory provisions consolidating,
      amending, supplementing, interpreting or replacing the statute or
      regulation referred to.




	 	(b) 	
      Currency. All references in this Agreement to
      currency or to “$”, unless otherwise expressly indicated, shall be to
      United States dollars.

	 	 	 
	 	(c) 	
      Accounting Principles. Where the character or
      amount of any asset or liability or item of revenue or expense is required
      to be determined, or any consolidation or other accounting computation is
      required to be made, for the purposes of this Agreement and any other
      Transaction Document, including the contents of any certificate to be
      delivered hereunder, such determination, consolidation or computation
      shall, unless the Parties otherwise agree or the context otherwise
      requires, be made in accordance with GAAP applied on a consistent
      basis.

	 	 	 
	 	(d) 	
      Time of Essence. Time shall be of the essence of
      this Agreement.




	3. 	
      Purchase and Sale of Purchased Gold
  Ounces

	 	 	 
		(a) 	
      Purchase and Sale. On and subject to the terms and
      conditions of this Agreement, in consideration of the Purchase Price, the
      Seller agrees to sell and deliver to the Buyer, and the Buyer agrees to
      purchase from the Seller, 38,250 ounces of Refined Gold (the “Purchased
      Gold Ounces”), free and clear of any and all Encumbrances. For greater
      certainty, the Buyer shall not be responsible for any Deductions, all of
      which shall be for the account of the Seller.

	 	 	 
		(b) 	
      Payment. Subject to the satisfaction of the
      conditions set out in Section 4(a), the Buyer shall pay the Purchase Price
      to the Seller (or as directed by the Seller in connection with completion
      of the Acquisition) on the Effective Date. The Purchase Price shall be
      payable in cash by wire transfer to an account to be designated by the
      Seller and notified to the Buyer in writing at least one Business Day
      prior to the Effective Date. The Seller shall use the proceeds of the
      Purchase Price only for the purpose of paying for the
  Acquisition.

	 	 	 
		(c) 	
      Monthly Delivery Requirements. On each Delivery
      Date occurring during the Delivery Period, the Seller shall deliver to the
      Buyer Refined Gold in an amount equal to the applicable Monthly Delivery
      Requirements. The Seller’s delivery obligations are fixed and not
      dependent on whether mining operations are being conducted on the
      Properties or any other properties of the Seller Entities or the results
      of such operations. The Seller shall not be obliged to deliver to the
      Buyer Refined Gold physically mined, produced or extracted from the
      Properties or any other properties of the Seller Entities, provided that
      the Seller shall not deliver any Refined Gold to the Buyer that has been
      purchased directly or indirectly on a commodities exchange. For greater
      certainty, the Seller shall be permitted to deliver to the Buyer Refined
      Gold from a refinery regardless of the origin of the Refined Gold,
      provided that the Refined Gold does not contain any minerals subject to
      conflict minerals legislation (or similar legislation banning the
      purchase, sale, delivery or use of, or requiring verification or reporting
      with respect to, minerals based on their origin) and the delivery of the Refined Gold to the
  Buyer is otherwise made in accordance with Applicable Law.







- 17 - 

	 	(d) 	
      Advance Deliveries. Notwithstanding any other
      provisions of this Agreement, the Seller may at any time deliver to the
      Buyer Refined Gold in advance of the Monthly Delivery Requirements,
      without bonus or penalty. Such advance deliveries of Refined Gold shall be
      credited against the next following Monthly Delivery
  Requirements.

	 	 	 	 
	 	(e) 	
      Manner of Delivery. The Seller shall deliver to
      the Buyer all Refined Gold to be delivered pursuant to the Monthly
      Delivery Requirements by way of credit in metal or physical allocation to
      the metal account designated by the Buyer, or such other location
      specified by the Buyer from time to time, acting reasonably, with such
      details to be specified by the Buyer and notified to the Seller in writing
      at least 10 Business Days prior to a delivery. Delivery of Refined Gold to
      the Buyer shall be deemed to have been made at the time such Refined Gold
      is credited or physically allocated to the designated metal account of the
      Buyer (the “Time of Delivery”). All costs and expenses pertaining
      to each delivery of Refined Gold shall be borne by the Seller provided
      that the Buyer’s account is located in a Designated Jurisdiction and, if
      the Buyer pays any of such costs and expenses, the Seller shall promptly
      reimburse the Buyer for such payments upon receipt of satisfactory
      evidence of the Buyer’s payment of such costs and expenses.

	 	 	 	 
	 	(f) 	
      Passing of Title. Title to, and risk of loss of,
      Refined Gold shall pass from the Seller to the Buyer at the Time of
      Delivery. The Seller represents, warrants and covenants to the Buyer that,
      immediately prior to each Time of Delivery:

	 	 	 	 
	 		(i) 	
      it will be the legal and beneficial owner of the Refined
      Gold credited or physically allocated to the designated metal account of
      the Buyer;

	 	 	 	 
	 		(ii) 	
      it will have good, valid and marketable title to such
      Refined Gold; and

	 	 	 	 
	 		(iii) 	
      such Refined Gold will be free and clear of all
      Encumbrances.





	 	(g) 	
      Notification and Confirmation. The Parties agree
      to the following notification and confirmation protocol in respect of the
      delivery of the Purchased Gold Ounces under this Agreement:

	 	 	 	 	 
	 		(i) 	
      In the case of any deliveries contemplated by Section
      3(d), the Seller shall notify the Buyer in writing at least three Business
      Days before any delivery and credit or physical allocation to the metal
      account specified by the Buyer of:

	 	 	 	 	 
	 			(A) 	
      the number of ounces of Refined Gold to be delivered and
      credited or physically allocated; and

	 	 	 	 	 
	 			(B) 	
      the estimated Time of Delivery.

	 	 	 	 	 
	 		(ii) 	
      At the Time of Delivery, the Seller shall deliver to the
      Buyer an invoice setting out:

	 	 	 	 	 
	 			(A) 	
      the number of ounces of Refined Gold so credited or
      physically allocated; and







- 18 - 

	 	(B) 	
      such other information regarding the Refined Gold so
      delivered as reasonably requested by the Buyer from time to
  time.




	 	(h) 	
      Late Charge. If delivery of Refined Gold is not
      made by the applicable Delivery Date, the Buyer may give the Seller
      written notice of such default. Unless the Seller shall have made such
      delivery within five days of receipt of such notice, an additional cash
      sum equal to [redacted for proprietary reasons] of the value
      of the delinquent delivery determined based on the Monthly Average Gold
      Price for the month during which the Delivery Date occurred (the “late
      charge”) shall be payable to the Buyer, plus interest on such amount and
      the late charge at the rate of [redacted for proprietary reasons]
      per annum, which shall accrue from the day the delinquent delivery
      was due to the date of such delivery in full and the payment of the late
      charge and accrued interest in full.




	4. 	
      Conditions for Payment of Purchase Price

	 	 	 	 
		(a) 	
      Conditions in Favour of the Buyer. The obligation
      of the Buyer to pay the Purchase Price to the Seller shall be subject to
      the following:

	 	 	 	 
			(i) 	
      the Buyer shall have received all documents set out in
      Schedule E and all conditions set out in Schedule E shall have been
      satisfied;

	 	 	 	 
			(ii) 	
      all of the representations and warranties made by the
      Seller Entities pursuant to the Transaction Documents shall be true and
      accurate in all respects as if made on and as of the Effective
  Date;

	 	 	 	 
			(iii) 	
      no Event of Default or Material Adverse Effect shall have
      occurred and be continuing;

	 	 	 	 
			(iv) 	
      no event which with notice or lapse of time or both would
      become an Event of Default shall have occurred and be
continuing;

	 	 	 	 
			(v) 	
      all of the conditions precedent to the completion of the
      Acquisition pursuant to the Acquisition Agreement (other than payment of
      the funds required to complete the Acquisition) shall have been satisfied
      or, in the case of conditions precedent in favour of the Seller, with the
      prior written consent of the Buyer (which shall not be unreasonably
      withheld), waived;

	 	 	 	 
			(vi) 	
      all of the conditions precedent to the funding pursuant
      to the Facility Agreement and the Subscription Receipt Agreement dated as
      of January 9, 2014, between the Seller, GMP Securities L.P. and
      Computershare Trust Company of Canada shall have been satisfied or waived
      and such funding shall be available to be paid to or as directed by the
      Seller for the purposes of completing the Acquisition;

	 	 	 	 
			(vii) 	
      the funds from the Purchase Price to be paid, together
      with the other funds referred to in clause (vi) above, will be sufficient
      to complete the Acquisition;

	 	 	 	 
			(viii) 	
      the 9% Senior Unsecured Notes due January 5, 2015 issued
      by the Seller shall have been repaid in full (such repayment not to exceed
      an amount equal to 102.5% of principal plus any unpaid accrued interest);
      provided that, if the funds referred to in clause (vi) above are to be
      used to repay such notes, the funds from the Purchase Price to be paid,
      together with the remainder of the funds referred
to in clause (vi) above after repayment of such notes, will
  be sufficient to complete the Acquisition; and







- 19 - 

	 	(ix) 	
      the Buyer shall have received a certificate signed by an
      authorized senior officer of the Seller confirming the matters set forth
      in clauses (ii) through (viii) above.





	 	(b) 	
      Conditions in Favour of the Seller. The obligation
      of the Seller to sell and deliver the Purchased Gold Ounces to the Buyer
      shall be subject to the Buyer having paid the Purchase Price and the
      Acquisition having been completed.

	 	 	 
	 	(c) 	
      Obligation to Satisfy Conditions. The Seller shall
      use all commercially reasonable efforts and take all reasonable action as
      may be necessary or advisable to satisfy and fulfill all the conditions
      set forth in this Section 4 as soon as practicable. The Buyer shall
      co-operate with the Seller in exchanging such information and providing
      such assistance as may be reasonably required in connection with the
      foregoing.

	 	 	 
	 	(d) 	
      Waiver of Conditions. Each of the conditions set
      forth in Section 4(a) is for the exclusive benefit of the Buyer, and may
      be waived by the Buyer in writing, in its sole discretion in whole or in
      part.




	5. 	
      Taxes

	 	 	 
		(a) 	
      Taxes Payable by Seller. Except as required by
      Applicable Law or expressly contemplated herein, all deliveries of the
      Purchased Gold Ounces and any other payment or transfer of property of any
      kind made under this Agreement to the Buyer shall be made free and clear
      and without any present or future deduction, withholding, charge or levy
      on account of Taxes, without setoff or counterclaim. The Seller shall be
      liable for all such Taxes directly or indirectly imposed on the Buyer and
      shall indemnify and save the Buyer harmless from any such Taxes imposed on
      the Buyer.

	 	 	 
		(b) 	
      Gross-up. All Taxes, if any, as are required by
      Applicable Law to be so deducted, withheld, charged or levied by the
      Seller on any such delivery (or payment, as applicable), shall be paid by
      the Seller delivering (or paying, as applicable) to the Buyer or on its
      behalf, in addition to such delivery (or payment, as applicable), such
      additional deliveries (or payments, as applicable) as are necessary to
      ensure that the net delivery (or payment, as applicable) received by the
      Buyer (net of any such Taxes, including any Taxes required to be deducted,
      withheld, charged or levied on any such additional amount) equals the full
      delivery (or payment, as applicable) that the Buyer would have received
      had no such deduction, withholding, charge or levy been
required.

