Filed by Automated Filing Services Inc. (604) 609-0244 - Quincy Gold Corp. - Exhibit 10.26





 AGENCY AGREEMENT 


December 21, 2004 

 Quincy Gold Corp. 

  3009 Centre Street 

  Hancock, Michigan 

  49930-2107 


Attention: Mr. Daniel Farrell, President and Chief Executive Officer 


Dear Sirs/Mesdames: 

 Reference is made to a letter agreement dated November 8,
  2004 (the "Letter Agreement") between Quincy Gold Corp. (the
  "Corporation") and Kingsdale Capital Partners Inc. (the "Agent").
  The Corporation hereby appoints the Agent, and the Agent hereby agrees to act,
  as agent on a best efforts agency basis to raise gross proceeds of a minimum
  of Cdn$1,000,000 (unless waived by the Corporation in writing at its sole
  and unfettered discretion) and up to a maximum of Cdn$4,000,000 for the
  Corporation through the sale of units ("Units") at a price
  of $0.45 per Unit. Each Unit shall consist of one share in the capital stock
  of the Corporation (a "Common Share") and one-half
  of one Common Share purchase warrant. Each whole warrant (a "Warrant")
  is exercisable at any time until that date which is 18 months following the
  Closing Date (as defined herein) for one Common Share at an exercise price of
  $0.65 per share. The offering of the Units by the Corporation is hereinafter
  referred to as the "Offering". It is understood that the
  sale of Units will take place only in the Provinces of British Columbia, Alberta
  and Ontario (the "Offering Jurisdictions"); and (ii)
  in other jurisdictions, other than Canada and the United States, PROVIDED
  that the Corporation is not required to file a prospectus or other disclosure
  document or become subject to continuing obligations in such other jurisdictions,
  in each case in accordance with the provisions of this Agreement. It is hereby
  agreed and understood that the Agent shall act as agent only and shall not at
  any time be obligated to purchase or arrange for the purchase of any Units but
  may subscribe for and purchase Units if it so chooses.

 It is further agreed and understood by the Agent that the
  Corporation is contemporaneously offering securities having substantially the
  same terms as the Units to persons who have not been introduced to the Corporation
  by the Agent and the Agent acknowledges that the terms of this Agreement do
  not apply to such persons and that the term "Offering" as defined
  herein specifically excludes any and all sales other than sales to persons introduced
  to the Corporation by the Agent.






	1.	Interpretation
	 	 
	(a)	 Unless expressly provided otherwise,
        where used in this Agreement or any schedule hereto, the following terms
        shall have the following meanings, respectively: 



  "Agent" shall have the meaning ascribed
  thereto in the first paragraph of this Agreement; 

"Agent’s Personnel" has the meaning
  ascribed thereto in Section 11 of this Agreement; 

"Agency Fee" shall have the meaning ascribed
  thereto in subsection 3(a) of this Agreement;

 "Agreement" means this agreement resulting
  from the acceptance of the offer made by the Corporation; 

 "Applicable Securities Laws" means, collectively,
  the applicable securities laws of the Offering Jurisdictions, the regulations,
  rules, rulings and orders made thereunder, the applicable published policy statements
  issued by the Securities Commissions thereunder and the securities legislation
  and published policies of each other jurisdiction in Canada the securities laws
  of which are applicable to the sale of the Units on the terms and conditions
  set out in this Agreement; 

  "Audited Financial Statements" means the
  audited consolidated financial statements of the Corporation as at and for the
  twelve month period ended April 30, 2004;

 "Broker Warrants" shall have the meaning
  ascribed thereto in subsection 3 of this Agreement; 

 "Broker Warrant Shares" shall have the
  meaning ascribed thereto in subsection 3 of this Agreement; 

 "Business Day" shall mean any day except
  Saturday, Sunday or a statutory or civic holiday in Toronto, Ontario; 

 "Closing" means the closing on the Closing
  Date of the transaction of purchase and sale in respect of the Units pursuant
  to this Agreement; 

 "Closing Date" means December 21, 2004,
  or such other date(s) as the Agent and the Corporation may agree; 

 "Common Shares" means the shares in the
  common stock of the Corporation; 

 "Corporate Finance Fee" shall have the
  meaning ascribed thereto in subsection 3(d) of this Agreement;

 "Disclosure Documents" means all documents
  that have been disclosed by the Corporation to the public and filed since April
  30, 2004 with the SEC on EDGAR pursuant to the requirements of applicable securities
  laws of the United States;

 "Exchange" means the TSX Venture Exchange;









 "Financial Statements" means, collectively,
  the Audited Financial Statements and the unaudited financial statements of the
  Corporation as at and for the three month period ended July 31, 2004;

 "Gross Proceeds" means the gross proceeds
  raised from the sale of the Units sold by the Agent; 

 "Hazardous Substances" shall have the meaning
  ascribed thereto in subsection 6(nn) of this Agreement; 

 "Indemnified Party" shall have the meaning
  ascribed thereto in Section 12 of this Agreement;

 "Indemnified Persons" shall have the meaning
  ascribed thereto in subsection 4(c) of this Agreement;

 "Intellectual Property" shall have the
  meaning ascribed thereto in subsection 6(yy) of this Agreement; 

 "Kingsdale" means Kingsdale Capital Markets
  Inc.;

 "Leased Premises" shall have the meaning
  ascribed thereto in subsection 6(hh) of this Agreement; 

 "Letter Agreement" shall have the meaning
  ascribed thereto in the first paragraph of this Agreement; 

 "Liabilities" has the meaning ascribed
  thereto in subsection 6(ff) of this Agreement;

 "Material Adverse Effect" means, with respect
  to the Corporation, a material adverse effect on the condition (financial or
  otherwise), business, properties, assets, liabilities (including contingent
  liabilities), and results of operations of the Corporation and the Subsidiary
  (taken as a whole);

  "Material Agreements" has the meaning
  ascribed thereto in subsection 6(n) of this Agreement; 

 "material change" means a material change
  for the purposes of the Applicable Securities Laws or any of them or where undefined
  under the Applicable Securities Laws of an Offering Jurisdiction means a change
  in the business, operations or capital of the Corporation that would reasonably
  be expected to have a significant effect on the market price or value of any
  of the Corporation’s securities and includes a decision to implement such
  a change made by the Corporation’s board of directors or by senior management
  of the Corporation who believe that confirmation of the decision by the board
  of directors is probable; 

 "material fact" means a material fact for
  the purposes of the Applicable Securities Laws or any of them or where undefined
  under the Applicable Securities Laws of an Offering Jurisdiction means a fact
  that significantly affects, or would reasonably be expected to have a significant
  effect on, the market price or value of the Corporation’s securities;









 "misrepresentation" means a misrepresentation
  for the purposes of the Applicable Securities Laws or any of them or where undefined
  under the Applicable Securities Laws of an Offering Jurisdiction means (i) an
  untrue statement of a material fact, or (ii) an omission to state a material
  fact that is required to be stated or that is necessary to make a statement
  not misleading in the light of the circumstances in which it was made; 

 "Offering" shall have the meaning ascribed
  thereto in the first paragraph of this Agreement; 

 "Offering Jurisdictions" shall have the
  meaning ascribed thereto in the first paragraph of this Agreement; 

 "person" includes any individual, corporation,
  limited partnership, general partnership, joint stock company or association,
  joint venture association, company, trust, bank, trust company, land trust,
  investment trust, society or other entity, organization, syndicate, whether
  incorporated or not, trustee, executor or other legal personal representative,
  and governments and agencies and political subdivisions thereof; 

 "Private Placement Exemptions" means the
  prospectus exemptions pursuant to which the Units are to be issued in the Offering
  Jurisdictions as more specifically set out in the Subscription Agreements;

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

 "Purchasers" means, collectively, those
  persons or companies who are purchasing the Units as contemplated herein; 

  "Securities Commissions" means the applicable
  securities regulatory authorities in the Offering Jurisdictions; 

 "Subscription Agreements" means, collectively,
  the subscription agreements in the form agreed to by the Agent and the Corporation
  to be entered into between the Purchasers and the Corporation pursuant to which
  the Purchasers agree to subscribe for and purchase Units as herein contemplated
  and shall include, for greater certainty, all schedules thereto, in the form
  attached hereto as Schedule "A"; 

 "Subsidiary" means Atlas Database Corp.;


 "Time of Closing" means 10:00 a.m. (Toronto
  time) on the Closing Date or such other time on the Closing Date as the Corporation
  and the Agent may agree; 

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

 "United States" means the United States
  of America, its territories and possessions, any state of the United States,
  and the District of Columbia;

 "Units" shall have the meaning ascribed
  thereto in the first paragraph of this Agreement; 








 "Warrant Certificates" means the certificates
  representing the Warrants substantially in the form attached hereto as Schedule
  "B";

 "Warrant Shares" means the Common Shares
  issuable upon the due exercise of the Warrants; and 

 "Warrants" has the meaning ascribed thereto
  in the first paragraph of this Agreement. 

	 (b)      	 The division of this Agreement into sections, subsections,
        paragraphs and other subdivisions and the insertion of headings are for
        convenience of reference only and shall not affect the construction or
        interpretation of this Agreement. Unless something in the subject matter
        or context is inconsistent therewith, references herein to sections, subsections,
        paragraphs and other subdivisions are to sections, subsections, paragraphs
        and other subdivisions of this Agreement. Unless otherwise expressly provided,
        all amounts expressed herein in terms of money refer to lawful currency
        of Canada and all payments to be made hereunder shall be made in such
        currency. 

	 	 
	 (c)      	 If any provision of this Agreement shall be adjudged
        by a competent authority to be invalid or for any reason unenforceable,
        such invalidity or unenforceability shall not affect the validity, enforceability
        or operation of any other provision herein. 

	 	 
	 (d)      	 The following are the schedules attached to this
        Agreement, which schedules are deemed to be a part hereof and are hereby
        incorporated by reference herein: 

	 	 
	 	 Schedule "A" – Form of Subscription
        Agreement 

	 	 
	 	 Schedule "B" – Form of Warrant
        Certificate 

	 	 
	 	 Schedule "C" - Form of Broker Warrant
        Certificate 

	 	 
	2. 	Nature of Transaction




	 	 (a)      	 Each Purchaser shall purchase Units under a Private
        Placement Exemption. The Agent shall offer the Units for sale on behalf
        of the Corporation in the Offering Jurisdictions in compliance with Applicable
        Securities Laws. The Agent will notify the Corporation with respect to
        the identity of any such Purchaser as soon as practicable and with a view
        to leaving sufficient time to allow the Corporation to secure compliance
        with all relevant regulatory requirements of the applicable Offering Jurisdictions
        relating to the sale of the Units and, in any event not later than 3:00
        p.m. (Toronto time) on the day which is two business days before the Closing
        Date. The Corporation undertakes to file or cause to be filed all forms
        or undertakings required to be filed by the Corporation and to pay all
        filing fees in connection with the purchase and sale of the Units so that
        the distribution of such securities may lawfully occur without the necessity
        of filing a prospectus in Canada or comparable document elsewhere. 

	 	 	 
	 	 (b)      	 It is understood and agreed that the Units may be
        sold to purchasers in jurisdictions, other than Canada and the United
        States, on a private placement 








 

	 	 	 basis, provided that the Corporation is not required
        to file a prospectus or other disclosure document or made subject to continuing
        obligations in such other jurisdictions. 

