Filed by Automated Filing Services Inc. (604) 609-0244 - Farallon Resources Ltd. - Exhibit 4.10






UNDERWRITING AGREEMENT 

December 3, 2007 

	Farallon Resources Ltd. 
	Suite 1020 
	800 West Pender Street 
	Vancouver, B.C. 
	V6C 2V6 



	Attention: 	Mr. Dick Whittington, President and Chief
      Executive Officer 


Dear Sirs: 

The undersigned, Paradigm Capital Inc. (“Paradigm”),
Canaccord Capital Corp., MGI Securities Inc., and Raymond James Ltd.
(collectively with Paradigm, the “Underwriters”), understand that
Farallon Resources Ltd. (the “Corporation”) proposes to issue and
sell to the Underwriters 28,572,000 common shares of the Corporation (the
“Underwritten Shares”) subject to the terms and conditions set out below.


Upon and subject to the terms and conditions set forth herein,
the Underwriters severally, in respect of the percentages set forth in paragraph
20 of this Agreement, and not jointly, agree to act as underwriters and purchase
from the Corporation, and by its acceptance hereof, the Corporation agrees to
sell to the Underwriters the Underwritten Shares on the Closing Date (as
hereinafter defined) at a price of $0.70 per Offered Share for an aggregate
purchase price of $20,000,400.00. 

The Corporation also proposes to grant to the Underwriters an
option (the “Over-Allotment Option”) to acquire up to 4,285,800
additional common shares (“Optioned Shares”) and together with the
Offered Shares, the “Offered Shares”). The purchase price for each
Optioned Share shall be $0.70 per share. If Paradigm, on behalf of the
Underwriters, elect to exercise such Over-Allotment Option, Paradigm shall
notify the Corporation in writing not later than 5:00 p.m. (Vancouver time) 30
days after the Closing Date, which notice shall specify the number of Optioned
Shares to be purchased by the Underwriters and the date (the “Option Closing
Date”) on which such Optioned Shares are to be purchased. Such Option
Closing Date may be the same as the Closing Date but not earlier than the later
of (i) the Closing Date and (ii) two Business Days after the date of such
notice. Optioned Shares may be purchased solely for the purpose of covering
over-allotments made in connection with the offering of the Offered Shares and
for market stabilization purposes. If any Optioned Shares are purchased, each
Underwriter agrees, severally and not jointly, to purchase the percentage of
such Optioned Shares (subject to such adjustments to eliminate fractional Common
Shares as Paradigm may determine) equal to the percentage set out opposite the
name of such Underwriter in paragraph 20 of this Agreement.

The Underwriters propose to distribute the Offered Shares in
all the provinces of Canada (except Quebec) pursuant to the Final Prospectus (as
hereinafter defined) and in the United States and other offshore jurisdictions
on a private placement basis, all in the manner contemplated by this Agreement.


To the extent that substituted purchasers purchase Offered
Shares at the Closing Time (as hereinafter defined), the obligations of the
Underwriters to do so will be reduced by the number of Offered Shares purchased
from the Corporation by such substituted purchasers. Any reference in this
Agreement to “the purchasers” shall be taken to be a reference to the
Underwriters, as the initial committed purchasers, and to the substituted
purchasers, if any. 

Farallon Resources Ltd. Underwriting Agreement 
December
3, 2007 




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The parties acknowledge that the Offered Shares have not been
and will not be registered under the U.S. Securities Act (as hereinafter
defined) or any state securities law and may not be offered or sold in the
United States (as hereinafter defined) except pursuant to exemptions from the
registration requirements of the U.S. Securities Act and the applicable laws of
any state of the United States. Accordingly, the Corporation and each of the
Underwriters agree that any offers or sales in the United States shall be
conducted only in the manner specified in Schedule “A” hereof. All actions to be
undertaken by the Underwriters in the United States in connection with the
matters contemplated herein shall be undertaken through one or more of the
Underwriters’ duly registered broker-dealer affiliates in the United States (the
“U.S. Affiliates”). 

The Underwriters shall be entitled to appoint a soliciting
dealer group consisting of other registered dealers acceptable to the
Corporation for the purposes of arranging for purchasers of the Offered Shares.


In consideration of the Underwriters’ services to be rendered
in connection with the Offering (as hereinafter defined), including the
agreement of the Underwriters to: (a) purchase the Offered Shares and to offer
them to the public pursuant to the Prospectus (as hereinafter defined); (b)
arrange for substituted purchasers; or (c) cause their respective U.S.
Affiliates to act as placement agents for the Offered Shares in the United
States, the Corporation shall pay to the Underwriters at Closing (as hereinafter
defined) a commission comprised of (i) a cash commission (the “Cash
Commission”) equal to 6.0% of the gross proceeds realized by the
Corporation in respect of the sale of Offered Shares, and (ii) options
(“Compensation Options”) to acquire that number of common shares in the
capital of the Corporation equal to 6.0% of the Offered Shares sold hereunder,
and the Optioned Shares, if any are sold, exercisable for a period of 24 months
from the Closing Date at a price equal to $0.70 per share. The obligation of the
Corporation to pay the Commission and issue the Compensation Options shall arise
at the Closing Time (as hereinafter defined) in respect of the Offered Shares
and on the Option Closing Date in respect of the Optioned Shares against payment
for the relevant Offered Shares and the Cash Commission and the Compensation
Options shall be fully earned by the Underwriters at that time. 

DEFINITIONS 

In this Agreement, in addition to the terms defined above or
elsewhere in this Agreement, the following terms shall have the following
meanings: 

“Agreement” means the agreement resulting from the
acceptance by the Corporation of the offer made hereby; 

“AIF” means the annual information form of the
Corporation dated September 21, 2007; 

“Broker Shares” means the Common Shares issuable upon
exercise of the Compensation Options in accordance with their terms; 

“Business Day” means a day which is not a Saturday,
Sunday or statutory or civic holiday in the City of Toronto, Ontario or
Vancouver, British Colombia; 

“Campo Morado Technical Report” means the report
entitled “Technical Report on the 2007 Program at the G-9 Deposit, Campo Morado
Project, Guerrero State, Mexico” dated September 28, 2007 with an effective date
of September 23, 2007 by David M.R. Stone and Stephen J. Godden; 

“Canadian Securities Regulators” means the applicable
securities commission or securities regulatory authority in each of the
Qualifying Jurisdictions; 

“Closing” means the completion of the issue and sale by
the Corporation and the purchase by the Underwriters on the Closing Date of the
Offered Shares or on the Option Closing Date of the Optioned Shares as
contemplated by this Agreement; 




- 3 - 

“Closing Date” means December 18, 2007 or such other
date as the Corporation and Paradigm may agree in writing, but not later than
that date which is 42 days following the date of the MRRS decision document for
the Final Prospectus; 

“Closing Time” means 8:30 a.m. (Toronto time) on the
Closing Date or such other time on the Closing Date as the Corporation and
Paradigm may agree; 

“Common Shares” means the common shares of the
Corporation, which the Corporation is authorized to issue as constituted on the
date hereof; 

“Compensation Options” has the meaning given to it in
the preamble of this Agreement; 

“Compensation Option Certificate” means the certificate
representing the Compensation Options issued by the Corporation to each of the
Underwriters substantially in the form attached hereto as Schedule “B”; 

“Corporation’s Auditors” means such firm of chartered
accountants as the Corporation may have appointed or may from time to time
appoint as auditors of the Corporation; 

“Documents Incorporated by Reference” means all
financial statements, management information circulars, annual information
forms, material change reports or other documents issued by the Corporation,
whether before or after the date of this Agreement, that are required to be
incorporated by reference into the Preliminary Prospectus and/or the Final
Prospectus, as applicable;

“Eligible Issuer” means an issuer that meets the
criteria and has complied with the requirements of NI 44-101 so as to allow it
to offer its securities using a short form prospectus; 

“Engagement Letter” means the letter agreement dated
November 26, 2007 and confirmed on November 27, 2007 between the Corporation and
Paradigm relating to the Offering; 

“Final Prospectus” means the final short form
prospectus, in each case including all of the Documents Incorporated By
Reference, prepared by the Corporation and relating to the distribution of the
Offered Shares and the Compensation Options and for which an MRRS decision
document has been issued by the British Columbia Securities Commission on its
own behalf and on behalf of each of the other Canadian Securities Regulators;


“Financial Statements” means the financial statements of
the Corporation included in the Documents Incorporated by Reference, including
the notes to such statements and the related auditors’ report on such
statements; 

“Indemnified Party” has the meaning ascribed thereto in
Section 16; 

“Material Adverse Effect” when used in connection with
an entity means any change, event, violation, inaccuracy, circumstance or effect
that is materially adverse to the business, assets (including intangible
assets), capitalization, financial condition or results of operations of such
entity and its parent (if applicable) or subsidiaries taken as a whole, whether
or not arising in the ordinary course of business of such entity; 

“Material Subsidiaries” means Farallon Resources Corp.,
Farallon Minerals Mexicana, SA de C.V., Grupo Minero HDSA de C.V., Grupo Minero
Farallon SA de C.V., and Minas De Arcelia SA de C.V.; 

“MI 11-101” means Multilateral Instrument 11-101 –
Principal Regulator System adopted by certain members of the Canadian
Securities Regulators and its related memorandum of understanding; 

“Mining Rights” shall have the meaning ascribed thereto
in subparagraph 7(a)(xxxiv); 




- 4 - 

“misrepresentation”, “material fact”,
“material change”, “affiliate”, “associate”, and
“distribution” shall have the respective meanings ascribed thereto in the
Securities Act (Ontario); 

“Mutual Reliance Procedures” means the mutual reliance
review system procedures provided for under NP 43-201 and MI 11-101; 

“NI 44-101” means National Instrument 44-101 - Short
Form Prospectus Distributions;

“NP 43-201” means National Policy 43-201 – Mutual
Reliance Review System for Prospectuses and Annual Information Forms adopted
by the Canadian Securities Regulators and its related memorandum of
understanding; 

“Offering” means the issuance and sale of the Offered
Shares pursuant to this Agreement; 

“Offering Documents” has the meaning ascribed thereto in
subparagraph 5(a)(iii); 

“Person” shall be broadly interpreted and shall include
any individual, corporation, partnership, joint venture, association, trust or
other legal entity; 

“Preliminary Prospectus” means the preliminary short
form prospectus to be dated on or about December 3, 2007 prepared by the
Corporation relating to the distribution of the Offered Shares and Compensation
Options, in each case including all of the Documents Incorporated By Reference;


“Prospectus” means, collectively, the Preliminary
Prospectus and the Final Prospectus and any amendments thereto; 

“Qualifying Jurisdictions” means, collectively, all of
the provinces in Canada (except Québec); 

“Securities Laws” means, unless the context otherwise
requires, all applicable securities laws in each of the Qualifying Jurisdictions
and the United States and the respective regulations made thereunder, together
with applicable published fee schedules, prescribed forms, policy statements,
orders, blanket rulings and other regulatory instruments of the securities
regulatory authorities in such jurisdictions; 

“Securities Regulators” means, collectively, the TSX,
and the securities commissions or other securities regulatory authorities in the
Qualifying Jurisdictions and the United States, as the case may be; 

“Selling Firm” has the meaning ascribed thereto in
paragraph 3(a); 

“Standard Listing Conditions” has the meaning ascribed
thereto in subparagraph 4(a)(v); 

“Subsidiaries” means the subsidiaries of the Corporation
as set out in the AIF under the heading “Corporate Structure” and
“Subsidiary” means any one of them; 

“Supplementary Material” means, collectively, any
amendment to the Final Prospectus, any amendment or supplemental prospectus or
ancillary materials that may be filed by or on behalf of the Corporation under
the Securities Laws relating to the distribution of the Offered Shares and the
Compensation Options thereunder; 

“Transfer Agent” means Computershare Trust Company of
Canada; 

“TSX” means the Toronto Stock Exchange; 

“Underwriters’ Personnel” shall have the meaning
ascribed thereto in Section 16; 




- 5 - 

“United States” means the United States of America as
defined in Regulation S under the U.S. Securities Act; 

“U.S. Affiliate” means a duly registered U.S.
broker-dealer affiliate of an Underwriter; 

“U.S. Private Placement Memorandum” has the meaning
ascribed thereto in paragraph 4(a)(iv); and 

“U.S. Securities Act” means the United States
Securities Act of 1933, as amended. 

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” – Terms and Conditions for
      United States Offers and Sales 

      Schedule “B” – Form of Compensation Option Certificate 

  



TERMS AND CONDITIONS 

1.          
Compliance With Securities Laws. The Corporation represents and warrants
to, and covenants and agrees with, the Underwriters that the Corporation has
prepared and will file on the date hereof the Preliminary Prospectus and obtain
pursuant to the Mutual Reliance Procedures an MRRS decision document evidencing
the issuance by the Canadian Securities Regulators of receipts for the
Preliminary Prospectus and other related documents in respect of the proposed
distribution of the Offered Shares and the Compensation Options. The Corporation
has prepared and will promptly, in any event no later than December 10, 2007 or
such later date as may be agreed to between the Corporation and the
Underwriters, use its best efforts to file the Final Prospectus and obtain
pursuant to the Mutual Reliance Procedures an MRRS decision document evidencing
the issuance by the Canadian Securities Regulators of receipts for the Final
Prospectus in accordance with NP 43-201 and other related documents in respect
of the proposed distribution of the Offered Shares and the Compensation Options.


2.          
Due Diligence. Prior to the filing of the Preliminary Prospectus and
the Final Prospectus, the Corporation shall have permitted the Underwriters to
review each of the Preliminary Prospectus and the Final Prospectus and shall
allow the Underwriters to conduct any due diligence investigations which each of
them reasonably requires in order to fulfill its obligations as an underwriter
under the Securities Laws of the Qualifying Jurisdictions and in order to enable
it to responsibly execute the certificate in the Preliminary Prospectus and the
Final Prospectus required to be executed by it. 

3.          
Distribution and Certain Obligations of the
Underwriters.         


	 	(a) 	
      The Underwriters shall, and shall require any investment
      dealer or broker (other than the Underwriters) with which the Underwriters
      have a contractual relationship in respect of the distribution of the
      Offered Shares (each, a “Selling Firm”) to agree to, comply with
      the Securities Laws in connection with the distribution of the Offered
      Shares and shall offer the Offered Shares for sale to the public directly
      and through Selling Firms upon the terms and conditions set out in the
      Final Prospectus and this Agreement. The Underwriters shall, and shall
      require any Selling Firm to, offer for sale to the public and sell the
      Offered Shares only in those jurisdictions where they may be lawfully
      offered for sale or sold. The Underwriters shall: (i) use all reasonable
      efforts to complete and cause each Selling Firm to complete the
      distribution of the Offered Shares as soon as reasonably practicable; and
      (ii) promptly notify the Corporation when, in their opinion, the
      Underwriters and the Selling Firms have ceased distribution of the Offered
      Shares and provide a breakdown of the number of Offered Shares distributed
      in each of the Qualifying Jurisdictions where such breakdown is required
      for the purpose of calculating fees payable to the Securities
      Regulators.







- 6 - 

	 	(b) 	
      The Underwriters shall, and shall require any Selling
      Firm to agree to, distribute the Offered Shares in a manner which complies
      with and observes all applicable laws and regulations in each jurisdiction
      into and from which they may offer to sell the Offered Shares or
      distribute the Prospectus or any Supplementary Material in connection with
      the distribution of the Offered Shares and will not, directly or
      indirectly, offer, sell or deliver any Offered Shares or deliver the
      Prospectus or any Supplementary Material to any person in any jurisdiction
      other than in the Qualifying Jurisdictions except in a manner which will
      not require the Corporation to comply with the registration, prospectus,
      filing, continuous disclosure or other similar requirements under the
      applicable securities laws of such other jurisdictions or pay any
      additional governmental filing fees which relate to such other
      jurisdictions. Subject to the foregoing, the Underwriters and any Selling
      Firm shall be entitled to offer and sell the Offered Shares:

	 	 	 	 
	 		(i) 	
      in the United States, solely pursuant to an applicable
      exemption or exemptions from the registration requirements of the U.S.
      Securities Act and applicable state securities laws. Any offer or sale of
      the Offered Shares in the United States will be made in accordance with
      Schedule “A” which forms part of this Agreement; and

	 	 	 	 
	 		(ii) 	
      in such other jurisdictions in accordance with any
      applicable securities and other laws in such jurisdictions in which the
      Underwriters and/or Selling Firms offer the Offered Shares 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.

	 	 	 	 
	 	(c) 	
      Any Selling Firm appointed by the Underwriters shall be
      compensated by the Underwriters from their compensation hereunder. The
      Underwriters shall use commercially reasonable efforts to ensure that any
      Selling Firm appointed pursuant to this Section 3 complies with the
      covenants and obligations of the Underwriters hereunder.

	 	 	 	 
	 	(d) 	
      For the purposes of this paragraph 3, the Underwriters
      shall be entitled to assume that the Offered Shares are qualified for
      distribution in any Qualifying Jurisdiction where a receipt or similar
      document for the Final Prospectus shall have been obtained from the
      applicable Securities Regulators (including a decision document for the
      Final Prospectus issued under the Mutual Reliance Procedures) following
      the filing of the Final Prospectus unless otherwise notified in
      writing.

	 	 	 	 
	 	(e) 	
      The Corporation and the Underwriters agree that the
      provisions of Schedule “A” to this Agreement entitled “Terms and
      Conditions for United States Offers and Sales”, shall apply in respect to
      offers and sales in the United Sates and are incorporated by reference in
      and shall form part of this Agreement.

	 	 	 	 
	 	(f) 	
      Notwithstanding the foregoing provisions of this
      paragraph 3, an Underwriter will not be liable to the Corporation under
      this paragraph 3 with respect to a default under this paragraph 3 or
      Schedule “A” by another Underwriter or another Underwriter’s U.S.
      Affiliate, as the case may be.

	 	 	 	 
	 	(g) 	
      Upon the Corporation obtaining the necessary receipts
      therefor from the applicable regulatory authorities in the Qualifying
      Jurisdictions, the Underwriters shall deliver one copy of the Final
      Prospectus (together with any amendments thereto) to persons resident in
      the Qualifying Jurisdictions who are to acquire Offered
  Shares.