	 	 	 
		(c) 	
      Additional Taxes. Notwithstanding Sections 3(a),
      5(a) and 5(b), the Buyer shall be responsible for, and the Seller shall be
      entitled to deduct, withhold, charge or levy, any additional Taxes in
      respect of deliveries of the Purchased Gold Ounces and any other payment
      or transfer of property of any kind made under this Agreement to the Buyer
      where such additional Taxes arise solely because the Buyer is not resident
      in Canada for purposes of the Income Tax Act (Canada) or the
      location of the Buyer’s specified metal account is not located in a
      Designated Jurisdiction. For greater certainty, such additional Taxes
      shall be limited to the amount by which the Taxes required to be deducted,
      withheld, charged or levied in respect of deliveries of the Purchased Gold
      Ounces and any other payment or transfer of property of any kind made
      under this Agreement to the Buyer because the Buyer is not resident in
      Canada for purposes of the Income Tax
Act (Canada) or the location of the Buyer’s specified metal
      account is not located in a Designated Jurisdiction exceeds the Taxes that
      would have been deducted, withheld, charged or levied had the Buyer been
      resident in Canada for purposes of the Income Tax Act (Canada) or
      the location of the Buyer’s metal account been in a Designated
Jurisdiction, as the case may be.







- 20 - 

	 	(d) 	
      Withholding by Buyer. To the extent required by
      Applicable Law, the Buyer may deduct, withhold, charge or levy, any Taxes
      imposed by any Governmental Authority on the Seller or any of its
      Affiliates, or otherwise required to be withheld, in respect of any
      payment made by the Buyer to the Seller or any of its Affiliates under
      this Agreement.

	 	 	 
	 	(e) 	
      Application to Guarantors. The provisions of
      Sections 5(a), 5(b) and 5(c) shall also apply to all deliveries and
      payments made by any other Seller Entity to the Buyer whether made
      pursuant to its guarantee obligations under the Securities Documents or
      otherwise.

	 	 	 
	 	(f) 	
      Cooperation. The Parties agree to reasonably
      cooperate to: (i) ensure that no more Taxes, duties or other charges are
      payable than is required under Applicable Law; and (ii) obtain a refund or
      credit of any Taxes which have been overpaid.

	 	 	 
	 	(g) 	
      Tax Planning. Following the execution and delivery
      of this Agreement, each of the Parties will co-operate reasonably with the
      other Party in implementing any proposed adjustments to the structure or
      terms of this Agreement to facilitate tax planning, provided that such
      adjustments have no material adverse impact on the non-proposing Party and
      that the costs of such adjustments shall be paid for by the proposing
      Party.





	6. 	
      Reporting Obligations

	 	 	 	 
		(a) 	
      Reports. The Seller shall deliver or cause to be
      delivered to the Buyer:

	 	 	 	 
			(i) 	
      within 15 days after the end of each calendar month, a
      Monthly Operational Report in respect of the Midas Mine and the Fire Creek
      Project;

	 	 	 	 
			(ii) 	
      within 45 days after the end of each fiscal year, an
      Annual Operational Report, which shall be accompanied by an Annual
      Compliance Certificate dated the date on which such Annual Compliance
      Certificate is delivered to the Buyer; and

	 	 	 	 
			(iii) 	
      at least 45 days before the beginning of each fiscal
      year, an Annual Forecast Report.




	 	(b) 	
      Financial Statements. Except if the Seller is a
      reporting issuer and such materials are filed on SEDAR prior to the dates
      specified below, the Seller shall deliver to the Buyer:

	 	 	 	 
	 		(i) 	
      within 45 days after the end of each of the first three
      fiscal quarters of each fiscal year, a copy of the Seller’s interim
      consolidated financial statements; and

	 	 	 	 
	 		(ii) 	
      within 90 days after the end of each fiscal year, a copy
      of the Seller’s audited annual consolidated financial
statements.

	 	 	 	 
	 	(c) 	
      Shareholder Documents. Except if the Seller is a
      reporting issuer and such materials are filed on SEDAR promptly after they
      become available, the Seller shall promptly deliver to the Buyer a copy of each management
      information circular and other notices issued to its
  shareholders.







- 21 - 

	 	(d) 	
      Geological Reports. Except if the Seller is a
      reporting issuer and such materials are filed on SEDAR promptly after they
      become available, the Seller shall promptly deliver to the Buyer a copy
      any technical reports prepared in accordance with National Instrument 43-
      101 or initial or updated mineral reserve and mineral resource estimates
      produced that pertain to the Properties.

	 	 	 
	 	(e) 	
      Claims Fee Filings and Payment Receipts. By no
      later than August 1st of each year, the Seller shall deliver to the Buyer
      documentation of acknowledgement by the United States Bureau of Land
      Management that the annual maintenance fees for all unpatented mining
      claims within the Properties have been paid, and copies of the Affidavit
      and Notice of Intent to Hold Claims recorded in the State of Nevada with
      respect to the Properties.

	 	 	 
	 	(f) 	
      Development and Mine Plans. The Seller shall
      promptly deliver to the Buyer a copy of the current development plan or
      mine plan, as applicable, for each of the Midas Mine and the Fire Creek
      Project, and a new copy thereof promptly upon any material amendment
      thereto.

	 	 	 
	 	(g) 	
      Other Notices. The Seller shall deliver to the
      Buyer:





	 	(i) 	
      promptly after the Seller has knowledge or becomes aware
      thereof, notice of the occurrence of any Event of Default;

	 	 	 
	 	(ii) 	
      promptly after the Seller has knowledge or becomes aware
      thereof, written notice of all actions, suits and proceedings before any
      Governmental Body or arbitrator, pending or threatened, against or
      directly affecting any Seller Entity, the Midas Mine, the Fire Creek
      Project or any other mineral project of the Seller Entities, including any
      actions, suits, claims, notices of violation, hearings, investigations or
      proceedings against or affecting any Seller Entity, or with respect to the
      ownership, use, maintenance and operation of its properties, including
      those relating to Environmental Laws;

	 	 	 
	 	(iii) 	
      promptly after the Seller has knowledge or becomes aware
      thereof, written notice of any other condition or event which has
      resulted, or that could reasonably be expected to result, in a Material
      Adverse Effect; and

	 	 	 
	 	(iv) 	
      such other statements, lists of property and accounts,
      budgets, forecasts, projections, reports, or other information respecting
      the operations, properties, business or condition (financial or otherwise)
      of any Seller Entity (including with respect to the Collateral) as the
      Buyer may from time to time reasonably request.



Each notice pursuant to clauses (i)
through (iii) above shall be accompanied by a written statement by an authorized
senior officer of the Seller setting forth all material information relating to
the occurrence referred to therein, including any action which the Seller
Entities have taken or propose to take with respect thereto. 




- 22 - 

	7. 	
      Books and Records; Audits; Inspections

	 	 	 
		(a) 	
      Books and Records. The Seller shall, and shall
      cause each of the Seller Entities to, keep true, complete and accurate
      books and records of all material operations and activities with respect
      to the Properties and any other properties of the Seller Entities, and in
      which complete entries will be made, in accordance with GAAP applied on a
      consistent basis, reflecting all material financial transactions of each
      of the Seller Entities.

	 	 	 
		(b) 	
      Audits. Upon not less than three Business Days’
      notice, the Buyer and its authorized representatives shall be entitled, at
      its own cost and expense, to perform audits or other reviews and
      examinations of the books and records of the Seller Entities to confirm
      compliance by the Seller Entities with the terms of this Agreement and the
      other Transaction Documents. The Seller shall, and shall cause each of the
      Seller Entities to, provide the Buyer with complete access to all the
      Seller Entities’ books and records at the Seller Entities’ offices during
      usual business hours. If any such audits reveal a material breach of any
      provision of this Agreement or the other Transaction Documents, the Seller
      shall reimburse the Buyer for its costs and expenses incurred in such
      audit.

	 	 	 
		(c) 	
      Inspections. At reasonable times and with the
      prior consent of the Seller (not to be unreasonably withheld or delayed),
      the Buyer and its authorized representatives shall have a right of access
      to all surface and subsurface portions of the Properties and any other
      properties of the Seller Entities and to any related operations of the
      Seller Entities for the purpose of enabling the Buyer to monitor
      compliance by the Seller Entities with the terms of this Agreement and the
      other Transaction Documents.

	 	 	 
		(d) 	
      Investor Tours. Upon not less than 10 Business
      Days’ notice to the Seller and up to two times in any fiscal year, the
      Buyer shall have the right to conduct an investors tour on the Properties
      and any facilities associated therewith.

	 	 	 
		(e) 	
      Additional Requirements. Access to the Seller
      Entities’ properties and associated facilities pursuant to Sections 7(c)
      and 7(d) shall be subject to the following: (i) any such access shall be
      at the sole risk and expense of the Buyer, its representatives and its
      invitees; (ii) any such access shall not unreasonably interfere with the
      Seller Entities’ activities and operations; (iii) the Buyer shall comply,
      and request that its representatives and invitees comply, with the
      policies and procedures that the Seller Entities apply to their own
      invitees; (iv) the Buyer shall give the Seller prompt notice of any
      injuries, property damage or environmental harm that may occur during such
      tour; and (v) the Buyer shall indemnify the Seller Entities from any
      Losses (excluding loss of profit and consequential or punitive damages)
      suffered or incurred by any Seller Entity as a consequence of injury to
      the Buyer, or its representatives or invitees incurred during such access,
      provided that the foregoing shall not apply to any Losses to the extent
      they arise primarily from the gross negligence or willful misconduct of
      any Seller Entity.




	8. 	
      Maintenance of Existence and Property

	 	 	 
		(a) 	
      Maintenance of Existence. The Seller shall at all
      times do or cause to be done all things necessary to maintain each of the
      Seller Entities’ corporate or other entity existence and to obtain and,
      once obtained, maintain all Authorizations necessary to carry on its
      business and own its assets in each jurisdiction in which they carry on
      business or in which their assets are located.







- 23 - 

	 	(b) 	
      Maintenance of Properties. The Seller shall at all
      times do or cause to be done all things necessary to maintain the
      Properties and any other properties of the Seller Entities in good
      standing, including paying or causing to be paid all Taxes owing in
      respect thereof, performing or causing to be performed all required
      assessment work thereon, paying or causing to be paid all claim, permit
      and license maintenances fees in respect thereof, paying or causing to be
      paid all rents and other payments in respect of leased properties forming
      a part thereof and otherwise maintaining the Properties and any other
      properties of the Seller Entities in accordance with Applicable
    Laws.

	 	 	 
	 	(c) 	
      Encumbrances. The Seller shall not, and shall
      ensure that the other Seller Entities do not, cause or allow to be
      registered or otherwise permit to exist any Encumbrance other than
      Permitted Encumbrances against any of the Collateral.

	 	 	 
	 	(d) 	
      Abandonment. The Seller shall not, and shall
      ensure that the other Seller Entities do not, abandon any patented or
      unpatented claims comprising part of the Properties or any other interest
      in the Properties unless it first complies with this Section 8(d)
      (provided that in the case of leased properties, the Owner shall comply
      with this Section 8(d) to the extent permitted under the applicable lease
      or sublease). If any Seller Entity wishes to abandon any of the patented
      or unpatented claims comprising part of the Properties or any other
      interest in the Properties (“Abandonment Property”), the Seller
      shall first give notice of such intention to the Buyer at least 90 days in
      advance of the proposed date of abandonment. If, not less than 10 days
      before the proposed date of abandonment, the Seller receives from the
      Buyer written notice that the Buyer wishes to acquire the Abandonment
      Property, the Seller shall, or shall cause the relevant Seller Entity to,
      without additional consideration, convey the Abandonment Property in good
      standing by quit claim deed, without warranty, to the Buyer or an assignee
      thereof, and shall thereafter have no further obligation to maintain title
      to the Abandonment Property. If the Buyer does not give such notice to the
      Seller within the prescribed period of time, the relevant Seller Entity
      may abandon the Abandonment Property and shall thereafter have no further
      obligation to maintain title to the Abandonment Property.