	 	 	 
	 	 (c)      	 The certificates representing the Common Shares,
        Warrants and Broker Warrants delivered at Closing, as well as any Warrant
        Shares and Broker Warrant Shares issued prior to April 22, 2005 shall
        contain the following legends: 

	 	 	 
	 	 	 "UNLESS PERMITTED UNDER SECURITIES LEGISLATION,
        THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE APRIL 22,
        2005." 

	 	 	 
	 	 (d)      	 The certificates representing the Common Shares,
        Warrants and Broker Warrants delivered at Closing, as well as any Warrant
        Shares and Broker Warrant Shares issued prior to April 22, 2005 shall
        also contain the following legend: 

	 	 	 
	 	 	 "WITHOUT PRIOR WRITTEN APPROVAL OF THE
        TSX VENTURE EXCHANGE AND COMPLIANCE WITH ALL APPLICABLE SECURITIES LEGISLATION,
        THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED,
        HYPOTHECATED OR OTHERWISE TRADED ON OR THROUGH THE FACILITIES OF THE TSX
        VENTURE EXCHANGE OR OTHERWISE IN CANADA OR TO OR FOR THE BENEFIT OF A
        CANADIAN RESIDENT UNTIL APRIL 22, 2005." 

	 	 	 
	 	 (e)      	 In addition, the Common Shares, Warrants and Broker
        Warrants delivered at Closing, as well as any Warrant Shares and Broker
        Warrant Shares delivered will bear a legend in substantially the following
        form, unless such securities have been registered under the U.S. Securities
        Act: 

	 	 	 
	 	 "THE SECURITIES REPRESENTED
        BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
        ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES ACT") OR OTHER
        APPLICABLE SECURITIES LAWS. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT
        AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE AND MAY NOT BE OFFERED,
        SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) IN ACCORDANCE WITH THE
        PROVISIONS OF REGULATIONS S, RULE 901 THROUGH RULE 905, AND PRELIMINARY
        NOTES UNDER THE U.S. SECURITIES ACT OR (2) PURSUANT TO AN AVAILABLE EXEMPTION
        FROM THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT OR (3) PURSUANT
        TO AN EFFECTIVE REGISTRATION STATEMENT. HEDGING TRANSACTIONS INVOLVING
        THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE U.S.
        SECURITIES ACT." 

	 	 	 
	 	(f)	After the registration statement, referenced in Section
        4 is declared effective by the SEC, Kingsdale may deliver to the Corporation
        the certificate(s) representing 







 

	 	 	any Broker Warrant Shares issued to Kingsdale and the Corporation will,
      within three days after receipt by the Corporation of the foregoing, issue
      new certificate(s) representing and in exchange for the aforementioned certificate(s),
      which new certificate(s) shall be legended as follows: 
	 	 	 
	 	"THE SECURITIES REPRESENTED BY THIS CERTIFICATE
      HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES
      MAY BE SOLD PURSUANT TO THE REGISTRATION STATEMENT PROVIDED THAT (I) THE
      REGISTRATION STATEMENT IS CURRENT AND EFFECTIVE, (II) THE HOLDER COMPLIES
      WITH THE PROSPECTUS DELIVERY REQUIREMENTS UNDER THE SECURITIES ACT OF 1933,
      AS AMENDED, AND (III) THE SALE IS IN COMPLIANCE WITH THE PLAN OF DISTRIBUTION
      SET FORTH IN THE PROSPECTUS. THE TRANSFER OF SUCH SECURITIES IS RESTRICTED
      AS SET FORTH IN A SUBSCRIPTION AGREEMENT BETWEEN THE ISSUER AND THE HOLDER,
      A COPY OF WHICH MAY BE OBTAINED FROM THE ISSUER." 
	 	 	 
	3. 	Agent’s Compensation
	 	 	 


	 	 (a)      	 In consideration for the performance of its obligations
        hereunder, the Corporation shall, subject to the provisions of this Agreement,
        pay to the Agent an aggregate fee (the "Agency Fee")
        equal to 8% of the Gross Proceeds sold by the Agent in the Offering provided
        that such Agency Fee shall not be less than $160,000 in any event.
      

	 	 	 
	 	 (b)      	 The Agent may retain one or more registered securities
        brokers or investment dealers to act as selling agent (individually, each
        a "Selling Agent" and collectively, the "Selling
        Agents") in connection with the sale of the Units but the compensation
        payable to such Selling Agents shall be the sole responsibility of the
        Agent, and only as permitted by and in compliance with Applicable Securities
        Laws, upon the terms and conditions set forth in this Agreement and will
        require each such Selling Agent to so agree. 

	 	 	 
	 	 (c)      	 In addition to the Agency Fee, as additional consideration
        for the performance of its obligations hereunder, the Agent hereby directs
        the Corporation to, and the Corporation shall, issue to Kingsdale at the
        Time of Closing on the Closing Date, non-assignable and non-transferable
        broker warrants (the "Broker Warrants"), substantially
        in the form set out in Schedule "C" hereto, entitling Kingsdale
        to acquire, in the aggregate, a number of Common Shares (the "Broker
        Warrant Shares") equal to 10% of the aggregate number of Units
        sold by the Agent hereunder exercisable by Kingsdale at a price of $0.45
        per Broker Warrant Share for a period of 18 months following the Closing
        Date. 

	 	 	 
	 	 (d)      	 A corporate finance fee (the "Corporate
        Finance Fee") of $25,000 shall be payable to the Agent on
        the initial Closing Date. 








 

	 	 (e)      	 The Corporation agrees that any subscribers or potential
        investors introduced to the Corporation by the Agent and not previously
        known to the Corporation shall be proprietary to the Agent until November
        8, 2005, and all fees and commissions payable to the Agent pursuant to
        this Section 3 (other than the Corporate Finance Fee) shall be payable
        in respect of a financing which is concluded by the Corporation on or
        prior to November 8, 2005 with any subscribers or potential investors
        so introduced. For greater certainty, the Agent will have no proprietary
        rights or rights to compensation with respect any persons other than subscribers
        or potential investors introduced to the Corporation by the Agent and
        not previously known to the Corporation. 

	 	 	 
	 	 (f)      	 Kingsdale understands there may be material tax
        consequences to it by reason of the acquisition or disposition of the
        Broker Warrants or Broker Warrant Shares. The Corporation makes no representation
        with respect to the tax consequences under Canadian, U.S., state or foreign
        tax laws by reason of Kingsdale’s acquisition or disposition of
        such Broker Warrants or Broker Warrant Shares. 

	 	 	 
	4. 	Registration Rights 
	 	 	 


	 	 (a)      	 As soon as practicable but no later than thirty
        (30) days after the Closing Date, the Corporation shall file a registration
        statement on Form SB-2 (or similar form) under the U.S. Securities Act
        covering the Broker Warrant Shares and shall use its best efforts to cause
        such registration statement to be declared effective by the SEC at the
        earliest practicable date, all at the Corporation’s sole cost and
        expense, excepting Kingsdale’s costs and expenses (including counsel
        fees and expenses) associated with compliance with the rules and regulations
        of the National Association of Securities Dealers, Inc. Such best efforts
        shall include promptly responding to all comments received by the staff
        of the SEC, and promptly preparing and filing amendments to such registration
        statement which are responsive to the comments received from the staff
        of the SEC, and in no event later than twenty-one (21) days from receipt
        by the Corporation of the comments of the staff of the SEC. Such registration
        statement shall name Kingsdale as a selling shareholder and shall provide
        for the sale of the Broker Warrant Shares by Kingsdale from time to time
        directly to purchasers or in the over-the-counter market or through or
        to securities brokers or dealers that may receive compensation in the
        form of discounts, concessions, or commissions. The Corporation shall
        provide Kingsdale with such number of copies of the prospectus as shall
        be reasonably requested to facilitate the sale of the Broker Warrant Shares.
        None of the foregoing shall in any way limit Kingsdale’s rights
        to sell the Broker Warrant Shares in reliance on an exemption from the
        registration requirements under the U.S. Securities Act in connection
        with a particular transaction. 

	 	 	 
	 	 	 The Corporation shall use its best efforts to maintain
        the currency of the registration statement filed with the SEC and under
        all applicable United States securities laws in respect of the Broker
        Warrants for the greater of (i) 12 months from the Closing Date or (ii)
        the date on which Kingsdale receives an opinion of 








 

	 	 	 counsel to the Corporation, that the Broker Warrants
        and underlying Broker Warrant Shares may be sold under the provisions
        of Rule 144 without limitation as to volume; or (iii) all Broker Warrant
        Shares may be sold without any time, volume or manner limitations pursuant
        to Rule 144(k) or any similar provision then in effect under the 1933
        Act in the opinion of counsel to the Corporation; or, (iv) the Corporation
        obtains the written consent of Kingsdale. 

	 	 	 
	 	 	 Kingsdale agrees that any registration statement
        may be withdrawn or abandoned by the Corporation in the event the SEC
        determines the Corporation or the Agent has directly or indirectly made
        any offers or sales of any security or solicited any offers to buy any
        security under circumstances that would cause the Offering to be integrated
        with prior offerings by the Company for purposes of the U.S. Securities
        Act, which would prevent the Company from selling the Units and/or issuing
        the Broker Warrants pursuant to Rule 506 under the U.S. Securities Act,
        or any applicable exchange-related stockholder approval provisions. The
        Agent agrees not to take any action or steps that would cause the Offering
        to be integrated with other offerings. 

	 	 	 
	 	 (b)      	 To the extent permitted by law, the Corporation
        will indemnify Kingsdale and each person who controls Kingsdale within
        the meaning of Section 15 of the U.S. Securities Act, against all expenses,
        claims, losses, damages or liabilities (or actions in respect thereof),
        including any of the foregoing incurred in settlement of any litigation,
        commenced or treated, to the extent such expenses, claims, losses, damages
        or liabilities arise out of or are based on any untrue statement (or alleged
        untrue statement) of a material fact contained in any registration statement,
        prospectus, offering circular or other document, or any amendment or supplement
        thereto, incident to any such registration, qualification or compliance,
        or based on any omission (or alleged omission) to state therein a material
        fact required to be stated therein or necessary to make the statements
        therein, in light of the circumstances in which they were made, not misleading,
        or any violation by the Corporation of the U.S. Securities Act or any
        rule or regulation promulgated under the U.S. Securities Act applicable
        to the Corporation in connection with any such registration, qualification
        or compliance, and the Corporation will reimburse Kingsdale and each person
        who controls Kingsdale, for any legal and any other expense reasonably
        incurred in connection with investigation, preparing or defending any
        such claim, loss, damage, liability or action, provided, however, that
        the indemnity contained herein shall not apply to amounts paid in settlement
        of any claim, loss, damage, liability or expense if settlement is effected
        without the consent of the Corporation (which consent shall not unreasonably
        be withheld); provided, further, that the Corporation will not be liable
        in any such case to the extent that any such claim, loss, damage, liability
        or expense arises out of or is based on any untrue statement or omission
        or alleged untrue statement or omission, made in reliance upon and in
        conformity with written information furnished to the Corporation by the
        Agent or Kingsdale specifically for use therein. Notwithstanding the foregoing,
        insofar as the foregoing indemnity relates to any such untrue statement
        (or alleged untrue statement) or omission (or alleged omission) made in
        the preliminary prospectus 








 

	 	 	 but eliminated or remedied in the amended prospectus
        on file with the Commission at the time the registration statement becomes
        effective or in the final prospectus filed with the Commission pursuant
        to Rule 424(b) of the Commission, the indemnity agreement herein shall
        not inure to the benefit of Kingsdale if a copy of the final prospectus
        filed pursuant to Rule 424(b) was not furnished to the person or entity
        asserting the loss, liability, claim or damage at or prior to the time
        such furnishing is required by the U.S. Securities Act. 