- 7 - 

	4. 	
      Deliveries on Filing and Related Matters.

	 	 	 	 
		(a) 	
      The Corporation shall deliver to each of the
      Underwriters:

	 	 	 	 
			(i) 	
      at the Closing Time, a copy of the Preliminary Prospectus
      and the Final Prospectus signed and certified by the Corporation as
      required by the Securities Laws;

	 	 	 	 
			(ii) 	
      at the Closing Time, a copy of any Supplementary Material
      required to be filed by the Corporation in compliance with Securities
      Laws;

	 	 	 	 
			(iii) 	
      concurrently with the filing of the Final Prospectus with
      the Canadian Securities Regulators, a “long form” comfort letter dated the
      date of the Final Prospectus, in form and substance satisfactory to the
      Underwriters, acting reasonably, addressed to the Underwriters and the
      directors of the Corporation from the Corporation’s Auditors with respect
      to financial and accounting information relating to the Corporation
      contained in the Final Prospectus, which letter shall be based on a review
      by the Corporation’s Auditors within a cut-off date of not more than two
      Business Days prior to the date of the letter, which letter shall be in
      addition to the auditors’ consent letter and comfort letter addressed to
      the Canadian Securities Regulators;

	 	 	 	 
			(iv) 	
      as soon as practicable after the Preliminary Prospectus,
      the Final Prospectus and any Supplementary Material are prepared, the
      private placement memorandum incorporating the Preliminary Prospectus, the
      Final Prospectus or any Supplementary Material, as the case may be,
      prepared for use in connection with the offering for sale of the Offered
      Shares in the United States (the “U.S. Private Placement
      Memorandum”), and, forthwith after preparation, any amendment to the
      U.S. Private Placement Memorandum; and

	 	 	 	 
			(v) 	
      prior to the filing of the Final Prospectus with the
      Canadian Securities Regulators, copies of correspondence indicating that
      the application for the listing and posting for trading on the TSX of the
      Offered Shares has been approved for listing subject only to satisfaction
      by the Corporation of certain standard post-closing conditions imposed by
      the TSX (the “Standard Listing Conditions”).

	 	 	 	 
		(b) 	
      Supplementary Material. The Corporation
      shall also prepare and deliver promptly to the Underwriters signed copies
      of all Supplementary Material.

	 	 	 	 
		(c) 	
      Representations as to Prospectus and Supplementary
      Material. Delivery of the Preliminary Prospectus, the Final
      Prospectus and any Supplementary Material by the Corporation shall
      constitute the representation and warranty of the Corporation to the
      Underwriters that, as at their respective dates of filing:

	 	 	 	 
			(i) 	
      all information and statements (except information and
      statements relating solely to the Underwriters and provided by the
      Underwriters) contained in the Preliminary Prospectus or the Final
      Prospectus or any Supplementary Material, as the case may be, are true and
      correct, in all material respects, and contain no misrepresentation and
      constitute full, true and plain disclosure of all material facts relating
      to the Corporation and the Offered Shares;

	 	 	 	 
			(ii) 	
      no material fact or information has been omitted
      therefrom (except facts or information relating solely to the Underwriters
      and provided by the Underwriters) which is required to be stated in such
      disclosure or is necessary to







- 8 - 

				make the statements or information contained in such
      disclosure not misleading in light of the circumstances under which they
      were made; and
	 	 	 	 
			(iii) 	
      except with respect to any information relating solely to
      the Underwriters and provided by the Underwriters, such documents comply
      in all material respects with the requirements of the Securities
    Laws.

	 	 	 	 
			
      Such deliveries shall also constitute the Corporation’s
      consent to the Underwriters’ use of the Preliminary Prospectus, the Final
      Prospectus and any Supplementary Material in connection with the
      distribution of the Offered Shares in the Qualifying Jurisdictions in
      compliance with this Agreement and the Securities Laws unless otherwise
      advised in writing.

	 	 	 	 
		(d) 	
      Commercial Copies. The Corporation
      shall:

	 	 	 	 
			(i) 	
      cause commercial copies of the Preliminary Prospectus,
      the Final Prospectus and any Supplementary Material to be delivered to the
      Underwriters without charge, in such numbers and in such cities in the
      Qualifying Jurisdictions as the Underwriters may reasonably request by
      oral instructions to the Corporation’s financial printer of the
      Preliminary Prospectus and the Final Prospectus given forthwith after the
      Underwriters have been advised that the Corporation has complied with the
      Securities Laws in the Qualifying Jurisdictions. Such delivery shall be
      effected as soon as possible and, in any event, on or before a date which
      is one Business Day after compliance with applicable Securities Laws in
      the Qualifying Jurisdictions with respect to the Preliminary Prospectus
      and the Final Prospectus, and on or before a date which is two Business
      Days after the Canadian Securities Regulators issue receipts or accept for
      filing, as the case may be, of any Supplementary Material; and

	 	 	 	 
			(ii) 	
      cause to be delivered to the Underwriters, as soon as
      practicable after preparation thereof, without charge, in such numbers and
      at such locations as the Underwriters may reasonably request, commercial
      copies of the U.S. Private Placement Memorandum and any amendments
      thereto.

	 	 	 	 
		(e) 	
      Press Releases. During the period
      commencing on the date hereof and until completion of the distribution of
      the Offered Shares, the Corporation will promptly provide to the
      Underwriters drafts of any press releases of the Corporation for review by
      the Underwriters and the Underwriters’ counsel prior to
issuance.

	 	 	 	 
	5. 	
      Material Changes.

	 	 	 	 
		(a) 	
      During the period prior to the Underwriters notifying the
      Corporation of the completion of the distribution of the Offered Shares,
      the Corporation shall promptly inform the Underwriters (and if requested
      by the Underwriters, confirm such notification in writing) of the full
      particulars of:

	 	 	 	 
			(i) 	
      any material change (actual, anticipated, contemplated,
      threatened, financial or otherwise) in the assets, liabilities (contingent
      or otherwise), business, affairs, operations or capital of the Corporation
      and its Subsidiaries taken as a whole;

	 	 	 	 
			(ii) 	
      any material fact which has arisen or has been discovered
      and would have been required to have been stated in the Preliminary
      Prospectus or the Final Prospectus had the fact arisen or been discovered
      on, or prior to, the date of such documents;
and







- 9 - 

	 		(iii) 	
      any change in any material fact contained in the
      Preliminary Prospectus, the Final Prospectus or any Supplementary Material
      (collectively, the “Offering Documents”) or whether any event or
      state of facts has occurred after the date hereof, which, in any case, is,
      or may be, of such a nature as to render any of the Offering Documents
      untrue or misleading in any material respect or to result in any
      misrepresentation in any of the Offering Documents, or which would result
      in the Final Prospectus or any Supplementary Material not complying (to
      the extent that such compliance is required) with Securities
  Laws.

	 	 	 	 
	 	(b) 	
      The Corporation will comply with Section 57 of the
      Securities Act (Ontario) and with the comparable provisions of the
      other Securities Laws, and the Corporation will prepare and file promptly
      any Supplementary Material which may be necessary and will otherwise
      comply with all legal requirements necessary to continue to qualify the
      Offered Shares and the Compensation Options for distribution in each of
      the Qualifying Jurisdictions.

	 	 	 	 
	 	(c) 	
      In addition to the provisions of subparagraphs 5(a) and
      5(b) hereof, the Corporation shall in good faith discuss with the
      Underwriters any change, event or fact contemplated in subparagraphs 5(a)
      and 5(b) which is of such a nature that there is or could be reasonable
      doubt as to whether notice should be given to the Underwriters under
      subparagraph 5(a) hereof and shall consult with the Underwriters with
      respect to the form and content of any amendment or other Supplementary
      Material proposed to be filed by the Corporation, it being understood and
      agreed that no such amendment or other Supplementary Material shall be
      filed with any Securities Regulator prior to the review thereof by the
      Underwriters and their counsel, acting reasonably.

	 	 	 	 
	 	(d) 	
      If during the period of distribution of the Offered
      Shares there shall be any change in Securities Laws which, in the opinion
      of the Underwriters, acting reasonably, requires the filing of any
      Supplementary Material, upon written notice from the Underwriters, the
      Corporation shall, to the satisfaction of the Underwriters, acting
      reasonably, promptly prepare and file any such Supplementary Material with
      the appropriate Securities Regulators where such filing is
  required.



6.          
Covenants of the Corporation. The Corporation hereby covenants to the
Underwriters that the Corporation: 

	 	(a) 	
      will advise the Underwriters, promptly after receiving
      notice thereof, of the time when the Preliminary Prospectus, the Final
      Prospectus and any Supplementary Material has been filed and receipts
      therefor have been obtained pursuant to the Mutual Reliance Procedures and
      will provide evidence reasonably satisfactory to the Underwriters of each
      such filing and copies of such receipts;

	 	 	 	 
	 	(b) 	
      will advise the Underwriters, promptly after receiving
      notice or obtaining knowledge thereof, of:

	 	 	 	 
	 		(i) 	
      the issuance by any Canadian Securities Regulators of any
      order suspending or preventing the use of the Preliminary Prospectus, the
      Final Prospectus or any Supplementary Material;

	 	 	 	 
	 		(ii) 	
      the institution, threatening or contemplation of any
      proceeding for any such purposes;

	 	 	 	 
	 		(iii) 	
      any order, ruling, or determination having the effect of
      suspending the sale or ceasing the trading in any securities of the
      Corporation (including the Offered Shares) has been issued by any
      Securities Regulator or the institution, threatening or contemplation of
      any proceeding for any such purposes; or







- 10 - 

	 		(iv) 	
      any requests made by any Canadian Securities Regulators
      for amending or supplementing the Preliminary Prospectus or the Final
      Prospectus or for additional information, and will use its commercially
      reasonable efforts to prevent the issuance of any order referred to in (i)
      above and, if any such order is issued, to obtain the withdrawal thereof
      as quickly as possible;

	 	 	 	 
	 	(c) 	
      except to the extent the Corporation participates in a
      merger or business combination transaction and following which the
      Corporation is not a “reporting issuer”, will use its reasonable best
      efforts to maintain its status as a “reporting issuer” (or the equivalent
      thereof) not in default of the requirements of the Securities Laws of each
      of the Qualifying Jurisdictions which have such a concept to the date
      which is one year following the Closing Date;

	 	 	 	 
	 	(d) 	
      except to the extent the Corporation participates in a
      merger or business combination transaction and following which the
      Corporation is not listed on the TSX, will use its reasonable best efforts
      to maintain the listing of the Common Shares on the TSX or such other
      recognized stock exchange or quotation system as the Underwriters may
      approve, acting reasonably, to the date that is one year following the
      Closing Date so long as the Corporation meets the minimum listing
      requirements of the TSX or such other exchange or quotation system;
    and

	 	 	 	 
	 	(e) 	
      will use the net proceeds of the offering of Offered
      Shares contemplated herein in the manner and subject to the qualifications
      described in the Prospectus under the heading “Use of
  Proceeds”.




	7. 	
      (a) 
	Representations and Warranties of the
      Corporation. The Corporation represents and warrants to the
      Underwriters that:



	 	(i) 	
      the Corporation and each of the Material Subsidiaries is
      a corporation duly incorporated, continued or amalgamated and validly
      existing under the laws of the jurisdiction in which it was incorporated,
      continued or amalgamated, as the case may be, has all requisite corporate
      power and authority and is duly qualified and holds all necessary material
      permits, licences and authorizations necessary or required to carry on its
      business as now conducted and to own, lease or operate its properties and
      assets and no steps or proceedings have been taken by any person,
      voluntary or otherwise, requiring or authorizing its dissolution or
      winding up, and the Corporation has all requisite power and authority to
      enter into each of this Agreement and the Compensation Option Certificates
      and to carry out its obligations hereunder and thereunder;

	 	 	 
	 	(ii) 	
      all of the Subsidiaries, and the Corporation’s direct and
      indirect holdings and interests in each one, are as set out in the AIF
      under the heading “Corporate Structure”. Other than the Material
      Subsidiaries, none of the Subsidiaries (i) are active, (ii) hold any
      assets, (iii) have any liabilities (iv) have generated any revenues nor
      (v) have incurred any expenses;

	 	 	 
	 	(iii) 	
      except as disclosed in writing to the Underwriters, all
      of the issued and outstanding shares of the Material Subsidiaries are
      issued as fully paid and non- assessable shares, in each case free and
      clear of all mortgages, liens, charges, pledges, security interests,
      encumbrances, claims or demands whatsoever and no person, firm or
      corporation has any agreement, option, right or privilege (whether
      pre-emptive or contractual) capable of becoming an agreement, for the
      purchase from the Corporation or any of its Material Subsidiaries of any
      interest in any of the shares in the capital of any of the Material
      Subsidiaries;







- 11 - 

	 	(iv) 	
      each of the execution and delivery of this Agreement and
      the Compensation Option Certificates, the performance by the Corporation
      of its obligations hereunder and thereunder, the issue and sale of the
      Offered Shares hereunder, the issue of the Compensation Options and the
      consummation of the transactions contemplated in this Agreement and the
      Compensation Option Certificates, do not and will not conflict with or
      result in a breach or violation of any of the terms or provisions of, or
      constitute a material default under (whether after notice or lapse of time
      or both) (A) any statute, rule or regulation applicable to the Corporation
      including, without limitation, Canadian Securities Laws and the rules and
      regulations of the TSX; (B) the constating documents, by-laws or
      resolutions of the Corporation which are in effect at the date hereof; (C)
      any mortgage, note, indenture, contract, agreement, joint venture,
      partnership, instrument, lease or other document to which the Corporation
      is a party or by which it is bound; or (D) any judgment, decree or order
      binding the Corporation or the Material Subsidiaries or the property or
      assets of the Corporation or the Material Subsidiaries;

	 	 	 
	 	(v) 	
      other than as disclosed in the Prospectus or in writing
      to the Underwriters, none of the Corporation or any Subsidiary has
      approved, is contemplating, has entered into any agreement in respect of,
      or has any knowledge of: (A) the purchase of any property material to the
      Corporation or assets or any interest therein or the sale, transfer or
      other disposition of any property material to the Corporation or assets or
      any interest therein currently owned, directly or indirectly, by the
      Corporation or any Subsidiary whether by asset sale, transfer of shares or
      otherwise; or (B) the change of control (by sale or transfer of shares or
      sale of all or substantially all of the property and assets of the
      Corporation or any Subsidiary or otherwise) of the Corporation or any
      Subsidiary;

	 	 	 
	 	(vi) 	
      the Financial Statements have been prepared in accordance
      with generally accepted accounting principles in Canada and present fully,
      fairly and correctly in all material respects, the financial condition of
      the Corporation as at the dates thereof and the results of the operations
      and the changes in the financial position of the Corporation for the
      periods then ended and contain and reflect adequate provisions or
      allowance for all reasonably anticipated liabilities, expenses and losses
      of the Corporation and there has been no change in accounting policies or
      practices of the Corporation since June 30, 2007;

	 	 	 
	 	(vii) 	
      other than as disclosed in the Prospectus or in writing
      to the Underwriters, all taxes (including income tax, capital tax, payroll
      taxes, employer health tax, workers’ compensation payments, property
      taxes, custom and land transfer taxes), duties, royalties, levies,
      imposts, assessments, deductions, charges or withholdings and all
      liabilities with respect thereto including any penalty and interest
      payable with respect thereto (collectively, “Taxes”) due and
      payable by the Corporation and the Material Subsidiaries have been paid,
      except where the failure to pay such taxes would not constitute an adverse
      material fact in respect of the Corporation or have a Material Adverse
      Effect on the Corporation. All tax returns, declarations, remittances and
      filings required to be filed by the Corporation and the Material
      Subsidiaries have been filed with all appropriate governmental authorities
      and all such returns, declarations, remittances and filings are complete
      and accurate and no material fact or facts have been omitted therefrom
      which would make any of them misleading, except where such failure would
      not constitute an adverse material fact in respect of the Corporation or
      have a Material Adverse Effect on the Corporation. Other than as disclosed
      in the Prospectus or in writing to the Underwriters, to the best of the
      knowledge of







- 12 - 

	 		
      the Corporation, no examination of any tax return of the
      Corporation or any Subsidiary is currently in progress and there are no
      issues or disputes outstanding with any governmental authority respecting
      any taxes that have been paid, or may be payable, by the Corporation or
      any Subsidiary, in any case, except where such examinations, issues or
      disputes would not constitute an adverse material fact in respect of the
      Corporation or have a Material Adverse Effect on the
Corporation;

	 	 	 
	 	(viii) 	
      the Corporation’s Auditors are independent public
      accountants and have participant status with the Canadian Public
      Accountability Board as required under Canadian Securities Laws and there
      has never been a reportable disagreement (within the meaning of National
      Instrument 51-102 – Continuous Disclosure Obligations) between the
      Corporation and the Corporation’s Auditors;

	 	 	 
	 	(ix) 	
      as at the Closing Date, except as contemplated by this
      Agreement and as disclosed in the Preliminary Prospectus, no holder of
      outstanding shares in the capital of the Corporation will be entitled to
      any pre-emptive or any similar rights to subscribe for any Common Shares
      or other securities of the Corporation and no rights, warrants or options
      to acquire, or instruments convertible into or exchangeable for, any
      shares in the capital of the Corporation are outstanding;

	 	 	 
	 	(x) 	
      other than as set out in the Prospectus, no legal or
      governmental proceedings or inquiries are pending to which the
      Corporation, or any of its Material Subsidiaries, is a party or to which
      its property is subject that would result in the revocation or
      modification of any material certificate, authority, permit or license
      necessary to conduct the business now owned or operated by the Corporation
      and its Material Subsidiaries which, if the subject of an unfavourable
      decision, ruling or finding would have a Material Adverse Effect on the
      Corporation and, to the best of the Corporation’s knowledge, no such legal
      or governmental proceedings or inquiries have been threatened against or
      are contemplated with respect to the Corporation or its Material
      Subsidiaries or with respect to their properties;

	 	 	 
	 	(xi) 	
      none of the Corporation nor its Material Subsidiaries is
      in violation of its constating documents or in default in the performance
      or observance of any material obligation, agreement, covenant or condition
      contained in any contract, indenture, trust deed, mortgage, loan
      agreement, note, lease or other agreement or instrument to which it is a
      party or by which it or its property may be bound;