	 	 	 
	 	(e) 	
      Right of Buyer to Cure Defects. The Buyer may
      undertake such investigation of the title and status of the Midas Mine,
      Fire Creek Property and any other properties of the Seller Entities as it
      shall deem necessary. If that investigation should reveal defects in the
      title, the Seller shall forthwith proceed to cure such title defects to
      the satisfaction of the Buyer. If the Seller fails to do so: (i) the Buyer
      may proceed to cure such title defects; (ii) any costs and expenses
      incurred (including attorney’s fees and costs) by the Buyer shall be
      promptly reimbursed by the Seller; and (iii) the Buyer may lien such
      properties for such amounts until the Seller reimburses the Buyer in
      full.




	9. 	
      Management of Mining Operations

	 	 	 
		(a) 	
      Performance of Mining Operations. The Seller shall
      ensure that all exploration, construction, development and mining
      operations and other activities in respect of the Properties will be
      performed in a commercially reasonable manner in compliance with
      Applicable Laws, Authorizations and Other Rights, and in accordance with
      good mining, processing, engineering and environmental practices
      prevailing in the industry. The Seller shall cause the other Seller
      Entities to use all commercially reasonable and lawful efforts to obtain
      and, once obtained, maintain all Authorizations necessary to commence and
      continue development and mining operations on the
  Properties.







- 24 - 

	 	(b) 	
      Maintenance of Mining Rights. The Seller shall
      cause the other Seller Entities to use all commercially reasonable and
      lawful efforts to maintain and apply for and obtain any and all available
      renewals and extensions of the Properties, Authorizations, Other Rights
      and any and all other necessary rights in respect of the Midas Mine, the
      Fire Creek Project, and, other than as would not constitute an Event of
      Default, not abandon any of the Midas Mine or the Fire Creek Project
      (including Utility Commitments) or allow or permit any of the Properties,
      Authorizations, Other Rights or such other necessary rights referred to
      above to terminate or lapse.

	 	 	 
	 	(c) 	
      Compliance with Applicable Laws. The Seller shall,
      and shall cause the other Seller Entities to, and shall cause all
      operations and activities conducted at, on or in respect of the Midas Mine
      and the Fire Creek Project to, comply in all material respects with all
      Applicable Laws, all Authorizations and the terms and conditions of Other
      Rights.

	 	 	 
	 	(d) 	
      Reclamation Obligations. The Seller shall, and
      shall cause each other Seller Entity to, timely and fully perform, pay and
      observe, or cause to be performed, observed and paid, in all material
      respects, any and all liabilities and obligations required by any
      Applicable Laws, Authorizations or the terms and conditions of Other
      Rights or by any Governmental Body for the reclamation, restoration or
      closure of any facility or land used in connection with the Seller
      Entities’ operations or activities at, on or in respect of the Midas Mine
      and the Fire Creek Project or required under this Agreement. The Seller
      shall not, and shall ensure that the other Seller Entities do not,
      undertake, cause, suffer, or permit any condition or activity at, on or in
      the vicinity of the Properties which constitutes or results in a material
      violation of Environmental Laws. If any Seller Entity (i) fails to comply
      with Environmental Laws in any material respect or (ii) undertakes any
      activity giving rise to liability under Environmental Laws (except as
      permitted or authorized by any Authorization or by Applicable Law), the
      Seller shall promptly remedy and correct such failure to comply, satisfy
      such liability and otherwise take all necessary or desirable action to
      cure (whether through remediation, payment of penalties or otherwise) such
      non-compliance or liability and satisfy all obligations in connection
      therewith.




	10. 	
      Royalty and Stream Interests

	 	 	 
		(a) 	
      General Prohibition. The Seller shall not, and
      shall not permit any other Seller Entity to, without the Buyer’s prior
      written consent, create, grant, convey or otherwise agree to any royalty
      or stream interest, or enter into any agreements that are similar to a
      royalty agreement or a stream agreement, in each case in respect of any
      mineral interests of the Seller Entities, whether owned now or hereafter
      acquired, except as expressly permitted by and subject to this Section
      10.

	 	 	 
		(b) 	
      Right of First Refusal. If any Seller Entity
      receives a bona fide written offer (a “Third Party Offer”) from any
      Person dealing at arm’s length with the Seller Entities to purchase a new
      or existing royalty or stream interest (the “Offered Interest”) in
      any mineral interests of the Seller Entities, whether owned now or
      hereafter acquired, for cash consideration, which such Seller Entity
      either wishes to accept or has accepted conditional on and subject to the
      Buyer’s right of first refusal pursuant to this Section 10, the Seller
      shall promptly give notice of the Third Party Offer (the “Notice of
      Offer”) to the Buyer and comply with this Section 10. The Notice of
      Offer must contain a copy of the Third Party Offer, disclose the identity
      and address of the Person making the Third Party Offer (the “Third
      Party Offeror”) and provide reasonably sufficient evidence
  to establish that the Third Party Offeror has the power and
      capacity, including the financial capacity, to complete the purchase of
      the Offered Interest. Upon the Notice of Offer being given, the Buyer will
      have the right to purchase all, but not less than all, of the Offered
      Interest at the same price and upon the same terms and conditions as are
  contained in the Third Party Offer.







- 25 - 

	 	(c) 	
      Determination of Price. If the Offered Interest is
      being offered for sale to the Third Party Offeror together with or in
      conjunction with other unrelated assets of the Seller Entities, the Buyer
      will be entitled to purchase only the Offered Interest and the Notice of
      Offer must specify the Seller’s good faith estimate of the cash being
      offered by the Third Party Offeror for the Offered Interest. If the Buyer
      does not agree with the Seller’s estimate, the value of the cash being
      offered for the Offered Interest shall be conclusively determined by a
      firm of qualified mineral valuators jointly appointed (and the cost of
      which shall be borne equally) by the Seller and the Buyer, each acting
      reasonably. Such determination shall be binding upon the Seller Entities
      and the Buyer. All time periods referred to in this Section 10 shall be
      extended by the time taken to obtain such determination.

	 	 	 
	 	(d) 	
      Exercise and Closing. If the Buyer desires to
      exercise its right to purchase all of the Offered Interest as contemplated
      by Section 10(b), it will give notice of exercise (the “ROFR Exercise
      Notice”) to the Seller within 30 Business Days of having been given
      the Notice of Offer. The giving of the ROFR Exercise Notice shall
      constitute a legally binding agreement between the Buyer and the relevant
      Seller Entity for the sale by such Seller Entity to the Buyer of the
      Offered Interest in accordance with the terms set out in the Third Party
      Offer, which sale transaction will be completed (subject to entry into a
      royalty or stream agreement reflecting the Offered Interest and such other
      customary industry terms in form and substance satisfactory to the Buyer)
      on the date therein provided (or on such other date as the Buyer and such
      Seller Entity may agree) by delivery of the Offered Interest (including
      such agreement referred to above) by such Seller Entity to the Buyer with
      title, free and clear of all Encumbrances arising on or after the date
      such Seller Entity received such Third Party Offer, against payment by the
      Buyer to such Seller Entity of the cash consideration by bank wire
      transfer to the account designated by such Seller Entity. If, at the time
      of completion, any portion of the Offered Interest is subject to any
      Encumbrance arising on or after the date such Seller Entity received such
      Third Party Offer, the Buyer will be entitled to deduct from the purchase
      money to be paid to such Seller Entity the amount required to discharge
      such Encumbrance and will apply such amount to discharge such Encumbrance,
      on behalf of such Seller Entity.

	 	 	 
	 	(e) 	
      No Exercise. If the Buyer does not give the ROFR
      Exercise Notice in accordance with the provisions of Section 10(d), the
      right of the Buyer to purchase the Offered Interest will terminate and the
      Seller Entities may sell all, but not less than all, of the Offered
      Interest to the Third Party Offeror in accordance with the terms of the
      Third Party Offer at any time within 50 Business Days after the expiry of
      the 30 Business Day period specified in Section 10(d). If the sale of the
      Offered Interest is not completed within such 50 Business Day period on
      such terms, the rights of the Parties pursuant to this Section 10 will
      again take effect with respect thereto.

	 	 	 
	 	(f) 	
      Exceptions. The restrictions set out in this
      Section 10 shall not apply to: (i) any royalties or levies imposed by any
      Governmental Body on mineral production; (ii) any royalty interests
      purchased by or granted to a Seller Entity (including the purchase or
      buy-back of any royalty interest previously granted by a Seller
      Entity); (iii) any royalty interests granted by a Seller Entity pursuant
      to a bona fide option or joint venture agreement in respect of the
      Properties or other mineral interests of such Seller Entity (provided the
      entering into of such agreement is not prohibited by the terms of the
      Transaction Documents and that any such royalty interests shall be junior
      in priority to any royalties owned by the Buyer or any of its Affiliates
      on the Properties); or (iv) any royalty or stream interest granted by a
      Seller Entity after a Change of Control of the Seller in respect of
      mineral interests of the Seller Entities acquired after such Change of
      Control (for greater certainty, the restrictions set out in this Section
      10 shall continue to apply to mineral interests of the Seller Entities
      owned as at the time of such Change of Control).








- 26 - 

	 	(g) 	
      Survival. For greater certainty, this Section 10
      shall, pursuant to Section 19(c), survive termination of this
      Agreement.





	11. 	
      Financing Matters

	 	 	 
		(a) 	
      Compliance with Facility Agreement. So long as the
      Loan or any Permitted Refinancing Indebtedness is outstanding, the Seller
      shall, and shall cause each of the other Seller Entities to, comply with
      all of the covenants in the Facility Agreement (or any agreement governing
      any Permitted Refinancing Indebtedness) as in effect from time to time (as
      such covenants may be amended, supplemented or added to from time to
      time), without any waiver thereof and without regard to any amendment
      thereof which has the effect of making such provisions less restrictive on
      the Seller Entities, except as consented to from time to time by the
      Buyer.

	 	 	 
		(b) 	
      Refinancing of Loan. The Seller will not, and will
      cause the other Seller Entities not to, refinance, replace, repurchase or
      enter into any other transaction the effect of which would be to repay the
      Loan and replace it with other Indebtedness, except Permitted Refinancing
      Indebtedness. For greater certainty, this provision will not apply to
      restrict repayments of the Loan in accordance with its terms if such
      repayment or prepayment is not effected with the proceeds of additional
      Indebtedness of any Seller Entity.

	 	 	 
		(c) 	
      Limitation on Indebtedness. The Seller shall
      ensure that none of the Seller Entities shall incur any Indebtedness
      (other than Permitted Refinancing Indebtedness) except: (i) Indebtedness
      solely for ordinary course working capital purposes in an aggregate
      maximum amount at any time outstanding not to exceed [redacted for
      proprietary reasons] (“Permitted Working Capital Debt”);
      (ii) [redacted for proprietary reasons] and (iii) bonds,
      letters of credit, guarantees and other instruments or arrangements
      securing or guaranteeing performance of the Seller Entities’ obligations
      in respect of the reclamation, restoration or closure of any facility or
      land used in connection with the Seller Entities’ operations or activities
      to the extent required by Applicable Law. The Permitted Working Capital
      Debt may be secured against the Collateral provided that the security
      thereunder is expressly subordinated to the security provided under the
      Security Agreements pursuant to an intercreditor agreement between the
      Persons extending such Indebtedness and the Buyer providing for such
      subordination and other customary provisions, all in form and substance
      satisfactory to the Buyer (any such security, and the “Permitted
      Working Capital Security”).

	 	 	 
		(d) 	
      Amendments to Facility Documents. The Seller
      agrees that (i) no Facility Documents (as defined in the Intercreditor
      Agreement) to which any Seller Entity is a party will be amended,
      modified, replaced or supplemented in such manner as to make the terms
      of such Facility Documents less
favourable to any Seller Entity in any material respect (including, for greater
certainty, by increasing the interest rate or fees payable thereunder,
shortening the term to maturity thereof, imposing increased amortization
requirements or imposing additional (or more restrictive) covenants thereunder)
unless such amendment, modification, replacement or supplement is consented to
by the Buyer in writing, and (ii) none of the Seller Entities shall take any
action under or in connection with any of the Facility Documents that would
require or result in payment by any of them of any amount in advance of any
scheduled or mandatory payment, redemption or prepayment date, including
purchasing the Term Notes by tender or private contract (except for refinancing
the Facility Obligations (as defined in the Intercreditor Agreement) with
Permitted Refinancing Indebtedness), unless such action is consented to by the
Buyer in writing. 