	 	 	 
	 	 (c)      	 To the extent permitted by law, Kingsdale will indemnify
        the Corporation, each of its directors and officers, control persons (within
        the meaning of Section 15 of the U.S. Securities Act), affiliates, counsel,
        advisors, employees (the "Indemnified Persons") against
        all claims, losses, damages and liabilities (or actions in respect thereof),
        including attorneys fees and costs, arising out of or based on any untrue
        statement (or alleged untrue statement) of a material fact relating solely
        to the Agent or Kingsdale contained in any such registration statement,
        prospect, offering circular or other document and furnished to the Corporation
        by the Agent or Kingsdale specifically for use therein, or any omission
        (or alleged omission) to state therein or necessary to make the statements
        therein not misleading or any violation by Kingsdale of any rule or regulation
        promulgated under the U.S. Securities Act applicable to Kingsdale and
        relating to action or inaction required of Kingsdale in connection with
        any such registration, qualification or compliance, and will reimburse
        the Indemnified Person for any legal or other expenses reasonably incurred
        in connection with investigating or defending any such claim, loss, damage,
        liability or action; provided, however, that the indemnity contained herein
        shall not apply to amounts paid in settlement of any claim, loss, damage,
        liability or expense if settlement is effected without the consent of
        Kingsdale (which consent shall not be unreasonably withheld). Notwithstanding
        the foregoing, the liability of Kingsdale under this subsection (c) shall
        be limited in an amount equal to the net proceeds from the sale of the
        Broker Warrant Shares sold by Kingsdale, unless such liability arises
        out of or is based on the bad faith, negligence, or wilful conduct by
        Kingsdale. 

	 	 	 
	5. 	Representations, Warranties, Covenants and Certification
      of the Agent


The Agent hereby represents, warrants to and covenants with
  the Corporation, and acknowledges that the Corporation is relying upon such
  representations and warranties in entering into this Agreement, that as at the
  date hereof: 

	 	 (a)      	 it has conducted and will conduct activities in
        connection with arranging for Purchasers of the Units in compliance with
        Applicable Securities Laws and the securities laws of the United States
        and all applicable laws of the jurisdictions in which it offers Units
        and will indemnify the Corporation from all losses incurred by it as a
        result of a violation by the Agent or any Selling Agents retained by it
        of such securities laws; (ii) it has not and will not deliver to any prospective
        Purchaser any document or material which constitutes an offering memorandum
        under Applicable Securities Laws; (iii) it has not and will not solicit
        offers to purchase or sell the Units so as to require registration thereof
        or filing of a 








 

	 	 	 prospectus with respect thereto or continuing obligations
        on the part of the Corporation under the laws of any jurisdiction including,
        without limitation, the United States of America or any state thereof
        (save and excepted for the registration required by the Subscription Agreement
        and pursuant to Section 4 hereof), and not solicit offers to purchase
        or sell the Units in any jurisdiction outside of Canada where the solicitation
        or sale of the Units would result in any statutory ongoing disclosure
        requirements in such jurisdiction or any registration requirements in
        such jurisdiction on the part of the Corporation except for the filing
        of a notice or report of the solicitation or sale; (iv) it will obtain
        from each Purchaser an executed Subscription Agreement in a form reasonably
        acceptable to the Corporation and to the Agent relating to the transactions
        herein contemplated, together with all documentation as may be necessary
        in connection with subscriptions for Units; (v) it has refrained and will
        refrain from advertising the Offering in (A) printed media of general
        circulation, (B) radio, (C) television, or (D) electronic media, and not
        make use of any green sheet or other internal marketing document without
        the consent of the Corporation, such consent to be promptly considered
        and not to be unreasonably withheld; and (vi) it has complied and will
        comply with, and ensure that it and its Selling Agents and their respective
        directors, officers, employees and affiliates has complied and will comply
        with all Applicable Securities Laws, the securities laws of the United
        States of America and the terms and conditions set forth in this Agreement;
      

	 	 	 
	 	 (b)      	 the Agent and Kingsdale hereby certify that they
        are not "US Persons" as that term is defined in Regulation
        S as promulgated by the SEC, are not in the United States, and that Kingsdale
        is an "accredited investor" as defined under Applicable Securities
        Laws by virtue of being a company registered under the Securities Act
        (Ontario) as an adviser or dealer (other than a limited market dealer)
        and is acquiring the Broker Warrants as principal for its own account
        and not for the benefit of any other person; 

	 	 	 
	 	 (c)      	 the Agent knows of no claims for services in the
        nature of a finder's fee or origination fee with respect to this financing
        resulting from the respective acts of their officers, directors, or employees,
        for which the Agent and Corporation may be responsible, and agree to indemnify
        and hold each other harmless from any claims for any services of such
        nature arising from any act of the Agent and the Corporation and their
        officers, directors, and employees, unless otherwise disclosed in writing
        herein; 

	 	 	 
	 	 (d)      	 the Offering has been conducted in compliance with
        the requirements of the Applicable Securities Laws and to impose such
        "flow back" restrictions to prevent the Common Shares forming
        part of the Units, Warrants, Broker Warrants, Warrant Shares and Broker
        Warrant Shares from being transferred into the United States; 

	 	 	 
	 	 (e)      	 the execution and delivery of this Agreement, and
        the consummation of the transactions herein contemplated, and compliance
        with the terms of this Agreement will not conflict with or result in a
        breach of any of the terms, 








 

	 	 	 conditions or provisions of, or constitute a default
        under, any material note, indenture, mortgage, deed of trust, or other
        agreement or instrument to which the Agent is a party or by which the
        Agent or any property of the Agent is bound, or to the Agent’s knowledge,
        any existing law, order, rule, regulation, writ, injunction or decree
        of any government, governmental instrumentality, agency or body, arbitration
        tribunal or court, domestic or foreign, having jurisdiction over the Agent
        or any property of the Agent; 

	 	 	 
	 	 (f)      	 the execution and delivery by each of Kingsdale
        and the Agent of this Agreement have been duly authorized by all necessary
        action, and this Agreement is the valid, binding and legally enforceable
        obligation of each of Kingsdale and the Agent; 

	 	 	 
	 	 (g)      	 the Agent is acting as an independent contractor
        and nothing in this Agreement is intended, or shall be deemed, to create,
        a partnership, joint venture or employer- employee relationship between
        the Corporation and the Agent. Neither the Corporation nor the Agent is
        in any way the fiduciary of the other; 

	 	 	 
	 	 (h)      	 the Agent agrees not to make any misleading statements
        of material fact or omit to state any material facts; 

	 	 	 
	 	 (i)      	 the Agent certifies that, to the best of Agent’s
        knowledge, the Agent has not been designated, and is not owned or controlled,
        by a "suspected terrorist" as defined in Executive Order 13224.
        The Agent complies with all applicable laws concerning money laundering
        and related activities. In furtherance of those efforts, the Agent hereby
        represents, warrants and agrees that: (i) none of the cash or property
        that the Agent will pay or will contribute to the Corporation has been
        or shall be derived from, or related to, any activity that is deemed criminal
        under United States law; and (ii) no contribution or payment by the Agent
        to the Corporation, to the extent that they are within the Agent’s
        control shall cause the Purchaser to be in violation of the United States
        Bank Secrecy Act, the United States International Money Laundering Control
        Act of 1986 or the United States International Money Laundering Abatement
        and Anti-Terrorist Financing Act of 2001. The Agent shall promptly notify
        the Agent if any of these representations ceases to be true and accurate
        regarding the Agent. The Agent understands and agrees that if at any time
        it is discovered that any of the foregoing representations are incorrect,
        or if otherwise required by applicable law or regulation related to money
        laundering similar activities, the Corporation may undertake appropriate
        actions to ensure compliance with applicable law or regulation. The Agent
        further understands that the Corporation may release confidential information
        about the Agent and, if applicable, any underlying beneficial owners,
        to proper authorities to ensure compliance with relevant rules and regulations
        under the laws set forth in subsection (ii) above; and 

	 	 	 
	 	 (j)      	 the Agent or any of its affiliates have not, will
        not and will not cause any person or entity, directly or indirectly, to
        engage in "short sales" of the Common Shares as long as the Broker Warrants
        shall be outstanding. 









 It is understood and agreed that for the purpose of the opinions
  to be delivered pursuant to subparagraph 8(e) of this Agreement, counsel to
  the Corporation will rely on inter alia, the accuracy and truth of the
  representations, warranties and covenants set forth in this paragraph 5. 

	6. 	Representations and Warranties of the Corporation


The Corporation hereby represents and warrants to and with
  the Agent (on its own behalf and on behalf of each of the Purchasers) and acknowledges
  that it is relying upon such representations and warranties in acting as agent,
  in the case of the Agent, and in purchasing the Units, in the case of the Purchasers,
  that, except as otherwise disclosed in the Disclosure Documents as at the date
  hereof:

	 	 (a)      	 each of the Corporation and the Subsidiary has been
        duly incorporated or amalgamated and is existing under the laws of its
        jurisdiction of incorporation or amalgamation and has all requisite power
        and authority necessary to, and is qualified to, carry on its business
        as now conducted and to own or lease its properties and assets in all
        jurisdictions in which it currently carries on business and/or owns or
        leases its properties and assets, save and except where the failure to
        do so would not have a Material Adverse Effect on the Corporation; and
        the Corporation has all required corporate power and authority to allot,
        issue and sell the Units, to enter into this Agreement, the Warrant Certificates,
        the Broker Warrant Certificate and the Subscription Agreements, and to
        carry out the provisions of each of such agreements; 

	 	 	 
	 	 (b)      	 the authorized capital of the Corporation consists
        of 200,000,000 Common Shares with a par value of $0.001 per Common
        Share, of which, as of the date hereof, 22,676,670 Common Shares are issued
        and outstanding as fully paid and non-assessable shares in the capital
        of the Corporation, and warrants to purchase Common Shares, of which,
        as of the date hereof, 1,550,000 are outstanding, and options to purchase
        Common Shares of which, as of the date hereof, 2,590,000 have been granted
        and are outstanding; 

	 	 	 
	 	 (c)      	 the Corporation has no subsidiaries other than the
        Subsidiary and the Corporation does not beneficially own or exercise control
        or direction over, 10% or more of the outstanding voting shares of any
        company other than the Subsidiary; the Corporation beneficially owns,
        directly or indirectly, 100% of the issued and outstanding shares in the
        capital of the Subsidiary free and clear of all mortgages, liens, charges,
        pledges, security interests, encumbrances, claims or demands of any kind
        whatsoever; to the best of the Corporation’s knowledge all of such
        shares have been duly authorized and validly issued and are outstanding
        as fully- paid shares and, in respect of the Subsidiary only, no person
        has any right, agreement or option, present or future, contingent or absolute,
        or any right capable of becoming a right, agreement or option, for the
        purchase from the Corporation of any interest in any of such shares or
        for the issue or allotment of any unissued shares in the capital of the
        Subsidiary or any other security convertible into or exchangeable for
        any such shares; 








 

	 	 (d)      	 to the knowledge of the Corporation, no order ceasing
        or suspending trading in any securities of the Corporation or prohibiting
        the sale of the Units or the trading of any of the Corporation’s
        issued securities has been issued and no proceedings for such purpose
        are pending or, to the knowledge of the Corporation, threatened; 

	 	 	 
	 	 (e)      	 to the knowledge of the Corporation, no agreement
        is in force or effect which in any manner affects the voting or control
        of any of the securities of the Corporation or the Subsidiary; 

	 	 	 
	 	 (f)      	 the Corporation has not declared or paid any dividends
        or declared or made any other payments or distributions on or in respect
        of any of its shares and has not, directly or indirectly, redeemed, purchased
        or otherwise acquired any of its shares or agreed to do so or otherwise
        effected any return of capital with respect to such shares; 

	 	 	 
	 	 (g)      	 except as set forth in the Disclosure Documents
        and except as contemplated hereby, no person, firm or corporation, as
        of the date hereof, has any agreement or option, or any right or privilege
        (whether pre-emptive or contractual) capable of becoming an agreement
        or option, for the purchase, subscription or issuance of any securities
        of the Corporation; 

	 	 	 
	 	 (h)      	 the Corporation is not in default in any material
        respect of any requirement of the Applicable Securities Laws of the Offering
        Jurisdictions or the SEC. In particular, without limiting the foregoing,
        the Corporation is in compliance at the date hereof with its obligations
        to make timely disclosure of all material changes relating to it and,
        since April 30, 2004, no such disclosure has been made on a confidential
        basis and there is no material change relating to the Corporation which
        has occurred but has not been disclosed; 

	 	 	 
	 	 (i)      	 the currently issued and outstanding Common Shares
        of the Corporation have been conditionally approved for listing on the
        Exchange and to its knowledge no order ceasing or suspending trading in
        any securities of the Corporation or prohibiting the sale of the Units
        has been issued and no proceedings for such purpose are pending or, to
        the knowledge of the Corporation, threatened; 

	 	 	 
	 	 (j)      	 the definitive form of certificate representing
        the Common Shares complies with the requirements of the applicable laws
        of Nevada and of the Exchange; 

	 	 	 
	 	 (k)      	 to the best of the knowledge of the Corporation,
        each of the Corporation and the Subsidiary has conducted, and is conducting,
        its business in material compliance with all applicable laws, rules and
        regulations of each jurisdiction in which its business is carried on and
        is licensed, registered or qualified in all jurisdictions in which it
        owns, leases or operates its property or carries on business to enable
        its business to be carried on as now or proposed to be conducted and its
        property and assets to be owned, leased and operated and all such licences,
        registrations and qualifications are valid, subsisting and in good standing,
        except in each case in respect of matters which do not and will not result
        in any Material Adverse Effect 








 

	 	 	 on the business, business prospects or condition
        (financial or otherwise) of the Corporation and the Subsidiary (on a consolidated
        basis), and except for the failure to be so qualified or the absence of
        any such license, registration or qualification which does not and will
        not have a Material Adverse Effect on the assets or properties, business,
        results of operations, prospects or condition (financial or otherwise)
        of the Corporation and the Subsidiary (on a consolidated basis) or on
        the corporate power or authority of the Corporation to perform its obligations
        under this Agreement; 

	 	 	 
	 	 (l)      	 each of the Corporation and the Subsidiary is the
        beneficial owner of the properties, business and assets or the interests
        in the properties, business or assets referred to as owned by it in the
        Disclosure Documents, all agreements under which the Corporation or the
        Subsidiary holds an interest in a property, business or asset are in good
        standing according to their terms except where the failure to be in such
        good standing does not and will not have a Material Adverse Effect on
        the Corporation and the Subsidiary (on a consolidated basis) or its properties,
        business or assets, and the Disclosure Documents were as at the date thereof
        true and correct in all material respects concerning the Corporation and
        the Subsidiary, and contained no material misrepresentations; 

	 	 	 
	 	 (m)      	 neither the Corporation nor the Subsidiary has received
        any notice of proceedings relating to the revocation or modification of
        any material certificate, authority, permit or license necessary to conduct
        the business now owned or operated by it which, if the subject of an unfavourable
        decision, ruling or finding would have a Material Adverse Effect on the
        conduct of the business, operations, financial condition or income of
        the Corporation and the Subsidiary (on a consolidated basis); 

	 	 	 
	 	 (n)      	 the Corporation is not in default or in breach in
        any material respect of, and the execution and delivery of this Agreement,
        the performance and compliance with the terms hereof and the completion
        of the transactions described herein by the Corporation will not result
        in any material breach of, or be in conflict with or constitute a material
        default under, or create a state of facts which, after notice or lapse
        of time, or both, would constitute a material default under any term or
        provision of the constating documents or any resolutions of the Corporation
        or any material mortgage, note, indenture, contract, agreement (written
        or oral), instrument, lease or other document to which the Corporation
        is a party or by which it or a material portion of its assets are bound
        (a "Material Agreement"), or any judgment, decree,
        order, statute, rule or regulation applicable to any of them; 

	 	 	 
	 	 (o)      	 the auditors of the Corporation who audited the
        Audited Financial Statements are independent public accountants as required
        by Applicable Securities Laws and there has never been any disagreement
        (within the meaning of Regulation 304(b) of Regulation SB as promulgated
        by the SEC) with the present auditor; 








 

	 	 (p)      	 each of the Corporation and the Subsidiary has filed
        all federal, provincial, state, local and foreign tax returns that are
        required to be filed or have requested extensions thereof (except in any
        case in which the failure so to file would not have a material adverse
        effect on the assets and properties, business, results of operations,
        prospects or condition (financial or otherwise) of the Corporation and
        the Subsidiary (on a consolidated basis)) and has paid all taxes required
        to be paid by it and any other assessment, fine or penalty levied against
        it, to the extent that any of the foregoing is due and payable, except
        for any such assessment, fine or penalty that is currently being contested
        in good faith; 

	 	 	 
	 	 (q)      	 each of the Corporation and the Subsidiary has established
        on its books and records reserves that are adequate for the payment of
        all taxes not yet due and payable and there are no liens for taxes on
        the assets of the Corporation or the Subsidiary, and there are no audits
        known by the Corporation’s management to be pending of the tax returns
        of the Corporation or the Subsidiary (whether federal, state, provincial,
        local or foreign) and there are no claims which have been or may be asserted
        relating to any such tax returns, which audits and claims, if determined
        adversely, would result in the assertion by any governmental agency of
        any deficiency that would have a material adverse effect on the assets
        or properties, business, results of operations, prospects or condition
        (financial or otherwise) of the Corporation and the Subsidiary (on a consolidated
        basis); 

	 	 	 
	 	 (r)      	 no domestic or foreign taxation authority has asserted
        or, to the best of the Corporation’s knowledge, threatened to assert
        any assessment, claim or liability for taxes due or to become due in connection
        with any review or examination of the tax returns of the Corporation or
        the Subsidiary (including, without limitation, any predecessor companies)
        filed for any year which would have a material adverse effect on the assets
        or properties, business, results of operations, prospects or condition
        (financial or otherwise) of the Corporation or the Subsidiary; 

	 	 	 
	 	 (s)      	 neither the Corporation nor, to the best of the
        Corporation’s knowledge, any other party to a Material Agreement
        is in material default in the observance or performance of any term or
        obligation to be performed by it under any such Material Agreement and,
        to the best of the Corporation’s knowledge, no event has occurred
        which with notice or lapse of time or both would constitute such a default,
        in any such case which default or event would have a material adverse
        effect on the assets or properties, business, results of operations, prospects
        or condition (financial or otherwise) of the Corporation and the Subsidiary
        (on a consolidated basis); 

	 	 	 
	 	 (t)      	 the Corporation has filed all documents, taken all
        proceedings and obtained all regulatory consents necessary to be filed
        by the Time of Closing in connection with the sale of the Units; 

	 	 	 
	 	 (u)      	 upon completion of all of the transactions contemplated
        in this Agreement the Units will be validly issued and outstanding as
        fully paid and non-assessable and 








 

	 	 	 will not have been issued in violation
        of or subject to any pre-emptive rights or other contractual rights to
        purchase securities issued by the Corporation; 

	 
	 	 (v)      	 the execution and delivery of each of
        this Agreement, the Warrant Certificates, the Broker Warrant Certificate
        and the Subscription Agreements and the performance of the transactions
        contemplated thereunder, the offering and sale of the Units and any compliance
        by the Corporation with the other provisions of each of such agreements
        to be complied with by it does not and will not: 

	 
	 	 	 (i)      
	 require the consent, approval, authorization,
        registration or qualification of or with any governmental authority, stock
        exchange, securities regulatory authority or other third party, except:
        (i) such as have been obtained; (ii) such as may be required under the
        applicable by-laws, policies, regulations and prescribed forms of the
        Exchange; or (iii) as may be required in connection with the registration
        with the SEC of the resale of the Common Shares forming part of the Units,
        the Warrants, the Warrant Shares and the Broker Warrant Shares; 

	 
	 	 	 (ii)      
	 result in a breach of or default under,
        or create a state of facts which, after notice or lapse of time or both,
        would result in a breach of or default under, or conflict with: 

	 
	 	 	 	 (A)      
	 any of the terms, conditions or provisions of the
        constating documents or resolutions of the shareholders, directors or
        any committee of directors of the Corporation or the Subsidiary or any
        Material Agreement ; or 

	 
	 	 	 	 (B)     
      
	 any statute, rule, regulation or law applicable
        to the Corporation, or the Subsidiary including, without limitation, the
        Applicable Securities Laws of the Offering Jurisdictions or the United
        States (to the extent applicable), or any judgment, order or decree of
        any governmental body, agency or court having jurisdiction over the Corporation
        or the Subsidiary; or 

	 
	 	 	 (iii)      
	 give rise to any lien, charge or claim
        in or with respect to the properties or assets now owned or hereafter
        acquired by the Corporation or the Subsidiary or the acceleration of or
        the maturity of any debt under any indenture, mortgage, lease, agreement
        or instrument binding or affecting any of them or any of their properties;
      

	 
	 	 (w)      	 to the best of the Corporation’s
        information, knowledge and belief, and without having conducted any inquiry,
        the Corporation is not aware of any legislation, or proposed legislation
        (published by a legislative body), which it anticipates will materially
        and adversely affect the business, affairs, operations, assets, liabilities
        (contingent or otherwise) or prospects of the Corporation and the Subsidiary,
        considered as a whole; 








 

	 	 (x)      	 all information filed by or on behalf
        of the Corporation since April 30, 2004 with the SEC or the Exchange taken
        together as a whole, are true and correct and do not contain a material
        misrepresentation, determined as at the date of filing, which has not
        been corrected; 

	 
	 	 (y)      	 other than the Agent, there is no person
        acting or, to the knowledge of the Corporation, purporting to act at the
        request of the Corporation, who is entitled to any brokerage or agency
        fee in connection with the Offering; 

	 
	 	 (z)      	 the minute books and records of each of
        the Corporation and the Subsidiary made available to the Agent to the
        extent requested by the Agent in connection with its due diligence investigation
        of the Corporation for the periods from the date of amalgamation or incorporation,
        as the case may be, to the date of examination thereof respectively, are
        all of the minute books and records of each of the Corporation and the
        Subsidiary, as the case may be, and contain copies of all proceedings
        (or certified copies thereof) of the shareholders and the boards of directors
        of each of the Corporation and the Subsidiary, as the case may be, and
        there have been no other meetings, resolutions or proceedings of the shareholders
        or boards of directors of the Corporation and the Subsidiary, as the case
        may be, not reflected in such minute books and other records, other than
        those which have been disclosed to the Agent; 

	 
	 	 (aa)      	 there is not, in the constating documents
        of the Corporation or in any Material Agreement, any restriction upon
        or impediment to the declaration or payment of dividends by the directors
        of the Corporation or the payment of dividends by the Corporation to the
        holders of its Common Shares; 

	 
	 	 (bb)      	 Equity Transfer Services Inc. at its principal
        office in the City of Toronto, has been duly appointed Canadian transfer
        agent and registrar for the Common Shares; 

	 
	 	 (cc)      	 the Financial Statements: 

	 
	 	 	 (i)     
      
	 have been prepared in accordance with United States
        generally accepted accounting principles applied on a basis consistent
        with those of preceding fiscal periods; 

	 
	 	 	 (ii)      
	 present fully, fairly and correctly, in all material
        respects, the assets, liabilities and financial condition of the Corporation
        as at April 30, 2004 and as at July 31, 2004, respectively, and the results
        of each of their operations and the changes in each of their financial
        positions for the relevant period then ended; and 

	 
	 	 	 (iii)      
	 contain and reflect adequate provision or allowance
        for all reasonably anticipated liabilities, expenses and losses of the
        Corporation; 

	 
	 	 (dd)      	 except as disclosed in the Disclosure
        Documents since April 30, 2004, the Corporation has not incurred any material
        liabilities or obligations (absolute, 








 

	 	 	 accrued, contingent or otherwise), or
        entered into any material transaction, not in the ordinary course of business
        and there has been no material adverse change in the financial position
        or condition of the business of the Corporation from that indicated by
        the Financial Statements, nor has there been any material adverse change
        since April 30, 2004 in the affairs, business, prospects, liabilities,
        assets, operations or condition of the business, financial or otherwise
        of the Corporation or the Subsidiary; 

	 
	 	 (ee)      	 since April 30, 2004, the Corporation
        has conducted its business only in the ordinary course and, except as
        disclosed in the Corporation’s Disclosure Document, there has not
        occurred: 

	 
	 	 	 (i)      
	 any event that could reasonably be expected,
        individually or in the aggregate, to have a Material Adverse Effect on
        the Corporation and the Subsidiary (taken as a whole); 

	 
	 	 	 (ii)      
	 any amendments or changes in the constating
        documents or by-laws of the Corporation and the Subsidiary; 

	 
	 	 	 (iii)      
	 any damage, destruction or loss, whether
        or not covered by insurance, that would, individually or in the aggregate,
        have a Material Adverse Effect on the Corporation and the Subsidiary;
      

	 
	 	 	 (iv)      
	 any: 

	 
	 	 	 	 (A)      
	 incurrence, assumption or guarantee by the Corporation
        or the Subsidiary of any debt for borrowed money (other than for equipment
        leases or working capital lines of credit, in each case, in the ordinary
        course of business); 

	 
	 	 	 	 (B)     
      
	 issuance or sale of any securities convertible into
        or exchangeable for securities of the Corporation other than to directors,
        employees and consultants pursuant to existing equity compensation or
        stock option plans of the Corporation in accordance with past practices;
      

	 
	 	 	 	 (C)      
	 issuance or sale of options or other rights to acquire
        from the Corporation or the Subsidiary, directly or indirectly, securities
        of the Corporation or the Subsidiary or any securities convertible into
        or exchangeable for any such securities, other than options issued to
        directors, employees and consultants in the ordinary course of business
        pursuant to existing equity compensation or stock option plans of the
        Corporation in accordance with past practices; 

	 
	 	 	 	 (D)      
	 issuance or sale of any share, bond or other corporate
        security; 

	 
	 	 	 	 (E)      
	 declaration or making any dividend, payment or other
        distribution to shareholders or purchase or redemption of any share of
        its capital stock or other security; 








 

	 	 	 	
      (F)
	 sale, assignment or transfer of any of its intangible assets except in
      the ordinary course of business, or cancellation of any debt of claim except
      in the ordinary course of business all in accordance with past practices;
    
	 
	 	 	 	 (G)      
	 waiver of any right of substantial value whether
        or not in the ordinary course of business; 

	 
	 	 	 	 (H)     
      
	 material change in officer compensation; or 

	 
	 	 	 	 (I)      
	 other commitment (contingent or otherwise) to do
        any of the foregoing; 

	 
	 	 	 (v)      
	 any creation, sufferance or assumption
        by the Corporation or any of the Subsidiary of any lien on any material
        asset or any making of any loan, advance or capital contribution to or
        investment in any person in an aggregate amount which exceeds $25,000
        outstanding at any time; or 

	 
	 	 	 (vi)      
	 any entry into, amendment of, relinquishment,
        termination or non-renewal by the Corporation or the Subsidiary of any
        material agreement, note, mortgage, indenture, contract, lease, instrument,
        permit, concession, franchise or license or other right or obligation,
        other than in the ordinary course of business; 

	 
	 	 (ff)      	 the Corporation and the Subsidiary do
        not have any material direct or indirect indebtedness, liabilities, claim,
        loss, damage, deficiency, obligation or responsibility, known or unknown,
        fixed or contingent, choate or inchoate, liquidated or unliquidated, secured
        or unsecured, absolute, accrued or otherwise, whether or not of a kind
        required by generally accepted accounting principles to be set forth in
        financial statements, including but not limited to off-balance sheet financings,
        guarantees and similar transactions ("Liabilities")
        which are not fully and adequately reflected in the Financial Statements.
        To the knowledge of the Corporation, there are no existing circumstances,
        conditions, events or arrangements which may hereafter give rise to any
        Liabilities of the Corporation or the Subsidiary except in the ordinary
        course of business. 

	 
	 	 (gg)      	 neither the Corporation, nor any affiliate
        of the Corporation (including, but not limited to, the Subsidiary), nor
        any agent or employee of the Corporation, any other person acting on behalf
        of or associated with the Corporation, or any individual related to any
        of the foregoing persons, acting on behalf of the Corporation alone or
        together, has: 

	 
	 	 	 (i)      
	 received, directly or indirectly, any
        rebates, payments, commissions, promotional allowances or any other economic
        benefits, regardless of their nature or type, from any customer, supplier,
        trading company, shipping company, governmental employee or other person
        with whom the Corporation or the Subsidiary has done business directly
        or indirectly; or 








 

	 	 	 (ii)      
	 directly or indirectly, given or agreed
        to give any gift or similar benefit to any customer, supplier, trading
        company, shipping company, governmental employee or other person who is
        or may be in a position to help or hinder the business of the Corporation
        or the Subsidiary (or assist the Corporation or the Subsidiary in connection
        with any actual or proposed transaction) which 

	 
	 	 	 	 (A)     
      
	 may subject the Corporation or the Subsidiary to
        any damage or penalty in any civil, criminal or governmental litigation
        or proceeding; 

	 
	 	 	 	 (B)      
	 if not given in the past, may have had a Material
        Adverse Effect on the Corporation or the Subsidiary; or 

	 
	 	 	 	 (C)      
	 if not continued in the future, may materially adversely
        affect the assets, business or operations of the Corporation or the Subsidiary
        or subject the Corporation or the Subsidiary to suit or penalty in any
        private or governmental litigation or proceeding; 

	 
	 	 (hh)      	 with respect to each premises which is
        material to the Corporation on a consolidated basis and which the Corporation
        or the Subsidiary occupies as tenant (the "Leased Premises"),
        the Corporation or such Subsidiary occupies the Leased Premises and has
        the right to occupy and use the Leased Premises and each of the leases
        pursuant to which the Corporation and/or the Subsidiary occupies the Leased
        Premises is in good standing and in full force and effect; 

	 
	 	 (ii)      	 to the knowledge of the Corporation, there
        has not been and there is not currently any labour disruption or conflict
        which is adversely affecting or could adversely affect, in a material
        manner, the carrying on of the Corporation’s or the Subsidiary’s
        business, considered as a whole; 

	 
	 	 (jj)      	 each of the Corporation and the Subsidiary
        has procured and maintains adequate insurance against all insurable risks
        which are material to the Corporation and the Subsidiary (taken as a whole);
      

	 
	 	 (kk)      	 the Corporation is not in default with
        respect to any of the provisions contained in any insurance policies and
        has not failed to give any notice or pay any premium or present any material
        claim under any such insurance policy and has no reason to believe that
        any of its insurance policies will not be renewed by the insurer; 

	 
	 	 (ll)      	 there are no actions, suits, proceedings
        or inquiries pending or to the knowledge of the Corporation, threatened
        against or affecting the Corporation or the Subsidiary at law or in equity
        or before or by any federal, provincial, municipal or other governmental
        department, commission, board, bureau, agency or instrumentality which
        in any way materially adversely affects the business, operations or condition
        (financial or otherwise) of the Corporation and the Subsidiary or their
        properties or assets or which affects or may affect the distribution of
        the Units and none of the actions, suits, proceedings or inquiries so
      








 

	 	 	 disclosed is expected to materially adversely affect,
        the business, operations or condition (financial or otherwise) of the
        Corporation and the Subsidiary or their properties or assets; 

	 
	 	 (mm)      	 except as disclosed in the Disclosure Documents,
        none of the directors, officers or employees of the Corporation or the
        Subsidiary, any known holder of more than ten per cent of any class of
        shares of the Corporation, or any known associate or affiliate of any
        of the foregoing persons or companies (as such terms are defined in the
        Securities Act (Ontario)), has had any material interest, direct
        or indirect, in any material transaction within the previous two years
        or any proposed material transaction which, as the case may be, materially
        affected, is material to or will materially affect the Corporation and
        the Subsidiary, save and except for the interest of William M. Sheriff,
        a shareholder and officer of the Corporation, in the acquisition by the
        Corporation of certain mineral properties located in Coconino and Mohave
        Counties, Arizona as reported in the Disclosure Documents, and which has
        not yet been approved by the Exchange; 

	 
	 	 (nn)      	 the Corporation and the Subsidiary are in material
        compliance with all applicable federal, provincial, state, municipal and
        local laws, statutes, ordinances, by-laws and regulations and orders,
        directives and decisions rendered by any ministry, department or administrative
        or regulatory agency, domestic or foreign (the "Environmental
        Laws") relating to the protection of the environment, occupational
        health and safety or the processing, use, treatment, storage, disposal,
        discharge, transport or handling of any pollutants, contaminants, chemicals
        or industrial, toxic or hazardous wastes or substance ("Hazardous
        Substances"); 

	 
	 	 (oo)      	 the Corporation and the Subsidiary have, collectively,
        obtained all material licences, permits, approvals, consents, certificates,
        registrations and other authorizations under all applicable Environmental
        Laws (the "Environmental Permits") necessary as at
        the date hereof for the operation of the businesses carried on or proposed
        to be commenced by the Corporation and the Subsidiary, and each Environmental
        Permit is valid, subsisting and in good standing and neither the Corporation
        nor the Subsidiary is in material default or breach of any Environmental
        Permit and, to the best of the knowledge of the Corporation, no proceeding
        is pending or threatened to revoke or limit any Environmental Permit;
      

	 
	 	 (pp)      	 neither the Corporation nor the Subsidiary has used,
        except in compliance with all Environmental Laws and Environmental Permits,
        any property or facility which it owns or leases or previously owned or
        leased, to generate, manufacture, process, distribute, use, treat, store,
        dispose of, transport or handle any Hazardous Substance; 

	 
	 	 (qq)      	 neither the Corporation nor the Subsidiary (including,
        if applicable, any predecessor companies) has received any notice of,
        or been prosecuted for an offence alleging, non-compliance with any Environmental
        Law, and neither the Corporation nor the Subsidiary (including, if applicable,
        any predecessor companies) has settled any allegation of non-compliance
        short of prosecution. 








 

	 	 	 There are no orders or directions relating to environmental
        matters requiring any material work, repairs, construction or capital
        expenditures to be made with respect to any of the assets of the Corporation
        or the Subsidiary, nor has the Corporation or any of the Subsidiary received
        notice of any of the same; 

	 
	 	 (rr)      	 except as ordinarily or customarily required by
        applicable permits, neither the Corporation nor the Subsidiary has received
        any notice wherein it is alleged or stated that it is potentially responsible
        for a federal, provincial, state, municipal or local clean-up site or
        corrective action under any Environmental Laws. Neither the Corporation
        nor the Subsidiary has received any request for information in connection
        with any federal, state, municipal or local inquiries as to disposal sites;
      

	 
	 	 (ss)      	 the Corporation and the Subsidiary, taken as a whole,
        owns, controls or has legal rights to, through mining tenements of various
        types and descriptions, all of the rights, titles and interests materially
        necessary or appropriate to authorize and enable it to carry on the material
        mineral exploration and/or mining activities as currently being undertaken
        and has obtained or, upon performance of all conditions precedent will
        be able to obtain such rights, titles and interests as may be required
        to implement its plans on its properties and the Subsidiary taken as a
        whole and is not in material default of such rights, titles and interests;
      

	 
	 	 (tt)      	 all assessments or other work required to be performed
        in relation to the material mining claims and the mining rights of the
        Corporation in order to maintain the Corporation's interest therein, if
        any, have been performed to date and the Corporation and the Subsidiary
        have complied in all material respects with all applicable governmental
        laws, regulations and policies in this connection as well as with regard
        to legal, contractual obligations to third parties in this connection
        except in respect of mining claims and mining rights that the Corporation
        or the Subsidiary intends to abandon or relinquish and except for any
        non-compliance which would not either individually or in the aggregate
        have a Material Adverse Effect. All such mining claims and mining rights
        are in good standing in all material respects as of the date of this agreement;
      

	 
	 	 (uu)      	 to the Corporation's knowledge, all mining operations
        on the properties of the Corporation and the Subsidiary have been conducted
        in all respects in accordance with good mining and engineering practices
        and all applicable workers' compensation and health and safety and workplace
        laws, regulations and policies have been duly complied with; and 

	 
	 	 (vv)      	 there are no environmental audits, evaluations,
        assessments, studies or tests relating to the Corporation or the Subsidiary
        except for ongoing assessments conducted by or on behalf of the Corporation
        in the ordinary course. 

	 
	 	 (ww)      	 each material plan for retirement, bonus, stock
        purchase, profit sharing, stock option, deferred compensation, severance
        or termination pay, insurance, medical, hospital, dental, vision care,
        drug, sick leave, disability, salary continuation, legal benefits, unemployment
        benefits, vacation, incentive or otherwise contributed to 








 

	 	 	 or required to be contributed to, by the Corporation
        for the benefit of any current or former director, officer, employee or
        consultant of the Corporation (the "Employee Plans")
        has been maintained in compliance with its terms and with the requirements
        prescribed by any and all statutes, orders, rules and regulations that
        are applicable to such Employee Plans, in each case in all material respects
        and has been publicly disclosed to the extent required by Applicable Securities
        Laws in the United States; 

	 
	 	 (xx)      	 all material accruals for unpaid vacation pay, premiums
        for unemployment insurance, health premiums, federal or state pension
        plan premiums, accrued wages, salaries and commissions and employee benefit
        plan payments have been reflected in the books and records of the Corporation
        or the Subsidiary; and 

	 
	 	 (yy)      	 each of the Corporation and the Subsidiary has good
        and valid title to all material intellectual property rights used by the
        Corporation or relating to the operation of its business, including copyrights,
        industrial designs, trade marks, trade secrets, know how and proprietary
        rights necessary to carry on its business (the "Intellectual
        Property") free and clear of any and all encumbrances, except
        for royalty obligations and general bank security incurred or granted,
        as the case may be, in the ordinary course of business. No royalty or
        other fee is required to be paid by the Corporation or the Subsidiary
        to any other person in respect of the use of any of the Intellectual Property.
        To the best of the knowledge of the Corporation, no employee of the Corporation
        or the Subsidiary is in violation of any term of any non-disclosure, proprietary
        rights or similar agreement between such employee and the Corporation
        or the Subsidiary or between such employee and any former employer. To
        the best of the knowledge of the Corporation, all technical information
        developed by and belonging to the Corporation and/or the Subsidiary which
        has not been copyrighted or patented has been kept confidential; 

	 
	 	 (zz)      	 there are no material restrictions on the ability
        of the Corporation or the Subsidiary to use and exploit all rights in
        the Intellectual Property required in the ordinary course of the Corporation’s
        or the Subsidiary’s business. None of the rights of the Corporation
        or the Subsidiary in the Intellectual Property will be impaired or affected
        in any way by the transactions contemplated by this agreement. To the
        best of the knowledge of the Corporation, the conduct of the business
        of the Corporation and the Subsidiary and the use of the Intellectual
        Property does not infringe, and each of the Corporation and the Subsidiary
        has not received any notice, complaint, threat or claim alleging infringement
        of, any patent, trade mark, trade name, copyright, industrial design,
        trade secret or other Intellectual Property or proprietary right of any
        other person, and the conduct of the business of each of the Corporation
        does not include any activity which may constitute passing off. Each of
        the Corporation and the Subsidiary has no notice of any infringements
        of the Intellectual Property or material claims against the Intellectual
        Property by any third party; and 

	 
	 	 (aaa)      	 the data processing systems used by the Corporation
        adequately meet the data processing needs of the business and operations
        of the Corporation as presently 








 

	 	 	conducted. Each of the Corporation and the Subsidiary
        has taken appropriate action by instruction, agreement or otherwise with
        its employees or other persons permitted access to system application
        programs and data files used in the data processing systems to protect
        against unauthorized access, use, copying, modification, theft and destruction
        of such programs and files. The data processing and data storage facilities
        of the Corporation and/or the Subsidiary are adequate and properly protected.
      

	 	 	 
	7. 	Covenants of the Corporation


The Corporation hereby covenants to and with the Agent (on
  its own behalf and on behalf of the Purchasers) that:

	 	 (a)      	 the Corporation will duly execute and deliver the
        Subscription Agreements, the Warrant Certificates and the Broker Warrants
        at the Closing Time, and comply with and satisfy all terms, conditions
        and covenants therein contained to be complied with or satisfied by the
        Corporation; 

	 
	 	 (b)      	 the Corporation will use its commercially reasonable
        best efforts to maintain its status as a reporting issuer not in default
        in each of British Columbia, Ontario, and Alberta for a period of 24 months
        from the Closing Date; 

	 
	 	 (c)      	 the Corporation will use its commercially reasonable
        best efforts to maintain the listing of the Common Shares on the Exchange
        to the date which is two years following the Closing Date and to ensure
        that the Common Shares comprising part of the Units and the Warrant Shares
        will be listed and posted for trading on the Exchange upon their issue
        subject to satisfaction with the continued listing requirements of the
        Exchange; and 

	 
	 	 (d)      	 in the event any person acting or purporting to
        act for the Corporation establishes a claim from the Agent for any brokerage
        or agency fee in connection with the transactions contemplated herein,
        the Corporation shall indemnify and hold harmless the Agent with respect
        thereto and with respect to all costs reasonably incurred in the defence
        thereof provided that such claim is not a result of the actions of the
        Agent. 

	 	 	 
	8.	 Conditions to Closing


The following are conditions to the closing of the transactions
  involving the issuance and sale of the Units contemplated hereby, which conditions
  the Corporation covenants to exercise its reasonable best efforts to have fulfilled
  on or prior to the Time of Closing and which conditions may be waived in writing
  in whole or in part by the Agent:

	 	 (a)      	 the Corporation will have made and/or obtained the necessary filings,
      approvals, consents and acceptances of the appropriate regulatory authorities
      required to be made or obtained by the Corporation in connection with the
      sale of the Units to the Purchasers prior to the Time of Closing on the
      Closing Date as herein 







 

	 	 	 contemplated, it being understood that
        the Agent shall do all that is reasonably required to assist the Corporation
        to fulfil this condition; 

	 
	 	 (b)      
	 the Corporation’s Common Shares
        will be listed on the Exchange at the Time of Closing; 

	 
	 	 (c)      
	 the Corporation’s board of directors
        shall have authorized and approved the execution and delivery of this
        Agreement, the acceptance of the Subscription Agreements, the allotment,
        issuance and delivery of the Common Shares comprising the Units, the creation
        and issuance of the Warrants and the Broker Warrants, the allotment, issuance
        and delivery of the Common Shares issuable upon the due exercise of the
        Broker Warrants, the allotment, issuance and delivery of the Warrant Shares
        issuable upon the due exercise of the Warrants, and all matters relating
        thereto; 

	 
	 	 (d)      
	 the Corporation shall have accepted one
        or more Subscription Agreements with the Purchasers; 

	 
	 	 (e)      
	 the Agent shall have received an opinion,
        dated the Closing Date, of the Corporation’s counsel (it being understood
        that such counsel may rely to the extent appropriate in the circumstances,
        (i) as to matters of fact, on certificates of the Corporation executed
        on its behalf by a senior officer of the Corporation and on certificates
        of the registrar and transfer agent for the Common Shares, as to the issued
        capital of the Corporation; (ii) as to matters of fact not independently
        established, on certificates of the Corporation’s auditors); (iii)
        as to matters of law, may rely on the opinion of other counsel for certain
        legal matters; (iv) on the representations and warranties of the Agent
        set out herein; and (v) the Disclosure Documents, which opinion shall,
        as appropriate, include the following opinions: 

	 
	 	 	 (i)     
      
	 the Corporation is a body corporate incorporated
        under the laws of Nevada and has not been discontinued or dissolved, and
        has all requisite corporate power and capacity to carry on its business
        to own or lease its assets and properties and to carry out the provisions
        of this Agreement, the Warrant Certificates, the Broker Warrant Certificate
        and the Subscription Agreements; 

	 
	 	 	 (ii)      
	 the Subsidiary is a corporation amalgamated under
        the laws of Delaware and has not been dissolved, and has all requisite
        corporate power and capacity to carry on its business to own or lease
        its assets and properties; 

	 
	 	 	 (iii)      
	 the Corporation has authorized and outstanding capital
        stock as set forth in the Disclosure Documents, and based on counsel's
        review of the Corporation’s certificate of incorporation and bylaws,
        minutes, consents, and upon representations of the Corporation’s
        officers, all of such issued and outstanding shares of capital stock have
        been duly and validly authorized and issued, and to the knowledge of such
        counsel are fully paid and non-assessable, and, except as set forth in
        the Disclosure Documents, 








 

	 	 	 	 to the knowledge of such counsel no other
        stockholder of the Corporation is entitled to any preemptive rights to
        subscribe for, or purchase shares of the capital stock and to the knowledge
        of such counsel none of such securities were issued in violation of the
        preemptive rights of any holders of any securities of the Corporation.
      