	 	 	 
	 	(xii) 	
      the Corporation and each of its Material Subsidiaries
      owns or has the right to use under license, sub-license or otherwise all
      material intellectual property used by the Corporation and its Material
      Subsidiaries in its business, including copyrights, industrial designs,
      trade marks, trade secrets, know how and proprietary rights, free and
      clear of any and all encumbrances;

	 	 	 
	 	(xiii) 	
      any and all of the agreements and other documents and
      instruments pursuant to which the Corporation and its Material
      Subsidiaries hold the property and assets thereof (including any interest
      in, or right to earn an interest in, any property) are valid and
      subsisting agreements, documents or instruments in full force and effect,
      enforceable in accordance with terms thereof, neither the Corporation nor
      any Subsidiary is in default of any of the material provisions of any such
      agreements, documents or instruments nor has any such default been alleged
      and such properties and assets are in good standing under the applicable
      statutes and regulations of the jurisdictions in which they are situated,
      all leases, licences and claims pursuant to which the Corporation or any
      Subsidiary derive the interests







- 13 - 

	 		
      thereof in such property and assets are in good standing
      and there has been no material default under any such lease, licence or
      claim. None of the properties (or any interest in, or right to earn an
      interest in, any property) of the Corporation or any Subsidiary is subject
      to any right of first refusal or purchase or acquisition right which is
      not disclosed in the Preliminary Prospectus;

	 	 	 
	 	(xiv) 	
      this Agreement has been, and, when delivered, each the
      Compensation Options Certificates will have been duly authorized and
      executed and delivered by the Corporation, and do, or will, as applicable,
      constitute a valid and binding obligation of the Corporation enforceable
      against the Corporation in accordance with its terms, except as
      enforcement thereof may be limited by bankruptcy, insolvency,
      reorganization, moratorium and other laws relating to or affecting the
      rights of creditors generally and except as limited by the application of
      equitable principals when equitable remedies are sought, and by the fact
      that rights to indemnity, contribution and waiver, and the ability to
      sever unenforceable terms, may be limited by applicable law;

	 	 	 
	 	(xv) 	
      at the Closing Time, all necessary corporate action will
      have been taken by the Corporation to allot and authorize the allotment,
      issuance and sale of the Offered Shares and the Broker Shares and, upon
      payment therefor the Offered Shares and the Broker Shares will be validly
      issued as fully paid and non-assessable securities in the capital of the
      Corporation;

	 	 	 
	 	(xvi) 	
      all notices and filings necessary as at the date hereof
      have been made with and all necessary consents, approvals and
      authorizations obtained by the Corporation from the TSX to ensure that,
      subject to fulfilling the Standard Listing Conditions, the Offered Shares
      and the Broker Shares will be listed and posted for trading on the
    TSX;

	 	 	 
	 	(xvii) 	
      no order, ruling of suspending the sale or ceasing the
      trading in any securities of the Corporation has been issued by any
      securities regulatory authority and is continuing in effect and no
      proceedings for that purpose have been instituted or, to the best
      knowledge of the Corporation, are pending, contemplated or threatened by
      any regulatory authority;

	 	 	 
	 	(xviii) 	
      the authorized capital of the Corporation consists of an
      unlimited number of Common Shares without par value and an unlimited
      number of preferred shares without par value of which, as at the close of
      business on the business day immediately preceding the date hereof,
      289,705,318 Common Shares and no preferred shares were issued and
      outstanding as fully paid and non-assessable shares in the capital of the
      Corporation;

	 	 	 
	 	(xix) 	
      other than as disclosed in the Prospectus, the
      Corporation has not made any loans to or guaranteed the obligations of any
      person other than the Material Subsidiaries;

	 	 	 
	 	(xx) 	
      with respect to each premises of the Corporation or its
      Material Subsidiaries, the Corporation or its Material Subsidiaries
      occupies as tenant (the “Leased Premises”), the Corporation or such
      Subsidiary occupies the Leased Premises and has the exclusive right to
      occupy and use the Leased Premises and each of the leases pursuant to
      which the Corporation and/or its Material Subsidiaries occupies the Leased
      Premises is in good standing and in full force and effect;

	 	 	 
	 	(xxi) 	
      the Corporation and each Subsidiary is in compliance with
      all laws respecting employment and employment practices, terms and
      conditions of employment,







- 14 - 

	 		
      pay equity and wages, except where non-compliance with
      such laws could not reasonably be expected to have a Material Adverse
      Effect on the Corporation or any Subsidiary, and has not and is not
      engaged in any unfair labour practice;

	 	 	 
	 	(xxii) 	
      there has not been in the last two years and there is not
      currently any labour disruption or conflict which could reasonably be
      expected to have a Material Adverse Effect on the Corporation;

	 	 	 
	 	(xxiii) 	
      other than as set out in the Prospectus, to the best
      knowledge of the Corporation, none of the directors, officers or employees
      of the Corporation or any associate or affiliate of any of the foregoing
      had or has any material interest, direct or indirect, in any transaction
      or any proposed transaction with the Corporation or its Material
      Subsidiaries which, as the case may be, materially affects, is material to
      or will materially affect the Corporation;

	 	 	 
	 	(xxiv) 	
      the assets of the Corporation and its Material
      Subsidiaries and their business and operations are insured against loss or
      damage with responsible insurers on a basis consistent with insurance
      obtained by reasonably prudent participants in comparable businesses, and
      such coverage is in full force and effect, and the Corporation has not
      failed to promptly give any notice of any material claim
  thereunder;

	 	 	 
	 	(xxv) 	
      the Transfer Agent at its principal offices in the City
      of Vancouver has been duly appointed as registrar and transfer agent for
      the Common Shares;

	 	 	 
	 	(xxvi) 	
      the minute books and records of the Corporation and its
      Material Subsidiaries made available to counsel for the Underwriters in
      connection with its due diligence investigation of the Corporation and its
      Material Subsidiaries for the periods from their respective dates of
      incorporation to the date hereof are all of the minute books and records
      of the Corporation and its Material Subsidiaries, respectively, and
      contain copies of all material proceedings (or certified copies thereof or
      drafts thereof pending approval) of the shareholders, the directors and
      all committees of directors of the Corporation and its Material
      Subsidiaries to the date of review of such corporate records and minute
      books and there have been no other meetings, resolutions or proceedings of
      the shareholders, directors or any committees of the directors of the
      Corporation or any of its Material Subsidiaries to the date hereof not
      reflected in such minute books and other records, other than those which
      have been disclosed to the Underwriters or which are not material in the
      context of the Corporation and its Material Subsidiaries, on a
      consolidated basis;

	 	 	 
	 	(xxvii) 	
      to the best of the Corporation’s knowledge, neither the
      Corporation nor any of its Material Subsidiaries has been in material
      violation of, in connection with the ownership, use, maintenance or
      operation of its property and assets, including the Leased Premises, any
      applicable federal, provincial, state, municipal or local laws, by-laws,
      regulations, orders, policies, permits, licences, certificates or
      approvals having the force of law, domestic or foreign, relating to
      environmental, health or safety matters (collectively the
      “Environmental Laws”) which would have a Material Adverse Effect on
      the Corporation;

	 	 	 
	 	(xxviii) 	
      without limiting the generality of the subsection
      immediately above, the Corporation and each of its Material Subsidiaries,
      do not have any knowledge of, and have not received any notice of, any
      material claim, judicial or administrative proceeding, pending or
      threatened against, or which may affect, either the Corporation or any
      Subsidiary or any of the property, assets or
operations







- 15 - 

	 		
      thereof, relating to, or alleging any violation of any
      Environmental Laws, the Corporation is not aware of any facts which could
      give rise to any such claim or judicial or administrative proceeding and
      neither the Corporation nor any Subsidiary nor any of the property, assets
      or operations thereof is the subject of any investigation, evaluation,
      audit or review by any Governmental Authority (which term means and
      includes, without limitation, any national, federal government, province,
      state, municipality or other political subdivision of any of the
      foregoing, any entity exercising executive, legislative, judicial,
      regulatory or administrative functions of or pertaining to government and
      any corporation or other entity owned or controlled (through stock or
      capital ownership or otherwise) by any of the foregoing) to determine
      whether any violation of any Environmental Laws has occurred or is
      occurring or whether any remedial action is needed in connection with a
      release of any contaminant into the environment, except for compliance
      investigations conducted in the normal course by any Governmental
      Authority, in each case which could reasonably be expected to have a
      Material Adverse Effect on the Corporation;

	 	 	 
	 	(xxix) 	
      there are no orders, rulings or directives issued,
      pending or, to the best of the Corporation’s knowledge threatened against
      the Corporation or any of its Material Subsidiaries under or pursuant to
      any Environmental Laws requiring any work, repairs, construction or
      capital expenditures with respect to the property or assets of the
      Corporation or any of its Material Subsidiaries (including the Leased
      Premises) which would have a Material Adverse Effect on the
      Corporation;

	 	 	 
	 	(xxx) 	
      to the best of the Corporation’s knowledge, the
      Corporation and its Material Subsidiaries are not subject to any
      contingent or other liability relating to the restoration or
      rehabilitation of land, water or any other part of the environment (except
      for those derived from normal exploration or mining activities) or non-
      compliance with Environmental Laws which could reasonably be expected to
      have a Material Adverse Effect on the Corporation;

	 	 	 
	 	(xxxi) 	
      other than the Underwriters, there is no person acting or
      purporting to act at the request or on behalf of the Corporation that is
      entitled to any brokerage or finder’s fee in connection with the
      transactions contemplated by this Agreement;

	 	 	 
	 	(xxxii) 	
      other than as set out in the Prospectus, each of the
      Corporation and its Material Subsidiaries holds all requisite licences,
      registrations, qualifications, permits and consents necessary or
      appropriate for carrying on its business as currently carried on and all
      such licences, registrations, qualifications, permits and consents are
      valid and subsisting and in good standing in all material respects except
      where the failure to hold such licences, registrations, qualifications,
      permits and consents would not have a Material Adverse Effect on the
      Corporation. In particular, without limiting the generality of the
      foregoing, neither the Corporation nor any of its Material Subsidiaries
      has received any notice of proceedings relating to the revocation or
      adverse modification of any material mining or exploration permit or
      licence, nor have any of them received notice of the revocation or
      cancellation of, or any intention to revoke or cancel, any mining claims,
      groups of claims, exploration rights, concessions or leases with respect
      to any of the resource properties described in the Preliminary Prospectus
      where such revocation or cancellation would have a Material Adverse Effect
      on the Corporation;

	 	 	 
	 	(xxxiii) 	
      except as disclosed in the Preliminary Prospectus, the
      Corporation and the Material Subsidiaries are the absolute legal and
      beneficial owners of, and have







- 16 - 

			
      good and marketable title to, all of the material
      property or assets thereof as described in the Prospectus, and no other
      Mining Rights (defined below) are necessary for the conduct of the
      business of the Corporation or any Subsidiary as currently conducted, none
      of the Corporation or any Subsidiary knows of any claim or the basis for
      any claim that might or could materially and adversely affect the right
      thereof to use, transfer or otherwise exploit such Mining Rights and,
      except as disclosed in the Preliminary Prospectus, none of the Corporation
      or any Subsidiary has any responsibility or obligation to pay any material
      commission, royalty, license fee or similar payment to any person with
      respect to the Mining Rights thereof; 

	 	  	
      

		(xxxiv) 	
      the Corporation and its Material Subsidiaries hold either
      freehold title, mining leases, mining concessions, mining claims or
      participating interests or other conventional property or proprietary
      interests or rights, recognized in the jurisdiction in which a particular
      property described in the Preliminary Prospectus is located (collectively,
      “Mining Rights”), in respect of the ore bodies and minerals located
      in properties in which the Corporation and the Material Subsidiaries have
      an interest as described in the Preliminary Prospectus under valid,
      subsisting and enforceable title documents or other recognized and
      enforceable agreements or instruments, sufficient to permit the
      Corporation or the applicable Subsidiary to explore the minerals relating
      thereto; all property, leases or claims in which the Corporation or any
      Subsidiary has an interest or right have been validly located and recorded
      in accordance in all material respects with all applicable laws and are
      valid and subsisting except where the failure to be so would not have a
      Material Adverse Effect on the Corporation; the Corporation and the
      Material Subsidiaries have all necessary surface rights, access rights and
      other necessary rights and interests relating to the properties in which
      the Corporation and the Material Subsidiaries have an interest as
      described in the Preliminary Prospectus granting the Corporation or
      applicable Subsidiary the right and ability to explore for minerals, ore
      and metals for development purposes as are appropriate in view of the
      rights and interest therein of the Corporation or the applicable
      Subsidiary, with only such exceptions as do not interfere with the use
      made by the Corporation or the applicable Subsidiary of the rights or
      interest so held; and each of the proprietary interests or rights and each
      of the documents, agreements and instruments and obligations relating
      thereto referred to above is currently in good standing in the name of the
      Corporation or a Subsidiary except where the failure to be so would not
      have a Material Adverse Effect on the Corporation. The Mining Rights in
      respect of the Corporation’s properties, as disclosed in the Preliminary
      Prospectus, constitute a description of all material Mining Rights held by
      the Corporation and its Material Subsidiaries; 

	 	  	
      

		(xxxv) 	
      the definitive form of certificate representing the
      Common Shares is in proper form under the laws of British Columbia,
      complies with the requirements of the TSX and does not conflict with the
      constating documents of the Corporation; 

	 	  	
      

		(xxxvi) 	
      other than as disclosed in the Prospectus, 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; 

	 	  	
      

		(xxxvii) 	
      the Corporation is an Eligible Issuer and a reporting
      issuer under Canadian Securities Laws in the provinces or British
      Columbia, Alberta, Manitoba, Ontario and New Brunswick; and, at the
      Closing Time, the Corporation will be reporting issuer and an Eligible
      Issuer under Canadian Securities Laws in such provinces








- 17 - 

			
      and the Qualifying Jurisdictions; the Corporation is not
      in default in any material respect of any requirement of Canadian
      Securities Laws and the Corporation is not included in a list of
      defaulting reporting issuers maintained by the Canadian Securities
      Regulators. 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 June 30, 2007
      (other than in respect of material change reports previously filed on a
      confidential basis and thereafter made public or material change reports
      previously filed on a confidential basis and in respect of which no
      material change ever resulted), no such disclosure has been made on a
      confidential basis and there is no material change relating to the
      Corporation which has occurred and with respect to which the requisite
      material change statement has not been filed, except to the extent that
      the Offering constitutes a material change; 

	 	  	
       

		(xxxviii) 	
      all disclosure filings required to be made by the
      Corporation pursuant to Canadian Securities Laws have been made and such
      disclosure and filings were true and accurate as at the respective dates
      thereof and the Corporation has not filed any confidential material change
      reports; 

	 	  	
       

		(xxxix) 	
      the Corporation has, and to the best of the Corporation’s
      knowledge the directors and officers of the Corporation have, answered
      every question or inquiry of the Underwriters and their counsel in
      connection with the Underwriters’ due diligence investigations fully and
      truthfully; 

	 	  	
       

		(xl) 	
      the Campo Morado Technical Report was prepared, filed and
      certified in accordance with National Instrument 43-101 – Standards of
      Disclosure for Mineral Projects and Form 43-101F1 Technical
      Report; 

	 	  	
       

		(xli) 	
      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 Material Subsidiaries, considered as a whole;
    

	 	  	
       

		(xlii) 	
      neither the Corporation, nor to the best of the
      Corporation’s knowledge any other person associated with or acting on
      behalf of the Corporation including, without limitation, any director,
      officer, agent or employee of the Corporation or its Material
      Subsidiaries, has, directly or indirectly, while acting on behalf of the
      Corporation or its Material Subsidiaries (i) used any corporate funds for
      unlawful contributions, gifts, entertainment or other unlawful expenses
      relating to political activity; (ii) made any unlawful payment to foreign
      or domestic government officials or employees or to foreign or domestic
      political parties or campaigns from corporate funds; (iii) violated any
      provision of the Foreign Corrupt Practices Act of 1977, as
      amended or similar legislation; or (iv) made any other unlawful payment;
      and 

	 	  	
       

		(xliii) 	
      the operations of the Corporation and its Material
      Subsidiaries are and have been conducted at all times in compliance with
      applicable financial recordkeeping and reporting requirements of money
      laundering statutes of all jurisdictions, the rules and regulations
      thereunder and any related or similar rules, regulations or guidelines,
      issued, administered or enforced by any governmental agency (collectively,
      the “Money Laundering Laws”) and no action, suit or proceeding by
      or before any court or governmental agency, authority or body or any
      arbitrator involving the Corporation or any of it Material Subsidiaries
      with 







- 18 - 

	 			respect to the Money Laundering Laws is pending, or to
      the best of the Corporation's knowledge, threatened.
	 	 	 
	 	(b) 	
      The Corporation further acknowledges that the
      Underwriters are relying upon the representations and warranties contained
      in this Section 7.



8.          
Closing Deliveries. The purchase and sale of the Underwritten Shares
and of the Optioned Shares shall be completed at the Closing Time or the Option
Closing Date, as applicable, concurrently at the offices of Lang Michener LLP,
Vancouver, B.C. and Heenan Blaikie LLP, Toronto, Ontario, or at such other place
as Paradigm and the Corporation may agree. At or prior to the Closing Time or
the Option Closing Date, as the case may be, the Corporation shall duly and
validly deliver to the Underwriters one or more certificate(s) in definitive
form representing the applicable Offered Shares registered in the name of “CDS
& Co.” and the Compensation Option Certificates registered in the names of
the Underwriters, or in each case, in such other name or names as the
Underwriters may notify the Corporation in writing not less than 48 hours prior
to Closing Time, against payment by the Underwriters to the Corporation, at the
direction of the Corporation, in lawful money of Canada by wire transfer or, if
permitted by applicable law, by certified cheque or bank draft payable at par in
the City of Toronto, of an amount equal to the aggregate purchase price for the
Offered Shares being issued and sold hereunder less the Cash Commission and all
of the estimated out-of-pocket expenses of the Underwriters payable by the
Corporation to the Underwriters in accordance with paragraph 18 hereof. 