- 27 - 

	12. 	
      Insurance Matters

	 	 	 
		(a) 	
      Maintenance of Insurance. The Seller shall, and
      shall cause the other Seller Entities to, maintain with reputable
      insurance companies insurance with respect to the Midas Mine, Fire Creek
      Project and any other mineral projects of the Seller Entities and the
      operations conducted at, on and in respect thereof against such casualties
      and contingencies and of such types and in such amounts as is customary in
      the case of similar operations in the United States of America. Without
      limiting the foregoing, such insurance shall include workers compensation
      insurance in amounts required by Applicable Laws, and commercial general
      liability insurance in such amounts as will, in the Buyer’s reasonable
      judgment, adequately protect the Seller Entities, the Buyer, and the
      Properties and any other mineral projects of the Seller Entities from any
      Losses which may reasonably be expected to arise with respect to this
      Agreement or the Properties or any other mineral projects of the Seller
      Entities and that can be covered by commercial general liability
      insurance.

	 	 	 
		(b) 	
      Shipment of Minerals. The Seller shall, and shall
      cause the other Seller Entities to, ensure that each shipment of Minerals
      is adequately insured in such amounts and with such coverage as is
      customary in the mining industry, until the time that risk of loss and
      damage for such Minerals is transferred to the purchaser.

	 	 	 
		(c) 	
      Additional Insured. The Seller shall cause the
      Buyer to be named a loss payee (as its interests may appear) under all
      property insurance policies of the Seller Entities and as additional
      insured under all liability insurance policies of the Seller
    Entities.

	 	 	 
		(d) 	
      Notice of Loss or Damage. The Seller shall
      promptly provide the Buyer with written notice of any material loss or
      damage suffered to any assets or property of the Seller Entities and
      whether it plans to make any insurance claim.




	13. 	
      Security Matters

	 	 	 
		(a) 	
      Grant of Security Interest. The Seller shall, and
      shall cause each of the other Seller Entities to, grant to the Buyer a
      continuing security interest and a first priority lien on the Collateral,
      including all proceeds and products thereof, subject only to the Permitted
      Encumbrances, as security for the due and punctual performance by the
      Seller of the Delivery Obligations or, in the case of any other Seller
      Entity, its guarantee of the Delivery Obligations of the Seller. The
      Buyer’s security interest and lien on the Collateral shall be further
      evidenced by the Security Agreements and such other security
    documents as the Buyer may at any time reasonably request. The
      Security shall be effective from the Effective Date and continue until the
      Delivery Obligations have been satisfied in full, provided that,
      notwithstanding any other provisions of this Agreement, the Security
      provided by the Midas Entities shall only become effective upon completion
      of the Acquisition and for certainty will continue until the Delivery
      Obligations have been satisfied in full. Upon creating or acquiring any
      other new Subsidiary, the Seller shall cause such Subsidiary to provide
      Security in favour of the Buyer, in substantially the same form as the
  Security Agreements.







- 28 - 

	 	(b) 	
      Renewal. The Seller shall cause the personal
      property registrations relating to the Security to be properly renewed
      under Applicable Law no later than three months before the expiry date
      thereof (if any) to ensure that, except as may be otherwise provided
      herein, at all times until the Final Delivery Date, the Security remains
      in full force and effect and duly registered and perfected under
      Applicable Law. The Seller shall provide evidence satisfactory to the
      Buyer of each such re-registration and renewal on or before the date that
      is three months before the expiry date of the Security, failing which the
      Buyer shall have the right (but not the obligation) to proceed with such
      renewal, and the Seller shall be responsible for all costs and fees
      related thereto and shall reimburse the Buyer for such amounts on
      demand.

	 	 	 
	 	(c) 	
      Further Assurances. Without limiting the
      foregoing, the Seller shall, and shall cause each of the other Seller
      Entities to, from time to time, at the cost and expense of the Seller
      Entities, promptly execute and deliver all further instruments and
      documents and take all further action that may be necessary or desirable
      or that the Buyer may reasonably request in order to perfect and protect
      any pledge, assignment, or security interest granted or purported to be
      granted by any Transaction Document or to enable the Buyer to exercise and
      enforce its rights and remedies under any Transaction Documents with
      respect to any Collateral. The Seller Entities each irrevocably make,
      constitute, and appoint the Buyer (and any of the Buyer’s officers,
      employees, or Agents' designated by the Buyer) as its true and lawful
      attorney with power, upon the failure or refusal of any Seller Entity to
      comply with its undertakings contained in this paragraph, to sign the name
      of such Seller Entity on any of the above described documents or on any
      other similar documents that need to be executed, recorded, and/or filed
      in order to perfect or continue the Buyer’s perfected security interest in
      the Collateral.





	14. 	
      Events of Default

	 	 	 
		
      Each of the events or circumstances set out in this
      Section 14 shall constitute an event of default (“Event of
      Default”):

	 	 	 
		(a) 	
      Delivery Obligations. The Seller fails to deliver
      all or any portion of the Purchased Gold Ounces to the Buyer in accordance
      with the Delivery Obligations or to make any payment to the Buyer in
      accordance with the provisions of this Agreement.

	 	 	 
		(b) 	
      Representations and Warranties; Reports; Certificates.
      Any representation or warranty made, or any report or certificate
      furnished to the Buyer, by any Seller Entity under or in connection with
      the Transaction Documents proves to have been incorrect or misleading in
      any material respect (or in any respect where such representation or
      warranty is subject to a materiality qualification) when made, deemed made
      or furnished (as applicable), and the facts or circumstances which made
      such representation or warranty incorrect or misleading shall remain
      unrectified for a period of 30 days from the earlier of: (a) the Buyer giving notice to the Seller,
      and (b) the Seller becoming aware that such representation or warranty is
      incorrect or misleading, unless such facts or circumstances are not
      capable of rectification in which event the default shall occur
  immediately.







- 29 - 

	 	(c) 	
      Failure to Perform Certain Covenants. Failure by
      any Seller Entity to perform, comply with or observe any term, covenant or
      agreement contained in Sections 8(a), 8(b), 8(c) and 8(d) (Maintenance of
      Existence and Property) (provided that, in the case of Sections 8(b) and
      8(d) only, this Section 14(c) shall not apply to any such failure with
      respect to the Other Properties, and in which case Section 14(d) shall
      apply), 10 (Royalty and Stream Interests), 11 (Financing Matters), 13
      (Security Matters) or 20 (Restricted Transfer Rights of the Seller
      Entities).

	 	 	 	 	 
	 	(d) 	
      Failure to Perform Other Covenants. Any Seller
      Entity fails to perform, comply with or observe any term, covenant or
      agreement contained in any Transaction Document (other than those referred
      to above in Sections 14(a) to (c) above) and any such failure shall remain
      unremedied or unresolved for a period of 30 days from the earlier of: (a)
      the Buyer giving notice to the Seller, and (b) the Seller becoming aware
      of the failure to comply, unless such failure is not capable of remedy in
      which event the default shall occur immediately.

	 	 	 	 	 
	 	(e) 	
      Insolvency. (i) Any Seller Entity becomes
      Insolvent, or suffers or consents to or applies for the appointment of a
      receiver, trustee, custodian or liquidator of itself or any of its
      property, or is generally unable to or fails to pay its debts as they
      become due, or makes a general assignment for the benefit of creditors;
      (ii) any Seller Entity files a voluntary petition in bankruptcy, or seeks
      to effect a plan or other arrangement with creditors or any other relief
      under any Bankruptcy Code, or under any Applicable Law granting relief to
      debtors, whether now or hereafter in effect; (iii) any involuntary
      petition or proceeding pursuant to any Bankruptcy Code or any other
      Applicable Law relating to bankruptcy, reorganization or other relief for
      debtors is filed or commenced against any Seller Entity and is not
      dismissed, stayed or vacated within 30 days thereafter; (iv) any Seller
      Entity files an answer admitting the jurisdiction of the court and the
      material allegations of any involuntary petition; (v) any Seller Entity is
      adjudicated bankrupt, or an order for relief is entered by any court of
      competent jurisdiction under any Bankruptcy Code or any other Applicable
      Law relating to bankruptcy, reorganization or other relief for debtors;
      (vi) any Seller Entity voluntarily ceases to conduct its business in the
      ordinary course or materially changes the nature of the business it
      carries on; or (vii) any Seller Entity takes any action authorizing or in
      furtherance of any of the foregoing.

	 	 	 	 	 
	 	(f) 	
      Liquidation. Any Seller Entity liquidates, winds
      up or dissolves (or suffers any liquidation, wind-up or dissolution),
      suspends its operations other than in the ordinary course of business, or
      takes any action authorizing or in furtherance of any of the
    foregoing.

	 	 	 	 	 
	 	(g) 	
      Cross Default. Any Seller Entity:

	 	 	 	 	 
	 		(i) 	
      fails:

	 	 	 	 	 
	 			(A) 	
      to make any payment of any principal, interest or premium
      in connection with the Loan or any other Indebtedness having an aggregate
      principal amount of more than the Threshold Amount (or its equivalent in
      another currency) when due (whether by scheduled maturity,
      required prepayment, acceleration, demand or otherwise) and such failure
      shall continue after the applicable notice or grace period, if any,
      specified in the agreement or instrument relating to such Indebtedness as
      of the date of such failure; or








- 30 - 

	 	(B) 	
      to perform or observe any term, covenant or condition on
      its part to be performed or observed under any agreement or instrument
      relating to the Loan or any other Indebtedness having an aggregate
      principal amount of more than the Threshold Amount (or its equivalent in
      another currency), when required to be performed or observed, or any other
      event shall occur or condition shall exist under any such agreement or
      instrument, and such failure, event or condition shall continue after the
      later of 10 days from written notice of such failure, event or condition
      by the applicable counterparty or the Buyer or the applicable, notice or
      grace period, if any, specified in such agreement or instrument, if the
      effect of such failure, event or condition is to accelerate, or to permit
      the acceleration of, the maturity of such Indebtedness;
  or





	 	(ii) 	
      is subject to a declaration that any Indebtedness
      referred to in Section 14(g)(i) is due and payable, or required to be
      prepaid (other than by a regularly scheduled required repayment), prior to
      the stated maturity thereof;

	 	 	 
	 	(iii) 	
      is subject to any facility or commitment available to it
      under the Facility Agreement or any other Indebtedness in an aggregate
      amount at any one time of not less than the Threshold Amount (or its
      equivalent in any other currency) being withdrawn, suspended or cancelled
      by reason of any default (however described) of any Seller Entity;
    or

	 	 	 
	 	(iv) 	
      fails to perform or observe any term, covenant or
      condition on its part to be performed or observed under any agreement or
      instrument relating to Indebtedness referred to in Section 14(g)(i) which
      would result in a Material Adverse Effect.




	 	(h) 	
      Creditors’ Process. Either:

	 	 	 	 
	 		(i) 	
      a final Order for the payment of money in excess of the
      Threshold Amount (or its equivalent in another currency) which is not
      fully covered by third-party insurance is rendered against any Seller
      Entity; or

	 	 	 	 
	 		(ii) 	
      any non-monetary judgment or Order is rendered against
      any Seller Entity which would constitute a Material Adverse
  Effect,



and in each case there shall be any
period of 30 days during which such judgment or Order continues unsatisfied or
during which a stay of enforcement of such judgment or Order, by reason of a
pending appeal or otherwise, shall not be in effect. 




- 31 - 

	 	(i) 	
      Security Agreements.

	 	 	 	 	 
	 		(i) 	
      Any Seller Entity:

	 	 	 	 	 
	 			(A) 	
      contests in any manner the validity or enforceability of
      any of the Security Agreements; or

	 	 	 	 	 
	 			(B) 	
      denies that it has any further liability or obligation
      under any of the Security Agreements.




	 	(ii) 	
      Any of the Security Agreements:

	 	 	 	 
	 		(A) 	
      for any reason, except to the extent permitted by the
      terms thereof, ceases to create a valid Encumbrance or the Encumbrance
      created thereby fails to rank in priority in the manner contemplated in
      the Security Agreements and the Intercreditor Agreement (other than by a
      direct act or omission of the Buyer), subject only to Permitted
      Encumbrances, in any of the Collateral purported to be covered thereby;
      or

	 	 	 	 
	 		(B) 	
      after delivery for any reason is revoked or invalidated,
      or otherwise ceases to be in full force and effect in any material
      respect.




	 	(j) 	
      Unlawfulness. It is or becomes unlawful for any
      Seller Entity to perform any of its obligations under the Transaction
      Documents to which it is a party or any of the Security created or
      expressed to be created by the Transaction Documents ceases to be
      effective at any time at which such Security is intended to be
      effective.

	 	 	 
	 	(k) 	
      Repudiation. Any Seller Entity repudiates or
      rescinds any Transaction Document or purports to or evidences an intention
      to repudiate or rescind any Transaction Document.

	 	 	 
	 	(l) 	
      Authorizations. If any Authorization or Other
      Right is suspended, cancelled, revoked, forfeited, surrendered, refused
      renewal or terminated (whether in whole or in part) or otherwise is not,
      or ceases to be, in full force and effect, and the absence thereof would
      have a Material Adverse Effect.

	 	 	 
	 	(m) 	
      Major Damage. Any Seller Entity suffers material
      loss of or damage to its business, assets or operations (including any
      related infrastructure) which would have a Material Adverse
  Effect.

	 	 	 
	 	(n) 	
      Abandonment. Any material portion of the Midas
      Mine, the Fire Creek Project or the Collateral is lost, forfeited or
      abandoned and which would have a Material Adverse Effect.

	 	 	 
	 	(o) 	
      Expropriation. Any Governmental Body condemns,
      expropriates, seizes or appropriates any property which relates to or
      forms part of the Midas Mine, the Fire Creek Project or the Collateral and
      which would result in a Material Adverse Effect.

	 	 	 
	 	(p) 	
      Proceedings. There is any action, suit or
      proceeding against or affecting any Seller Entity before any court or by
      or before any Governmental Body which, if successful, could reasonably be
      expected to have a Material Adverse Effect, unless the action, suit, or
      proceeding is contested diligently and in good faith and, in circumstances
      where a lower court or tribunal has rendered a decision adverse to it,
      any Seller Entity, as applicable, is appealing such decision, and has
  provided a reserve in respect thereof satisfactory to the Buyer.







- 32 - 

	 	(q) 	
      Change of Control. There shall occur a Change of
      Control of any of the Seller Entities, unless such Change of Control
      occurs pursuant to a Transfer consented to by the Buyer in accordance with
      Section 20, or the Seller shall become obligated to offer to purchase all
      of the Term Notes then outstanding as a result of a Change of Control (as
      defined in the Facility Agreement).

	 	 	 
	 	(r) 	
      Material Adverse Effect. Any event or circumstance
      occurs that has a Material Adverse Effect.





	15. 	
      Effect of Event of Default

	 	 	 
		
      Upon each occurrence of an Event of Default, and for so
      long as such Event of Default is continuing:

	 	 	 
		(a) 	
      upon written notice to the Seller, and in addition to and
      not in substitution for any other remedies available to it hereunder or at
      law or in equity, the Buyer shall have the right to terminate the Seller’s
      obligation to deliver any further Purchased Gold Ounces (which shall not
      be less than all of the Purchased Gold Ounces not then delivered) if it so
      elects, and upon such election, the Default Amount shall become
      immediately due and payable by the Seller (it being acknowledged by the
      Seller that the Default Amount is intended to be a genuine pre-estimate of
      liquidated damages that would be suffered by the Buyer upon the occurrence
      of an Event of Default);

	 	 	 
		(b) 	
      the Buyer shall be entitled to enforce its security under
      the Transaction Documents; and

	 	 	 
		(c) 	
      the Buyer shall be entitled to such other rights and
      remedies as are available to it at law.




	16. 	
      Representations and Warranties of the
  Buyer

	 	 
		
      The Buyer, acknowledging that the Seller is entering into
      this Agreement in reliance thereon, hereby makes the representations and
      warranties to the Seller as set out in Schedule F.

	 	 
	17. 	
      Representations and Warranties of the
  Seller

	 	 
		
      The Seller, acknowledging that the Buyer is entering into
      this Agreement in reliance thereon, hereby makes the representations and
      warranties to the Buyer: (i) as set out in Schedule G; and (ii) as set out
      in Article IV of the Acquisition Agreement, in each case to the extent
      relating to the Midas Entities or their properties and assets, as if such
      representations and warranties were set forth in this Agreement. The
      representations and warranties in Schedule G shall be deemed to be
      repeated by the Seller: (a) as of the Effective Date; and (b) as of the
      date of each Annual Compliance Certificate, except to the extent that on
      or prior to such date the Seller shall have advised the Buyer in writing
      of a variation in any such representation or warranty and the Buyer has
      approved such variation.







- 33 - 

	18. 	
      Indemnities

	 	 	 
		
      The Seller agrees to indemnify and save the Buyer, and
      its Affiliates and the directors, officers, employees and Agents' of the
      foregoing harmless from and against any and all Losses suffered or
      incurred by any of them as a result of, in respect of, or arising as a
      consequence of the Buyer entering into the Transaction Documents and the
      matters contemplated therein, including:

	 	 	 
		(a) 	
      any breach or inaccuracy of any representation or
      warranty of the Seller Entities contained in this Agreement or the other
      Transaction Documents, including the representations and warranties set
      forth in Schedules G hereto, or in any document, instrument or agreement
      delivered pursuant hereto or thereto;

	 	 	 
		(b) 	
      any breach, including breach due to non-performance, by
      the Seller Entities of any covenant or agreement to be performed by any of
      the Seller Entities contained in this Agreement or the other Transaction
      Documents or in any document, instrument or agreement delivered pursuant
      hereto or thereto;

	 	 	 
		(c) 	
      the development or operation of the Midas Mine, the Fire
      Creek Project or any other mineral project of the Seller
  Entities;

	 	 	 
		(d) 	
      the failure of any of the Seller Entities to comply with
      any Applicable Law, including any Applicable Law relating to environmental
      matters and reclamation obligations, with respect to the Midas Mine, the
      Fire Creek Project or any other mineral project of the Seller
    Entities;

	 	 	 
		(e) 	
      the physical environmental condition of the Midas Mine,
      the Fire Creek Project or any other mineral project of the Seller Entities
      and matters of health and safety related thereto or any action or claim
      brought with respect thereto (including conditions arising before the date
      of this Agreement); and

	 	 	 
		(f) 	
      any actual or threatened withdrawal by any Governmental
      Body of any Authorization under Environmental Laws which is necessary for
      the construction or operation of the Midas Mine, the Fire Creek Project or
      any other mineral project of the Seller Entities, or any actual or
      threatened challenge by any Person to any Authorization under
      Environmental Laws which is necessary for the development or operation of
      the Midas Mine, the Fire Creek Project or any other mineral project of the
      Seller Entities,




		
      provided that the foregoing shall not apply to any Losses
      to the extent they arise primarily from the gross negligence or willful
      misconduct of such indemnified persons. For greater certainty, this
      Section 18 shall, pursuant to Section 19(c), survive termination of this
      Agreement.

	 	 	 
	19. 	
      Term

	 	 	 
		(a) 	
      Term. The term of this Agreement shall commence on
      the date of this Agreement and, unless terminated earlier pursuant to
      Section 19(b), shall terminate on the Final Delivery Date.

	 	 	 
		(b) 	
      Termination. The Buyer shall have the right to
      terminate this Agreement upon written notice of termination to the other
      parties at or after 12:01 a.m. (Toronto time) on February 12, 2014, if the
      Acquisition has not yet been completed, whereupon the Seller shall
      immediately return the Purchase Price in full to the Buyer, without
      interest or setoff or counterclaim, and thereafter no Party shall have any
      further obligation to the other Parties under this Agreement (other than
  in connection with any antecedent breach).







- 34 - 

	 	(c) 	
      Survival. Notwithstanding the termination of this
      Agreement pursuant to Section 19(a) or (b), Sections 1 (to the extent
      applicable to other surviving provisions), 2, 5, 7 (in respect of periods
      ending on or prior to the Final Delivery Date), 10, 18, 22, 23 and 24
      shall survive indefinitely.





	20. 	
      Restricted Transfer Rights of the Seller
      Entities

	 	 	 	 
		(a) 	
      Prohibited Transfers. The following Transfers are
      prohibited, in each case unless the Buyer gives its prior written consent
      to such Transfer (which consent may be withheld for any reason):

	 	 	 	 
			(i) 	
      the Seller may not Transfer, in whole or in part, its
      rights and obligations under this Agreement, the Collateral or its shares
      of Klondex BC Holdco;

	 	 	 	 
			(ii) 	
      Klondex BC Holdco may not Transfer, in whole or in part,
      its rights and obligations under this Agreement, the Collateral or its
      shares of Klondex Holdings;

	 	 	 	 
			(iii) 	
      Klondex Holdings may not Transfer, in whole or in part,
      its rights and obligations under this Agreement, the Collateral, its
      shares of the Fire Creek Owner or, after completion of the Acquisition,
      its shares of Midas Holdings;

	 	 	 	 
			(iv) 	
      Midas Holdings may not Transfer, in whole or in part, its
      rights and obligations under this Agreement, the Collateral or its shares
      of the Midas Owner;

	 	 	 	 
			(v) 	
      the Midas Owner may not Transfer, in whole or in part,
      its rights and obligations under this Agreement or the Collateral;
    and

	 	 	 	 
			(vi) 	
      the Fire Creek Owner may not Transfer, in whole or in
      part, its rights and obligations under this Agreement or the
      Collateral.




	 	(b) 	
      Transfers of Interests in Seller. Notwithstanding
      any other provision of this Agreement, neither (i) an amalgamation, merger
      or consolidation of the Seller with or into another body corporate,
      including by way of a plan of arrangement, nor (ii) a transfer of shares
      of the Seller, including a transfer of all of the shares pursuant to a
      takeover bid and subsequent acquisition transaction (including a
      compulsory acquisition) or a plan of arrangement, is a Transfer to which
      this Section 20 applies; provided, however, that in the case of clause (i)
      any successor entity to the Seller shall have acknowledged in writing to
      the Buyer that it is bound by this Agreement.

	 	 	 
	 	(c) 	
      Effect of Prohibited Transfer. Any Transfer made
      in violation of this Section 20 shall be null and void and of no force or
      effect whatsoever.




	21. 	
      Transfer Rights of the Buyer

	 	 	 
		(a) 	
      Transfers. The Buyer shall have the right to
      Transfer or encumber, in whole or in part, its rights and obligations
      under this Agreement to any Person, without the consent of any Seller
      Entity, upon the delivery of notice of such Transfer to the Seller. In
      such a case, provided that such Person has agreed to be bound by such
      Transferred obligations under this Agreement, the Buyer, shall be released
  from such Transferred obligations under this Agreement.







- 35 - 

	 	(b) 	
      Encumbrances. Notwithstanding anything in this
      Agreement, the Buyer shall have the right to Transfer by way of
      Encumbrance, in whole or in part, its rights and obligations under this
      Agreement to one or more lenders providing financing to the Buyer or any
      of its Affiliates without notice to, or the consent of, any Seller Entity.
      If such transferee enforces such Encumbrance, it will provide notice to
      the Seller and upon delivery of such notice, which notice shall confirm
      that such transferee agrees to be bound by such Transferred obligations
      under this Agreement, such transferee shall become a party to this
      Agreement with all of the rights and obligations of the
  Buyer.