	 
	 	 	 (iv)	 all requisite corporate actions have been
        taken by or on behalf of the Corporation to authorize the issuance and
        sale of the Units; 

	 
	 	 	 (v)	 the execution and delivery of this Agreement,
        the Warrant Certificates, the Broker Warrant Certificate and the Subscription
        Agreements has been duly authorized by, and has been executed and delivered
        on behalf and is legally binding upon, the Corporation and is enforceable
        in accordance with its terms, subject to the usual qualifications; 

	 
	 	 	 (vi)	 the Common Shares comprising the Units
        will have been and the Common Shares issuable upon the due exercise of
        the Warrants and the Broker Warrant Shares will be issued as fully paid
        and non-assessable shares in the capital of the Corporation; 

	 
	 	 	 (vii)	 no documents need be filed, proceedings
        taken or approvals, permits, consents or authorizations obtained under
        the Applicable Securities Laws of the Offering Jurisdictions and the rules,
        regulations and policies thereunder to permit the offer and sale of the
        Units in the Offering Jurisdictions and the issuance of the Broker Warrants,
        other than applicable reports of trade with the applicable securities
        regulatory authorities in each of the Offering Jurisdictions; 

	 
	 	 	 (viii)	 the first trade of the Common Shares,
        the Warrants, the Warrant Shares or the Broker Warrant Shares, other than
        a trade that is otherwise exempted by the Securities Laws, will be subject
        to the prospectus and registration requirements of the Applicable Securities
        Laws unless: 

	 
	 	 	 	 (A)  
	 the Corporation is and has been a "reporting
        issuer" in one of the Offering Jurisdictions for at least four months
        (determined in accordance with section 2.9 of the Multilateral Instrument
        45-102 – Resale of Securities ("MI 45-102"))
        immediately preceding such trade; 

	 
	 	 	 	 (B)
	 at least four months have elapsed from the distribution
        date of the Units or the Broker Warrants, as applicable; 

	 
	 	 	 	 (C)
	 such trade is not a "control distribution"
        as defined in the Multilateral Instrument; 

	 
	 	 	 	 (D)
	 no unusual effort is made to prepare the market
        or to create a demand for such securities; 








 

	 	 	 	(E)	 no extraordinary commission or other consideration is paid in respect
      of the trade; 
	 
	 	 	 	(F)	 certificates representing the Common Shares, the
        Warrants, the Warrant Shares (if issued on or before that date which is
        four months from the Closing Date), and the Broker Warrant Shares (if
        issued on or before that date which is four months from the Closing Date),
        were issued with a legend stating the prescribed restricted period in
        accordance with section 2.5 of the MI 45-102; and 

	 
	 	 	 	(G)	 if the selling security holder is an insider or
        officer of the Corporation, the selling security holder has no reasonable
        grounds to believe that the Corporation is in default of any applicable
        securities legislation 

	 
	 	 	 	 provided that the Corporation’s
        counsel will qualify their opinion to the extent necessary to address
        the restricted nature of such securities under the securities laws of
        the United States. 

	 
	 	 	 (ix)	 the execution and delivery
        of this Agreement, the Warrant Certificates, the Broker Warrant Certificate
        and the Subscription Agreements and the fulfilment of the terms hereof,
        do not and will not result in a breach of, do not create a state of facts
        which after notice or lapse of time or both will result in a breach of,
        and do not and will not conflict with, any of the terms, conditions or
        provisions of the constating documents of the Corporation; 

	 
	 	 	 (x)	 the Exchange has approved
        the listing and posting for trading of all of the Common Shares comprising
        the Units, the Warrant Shares and the Broker Warrant Shares subject to
        the satisfaction of the conditions set out in its conditional listing
        letter; and 

	 
	 	 	 (xi)	 such other opinions as may be reasonably requested
      by the Agent. 
	 
	 	 (f)	
the Agent shall have received an Incumbency
        Certificate dated the Closing Date including specimen signatures of the
        Chief Executive Officer, the Chief Financial Officer and any other officer
        of the Corporation signing this Agreement or any document delivered hereunder;
      

	 
	 	 (g)	 the Agent shall have received a certificate,
        dated the Closing Date, of the Chief Executive Officer and the Chief Financial
        Officer of the Corporation (or such other officer or officers of the Corporation
        acceptable to the Agent, acting reasonably), addressed to the Agent and
        its counsel to the effect that, to the best of their knowledge, information
        and belief, after due enquiry and without personal liability: 

	 





 

	 	 	(i) 	 the representations and warranties of the Corporation
        in this Agreement are true and correct in all material respects as if
        made at and as of the Time of Closing and the Corporation has performed
        all covenants and agreements and satisfied all conditions on its part
        to be performed or satisfied in all material respects at or prior to the
        Time of Closing; 

	 
	 	 	(ii)	 no order, ruling or determination having the effect
        of suspending the sale or ceasing, suspending or restricting the trading
        of Common Shares in any of the Offering Jurisdictions or in the United
        States has been issued or made by any stock exchange, securities commission
        or regulatory authority and is continuing in effect and no proceedings,
        investigations or enquiries for that purpose have been instituted or are
        pending; 

	 
	 	 	(iii) 	 the articles and by-laws of the Corporation attached
        to the certificate are full, true and correct copies, unamended, and in
        effect on the date thereof; 

	 
	 	 	(iv)	 the minutes or other records of various proceedings
        and actions of the Corporation’s Board of Directors attached to
        the certificate relating to the Offering are full, true and correct copies
        thereof and have not been modified or rescinded as of the date thereof;
      

	 
	 	 	(v) 	 since the date of the Letter Agreement, there has
        been no material adverse change in the business, affairs, operations,
        assets, liabilities or capital of the Corporation and the Subsidiary taken
        as a whole; and 

	 
	 	 (h)      	 the Common Shares comprising
        the Units, the Warrant Shares and the Common Shares issuable upon the
        due exercise of the Broker Warrants shall have been approved for listing
        on the Exchange, subject only to the official notices of issuance and
        fulfilment of such other conditions of the Exchange as set out in the
        conditional listing letter. 



 It is understood that the Agent, may waive in whole or in
  part or extend the time for compliance with any of such terms and conditions
  without prejudice to the Agent’s rights in respect of any other of the
  foregoing terms and conditions or any other or subsequent breach or non-compliance,
  provided that to be binding on the Agent any such waiver or extension must be
  in writing and signed by the Agent. 

 The Corporation agrees that the aforesaid legal opinions and
  certificate to be delivered at the Time of Closing will also be addressed to
  the Purchasers and that the Agent may deliver copies thereof to the Purchasers.


	9. 	Closing


The sale of Units (the "Closing") will be completed
  concurrently at the offices of the Corporation’s counsel, John William
  Legg, Suite 1650, 200 Burrard Street, Vancouver, British Columbia V6C 3L6, and
  of the Agents’ counsel, Heenan Blaikie LLP, 200 Bay Street, Suite 2600,
  Toronto, Ontario, M5J 2J4, or such other place or places as may be agreed upon
  by the Corporation and the Agent, at the Time of Closing on the Closing Date,
  provided that if the 







 Corporation has not been able to comply with any of the conditions
  to closing set forth under "Conditions to Closing" prior to the
  Time of Closing on the Closing Date, the Closing Date may be extended by mutual
  agreement of the Corporation and the Agent, failing which, the respective obligations
  of the parties will terminate without further liability or obligation except
  as set out under sections 13, 15 and 16 hereof. 

 At the Time of Closing, the Corporation shall deliver to the
  Agent: 

	 	 (a)      	 certificates, duly registered as the Agent may direct,
        representing the Common Shares and Warrants purchased, 

	 	 	 
	 	 (b)      	 certificates, duly registered as the Agent may direct,
        representing the Broker Warrants; 

	 	 	 
	 	 (c)      	 the requisite legal opinions and certificates as
        contemplated in Section 8 hereof; 

	 	 	 
	 	 (d)      	 a direction addressed to the Agent directing the
        Agent to pay the Gross Proceeds; and 

	 	 	 
	 	 (e)      	 such further documentation as may be contemplated
        herein, 



 against payment of the purchase price for the Units by certified
  cheque or bank draft to the Corporation as contemplated herein. 

 All representations and warranties contained herein and all
  of the covenants and agreements of the Corporation herein, to the extent that
  they are required to be performed on or before Closing, shall be construed as
  conditions and any breach or failure to comply with any thereof shall entitle
  the Agent, at its option, in addition to and not in lieu of any other remedies
  the Agent has in respect thereof, to terminate and cancel their obligations
  hereunder by written notice to that effect given to the Corporation prior to
  the Time of Closing on the Closing Date. It is understood that the Agent may
  waive in whole or in part or extend the time for compliance with any of such
  terms and conditions without prejudice to its rights in respect of any other
  of such terms and conditions or any other or subsequent breach or non-compliance,
  provided that to be binding on the Agent any such waiver or extension must be
  in writing and signed by the Agent. 

	10. 	Expenses


The Corporation shall pay all costs and expenses of or incidental
  to the Offering, including, without limitation, the costs and filing fees with
  respect to the private placement of the Units, the listing of the Common Shares
  comprising the Units, the Broker Warrant Shares, and the Warrant Shares on the
  Exchange, the cost of printing the certificates representing the Common Shares
  and Warrants, the cost of registration and delivery of such certificates, and
  the fees and expenses of each of the Corporation’s auditors, counsel and
  local counsel. The Corporation shall also pay the Agent’s counsel with
  regard to its reasonable fees (such fees not to exceed $15,000), disbursements
  and taxes thereon, including G.S.T. All fees and expenses of the Agent other
  than Agent’s counsel’s fees, shall not exceed $5,000 and shall
  be payable by the Corporation upon the closing of the Offering or upon the Corporation
  receiving an invoice from the Agent.



 

	11. 	Indemnity 


The Corporation covenants and agrees to indemnify and save
  harmless each of the Agent and its directors, officers, employees, shareholders
  and Agent (collectively, the "Agent’s Personnel"),
  against all losses (other than loss of profits), claims, damages, liabilities,
  costs or expenses, whether joint or several, caused or incurred by reason of
  or in connection with a claim made against the Corporation or the Agent in connection
  with the transactions contemplated hereby including, without limitation, the
  following:

	 	 (a)      	 any statement (other than a statement contained
        in and included in reliance upon and in conformity with written information
        furnished to the Corporation by the Agent relating to the Agent specifically
        for use therein) in any document delivered by or on behalf of the Corporation
        to the Agent pursuant to this Agreement, which at the time and in the
        light of the circumstances under which it was made contains or is alleged
        to contain a misrepresentation; 

	 
	 	 (b)      	 the omission or alleged omission to state in any
        certificate of the Corporation or of any officers of the Corporation delivered
        hereunder or pursuant hereto any material fact (other than a material
        fact omitted in reliance upon and in conformity with written information
        furnished to the Corporation by the Agent relating to the Agent specifically
        for use therein) required to be stated therein where such omission or
        alleged omission constitutes or is alleged to constitute a misrepresentation;
      

	 
	 	 (c)      	 any order made or in any inquiry, investigation
        or proceeding commenced or threatened by any securities regulatory authority,
        stock exchange or by any other competent authority based upon any failure
        or alleged failure to comply with Applicable Securities Laws (other than
        any failure or alleged failure to comply by the Agent) preventing and
        restricting the trading in or the sale of the Common Shares in the provinces
        of Canada; 

	 
	 	 (d)      	 the non-compliance or alleged non-compliance by
        the Corporation with any requirement of Applicable Securities Laws, including
        the Corporation’s non- compliance with any statutory requirement
        to make any document available for inspection; or 

	 
	 	 (e)      	 any breach of any representation, warranty or covenant
        of the Corporation contained herein or the failure of the Corporation
        to comply with any of its obligations hereunder, 



 provided that, in the event and to the extent that a court
  of competent jurisdiction shall determine that the liabilities, claims, actions,
  suits, proceedings, losses, costs, damages or expenses resulted from the negligence,
  fraud or wilful misconduct of an Indemnified Party claiming indemnity, this
  indemnity shall not apply. 

 The Corporation shall not, without the prior written consent
  of the Agent, which shall not be unreasonably delayed or withheld, settle or
  compromise or consent to the entry of any judgment in any pending or threatened
  claim, action, suit or proceeding in respect of which 








 indemnification may be sought hereunder (whether or not the
  Agent or any Agent’s Personnel are a party to such claim, action, suit
  or proceeding), unless such settlement, compromise or consent includes an unconditional
  release of the Agent and each Agent’s Personnel from all liability arising
  out of such claim, action, suit or proceeding. 

 Notwithstanding the foregoing, an indemnifying party shall
  not be liable for the settlement of any claim or action in respect of which
  indemnity may be sought hereunder effected without its written consent, which
  consent shall not be unreasonably withheld. 

 If any matter or thing contemplated by this paragraph shall
  be asserted against any person in respect of which indemnification is or might
  reasonably be considered to be provided, such person (the "Indemnified
  Party") will notify the Corporation as soon as possible and in
  any event on a timely basis, of the nature of such claim and the Corporation
  shall be entitled (but not required) to assume the defence of any suit brought
  to enforce such claim; provided, however, that the defence shall be through
  legal counsel acceptable to the Indemnified Party, acting reasonably, and that
  no settlement may be made by the Corporation or the Indemnified Party without
  the prior written consent of the other. 

 In any such claim, the Indemnified Party shall have the right
  to retain other counsel to act on the Indemnified Party’s behalf, provided
  that the fees and disbursements of such other counsel shall be paid by the Indemnified
  Party, unless (i) the Corporation and the Indemnified Party mutually agree to
  retain such other counsel or (ii) the named parties to any such claim (including
  any third or implicated party) include both the Indemnified Party on the one
  hand and the Corporation, on the other hand, and the representation of the Corporation
  and the Indemnified Party by the same counsel would be inappropriate due to
  actual or potential conflicting interests, in which event such fees and disbursements
  shall be paid by the Corporation to the extent that they have been reasonably
  incurred. 

 To the extent that any Indemnified Party is not a party to
  this Agreement, the Agent shall obtain and hold the right and benefit of the
  indemnity provisions hereunder in trust for and on behalf of such Indemnified
  Party. 

 The Corporation hereby waives all rights which it may have
  by statute or common law to recover contribution from the Agent in respect of
  losses, claims, costs, damages, expenses or liabilities which any of them may
  suffer or incur directly or indirectly (in this paragraph, "losses")
  by reason of or in consequence of a document containing a misrepresentation;
  provided, however, that such waiver shall not apply in respect of losses by
  reason of or in consequence of any misrepresentation which is based upon or
  results from information or statements furnished by, or relating solely, to
  the Agent.

 The Agent agrees to indemnify and hold harmless the Corporation
  for any untrue statement or alleged untrue statement of a material fact contained
  in any Registration Statement (as amended or supplemented if the Corporation
  shall have filed with the SEC any amendments thereof or supplements thereto),
  or the omission or alleged omission to state therein a material fact necessary
  in order to make the statement therein, not misleading, or any negligent misrepresentation
  of any officer, director, agent, consultant accountant, attorney or employee
  of the Agent, but only if insofar as such statement or omission was made in
  reliance upon 





 infomration furnished in writing to the Corporation by the
  Agent specifically for use in connection with the preparation of the Registration
  Statement, or any such amendments thereto. 

	13.	 Contribution


In the event that the indemnity provided for above is, for
  any reason, illegal or unenforceable as being contrary to public policy or for
  any other reason, the Agent and the Corporation shall contribute to the aggregate
  of all losses, claims, costs, damages, expenses or liabilities (including any
  legal or other expenses reasonably incurred by the Indemnified Party in connection
  with investigating or defending any action or claim which is the subject of
  this section but excluding loss of profits or consequential damages) of the
  nature provided for above such that the Agent shall be responsible for that
  portion represented by the percentage that the Agency Fee and the Corporate
  Finance Fee paid by the Corporation to the Agent bears to the Gross Proceeds
  realized from the sale of the Units and the Corporation shall be responsible
  for the balance, whether or not it has been sued, provided that, in no event,
  shall any Agent be responsible for any amount in excess of the amount of the
  Agency Fee and the Corporate Finance Fee actually received by it. In the event
  that the Corporation may be held to be entitled to contribution from the Agent
  under the provisions of any statute or law, the Corporation shall be limited
  to contribution in an amount not exceeding the lesser of: (i) the portion of
  the full amount of losses, claims, costs, damages, expenses and liabilities,
  giving rise to such contribution for which the Agent is responsible, as determined
  above, and (ii) the amount of the Agency Fee and the Corporate Finance Fee actually
  received by the Agent. Notwithstanding the foregoing, a party guilty of fraudulent
  misrepresentation shall not be entitled to contribution from the other party.
  Any party entitled to contribution will, promptly after receiving notice of
  commencement of any claim, action, suit or proceeding against such party in
  respect of which a claim for contribution may be made against the other party
  under this section, notify such party from whom contribution may be sought.
  In no case shall such party from whom contribution may be sought be liable under
  this Agreement unless such notice has been provided, but the omission to so
  notify such party shall not relieve the party from whom contribution may be
  sought from any other obligation it may have otherwise than under this section.


 The rights to indemnity and contribution provided in this
  Agreement shall be in addition and not in derogation of any other right to indemnity
  or contribution which the Agent or the Corporation may have by statute or otherwise
  by law. 

	14.	 Notice


Any notice or other communication to be given by delivery or
  by telecopier hereunder shall, in the case of notice to the Corporation, be
  addressed to the Corporation at the address appearing on page 1 of this Agreement,
  Attention: Mr. Daniel Farrell, President and Chief Executive Officer, Telecopier
  No. (416) 364-5400, with a copy to:

John William Legg 

  Barrister & Solicitor 

  200 Burrard Street 

  Suite 1650 

  Vancouver, British Columbia 

  V6C 3L6 




Telephone: (604) 484-6290 

  Fax: (604) 484-6333 

 and in the case of notice to the Agent:

Kingsdale Capital Partners Inc. 

  Exchange Tower 

  130 King Street West 

  Suite 2950, PO Box 156 

  Toronto, Ontario

  M5X 1C7 

  Attn: Brian Faughnan

Telephone: (416) 867-4552 

  Fax: (416) 867-4566 

 and if so given, shall be deemed to have been given and received
  upon receipt by the addressee or a responsible officer of the addressee if delivered,
  or one hour after being telecopied and receipt confirmed during normal business
  hours, as the case may be. Any party may, at any time, give notice in writing
  to the others in the manner provided for above of any change of address or telecopier
  number.

	15. 	Time of the Essence 


Time shall be of the essence of this Agreement and every part hereof. 

	16. 	Assignment


Except as contemplated herein, no party hereto may assign this
  Agreement or any part hereof without the prior written consent of the other
  parties hereto. Subject to the foregoing, this agreement shall enure to the
  benefit of, and shall be binding upon, the Corporation and the Agent and its
  successors and legal representatives, and nothing expressed or mentioned in
  this Agreement is intended or shall be construed to give any other person any
  legal or equitable right, remedy or claim under or in respect of this Agreement,
  or any provisions contained in this Agreement, this Agreement and all conditions
  and provisions of this Agreement being intended to be and being for the sole
  and exclusive benefit of such persons and for the benefit of no other person
  except that the covenants and indemnities of the Corporation set out under the
  headings "Indemnity" and "Contribution" shall also be
  for the benefit of the Agent’s Personnel. 



 

	17.
	 Counterpart Provision
	 	 
	This Agreement may be executed
        in any number of counterparts, each of which when delivered shall be deemed
        to be an original and all of which together shall constitute one and the
        same document.

	 	 
	18. 
	Entire Agreement
	 	 
	The provisions herein contained
        constitute the entire agreement between the parties relating to the Offering
        and supersede all previous communications, representations, understandings
        and agreements between the parties including, but not limited to, the
        Letter Agreement, with respect to the subject matter hereof whether verbal
        or written. 

	 	 
	19. 
	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. 

	 	 
	20. 
	Survival of Warranties, Representations, Covenants and Agreements
	 	 
	All warranties, representations,
        covenants, indemnities and agreements of the Corporation herein contained
        or contained in documents submitted or required to be submitted pursuant
        to this Agreement shall survive the purchase by the Purchasers of the
        Units and shall continue in full force and effect for the benefit of the
        Agent, Kingsdale and the Purchasers for a period of 18 months from the
        Closing Date, regardless of any investigation which the Agent or the Purchasers
        may carry on or which may be carried on behalf of the Agent, Kingsdale
        or the Purchasers.

	 	 
	21. 
	Language
	 	 
	The parties hereto confirm
        their express wish that this agreement and all documents and agreements
        directly or indirectly relating thereto be drawn up in the English language.

       Les parties reconnaissent leur volonté express
        que la présente convention ainsi que tous les documents et contrats
        s’y rattachant directement ou indirectement soient rédigés
        en anglais. 

	 	 
	22. 
	Facsimile
	 	 
	The Corporation, Kingsdale
        and the Agent shall be entitled to rely on delivery by facsimile of an
        executed copy of this Agreement and acceptance by the Corporation, Kingsdale
        and the Agent of that delivery shall be legally effective to create a
        valid and binding agreement between the Corporation and Kingsdale and
        the Agent in accordance with the terms of this Agreement. 

	 	 
	23. 
	Acceptance
	 	 
	If this letter accurately
        reflects the terms of the transaction which we are to enter into and if
        such terms are agreed to by the Corporation, please communicate acceptance
        by executing where indicated below and returning a signed copy of this
        Agreement to the Agent.







 

	 Yours very truly,  	 
	 	 	 
	 KINGSDALE CAPITAL PARTNERS INC.  	 
	 	  	 
	 	 	 
	Per: 	  	 
	 	 Authorized Signing Officer  	 
	 	  	 
	 	 	 
	 KINGSDALE CAPITAL MARKETS INC.  	 
	 	  	 
	 	 	 
	Per: 	  	 
	 	 Authorized Signing Officer  	 


 The foregoing accurately reflects the terms of the transaction
  which we are to enter into and such terms are agreed to with effect as of the
  date provided at the top of the first page of this Agreement. 

	 QUINCY GOLD CORP.  	 
	 	  	 
	 	 	 
	Per: 	  	 
	 	 Daniel Farrell  	 
	 	President and Chief Executive Officer