9.          
Underwriters’ Obligation to Purchase Offered Shares. The obligation of
the Underwriters to purchase the Offered Shares at the Closing Time shall
be subject to the following conditions (it being understood that the
Underwriters 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 the following terms and conditions or any other or subsequent
breach or non-compliance, provided that to be binding on the Underwriters any
such waiver or extension must be in writing and signed by them): 

	 	(a) 	
      the Underwriters shall have received an opinion, dated
      the Closing Date and subject to customary qualifications, of Lang Michener
      LLP, or from local counsel in Qualifying Jurisdictions other than British
      Columbia and Ontario (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 Transfer Agent, as to the
      issued capital of the Corporation; and (ii) as to matters of fact not
      independently established, on certificates of the Corporation’s auditors
      or a public official) with respect to the following matters:

	 	 	 	 
	 		(i) 	
      as to the incorporation and existence of the Corporation
      under the laws of the British Columbia and as to the corporate power of
      the Corporation to carry out its obligations under this Agreement, and to
      issue the Offered Shares and the Compensation Options and the Broker
      Shares;

	 	 	 	 
	 		(ii) 	
      as to the authorized and issued capital of the
      Corporation;

	 	 	 	 
	 		(iii) 	
      that the Corporation has taken all necessary corporate
      action to authorize the execution and delivery of each of this Agreement
      and the Compensation Option Certificates and that each of this Agreement
      and the Compensation Options constitutes a legal, valid and binding
      obligations of the Corporation enforceable against the Corporation in
      accordance with its terms subject to customary exemptions for opinions of
      such nature.

	 	 	 	 
	 		(iv) 	
      that the execution and delivery of each of this Agreement
      and the Compensation Option Certificates and the performance by the
      Corporation of its obligations hereunder and thereunder do not and will
      not conflict with, result in a breach of or create a state of facts which,
      whether with or without the giving of notice
or







- 19 - 

	 		
      lapse of time or both, will result in a breach or
      violation of any of the terms, conditions or provisions of the articles,
      by-laws or resolutions of the board of directors or the shareholders of
      the Corporation.

	 	 	 
	 	(v) 	
      the Offered Shares have been duly authorized and validly
      allotted and issued by the Corporation to the Underwriters and such
      Offered Shares are outstanding as fully paid and non-assessable
    shares;

	 	 	 
	 	(vi) 	
      that the Compensation Options have been validly
      authorized and created and, upon the Corporation receiving payment of the
      purchase price for any Broker Shares issued by the Corporation upon the
      exercise of the Compensation Options in accordance with the terms thereof,
      such Broker Shares will be validly issued and outstanding as fully paid
      and non-assessable;

	 	 	 
	 	(vii) 	
      the attributes of the Offered Shares conform in all
      material respects with the description thereof contained in the Final
      Prospectus;

	 	 	 
	 	(viii) 	
      all necessary corporate action has been taken by the
      Corporation to authorize the execution and delivery of the Preliminary
      Prospectus and the Final Prospectus and the filing of such documents as
      are required under the Securities Laws in each of the Qualifying
      Jurisdictions;

	 	 	 
	 	(ix) 	
      no consent, approval, authorization or order of or
      filing, registration or qualification with any court, governmental agency
      or body or regulatory authority having jurisdiction is required at this
      time for the execution and delivery by the Corporation of this Agreement
      and the performance of its obligations hereunder, except for such as have
      been made or obtained;

	 	 	 
	 	(x) 	
      all approvals, permits, consents, orders and
      authorizations have been obtained, all necessary documents have been filed
      and all other legal requirements have been fulfilled under Securities Laws
      of the Qualifying Jurisdictions to qualify the issuance or distribution
      and sale of the Offered Shares to the public in each of the Qualifying
      Jurisdictions and to qualify the distribution of the Compensation Options
      to the Underwriters and to permit the issuance, sale and delivery of the
      Offered Shares to the public through dealers registered under the
      applicable laws of each of the Qualifying Jurisdictions who have complied
      with the relevant provisions of such laws and the terms of their
      registration;

	 	 	 
	 	(xi) 	
      the Offered Shares will, as of the date they are issued,
      be “qualified investments” under the Income Tax Act (Canada) and
      the regulations thereunder for trusts governed by registered retirement
      savings plans, registered retirement income funds, registered education
      savings plans and deferred profit sharing plans;

	 	 	 
	 	(xii) 	
      the form of share certificate representing the Offered
      Shares has been duly approved and adopted by the Corporation and complies
      in all material respects with the constating documents of the Corporation,
      the Business Corporations Act (British Columbia) and the
      requirements of the TSX;

	 	 	 
	 	(xiii) 	
      that the Offered Shares and the Broker Shares have been
      conditionally approved for listing on the TSX subject only to the Standard
      Listing Conditions;

	 	 	 
	 	(xiv) 	
      that Computershare Trust Company of Canada has been duly
      appointed as the transfer agent and registrar for the Common Shares;
      and







- 20 - 

	 		(xv) 	
      as to such other matters as the Underwriter’s legal
      counsel may reasonably request prior to the Closing Time;

	 	 	 	 
	 	(b) 	
      if any of the Offered Shares are offered and sold in the
      United States, the Underwriters shall have received a legal opinion
      addressed to the Underwriters, dated as of the Closing Date, in form and
      substance satisfactory to the Underwriters, acting reasonably, to the
      effect that the offer and sale of the Offered Shares are not required to
      be registered under the U.S. Securities Act; provided that such counsel
      may rely, to the extent appropriate in the circumstances, as to matters of
      fact on certificates of officers of the Corporation, the Underwriters and
      others;

	 	 	 	 
	 	(c) 	
      the Underwriters shall have received favourable legal
      opinions addressed to the Underwriters and the Underwriters’ counsel in
      form and substance satisfactory to the Underwriters’ counsel, acting
      reasonably, dated the Closing Date from counsel to the Corporation in
      Mexico, the British Virgin Islands, and the United States, as applicable,
      as to the incorporation and subsistence of the Material Subsidiaries, the
      corporate power and authority of the Material Subsidiaries to carry on its
      business as presently carried on and to own its assets and as to the
      registered ownership of the issued and outstanding securities of the
      Material Subsidiaries;

	 	 	 	 
	 	(d) 	
      the Corporation will have caused an updated title
      opinions to be delivered by local counsel in Mexico in respect of the
      Camps Morado Project in form and substance satisfactory to the
      Underwriters, acting reasonably;

	 	 	 	 
	 	(e) 	
      the Underwriters 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;

	 	 	 	 
	 	(f) 	
      the Underwriters 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 Underwriters, acting reasonably), addressed
      to the Underwriters and their 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 Closing Time 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 Closing
  Time;

	 	 	 	 
	 		(ii) 	
      no order, ruling or determination having the effect of
      suspending the sale or ceasing, suspending or restricting the trading of
      Common Shares in the Qualifying Jurisdictions 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 delivered at
      Closing 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 relating to the Offering
      and delivered at Closing are full, true and correct copies thereof and
      have not been modified or rescinded as of the date
  thereof;







- 21 - 

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

	 	 	 	 
	 		(vi) 	
      none of the documents filed with applicable securities
      regulatory authorities since December 31, 2006 contained a
      misrepresentation as at the time the relevant document was filed that has
      not since been corrected;

	 	 	 	 
	 	(g) 	
      the Underwriters shall have received a letter dated as of
      the Closing Date, in form and substance satisfactory to the Underwriters,
      addressed to the Underwriters and the directors of the Corporation from
      the Corporation’s auditors confirming the continued accuracy of the
      comfort letter to be delivered to the Underwriters pursuant to
      subparagraph 4(a)(iii) hereof with such changes as may be necessary to
      bring the information in such letter forward to a date not more than two
      Business Days prior to the Closing Date, which changes shall be acceptable
      to the Underwriters;

	 	 	 	 
	 	(h) 	
      the Offered Shares and Broker Shares shall have been
      approved for listing on the TSX, subject only to the official notices of
      issuance and fulfilment of the Standard Listing Conditions;

	 	 	 	 
	 	(i) 	
      the Underwriters shall have conducted all due diligence
      inquiries and investigations and not identified any material adverse
      changes or misrepresentations or any items materially adversely affecting
      the Corporation’s affairs which exist as of the date hereof but which have
      not been widely disseminated to the public;

	 	 	 	 
	 	(j) 	
      the Underwriters shall have received a certificate, dated
      the Closing Date, of the Chief Executive Officer of the Corporation
      addressed to the Underwriters and their counsel to the effect
  that:

	 	 	 	 
	 		(i) 	
      except for developments contemplated in and described by
      the prospectus, the statements made on behalf of the corporation during
      any due diligence sessions held by the Underwriters in connection with the
      filing of the Prospectus remain accurate, complete and true in all
      material respects as if such statements were made on the date
    hereof;

	 	 	 	 
	 		(ii) 	
      there has been no change in any material fact (which
      includes the disclosure of any previously undisclosed material fact)
      contained in the Prospectus which fact or change is, or may be, of such a
      nature as to render any statement in the Prospectus misleading or untrue
      in any material respect or which would result in a misrepresentation in
      the Prospectus or which would result in the Prospectus not complying with
      Canadian securities laws; and

	 	 	 	 
	 		(iii) 	
      since the date of the Final Prospectus, there has arisen
      no action, suit, proceeding or inquiry, actual or, to the knowledge of the
      Corporation, threatened, against or affecting the Corporation at law or in
      equity or before or by any federal, provincial, municipal or other
      governmental department, commission, board, bureau, agency or
      instrumentality, domestic or foreign, which may in any way adversely
      affect the Corporation.

	 	 	 	 
	 	(k) 	
      the Underwriters shall have received a certificate of
      good standing in respect of the Corporation from the applicable government
      agency in British Columbia;

	 	 	 	 
	 	(l) 	
      the Underwriters shall have received certificates, issued
      under the Securities Laws of the Qualifying Jurisdictions which issue such
      certificates stating, and, in respect of the
other







- 22 - 

	 		
      Qualifying Jurisdictions, printouts of the applicable
      list of defaulting Reporting Issuer confirming, that the Corporation is
      not in default under such Securities Laws; and

	 	 	 
	 	(m) 	
      the Underwriters shall have received a certificate from
      Computershare Trust Company as to the number of Common Shares issued and
      outstanding as at a date no more than two Business Days prior to the
      Closing Date.



10.          
Purchase of Optioned Shares. The Underwriters’ obligation to purchase
the Optioned Shares on the Option Closing Date (in the event that the
Over-Allotment Option to purchase the Optioned Securities is exercised) shall be
subject to the accuracy of the representations and warranties of the Corporation
contained in this Agreement as of the Option Closing Date and the performance by
the Corporation of its obligations under this Agreement. The Corporation agrees
to fulfill or cause to be fulfilled the following conditions: 

	 	(a) 	
      the Underwriters shall have received favourable legal
      opinions from the Corporation’s counsel and local counsel, each dated the
      Option Closing Date, in form and substance satisfactory to the
      Underwriters acting reasonably;

	 	 	 
	 	(b) 	
      the Underwriters shall have received a letter dated as of
      the Option Closing Date, in form and substance satisfactory to the
      Underwriters, addressed to the Underwriters and the directors of the
      Corporation from the Corporation’s auditors confirming the continued
      accuracy of the comfort letter to be delivered to the Underwriters
      pursuant to subparagraph 4(a)(iii) hereof with such changes as may be
      necessary to bring the information in such letter forward to a date not
      more than two Business Days prior to the Option Closing Date, which
      changes shall be acceptable to the Underwriters;

	 	 	 
	 	(c) 	
      the Underwriters shall have received a certificate dated
      as of the Option Closing Date, addressed to the Underwriters and signed by
      appropriate officers of the Corporation, with respect to the constating
      documents of the Corporation, all resolutions of the board of directors of
      the Corporation relating to this Agreement, the incumbency and specimen
      signatures of signing officers of the Corporation and such other matters
      as the Underwriters may reasonably request;

	 	 	 
	 	(d) 	
      the Underwriters shall have received a certificate in the
      form set out in paragraph 9(j) dated as of the Option Closing Date;
    and

	 	 	 
	 	(e) 	
      the Underwriters shall have received such other
      certificates, agreements, materials or documents as they may reasonably
      request.




	11. 	
      Restrictions on Further Issues or Sales and Right of
      First Refusal.

	 	 	 
		(a) 	
      During the period commencing the date of the Engagement
      Letter and ending on the day which is 90 days following the Closing Date,
      the Corporation shall not, (and, for greater certainty, shall not publicly
      announce any intention to do any of the following) without the prior
      written consent of Paradigm on behalf of the Underwriters (such consent
      not to be unreasonably withheld or delayed: (i) issue any Common Shares or
      financial instruments convertible or exchangeable into Common Shares
      (collectively “Equity Securities”) or (ii) enter into any swap or
      other arrangement that transfers to another, in whole or in part, any of
      the economic consequences of ownership of Common Shares, where any such
      swap or other arrangement may be settled by delivery of Common Shares or
      other securities, in cash or otherwise, other than: (i) the issue of the
      Offered Shares and Compensation Options pursuant to this Agreement; (ii)
      the grant or exercise of stock options pursuant to the stock option plan
      of the Corporation; (iii) under any agreement or instruments already
      entered into, issued or authorized by the Corporation as at the date
      hereof including, for greater certainty, the Compensation Options and in
      connection with







- 23 - 

	 		
      the US$20 million bridge facility by NM Rothschild &
      Sons Limited and Paradigm; (iv) pursuant to a bona fide arms-length
      acquisition by the Corporation or one of its affiliates; or (v) pursuant
      to the concurrent non-brokered private placement of up to $5.75 million of
      common shares to certain accredited investors.

	 	 	 
	 	(b) 	
      In addition, the Corporation shall use reasonable efforts
      to cause its executive officers and directors and associates of both
      groups to enter into agreements on terms and conditions satisfactory to
      Paradigm in which they will covenant and agree that they will not, for a
      period of 90 days following the Closing Date, directly or indirectly,
      offer, sell, contract to sell, lend, swap, or enter into any other
      agreement to transfer the economic consequences of, or otherwise dispose
      of or deal with, or publicly announce any intention to offer, sell,
      contract to sell, grant or sell any option to purchase, hypothecate,
      pledge, transfer, assign, purchase any option or contract to sell, lend,
      swap or enter into any agreement to transfer the economic consequences of,
      or otherwise dispose of or deal with, whether through the facilities of a
      stock exchange, by private placement or otherwise, common shares held by
      them, directly or indirectly, without first obtaining the written consent
      of Paradigm, which consent will not be unreasonably withheld or delayed
      and will not be withheld upon the occurrence of a take-over bid or similar
      transaction involving a change of control of the Corporation.

	 	 	 
	 	(c) 	
      The Corporation hereby grants to Paradigm the right but
      not the obligation, to participate in a minimum of 40% of any further
      brokered offering of equity securities of the Corporation (a “Subsequent
      Financing”), which right will be exercisable commencing on the Closing
      Date and for a period of 12 months from the Closing Date. Should the
      Corporation receive a specific offer in connection with a Subsequent
      Financing from another broker/dealer during that period, the Corporation
      shall immediately advise Paradigm of the terms and conditions of the
      Subsequent Financing and Paradigm shall have 2 business days to exercise
      its first right to participate on the same terms and conditions as
      contemplated in the Subsequent Financing.



12.          
All Terms to be Conditions. The Corporation agrees that the conditions
contained in paragraph 9, and, if applicable, paragraph 10, will be complied
with insofar as the same relate to acts to be performed or caused to be
performed by the Corporation and that it will use its commercially reasonable
efforts to cause all such conditions to be complied with. Any breach or failure
to comply with any of the conditions set out in paragraph 9 shall entitle each
of the Underwriters to terminate its obligation to purchase the Underwritten
Shares, by written notice to that effect given to the Corporation at or prior to
the Closing Time. It is understood that the Underwriters may waive, in whole or
in part, or extend the time for compliance with, any of such terms and
conditions without prejudice to the rights of the Underwriters in respect of any
such terms and conditions or any other or subsequent breach or non-compliance,
provided that to be binding on the Underwriters any such waiver or extension
must be in writing. 

13.          
Termination Events. Each of the Underwriters may terminate its
obligations on or before Closing if: 

	 	(a) 	
      there shall have occurred any adverse material change or
      there shall be discovered any previously undisclosed adverse material fact
      in relation to the Corporation; or

	 	 	 
	 	(b) 	
      there shall have occurred any change in the Securities
      Laws of any Qualifying Jurisdiction or any inquiry, investigation or other
      proceeding is made or any order is issued under or pursuant to any statute
      of Canada or any province thereof, any statute of the United States or any
      state thereof, or any stock exchange in relation to the Corporation or any
      of its securities (except for any inquiry, investigation or other
      proceeding based upon activities of the Underwriters and not upon
      activities of the Corporation),







- 24 - 

which, in the opinion of the
Underwriter, prevents or restricts trading in or the distribution of the Common
Shares or materially adversely affects or might reasonably be expected to
materially adversely affect the market price or value of the Underwritten
Shares; 

	 	(c) 	
      there should develop, occur or come into effect or
      existence any event, action, state, condition or major financial
      occurrence, catastrophe, war or act of terrorism of national or
      international consequence or any law or regulation which, in the
      reasonable opinion of the Underwriters, seriously adversely affects or
      involves, or will seriously adversely affect or involve, the financial
      markets or the business, operations or affairs of the Corporation and its
      subsidiaries, taken as a whole;

	 	 	 
	 	(d) 	
      a cease trading order is made by any securities
      commission or other competent authority by reason of the fault of the
      Corporation or its respective directors, officers and Underwriters and
      such cease trading order is not rescinded within 48 hours; or

	 	 	 
	 	(e) 	
      the Corporation fails to obtain the approval of the TSX
      for the listing of the Underwritten Shares.



         
The Underwriters shall be entitled, to terminate and cancel their
obligations to the Corporation hereunder by written notice to that effect given
to the Corporation prior to the Closing. 

14.          
Exercise of Termination Right. If this Agreement is terminated by any
of the Underwriters pursuant to paragraph 13, there shall be no further
liability to the Corporation on the part of such Underwriter or of the
Corporation to such Underwriter, except in respect of any liability which may
have arisen or may thereafter arise under paragraphs 16 or 18. The right of the
Underwriters or any one of them to terminate their respective obligations under
this Agreement is in addition to such other remedies as they may have in respect
of any default, act or failure to act of the Corporation in respect of any of
the matters contemplated by this Agreement. A notice of termination given by one
Underwriter under paragraph 13 shall not be binding upon the other Underwriters.