	22. 	
      Governing Law

	 	 
		
      This Agreement shall be governed by and construed in
      accordance with the laws of the Province of Ontario and the federal laws
      of Canada applicable therein. Each of the Parties irrevocably submits to
      the non-exclusive jurisdiction of the courts of the Province of
      Ontario.

	 	 
	23. 	
      Notices

	 	 
		
      Any notice or other communication required or permitted
      to be given hereunder shall be in writing and shall be sent or delivered
      to the respective Parties at their respective addresses, facsimile numbers
      or e-mail addresses set forth below (or at or to such other address,
      facsimile, number or e-mail address as shall be designated by any Party in
      a written notice to the other Parties):



If to the Seller: 

Klondex Mines Ltd. 
Suite 600-595
Howe Street 
Vancouver BC V6C 2T5 


Attention:        Paul Huet

Fax Number:     604.662.3904

Email:               
phuet@klondexmines.com


with a copy (which shall not
constitute notice) to: 

Bennett Jones LLP 
3400 One First
Canadian Place 
PO Box 130 
Toronto ON M5X 1A4 


Attention:        Abbas Ali
Khan 
Facsimile:         416.863.1716

Email:               
alikhana@bennettjones.com





- 36 - 

If to the Buyer:

Franco-Nevada GLW Holdings Corp.

c/o Franco-Nevada Corporation 
199 Bay Street, Suite 2000 
P.O. Box
285 
Commerce Court Postal Station
Toronto, Ontario 
Canada M5L 1G9



Attention:        Chief Legal
Officer 
Fax Number:    (416) 306-6330

Email:               
hong@franco-nevada.com


Any notice and communications shall be
effective: 

	 	(a) 	
      if delivered by hand, sent by certified or registered
      mail or sent by an overnight courier service, when received; and, provided
      that if such date is a day other than a Business Day, where the recipient
      Party is located, then such notice shall be deemed to have been given and
      received on the first Business Day, where the recipient Party is located,
      following the date of such delivery; and

	 	 	 
	 	(b) 	
      if sent by facsimile or e-mail transmission and
      successfully transmitted before 5:00 p.m. on a Business Day, where the
      recipient Party is located, then on that Business Day, and if transmitted
      after 5:00 p.m. on that day or on a day that is not a Business Day, then
      on the first Business Day, where the recipient Party is located, following
      the date of transmission.




	24. 	
      General Provisions

	 	 	 
		(a) 	
      Further Assurances. Each Party shall execute all
      such further instruments and documents and shall take all such further
      actions as may be necessary to effect the transactions contemplated
      herein, in each case at the cost and expense of the Party requesting such
      further instrument, document or action, unless expressly indicated
      otherwise.

	 	 	 
		(b) 	
      Obligations of Seller Entities. The Seller agrees
      to take all action necessary to cause each and every other Seller Entity
      to observe, comply with and perform its covenants and obligations in this
      Agreement. To the extent that any covenants or obligations in this
      Agreement are stated to be covenants or obligations of the Seller Entities
      or any of them, and a Seller Entity is not a party to this Agreement
      (including any Person that becomes a Seller Entity after the date of this
      Agreement), the Seller shall take all action necessary to cause such
      non-party Seller Entity to observe, comply with and perform such covenants
      or obligations, including causing such non-party Seller Entity to agree in
      writing in favour of the Buyer to be bound by this Agreement.

	 	 	 
		(c) 	
      Confidentiality. The Buyer shall not, without the
      express written consent of the Seller, which consent shall not be
      unreasonably withheld, disclose any data or information concerning the
      operations of the Seller Entities obtained in connection with the
      Transaction Documents which is not already in the public domain (the
      “Confidential Information”); provided, however, the Buyer may
      disclose Confidential Information without the consent of the Seller: (i) if required by
      Applicable Law or requested by a Government Body having jurisdiction over
      the Buyer or its Affiliates; (ii) to the Buyer’s Affiliates and to any
      representatives, consultants or advisers of the Buyer or its Affiliates
      for the purpose of providing services to the Buyer or its Affiliates; and
      (iii) to any Person to whom the Buyer, in good faith, anticipates
      Transferring an interest in this Agreement as contemplated by Section
      21(a) or 21(b) and such Person’s Affiliates and the representatives,
      consultants and advisers of such Person or its Affiliates. In the case of
      disclosure pursuant to clause (ii) or (iii), the Buyer shall be
      responsible to ensure that the recipient of the Confidential Information
      does not disclose the Confidential Information to the same extent as if it
      were bound by the same non-disclosure obligations of the Buyer hereunder.
      Notwithstanding the foregoing, the Buyer shall not be restricted from
      disclosing the terms of this Agreement and deliveries of Refined Gold
      hereunder. For greater certainty, the Buyer shall be entitled to disclose
      publicly data or information concerning the operations of the Seller
      Entities, without the consent of the Seller, once such information has
been publicly disclosed by any of the Seller Entities.







- 37 - 

	 	(d) 	
      No Partnership. Nothing herein shall be construed
      to create, expressly or by implication, a joint venture, agency
      relationship, fiduciary relationship, mining partnership, commercial
      partnership or other partnership relationship between the
  Parties.

	 	 	 
	 	(e) 	
      Severability. If any provision of this Agreement
      is wholly or partially invalid, this Agreement shall be interpreted as if
      the invalid provision had not been a part hereof so that the invalidity
      shall not affect the validity of the remainder of this Agreement which
      shall be construed as if this Agreement had been executed without the
      invalid portion.

	 	 	 
	 	(f) 	
      Rate of Interest. The Parties do not intend that
      the purchase of the Purchased Gold Ounces be in the nature of a loan, but,
      if it were so characterized by an arbitrator, court or tribunal of
      competent jurisdiction, the Parties agree that the return to the Buyer,
      whether for interest, fees or otherwise, not exceed the maximum amount
      permitted by Applicable Law. Accordingly, if such arbitrator, court or
      tribunal should rule that: (i) the purchase of the Purchase Gold Ounces is
      of the nature of or is deemed to be a loan; and (ii) a portion of the
      total return to the Buyer is of the nature of or is deemed to be interest,
      and the portion of the total return, for deemed interest, fees or
      otherwise would, but for this provision, exceed the amount of return
      permitted under Applicable Law, then the delivery schedule for the
      aggregate quantity of Refined Gold remaining deliverable shall
      automatically be extended such that the amount of return does not exceed
      the maximum amount permitted under Applicable Law, and this Agreement
      shall not be terminated solely as a result of such violation.

	 	 	 
	 	(g) 	
      Entire Agreement. This Agreement and the other
      Transaction Documents constitute the entire agreement among the Parties
      pertaining to the subject matter hereof and thereof and supersede all
      prior agreements, negotiations, discussions and understandings, written or
      oral, among the Parties. The Seller and the Buyer agree that the
      confirmation letter dated December 5, 2013 between the Seller and the
      Buyer is hereby terminated with effect from the date of this
    Agreement.

	 	 	 
	 	(h) 	
      Amendments. This Agreement may not be changed,
      amended or modified in any manner, except pursuant to an instrument in
      writing signed on behalf of each of the
Parties.








- 38 - 

	 	(i) 	
      Waiver. The failure by any Party to enforce at any
      time any of the provisions of this Agreement shall in no way be construed
      to be a waiver of any such provision unless such waiver is acknowledged in
      writing, nor shall such failure affect the validity of this Agreement or
      any part thereof or the right of a Party to enforce each and every
      provision. No waiver of a breach of this Agreement shall be held to be a
      waiver of any other or subsequent breach.

	 	 	 
	 	(j) 	
      Specific Performance. Each of the Parties
      acknowledges that any breach of this Agreement may cause the other Parties
      irreparable harm for which damages are not an adequate remedy. The Parties
      agree that, in the event of any such breach, in addition to other remedies
      at law or in equity that a Party may have, a Party shall be entitled to
      seek specific performance.

	 	 	 
	 	(k) 	
      No Beneficiaries. This Agreement is intended for
      the benefit of the Parties and their respective successors and permitted
      assigns and, except for the indemnified Persons referred to in Section 18,
      is not for the benefit of, nor may any provision in this Agreement be
      enforced by, any other Person. With respect to any indemnified Person who
      is not a party to this Agreement, the Buyer shall obtain and hold the
      rights and benefits of Section 18 in trust for and on behalf of such
      indemnified Person.

	 	 	 
	 	(l) 	
      Costs and Expenses. Each of the Parties shall be
      responsible for paying all costs and expenses incurred by them,
      respectively, in connection with the negotiation and preparation of this
      Agreement and the related Transaction Documents.

	 	 	 
	 	(m) 	
      Counterparts. This Agreement may be executed in
      one or more counterparts and by the Parties in separate counterparts, each
      of which when executed shall be deemed to be an original, but all of which
      when taken together shall constitute one and the same agreement. Delivery
      of an executed counterpart of a signature page to this Agreement by
      telecopier or electronic format shall be effective as delivery of a
      manually executed counterpart of this Agreement.



[Signature page follows.] 




IN WITNESS WHEREOF the parties hereto have executed this
Agreement as of the date and year first above written. 

KLONDEX MINES LTD. 

 

	 	By: 	(signed) Paul Huet 
	 	  	Paul Huet 
	 	  	President and Chief Executive
      Officer 


 

FRANCO-NEVADA GLW HOLDINGS CORP.


 

	 	By: 	(signed) David Harquail 
	 	  	David Harquail 
	 	  	President and Chief Executive
      Officer 






SCHEDULE A 

DESCRIPTION OF MIDAS PROPERTY 

[Omitted] 




SCHEDULE B 

DESCRIPTION OF FIRE CREEK PROPERTY 

[Omitted] 




SCHEDULE C 

DESCRIPTION OF OTHER PROPERTIES 

[Omitted] 




SCHEDULE D 

MONTHLY DELIVERY REQUIREMENTS 

This Schedule sets out, for each calendar month, the applicable
ounces of Refined Gold to be delivered to the Buyer on each Delivery Date
pursuant to Monthly Delivery Requirements. 


	 2014 	 	 2015 	 	2016 
	Month 	Ounces 	 	Month 	Ounces 	 	Month 	Ounces 
	January 	nil 	 	January 	625.0 	 	January 	666.7 
	February 	nil 	 	February 	625.0 	 	February 	666.7 
	March 	nil 	 	March 	625.0 	 	March 	666.7 
	April 	nil 	 	April 	625.0 	 	April 	666.7 
	May 	nil 	 	May 	625.0 	 	May 	666.7 
	June 	964.5 	 	June 	625.0 	 	June 	666.7 
	July 	964.5 	 	July 	625.0 	 	July 	666.7 
	August 	964.5 	 	August 	625.0 	 	August 	666.7 
	September 	964.5 	 	September 	625.0 	 	September 	666.7 
	October 	964.5 	 	October 	625.0 	 	October 	666.7 
	November 	964.5 	 	November 	625.0 	 	November 	666.7 
	December 	963.0 	 	December 	625.0 	 	December 	666.3 
	Total: 	6,750.0    	 	Total: 	7,500.0    	 	Total: 	8,000.0    
	  	  	 	  	  	 	  	  
	  	  	 	  	  	 	  	  
	  	  	 	  	  	 	  	  
	 2017 	 	 2018 	 	  	  
	Month 	Ounces 	 	Month 	Ounces 	 	  	  
	January 	666.7 	 	January 	666.7 	 	  	  
	February 	666.7 	 	February 	666.7 	 	  	  
	March 	666.7 	 	March 	666.7 	 	  	  
	April 	666.7 	 	April 	666.7 	 	  	  
	May 	666.7 	 	May 	666.7 	 	  	  
	June 	666.7 	 	June 	666.7 	 	  	  
	July 	666.7 	 	July 	666.7 	 	  	  
	August 	666.7 	 	August 	666.7 	 	  	  
	September 	666.7 	 	September 	666.7 	 	  	  
	October 	666.7 	 	October 	666.7 	 	  	  
	November 	666.7 	 	November 	666.7 	 	  	  
	December 	666.3 	 	December 	666.3 	 	  	  
	Total: 	8,000.0    	 	Total: 	8,000.0    	 	  	   








SCHEDULE E 

CONDITIONS FOR PAYMENT OF PURCHASE PRICE 

[redacted for proprietary reasons] 




SCHEDULE F 

REPRESENTATIONS AND WARRANTIES OF THE BUYER

	1. 	
      Organization and Powers. The Buyer is duly
      organized, validly existing and in good standing under the laws of the
      jurisdiction of its incorporation, and has all requisite power and
      authority to execute and deliver, and perform its obligations under, the
      Transaction Documents to which it is a party.

	 	 	 
	2. 	
      Authorization; No Conflict. The execution and
      delivery by the Buyer of, the performance of its obligations under, and
      the consummation of the transactions contemplated by the Transaction
      Documents to which it is a party have been duly authorized by all
      necessary action of the Buyer, and do not and will not:

	 	 	 
		(a) 	
      violate the terms of its constating documents;
  or

	 	 	 
		(b) 	
      conflict with, result in a breach of, or constitute a
      default or an event creating rights of acceleration, termination,
      modification or cancellation or a loss of rights under (with or without
      the giving notice or lapse of time or both), any written or oral contract,
      agreement, license, concession, indenture, mortgage, debenture, note or
      other instrument to which it is a party, subject or otherwise bound
      (including with respect to its assets) except in each case as would not
      have a material adverse effect on its ability to perform its obligations
      under the Transaction Documents; or

	 	 	 
		(c) 	
      violate in any material respect any Applicable Law to
      which it is subject or otherwise bound (including with respect to its
      assets).

	 	 	 
	3. 	
      Execution; Binding Obligation. Each Transaction
      Document to which the Buyer is a party has been duly and validly executed
      and delivered by the Buyer. Each of the Transaction Documents to which the
      Buyer is a party constitutes, or when delivered under this Agreement will
      constitute, a legal, valid and binding obligation of the Buyer,
      enforceable against it in accordance with its terms, except to the extent
      enforcement may be affected by Applicable Laws and regulations relating to
      bankruptcy, reorganization, insolvency and creditors’ rights and by the
      availability of injunctive relief, specific performance and other
      equitable remedies.

	 	 	 
	4. 	
      Consents. The Buyer is not required to give any
      notice to, make any filing with or obtain any authorization, consent,
      Order or approval of any Person in connection with the execution and
      delivery of any Transaction Document or the consummation of the
      transactions contemplated herein and therein, except, in each case, as
      would not have a material adverse effect on its ability to perform its
      obligations under the Transaction Documents.







SCHEDULE G 

REPRESENTATIONS AND WARRANTIES OF THE SELLER 

No specific representation or warranty shall limit the
generality or applicability of a more general representation or warranty. The
representations and warranties of the Seller set out in this Schedule below are
made subject to and modified by the exceptions and qualifications (if any) noted
in the correspondingly numbered section of the Disclosure Schedule. No
disclosure in any particular section of the Disclosure Schedule (including the
listing of a document or item in any Disclosure Schedule or the inclusion of a
copy thereof in such Disclosure Schedule) shall be adequate to disclose an
exception or qualification to a representation or warranty in any other sections
of this Agreement or in any other section of the Disclosure Schedule unless the
applicability of such disclosure to the other representations and warranties is
clear and obvious on its face. Each section of the Disclosure Schedule shall be
numbered to correspond to the paragraph of this Schedule G to which such section
relates. 

	1. 	
      Organization and Powers. Each Klondex Entity
      is:

	 	 	 
		(a) 	
      duly organized, validly existing and in good standing
      under the laws of the jurisdiction of its incorporation, and has all
      requisite power and authority to execute and deliver, and perform its
      obligations under, the Transaction Documents to which it is a
  party;

	 	 	 
		(b) 	
      qualified or licensed to do business and is in good
      standing in each jurisdiction in which the nature of its business or the
      nature and location of its assets requires such qualification or licensing
      except where such failure to qualify or be licensed or in good standing
      would not have a Material Adverse Effect; and

	 	 	 
		(c) 	
      has all requisite power and authority to own and lease
      its assets and carry on its business.

	 	 	 
	2. 	
      Authorization; No Conflict. The execution and
      delivery by each Klondex Entity of, the performance of its obligations
      under, and the consummation of the transactions contemplated by the
      Transaction Documents to which it is a party have been duly authorized by
      all necessary corporate or other action of such Klondex Entity and do not
      and will not:

	 	 	 
		(a) 	
      violate the terms of the constating documents of such
      Klondex Entity;

	 	 	 
		(b) 	
      conflict with, result in a breach of, or constitute a
      default or an event creating rights of acceleration, termination,
      modification or cancellation or a loss of rights under (with or without
      the giving notice or lapse of time or both), any written or oral contract,
      agreement, license, concession, indenture, mortgage, debenture, note or
      other instrument to which such Klondex Entity is a party, subject or
      otherwise bound (including with respect to its assets) in each case except
      as would not have a Material Adverse Effect;

	 	 	 
		(c) 	
      violate in any material respect any Applicable Law to
      which such Klondex Entity is subject or otherwise bound (including with
      respect to its assets); or

	 	 	 
		(d) 	
      except as contemplated by this Agreement, result in, or
      require, the creation or imposition of any Encumbrance upon or with
      respect to any of the assets or properties of such Klondex
  Entity.







- 4 - 

	3. 	
      Solvency. Each Klondex Entity is Solvent and no
      Klondex Entity will be rendered Insolvent by the execution and delivery of
      any of the Transaction Documents to which such Klondex Entity is a
      party.

	 	 
	4. 	
      Execution; Binding Obligation. Each Transaction
      Document to which a Klondex Entity is a party has been duly and validly
      executed and delivered by such Klondex Entity. Each of the Transaction
      Documents to which each Klondex Entity is a party constitutes, or when
      delivered under or in connection with this Agreement will constitute,
      legal, valid and binding obligation of such Klondex Entity, enforceable
      against such Klondex Entity in accordance with its terms, except to the
      extent enforcement may be affected by Applicable Laws and regulations
      relating to bankruptcy, reorganization, insolvency and creditors’ rights
      and by the availability of injunctive relief, specific performance and
      other equitable remedies.

	 	 
	5. 	
      Consents. Except as set out in section 3 of
      Schedule E of this Agreement, no Klondex Entity is required to give any
      notice to, make any filing with or obtain any authorization, consent,
      Order or approval of any Person in connection with the execution, delivery
      or performance of its obligations under any Transaction Document or the
      consummation of the transactions contemplated herein and therein, except
      for recordings or filings in connection with the perfection of the
      Encumbrances on the Collateral in favor of the Buyer.

	 	 
	6. 	
      No Defaults. No event has occurred or circumstance
      exists that (with or without the giving of notice or lapse of time or
      both) has contravened, conflicted with or resulted in, or may contravene,
      conflict with or result in, a violation or breach of, or give any Klondex
      Entity or any other Person the right to declare a default or exercise any
      remedy under, or to accelerate the maturity or performance of, or to
      cancel, terminate or modify, any contract, lease, license, concession,
      Authorization, agreement, indenture, mortgage, debenture, note,
      instrument, or Order to which it is a party or by which it or its
      properties and assets may be bound, and, to the knowledge of the Seller,
      each other Person that is party thereto is in compliance in all material
      respects with the terms and requirements thereof, in each case, except as
      would not have a Material Adverse Effect.

	 	 
	7. 	
      Litigation. Except as set out in Schedule G.7 of
      the Disclosure Schedule, there are no material actions, suits,
      investigations, claims or proceedings pending or, to the best of the
      Seller’s knowledge, threatened in writing against or directly affecting
      any Klondex Entity by or before any Governmental Body.

	 	 
	8. 	
      Financial Statements; Projections. All annual and
      interim consolidated financial statements of the Seller filed on SEDAR
      since January 1, 2012 are complete and correct and fairly present, in all
      material respects, the financial condition and results of operations of
      the Klondex Entities as at the times and for the periods covered by such
      statements, in each case in accordance with GAAP, subject, in the case of
      any unaudited financial statements, to normal year-end adjustments and any
      absence of notes. All other consolidated or other financial statements of
      each Klondex Entity delivered to the Buyer are complete and correct and
      fairly present, in all material respects, the financial condition and
      results of operations of such Klondex Entity as at the times and for the
      periods covered by such statements, in each case in accordance with GAAP,
      subject, in the case of any unaudited financial statements, to normal
      year-end adjustments and any absence of notes. Since January 1, 2012,
      there has been no Material Adverse Effect. All financial projections and
      forecasts delivered to the Buyer represent the Seller’s reasonable
      estimates and assumptions as to future performance, which the Seller
      believes to be fair and reasonable as of the time made in the light of
      current and reasonably foreseeable business
conditions.







- 5 - 

	9. 	
      Liabilities. No Klondex Entity has any material
      liabilities or obligations of any nature whatsoever, whether direct or
      indirect, matured or unmatured, known or unknown, fixed, absolute,
      accrued, contingent or otherwise, that are not reflected in the
      consolidated financial statements referred to in the first sentence of
      Section 8 above or in the notes thereto, other than liabilities arising in
      the ordinary course of business since September 30, 2013.

	 	 
	10. 	
      Taxes. Except as disclosed in Schedule G. 10 of
      the Disclosure Schedule (i) each Klondex Entity has filed or caused to be
      filed on a timely basis all federal (United States or Canada), state,
      provincial and material local tax returns that were required to be filed
      by or with respect to it pursuant to Applicable Law, (ii) all tax returns
      filed by such Klondex Entity are complete and correct and comply with
      Applicable Law in all material respects, (iii) each Klondex Entity has
      paid, or made provisions for the payment of, all material Taxes that have
      been or could have become due for all periods covered by any tax return or
      otherwise, (iv) each Klondex Entity has withheld or collected and paid to
      the proper Governmental Body or other Person all material Taxes required
      to be withheld, collected or paid by it, (v) no claim has been made by any
      Governmental Body in a jurisdiction where any Klondex Entity does not file
      tax returns that such Klondex Entity is or could be subject to taxation by
      that jurisdiction, (vi) to the knowledge of the Seller, no tax return of
      any Klondex Entity is under audit by any Governmental Body, and (vii) no
      proceedings are pending or, to the knowledge of any Klondex Entity,
      threatened by or before any Governmental Body with respect to material
      Taxes of any Klondex Entity.

	 	 
	11. 	
      Insurance. The properties, assets and operations
      of each Klondex Entity are insured with reputable insurance companies (not
      Affiliates of any Klondex Entity), in such amounts, with such deductibles
      and covering such risks as is customarily carried by companies engaged in
      similar businesses and owning similar properties in the localities where
      such Klondex Entity operates.

	 	 
	12. 	
      Title to Collateral; Liens. Subject to Permitted
      Encumbrances and as set out in Schedule G.12 of the Disclosure Schedule,
      the Klondex Entities (i) have valid and subsisting leasehold title to all
      leases of real property included within the Fire Creek Property, and,
      following completion of the Acquisition, the Midas Property, or Collateral
      (including the Other Properties), (ii) have valid possessory and record
      title to all unpatented mining claims and millsite claims included within
      such Properties or Collateral (including the Other Properties), except for
      such claims that are leased to a Klondex Entity and are covered under part
      (i) of this paragraph, (iii) have good and marketable title to such other
      real property interests included within such Properties or Collateral
      (including the Other Properties) and not otherwise included under parts
      (i) and (ii) of this paragraph, and (iv) have good and valid title to or
      hold a valid leasehold interest in such properties and assets, which are
      not real property interests, and are included within the Collateral. There
      are no Encumbrances upon or with respect to any of the properties and
      assets included in such Properties or Collateral, except for Permitted
      Encumbrances. Without limiting the foregoing:




	 	(a) 	
      no Person other than the Klondex Entities has any rights
      to participate in or operate the Fire Creek Property and the Fire Creek
      Project, and, following completion of the Acquisition, the Midas Property
      and the Midas Mine;

	 	 	 
	 	(b) 	
      the Fire Creek Property and the Midas Property comprise
      all of the real property, mineral and surface interests held by the
      Klondex Entities in respect of the Fire Creek Project and, following
      completion of the Acquisition, the Midas Mine, respectively;

	 	 	 
	 	(c) 	
      the Fire Creek Property and, following completion of the
      Acquisition, the Midas Property constitute all real property, mineral,
      surface interests and ancillary rights necessary for,
as applicable, the construction, development and mining
      operations of the Fire Creek Project and the Midas Mine, respectively, as
      currently operated and substantially in accordance with the current or
  then applicable development or mine plan;







- 6 - 

	 	(d) 	
      except as set out in Schedule G.12 of the Disclosure
      Schedule, none of the Fire Creek Property or, following completion of the
      Acquisition, the Midas Property or any Minerals produced therefrom are
      subject to an option, right of first refusal or right, title, interest,
      reservation, claim, rent, royalty, or payment in the nature of rent or
      royalty, or right capable of becoming an agreement, option, right of first
      refusal or right, title, interest, reservation, claim, rent, royalty, or
      payment in the nature of rent or royalty;

	 	 	 
	 	(e) 	
      none of the Permitted Encumbrances would have a Material
      Adverse Effect or otherwise materially adversely affect the ability of any
      Klondex Entity to enjoy the anticipated benefits of the Fire Creek
      Property or, following completion of the Acquisition, the Midas Property;
      and

	 	 	 
	 	(f) 	
      the Other Properties comprise all of the real property,
      mineral and surface interests held by the Klondex Entities other than the
      Fire Creek Property and as disclosed in Schedule G.12 of the Disclosure
      Schedule and, following completion of the Acquisition, the Midas
      Property.





	13. 	
      Maintenance of Property. All mining claim
      maintenance fees, recording fees, Taxes and all other amounts have been
      paid when due and payable and all other actions and all other obligations
      as are required to maintain the Fire Creek Property, any other properties
      of the Klondex Entities and, following completion of the Acquisition, the
      Midas Property have been taken and complied with in all material
      respects.

	 	 
	14. 	
      Authorizations. The Klondex Entities have obtained
      or been issued all Authorizations (including environmental Authorizations
      and Utility Commitments) and Other Rights necessary for (i) the
      construction, development and mining operations of the Fire Creek Project,
      any other mineral project of the Klondex Entities and, following
      completion of the Acquisition, the Midas Mine, and (ii) the commencement
      and ongoing operation of commercial production transactions, other than,
      in each case, such Authorizations (including environmental Authorizations
      and Utility Commitments) and Other Rights (A) that are not necessary on
      the date this representation and warranty is made or deemed made for the
      conduct of development activities as such activities are currently being
      conducted, but that are expected to be obtained, in the ordinary course of
      business, by the time they are necessary for the conduct of development
      activities and the eventual commencement and ongoing commercial
      production, as applicable, or (B) the failure of which to be obtained
      would not be material to the development of the Fire Creek Project, any
      other mineral project of the Klondex Entities or, following completion of
      the Acquisition, the Midas Mine or the commencement and ongoing operation
      of commercial production (including commercial production transactions).
      There are no facts or circumstances that might reasonably be expected to
      adversely affect the issuance or obtaining of any such material
      Authorizations (including environmental Authorizations and Utility
      Commitments) or Other Rights.

	 	 
	15. 	
      Compliance with Applicable Laws. Each Klondex
      Entity, the Fire Creek Project, any other mineral project of the Klondex
      Entities and, following completion of the Acquisition, the Midas Mine, is
      and has been in compliance in all material respects with all Applicable
      Laws. Without limiting the generality of the foregoing, except as set out
      in Schedule G.15 of the Disclosure Schedule, each Klondex Entity, the Fire
      Creek Project, any other mineral project of the Klondex Entities and,
      following completion of the Acquisition, the Midas Mine, is and has been
      in compliance in all material respects with all applicable
      Environmental Laws, and there are no actions, suits, claims, notices of
      violation, hearings, investigations or proceedings pending or, to the best
      of the Seller’s knowledge, threatened against or affecting any Klondex
      Entity with respect to the ownership, use, maintenance and operation of
      the Fire Creek Project, any other mineral project of the Klondex Entities
      or, following completion of the Acquisition, the Midas Mine, or the
      property or assets of any Klondex Entity, relating to any applicable
      Environmental Laws, where any adverse determination with respect thereto
      or liability imposed therein could have a Material Adverse
Effect.







- 7 - 

	16. 	
      Subsidiaries; Other Ventures. Klondex BC Holdco is
      a direct, wholly-owned Subsidiary of Klondex, Klondex Holdings is a
      direct, wholly-owned Subsidiary of Klondex BC Holdco and the Fire Creek
      Owner is a direct, wholly-owned Subsidiary of Klondex Holdings, and,
      following completion of the Acquisition, Midas Holdings will be a direct,
      wholly-owned Subsidiary of Klondex Holdings and the Midas Owner will be a
      direct, wholly-owned Subsidiary of Midas Holdings. None of the Seller
      Entities has any other Subsidiaries or any other equity interest in any
      Person. No Seller Entity is engaged in any joint purchasing arrangement,
      joint venture, partnership or other joint enterprise with any other
      Person.

	 	 
	17. 	
      Certain Indebtedness. Schedule G.17 of the
      Disclosure Schedule identifies as of the date hereof all Indebtedness of
      each Klondex Entity.

	 	 
	18. 	
      Chief Executive Office and Other Locations. Each
      Klondex Entity’s chief executive office and principal place of business is
      set forth in Schedule G.18 of the Disclosure Schedule. Each Klondex
      Entity’s material Records are located at its chief executive office, and
      the only other offices and/or locations where it keeps the Collateral
      (except for inventory which is in transit) or conducts any of its business
      are set forth in Schedule G.18 of the Disclosure Schedule.

	 	 
	19. 	
      No Subordination. There is no agreement,
      indenture, contract or instrument to which any Klondex Entity is a party
      or by which it or any of its properties or assets may be bound that
      requires the subordination in right of payment of any of the obligations
      of the Klondex Entity under the Transaction Documents to any other
      obligation of it.

	 	 
	20. 	
      Labour Matters. There is no strike, lock-out or
      other work stoppage or labour dispute occurring or, to the knowledge of
      the Seller, threatened that would have a Material Adverse
Effect.

	 	 
	21. 	
      Employee Benefit Plans. Except as set forth in
      Schedule G.21 of the Disclosure Schedule, no Klondex Entity nor any of
      their respective Affiliates sponsors, maintains or contributes to, or at
      any time during the last six years has sponsored, maintained or
      contributed to (or been obligated to sponsor, maintain or contribute to)
      any Employee Benefit Plan (as defined below) that is (or was) subject to
      the laws of the United States of America. Each Employee Benefit Plan
      mandated by a Governmental Body (other than the United States of America
      or a constituent state thereof) or subject to the laws of a jurisdiction
      outside of the United States of America (“Foreign Company Plan”)
      that is intended to qualify for special tax treatment meets all of the
      requirements for such treatment and has obtained all necessary approvals
      of all relevant Governmental Bodies. No Foreign Company Plan has any
      unfunded liabilities, determined in accordance with GAAP, that have not
      been fully accrued on the Seller’s financial statements or that will not
      be fully offset by insurance. All Foreign Company Plans are registered
      where required by, and are in good standing under, all Applicable Laws.
      For purposes of this Section 21, “Employee Benefit Plan” means any
      employee benefit plan, program, policy or arrangement sponsored,
      maintained or contributed to by a Klondex Entity or any of their
      respective Affiliates or with respect to which the Seller, any Klondex Entity
      or any of their respective Affiliates has any liability or
    obligation.








- 8 - 

	22. 	
      Intellectual Property. Each Klondex Entity owns,
      licenses or otherwise has the right to use all material licenses,
      Authorizations, patents, patent applications, trademarks, trademark
      applications, service marks, trade names, copyrights, copyright
      applications, franchises, authorizations and other intellectual property
      rights that are necessary for the operation of its business, without
      infringement upon or conflict with the rights of any other Person with
      respect thereto. No slogan or other advertising device, product, process,
      method, substance, part or other material now employed, or now
      contemplated to be employed, by any Klondex Entity infringes upon or
      conflicts with any rights owned by any other Person. No claim or
      litigation regarding any of the foregoing is pending or, to its knowledge,
      threatened.

	 	 
	23. 	
      Mineral Reserves and Resources. The most recent
      estimated measured, indicated and inferred mineral resources and proven
      and probable mineral reserves, if any, and technical reports disclosed in
      the Seller Securities Documents (as defined below) for the Fire Creek
      Project, any other mineral project of the Klondex Entities and, following
      completion of the Acquisition, the Midas Mine, have been prepared and
      disclosed in accordance with accepted mining industry practices and in
      accordance with the requirements prescribed by National Instrument 43-101
      and the companion policy thereto (as in effect on the date of publication
      of the relevant report or information); the Seller has no knowledge that
      the mineral resources or mineral reserves (or any other material aspect of
      any technical reports) as disclosed in the Seller Securities Documents are
      inaccurate in any material respect; there are no outstanding unresolved
      comments of any securities commission or other securities regulatory
      authority in each province and territory of Canada in which the Seller is
      a reporting issuer (the “Securities Regulatory Authorities”) in
      respect of the technical disclosure made in the Seller Securities
      Documents; and, to the knowledge of the Seller, there has been no material
      reduction in the aggregate amount of estimated mineral resources and
      reserves, if any, of the Klondex Entities, from the amounts last disclosed
      publicly by the Seller in the Seller Securities Documents.

	 	 
	24. 	
      Regulatory Compliance. The Seller has filed, on a
      timely basis, all required reports, schedules, financial statements,
      forms, registrations, certifications and other documents together with any
      amendments required to be made with respect thereto with the Securities
      Regulatory Authorities and the TSX since January 1, 2012 (together with
      the exhibits and other information incorporated therein, the “Seller
      Securities Documents”) with the TSX and the Securities Regulatory
      Authorities and paid all fees and assessments due and payable in
      connection therewith; as of their respective dates of filing (or, if
      amended or superseded by a filing prior to the date hereof, as of the date
      of such filing), the Seller Securities Documents complied in all material
      respects with the requirements of Applicable Laws and none of the Seller
      Securities Documents contained any untrue statement of a material fact or
      omits any material fact required to be stated therein or necessary to make
      the statements made therein, in the light of the circumstances under which
      they are made, not misleading; the Seller has not filed any confidential
      material change reports which continue to be confidential.

	 	 
	25. 	
      Brokers and Finders. No Klondex Entity has
      employed any broker or finder or incurred any liability for any brokerage
      fee, commission, finders’ fee or any other similar payment in connection
      with the transactions contemplated by this Agreement that could give rise
      to any claim against the Buyer for brokerage fees, commissions, finders’
      fees or any other similar payments.

	 	 
	26. 	
      Disclosure. All information relating to the
      business, assets, liabilities, properties or financial condition of the
      Seller Entities provided to the Buyer or any of its representatives or
      advisors, or








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	26. 	Disclosure. All information relating to the
      business, assets, liabilities, properties or financial condition of the
      Seller Entities provided to the Buyer or any of its representatives or
      advisors, or made available to the Buyer or any its representatives or advisors, is true, accurate and complete in all material respects.