15.          
Survival of Representations and Warranties. All terms, warranties,
representations, covenants and agreements herein contained or contained in any
documents delivered pursuant to this Agreement and in connection with the
transactions herein contemplated shall survive the purchase and sale of the
Offered Shares and will continue in full force and effect for the benefit of the
Underwriters and/or the Corporation, as the case may be, regardless of any
subsequent disposition of the Offered Shares or any investigation by or on
behalf of the Underwriters with respect thereto for a period ending on the later
of: (i) the date that is two years following the Closing Date, and (ii) the
latest date under applicable Securities Laws (non-residents of Canada being
deemed to be resident in the Province of Ontario for such purposes) that an
action may be commenced or a right of rescission may be exercised with respect
to a misrepresentation contained in the Final Prospectus or, if applicable, any
Supplementary Material. The Underwriters will be entitled to rely on the
representations and warranties of the Corporation contained in this Agreement or
delivered pursuant to this Agreement notwithstanding any investigation, which
the Underwriters may undertake or which may be undertaken on the Underwriters’
behalf. 

16.          
Indemnity

The Corporation covenants and agrees to indemnify and save
harmless the Underwriters and/or any of their affiliates and their respective
directors, officers, employees, shareholders and Underwriters (collectively with
the Underwriters’ affiliates, “Underwriters’ 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 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
Underwriters







- 25 - 

	 		
      relating to the Underwriters specifically for use
      therein) in the Prospectus, or any other document filed by the Corporation
      with the relevant securities regulatory authorities in Canada, 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 Underwriters relating to
      the Underwriters 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 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 Underwriters) preventing
      and restricting the trading in or the sale of the securities of the
      Corporation 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,



and will reimburse the Underwriters promptly upon demand for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such losses, claims, damages, liabilities or
actions in respect thereof, as incurred. 

Notwithstanding the foregoing, this indemnity shall not apply
to the extent that a court of competent jurisdiction in a final judgment that
has become non-appealable shall determine that: 

	 	(a) 	
      the Underwriters or Underwriters’ Personnel have been
      guilty of fraud, been negligent or exercised wilful misconduct in the
      course of such performance; and

	 	 	 
	 	(b) 	
      the expenses, losses, claims, damages or liabilities, as
      to which indemnification is claimed, were directly caused by the
      negligence or wilful misconduct referred to in
(a).



The Corporation shall not, without the prior written consent of
the Underwriters, which shall not be unreasonably 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 Underwriters or any Underwriters’ Personnel are a
party to such claim, action, suit or proceeding), unless such settlement,
compromise or consent includes an unconditional release of the Underwriters and
all Underwriters’ 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 section 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 




- 26 - 

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 Underwriters 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 Underwriters in respect
of losses, claims, costs, damages, expenses or liabilities which any of them may
suffer or incur directly or indirectly (in this Section 16, “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
Underwriters. 

	17. 	
      Contribution

	 	 
		
      (a) Contribution



In order to provide for a just and equitable contribution in
circumstances in which the indemnity provided in Section 16 would otherwise be
available in accordance with its terms but is, for any reason, unavailable to or
unenforceable by the Underwriters or enforceable otherwise than in accordance
with its terms or insufficient to hold any Indemnified Party harmless, the
Corporation shall contribute to all claims suffered or incurred by any
Indemnified Party in such proportion as is appropriate to reflect not only the
relative benefits received by the Corporation on the one hand and any
Indemnified Party on the other hand from the distribution of the Offered Shares
but also the relative fault of the Corporation or any Indemnified Party as well
as any relevant equitable considerations. The Corporation shall in any event be
liable to contribute to the amount paid or payable by an Indemnified Party as a
result of a claim under Section 16, any amounts in excess of the Cash Commission
or any portion of such commission actually received by the Indemnified Party.
The Underwriters shall not in any event be liable to contribute, in the
aggregate, any amounts in excess of the Cash Commission or any portion of such
commission actually received. However, no party who has engaged in any fraud,
fraudulent misrepresentation, wilful misconduct or negligence shall be entitled
to claim contribution from any person who has not engaged in such fraud,
fraudulent misrepresentation, wilful misconduct or negligence. 

	 	(b) 	Right of Contribution in Addition to Other
      Rights 


The rights to contribution provided in this Section shall be in
addition to and not in derogation of any other right to contribution which the
Underwriters may have by statute or otherwise at law. 

	 	(c) 	Calculation of Contribution



If the Corporation may be held to be entitled to contribution
from the Underwriters under the provisions of any statute or at law, the
Corporation shall be limited to contribution in an amount not exceeding the
lesser of: 




- 27 - 

	 		(i) 	
      the portion of the full amount of the loss or liability
      giving rise to such contribution for which the Underwriters are
      responsible, as determined in subsection 17(a), and

	 	 	 	 
	 		(ii) 	
      the amount of the Cash Commission actually received by
      the Underwriters from the Corporation under this Agreement.

	 	 	 	 
	 	(d) 	
      Right of Contribution in Favour of
  Others



With respect to any Indemnified Party who is not a party to
this Agreement, it is the intention of the Corporation to constitute the
Underwriters as trustees for such Indemnified Party of the rights and benefits
of this Section and the Underwriters agree to accept such trust and to hold the
rights and benefits of this Section in trust for an on behalf of such
Indemnified Party. 

18.          
Expenses. The Corporation shall pay all expenses and fees in connection
with the offering of Offered Shares contemplated by this Agreement, including,
without limitation, all expenses of or incidental to the issue, sale or
distribution of the Offered Shares and all expenses of or incidental to all
other matters in connection with the transaction set out in this Agreement,
including, without limitation, the fees and expenses payable in connection with
the distribution of the Offered Shares and the Compensation Options, the fees
and expenses of the Corporation’s counsel and of local counsel to the
Corporation, the reasonable fees and expenses of the auditors and the transfer
agent for the Common Shares, all costs incurred in connection with the
preparation and printing of the Offering Documents and certificates representing
the Offered Shares, all costs incurred related to road shows and marketing
activities, filing fees and all reasonable expenses and fees incurred by the
Underwriters and the reasonable fees and disbursements of the Underwriters’
counsel (to a maximum of $90,000 exclusive of disbursements and applicable
taxes), whether or not the Offering is completed. 

19.          
Advertisements. The Corporation acknowledges that the Underwriters
shall have the right, at their own expense, subject to the prior consent of the
Corporation, such consent not to be unreasonably withheld, to place such
advertisement or advertisements relating to the sale of the Offered Shares
contemplated herein as the Underwriters may consider desirable or appropriate
and as may be permitted by applicable law. The Corporation and the Underwriters
each agree that they will not make or publish any advertisement in any media
whatsoever relating to, or otherwise publicize, the transaction provided for
herein so as to result in any exemption from the prospectus and registration or
other similar requirements under applicable securities legislation in any of the
provinces of Canada or any other jurisdiction in which the Offered Shares shall
be offered and sold being unavailable in respect of the sale of the Offered
Shares to prospective purchasers. 

20.          
Underwriters’ Obligations. The Underwriters’ obligations under this
Agreement shall be several and not joint, and the Underwriters’ respective
obligations and rights and benefits hereunder shall be as to the following
percentages: 

	 	Paradigm Capital Inc. 	- 	70% 
	 	Canaccord Capital Corp. 	- 	10% 
	 	MGI Securities Inc. 	- 	10% 
	 	Raymond James Ltd. 	- 	10% 


          If an
Underwriter (a “Refusing Underwriter”) shall not complete the purchase and sale
of the Underwritten Shares which such Underwriter has agreed to purchase
hereunder for any reason whatsoever, the other Underwriters (the “Continuing
Underwriters”) shall be entitled, at their option, to purchase all but not less
than all of the Underwritten Shares which would otherwise have been purchased by
such Refusing Underwriter pro rata according to the number of Underwritten
Shares to have been acquired by the Continuing Underwriters hereunder or in such
proportion as the Continuing Underwriters shall agree in writing. If the
Continuing Underwriters do not elect to purchase the balance of the Underwritten
Shares pursuant to the foregoing: 




- 28 - 

	 	(a) 	
      the Continuing Underwriters shall not be obliged to
      purchase any of the Underwritten Shares that any Refusing Underwriter is
      obligated to purchase; and

	 	 	 
	 	(b) 	
      the Corporation shall not be obliged to sell less than
      all of the Underwritten Shares,



and the Corporation shall be entitled to terminate its
obligations under this Agreement arising from its acceptance of this offer, in
which event there shall be no further liability on the part of the Corporation
or the Continuing Underwriters, except pursuant to the provisions of paragraph
16 hereof. Nothing in this Agreement shall oblige any U.S. Affiliate to purchase
any Underwritten Shares. 

21.          
Underwriters’ Authority. The Corporation shall be entitled to and shall
act on any notice, request, direction, consent, waiver, extension and other
communication given or agreement entered into by or on behalf of the
Underwriters by Paradigm who shall represent the Underwriters and have authority
to bind the Underwriters hereunder, except for any waiver of a material
condition under paragraph 9 or 10, any termination notice under paragraph 13, or
any notice of claim or settlement of any claim under paragraph 16 or 17.

22.          
Notices. Unless otherwise expressly provided in this Agreement, any
notice or other communication to be given under this Agreement (a
“notice”) shall be in writing addressed as follows: 

	 	(a) 	If to the Corporation, addressed and
      sent to: 
	 	  	  	  
	 	  	Farallon Resources Ltd. 
	 	  	1020-800 West Pender Street 
	 	  	Vancouver, BC 	  
	 	  	V6C 2V6 	  
	 	  	  	  
	 	  	Attention: 	Dick Whittington, President and Chief Executive
      Officer 
	 	  	Fax: 	604-684-8092 
	 	  	  	  
	 	  	with a copy (for information purposes
      only and not constituting notice) to: 
	 	  	  	  
	 	  	Lang Michener LLP 
	 	  	1500 Royal Centre P.O. Box 11117
  
	 	  	1055 West Georgia Street 
	 	  	Vancouver, British Columbia 
	 	  	V6E 4N7 	  
	 	  	  	  
	 	  	Attention: 	Bernie Zinkhofer 
	 	  	Fax: 	604-893-2395 
	 	  	  	  
	 	  	  	  
	 	(b) 	If to the Underwriters, addressed and
      sent to: 
	 	  	  	  
	 	  	Paradigm Capital Inc. 
	 	  	Suite 2101, 95 Wellington Street West
    
	 	  	Toronto, ON M5J 2N7 
	 	  	  	  
	 	  	Attention: 	Andrew Partington 
	 	  	Fax.: 	(416) 361-0679 
	 	  	  	  
	 	  	Canaccord Capital Corporation 
	 	  	P.O. Box 10337, Pacific Centre
  






- 29 - 

	 	Suite 2200, 609 Granville Street 
	 	Vancouver, BC 	V7Y 1H2 
	 	  	  
	 	Attention: 	Ali Pejman 
	 	Fax: 	(604) 643-7733 
	 	  	  
	 	  	  
	 	MGI Securities Inc. 
	 	26 Wellington Street East 
	 	Suite 900 	  
	 	Toronto, ON M5E 1S2 
	 	  	  
	 	Attention: 	Joshua Kingsmill 
	 	Fax: 	(416) 864-7359 
	 	  	  
	 	  	  
	 	Raymond James Ltd. 
	 	2300 - 925 West Georgia St. 
	 	Vancouver, BC 	V6C 3L2 
	 	  	  
	 	Attention: 	John Murphy 
	 	Fax: 	(604) 659-8398 
	 	  	  
	 	with a copy (for information purposes only and
      not constituting notice) to: 
	 	  	  
	 	Heenan Blaikie LLP 
	 	Suite 2600, South Tower 
	 	Royal Bank Plaza 
	 	200 Bay Street 	  
	 	Toronto, ON M5J 2J4 
	 	  	  
	 	Fax: 	(416) 360-8425 
	 	Attention: 	Sonia Yung 


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. 

23.          
Time of the Essence. Time shall, in all respects, be of the essence
hereof. 

24.          
Canadian Dollars. All references herein to dollar amounts are to lawful
money of Canada. 

25.          
Headings. The headings contained herein are for convenience only and
shall not affect the meaning or interpretation hereof. 

26.          
Singular and Plural, etc. Where the context so requires, words
importing the singular number include the plural and vice versa, and words
importing gender shall include the masculine, feminine and neuter genders. 

27.          
Entire Agreement. This Agreement constitutes the only agreement between
the parties with respect to the subject matter hereof and shall supersede any
and all prior negotiations and understandings, including, without limitation,
the Engagement Letter. This Agreement may be amended or modified in any respect
by written instrument only. 




- 30 - 

28.          
Severability. If one or more provisions contained herein shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
hereof, but this Agreement shall be construed as if such invalid, illegal or
unenforceable provision or provisions had never been contained herein. 

29.          
Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Province of British Columbia and the laws of
Canada applicable therein. 

30.          
Effective Date. This Agreement is intended to and shall take effect as
of the date first set forth above, notwithstanding its actual date of execution
or delivery. 

31.          
Successors and Assigns. The terms and provisions of this Agreement
shall be binding upon and enure to the benefit of the Corporation and the
Underwriters and their respective successors and permitted assigns. 

32.          
Further Assurances. Each of the parties hereto shall do or cause to be
done all such acts and things and shall execute or cause to be executed all such
documents, agreements and other instruments as may reasonably be necessary or
desirable for the purpose of carrying out the provisions and intent of this
Agreement. 

33.          
Counterparts. This Agreement may be executed in any number of
counterparts and by facsimile or electronic portable document format, which
taken together shall form one and the same agreement. 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK] 




- 31 - 

If the Corporation is in agreement with the foregoing terms and
conditions, please so indicate by executing a copy of this Agreement where
indicated below and delivering the same to the Underwriters. 

Yours very truly, 

PARADIGM CAPITAL INC. 

	(signed)“Andrew Partington” 	 
	 	 
	Authorized Signing Officer 	 
	 	 
	 	 
	CANACCORD CAPITAL CORP. 	 
	 	 
	(signed)“Ali Pejman” 	 
	 	 
	Authorized Signing Officer 	 
	 	 
	 	 
	MGI SECURITIES INC. 	 
	 	 
	(signed)“Joshua H.H. Kingsmill” 	 
	 	 
	Authorized Signing Officer 	 
	 	 
	 	 
	RAYMOND JAMES LTD. 	 
	 	 
	(signed)“John M. Murphy” 	 
	 	 
	Authorized Signing Officer 	 






- 32 - 

The foregoing is hereby accepted on the terms and conditions
therein set forth. 

DATED as of the 3rd day of December, 2007. 

FARALLON RESOURCES LTD. 

	(signed)“J.R.H. Whittington” 	 
	 	 
	Authorized Signing Officer 	 






SCHEDULE “A” 

TERMS AND CONDITIONS FOR UNITED STATES OFFERS AND SALES


TERMS FOR OFFERING TO U.S. PURCHASERS 

         
As used in this Schedule “A” and related appendices, capitalized terms
used herein and not defined herein shall have the meanings ascribed thereto in
the Underwriting Agreement to which this Schedule “A” is annexed and the
following terms shall have the meanings indicated:

1.          
“Directed Selling Efforts” means directed selling efforts as that term
is defined in Rule 902(c) of Regulation S. Without limiting the foregoing, but
for greater clarity in this Schedule, it means, subject to the exclusions from
the definition of directed selling efforts contained in Regulation S, any
activity undertaken for the purpose of, or that could reasonably be expected to
have the effect of, conditioning the market in the United States for any of the
Offered Shares and includes the placement of any advertisement in a publication
with a general circulation in the United States that refers to the offering of
the Offered Shares; 

2.          
“Foreign Issuer” means “foreign issuer” as that term is defined in Rule
902(e) of Regulation S; 

3.          
“General Solicitation” and “General Advertising” means “general solicitation”
and “general advertising”, respectively, as used under Rule 502(c) of Regulation
D, including advertisements, articles, notices or other communications published
in any newspaper, magazine or similar media or broadcast over radio or
television, or any seminar or meeting whose attendees had been invited by
general solicitation or general advertising; 

4.          
“Institutional Accredited Investors” means institutions that are “accredited
investors” as specified in Rule 501(a)(1),(2),(3) or (7) of Regulation D; 

5.          
“Offshore Transaction” means “offshore transaction” as that term is defined in
Rule 902(h) of Regulation S; 

6.          
“Regulation D” means Regulation D adopted by the SEC under the U.S.
Securities Act; 7. “Regulation S” means Regulation S adopted by the SEC under
the U.S. Securities Act; 8. “SEC” means the United States Securities and
Exchange Commission; 

9.          
“Substantial U.S. Market Interest” means “substantial U.S. market
interest” as that term is defined in Rule 902(j) of Regulation S; 

10         
“United States” means the United States of America, its territories and
possessions, any state of the United States, and the District of Columbia;

11.         “U.S.
Affiliate” of any Underwriter means the U.S. registered broker-dealer affiliate
of such Underwriter; 

12.         “U.S.
Exchange Act” means the United States Securities Exchange Act of 1934, as
amended; 13. “U.S. Person” means a U.S. person as that term is defined in Rule
902(k) Regulation S; and 14. “U.S. Securities Act” means the United States
Securities Act of 1933, as amended.

Farallon Resources Ltd. Underwriting Agreement 
December
3, 2007 




- 2 - 

         
Representations, Warranties and Covenants of the Underwriters

         
Each of the Underwriters and the U.S. Affiliates acknowledges that the
Offered Shares have not been and will not be registered under the U.S.
Securities Act or any state securities laws, and may be offered and sold only in
transactions exempt from or not subject to the registration requirements of the
U.S. Securities Act and state securities laws. Accordingly, each of the
Underwriters and the U.S. Affiliates represents, warrants and covenants to the
Corporation that:

1.          
It has not offered and sold, and will not offer and sell, any Offered
Shares forming part of its allotment except (a) in an Offshore Transaction in
accordance with Rule 903 of Regulation S or (b) in the United States as provided
in Sections 2 through 10 below. Accordingly, neither the Underwriter nor any of
its affiliates nor any persons acting on its behalf, has made or will make
(except as permitted in Sections 2 through 11 below), (i) any offer to sell or
any solicitation of an offer to buy, any Offered Shares to any person in the
United States or a U.S. Person, (ii) any sale of Offered Shares to any purchaser
unless, at the time the buy order was or will have been originated, the
purchaser was outside the United States, or such Underwriter, affiliate or
person acting on its or their behalf reasonably believed that such purchaser was
outside the United States, or (iii) any Directed Selling Efforts in the United
States with respect to the Offered Shares. 

2.          
It has not entered and will not enter into any contractual arrangement
with respect to the distribution of the Offered Shares, except with its U.S.
Affiliates, any selling group members or with the prior written consent of the
Corporation. It shall require each selling group member to agree, for the
benefit of the Corporation, to comply with, and shall use its best efforts to
ensure that each selling group member complies with, the provisions of this
Schedule “A” applicable to the Underwriter as if such provisions applied to such
selling group member. 

3.          
All offers and sales of Offered Shares in the United States shall be
made by the Underwriter through its U.S. Affiliate, which on the dates of such
offers and sales was and will be duly registered as a broker-dealer under the
U.S. Exchange Act and under all applicable state securities laws (except where
exempted from the respective state’s broker-dealer registration requirements)
and a member of, and in good standing with, the Financial Industry Regulatory
Authority, in accordance with all applicable United States federal and state
securities (including broker-dealer) laws. The U.S. Affiliate will make all
offers and sales of Offered Shares in compliance with all applicable United
States federal and state broker-dealer requirements. 

4.          
It and its affiliates have not, either directly or through a person
acting on its or their behalf, solicited and will not solicit offers for, and
have not offered to sell and will not offer to sell, any of the Offered Shares
in the United States by any form of General Solicitation or General Advertising
or in any manner involving a public offering within the meaning of Section 4(2)
of the U.S. Securities Act. 

5.          
Any offer, sale or solicitation of an offer to buy Offered Shares that
has been made or will be made in the United States was or will be made only to
Institutional Accredited Investors in transactions that are exempt from
registration under the U.S. Securities Act and applicable state securities laws.


6.          
Each offeree in the United States shall be provided, prior to time of purchase
of any Offered Shares, with a copy of the U.S. private placement offering
memorandum (the “U.S. Private Placement Memorandum”) attached to a copy of the
Final Prospectus and no other written material will be used in connection with
the offer or sale of the Offered Shares in the United States. 

7.          
Immediately prior to soliciting any purchaser that is in the United
States or for the benefit or account of a U.S. Person, the Underwriter, the U.S.
Affiliate, their respective affiliates, and any person acting on their behalf,
had reasonable grounds to believe and did believe that each such purchaser was
an Institutional Accredited Investor, and at the time of completion of each sale
to or for the benefit or account of a U.S. Person or a person in the United
States, the Underwriter, the U.S. Affiliate, their 




- 3 - 

respective affiliates, and any person acting on their behalf
will have reasonable grounds to believe and will believe, that each purchaser
designated by the Underwriter or the U.S. Affiliate to purchase Offered Shares
from the Corporation is an Institutional Accredited Investor. 

8.          
Prior to any sale of Offered Shares in the United States, it shall
cause each purchaser that is a U.S. Person thereof to execute a U.S.
Subscription Agreement in the form attached hereto as Appendix I. 

9.          
At least one business day prior to the Time of Delivery, the transfer
agent will be provided with a list of all purchasers of the Offered Shares in
the United States. 

10.         At
closing, each U.S. Affiliate and the Underwriter, will provide a certificate,
substantially in the form of Appendix II, relating to the manner of the offer
and sale of the Offered Shares in the United States. 

11.        
Prior to soliciting any offerees and prior to the completion of any
sale of Offered Shares to U.S. Persons or persons in the United States, each
purchaser will be informed that the Offered Shares have not been and will not be
registered under the U.S. Securities Act, or any applicable state securities
laws, and are being offered to such purchaser in reliance on an exemption from
the registration requirements of the U.S. Securities Act provided by Rule 506 of
Regulation D. 

12.         The
Underwriter and the U.S. Affiliate acknowledge that, until 40 days after the
commencement of the offering of the Offered Shares, an offer or sale of the
Offered Shares within the United States by any dealer (whether or not
participating in the offering) may violate the registration requirements of the
U.S. Securities Act if such offer or sale is made otherwise than in accordance
with an exemption from registration under the U.S. Securities Act. 

13.        
None of the Underwriter, the U.S. Affiliate nor any person acting on its or
their behalf has engaged or will engage in any violation of Regulation M under
the U.S. Exchange Act in connection with its offers or sales of the Offered
Shares in the United States. 

         
Representations, Warranties and Covenants of the Corporation

         
The Corporation represents, warrants, covenants and agrees that:

1.          
The Corporation is a Foreign Issuer with no Substantial U.S. Market
Interest in the Offered Shares of the Corporation. 

2.          
The Corporation is not, and as a result of the sale of the Offered Shares
contemplated hereby will not be, an “investment company” as defined in the
United States Investment Company Act of 1940, as amended. 

3.          
Except with respect to offers and sales to Institutional Accredited
Investors in reliance upon an exemption from registration under the U.S.
Securities Act, neither the Corporation nor any of its affiliates, nor any
person acting on its or their behalf (other than the Underwriter, the U.S.
Affiliate, or any members of the banking and selling group formed by them, as to
whom the Corporation makes no representation), has made or will make: (A) any
offer to sell, or any solicitation of an offer to buy, any Offered Shares to or
for the benefit of a person in the United States; or (B) any sale of Offered
Shares unless, at the time the buy order was or will have been originated, the
purchaser is (i) outside the United States, or (ii) the Corporation, its
affiliates, and any person acting on their behalf reasonably believe that the
purchaser is outside the United States. 

4.          
Neither it nor any of its affiliates, nor any person acting on its or their
behalf (other than the Underwriter, the U.S. Affiliate, or any members of the
banking and selling group formed by them, as to whom the Corporation makes no
representation), has made or will make any Directed Selling Efforts in 




- 4 - 

the United States with respect to the Offered Shares, or has
taken or will take any action that would cause the applicable exemption afforded
by the U.S. Securities Act or Regulation S to be unavailable for offers and
sales of the Offered Shares pursuant to this agreement. 

5.          
None of the Corporation, any of its affiliates or any person acting on
its or their behalf have (other than the Underwriter, the U.S. Affiliate, or any
members of the banking and selling group formed by them, as to whom the
Corporation makes no representation) has offered or will offer to sell, or has
solicited or will solicit offers to buy, any of the Offered Shares in the United
States by means of any form of General Solicitation or General Advertising or in
any manner involving a public offering within the meaning of Section 4(2) of the
U.S. Securities Act. 

6.          
Except with respect to the offer and sale of the Offered Shares offered
hereby, neither the Corporation nor any person acting on behalf of the
Corporation has, within six months prior to the date hereof, sold, offered for
sale or solicited any offer to buy any of the Corporation’s securities of the
same or similar class to that of the Offered Shares, in a manner that would be
integrated with the offer and sale of the Offered Shares and would cause the
exemption from registration set forth in Rule 506 of Regulation D to become
unavailable with respect to the offer and sale of the Offered Shares. 

7.          
Neither the Corporation nor any of its predecessors or affiliates has
been subject to any order, judgment, or decree of any court of competent
jurisdiction temporarily, preliminarily or permanently enjoining such person for
failure to comply with Rule 503 of Regulation D. 

8.          
None of the Corporation, its affiliates or any person acting on its behalf,
(other than the Underwriter, the U.S. Affiliate, or any members of the banking
and selling group formed by them, as to whom the Corporation makes no
representation) has engaged or will engage in any violation of Regulation M
under the U.S. Exchange Act in connection with any offer or sale of the Offered
Shares. 

9.          
For each taxable year, if any, that the Corporation qualifies as a “passive
foreign investment company” (a “PFIC”), as defined in section 1297(a) of the
Internal Revenue Code of 1986, as amended (the “Code”), in the case of a
purchaser of Offered Shares that is a “United States person,” as defined in
section 7701(a)(30) of the Code, and that has made an effective “qualified
electing fund” election, as defined in section 1295 of the Code with respect to
the Corporation (a “QEF Election”), the Corporation will provide to such
purchasers (a) a “PFIC Annual Information Statement” as described in Treasury
Regulation section 1.1295 -1(g) (or any successor Treasury Regulation),
including all representations and statements required by such PFIC Annual
Information Statement, and (b) all additional information that such Subscriber
is required to obtain in connection with maintaining such QEF Election. With
regard to the PFIC Annual Information Statement, as permitted by Treasury
Regulation section 1.1293 -1(a)(2)(A), the Corporation will calculate and report
the amount of each category of long-term capital gain described in section 1(h)
of the Code that was recognized by the Corporation.




- 5 - 

APPENDIX I TO SCHEDULE “A” 

U.S. SUBSCRIPTION AGREEMENT 

OFFERED SHARES 

	 	TO: 	Farallon Resources Ltd. (the “Company”) 
	 	 	 
	 	AND TO: 	Paradigm Capital Inc. (the “Underwriter”) 
	 	 	 
	 	AND TO: 	Paradigm Capital U.S. Inc. (the “U.S. Affiliate”)
    
	 	 	 
	 	RE: 	Purchase of Common Shares of Farallon Resources Ltd. 


1.          
The undersigned (the “Subscriber”) hereby irrevocably subscribes
for and agrees to purchase from the Company the number of common shares (the
“Offered Shares”) of the Company at a price of Cdn$0.70, for the
aggregate consideration set forth in Box A of Section 9 below (the
“Subscription Price”).

2.          
The Subscriber acknowledges that this subscription agreement is subject
to acceptance by the Company. The Company may also accept this subscription
agreement in part. The Subscriber agrees that if this subscription agreement is
not accepted in full, any funds related to the portion of this subscription
agreement not accepted will be returned to the undersigned, without interest.


3.          
By executing this subscription agreement, the Subscriber represents,
warrants and covenants (on its own behalf and, if applicable, on behalf of each
beneficial purchaser for whom it is contracting hereunder) to the Company, the
Underwriters and the U.S. Affiliate (and acknowledges that the Company, the
Underwriters and the U.S. Affiliate are relying thereon) that: 

	 	(a) 	
      it is authorized to consummate the purchase of the
      Offered Shares;

	 	 	 	 
	 	(b) 	
      it understands that the Offered Shares, have not been and
      will not be registered under the United States Securities Act of 1933, as
      amended (the “U.S. Securities Act”), or any applicable state
      securities laws, and that the offer and sale of Offered Shares to it is
      being made in reliance on a private placement exemption available under
      Rule 506 under the U. S. Securities Act to “institutional accredited
      investors”, as defined to mean those accredited investors described in
      Rule 501(a) (1), (2), (3) and (7) of Regulation D of the U. S. Securities
      Act, as set forth in Annex A hereto (“Institutional Accredited
      Investors”);

	 	 	 	 
	 	(c) 	
      it is an Institutional Accredited Investor acquiring the
      Offered Shares for its own account or, if the Offered Shares are to be
      purchased for one or more accounts (“investor accounts”) for which
      it exercises sole investment discretion as a fiduciary or agent, each such
      investor account is an Institutional Accredited Investor on a like
      basis;

	 	 	 	 
	 	(d) 	
      it has such knowledge and experience in financial and
      business matters as to be capable of evaluating the merits and risks of
      its investment in the Offered Shares and is able to bear the economic
      risks of, and withstand the complete loss of, such
  investment;







- 6 - 

	 	(e) 	
      it has received a copy, for its information only, of the
      Canadian Prospectus dated December o, 2007 (the “Canadian
      Prospectus”), together with a U.S. private placement memorandum dated
      December o, 2007 (the “U.S. Placement Memorandum”), relating to the
      offering in the United States of the Offered Shares, it has had access to
      such additional information, if any, concerning the Company as it has
      considered necessary in connection with its investment decision to acquire
      the Offered Shares, and it acknowledges that it has been offered the
      opportunity to ask questions and receive answers from management of the
      Company concerning the terms and conditions of the offering of the Offered
      Shares, and to obtain any additional information which the Company
      possesses or can acquire without unreasonable effort or expense that is
      necessary to verify the accuracy of the information contained in the
      accompanying U.S. Placement Memorandum (including the Canadian
      Prospectus);

	 	 	 
	 	(f) 	
      it is relying on the information contained in the U.S.
      Placement Memorandum (including the Canadian Prospectus) in making its
      investment decision with respect to the Offered Shares. It acknowledges
      that no representation or warranty is made by the Underwriters or the U.S.
      Affiliates as to the accuracy or completeness of such materials. It
      further acknowledges that none of the Company, the Underwriters or the
      U.S. Affiliate has made any representation or given any information to it
      with respect to the Company or the offering or sale of the Offered Shares
      other than the information contained in this U.S. Placement Memorandum
      (including the Canadian Prospectus);

	 	 	 
	 	(g) 	
      it has no knowledge of a “material fact” or “material
      change” (as those terms are defined under Section 1(1) of the Securities
      Act (British Columbia)) in the affairs of the Company that has not been
      generally disclosed to the public;

	 	 	 
	 	(h) 	
      it is an Institutional Accredited Investor acquiring the
      Offered Shares for its own account or, if the Offered Shares are to be
      purchased for one or more accounts (“investor accounts”) for which
      it exercises sole investment discretion as a fiduciary or agent, each such
      investor account is an Institutional Accredited Investor on a like
      basis;

	 	 	 
	 	(i) 	
      it is not acquiring the Offered Shares with a view to any
      resale, distribution or other disposition of the Offered Shares in
      violation of United States federal or applicable state securities laws,
      and, in particular, it has no intention to distribute either directly or
      indirectly any of the Offered Shares in the United States or to U.S.
      persons; provided, however, that the holder may sell or otherwise dispose
      of any of the Offered Shares pursuant to registration thereof under the
      U.S. Securities Act and any applicable state securities laws or pursuant
      to an exemption from such registration requirements;

	 	 	 
	 	(j) 	
      in the case of the purchase by the Subscriber of the
      Offered Shares as a fiduciary or agent for an investor account, the
      Subscriber has due and proper authority to act in such capacity in
      connection with the transactions contemplated hereby;

	 	 	 
	 	(k) 	
      it is not a “control person” of the Company as defined
      under Canadian securities laws, will not become a “control person” by
      virtue of this purchase of any of the Offered Shares, and does not intend
      to act in concert with any other person to form a control group of the
      Company;

	 	 	 
	 	(l) 	
      it is not purchasing the Offered Shares as a result of
      any general solicitation or general advertising (as those terms are used
      in Regulation D (“Regulation D”) under the U.S. Securities Act),
      including advertisements, articles, notices or other
  communications







- 7 - 

	 		
      published in any newspaper, magazine or similar media or
      broadcast over radio or television, or any seminar or meeting whose
      attendees have been invited by general solicitation or general
      advertising;

	 	 	 	 
	 	(m) 	
      it understands that the Offered Shares are “restricted
      securities” as defined in Rule 144 under the U.S. Securities Act and
      agrees that if it decides to offer, sell, pledge or otherwise transfer
      such securities, directly or indirectly, such securities may be offered,
      sold, pledged or otherwise transferred only (A) to the Company, (B)
      outside the United States in accordance with Rule 904 of Regulation S
      under the U.S. Securities Act and in compliance with Canadian local laws
      and regulations, (C) within the United States in accordance with the
      exemption from registration under the U.S. Securities Act provided by Rule
      144 thereunder, if available, and in accordance with applicable state
      securities laws; (D) in a transaction that does not require registration
      under the U.S. Securities Act or any applicable U.S. state laws and
      regulations governing the offer and sale of securities; or (E) pursuant to
      an effective registration statement under the U.S. Securities Act,
      provided that with respect to sales or transfers under clauses (C) or (D),
      only if the holder has furnished to the Company an opinion of counsel,
      reasonably satisfactory to the Company, prior to such sale or transfer
      stating that such transaction is exempt from registration under applicable
      securities laws;

	 	 	 	 
	 	(n) 	
      it has been independently advised as to the applicable
      hold period and resale restrictions with respect to trading imposed in
      respect of the Offered Shares by securities legislation in the
      jurisdiction in which it resides, and confirms that no representation has
      been made respecting the applicable hold periods for the Offered Shares
      and is aware of the risks and other characteristics of Offered Shares and
      of the fact that the undersigned may not be able to resell such securities
      except in accordance with applicable securities legislation and regulatory
      policy;

	 	 	 	 
	 	(o) 	
      no person has made to the Subscriber any written or oral
      representations:

	 	 	 	 
	 		(i) 	
      that any person will resell or repurchase the Offered
      Shares;

	 	 	 	 
	 		(ii) 	
      that any person will refund the purchase price of the
      Offered Shares; or

	 	 	 	 
	 		(iii) 	
      as to the future price or value of any of the Offered
      Shares;

	 	 	 	 
	 	(p) 	
      it understands and acknowledges that upon the original
      issuance thereof, and until such time as the same is no longer required
      under applicable requirements of the U.S. Securities Act or applicable
      state securities laws, certificates representing the Offered Shares and
      all certificates issued in exchange therefor or in substitution thereof,
      shall bear the following legend:

	 	 	 	 
	 		
      “THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
      REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
      “U.S. SECURITIES ACT”), OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER
      HEREOF, BY PURCHASING THESE SECURITIES, AGREES FOR THE BENEFIT OF THE
      COMPANY, THAT THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE
      TRANSFERRED ONLY (A) TO THE COMPANY, (B) OUTSIDE THE UNITED STATES IN
      ACCORDANCE







- 8 - 

		               	
      WITH REGULATION S UNDER THE U.S.
      SECURITIES ACT AND IN COMPLIANCE
      WITH CANADIAN LOCAL LAWS AND REGULATIONS, (C) IN COMPLIANCE WITH THE EXEMPTION
      FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
      U.S. SECURITIES ACT, IF AVAILABLE, AND IN
      ACCORDANCE WITH APPLICABLE STATE SECURITIES
      LAWS, OR (D) IN ANOTHER TRANSACTION THAT DOES
      NOT REQUIRE REGISTRATION UNDER THE U.S.
      SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS, AND, IN THE CASE OF (C) AND (D), THE SELLER
      FURNISHES TO THE COMPANY AN OPINION OF COUNSEL
      OF RECOGNIZED STANDING IN
      FORM AND SUBSTANCE SATISFACTORY TO THE
      COMPANY TO SUCH EFFECT. DELIVERY OF THIS
      CERTIFICATE MAY NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN
      CANADA.” 

	 	  	
        
	
       

	 	provided that:
    	
       

	 	  	
        
	
       

		           	
      (i) 
	
      if any such securities are being sold under
      clause 3(l)(B) above and in compliance with Canadian
      local laws and regulations, and provided that the Company is a “foreign issuer” within the meaning of Regulation S at
      the time of sale, the legend may be removed by
      providing a declaration to Computershare Trust Company
      of Canada, as registrar and transfer agent, in the form attached as
      Exhibit II to the U.S. Placement Memorandum, as may be
      amended from time to time by the Company, to the
      effect that the securities are being sold in compliance with Rule 904 of Regulation S, together with any
      documentation as may be required by the Company or its
      transfer agent to the effect that an exclusion from
      the registration requirements of the U.S. Securities Act is available; and 

	 	  	
        
	
       

		     	
      (ii) 
	
      if any such securities are being sold under
      clause 3(l)(C) or 3(l)(D) above, the legend may be
      removed by delivery to Computershare Trust Company of Canada and the Company of an opinion of counsel, of recognized standing
      reasonably satisfactory to the Company, that such
      legend is no longer required under applicable
      requirements of the U.S. Securities Act or state securities laws;
      

	 	  	
        
	
       

		(q)   	
      it consents to the Company making a notation
      on its records or giving instructions to any transfer
      agent of the Offered Shares in order to implement the restrictions on
      transfer set forth and described herein;
  

	 	  	
        
	
        
	
        
	
        
	
        
	
        
	
        
	
        

		(r)   	
      the office or other address of the
      undersigned at which the undersigned received and accepted the offer to purchase the Offered Shares is the address
      listed in Box B of Section 9 below; 

	 	  	
        
	
        
	
        
	
        
	
        
	
        
	
        
	
        

		(s)    	
      it understands and acknowledges that the
      Company is not obligated to file and has no present
      intention of filing with the U.S. Securities and Exchange Commission or
      with any state securities administrator any
      registration statement in respect of the Offered Shares under the U.S. Securities Act or any state securities laws;
      







- 9 - 

	 	(t) 	
      if required by applicable securities laws, regulatory
      policy, rule or order or by any securities commission, stock exchange or
      other regulatory authority, it will execute, deliver and file, within the
      approved time periods, all documentation as may be required thereunder,
      and otherwise assist the Company, the Underwriters or the U.S. Affiliates
      in filing reports, questionnaires, undertakings and other documents with
      respect to the issuance of the Offered Shares; and

	 	 	 
	 	(u) 	
      this subscription agreement has been duly and validly
      authorized, executed and delivered by and constitutes a legal, valid,
      binding and enforceable obligation of the
Subscriber.



4.          
The Subscriber acknowledges that the representations and warranties and
agreements contained herein are made by it with the intention that they may be
relied upon by the Company, the Underwriters and the U.S. Affiliate, and their
respective legal counsel, in determining its eligibility or, if applicable, the
eligibility of others on whose behalf it is contracting hereunder, to purchase
the Offered Shares. The Subscriber further agrees that by accepting delivery of
the Offered Shares or by having the Underwriters or U.S. Affiliates accept
delivery of the Offered Shares on its behalf, it shall be representing and
warranting that the representations, warranties, acknowledgements and agreements
contained herein are true and correct as at the time of accepting delivery of
the Offered Shares with the same force and effect as if they had been made by
the Subscriber at such time and that the representations and warranties shall
survive the purchase by the Subscriber of the Offered Shares and shall continue
in full force and effect notwithstanding any subsequent disposition by the
Subscriber of the Offered Shares. The Company and its directors, officers,
employees, shareholders and its legal counsel, and the Underwriters, the U.S.
Affiliate and their respective directors, officers, employees, shareholders and
legal counsel shall be entitled to rely on the representations and warranties of
the Subscriber contained in this subscription agreement, and the Subscriber
shall indemnify and hold harmless the Company, the Underwriters and the U.S.
Affiliate, and their respective legal counsel, for any loss, costs or damages
any of them may suffer as a result of any misrepresentations or any breach or
failure to comply with any agreement herein. 

5.          
The Subscriber acknowledges and consents to the fact that the Company,
the Underwriters and the U.S. Affiliate are collecting the Subscriber’s personal
information for the purpose of fulfilling this Subscription Agreement. The
Subscriber further acknowledges and consents to the fact that the Company, the
Underwriters or the U.S. Affiliate may be required by applicable securities laws
to provide the securities regulators or other authorities pursuant to the
Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) with
any personal information provided by the Subscriber, pursuant to this
subscription agreement. Notwithstanding that the Subscriber may be purchasing
Offered Shares as a fiduciary or agent on behalf of an undisclosed principal,
the Subscriber agrees to provide, on request, particulars as to the identity of
such undisclosed principal as may be required by the Underwriters, the U.S.
Affiliate or the Company in order to comply with the foregoing. 

6.          
The Subscriber irrevocably authorizes the Company to produce this
subscription agreement or a copy hereof to any interested party in any
administrative or legal proceeding or official inquiry with respect to the
matters covered hereby. 

7.          
The contract arising out of the acceptance of this subscription by the
Company shall be governed by and construed in accordance with the laws of the
province of British Columbia and the laws of Canada applicable in the province
of British Columbia and represents the entire agreement of the parties hereto
relating to the subject matter hereof. 

8.          
The Company, the Underwriters, and the U.S. Affiliate shall be entitled
to rely on delivery of a facsimile copy of this Subscription Agreement, and
acceptance by the Company of a facsimile copy of 




- 10 - 

this Subscription Agreement shall create a legal, valid and
binding agreement among the undersigned, the Company, the Underwriters and the
U.S. Affiliate in accordance with the terms hereof. 




- 11 - 

	9. 	SUBSCRIPTION PARTICULARS




	BOX A 
	Particulars of Purchase of Offered
      Shares 
	  
	     Number of Offered Shares subscribed
      for: 	 	 
	  
	     Subscription Price (Cdn. $ 0.70 X
      number of 	 	 
	     Offered Shares 	 	 
	 	 	 



	BOX B 
	Subscriber Information 
	 
	     Name of Purchaser 	 	 
	 	 	 
	     Street Address 	 	 
	 	 	 
	     Street Address (2) 	 	 
	 	 	 
	     City and State 	 	 
	 	 	 
	     Zip Code 	 	 
	 	 	 
	     Contact Name 	 	 
	 	 	 
	 	 	 
	     Alternate Contact 	 	 
	 	 	 
	     Phone No. 	 	 
	 	 	 
	     Fax No. 	 	 
	 	 	 






- 12 - 

	BOX C 
	Registration Information 
	 
	     Name 	 	 
	 	 	 
	     Account Reference 	 	 
	 	 	 
	     (if applicable) 	 	 
	 	 	 
	     Street Address 	 	 
	 	 	 
	     Street Address (2) 	 	 
	 	 	 
	     City and State 	 	 
	 	 	 
	     Zip Code 	 	 
	 	 	 
	     Contact Name 	 	 
	 	 	 
	     Alternate Contact 	 	 
	 	 	 
	     Phone No. 	 	 
	 	 	 
	     Fax No. 	 	 
	 	 	 






- 13 - 

	BOX D 
	Delivery Instructions for
      Certificates 
	 
	     [    
      ]         
      Deliver certificates representing the Offered Shares as set out
      in Box B 
	 
	     [    
      ]         
      Deliver certificates representing the Offered Shares as set out
      in Box C 
	 
	     [    
      ]         
      Make the certificates representing the Offered Shares available
      to be picked up at the principal 
	 
	     [    
      ]         
      office of the Company's Registrar and Transfer Agent in the City
      of Vancouver, British Columbia. 
	 
	     [    
      ]         
      Deliver the certificates representing the Offered Shares as
      follows: 
	 
	         
      Name 	 	 
	 	 	 
	         
      Street Address 	 	 
	 	 	 
	         
      Street Address (2) 	 	 
	 	 	 
	         
      City and State 	 	 
	 	 	 
	         
      Zip Code 	 	 
	 	 	 
	         
      Contact Name 	 	 
	 	 	 
	         
      Alternate Contact 	 	 
	 	 	 
	         
      Phone No. 	 	 
	 	 	 
	         
      Fax No. 	 	 
	 	 	 






- 14 - 

	BOX E 
	Beneficial Purchaser Information
  
	 
	     Name of Beneficial Purchaser 	 	 
	 	 	 
	     Street Address 	 	 
	 	 	 
	     Street Address (2) 	 	 
	 	 	 
	     City and State 	 	 
	 	 	 
	     Zip Code 	 	 
	 	 	 
	     Contact Name 	 	 
	 	 	 
	     Alternate Contact 	 	 
	 	 	 
	     Phone No. 	 	 
	 	 	 
	     Fax No. 	 	 
	 	 	 






- 15 - 

1.          
A certified cheque or bank draft in the amount of the Subscription
Price as set forth in Box A of Section 9 above, accompanies this subscription
agreement or other acceptable payment arrangements have been made. 

SIGNATURE OF SUBSCRIBER 

Signature of Subscriber (on its own behalf and, if applicable,
on behalf of each person for whom it is contracting hereunder): 

	 	 
	(Full Name of Subscriber) 	 
	 	 
	 	 
	(Authorized Signature) 	 
	 	 
	 	 
	(Name and Official Capacity – PLEASE PRINT) 	 


ACCEPTANCE BY COMPANY 

The Company hereby accepts the above subscription as of this
______day of _____________, 2007. 

FARALLON RESOURCES LTD. 

	 	 
	(Signature) 	 
	 	 
	 	 
	(Name and Title – PLEASE PRINT) 	 






- 16 - 

ANNEX A 

DEFINITION OF INSTITUTIONAL ACCREDITED INVESTOR 

“Institutional Accredited Investor” means any entity which
comes within any of the following categories or of which all the equity owners
come within any of the following categories of Rule 501(a) of Regulation D under
the U.S. Securities Act: 

	(1) 	
      Any bank as defined in Section 3(a)(2) of the U.S.
      Securities Act or any savings and loan association or other institution as
      defined in Section 3(a)(5)(A) of the U.S. Securities Act whether acting in
      its individual or fiduciary capacity; any broker or dealer registered
      pursuant to Section 15 of the Securities Exchange Act of 1934; any
      insurance company as defined in Section 2(a)(13) of the U.S. Securities
      Act; any investment company registered under the Investment Company Act of
      1940 or a business development company as defined in Section 2(a)(48) of
      that Act; any Small Business Investment Company licensed by the U.S. Small
      Business Administration under Section 301(c) or (d) of the Small Business
      Investment Act of 1958; any plan established and maintained by a state,
      its political subdivisions, or any agency or instrumentality of a state or
      its political subdivisions, for the benefit of its employees, if such plan
      has total assets in excess of US$5,000,000; any employee benefit plan
      within the meaning of the Employee Retirement Income Security Act of 1974,
      if the investment decision is made by a plan fiduciary, as defined in
      Section 3(21) of such Act, which is either a bank, savings and loan
      association, insurance company, or registered investment adviser, or if
      the employee benefit plan has total assets in excess of US$5,000,000, or,
      if a self-directed plan, with investment decisions made solely by persons
      that are U.S. Accredited Investors;

	 	 
	(2) 	
      Any private business development company as defined in
      Section 202(a)(22) of the Investments Advisers Act of 1940;

	 	 
	(3) 	
      Any organization described in section 501(c)(3) of the
      Internal Revenue Code, corporation, Massachusetts or similar business
      trust, or partnership not formed for the specific purpose of acquiring the
      securities offered, with total assets in excess of US$5,000,000;
  or

	 	 
	(4) 	
      Any trust with total assets in excess of US$5,000,000,
      not formed for the specific purpose of acquiring the securities offered,
      whose purchase is directed by a sophisticated person (being defined as a
      person who has such knowledge and experience in financial and business
      matters that he or she is capable of evaluating the merits and risks of
      the prospective investment).







- 17 - 

EXHIBIT II TO U.S. PLACEMENT MEMORANDUM 

FORM OF DECLARATION FOR REMOVAL OF LEGEND 

	TO: 	COMPUTERSHARE TRUST COMPANY OF CANADA 
	  	as registrar and transfer agent for Common
      Shares of 
	  	FARALLON RESOURCES LTD. 
	  	Vancouver BC 
	  	CANADA 


The undersigned (a) acknowledges that the sale of the
securities of FARALLON RESOURCES LTD. (the “Company”) to which this declaration
relates is being made in reliance on Rule 904 of Regulation S under the United
States Securities Act of 1933, as amended (the “U.S. Securities Act”) and (b)
certifies that (1) the undersigned is not an affiliate of the Company (as that
term is defined in Rule 405 under the U.S. Securities Act), (2) the offer of
such securities was not made to a person in the United States and either (A) at
the time the buy order was originated, the buyer was outside the United States,
or the seller and any person acting on its behalf reasonably believed that the
buyer was outside the United States, or (B) the transaction was executed in, on
or through the facilities of the Toronto Stock Exchange or any other designated
offshore securities market (as defined in Regulation S under the U.S. Securities
Act), and neither the seller nor any person acting on its behalf knows that the
transaction has been prearranged with a buyer in the United States, (3) neither
the seller nor any affiliate of the seller nor any person acting on any of their
behalf has engaged or will engage in any directed selling efforts in the United
States in connection with the offer and sale of such securities, (4) the sale is
bona fide and not for the purpose of “washing off” the resale restrictions
imposed because the securities are restricted securities (as such term is
defined in Rule 144(a)(3) under the U.S. Securities Act) and (5) the
contemplated sale is not a transaction, or part of a series of transactions
which, although in technical compliance with Regulation S under the U.S.
Securities Act, is part of a plan or scheme to evade the registration provisions
of the U.S. Securities Act. Terms used herein without definition have the
meanings given to them by Regulation S under the U.S. Securities Act. 

	 Dated: 	 		 
	 	 		 Name of Seller 
	 	 	  	 
	 	 	By: 	 
	 	 		 Name: (please print) 
	 	 	  	 
	 	 	  	 
	 	 		 Title: (please print)
  






- 18 - 

Affirmation by Seller’s Broker-Dealer 

We have read the foregoing representations of our customer,
_____________________________(the “Seller”), dated _______________________, with
regard to our sale, for such Seller’s account, of the _________________common
shares, represented by certificate number ______________(the “Shares”), of the
Company described therein, and on behalf of ourselves we certify and affirm that
(A) we have no knowledge that the transaction had been prearranged with a buyer
in the United States, (B) the transaction was executed on or through the
facilities of the Toronto Stock Exchange and (C) neither we, nor any person
acting on our behalf, engaged in any directed selling efforts in connection with
the offer and sale of such Securities. Terms used herein without definition have
the meanings given to them by Regulation S. 

	 	 
	Name of Firm 	 
	 	  	 
	By: 		 
	 	Authorized officer 	 






- 19 - 

APPENDIX II 

TO SCHEDULE “A” 

UNDERWRITERS’ CERTIFICATE 

         
In connection with the private placement in the United States of common
shares (the “Offered Shares”) of Farallon Resources Ltd. (the “Company”)
pursuant to an underwriting agreement (the “Underwriting Agreement”) dated
November o, 2007 among the Corporation and the underwriters named therein, the
undersigned, Paradigm Capital Inc. (“Paradigm”), on behalf of itself and each of
the other underwriters, and Paradigm Capital U.S. Inc. (the “U.S. Affiliate”),
the U.S. broker-dealer affiliate of Paradigm, hereby certify as follows:

	(1) 	
      on the date hereof and on the date each offer or sale of
      Offered Shares, the U.S. Affiliate is and was a duly registered
      broker-dealer with the United States Securities and Exchange Commission,
      duly registered as a broker-dealer under the laws of each state where it
      made offers of Offered Shares (unless exempted from the respective state’s
      broker-dealer registration requirements, and a member of and is in good
      standing with the Financial Industry Regulatory Authority on the date
      hereof;

	 	 
	(2) 	
      all offers and sales of Offered Shares in the United
      States have been and will be effected by the U.S. Affiliate in accordance
      with U.S. broker-dealer requirements;

	 	 
	(3) 	
      each offeree and purchaser in the United States was
      provided with a copy of the U.S. Private Placement Memorandum, including
      the Preliminary Prospectus, the Prospectus and any amendment thereto, and
      we have not used and will not use any other written material;

	 	 
	(4) 	
      immediately prior to transmitting the U.S. Private
      Placement Memorandum, including the Prospectus, we had reasonable grounds
      to believe and did believe that each offeree was an institutional
      “accredited investor” as defined in Rule 501(a)(1), (2), (3) and (7) of
      Regulation D (an “Institutional Accredited Investor”) under the United
      States Securities Act of 1933, as amended (the “U.S. Securities Act”),
      and, on the date hereof, we continue to believe that each purchaser in the
      United States purchasing Offered Shares from us is an Institutional
      Accredited Investor;

	 	 
	(5) 	
      no form of general solicitation or general advertising
      (as those terms are used in Regulation D under the U.S. Securities Act)
      was used by us, including advertisements, articles, notices or other
      communications published in any newspaper, magazine or similar media or
      broadcast over radio or television, or any seminar or meeting whose
      attendees had been invited by general solicitation or general advertising,
      in connection with the offer or sale of the Offered Shares in the United
      States or to U.S. persons;

	 	 
	(6) 	
      the offering of the Offered Shares in the United States
      has been conducted by us in accordance with the terms of the Underwriting
      Agreement; and

	 	 
	(7) 	
      prior to any sale of Offered Shares in the United States
      we caused each U.S. purchaser to execute a U.S. Subscription Agreement in
      the form of Appendix I to Schedule “A” to the Underwriting
    Agreement.







- 20 - 

Terms used in this certificate have the meanings given to them
in the Underwriting Agreement unless otherwise defined herein. 

Dated this __ day of __________, 2007. 

	PARADIGM CAPITAL INC. 	 	PARADIGM CAPITAL U.S. INC. 
	 	 	 
	By: 	 	 	By: 	 
	 	 	 	 	 
	Name: 	 	 	Name: 	 
	 	 	 	 	 
	Title: 	 	 	Title: 	 






SCHEDULE “B” 

THE COMPENSATION OPTIONS EVIDENCED HEREBY ARE EXERCISABLE ON
OR BEFORE 5:00 P.M. (VANCOUVER TIME) ON o, 2009, AFTER WHICH TIME
THE COMPENSATION OPTIONS EVIDENCED HEREBY SHALL BE DEEMED TO BE VOID AND OF NO
FURTHER FORCE OR EFFECT. 

NON-TRANSFERABLE 

COMPENSATION OPTIONS TO PURCHASE COMMON SHARES OF 

FARALLON RESOURCES LTD. 
(Existing under the laws of
British Columbia) 

Void After 

  <>, 2009 

         
THIS CERTIFIES that, for value received, o (the “Holder”), is the
registered holder of o non-transferable, compensation options (the “Compensation
Options”) each of which entitle the holder, subject to the terms and conditions
set forth in this Compensation Option Certificate, to purchase from Farallon
Resources Ltd. (the “Corporation”), one common share in the capital of the
Corporation (a “Share”), at any time until 5:00 p.m. (Vancouver time) on
o, 2009, at which time the Compensation Options shall become wholly void and the
unexercised portion of the subscription right represented hereby will expire and
terminate (the “Time of Expiry”) on payment of $0.70 per Share (the
“Exercise Price”). 

Exercise of Compensation Options 

	 	(1) 	
      Election to Purchase. The rights evidenced by this
      certificate may be exercised by the Holder in whole or in part and in
      accordance with the provisions hereof by delivery of an Election to
      Purchase in substantially the form attached hereto as Schedule 1, properly
      completed and executed, together with payment by certified cheque or bank
      draft of the Exercise Price for the number of Shares specified in the
      Election to Purchase at the office of the Corporation at Suite 1020, 800
      West Pender Street, Vancouver, B.C., V6C 2V6, or such other address in
      Canada as may be notified in writing by the Corporation (the “Corporation
      Office”). The election to purchase must be executed outside the United
      States. In the event that the rights evidenced by this certificate are
      exercised in part, the Corporation shall, contemporaneously with the
      issuance of the Shares issuable on the exercise of the Compensation
      Options so exercised, issue to the Holder a Compensation Option
      Certificate on identical terms in respect of that number of Shares in
      respect of which the Holder has not exercised the rights evidenced by this
      certificate.

	 	 	 
	 	(2) 	
      Exercise. The Corporation shall, within three
      business days after receiving a duly executed Election to Purchase and the
      Exercise Price for the number of Shares specified in the Election to
      Purchase (the “Exercise Date”), issue that number of Shares specified in
      the Election to Purchase.

	 	 	 
	 	(3) 	
      Certificates. As promptly as practicable after the
      Exercise Date, the Corporation shall issue and deliver to the Holder,
      registered in such name or names as the Holder may direct or if no such
      direction has been given, in the name of the Holder, a certificate or
      certificates for the number of Shares specified in the Election to
      Purchase. To the extent







- 2 - 

	 		
      permitted by law, such exercise shall be deemed to have
      been effected as of the close of business on the Exercise Date, and at
      such time the rights of the Holder with respect to the number of
      Compensation Options which have been exercised as such shall cease, and
      the person or persons in whose name or names any certificate or
      certificates for Shares shall then be issuable upon such exercise shall be
      deemed to have become the holder or holders of record of the Shares
      represented thereby.

	 	 	 	 
	 	(4) 	
      Fractional Units. No fractional Shares shall be
      issued upon exercise of these Compensation Options and the Holder will not
      be entitled to any cash payment or compensation in lieu of a fractional
      Share.

	 	 	 	 
	 	(5) 	
      Corporate Changes.

	 	 	 	 
	 		(i) 	
      Subject to clause 1(e)(ii) hereof, if, prior to the Time
      of Expiry, the Corporation shall be a party to any reorganization, merger,
      dissolution or sale of all or substantially all of its assets, whether or
      not the Corporation is the surviving entity, the Compensation Options
      evidenced by this certificate shall be adjusted so that the holder hereof
      shall be entitled to acquire the same number and type of securities to
      which the holder of that number of Shares of the Corporation subject to
      the unexercised Compensation Options would have been entitled by reason of
      such reorganization, merger, dissolution or sale of all or substantially
      all of its assets (the “Event”), and the Exercise Price shall be adjusted
      to be the amount determined by multiplying the Exercise Price in effect
      immediately prior to the Event by the number of Shares subject to the
      unexercised Compensation Options immediately prior to the Event, and
      dividing the product thereof by the number of securities to which the
      holder of that number of Shares subject to the unexercised Compensation
      Options would have been entitled to by reason of such Event.

	 	 	 	 
	 		(ii) 	
      If the Corporation is unable to deliver securities to the
      Holder pursuant to the proper exercise of a Compensation Option, the
      Corporation may satisfy such obligations to the Holder hereunder by paying
      to the Holder in cash the difference between the Exercise Price of all
      unexercised Compensation Options granted hereunder and the Fair Market
      Value of the securities to which the Holder would be entitled to upon
      exercise of all unexercised Compensation Options. Adjustments under this
      subsection (e) or (subject to subsection (o)) any determinations as to the
      Fair Market Value of any securities shall be made by the board of
      directors of the Corporation, or any committee thereof specifically
      designated by the board of directors to be responsible therefor, and any
      reasonable determination made by such board or committee thereof shall be
      binding and conclusive, subject only to any disputes being resolved by the
      Corporation’s auditors, whose determination shall be binding and
      conclusive.

	 	 	 	 
	 	(6) 	
      Subdivision or Consolidation of Common
      Shares.

	 	 	 	 
	 		(i) 	
      In the event that, prior to the Time of Expiry, the
      Corporation shall subdivide its outstanding common shares (“Common
      Shares”) into a greater number of shares, the Exercise Price in effect
      immediately prior to such subdivision shall be proportionately reduced,
      and conversely, in case the outstanding Common Shares shall be
      consolidated into a smaller number of shares, the Exercise Price in effect
      immediately prior to such consolidation shall be proportionately
      increased.







- 3 - 

	 		(ii) 	
      Upon each adjustment of the Exercise Price as provided
      herein, the Holder shall thereafter be entitled to acquire, at the
      Exercise Price resulting from such adjustment, the number of Shares
      (calculated to the nearest tenth of a Share) obtained by multiplying the
      Exercise Price in effect immediately prior to such adjustment by the
      number of Shares which may be acquired hereunder immediately prior to such
      adjustment and dividing the product thereof by the Exercise Price
      resulting from such adjustment.

	 	 	 	 
	 	(7) 	
      Change or Reclassification of Common Shares. In
      the event that prior to the Time of Expiry, the Corporation shall change
      or reclassify its outstanding Common Shares into a different class of
      securities, the rights evidenced by the Compensation Options shall be
      adjusted as follows so as to apply to the successor class of
      securities:

	 	 	 	 
	 		(i) 	
      the number of the successor class of securities which the
      Holder shall be entitled to acquire shall be that number of the successor
      class of securities which a holder of that number of Shares subject to the
      unexercised Compensation Options immediately prior to the change or
      reclassification would have been entitled to by reason of such change or
      reclassification; and

	 	 	 	 
	 		(ii) 	
      the Exercise Price shall be determined by multiplying the
      Exercise Price in effect immediately prior to the change or
      reclassification by the number of Shares subject to the unexercised
      Compensation Options immediately prior to the change or reclassification,
      and dividing the product thereof by the number of shares determined in
      clause 1(g)(i) hereof.

	 	 	 	 
	 	(8) 	
      Offering to Shareholders. If and whenever at any
      time prior to the Time of Expiry, the Corporation shall fix a record date
      or if a date of entitlement to receive is otherwise established (any such
      date being hereinafter referred to in this subsection 1(h) as the “record
      date”) for the issuance of rights, options or warrants to all or
      substantially all the holders of the outstanding Common Shares entitling
      them, for a period expiring not more than 45 days after such record date,
      to subscribe for or purchase Common Shares or securities convertible into
      or exchangeable for Common Shares at a price per share or, as the case may
      be, having a conversion or exchange price per share less than 95% of the
      Fair Market Value (as hereinafter defined) on such record date, the
      Exercise Price shall be adjusted immediately after such record date so
      that it shall equal the price determined by multiplying the Exercise Price
      in effect on such record date by a fraction, of which the numerator shall
      be the total number of Common Shares outstanding on such record date plus
      a number equal to the number arrived at by dividing the aggregate
      subscription or purchase price of the total number of additional Common
      Shares offered for subscription or purchase or, as the case may be, the
      aggregate conversion or exchange price of the convertible or exchangeable
      securities so offered by such Fair Market Value, and of which the
      denominator shall be the total number of Common Shares outstanding on such
      record date plus the total number of additional Common Shares so offered
      (or into which the convertible or exchangeable securities so offered are
      convertible or exchangeable); Common Shares owned by or held for the
      account of the Corporation or any subsidiary of the Corporation shall be
      deemed not to be outstanding for the purpose of any such computation; such
      adjustment shall be made successively whenever such a record date is
      fixed; to the extent that any rights or warrants are not so issued or any
      such rights or warrants are not exercised prior to the expiration thereof,
      the Exercise Price shall then be readjusted to the Exercise Price which
      would then be in effect if such record date had not been fixed or to the
      Exercise Price which would then be in effect based upon the
  number







- 4 - 

	 		
      of Common Shares or conversion or exchange rights
      contained in convertible or exchangeable securities actually issued upon
      the exercise of such rights or warrants, as the case may be.

	 	 	 	 
	 	(9) 	
      Carry Over of Adjustments. No adjustment of the
      Exercise Price shall be made if the amount of such adjustment shall be
      less than 1% of the Exercise Price in effect immediately prior to the
      event giving rise to the adjustment, provided, however, that in such case
      any adjustment that would otherwise be required then to be made shall be
      carried forward and shall be made at the time of and together with the
      next subsequent adjustment which, together with any adjustment so carried
      forward, shall amount to at least 1% of the Exercise Price.

	 	 	 	 
	 	(10) 	
      Notice of Adjustment. Upon any adjustment of the
      number of Shares and upon any adjustment of the Exercise Price, then and
      in each such case the Corporation shall give written notice thereof to the
      Holder, which notice shall state the Exercise Price and the number of
      Shares or other securities subject to the unexercised Compensation Options
      resulting from such adjustment, and shall set forth in reasonable detail
      the method of calculation and the facts upon which such calculation is
      based. Upon the request of the Holder there shall be transmitted promptly
      to the Holder a statement of the firm of independent chartered accountants
      retained to audit the financial statements of the Corporation to the
      effect that such firm concurs in the Corporation’s calculation of the
      change.

	 	 	 	 
	 	(11) 	
      Other Notices. In case at any time prior to the
      Time of Expiry:

	 	 	 	 
	 		(i) 	
      the Corporation shall declare any dividend upon its
      Common Shares payable in Common Shares;

	 	 	 	 
	 		(ii) 	
      the Corporation shall offer for subscription pro rata to
      the holders of its Common Shares any additional shares of any class or
      other rights;

	 	 	 	 
	 		(iii) 	
      there shall be any capital reorganization or
      reclassification of the capital stock of the Corporation, or
      consolidation, amalgamation or merger of the Corporation with, or sale of
      all or substantially all of its assets to, another corporation;
  or

	 	 	 	 
	 		(iv) 	
      there shall be a voluntary or involuntary dissolution,
      liquidation or winding-up of the Corporation,

	 	 	 	 
	 		
      then, in any one or more of such cases, the Corporation
      shall give to the Holder (A) at least 10 days’ prior written notice of the
      date on which a record date shall be taken for such dividend, distribution
      or subscription rights or for determining rights to vote in respect of any
      such reorganization, reclassification, consolidation, merger,
      amalgamation, sale, dissolution, liquidation or winding-up and (B) in the
      case of any such reorganization, reclassification, consolidation, merger,
      sale, dissolution, liquidation or winding-up, at least 10 days’ prior
      written notice of the date when the same shall take place. Such notice in
      accordance with the foregoing clause (A) shall also specify, in the case
      of any such dividend, distribution or subscription rights, the date on
      which the holders of Common Shares shall be entitled thereto, and such
      notice in accordance with the foregoing clause (B) shall also specify the
      date on which the holders of Common Shares shall be entitled to exchange
      their Common Shares for securities or other
property







- 5 - 

	 		
      deliverable upon such reorganization, reclassification,
      consolidation, merger, amalgamation, sale, dissolution, liquidation or
      winding-up, as the case may be.

	 	 	 
	 	(12) 	
      Shares to be Reserved. The Corporation will at all
      times keep available, and reserve if necessary under Canadian law, out of
      its authorized Common Shares, solely for the purpose of issue upon the
      exercise of the Compensation Options, such number of Shares as shall then
      be issuable upon the exercise of the Compensation Options. The Corporation
      covenants and agrees that all such Shares which shall be so issuable will,
      upon issuance, be duly authorized and issued as fully paid and
      non-assessable. The Corporation will take all such actions as may be
      necessary to ensure that all such Shares may be so issued without
      violation of any applicable requirements of any exchange upon which the
      Common Shares may be listed or in respect of which the Common Shares are
      qualified for unlisted trading privileges. The Corporation will take all
      such actions are within its power to ensure that all such Shares may be so
      issued without violation of any applicable law.

	 	 	 
	 	(13) 	
      Issue Tax. The issuance of certificates for Shares
      upon the exercise of Compensation Options shall be made without charge to
      the Holder for any issuance tax in respect thereto, provided that the
      Corporation shall not be required to pay any tax which may be payable in
      respect of any transfer involved in the issuance and delivery of any
      certificate in a name other than that of the Holder.

	 	 	 
	 	(14) 	
      Listing. The Corporation will, at its expense and
      as expeditiously as possible, use its reasonable commercial efforts to
      cause all Shares issuable upon the exercise of the Compensation Options to
      be duly listed on the Toronto Stock Exchange and/or any other stock
      exchange upon which the Common Shares may be then listed prior to the
      issuance of such Shares.

	 	 	 
	 	(15) 	
      Fair Market Value. For the purposes of any
      computation hereunder, the “Fair Market Value” at any date shall be the
      weighted average sale price per share for the Common Shares of the
      Corporation for the 20 consecutive trading days immediately before such
      date on the most senior stock exchange in Canada on which the Common
      Shares may then be listed and on which there is the greatest volume of
      trading of the Common Shares for such 20 day period, or, if the shares or
      any other security in respect of which a determination of Fair Market
      Value is being made are not listed on any stock exchange, the Fair Market
      Value shall be determined by the directors, which determination shall be
      conclusive. The weighted average price shall be determined by dividing the
      aggregate sale price of all such shares sold on the said exchange during
      the said 20 consecutive trading days by the total number of such shares so
      sold.




	2. 	Replacement 


         
Upon receipt of evidence satisfactory to the Corporation of the loss,
theft, destruction or mutilation of this Compensation Option Certificate and, if
requested by the Corporation, upon delivery of a bond of indemnity satisfactory
to the Corporation (or, in the case of mutilation, upon surrender of this
Compensation Option Certificate), the Corporation will issue to the Holder a
replacement certificate (containing the same terms and conditions as this
Compensation Option Certificate). 




- 6 - 

	3. 	Expiry Date 


         
The Compensation Option shall expire and all rights to purchase Shares
hereunder shall cease and become null and void at 5:00 p.m. (Vancouver time) on
o, 2009. 

	4. 	Covenant 


         
So long as any Compensation Option remain outstanding the Corporation
covenants that it shall do or cause to be done all things necessary to maintain
its status as a reporting issuer not in default in the Qualifying Jurisdictions.


	5. 	Defined Terms



         
All capitalized terms used herein and not otherwise defined shall have
the meaning ascribed thereto in the underwriting agreement dated as of December
o, 2007 between the Corporation, Paradigm Capital Inc., Canaccord Capital
Corporation, MGI Securities Inc. and Raymond James Ltd.

	6. 	Governing Law



         
The laws of the Province of British Columbia and the laws of Canada
applicable therein shall govern the Compensation Options. 

	7. 	Successors 


         
This Compensation Option Certificate shall enure to the benefit of the
Holder and its successors or assigns and shall be binding on the Corporation and
its respective successors. 

	8. 	General 


         
By acceptance hereof, the Holder hereby represents and warrants to the
Corporation that the Holder is acquiring these Compensation Options as principal
for its own account and not for the benefit of any other person. 

         
All amounts of money referred to in this Compensation Option
Certificate are expressed in lawful money of Canada. 

[The rest of this page intentionally left
blank] 




- 7 - 

         
IN WITNESS WHEREOF the Corporation has caused this Compensation Option
Certificate to be signed by a duly authorized officer. 

DATED as
of                   
 , 2007. 

	 	FARALLON RESOURCES
      LTD. 
	 	 	  
	 	 	  
	 	 	  
	 	Per:	
	 	 	Authorized Signing Officer







Schedule “1”


Election to Exercise 

	TO: 	FARALLON RESOURCES LTD. 


The undersigned hereby irrevocably elects to exercise the
number of Compensation Options of Farallon Resources Ltd. set out below for the
number of Shares (or other property or securities subject thereto) as set forth
below: 

	 	(a) 	Number of Compensation Options to
      be Exercised: 	 
    	 
	 	 	 	 	 
	 	(b) 	Number of Shares to be Acquired:
    	 
    	 
	 	 	 	 	 
	 	(c) 	Exercise Price per Share: 	$	 
	 	 	 	 	 
	 	(d) 	Aggregate Purchase Price [(b)
      multiplied by (c)] 	$ 	 


and hereby tenders a certified cheque, bank draft or cash for
such aggregate purchase price, and directs such Shares to be registered and a
certificate therefor to be issued as directed below. 

By executing this election to exercise, the undersigned
represents and warrants that the undersigned is not a U.S. Person or a Person
within the United States and that the Shares are not being subscribed for on
behalf of a U.S. Person (as such terms are defined for purposes of the United
States Securities Act of 1933, as amended). 

         
DATED this ______day of ____________, 200__ . 

	 	[NAME OF HOLDER] 
	 	 
	 	Per:	 
	 	 
	 	 
	 	 
	 	Name of Registered Holder: 
	 	 
	 	 
	 	 
	 	Address of Registered Holder: