<PAGE>



                                 ROYAL OAK MINES INC.


                                    as Corporation


                                         and



                           MONTREAL TRUST COMPANY OF CANADA


                                      as Trustee






--------------------------------------------------------------------------------


                                   TRUST INDENTURE
                              PROVIDING FOR THE ISSUE OF
                           U.S. $50 MILLION 15% DEMAND BONDS

                                    JUNE 22, 1998


--------------------------------------------------------------------------------
<PAGE>


                                TABLE OF CONTENTS

                                    ARTICLE 1
                                 INTERPRETATION
<TABLE>

<S>           <C>                                                         <C>
Section 1.1.  Defined Terms. . . . . . . . . . . . . . . . . . . . . . . .   1
Section 1.2.  Meaning of "outstanding" for Certain Purposes. . . . . . . .  11
Section 1.3.  Headings, etc. . . . . . . . . . . . . . . . . . . . . . . .  11
Section 1.4.  Deemed Notice of Indenture . . . . . . . . . . . . . . . . .  12
Section 1.5.  Judgment Currency. . . . . . . . . . . . . . . . . . . . . .  12
Section 1.6.  Applicable Law . . . . . . . . . . . . . . . . . . . . . . .  12
</TABLE>

                                      ARTICLE 2
                                      THE BONDS

<TABLE>

<S>           <C>                                                         <C>
Section 2.1.  Terms, Form and Denomination of Bonds. . . . . . . . . . . .  13
Section 2.2.  Issue of Bonds . . . . . . . . . . . . . . . . . . . . . . .  13
Section 2.3.  Signing of Bonds . . . . . . . . . . . . . . . . . . . . . .  14
Section 2.4.  Certification. . . . . . . . . . . . . . . . . . . . . . . .  14
Section 2.5.  Replacement of Bonds . . . . . . . . . . . . . . . . . . . .  15
Section 2.6.  Ownership of Bonds . . . . . . . . . . . . . . . . . . . . .  15
Section 2.7.  Payment of Principal and Interest. . . . . . . . . . . . . .  15
Section 2.8.  Taxes and Other Taxes. . . . . . . . . . . . . . . . . . . .  16
Section 2.9.  Exchange of Bonds. . . . . . . . . . . . . . . . . . . . . .  17
Section 2.10. Registration . . . . . . . . . . . . . . . . . . . . . . . .  17
</TABLE>

                                      ARTICLE 3
                                 REPLEDGING OF BONDS

<TABLE>

<S>           <C>                                                         <C>
Section 3.1.  Repledging of Bonds. . . . . . . . . . . . . . . . . . . . .  18
Section 3.2.  Outstanding. . . . . . . . . . . . . . . . . . . . . . . . .  18
</TABLE>

                                      ARTICLE 4
                                       SECURITY
<TABLE>

<S>           <C>                                                         <C>
Section 4.1.  Security . . . . . . . . . . . . . . . . . . . . . . . . . .  19
Section 4.2.  Effect of Liens. . . . . . . . . . . . . . . . . . . . . . .  20
Section 4.3.  Security Effective Notwithstanding Date of Advance . . . . .  20
Section 4.4.  Title to Collateral. . . . . . . . . . . . . . . . . . . . .  20
Section 4.5.  Further Assurances . . . . . . . . . . . . . . . . . . . . .  20
Section 4.6.  Registration . . . . . . . . . . . . . . . . . . . . . . . .  21
Section 4.7.  Release from Charge. . . . . . . . . . . . . . . . . . . . .  22
Section 4.8.  Application of Insurance Proceeds. . . . . . . . . . . . . .  22
Section 4.9.  Expropriation. . . . . . . . . . . . . . . . . . . . . . . .  22
Section 4.10. Priority of Liens. . . . . . . . . . . . . . . . . . . . . .  23
Section 4.11. Disposition of Assets. . . . . . . . . . . . . . . . . . . .  23
</TABLE>

                                     -i-


<PAGE>

<TABLE>

<S>           <C>                                                         <C>
Section 4.12. Royalty Interest . . . . . . . . . . . . . . . . . . . . . .  24
Section 4.13. Restricted Payments. . . . . . . . . . . . . . . . . . . . .  24
Section 4.14. Security . . . . . . . . . . . . . . . . . . . . . . . . . .  24
Section 4.15. Conflicts. . . . . . . . . . . . . . . . . . . . . . . . . .  24
</TABLE>

                                      ARTICLE 5
                             COVENANTS OF THE CORPORATION
<TABLE>

<S>           <C>                                                         <C>
Section 5.1.  Payment of Principal and Interest. . . . . . . . . . . . . .  25
Section 5.2.  Trustee's Remuneration and Expenses. . . . . . . . . . . . .  25
Section 5.3.  Insurance. . . . . . . . . . . . . . . . . . . . . . . . . .  25
Section 5.4.  Reorganization . . . . . . . . . . . . . . . . . . . . . . .  26
Section 5.5.  Limitation on Liens. . . . . . . . . . . . . . . . . . . . .  26
Section 5.6.  Performance of Covenants by Trustee. . . . . . . . . . . . .  26
</TABLE>

                                      ARTICLE 6
                               DEFAULT AND ENFORCEMENT
<TABLE>

<S>           <C>                                                         <C>
Section 6.1.  Events of Default. . . . . . . . . . . . . . . . . . . . . .  28
Section 6.2.  Acceleration on Default. . . . . . . . . . . . . . . . . . .  28
Section 6.3.  Enforcement by Trustee . . . . . . . . . . . . . . . . . . .  29
Section 6.4.  Enforcement by Bondholders . . . . . . . . . . . . . . . . .  29
Section 6.5.  Entry by Trustee . . . . . . . . . . . . . . . . . . . . . .  29
Section 6.6.  Appointment of Receiver. . . . . . . . . . . . . . . . . . .  30
Section 6.7.  Sale by Trustee. . . . . . . . . . . . . . . . . . . . . . .  31
Section 6.8.  Applying Bonds in Payment. . . . . . . . . . . . . . . . . .  31
Section 6.9.  Application of Proceeds of Sale or Realization . . . . . . .  32
Section 6.10.  Distribution of Proceeds. . . . . . . . . . . . . . . . . .  32
Section 6.11.  Persons Dealing with Trustee. . . . . . . . . . . . . . . .  33
Section 6.12.  Trustee Appointed Attorney. . . . . . . . . . . . . . . . .  33
</TABLE>

                                      ARTICLE 7
                              SATISFACTION AND DISCHARGE
<TABLE>

<S>           <C>                                                         <C>
Section 7.1.  Cancellation and Destruction . . . . . . . . . . . . . . . .  34
Section 7.2.  Release from Covenants . . . . . . . . . . . . . . . . . . .  34
</TABLE>

                                      ARTICLE 8
                                SUCCESSOR CORPORATIONS
<TABLE>

<S>           <C>                                                         <C>
Section 8.1.  Certain Requirements in Respect of Merger, etc . . . . . . .  35
Section 8.2.  Vesting of Powers in Successor . . . . . . . . . . . . . . .  35
Section 8.3.  Opinion of Counsel to be Given to Trustee. . . . . . . . . .  35
</TABLE>

                                     -ii-


<PAGE>

                                      ARTICLE 9
                              EXTRAORDINARY RESOLUTIONS
<TABLE>

<S>           <C>                                                         <C>
Section 9.1.  Powers Exercisable by Extraordinary Resolution . . . . . . .  36
Section 9.2.  Meaning of "Extraordinary Resolution". . . . . . . . . . . .  37
Section 9.3.  Powers Cumulative. . . . . . . . . . . . . . . . . . . . . .  37
Section 9.4.  Binding Effect of Resolutions. . . . . . . . . . . . . . . .  37
</TABLE>

                                      ARTICLE 10
                               SUPPLEMENTAL INDENTURES
<TABLE>

<S>           <C>                                                         <C>
Section 10.1.  Execution of Supplemental Indentures. . . . . . . . . . . .  38
</TABLE>

                                      ARTICLE 11
                                CONCERNING THE TRUSTEE
<TABLE>

<S>           <C>                                                         <C>
Section 11.1.  Conditions Precedent to Trustee's Obligation to Act . . . .  39
Section 11.2.  Evidence. . . . . . . . . . . . . . . . . . . . . . . . . .  39
Section 11.3.  Experts and Advisers. . . . . . . . . . . . . . . . . . . .  40
Section 11.4.  Action by Trustee to Protect Interests. . . . . . . . . . .  40
Section 11.5.  Trustee Not Required to Give Security . . . . . . . . . . .  40
Section 11.6.  Protection of Trustee . . . . . . . . . . . . . . . . . . .  40
Section 11.7.  Replacement of Trustee. . . . . . . . . . . . . . . . . . .  41
Section 11.8.  Conflict of Interest. . . . . . . . . . . . . . . . . . . .  41
Section 11.9.  Cash Collateral Held by the Trustee . . . . . . . . . . . .  42
Section 11.10. Certificate of Compliance . . . . . . . . . . . . . . . . .  42
Section 11.11. Legislation Relating to Indentures. . . . . . . . . . . . .  42
Section 11.12. Acceptance of Trust . . . . . . . . . . . . . . . . . . . .  42
</TABLE>

                                      ARTICLE 12
                                    MISCELLANEOUS
<TABLE>

<S>           <C>                                                         <C>
Section 12.1  Communications . . . . . . . . . . . . . . . . . . . . . . .  43
Section 12.2. Address of Record. . . . . . . . . . . . . . . . . . . . . .  43
Section 12.3. Indemnification of Trustee . . . . . . . . . . . . . . . . .  43
Section 12.4. Deposit of Securities. . . . . . . . . . . . . . . . . . . .  44
Section 12.5. Change of Name . . . . . . . . . . . . . . . . . . . . . . .  44
</TABLE>

                                      ARTICLE 13
                                    FORM OF BONDS
<TABLE>

<S>           <C>                                                         <C>
Section 13.1.  Form of Bonds . . . . . . . . . . . . . . . . . . . . . . .  46
</TABLE>

                                     -iii-


<PAGE>

                                      ARTICLE 14
                                      EXECUTION
<TABLE>

<S>           <C>                                                         <C>
Section 14.1.  Notarial Trust Deed . . . . . . . . . . . . . . . . . . . .  49
Section 14.2.  Counterparts. . . . . . . . . . . . . . . . . . . . . . . .  49
Section 14.3.  Formal Date . . . . . . . . . . . . . . . . . . . . . . . .  49
</TABLE>

                                     -iv-
<PAGE>
                                   TRUST INDENTURE


          TRUST INDENTURE dated June 22, 1998 between ROYAL OAK MINES INC. 
(the "CORPORATION") and MONTREAL TRUST COMPANY OF CANADA (the "TRUSTEE").

          WHEREAS the Corporation deems it necessary for its corporate 
purposes to deliver security to certain parties who have or may in future 
enter into hedging transactions with the Corporation;

          AND WHEREAS it is desirable to grant such security through a 
trustee acting under a trust indenture;

          AND WHEREAS in order to give effect to such security the 
Corporation proposes to issue bonds under the trust indenture;

          AND WHEREAS the Corporation under the laws relating to it is duly 
authorized to create, issue and secure the Bonds to be issued as provided in 
this Indenture;

          AND WHEREAS all things necessary have been done and performed to 
make the Bonds, when issued by the Corporation and certified by the Trustee, 
valid, binding and legal obligations of the Corporation with the benefits and 
subject to the terms of this Indenture and to make this Indenture a valid and 
binding indenture in accordance with its terms;

          AND WHEREAS the foregoing recitals and any statements contained in 
this Indenture or in the Bonds (except the representations in the certificate 
of the Trustee on the Bonds) are and shall be deemed to be made as 
representations and statements of fact by the Corporation;

          NOW THEREFORE, in consideration of the foregoing, the sum of $10.00 
and other good and valuable consideration, the receipt and sufficiency of 
which are acknowledged by the Corporation, the Corporation agrees as follows:

                                      ARTICLE 1
                                    INTERPRETATION

          SECTION 1.1.  DEFINED TERMS.   (1) As used in this Indenture and 
the Bonds, the following terms have the following meanings:

          "APM" means Arctic Precious Metals, Inc., a Nevada corporation.

          "AFFILIATE" has the meaning specified in the BUSINESS CORPORATIONS 
ACT (Ontario).

          "BONDS" means the bonds of the Corporation issued and certified 
under this Indenture and for the time being outstanding.

<PAGE>

                                     -2-


          "BONDHOLDERS" means the holders of the Bonds for the time being and 
from time to time.

          "BUSINESS DAY" means any day of the year, other than a Saturday, 
Sunday or other day on which banks are required or authorized to close in 
Toronto, Ontario.

          "CANADIAN DOLLARS" and "CDN. $" each mean lawful money of Canada.

          "CAPITAL LEASE OBLIGATIONS" means, as to any Person, the 
obligations of such Person to pay rent or other amounts under a lease that 
are required to be classified and accounted for as capital lease obligations 
in accordance with GAAP.

          "CERTIFICATE OF THE CORPORATION", "ORDER OF THE CORPORATION" and 
"REQUEST OF THE CORPORATION" mean, respectively, a written certificate, order 
and request signed in the name of the Corporation by any one of its Chairman, 
President, Chief Financial Officer or Secretary.

          "CERTIFIED RESOLUTION" means a copy of a resolution certified by 
the Secretary or any Assistant Secretary of the Corporation to have been duly 
passed by the Directors and to be in full force and effect on the date of the 
certification.

          "COLLATERAL" means the property, assets and undertaking of the 
Corporation and its Restricted Subsidiaries charged or in which the Trustee 
is granted a Lien pursuant to the Security and all replacements, 
substitutions and additions thereto and all income, gains and distributions 
thereon and proceeds thereof, of whatsoever nature and kind.

          "CORPORATION" means Royal Oak Mines Inc. and every Successor 
Corporation which has complied with the provisions of Article 8.

          "COUNSEL" means an attorney, barrister or solicitor or a firm of 
attorneys or barristers and solicitors retained by the Trustee or retained by 
the Corporation and acceptable to the Trustee.

          "DEBT" of any Person means all indebtedness including, without 
limitation (i) all indebtedness of such Person for and in respect of borrowed 
money, including obligations with respect to bankers' acceptances, letters of 
credit and letters of guarantee or indemnity; (ii) all indebtedness of such 
Person for the deferred purchase price of property or services represented by 
a note or other evidence of indebtedness or other security; (iii) all 
indebtedness created or arising under any conditional sale or other title 
retention agreement with respect to property acquired by such Person (even 
though the rights and remedies of the seller or lender under such agreement 
in the event of default are limited to the possession or sale of such 
property); (iv) all obligations under leases which, in accordance with GAAP 
(or accounting principles generally accepted in the jurisdiction of 
incorporation or organization of such Person), are recorded as capital 
leases, in respect of which such Person is liable as lessee; (v) all 
indebtedness or obligations of such Person pursuant to any interest rate 
swaps, currency swaps, commodity agreements and similar hedging agreements; 
and (vi) all Debt Guaranteed by 

<PAGE>
                                     -3-


such Person.

          "DEBT GUARANTEED" by any Person means Debt of the kinds referred to 
in (i) through (v) of the definition of Debt which is directly or indirectly 
guaranteed by such Person or which such Person has agreed (contingently or 
otherwise) with the creditor to purchase or otherwise acquire or assume, or 
in respect of which such Person has otherwise assured a credit against loss 
by means of an indemnity, security or bond.

          "DIRECTOR" means a director of the Corporation for the time being, 
and reference without more to action by the Directors means action by the 
directors of the Corporation as a board or, whenever duly empowered, action 
by a committee of the board.

          "DOCUMENTS" means the Security Documents and any other document 
delivered to the Bondholders by the Corporation or any Subsidiary pursuant to 
or in connection therewith.

          "ELIGIBLE CAPITAL LEASE OBLIGATIONS AND PURCHASE MONEY SECURITY 
INTERESTS" means (a) Capital Lease Obligations and Purchase Money Security 
Interests existing as at the date hereof or any renewals or replacements 
thereof on materially the same terms and in amounts not materially exceeding 
those existing as at the date hereof; and (b) Capital Lease Obligations and 
Purchase Money Security Interests incurred following the date hereof if the 
claims of the lessor or creditor thereunder are limited to recovery or 
repossession of the leased or financed property in question and if such 
leased or financed property is newly acquired by the Corporation.

          "ELIGIBLE HEDGING INDEBTEDNESS" means (i) Existing Hedging 
Indebtedness; and (ii) Indebtedness which is Permitted Indebtedness described 
in clauses (iii) or (iv) of the definition of "Permitted Indebtedness" in the 
Subordinated Indenture, as in effect on the date hereof.

          "EQUIVALENT CDN. $ AMOUNT" means, with respect to any amount of any 
currency other than Canadian Dollars, the amount of Canadian Dollars 
determined by using the quoted spot rate at which The Bank of Nova Scotia's 
principal office in Toronto, Ontario offers to provide Canadian Dollars in 
exchange for such other currency at 12:00 noon (Toronto time) on the date 
which such Equivalent Cdn. $ Amount is to be determined.

          "EVENT OF DEFAULT" has the meaning specified in Section 6.1.

          "EXCLUDED ASSETS" means the Windy Craggy Property.

          "EXISTING HEDGING INDEBTEDNESS" has the meaning ascribed to that 
term in the Subordinated Indenture, as in effect on the date hereof.

          "EXTRAORDINARY RESOLUTION" has the meaning specified in Section 9.2.

          "FISCAL YEAR" means a fiscal year of the Corporation commencing on 


<PAGE>

                                     -4-

January 1 of each calendar year and ending on December 31 of the same 
calendar year.

          "GAAP" means at any time, accounting principles generally accepted 
in Canada as recommended in the Handbook of the Canadian Institute of 
Chartered Accountants at the relevant time applied on a consistent basis.

          "GOVERNMENTAL ENTITY" means any (i) multinational, federal, 
provincial, state, municipal, local or other government, governmental or 
public department, central bank, court, commission, board, bureau, agency or 
instrumentality, domestic or foreign, (ii) any subdivision or authority of 
any of the foregoing, or (iii) any quasi-governmental or private body 
exercising any regulatory, expropriation or taxing authority under or for the 
account of any of the foregoing.

          "HEDGING COUNTERPARTY" means Bankers Trust Company, Macquarie Bank 
Limited, The Bank of Nova Scotia, and their respective successors and 
assigns, and any other Person with whom from time to time the Corporation has 
entered, or is proposing to enter into or incur Currency Agreements, Interest 
Swap Obligations, Foreign Exchange Obligations or Commodity Agreements, as 
such terms are defined in the Subordinated Indenture, as in effect on the 
date hereof.

          "IN AGREED FORM" means, with respect to any documents to be 
delivered by the Corporation or any Restricted Subsidiary to the Trustee 
under or pursuant to this Indenture, that such document is in substantially 
the same form and substance as the comparable document, if any, previously 
delivered or to be delivered contemporaneously by the Corporation or such 
Restricted Subsidiary to the Senior Bondholders.

          "INDENTURE", "HEREIN", "HEREBY", "HEREOF" and similar expressions 
mean and refer to this Indenture as supplemented or amended by any indenture, 
deed or instrument supplemental or ancillary hereto; and the expressions 
"ARTICLE" and "SECTION" followed by a number mean and refer to the specified 
Article or Section of this Indenture.

          "INSIDER" has the meaning specified in Section 1(1) of the 
SECURITIES ACT (Ontario).

          "KEMESS MINE" means the Kemess North Property and Kemess South Mine.

          "KEMESS NEWCO" means the wholly owned subsidiary of the Corporation 
to which, at the request of the Senior Bondholders, the Corporation will 
transfer ownership of the Kemess Mine and related assets.

          "KEMESS NEWCO GUARANTEE AND ASSUMPTION" means the guarantee and 
assumption to be given by Kemess Newco, in compliance with Section 5.4 of the 
Indenture, which guarantee and assumption shall be In Agreed Form and in form 
and substance satisfactory to the Trustee, based on the advice of Counsel, 
pursuant to which Kemess Newco will guarantee the obligations of the 
Corporation pursuant to the Bonds.

          "KEMESS NEWCO LIENS" means the present and future fixed and 
floating 

<PAGE>

                                     -5-

Liens to be granted by Kemess Newco to the Trustee in all of its property, 
assets and undertaking, including the Kemess Mine and related assets, which 
Lien shall be In Agreed Form and in form and substance satisfactory to the 
Trustee, based on the advice of Counsel, and which will secure the payment 
and performance by Kemess Newco of its obligations under the Kemess Newco 
Guarantee and Assumption.

          "KEMESS NORTH PROPERTY" means all present and future property, 
assets and undertaking comprising or relating to what is generally referred 
to as the Kemess North property in British Columbia, Canada, including, 
without limitation, all mineral claims and leases referred to in Schedule 
"B-1" to the Secured Debenture, all buildings, equipment, fixtures and other 
property and assets owned or leased by the Corporation (or in which the 
Corporation otherwise has an interest) situated or used at the Kemess North 
Property site, all operations, exploration and other activities carried on at 
such site and all permits, authorizations, licenses and similar approvals 
relating thereto.

          "KEMESS SOUTH MINE" means all present and future property, assets 
and undertaking comprising or relating to what is generally referred to as 
the Kemess South property in British Columbia, Canada, including, without 
limitation, all mineral claims and leases referred to in Schedule "B-2" to 
the Secured Debenture hereto, all buildings, equipment, fixtures and other 
property and assets owned or leased by the Corporation (or in which the 
Corporation otherwise has an interest) situated or used at the Kemess South 
Mine site, all operations, exploration and other activities carried on at 
such site and all permits, authorizations, licenses and similar approvals 
relating thereto.

          "KEMESS SOUTH RESOURCES LIMITED PARTNERSHIP" means the limited 
partnership of that name formed under the laws of the Province of British 
Columbia, and its successors and assigns. 

          "LIEN" means any mortgage, pledge, security interest, encumbrance, 
lien, charge or deposit arrangement or other arrangement or condition that in 
substance secures payment or performance of an obligation and shall include 
the interest of a vendor or lessor under any conditional sale agreement, 
capitalized lease or other title retention agreement.

          "NIGHTHAWK LAKE MINE" means the property covering approximately 
11,726 acres representing 254 claims in both Cody and Macklem Townships, 
Ontario, with most of the property held outright by the Corporation as staked 
mineral claims and the remaining property held through various agreements and 
subsidiary companies.

          "ORIGINAL CURRENCY" has the meaning specified in Section 1.5(1).

          "OTHER CURRENCY" has the meaning specified in Section 1.5(1).

          "OTHER TAXES" has the meaning specified in Section 2.8(2).

          "PAMOUR MINE" means the property (exclusive of the Hoyle 
properties) located in Whitney Township approximately 15 miles east of 
Timmins, Ontario which consisted of 38 patented mining claims and one license 
of occupation covering 

<PAGE>

                                     -6-

approximately 1,531 acres of mining and surface rights.

          "PERMITTED LIENS" mean

(a)       Liens on the property, assets or undertaking of the Corporation or 
of a Restricted Subsidiary that, in each case, secure indebtedness under the 
Senior Indentures in a principal amount not in excess of U.S.$120,000,000;

(b)       Liens securing indebtedness of a Person existing at the time that 
such Person is merged into or consolidated with the Corporation or a 
Restricted Subsidiary, provided that such Liens were in existence prior to 
the completion of such merger or consolidation and do not extend to any 
assets other than those of such Person;

(c)       Liens on property acquired by the Corporation or a Restricted 
Subsidiary, provided that such Liens were in existence prior to the 
contemplation of such acquisition and do not extend to any other property;

(d)       Liens on property, assets or undertaking of the Corporation that, 
in each case, secure the royalty payments to be made by the Corporation or a 
Restricted Subsidiary to Kemess South Resources Limited Partnership or, upon 
dissolution to the partners thereof, in respect of copper extracted and 
processed from the Kemess South property;

(e)       Liens on the property, assets or undertaking of the Corporation or 
a Restricted Subsidiary that, in each case, secure Capital Lease Obligations 
or Purchase Money Obligations;

(f)       Liens incurred, or pledges and deposits in connection with, 
workers' compensation, unemployment insurance and other social security 
benefits, and leases, appeal bonds and other obligations of like nature 
incurred by the Corporation or any Restricted Subsidiary in the ordinary 
course of business;

(g)       Liens imposed by law, including, without limitation, mechanics', 
carriers' warehousemen's, materialmen's, suppliers' and vendors' Liens, 
incurred by the Corporation or any Restricted Subsidiary in the ordinary 
course of business in a principal amount not in excess of at any time of Cdn. 
$15,000,000;

(h)       Liens for AD VALOREM, income or property taxes or assessments and 
similar charges which either are not delinquent or are being contested in 
good faith by appropriate proceedings for which the Corporation has set aside 
on its books reserves to the extent required by GAAP;

(i)       Liens on the property, assets or undertaking of the Corporation 
that, in each case, secure the obligations of the Corporation under the 
Royalty Agreement, including pursuant to the Royalty Debenture;

(j)       Liens on the property, assets or undertaking of Kemess Newco that 
secure indebtedness of the Corporation assumed by Kemess 

<PAGE>

                                     -7-

Newco on the transfer of Kemess Newco of ownership of the Kemess Mine and 
related assets;

(k)       Liens granted by the Corporation and its Restricted Subsidiaries to 
the Trustee pursuant to the terms hereof and the Security Documents;

(l)       the Subordinated Liens;

(m)       rights reserved to or vested in any Governmental Entity by the 
terms of any lease, licence, franchise, grant or permit, or by any statutory 
provision, to terminate the same, to take action which results in an 
expropriation, to designate a purchase of any property subject thereto or to 
require annual or other payments as a condition to the continuance thereof;

(n)       zoning restrictions, easements, rights of way, leases or other 
similar encumbrances or privileges in respect of real property which in the 
aggregate do not materially impair the use of such property by the 
Corporation or any Restricted Subsidiary in the operation of its business;

(o)       security given by the Corporation or a Restricted Subsidiary to a 
public utility or any Governmental Entity, when required by such utility or 
Governmental Entity in connection with the operations of the Corporation or 
such Restricted Subsidiary in the ordinary course of its business, which 
singly or in the aggregate do not materially detract from the value of the 
asset concerned or materially impair its use in the operation of the business 
of the Corporation or such Restricted Subsidiary;

(p)       the reservation in any original grants from any Governmental Entity 
of any land or interest therein and statutory exceptions to title; and

(q)       title, defects or irregularities which are of a minor nature and 
which do not materially detract from the value of the assets of the 
Corporation or its Restricted Subsidiaries encumbered thereby.

          "PERSON" means a natural person, partnership, corporation, 
joint-stock company, trust, unincorporated association, joint venture or 
other entity or Governmental Entity and pronouns which have a similarly 
extended meaning.

          "PLEDGE AGREEMENT" means an agreement between the Corporation and a 
Bondholder, pursuant to which a Bond issued hereunder is pledged to the 
Bondholder as security for the obligations specified therein.

          "PROPOSED LEASEBACK ASSETS"  means one P & H model 2800 x PB 
Electric Mining Shovel and one P & H model 100 x P Rotary Blast Hole Drill.

          "PURCHASE MONEY OBLIGATIONS" means indebtedness of the Corporation 
and its Restricted Subsidiaries incurred in connection with the purchase of 
assets; provided that any Lien so created in connection with such incurrence 
is limited solely to the property or assets so purchased.

<PAGE>

                                     -8-

          "PURCHASE MONEY SECURITY INTEREST"  means any Lien given, assumed 
or arising by operation of law, including capital leases, to provide or 
secure, or to provide the obliger with funds to pay, the whole or any part of 
the consideration for the acquisition of property where the principal amount 
of the obligation secured by such Lien (i) is not in excess of the cost to 
the obliger of the property encumbered thereby and (ii) is secured only by 
the property being acquired by the obliger, and includes the renewal or 
refinancing of any such Lien upon the same property provided that the 
indebtedness secured and the security therefor are not increased thereby.

          "RECEIVER'S CERTIFICATE" has the meaning specified in Section 6.6.

          "RESTRICTED SUBSIDIARY" means any Subsidiary of the Corporation 
that is not an Unrestricted Subsidiary.

          "ROYALTY AGREEMENT" means the agreement between the Corporation and 
Trilon Financial Corporation to be dated the date hereof pursuant to which 
Trilon Financial Corporation has been granted a royalty interest in the 
Kemess South Mine, as amended from time to time (other than amendments which 
violate Section 4.12 hereof).

          "ROYALTY DEBENTURE" means the debenture dated June 22, 1998, 
securing the obligations of the Corporation under the Royalty Agreement.

          "SALE" has the meaning specified in Section 4.11.

          "SECURED DEBENTURE" means the secured debenture to be delivered to 
the Trustee pursuant to Section 4.1(i) hereof.

          "SECURITY" means the security granted pursuant to Section 4.1 and 
any other security from time to time held by the Trustee for the benefit of 
the Bondholders.

          "SECURITY DOCUMENTS" means, collectively, the agreements, 
instruments and documents delivered from time to time to the Trustee by the 
Corporation, Kemess Newco and APM for the purpose of creating, perfecting, 
preserving or protecting the Liens in favour of the Trustee for the benefit 
of the Bondholders which secure the payment and performance by the 
Corporation and its Restricted Subsidiaries of their respective obligations 
under the Indenture, the Bonds and the Security Documents.  The Security 
Documents as the date hereof are described in Section 4.1(i) to (ix), hereof.

          "SENIOR BONDHOLDERS" means the holders of the Senior Security.

          "SENIOR INDENTURES" means the senior secured debenture, Series A, 
dated as of June 22, 1998 issued by the Corporation to Trilon Financial 
Corporation and the senior secured debenture, Series B, dated as of June 22, 
1998, issued by the Corporation to Northgate Exploration Limited, as from 
time to time amended (other than amendments which increase the principal 
amount due thereunder) and any debentures or other agreements which refinance 
or renew the amounts outstanding thereunder (provided that the principal 
amount outstanding thereunder is not increased).

<PAGE>

                                     -9-

          "SENIOR SECURITY" means the security from time to time granted by 
the Corporation or any of its Subsidiaries to secure the obligations of the 
Corporation or such Subsidiaries pursuant to the Senior Indentures.

          "SINGLE BONDHOLDER REQUEST" means an instrument signed in one or 
more counterparts by a Bondholder or Bondholders holding not less than U.S. 
$1 million in aggregate principal amount of the Bonds at the time outstanding.

          "SUBORDINATED INDENTURE" means the indenture dated as of August 12, 
1996 made by the Corporation as issuer, Kemess Mines Inc., as guarantor, and 
Mellon Bank, F.S.B., as trustee, as amended by supplemental indentures dated 
December 31, 1997, January 31, 1998 and May 19, 1998 and the date hereof, 
between the Corporation and Chase Manhattan Trust Company, National 
Association, as successor trustee, as further amended from time to time.

          "SUBORDINATED LIENS" means the present and future Liens held by a 
trustee or a collateral agent for and on behalf of the Subordinated 
Noteholders to secure payment and performance of the obligations of the 
Corporation and its Restricted Subsidiaries under the Subordinated Indenture, 
the Subordinated Notes and the Subordinated Security.

          "SUBORDINATED NOTES" means the notes issued pursuant to the 
Subordinated Indenture.

          "SUBORDINATED NOTEHOLDERS" means the holders from time to time of 
Subordinated Notes pursuant to the Subordinated Indenture.

          "SUBORDINATED SECURITY" means the security from time to time 
granted by the Corporation or any Subsidiary to secure the obligations of the 
Corporation pursuant to the Subordinated Indenture.

          "SUCCESSOR CORPORATION" has the meaning specified in Section 8.1.

          "SUBSIDIARIES" means all of the corporations listed on Schedule E 
to the Senior Indentures and any other corporation or limited liability 
company which is or hereafter becomes directly or indirectly controlled by 
the Corporation, and for the purposes of this definition, the Corporation 
shall be deemed to control a corporation if the Corporation beneficially 
owns, directly or indirectly, shares to which are attached more than 50% of 
the voting rights ordinarily exercisable at meetings of shareholders of such 
corporation, and the Corporation shall be deemed to own beneficially shares 
beneficially owned by a corporation controlled by it, and so on indefinitely, 
and the Corporation shall be deemed to control a limited liability company 
where it owns more than 50% of the equity interests in such limited liability 
company.

          "TAXES" has the meaning specified in Section 2.8(1).

          "TRUSTEE" means Montreal Trust Company of Canada and its successors 
for the time being in the trusts hereby created.

<PAGE>

                                     -10-

          "U.S. DOLLARS" and "U.S. $" each mean lawful money of the United 
States of America.

          "UNANIMOUS BONDHOLDERS' REQUEST" means an instrument signed in one 
or more counterparts by the Bondholders holding not less than 100% in 
aggregate principal amount of the Bonds at the time outstanding (excluding 
any such held by Affiliates or Insiders of the Corporation) requesting the 
Trustee to take some action or proceeding specified therein.

          "UNRESTRICTED SUBSIDIARY" means any Subsidiary of the Corporation 
designated as an Unrestricted Subsidiary by the board of directors of the 
Corporation; PROVIDED, HOWEVER, that (i) the Subsidiary to be so designated 
(x)(I) has total assets with a fair market value at the time of such 
designation of U.S. $1,000,000 or less, or (II) is being so designated prior 
to the acquisition by the Corporation of such Subsidiary by merger or 
consolidation with an Unrestricted Subsidiary, and (y) does not own any 
capital stock of the Corporation or any Restricted Subsidiary, (ii) if such 
Subsidiary is acquired by the Corporation, such Subsidiary is designated as 
an Unrestricted Subsidiary prior to the consummation of such acquisition, 
(iii) no Event of Default shall have occurred and be continuing, (iv) no 
portion of any Debt or any other obligation (contingent or otherwise) of such 
Subsidiary (a) is guaranteed by or is otherwise the subject of credit support 
provided by the Corporation or any of its Restricted Subsidiaries, (b) is 
recourse to or obligates the Corporation or any of its Restricted 
Subsidiaries in any way, or (c) subjects any property or asset of the 
Corporation or any of its Restricted Subsidiaries directly or indirectly, 
contingently or otherwise, to the satisfaction of such Debt or other 
obligation, (v) neither the Corporation nor any of its Restricted 
Subsidiaries has any contract, agreement, arrangement or understanding with 
such Subsidiary other than on terms as favourable to the Corporation or such 
Restricted Subsidiary as those that might be obtained at the time from 
Persons that are not Affiliates of the Corporation, and (vi) neither the 
Corporation nor any of its Restricted Subsidiaries has any obligations (a) to 
subscribe for additional shares of the capital stock of such Subsidiary, or 
(b) to maintain or preserve such Subsidiary's financial condition or to cause 
such Subsidiary to achieve certain levels of operating results.  Any such 
designation by the Corporation's board of directors shall be evidenced to the 
Trustee by filing with the Trustee a certified certificate stating that such 
designation complies with the foregoing conditions.  The Corporation's board 
of diectors may designate any Unrestricted Subsidiary to be a Restricted 
Subsidiary; PROVIDED, HOWEVER, that immediately after giving effect to such 
designation, no event of default shall have occurred and be continuing under 
the Senior Indentures or the Subordinated Indenture, assuming the incurrence 
by the Corporation and its Restricted Subsidiaries at the time of such 
designation of all existing Debt and Liens of the Unrestricted Subsidiary to 
be so designated as a Restricted Subsidiary.  In the event of any transaction 
described in Article 8 involving the Corporation in which the Corporation is 
not the Successor Corporation, the board of directors of the Successor 
Corporation may (x) prior to such transaction, designate any of its 
Subsidiaries, and any of the Corporation's Subsidiaries being acquired 
pursuant to such transaction that are not Restricted Subsidiaries, as 
Unrestricted Subsidiaries, and (y) after such transaction, designate any of 
its direct or indirect Subsidiaries as an Unrestricted Subsidiary under the 
same conditions and in the same manner as the Corporation under the terms of 
this 

<PAGE>

                                     -11-

Indenture.

          "WINDY CRAGGY PROPERTY"  means the mineral claims in and around 
Windy Craggy mountain in the Tatshenshini/Alsek region of northwestern 
British Columbia.

          (2)  Reference to any statute shall be deemed to be a reference to 
such statute as amended or re-enacted from time to time.

          (3)  Any references in this Indenture or in a Bond to gender 
includes all genders and words importing the singular number only shall 
include the plural and vice versa.

          SECTION 1.2.  MEANING OF "OUTSTANDING" FOR CERTAIN PURPOSES.  Every 
Bond certified and delivered by the Trustee shall be deemed to be outstanding 
until it shall be cancelled or delivered to the Trustee for cancellation, 
provided, however, that:

(a)       where a new Bond has been issued in substitution for a Bond which 
has been lost, destroyed or stolen, only one of them shall be counted for the 
purpose of determining the aggregate principal amount of Bonds outstanding; 
and

(b)       for the purpose of any provision of this Indenture entitling 
Bondholders to vote, sign consents, requests or other instruments or take any 
other action under this Indenture, Bonds owned by the Corporation or any 
Affiliate shall be disregarded, except that (i) for the purpose of 
determining whether the Trustee shall be protected in relying on any such 
vote, consent, request, instrument or other action, only the Bonds which the 
Trustee knows are so owned shall be so disregarded, and (ii) Bonds so owned 
which have been pledged in good faith other than to the Corporation or any 
Affiliate shall not be so disregarded if the pledgee establishes to the 
satisfaction of the Trustee the pledgee's right to vote such Bonds in its 
discretion free from the control of the Corporation or any Affiliate.

          SECTION 1.3.  HEADINGS, ETC.  The provision of a Table of Contents, 
the division of this Indenture into Articles and Sections and the insertion 
of headings are for convenient reference only and are not to affect the 
interpretation of this Indenture.

          SECTION 1.4.  DEEMED NOTICE OF INDENTURE.  Bondholders and all 
Persons claiming through or under them, respectively, shall be deemed to have 
notice of, and shall be bound by, the provisions of this Indenture.

          SECTION 1.5.  JUDGMENT CURRENCY.  (1) If, for the purposes of 
obtaining judgment in any court, it is necessary to convert a sum due 
hereunder or under a Bond in any currency (the "ORIGINAL CURRENCY") into 
another currency (the "OTHER CURRENCY"), the Corporation agrees, to the 
fullest extent that it may effectively do so, that the rate of exchange used 
shall be that at which, in accordance with normal banking procedures, the 
Trustee or the relevant Bondholder, as the case may be, could purchase the 
Original Currency with the Other Currency on the Business Day preceding that 
on which final judgment is given or, if permitted by applicable laws, on the 
day on which such judgment 


<PAGE>

                                     -12-

is paid or satisfied.

          (2)  The obligations of the Corporation in respect of any sum due 
in the Original Currency from it hereunder or under a Bond shall, 
notwithstanding any judgment in any Other Currency, be discharged only to the 
extent that on the Business Day following receipt by the Trustee or the 
relevant Bondholder of any sum adjudged to be so due in such Other Currency, 
the Trustee or such Bondholder may, in accordance with normal banking 
procedures, purchase the Original Currency with such Other Currency.  If the 
amount of the Original Currency so purchased is less than the sum originally 
due to the Trustee or such Bondholder in the Original Currency, the 
Corporation shall, as a separate obligation and notwithstanding any such 
judgment, indemnify the Trustee or such Bondholder, against such loss, and if 
the amount of the Original Currency so purchased exceeds the sum originally 
due to the Trustee or such Bondholder in the Original Currency, the Trustee 
or such Bondholder shall remit such excess to the Corporation.

          SECTION 1.6.  APPLICABLE LAW.  This Indenture and the Bonds shall 
be governed by and interpreted and enforced in accordance with the laws of 
the Province of Ontario and the federal laws of Canada applicable therein.

<PAGE>

                                     -13-

                                   ARTICLE 2
                                   THE BONDS

          SECTION 2.1.  TERMS, FORM AND DENOMINATION OF BONDS.  (1) The Bonds 
authorized to be issued pursuant to this Indenture shall consist of and be 
limited to an aggregate principal amount of U.S. $50 Million and shall be 
designated as the "U.S. $50 MILLION 15% DEMAND BONDS".

          (2)  The Bonds shall (i) be dated their issue date, (ii) be due and 
payable on demand, and (iii) bear interest (both before and after demand and 
judgment) from and including their issue date to but excluding the date of 
their payment in full at the rate of 15% per annum (including, in case of 
default, interest at the same rate on all amounts overdue payable on demand) 
calculated and compounded monthly in arrears from the issue date, and shall 
be paid in arrears on the last Business Day of each month beginning January 
of 1999.

          (3)  The Bonds shall (i) be issuable in registered form in integral 
multiples of U.S. $1 Million, (ii) be substantially in the form set out in 
Article 13 with appropriate insertions, and (iii) bear such distinguishing 
letters and numbers as the Trustee approves.

          (4)  Subject to this Indenture, all Bonds shall rank PARI PASSU 
among themselves and shall be secured equally and rateably.

          SECTION 2.2.  ISSUE OF BONDS.  (1) Bonds in the aggregate principal 
amount of U.S. $50 Million, in definitive form, are hereby created and may 
immediately be executed by the Corporation, certified by or on behalf of the 
Trustee and delivered by it to or upon the order of the Corporation.

          (2)  No Bond shall be issued, unless and until the Corporation and 
the Bondholder to whom the Bond is to be issued have certified to the Trustee 
as follows:

               (i)    the Bondholder is a Hedging Counterparty; and

               (ii)   upon issuance, the Bond will be pledged to the Bondholder
               pursuant to a Pledge Agreement to be held as security only for
               the obligations of the Corporation or its affiliates to the
               Bondholder pursuant to Eligible Hedging Indebtedness.

          (3)  A Bond shall only be obligatory or entitle the Bondholder to 
any benefit if, and to the extent, that such Bond is pledged to secure 
Eligible Hedging Indebtedness.

          (4)  Each of the Bondholders acknowledges that the indebtedness 
owed to a Hedging Counterparty is separate and unrelated to the indebtedness 
owed to any other Hedging Counterparty.  In the event that the Security, to 
the extent it secures any indebtedness to a Hedging Counterparty or any Bond 
pledged to such Hedging

<PAGE>

                                 -14-

Counterparty to secure such indebtedness (the "Affected Security"), is for 
any reason subordinated to any security for any other indebtedness (the 
"Other Security"), to which the Security, to the extent it secures Hedging 
Indebtedness to other Hedging Counterparties or the Bond pledged to such 
other Hedging Counterparties, (the "Unaffected Security") is not 
subordinated, then, notwithstanding subsection 2.1(4) or Section 4.2, the 
priority of the Unaffected Security shall not be affected and the Unaffected 
Security shall maintain its priority over the Other Security, and the holders 
of the Unaffected Security shall be entitled to participate in a distribution 
as if the Affected Security had not been subordinated.

          (5)  Except for the Bonds issued or to be issued to Bankers Trust 
Company, Macquarie Bank Limited and The Bank of Nova Scotia on or about the 
date hereof, no Bond shall be issued, or, if issued, shall be obligatory, 
unless the Trustee shall have received either (i) the consent of the existing 
Bondholders to such issuance expressed by way of Extraordinary Resolution; or 
(ii) each of the following:

(i)       an acknowledgment of the trustee under the Subordinated Indenture,
          substantially in the form of the acknowledgment received by the
          Trustee and Bankers Trust Company, Macquarie Bank Limited and The Bank
          of Nova Scotia on or about the date hereof;

(ii)      an opinion of Counsel that new Bonds will rank equally and rateably
          with the existing Bonds and will not prejudice the priority of the
          existing Bonds; and

(iii)     a certificate of The Bank of Nova Scotia or an opinion of counsel
          providing evidence that the principal amount of the Bonds outstanding
          after the issuance will not exceed U.S. $50 million less 150% of The
          Bank of Nova Scotia cash collateral.

          SECTION 2.3.  SIGNING OF BONDS.  The Bonds shall be under the 
corporate seal of the Corporation and shall be signed in the name and on 
behalf of the Corporation by any one of the Chairman or the President or the 
Chief Financial Officer, together with any one of the Secretary or any 
Assistant Secretary of the Corporation.  Notwithstanding that any of the 
individuals whose signature appears on any Bond as one of such officers may 
no longer hold office at the date of this Indenture, the date of the Bond or 
the date of certification and delivery, any Bond signed as aforesaid shall be 
valid and binding upon the Corporation.

          SECTION 2.4.  CERTIFICATION.  (1) No Bond shall be issued, or, if 
issued, shall be obligatory or entitle the Bondholder to any benefit, until 
it has been certified by or on behalf of the Trustee substantially in the 
form of the certificate set out in Article 13, or in some other form approved 
by the Trustee, and such certification by the Trustee upon any Bond shall be 
conclusive evidence as against the Corporation that the Bond so certified has 
been duly issued and is a valid obligation of the Corporation.

          (2)  The certificate of the Trustee on the Bonds shall not be
construed as a representation or warranty by the Trustee as to the validity of
this Indenture or of the Bonds (except the due certification and any other
warranties implied by law) and the Trustee shall not, in any respect, be liable
or answerable for the use made of the Bonds or any of them or of the proceeds of
the Bond.

<PAGE>

                                 -15-

          SECTION 2.5.  REPLACEMENT OF BONDS.  (1) If any of the Bonds are 
mutilated, defaced, lost, destroyed or stolen, the Corporation, subject to 
applicable law, shall issue and the Trustee, at its principal office in 
Toronto, Ontario or its principal office in Vancouver, British Columbia, 
shall certify and deliver a new Bond of like date and tenor as the one 
mutilated, defaced, lost, destroyed or stolen in exchange for, and in place 
of, and upon cancellation of, the mutilated or defaced Bond and in lieu of, 
and in substitution for, the lost, destroyed or stolen Bond.  The new Bond 
shall be entitled to the Security and rank equally in accordance with its 
terms with all other Bonds issued under this Indenture.

          (2)  The applicant for the issue of a new Bond pursuant to this 
Section 2.5 shall bear the cost of issue and, in the case of loss, 
destruction or theft shall, as a condition precedent to the issue, furnish 
the Corporation and the Trustee with such evidence of ownership and of the 
loss, destruction or theft as shall be satisfactory to the Corporation and 
the Trustee in their discretion.  The applicant may also be required to 
furnish an indemnity and surety bond in amount and form satisfactory to the 
Corporation and the Trustee in their discretion, and shall pay the reasonable 
charges of the Corporation and the Trustee.

          SECTION 2.6.  OWNERSHIP OF BONDS.  (1) A Bondholder may not 
transfer a Bond.

          (2)  Unless otherwise required by law, the Corporation and the 
Trustee may deem and treat the Bondholder of any Bond as the person entitled 
to the benefit thereof and neither the Corporation nor the Trustee shall be 
affected by any notice to the contrary, and payment of, or on account of the 
principal of, or any interest on, any Bond shall be made only to or upon the 
order in writing of the registered Bondholder.

          (3)  The Bondholder of any Bond shall be entitled to the principal 
or interest, or both, evidenced by the Bond, free from all equities or rights 
of set-off or counterclaim between the Corporation and the original or any 
intermediate Bondholder and all Persons may act accordingly.  The receipt of 
any Bondholder for any principal or interest shall be a good discharge to the 
Corporation and the Trustee for the same and neither the Corporation nor the 
Trustee shall be bound to inquire into the title of any Bondholder.

          SECTION 2.7.  PAYMENT OF PRINCIPAL AND INTEREST.  (1) The principal 
of the Bonds will be payable at the principal office of the Trustee in 
Vancouver, British Columbia on the Business Day after demand for payment has 
been made by a Bondholder.

          (2)  Interest accrued on the principal amount of any Bond, and 
interest on overdue interest, will be paid by the Corporation directly to the 
Bondholder of such Bond.  Upon request, the Corporation shall provide to the 
Trustee written confirmation of any amounts so paid.

          (3)  Interest shall be calculated at the rate mentioned in Section 
2.1(2) on the basis of the number of days elapsed in the year (which shall 
consist of three hundred and sixty-five (365) or three hundred and sixty-six 
(366) days, as the case may be).

<PAGE>

                                 -16-

          (4)  If the day on which interest on the Bonds falls due is not a 
Business Day, a Bondholder shall not be entitled to payment until the next 
following Business Day or to any interest or other sums in respect of the 
postponed payment.

          SECTION 2.8.  TAXES AND OTHER TAXES.  (1) All payments to a 
Bondholder under the Bond shall be made free and clear of and without 
deduction or withholding for any and all taxes, levies, imposts, deductions, 
charges or withholdings and all related liabilities (all such taxes, levies, 
imposts, deductions, charges, withholdings and liabilities being referred to 
as "Taxes") imposed by Canada (or any political subdivision or taxing 
authority of it), unless such Taxes are required by applicable Law to be 
deducted or withheld.  If the Corporation shall be required by applicable Law 
to deduct or withhold any such Taxes from or in respect of any amount payable 
under any Bond except, as provided in the next sentence, (i) the amount 
payable shall be increased (and for greater certainty, in the case of 
interest, the amount of interest shall be increased) as may be necessary so 
that after making all required deductions or withholdings (including 
deductions or withholdings applicable to any additional amounts paid under 
this Section 2.8), the Bondholder receives an amount equal to the amount it 
would have received if no such deduction or withholding had been made, (ii) 
the Corporation shall make such deductions or withholdings, and (iii) the 
Corporation shall immediately pay the full amount deducted or withheld to the 
relevant governmental entity in accordance with applicable Law.  The 
Corporation will not be required to pay any such additional amounts to any 
Bondholder by reason of that Bondholder being connected with Canada otherwise 
than merely by lending money to the Corporation pursuant to this Indenture.

          (2)  The Corporation agrees to immediately pay any present or 
future stamp or documentary taxes or any other excise or property taxes, 
charges, financial institutions duties, debits taxes or similar levies (all 
such taxes, charges, duties and levies being referred to as "Other Taxes") 
which arise from any payment made by the Corporation under any of the Bonds 
or from the execution, delivery or registration of, or otherwise with respect 
to, this Indenture or any of the Bonds.

          (3)  The Corporation shall indemnify the Bondholder for the full 
amount of Taxes or Other Taxes (including, without limitation, any Taxes or 
Other Taxes imposed by any jurisdiction on amounts payable by the Corporation 
under this Section 2.8) paid by the Bondholder and any liability (including 
penalties, interest and expenses) arising from or with respect to such Taxes 
or Other Taxes, whether or not they were correctly or legally asserted, 
excluding, in the case of any Bondholder, taxes imposed on its net income or 
capital taxes or receipts and franchise taxes.  The Corporation will not be 
required to indemnify a Bondholder for any Taxes or Other Taxes imposed by 
reason of a Bondholder being connected with Canada otherwise than merely by 
lending money to the Corporation pursuant to this Indenture.  Payment under 
this indemnification shall be made within 30 days from the date the 
Bondholder makes written demand for it.  A certificate as to the amount of 
such Taxes or Other Taxes submitted to the Corporation by the Bondholder 
shall be conclusive evidence, absent manifest error, of the amount due from 
the Corporation to the Bondholder, as the case may be.

          (4)  The Corporation shall furnish to the Bondholder the original 
or a certified copy of a receipt evidencing payment of Taxes or Other Taxes 
made by the Corporation within 30 days after the date of any payment of Taxes 
or Other Taxes.

<PAGE>

                                 -17-

          (5)  The provisions of this Section 2.8 shall survive the 
termination of the Indenture and the repayment of all amounts secured by this 
Indenture.

          SECTION 2.9.  EXCHANGE OF BONDS. (1) Bonds may be exchanged for 
other Bonds of the same aggregate outstanding principal amount as the Bonds 
so exchanged.

          (2)  Bonds may be exchanged only at the principal office of the 
Trustee in Toronto, Ontario or the principal office of the Trustee in 
Vancouver, British Columbia or at such other place or places (if any) as may 
from time to time be designated by the Corporation with the approval of the 
Trustee.  Any Bond tendered for exchange shall be surrendered to the Trustee. 
 The Corporation shall execute and the Trustee shall certify all Bonds 
necessary to carry out exchanges as aforesaid.  All Bonds surrendered for 
exchange shall be cancelled.

          (3)  The Corporation and a Bondholder may agree to reduce the 
principal amount of a Bond held by such Bondholder (without payment thereon) 
and the Trustee shall adjust the Bond and its records accordingly.

          (4)  The Trustee shall not charge a Bondholder for its services in 
connection with any transfer, exchange or adjustment of a Bond.  Payment of 
any applicable stamp or transfer tax or other governmental charge shall be 
made by the party requesting such exchange, transfer or adjustment as a 
condition precedent.

          SECTION 2.10.  REGISTRATION. (1) The Corporation shall cause to be 
kept by and at the principal office of the Trustee in Toronto, Ontario or in 
Vancouver, British Columbia a register in which shall be entered the names 
and addresses of Bondholders and particulars of the Bonds held by each of 
them. Such registration shall be noted on the Bonds by the Trustee or a new 
Bond shall have been issued by the Trustee.

          (2)  No transfer of a Bond shall be valid unless made on the 
register by the registered holder, its legal representatives or its attorney 
duly appointed by an instrument in writing in form and execution satisfactory 
to the Trustee, in compliance with such reasonable requirements as the 
Trustee may prescribe, and such transfer shall have been noted on such Bond 
by the Trustee or a new Bond shall have been issued by the Trustee.

          (3)  The transferee of a Bond shall, after the Bond together with 
any necessary endorsement on it or on any appropriate form of transfer is 
lodged with the Trustee, accompanied by a written designation, in form 
reasonably satisfactory to the Trustee, of the telecopy number or mailing 
address of the transferee and upon compliance with all other conditions in 
that behalf required by this Indenture or by law, be entitled to be entered 
on the register as the owner of such Bond.

          (4)  The register maintained pursuant to this Section 2.10 shall at 
all reasonable times be open for inspection by the Corporation, the Trustee 
or any Bondholder.

<PAGE>

                                     -18-

                                   ARTICLE 3
                              REPLEDGING OF BONDS

          SECTION 3.1.  REPLEDGING OF BONDS.  Bonds issued by the Corporation 
hereunder and acquired by the Corporation upon the release of a pledge may be 
cancelled or may be repledged to a Hedging Counterparty pursuant to a Pledge 
Agreement to secure Eligible Hedging Indebtedness of the Corporation 
provided, in any event, that the requirements of this Indenture are met.

          SECTION 3.2.  OUTSTANDING.  For purposes of determining whether a 
Bond can be issued within the limit set out in Section 2.1(1) hereof, (i) 
where the principal amount of a Bond has been reduced pursuant to Section 
2.9(3), only the reduced principal amount shall be taken into account; and 
(ii) the principal amount of a Bond which has been acquired by the 
Corporation upon the release of a pledge shall not be taken into account 
against the limit set out in Section 2.1(1) hereof, unless and until such 
Bond is repledged.

<PAGE>

                                     -19-

                                    ARTICLE 4
                                    SECURITY

          SECTION 4.1.  SECURITY.  As security for the due and punctual payment
and performance of all of its obligations to the Trustee and the Bondholders
under and in respect of this Indenture and the Bonds, the Corporation and its
Subsidiaries, as applicable, shall execute and deliver to the Trustee in each
case for the benefit of the Trustee and the Bondholders and in form and
substance satisfactory to the Trustee, valid and enforceable Liens against all
present and after acquired property, assets and undertaking of the Corporation
and the Restricted Subsidiary, except the Excluded Assets, all In Agreed Form,
including without limitation, the following:

(i)       a secured debenture by the Corporation creating a fixed and floating
          Lien on all of the Corporation's present and after acquired property,
          assets and undertaking including, without limitation, fixed and
          specific Liens on all property, assets and undertaking comprising the
          Kemess Mine, and assignments of the Corporation's interests in all
          material mining claims, concessions and leases in any way relating to
          the Kemess Mine;

(ii)      a general security agreement by the Corporation creating a Lien on all
          of the Corporation's present and after acquired property, assets and
          undertaking;

(iii)     a limited guarantee by APM of the obligations of the Corporation
          hereunder to the Bondholders;

(iv)      a general security agreement by APM creating a Lien on all of APM's
          present and after acquired property, assets and undertaking;

(v)       an assignment by the Corporation of its rights and interests in its
          right to receive distributions from the Kemess South Resources Limited
          Partnership;

(vi)      an assignment by the Corporation of its rights and interests in the
          Hydro contracts relative to the Kemess Mine;

(vii)     a pledge of all the shares in the capital of APM held by the
          Corporation;

(viii)    a moveable hypothec in form suitable for registration in Quebec; and

(ix)      such other agreements and documents as may be necessary or desirable
          to grant to the Trustee or the Collateral Agent valid and enforceable
          Liens on all of the property, assets and undertaking of the
          Corporation other than the Excluded Assets.

Notwithstanding anything to the contrary contained in the foregoing, the
Corporation shall not be obligated to register the Liens against any real
property or mineral claims consisting of:  (a) the Pamour Mine, the Nighthawk
Lake Mine and the mines generally 


<PAGE>

                                     -20-

known as Giant, HopeBrook and Colomac; and (b) the Corporation's currently 
existing exploration properties not in any way related to the Kemess Mine.  
The Corporation shall register Liens against the Pamour Mine and the 
Nighthawk Lake Mine in favour of the Trustee In Agreed Form should the 
Corporation grant or register Liens against (either or both) such mines in 
favour of the Senior Bondholders.  The Corporation shall ensure that all of 
the Security Documents are executed and delivered in accordance with this 
Section 4.1 such that the Liens created thereby are perfected in all 
jurisdictions and at all times required to maintain such perfection by the 
Trustee for the benefit of the Bondholders.

          SECTION 4.2.  EFFECT OF LIENS.  The Trustee shall have and hold the 
Security Documents and the Collateral and all rights hereby and thereby 
conferred unto the Trustee and its successors and assigns forever, but in 
trust, nevertheless, for the equal benefit and security of the Bondholders 
(subject to Section 2.2(4) hereof) without any preference or priority between 
them, subject to this Indenture, and with the powers and authorities and 
subject to the terms and conditions set forth in this Indenture and in the 
Security Documents.  The Corporation shall furnish to the Trustee, promptly 
after the execution and delivery of the Security Documents and promptly after 
the execution and delivery of any amendment hereto or thereto or any 
instrument of further assurance, an opinion of Counsel stating that, in the 
opinion of such Counsel, subject to customary exclusions and exceptions 
reasonably acceptable to the Trustee, either (i) the Security Documents, any 
such amendment and all other instruments of further assurance have been 
properly recorded, registered and filed and all such other action has been 
taken to the extent necessary to make effective the Liens intended to be 
created by the Security Documents and to perfect such Liens, and reciting the 
details of such action or referring to prior opinions of Counsel in which 
such details are given, or (ii) no such action is necessary to make the Liens 
intended to be created by the Security Documents effective.

          SECTION 4.3.  SECURITY EFFECTIVE NOTWITHSTANDING DATE OF ADVANCE.  
The Security shall be effective whether the moneys secured by this Indenture 
are advanced before or after or at the same time as the issue of any of the 
Bonds intended to be secured or before or after or upon the date of the 
execution of this Indenture.

          SECTION 4.4.  TITLE TO COLLATERAL.  The Corporation covenants with 
the Trustee and the Bondholders that (i) it lawfully owns and is lawfully 
possessed of that part of the Collateral described as the Kemess Mine and, 
except for Permitted Liens, will lawfully own and be lawfully possessed of 
all other property hereafter subjected to the Security, (ii) it has good 
right and lawful authority to mortgage, pledge, charge and grant a security 
interest in the same, (iii) such property is and will remain free and clear 
of any Lien except Permitted Liens, and (iv) it will warrant and defend its 
title to such property against the claims and demands of all Persons.

          SECTION 4.5.  FURTHER ASSURANCES.  The Corporation covenants with 
the Trustee that:
     
(a)       it shall from time to time execute all such assurances and do all 
such things as, in the opinion of Counsel, are necessary or of advantage for 
validly giving to the Trustee (so far as may be possible under applicable 
laws) the specific mortgage, pledge and charge intended to be created 
pursuant to the Security upon the Collateral, whether 


<PAGE>

                                     -21-

now owned or hereafter acquired by the Corporation; and

(b)       it shall from time to time, after the Security has become 
enforceable and the Trustee has determined or become bound to enforce it, 
execute and give all such assurances and do all things as the Trustee may 
reasonably require for facilitating the realization of the Collateral and for 
exercising all the powers, authorities and discretions conferred upon the 
Trustee and for confirming to any purchaser of any of the Collateral, whether 
sold by the Trustee or by judicial proceedings, title to the assets so sold.

          SECTION 4.6.  REGISTRATION.  The Corporation covenants with the 
Trustee that:

(a)       immediately after the execution of the Security Documents and each 
supplemental instrument, the Corporation shall register, file or record the 
same (or a deed in notarial form or a financing statement or such other 
document as may be appropriate under applicable law) in all offices where 
such registration, filing or recording is necessary or of advantage to 
perfect the Security created or intended so to be and the Corporation shall 
deliver to the Trustee certificates establishing each such registration, 
filing or recording, and shall do, observe and perform all matters and things 
necessary or expedient to be done, observed and performed for the purpose of 
creating and maintaining the Security as valid and effective security;

(b)       notwithstanding anything contained in Section 4.6(a), but subject 
to the last paragraph of Section 4.1, the Corporation shall not be required 
to register or record the Security Documents or any other instrument against 
the title to any real or immoveable property of the Corporation or in which 
the Corporation has any interest other than the Kemess Mine unless the 
Trustee (upon the request of Bondholders holding a majority in the principal 
amount of the Bonds) shall so request, in which event, and provided that the 
Corporation has first registered or recorded Liens in favour of the Senior 
Bondholders, the Corporation (so far as may be possible under the local laws 
of the places where the real or immoveable property is situate) shall 
immediately register or record the Security Documents and any supplemental 
instrument which may be required for such purpose, against the title to the 
real or immoveable property in respect of which the request has been made;

(c)       the Corporation shall not register, record or file the security in 
favour of the Subordinated Noteholders in any office, or against the title to 
any real or immovable property, or register any financing statement in 
respect of the security in favour of the Subordinated Noteholders, or consent 
to any of such actions, unless the Corporation has registered the Security 
Documents in priority to the security in favour of the Subordinated 
Noteholders; and

(d)       the Corporation shall, within five Business Days of the 
registration, recordation or filing of any security in favour of the Senior 
Bondholders, notify the Trustee of the particulars of any such registration, 
recordation or filing.

          SECTION 4.7.  RELEASE FROM CHARGE.  Until the Security has become 
enforceable and the Trustee has determined or become bound to enforce the 
same, the 

<PAGE>

                                     -22-

Trustee shall upon the Request of the Corporation execute and deliver to the 
Corporation such documents as, in the opinion of Counsel, may be necessary or 
desirable to release from the Security any lands, buildings, plant, machinery 
or equipment, whether moveable or immoveable, licenses or rights, or any 
interest therein, or any other property or assets sold or disposed of by the 
Corporation in accordance with Section 4.11(b), (c), (d) or (e) without 
payment to the Trustee of any proceeds.  Any Request of the Corporation shall 
be accompanied by a Certificate of the Corporation evidencing that the sale 
or disposition is not in breach of any provision of this Indenture.

          SECTION 4.8.  APPLICATION OF INSURANCE PROCEEDS.  The Corporation 
shall, from time to time until payment in full of the Bonds and the 
satisfaction and discharge of this Indenture, within 10 days following the 
receipt by the Corporation of any payment of proceeds of any insurance 
required to be maintained pursuant to Section 5.3 on account of each separate 
loss, damage or injury to any tangible property subject to the Security 
(unless such proceeds (or an equivalent amount) have been (i) expended or 
committed by the Corporation for the repair or replacement of the damaged 
property, with the prior written consent of the Trustee, and the Corporation 
has furnished to the Trustee evidence satisfactory to the Trustee of the 
expenditure or commitment, or (ii) paid to or for the benefit of the Senior 
Bondholders or any other holder of a Permitted Lien in the damaged or lost 
property ranking prior to the Security) apply, or to the extent the Trustee 
is loss payee under any insurance policy, irrevocably direct the Trustee to 
apply, without premium or penalty, the proceeds to the payment of principal 
or interest, or both, under the Bonds in the Trustee's sole discretion.  No 
consent of the Trustee shall be required for the application by the 
Corporation of insurance proceeds to the repair or replacement of property 
unless (i) the aggregate amount of insurance proceeds on account of loss, 
damage or injury in any twelve-month period exceed Can. $5,000,000, or (ii) 
an Event of Default (or any circumstance exists which, with the giving of 
notice, the lapse of time, or both, would constitute an Event of Default) has 
occurred and is continuing.

          SECTION 4.9.  EXPROPRIATION.  In the event of any expropriation or 
similar taking of any part of the Collateral or of any sale or conveyance by 
the Corporation in lieu of an expropriation or similar taking and in 
reasonable anticipation of such event, the Trustee may release the property 
so taken, sold or conveyed upon the deposit with the Trustee of a sum equal 
to (i) the net proceeds of, or compensation for, the expropriation or similar 
taking, or (ii) in case of a sale or conveyance in lieu of and in reasonable 
anticipation of such taking, the greater of (y) the net proceeds of the sale 
of the property to be released, or (z) the fair market value of the property 
as appraised by an independent appraiser acceptable to the Trustee.  For 
purposes hereof "net proceeds" shall mean proceeds after costs of disposition 
and payments to the Senior Bondholders and any other holder of a Permitted 
Lien in the subject property ranking prior to the Security.  The Trustee 
shall be fully protected in giving a release upon being furnished with an 
opinion of Counsel to the effect that the property has been lawfully 
expropriated or taken or, in the case of an anticipatory sale or conveyance, 
sold or conveyed as aforesaid, and in case of any anticipatory sale or 
conveyance, upon being furnished with a Certified Resolution stating that, in 
the opinion of the Directors, such sale or conveyance was in lieu of and in 
reasonable anticipation of expropriation or similar taking and was in the 
best interests of the Corporation.  In any proceedings for the taking of any 
part of the Collateral by expropriation or similar taking the Trustee may be 
represented by Counsel.

<PAGE>

                                     -23-


          SECTION 4.10.  PRIORITY OF LIENS.  Notwithstanding the time of 
grant of Liens, or the time of registering, filing or recording the same (or 
a notice or financing statement in respect thereof) (i) the Liens and 
beneficial rights of each of the Senior Bondholders in the assets and 
properties of the Corporation and its Restricted Subsidiaries and the 
proceeds thereof shall be senior and prior to the Liens and beneficial rights 
of the Trustee and any Bondholder therein, and (ii) the Liens and beneficial 
rights of the Trustee and any Bondholder in the assets and properties of the 
Corporation and its Restricted Subsidiaries shall be and are hereby 
subordinated and postponed to the Liens and beneficial rights of each of the 
Senior Bondholders therein.  Each Bondholder, by its acceptance of Bonds 
issued hereunder, authorizes and expressly directs the Trustee on its behalf 
to take such action as may be necessary or appropriate to effectuate, as 
between the Senior Bondholders and the Bondholders, the aforesaid 
subordination and postponement of the Liens and beneficial rights of the 
Trustee and any Bondholder therein, and appoints the Trustee its 
attorney-in-fact for such purposes.

          SECTION 4.11.  DISPOSITION OF ASSETS.  The Corporation shall not 
and shall not permit any of its Restricted Subsidiaries to consummate any 
sale, lease, consignment or other disposition (collectively a "Sale") of 
assets or property other than:

(a)       Any Sale of properties or assets of the Corporation or a Restricted 
Subsidiary to a direct or indirect wholly-owned Restricted Subsidiary of the 
Corporation;

(b)       (i) any Sale of machinery, equipment, other personal property or 
other similar property that has become worn out, obsolete or unserviceable; 
(ii) any Sale or abandonment of any personal property the use of which is no 
longer necessary or desirable in or material to the conduct of the business 
of the Corporation and its Restricted Subsidiaries; (iii) any Sale of any 
real property or an interest therein which is undeveloped and held by the 
Corporation or a Restricted Subsidiary for exploration purposes and is not 
material to the conduct of the business of the Corporation and its Restricted 
Subsidiaries; and (iv) any Sale of any assets and properties of the 
Corporation or a Restricted Subsidiary, other than assets and properties 
described in clauses (i), (ii) and (iii) above, and other than assets which 
comprise or are in any way material to the Kemess South Mine, if the proceeds 
from all such Sales in aggregate do not exceed U.S. $15,000,000 in any 
calendar year;

(c)       any Sale of the Proposed Leaseback Assets in connection with a 
sale-leaseback transaction;

(d)       any Sale of inventory of the ordinary course of business; and

(e)       any Sale of properties or assets not described in Sections 4.14 
(a), (b), (c) or (d) above, provided that the Corporation obtains the prior 
written consent of the Bondholders expressed by Extraordinary Resolution of 
any such Sale.

          SECTION 4.12.  ROYALTY INTEREST.  The Corporation shall not, 
without the prior written consent of the Trustee, amend the Royalty Agreement 
so as to increase the Initial Royalty Rate (as described therein) or amend 
Section 2.2 and 7.2(c) thereof.

<PAGE>

                                     -24-

          SECTION 4.13.  RESTRICTED PAYMENTS.  The Corporation and its 
Subsidiaries shall not, directly or indirectly, pay principal, interest, fees 
or any other amount in respect of any Debt of the Corporation or a Subsidiary 
other than on account of the Senior Indentures, the Eligible Hedging 
Indebtedness or other Debt secured by Liens ranking prior to the Security on 
liquidation, provided that if no Event of Default has occurred and is 
continuing, the foregoing shall not prohibit the Corporation, or a Restricted 
Subsidiary, from (i) paying interest on the Subordinated Notes in accordance 
with the terms and conditions contained in the Subordinated Indenture, (ii) 
paying amounts due and payable in the ordinary course in respect of other 
Debt other than Debt under the Subordinated Indenture; or (iii) in the case 
of a Restricted Subsidiary, from making payment to the Corporation or another 
Restricted Subsidiary.  The Corporation will not establish, designate or 
allow to exist a Restricted Subsidiary unless the property and undertaking of 
such Restricted Subsidiary is charged in favour of the Trustee with security 
with the same or better priority as the charges granted by the Corporation to 
the Trustee.

          SECTION 4.14.  SECURITY.  Each Bondholder, by its acceptance of a 
Bond hereunder, represents and warrants that it does not hold security in 
respect of Eligible Hedging Indebtedness of the Corporation or of a 
Restricted Subsidiary other than (i) pursuant to or in connection with the 
Bond or Bonds pledged to such Bondholder, this Indenture and the Security, 
and any other security which may now or hereafter be granted hereunder; and 
(ii) in the case of The Bank of Nova Scotia, cash collateral which does not 
and will not exceed U.S. $3,000,000.

          SECTION 4.15.  CONFLICTS.  In the event of any conflict or
inconsistency between a provision of this Indenture and a provision of the
Security Documents, the provision of this Indenture shall prevail.

<PAGE>

                                     -25-

                                   ARTICLE 5
                         COVENANTS OF THE CORPORATION

          SECTION 5.1.  PAYMENT OF PRINCIPAL AND INTEREST.  The Corporation 
covenants that it will punctually pay or cause to be paid the principal of 
and interest on each of the Bonds at the place, at the respective times and 
in the manner provided in this Indenture and in the Bonds.

          SECTION 5.2.  TRUSTEE'S REMUNERATION AND EXPENSES.  The Corporation 
covenants that it will pay to the Trustee from time to time reasonable 
remuneration for its services and will pay or reimburse the Trustee upon its 
request for all reasonable expenses, disbursements and advances incurred or 
made by the Trustee in the administration or execution of these trusts 
(including the reasonable compensation and the disbursements of its Counsel 
and all other advisors and assistants not regularly in its employ), both 
before and after any Event of Default, until all duties of the Trustee shall 
be finally and fully performed and paid, except any such expense, 
disbursement or advance as may arise from the wilful misconduct or bad faith 
of the Trustee.  Any amount due under this Section 5.2 and unpaid 30 days 
after request for payment shall bear interest from the expiration of such 30 
days at a rate per annum equal to the prime rate from time to time reported 
by The Bank of Nova Scotia or its successor.  After the occurrence and during 
the continuance of an Event of Default, all amounts so payable and the 
interest on such amounts shall be payable out of any funds coming into the 
possession of the Trustee in priority to any payments on the Bonds.

          SECTION 5.3.  INSURANCE.  (1) The Corporation shall (i) keep all of 
its properties adequately insured against loss or damage by fire and other 
hazards, at all times with responsible insurance carriers, in amounts and on 
terms as are customary in the mining industry, (ii) maintain adequate 
insurance at all times with responsible insurance carriers, in amounts and on 
such terms as are customary in the mining industry against liability on 
account of damage to persons and property, and (iii) maintain adequate 
insurance covering such other risks as are customary in the mining industry.  
All insurance covering tangible property subject to the Security shall 
provide that, in the case of each separate loss, the full amount of insurance 
proceeds in excess of U.S. $500,000 shall be payable to the Trustee as 
secured party or otherwise as its interest may appear and subject to the 
rights of any prior encumbrancer, to be applied in accordance with Section 
4.8, and shall further (iv) provide for at least 30 days' prior written 
notice to the Trustee of its cancellation or substantial modification, (v) 
provide that, in respect of the interests of the Trustee, the insurance shall 
not be invalidated by any action or inaction of the Corporation or any other 
Person, (vi) insure the Trustee's interests regardless of any breach of or 
violation by the Corporation or any other person of any warranties, 
declarations, or conditions contained in the insurance, and (vii) provide 
that the Trustee shall have the right (but not the obligation) to cure any 
default by the Corporation under the insurance.  Each liability policy 
required pursuant to this Section 5.3 shall name the Trustee as an additional 
insured and shall be primary without right of contribution from any other 
insurance which is carried by the Trustee to the extent that the other 
insurance provides it with contingent or excess liability insurance, or both, 
with respect to its interest in the Collateral and shall expressly provide 
that all of its provisions, except the limits of liability (which shall be 
applicable to all insureds as a group) and except liability 


<PAGE>

                                     -26-

for premiums (which shall be solely a liability of the Corporation), shall 
operate in the same manner as if there were a separate policy covering each 
insured.

          (2)  The Corporation shall, from time to time upon request by the 
Trustee, promptly furnish or cause to be furnished to the Trustee evidence, 
in form and substance satisfactory to the Trustee, of the maintenance of all 
insurance required to be maintained by Section 5.3(1), including, but not 
limited to, originals or copies as the Trustee may request of policies, 
certificates of insurance, riders and endorsements relating to such insurance 
and proof of premium payments.

          SECTION 5.4.  REORGANIZATION.  Except as set forth herein, the 
Corporation shall not dispose of any interest in the Kemess Mine or the right 
to the production or income thereof.  The Corporation may transfer Kemess 
Mine to Kemess Newco on the terms set out herein.  If the Corporation 
proposes to transfer all or a material interest in the Kemess Mine and the 
rights and benefits associated therewith to Kemess Newco, the Corporation 
shall, prior to, or contemporaneously with, any such transfer(s), cause 
Kemess Newco to assume and guarantee to the Trustee on behalf of the 
Bondholders all of the Corporation's obligations, liabilities and 
indebtedness under or pursuant to the Indenture and the Bonds, pledge 
(subject to the prior Liens held by the Senior Bondholders) to the Trustee on 
behalf of the Bondholders all of the Corporation's shares in the capital of 
Kemess Newco and any debt, equity or other consideration received by the 
Corporation in respect of such transfer, provide to the Trustee on behalf of 
the Bondholders such additional security, agreements and assurances 
(including a confirmation from the Trustee under the Subordinated Indenture 
that any acknowledgment of subordination and postponement will continue to 
apply after such transfer) as it may reasonably request to ensure that the 
Liens in favour of the Trustee on such assets are valid, enforceable and 
prior ranking to all other Liens, claims and interests in such assets except 
for such Liens as are held by the Senior Bondholders or as ranked prior to 
the Security immediately prior to the disposition, and obtain and deliver an 
opinion of counsel as to the enforceability of the Kemess Newco Guarantee and 
Assumption and validity and perfection of the Kemess Newco Liens and such 
other consents, certificates and authorizations as the Trustee, on the advice 
of Counsel, may require in connection with the foregoing.

          SECTION 5.5.  LIMITATION ON LIENS.  The Corporation shall not, and 
shall not cause or permit any of its Restricted Subsidiaries to, directly or 
indirectly, create, incur, assume or permit or suffer to exist or remain in 
effect any Liens (other than Permitted Liens) upon any properties or assets 
of the Corporation or of any of its Restricted Subsidiaries whether owned or 
hereafter acquired, or on any income or profits therefrom, or assign or 
otherwise convey any right to receive income or profits thereon.

          SECTION 5.6.  PERFORMANCE OF COVENANTS BY TRUSTEE.  If the 
Corporation fails to perform any of its covenants in this Indenture, the 
Trustee may itself perform any of the covenants capable of being performed by 
it, but shall be under no obligation to do so.  All sums so expended or 
advanced by the Trustee shall be repayable as provided in Section 5.2.  No 
such performance or advance by the Trustee shall be deemed to relieve the 
Corporation of any default. 


<PAGE>

                                     -27-

                                   ARTICLE 6 
                           DEFAULT AND ENFORCEMENT

          SECTION 6.1.  EVENTS OF DEFAULT.  The Security shall become 
enforceable in each and every of the following events (each of which is an 
"EVENT OF DEFAULT"):
     
(a)       if the Corporation fails to pay forthwith upon demand the principal 
or interest of any Bond;

(b)       if the Subordinated Indenture is amended in any way which purports 
to have the effect of prejudicing the priority of the Security, or any action 
is taken in furtherance of any such amendment;

(c)       if any registration, recordation or filing is effected in respect 
of the Subordinated Security, in respect of any asset or in any jurisdiction, 
and no such registration, recordation or filing has been made in priority to 
such in respect of the Security in favour of the Trustee hereunder;

(d)       if the Corporation fails to comply with its obligations under 
Section 5.4 or 5.5;

(e)       if the Corporation fails to observe or perform any other covenant 
or condition on its part to be observed or performed and, after notice in 
writing has been given by the Trustee to the Corporation specifying the 
default and requiring the Corporation to cure it, the Corporation fails to 
cure the default within a period of 30 days unless the Trustee has agreed to 
a longer period, (having regard to the subject matter of default) and in such 
event, within the period agreed to by the Trustee.

          SECTION 6.2.  ACCELERATION ON DEFAULT.  If any Event of Default 
shall occur and be continuing, the Trustee may, in its discretion, and shall, 
upon receipt of a Single Bondholders Request requiring it to do so, declare 
the principal of, and interest on, the Bonds and other monies secured by this 
Indenture to be due and payable and the same shall immediately become due and 
payable to the Trustee on demand (and without any further demand being 
required under any of the Bonds).  The Corporation shall on such demand 
immediately pay to the Trustee, for the benefit of the Bondholders, the 
principal of, and accrued and unpaid interest on, amounts in default, in each 
case in accordance with Article 2, on the Bonds and all other moneys secured 
by this Indenture, together with subsequent interest at the rates borne by 
the Bonds from the date of the declaration until payment is received by the 
Trustee, such subsequent interest to be payable at the times and places and 
in the moneys mentioned in and according to the tenor of the Bonds. Such 
payment when made shall be deemed to have been made in discharge of the 
Corporation's obligations under this Indenture and any moneys so received by 
the Trustee shall be applied in the same manner as if they were proceeds of 
realization of the Collateral.

          SECTION 6.3.  ENFORCEMENT BY TRUSTEE.  Whenever the Security has 
become enforceable and so long as the Security remains enforceable, but 
subject to the provisions of any Extraordinary Resolution:

<PAGE>

                                     -28-

(a)       the Trustee, in the exercise of its discretion, may proceed to 
realize the Security and enforce the rights of the Trustee and the 
Bondholders under the Security by entry as provided in Section 6.5; or by the 
appointment of a receiver or receiver and manager under the provisions of 
Section 6.6; or by sale under the provisions of Section 6.7; or by 
proceedings in any court of competent jurisdiction for the appointment of a 
receiver or receiver and manager or for sale of all or any part of the 
Collateral or for foreclosure; or by any other action, suit, remedy or 
proceedings authorized or permitted by this Indenture or by law or by equity; 
and may file such proofs of claim and other papers or documents as may be 
necessary or advisable in order to have the claims of the Trustee and the 
Bondholders lodged in any bankruptcy, winding-up or other judicial 
proceedings relative to the Corporation; and no such remedy for the 
realization of the Security or for the enforcement of the rights of the 
Trustee or the Bondholders shall be exclusive of or dependent on any other 
remedy but any one or more of the remedies may from time to time be exercised 
independently or in combination;

(b)       all rights of action may be enforced by the Trustee without the 
possession of any of the Bonds or their production at any trial or other 
related proceedings; and

(c)       upon receipt of a Unanimous Bondholders' Request and upon being 
indemnified and funded to its satisfaction as provided in Section 11.1, the 
Trustee shall exercise or take such one or more of the aforesaid remedies as 
the Unanimous Bondholders' Request may direct or, if such Unanimous 
Bondholders' Request contains no direction, as the Trustee may deem expedient.

          SECTION 6.4.  ENFORCEMENT BY BONDHOLDERS.  A Bondholder who has 
requested that the other Bondholders execute and deliver a Unanimous 
Bondholders Request, but has failed to obtain the consent of one or more of 
the other Bondholders may, acting for the benefit of itself and all the other 
Bondholders, take proceedings in any court of competent jurisdiction such as 
the Trustee might have taken under Section 6.3, but (subject to the foregoing 
right to take proceedings in a court of competent jurisdiction for the 
appointment of a receiver or receiver and manager or any other remedy) in no 
event shall a Bondholder or combination of Bondholders have any right to take 
or exercise any power of sale or appoint a receiver or receiver and manager 
or exercise or take any other remedy or proceedings out of court; it being 
understood and intended that no one or more Bondholders shall have any right 
in any manner whatsoever to affect, disturb or prejudice the Security by its 
or their action or enforce any right under this Indenture or under any Bond 
except subject to the conditions and in the manner herein provided, and that 
all powers and trusts shall be exercised and all proceedings at law which are 
instituted and maintained by the Trustee shall be instituted and maintained 
for the equal and rateable benefit of all Bondholders.

          SECTION 6.5.  ENTRY BY TRUSTEE.  Whenever the Security has become 
enforceable and so long as the Security remains enforceable, the Trustee 
shall have the right by its officers, agents or attorneys to enter into and 
upon and to take possession of all or any part of the Collateral and possess 
and use the same subject to the Security, with full power to carry on and 
manage the business operations of the Corporation to receive the rents, 
incomes and profits of such property and business, to pay all expenses of 

<PAGE>

                                     -29-

operating the property and of carrying on the business and all charges 
against the property and business ranking in priority to the Bonds or payment 
of which may be necessary to preserve or protect the property.  The remainder 
of the moneys so received and not required for any of the above purposes 
shall be applied by the Trustee in the manner provided in Section 6.10.  The 
foregoing is, however, subject to the condition that the Trustee shall, if 
all Events of Default existing to the knowledge of the Trustee have been 
cured, restore such property and business to the Corporation, and pay to it 
the remainder of the moneys so received after payment of all interest then 
due in accordance with Article 2 upon the Bonds. In case of any return of 
property to the Corporation, the Security shall no longer be or be deemed to 
be enforceable by reason of the Event of Default whereby the right of entry 
became vested in the Trustee, and any declaration that may have been made by 
the Trustee pursuant to Section 6.2 as a result of such Event of Default 
shall be cancelled.  Any part of the Collateral which has become subject to a 
fixed charge solely by reason of the crystallization of a floating charge 
shall be freed from the fixed charge, but shall subsequently be subject to 
the floating charge provided for in the Security, as fully and to the same 
extent as though no Event of Default had occurred.

          SECTION 6.6.  APPOINTMENT OF RECEIVER.  Whenever the Trustee 
determines under the applicable provisions of the Security and the provisions 
of Section 6.3 to appoint a receiver (which term shall include a receiver and 
manager) the following provisions shall apply:
     
(a)       the appointment shall be made by resolution of the board of 
directors of the Trustee or an executive committee of the Trustee and a copy 
of the resolution, certified by an officer of the Trustee under its corporate 
seal, shall be evidence for all purposes of such appointment; the Trustee may 
from time to time in the same manner remove any receiver so appointed and 
appoint another in its stead; in making any such appointment the Trustee 
shall be deemed to be acting as the attorney of the Corporation;

(b)       any appointment may be limited to a part or parts of the Collateral 
or may extend to the whole of the Collateral;

(c)       every receiver may, in the discretion of the Trustee, be vested 
with all or any of the powers and discretions of the Trustee;

(d)       the Trustee may from time to time fix the remuneration of every 
receiver and direct its payment out of the Collateral;

(e)       the Trustee may from time to time require any receiver to give 
security for the performance of its duties and may fix the nature and amount 
of such security, but shall not be bound to require such security;

(f)       every receiver may, with the consent in writing of the Trustee, 
borrow money for the purposes of carrying on the business of the Corporation 
or for the maintenance, protection or preservation of the Collateral, and the 
receiver may issue certificates (the "RECEIVER'S CERTIFICATES") for such sums 
as will, in the opinion of the Trustee, be sufficient for obtaining, upon the 
security of the Collateral, the amounts from time to time required; the 
Receiver's Certificates may be payable either to order or to 


<PAGE>

                                     -30-

bearer and may be payable at such time or times as to the Trustee may appear 
expedient, and shall bear interest as therein provided; the receiver may 
sell, pledge or otherwise dispose of the same in such manner as to the 
Trustee may seem advisable, and may pay a reasonable commission on a sale; 
the amounts from time to time payable pursuant to the Receiver's Certificates 
shall form a charge upon the Collateral in priority to the Bonds;

(g)       every receiver shall, so far as concerns responsibility for its 
acts or omissions, be deemed to be the agent of the Corporation, and in no 
event the agent of the Trustee, and the Trustee shall not, in making or 
consenting to such appointment, incur any liability to the receiver for its 
remuneration or otherwise;

(h)       except as may be otherwise directed by the Trustee, all moneys from 
time to time received by a receiver shall be paid over to the Trustee to be 
held by it on the trusts of these presents; and

(i)       the Trustee may pay to a receiver any moneys constituting part of 
the Collateral to be applied for the purposes of this Indenture, and the 
Trustee may from time to time determine what funds the receiver may keep in 
hand with a view to the performance of its duty as a receiver.

          SECTION 6.7.  SALE BY TRUSTEE.  If the Trustee decides to realize 
on the Security by sale, the Trustee shall have the right with or without 
entry to sell and dispose of all or any part of the Collateral en bloc or in 
parcels, at public auction or by tender or by private contract and at such 
time or times and on such terms and conditions, which shall, at the Trustees 
option, include, in case of sale by auction or tender, a reasonable reserve 
bid, as the Trustee shall determine.  The Trustee may make any such sale, 
whether by auction, tender or private contract, either for cash or upon 
credit or partly for one and partly for the other, upon such reasonable 
conditions as to terms of payment as it may deem proper; it may also rescind 
or vary any contract of sale that may have been entered into and resell with 
or under any of the powers conferred herein; it may also stop, suspend or 
adjourn any sale from time to time and hold the sale as adjourned without 
further notice; also deliver to the purchaser or purchasers of all or any 
part the Collateral a good and sufficient deed or deeds for the same.

          SECTION 6.8.  APPLYING BONDS IN PAYMENT.  Upon any sale of all or 
any part of the Collateral, whether made under power of sale or pursuant to 
foreclosure or other judicial proceedings, the Trustee or any one or more of 
the Bondholders or any agent or representative may become purchasers and may, 
in paying the purchase price, deliver the Bonds in place of cash to the 
amount which would, upon distribution of the net proceeds of such sale, be 
payable; and in case the amounts so payable are less than the amount due, the 
Bonds shall be returned after being properly marked or stamped to show 
partial payment; provided, however, that any such purchaser shall pay in cash 
the amount necessary to provide for the payments mentioned in Section 6.9(a).

          SECTION 6.9.  APPLICATION OF PROCEEDS OF SALE OR REALIZATION.  
Except as otherwise expressly provided, the moneys arising from any sale or 
other realization of the whole or any part of the Collateral, whether through 
a sale by the Trustee or by judicial process or otherwise, shall be held by 
the Trustee and applied, together with any other 

<PAGE>

                                     -31-

moneys in the hands of the Trustee available for such purposes as follows:
     
(a)       firstly, in payment of all charges on the Collateral (except those 
subject to which the sale or realization was made), ranking in priority to 
the Bonds;

(b)       secondly, in payment of the expenses referred to in Section 5.2;

(c)       thirdly, reasonable costs of realization not included in (a), above;

(d)       fourthly, in payment of the principal of the Bonds and, after 
payment of such principal, any accrued and unpaid interest on the Bonds, in 
that order, or in such other order of priority as between principal and 
interest as may be directed by Extraordinary Resolution; and

(e)       the surplus (if any) shall be paid to the Corporation or its 
assigns, unless otherwise provided by law.

          SECTION 6.10.  DISTRIBUTION OF PROCEEDS.  Payments to Bondholders 
pursuant to Section 6.9 shall be made as follows:
     
(a)       at least 10 days' notice of each payment shall be given in the 
manner provided in Article 12 specifying the time when and the place where 
the Bonds are to be presented, the amount of the payment and the application 
of the payment as between principal and interest;

(b)       payment of any Bond shall be made upon presentation of the Bond at 
any one of the places specified in the notice and any Bond paid in full shall 
be surrendered, otherwise a memorandum of the payment shall be endorsed on 
it; but the Trustee may, in its discretion, dispense with presentation and 
surrender or endorsement in any special case upon receipt of an indemnity 
acceptable to it;

(c)       from and after the date of payment specified in the notice, 
interest shall accrue only on the amount owing on each Bond after giving 
credit for the amount of the payment specified in such notice unless it is 
properly presented on or after the date so specified and payment is not made;

(d)       the Trustee shall not be required to make any interim payment to 
Bondholders unless the moneys in its hands, after reserving such amount as 
the Trustee may think necessary to provide for the payments mentioned in 
Section 6.9(a), exceeds 5% of the principal amount of the Bonds;

(e)       payments on account of the Bonds shall be made rateably to each 
Bondholder based on the lesser of (i) the Eligible Hedging Indebtedness which 
is owed to such Bondholder and is secured by a pledge of such Bond pursuant 
to the applicable Pledge Agreement; and (ii) the principal amount of the Bond 
held by such Bondholder;

(f)       if as a result of distributions made in accordance with paragraph 
(e), above, (i) the Eligible Hedging Indebtedness of any Hedging Counterparty 
has been paid 


<PAGE>

                                     -32-

in full, (ii) one or more other Hedging Counterparties have received the full 
amount of the Bond pledged to such Hedging Counterparty but have not received 
payment in full of their Eligible Hedging Indebtedness, and (iii) the Hedging 
Counterparties pursuant to a Secondary Pledge Agreement hold a security 
interest in the Bond held by the Hedging Counterparty whose claim has been 
paid in full, then, distributions shall thereafter be made rateably to the 
remaining Bondholders based upon the lesser of their remaining Eligible 
Hedging Indebtedness and the amount of the Bond held by them, whether by way 
of primary or secondary pledge (provided that a secondary pledge will only be 
taken into account where the primary pledge has been fully discharged); and

(g)       no Bondholder who is the Corporation or a Subsidiary or an 
Affiliate or Insider of the Corporation or a Subsidiary shall be entitled to 
participate in any distribution until the claims of all other Bondholders 
have been satisfied in full.

          SECTION 6.11.  PERSONS DEALING WITH TRUSTEE.  No person dealing 
with the Trustee or its agents shall be concerned to enquire whether the 
Security has become enforceable, or whether the powers which the Trustee is 
purporting to exercise have become exercisable, or whether any money remains 
due, or as to the necessity or expediency of the stipulations and conditions 
subject to which any sale has been made, or otherwise as to the propriety or 
regularity of any sale or of any other dealing by the Trustee with the 
Collateral, or to see to the application of any money paid to the Trustee.

          SECTION 6.12.  TRUSTEE APPOINTED ATTORNEY.  Effective from and 
after an Event of Default and so long as such Event of Default is continuing, 
the Corporation irrevocably appoints the Trustee to be the attorney of the 
Corporation in the name and on behalf of the Corporation to execute and do 
any deeds, transfers conveyances, assignments, assurances and things which 
the Corporation ought to execute and do, and has not executed or done, under 
the covenants and provisions contained in this Indenture and generally to use 
the name of the Corporation in the exercise of all or any of the powers 
conferred on the Trustee. 

<PAGE>

                                     -33-

                                   ARTICLE 7   
                         SATISFACTION AND DISCHARGE

          SECTION 7.1.  CANCELLATION AND DESTRUCTION.  All matured Bonds 
shall be cancelled and delivered to or to the order of the Trustee 
immediately after payment.  All Bonds (whether in temporary or definitive 
form) cancelled or required to be cancelled under this or any other provision 
of this Indenture may be destroyed by or under the direction of the Trustee 
(in the presence of a representative of the Corporation, if the Corporation 
requests) and the Trustee shall prepare or cause to be prepared and shall 
retain a certificate of such destruction and deliver a duplicate copy to the 
Corporation.

          SECTION 7.2.  RELEASE FROM COVENANTS.  Upon proof being given to 
the reasonable satisfaction of the Trustee that (i) the principal of all the 
Bonds and interest thereon and other moneys payable hereunder have been paid 
or satisfied, or (ii) all the Bonds have matured or have been called for 
redemption, or upon the Trustee having been given irrevocable instructions by 
the Corporation to give notice of redemption of all the Bonds, and (iii) such 
payment or redemption, or both, has been duly and effectually provided for by 
payment to the Trustee or otherwise, and (iv) upon payment of all costs, 
charges and expenses properly incurred by the Trustee in relation and the 
remuneration of the Trustee has been paid, or upon provision satisfactory to 
the Trustee being made for such payment, the Trustee shall, at the request 
and at the expense of the Corporation, execute and deliver to the Corporation 
such deeds or other instruments as shall be required to (v) evidence the 
satisfaction and discharge of the Security in accordance with Section 4.11, 
and (vi) release the Corporation from its covenants except pursuant to 
Section 2.8 and those relating to the indemnification of the Trustee. 

<PAGE>

                                     -34-

                                   ARTICLE 8   
                            SUCCESSOR CORPORATIONS

          SECTION 8.1.  CERTAIN REQUIREMENTS IN RESPECT OF MERGER, ETC.  The 
Corporation shall not enter into any transaction (whether by way of 
reconstruction, reorganization, amalgamation, transfer, sale, lease or 
otherwise) whereby all or substantially all of its undertaking, property and 
assets would become the property of any other person or, in the case of any 
such amalgamation, of the continuing Corporation unless, but may do so if:
     
(a)       such other person or continuing corporation (the "SUCCESSOR 
CORPORATION") is a corporation incorporated under the laws of Canada or any 
of its provinces;

(b)       the Successor Corporation executes, prior to or contemporaneously 
with the completion of the transaction, a supplemental indenture and such 
other instruments (if any) as are satisfactory to the Trustee and, in the 
opinion of Counsel, are necessary or advisable to evidence the assumption by 
the Successor Corporation of the Corporation's liability for the due and 
punctual payment of all the Bonds and any interest thereon and all other 
moneys payable under this Indenture and the covenant of the Successor 
Corporation to pay the same and its agreement to observe and perform all the 
covenants and obligations of the Corporation under this Indenture;

(c)       such transaction shall, to the satisfaction of the Trustee and in 
the opinion of Counsel, be upon such terms as preserve and do not impair in 
any respect the rights and powers of the Trustee or of the Bondholders; and

(d)       no condition or event shall exist in respect of the Successor 
Corporation at the time of such transaction and after giving full effect to 
the transaction which constitutes or would constitute an Event of Default.

          SECTION 8.2.  VESTING OF POWERS IN SUCCESSOR.  Whenever the 
conditions of Section 8.1 have been observed and performed, the Trustee shall 
execute and deliver the supplemental indenture provided for in Article 10 and 
the Successor Corporation shall possess and from time to time may exercise 
each and every right and power of the Corporation under this Indenture in the 
name of the Corporation or otherwise and any act or proceeding by any 
provision of this Indenture required to be done or performed by any directors 
or officers of the Corporation may be done and performed with like force and 
effect by the like directors or officers of such Successor Corporation.

          SECTION 8.3.  OPINION OF COUNSEL TO BE GIVEN TO TRUSTEE.  The 
Trustee shall receive an opinion of Counsel as conclusive evidence that any 
such reorganization, consolidation, amalgamation, sale, conveyance or lease 
and any such assumption complies with the provisions of this Article 8.

<PAGE>

                                     -35-

                                   ARTICLE 9 
                           EXTRAORDINARY RESOLUTIONS

          SECTION 9.1.  POWERS EXERCISABLE BY EXTRAORDINARY RESOLUTION.  In 
addition to all other powers stated in this Indenture to be exercisable by 
Extraordinary Resolution, the Bondholders shall have the following powers 
exercisable from time to time by Extraordinary Resolution:
     
(a)       the power to agree to any modification, abrogation or compromise or 
arrangement of the rights of the Bondholders or the Trustee against the 
Corporation or against the undertaking, property and assets of the 
Corporation, whether such rights arise under this Indenture, the Bonds or 
otherwise;

(b)       the power to direct or authorize the Trustee to exercise any power, 
right, remedy or authority given to it by this Indenture or the Bonds in any 
manner specified in such Extraordinary Resolution or to refrain from 
exercising any such power, right, remedy or authority;

(c)       the power to assent to any modification or change in, or omission 
from, these provisions or any supplemental instrument which shall be agreed 
to by the Corporation and to authorize the Trustee to concur in or execute 
any deed or supplemental instrument embodying the modification, change or 
omission;

(d)       the power, with the approval of the Corporation, to sanction the 
exchange of the whole or any part of the Bonds for other obligations of the 
Corporation or another corporation;

(e)       the power to waive and direct the Trustee to waive any default of 
the Corporation either unconditionally or upon any conditions specified in 
such Extraordinary Resolution whether or not the Security has become 
enforceable, and where a Bondholder has commenced a proceeding to enforce the 
Security by reason of such default, to restrain the Bondholder from 
continuing the proceeding and to stay or discontinue the same, upon payment 
of the costs, charges or expenses reasonably and properly incurred by the 
Bondholder in that connection;

(f)       the power to restrain any Bondholder from taking or instituting any 
suit, action or proceeding for the purpose of enforcing payment of the 
principal of or interest on the Bonds, or for the appointment of a liquidator 
or a receiver or a trustee in bankruptcy or to have the Corporation wound-up 
or for any other remedy under this Indenture;

(g)       the power to sanction any scheme for the reorganization of the 
Corporation or for the consolidation, amalgamation or merger of the 
Corporation with any other corporation and for the selling or leasing of all 
or substantially all of the undertaking, property and assets of the 
Corporation;

(h)       the power to approve the form and content of any document to be 
delivered to or by the Trustee, including the form of any Security to be 
delivered to the 

<PAGE>

                                     -36-

Trustee pursuant to Section 4.1 or otherwise;

(i)       the power to direct the Trustee as to the adequacy of the insurance 
maintained by the Corporation;

(j)       the power to authorize and direct the Trustee to execute and 
deliver such subordinations, priorities agreements, inter-creditor agreements 
and acknowledgments as the Extraordinary Resolution may specify; and

(k)       the power to amend, alter and repeal any Extraordinary Resolution 
previously adopted by the Bondholders.

          SECTION 9.2.  MEANING OF "EXTRAORDINARY RESOLUTION". The expression 
"EXTRAORDINARY RESOLUTION" when used in this Indenture means an instrument in 
writing signed in one or more counterparts by both (a) the Bondholders of a 
principal amount of the Bonds of not less than 75% of the Bonds which are 
outstanding at such time, excluding any of such as are then held by 
Affiliates or Insiders of the Corporation, and (b) each of Bankers Trust 
Company, Macquarie Bank Limited and The Bank of Nova Scotia, if they are then 
Bondholders.

          SECTION 9.3.  POWERS CUMULATIVE.  Any one or more of the powers or 
any combination of the powers in this Indenture stated to be exercisable by 
the Bondholders by Extraordinary Resolution or otherwise may be exercised 
from time to time and the exercise of any one or more of such powers or any 
combination of powers from time to time shall not be deemed to exhaust the 
right of the Bondholders to exercise such power or powers or combination of 
powers then or any power or powers or combination of powers thereafter from 
time to time.

          SECTION 9.4.  BINDING EFFECT OF RESOLUTIONS.  Every Extraordinary 
Resolution adopted in accordance with Section 9.2 shall be binding upon all 
the Bondholders, whether they are signatories or not, and each and every 
Bondholder and the Trustee (subject to any provisions for its indemnity) 
shall be bound to give effect accordingly to every such Extraordinary 
Resolution. 

<PAGE>

                                     -37-


                                   ARTICLE 10                
                             SUPPLEMENTAL INDENTURES

          SECTION 10.1.  EXECUTION OF SUPPLEMENTAL INDENTURES.  From time to 
time the Corporation (when authorized by a resolution of its Directors) and 
the Trustee may, subject to the provisions of this Indenture, and the 
Corporation and the Trustee shall, when so directed by or pursuant to this 
Indenture, execute and deliver indentures or other supplemental instruments, 
which shall form a part of this Indenture, for any one or more or all of the 
following purposes:
     
(a)       evidencing the succession of Successor Corporations to the 
Corporation and the covenants of and obligations assumed by such Successor 
Corporations in accordance with the provisions of Article 8;

(b)       giving effect to any Extraordinary Resolution;

(c)       providing for the issue of Bonds in forms or denominations other 
than those herein provided for and for the exchange of Bonds of different 
forms and denominations, and making modifications in the form of the Bonds 
which, in the opinion of the Trustee, does not affect their substance;

(d)       making any additions to, deletions from or alterations in the 
provisions of this Indenture which, in the opinion of Counsel, may from time 
to time be necessary or advisable to conform the same to legislation or to 
the requirements of any stock exchange;

(e)       adding such additional covenants, enforcement provisions, release 
provisions and other provisions as, in the opinion of Counsel, are necessary 
or advisable, provided that, in the opinion of the Trustee, the rights of the 
Trustee and of the Bondholders are not materially prejudiced;

(f)       correcting or rectifying any ambiguities, defective provisions, 
errors or omissions, provided that, in the opinion of the Trustee, the rights 
of the Trustee and of the Bondholders are not materially prejudiced; and

(g)       any other purpose not inconsistent with the terms of this 
Indenture, provided that, in the opinion of the Trustee, the rights of the 
Trustee and of the Bondholders are not materially prejudiced. 

<PAGE>

                                      -38-

                                   ARTICLE 11
                             CONCERNING THE TRUSTEE

          SECTION 11.1.  CONDITIONS PRECEDENT TO TRUSTEE'S OBLIGATION TO ACT. 
(1) The Trustee is not bound to give any notice or do or take any act, action 
or proceeding by virtue of the powers conferred on it unless and until it is 
required so to do under the terms of this Indenture; nor shall the Trustee be 
required to take notice of any default other than in payment of any moneys 
required to be paid to it, unless and until notified in writing of such 
default. In the absence of any such notice, the Trustee may, for all purposes 
of this Indenture, conclusively assume that the Corporation is not in default 
with respect to the payment of principal of, or interest on, the Bonds or in 
the observance or performance of any of its covenants, agreements or 
conditions. Any such notice shall in no way limit any discretion given to the 
Trustee to determine whether or not it shall take any action with respect to 
any default.

          (2)  The obligation of the Trustee to commence or continue any 
action or proceeding for the purpose of enforcing its or the Bondholders' 
rights shall be conditional upon the Bondholders providing, when required by 
notice in writing from the Trustee, (i) sufficient funds to commence or 
continue the action or proceeding, and (ii) an indemnity satisfactory to the 
Trustee to protect and hold harmless the Trustee against the cost, charges, 
expenses and liabilities to be incurred and any loss and damage it may suffer.

          (3)  None of the provisions contained in this Indenture shall 
require the Trustee to spend or risk its own funds or otherwise incur 
financial liability in the performance of any of its duties or in the 
exercise of any of its rights or powers unless indemnified and funded 
pursuant to Section 11.1(2).

          (4)  The Trustee may, before commencing or at any time during the 
continuance of any such action or proceeding, require the Bondholders at 
whose instance it is acting to deposit with the Trustee the Bonds held by 
them provided the Trustee issues receipts to the relevant Bondholders.

          SECTION 11.2.  EVIDENCE.  (1) Whenever it is provided in this 
Indenture, with reference to any application to the Trustee for the 
certification and delivery of Bonds or other action, that the Corporation 
deposit with the Trustee resolutions, certificates, opinions, requests, 
orders or other documents, it is intended that the truth, accuracy and good 
faith at the time of the granting of such application (or on the effective 
date of any such certificate or report, as the case may be) of the facts and 
opinions stated in all documents so deposited shall, in each and every such 
case, be conditions precedent to the right of the Corporation to have such 
application granted.  The Trustee may rely and shall be protected in acting 
upon documents deposited with it in purported compliance with any such 
provision or for any other purpose, but may in its discretion require further 
evidence before acting or relying on them.

          (2)  The Trustee may rely and shall be protected in acting upon any 
Certified Resolution, Certificate of the Corporation, Order of the 
Corporation, Request of the Corporation or any other resolution, certificate, 
order, request, statement, instrument, 

<PAGE>

                                      -39-


opinion, report, notice, consent, letter, telecopy or other paper or document 
believed by it to be genuine and to have been signed, sent or presented by or 
on behalf of the proper party or parties.

          SECTION 11.3.  EXPERTS AND ADVISERS.  (1) The Trustee may employ or 
retain such Counsel, accountants, appraisers or other experts or advisers as 
it may reasonably require for the purpose of discharging its duties and shall 
not be responsible for any misconduct on the part of any of them.

          (2)  The Trustee may act and shall be protected in acting in good 
faith on the advice of, or information obtained from, any Counsel, 
accountant, appraiser or other expert or adviser, whether retained or 
employed by the Corporation or by the Trustee, in relation to any moneys held 
by the Trustee, which under the trusts of this Indenture may be placed in the 
deposit vaults of the Trustee or of any Canadian chartered bank or deposited 
for safekeeping with any such bank.  Unless otherwise expressly provided, any 
moneys so held, pending its application or withdrawal under any provisions of 
this Indenture, may be deposited in the name of the Trustee in any Canadian 
chartered bank, at the rate of interest (if any) then current on similar 
deposits or, with the consent of the Corporation, may be (i) deposited in the 
deposit department of the Trustee or any other loan or trust company 
authorized to accept deposits under the laws of Canada or a province thereof, 
or (ii) invested in securities issued or guaranteed by the Government of 
Canada or any province thereof or any Canadian chartered bank or loan or 
trust company, maturing not more than one year from the date of investment.  
Unless an Event of Default shall have occurred and be continuing, all 
interest or other income received by the Trustee in respect of the deposits 
and investments shall belong to the Corporation.

          SECTION 11.4.  ACTION BY TRUSTEE TO PROTECT INTERESTS.  The Trustee 
shall have power to institute and to maintain such actions and proceedings as 
it may consider necessary or expedient to preserve, protect or enforce its 
interests and the interests of the Bondholders.

          SECTION 11.5.  TRUSTEE NOT REQUIRED TO GIVE SECURITY.  The Trustee 
shall not be required to give any bond or security in respect of the 
execution of the trusts and powers of this Indenture or otherwise.

          SECTION 11.6.  PROTECTION OF TRUSTEE.  By way of supplement to the 
provisions of any law for the time being relating to trustees:
     
(a)       the Trustee shall not be liable for or by reason of any statements 
of fact or recitals in this Indenture or in the Bonds (except the 
representation contained in Section 11.10 and in the certificate of the 
Trustee on the Bonds) or required to verify the same, but all such statements 
or recitals are and shall be deemed to be made by the Corporation;

(b)       the Trustee shall have no obligation to see to or to require 
evidence of the registration or filing (or renewal) of this Indenture or any 
supplemental or ancillary instrument;

<PAGE>

                                      -40-


(c)       the Trustee shall not be bound to notify any Person of the 
execution of this Indenture; and

(d)       the Trustee shall have no liability or responsibility whatsoever or 
be in any way responsible for the consequence of any breach on the part of 
the Corporation of any of the covenants or of any other acts of the agents or 
servants of the Corporation.

          SECTION 11.7.  REPLACEMENT OF TRUSTEE.  The Trustee may resign its 
trust and be discharged from all further duties and liabilities under this 
Indenture by giving the Corporation not less than 90 days' notice in writing 
or such shorter notice as may be acceptable to the Corporation.  The 
Bondholders, by Extraordinary Resolution, may at any time remove the Trustee 
and appoint a new Trustee.  In the event of the Trustee resigning or being 
removed or being dissolved, becoming bankrupt, going into liquidation or 
otherwise becoming incapable of acting, the Corporation shall immediately 
appoint a new Trustee unless a new Trustee has already been appointed by the 
Bondholders by Extraordinary Resolution; failing such appointment by the 
Corporation, the retiring Trustee or any Bondholder may apply to a Judge of 
the Ontario Court of Justice (General Division), for the appointment of a new 
Trustee.  Any new Trustee appointed by the Corporation or by the Court shall 
be subject to removal as aforesaid by the Bondholders.  Any new Trustee shall 
be a corporation authorized to carry on the business of a trust company in 
the Province of Ontario.  On any new appointment, the new Trustee shall be 
vested with the same powers, rights, duties and responsibilities as if it had 
been originally named as Trustee without any further assurance, conveyance, 
act or deed, but there shall be immediately executed, at the expense of the 
Corporation, all such conveyances or other instruments as, in the opinion of 
Counsel, may be necessary or advisable for the purpose of assuring the same 
to the new Trustee.  At the request of the Corporation or the new Trustee, 
the retiring Trustee, upon payment of the amounts, if any, due to it pursuant 
to Section 5.2, shall assign, transfer and deliver to the new Trustee all 
property and money held and all records kept by the retiring Trustee in 
connection with this Indenture.

          SECTION 11.8.  CONFLICT OF INTEREST.  (1) The Trustee represents to 
the Corporation that, at this date, no material conflict of interest exists 
in the Trustee's role as a fiduciary under this Indenture and agrees that in 
the event of a material conflict of interest arising it will, within 90 days 
after ascertaining that it has such material conflict of interest, either 
eliminate the conflict or resign these trusts.

          (2)  Subject to Section 11.8(1), the Trustee, in its personal or 
any other capacity, may buy, lend upon and deal in securities of the 
Corporation or any of its Affiliates and generally may contract and enter 
into financial transactions with the Corporation or any of its Affiliates 
without being liable to account for any profit.

          (3)  The Bondholders acknowledge that the Trustee is a wholly-owned 
subsidiary of The Bank of Nova Scotia and agree that such fact is not, in and 
of itself, a conflict of interest.

          SECTION 11.9.  CASH COLLATERAL HELD BY THE TRUSTEE.  The Trustee, 
the Corporation and by its acceptance of a Bond hereunder, each Bondholder 
acknowledge that (i) the Trustee is holding in safekeeping cash or cash 
equivalents equal to 

<PAGE>

                                      -41-


Cdn. $12,000,000 (the "Cash Collateral") on behalf of Her Majesty the Queen 
in Right of the Province of British Columbia (the "Province"), as represented 
by the Minister of Finance and Corporate Relations, as security for certain 
obligations of the Corporation under Permit M-206, issued to the Corporation 
under the MINES ACT (British Columbia) in connection with the Kemess Mine; 
(ii) the Trustee, both in its personal capacity and its capacity as the 
holder of the Cash Collateral on behalf of the Province, does not have any 
lien, charge, or right of set-off against the Cash Collateral or the proceeds 
thereof from the sale or redemption of the Cash Collateral (the foregoing 
does not however apply to or limit any existing lien, charge or right of 
set-off held by the province against the Cash Collateral or the proceeds 
thereof); (iii) any residual right, title or interest of the Corporation in 
the Cash Collateral is subject to the Senior Security, the Security, the 
Subordinated Security and any other security interests granted by the 
Corporation therein from time to time; (iv) the priority of any of the 
aforesaid security will be determined in accordance with inter-creditor 
agreements entered into between the holders of such security from time to 
time and applicable law; (v) the Trustee, the Corporation and each Bondholder 
hereby acknowledge that the Trustee will  not be in conflict or breach of its 
duties  and obligations hereunder by virtue of holding the Cash Collateral on 
behalf of the Province; and (vi) the Trustee may, upon receipt of a valid 
direction or instruction from the Province, deliver the Cash Collateral to 
the Province free and clear of any Lien created by the Security.

          SECTION 11.10.  CERTIFICATE OF COMPLIANCE.  At least once in each 
twelve-month period beginning on the date of this Indenture and at any other 
time upon the demand of the Trustee, the Corporation shall furnish the 
Trustee with a certificate that the Corporation has complied with all 
requirements contained in the Indenture that, if not complied with, would, 
with the giving of notice, lapse of time or otherwise, constitute an Event of 
Default, or, if there has been failure to comply, giving particulars of such 
failure.

          SECTION 11.11.  LEGISLATION RELATING TO INDENTURES.  The provisions 
of this Indenture are subject to the BUSINESS CORPORATIONS ACT (Ontario) and 
any other legislation applicable from time to time relating to trust 
indentures and to the rights, duties and obligations of trustees under trust 
indentures and of corporations issuing debt obligations under trust 
indentures.  In the event of any conflict between the provisions of this 
Indenture and the provisions of the BUSINESS CORPORATIONS ACT (Ontario) or 
any other such legislation, such legislation shall govern.

          SECTION 11.12.  ACCEPTANCE OF TRUST.  Montreal Trust Company of 
Canada accepts the trusts of this Indenture declared and provided for and 
agrees to perform the same upon the terms and conditions herein set forth.

<PAGE>

                                      -42-

                                   ARTICLE 12
                                 MISCELLANEOUS
  
          SECTION 12.1  COMMUNICATIONS.  Any notice, direction or other 
communication required or permitted to be given under this Indenture shall, 
except as otherwise permitted, be in writing and given by delivering it or 
sending it by telecopy or other similar form of recorded communication 
addressed, if to the Corporation, to it at:  5501 Lakeview Drive, Kirkland, 
Washington 98033, Attention:  President, Telephone:  (425) 822-8992, 
Telecopier: (425) 822-3349, if to the Trustee, to it at: 4th Floor, 510 
Burrard Street, Vancouver, British Columbia  V6C 3B9, Telephone:  (604) 
661-9591, Telecopier: (604) 685-4079, and, if to the Bondholders, at the 
addresses shown in the records of the Trustee.  Any communication shall be 
deemed to have been validly and effectively given (i) if personally 
delivered, on the date of such delivery if such date is a Business Day and 
such delivery was made prior to 4:00 p.m. (Toronto time), otherwise on the 
next Business Day, (ii) if transmitted by facsimile or similar means of 
recorded communication on the Business Day following the date of transmission.

          SECTION 12.2.  ADDRESS OF RECORD.  The Corporation and each 
Bondholder shall notify the Trustee of their respective telecopy number and 
mailing address and the Trustee shall furnish the same information with 
respect to itself to the Corporation and each of the Bondholders at the date 
of issue of the Bonds.  From time to time, the Corporation and any Bondholder 
may notify the Trustee and the Trustee may notify the Corporation and each 
Bondholder of a change in its telecopy number or mailing address, as the case 
may be, in the manner set forth in subsection 12.1.  Such number or address, 
until changed by a similar notice, shall be the address of record of such 
party for all purposes of this Indenture.

          SECTION 12.3.  INDEMNIFICATION OF TRUSTEE.  (1) The Corporation 
will at all times keep the Trustee indemnified and save the Trustee harmless 
from and against all claims, demands, losses, actions, causes of action, 
costs, charges, expenses, damages and liabilities whatsoever arising in 
connection with this Indenture including, without limitation, those arising 
out of or related to actions taken or omitted to be taken by the Trustee 
contemplated hereby, legal fees and disbursements of counsel engaged by the 
Trustee on a solicitor and client basis and costs and expenses incurred in 
connection with the enforcement of this indemnity (unless such enforcement is 
unsuccessful), which the Trustee may suffer or incur, whether at law or in 
equity, in any way caused by or arising, directly or indirectly, in respect 
of any act, deed, matter or thing whatsoever made, done, acquiesced in or 
omitted in or about or in relation to the execution of its duties as trustee 
and including any deed, matter or thing in relation to the registration, 
perfection, release or discharge of security. The foregoing provisions of 
this Section 12.3(1) do not apply to the extent that the Trustee or its 
employees have acted fraudulently or negligently.

          (2)  The Corporation hereby agrees to indemnify the Trustee, its 
directors, officers, employees, and agents, and all of their successors and 
assigns (collectively the "Indemnified Parties") against any loss, expenses, 
claim, liability or asserted liability (including strict liability and 
including costs and expenses of abatement and remediation of spills or 
releases of contaminants and including liabilities of the Indemnified Parties 
to third parties (including governmental agencies) in respect of bodily 

<PAGE>

                                      -43-


injuries, property damage, damage to or impairment of the environment or any 
other injury or damage and including liabilities of the Indemnified Parties 
to third parties for the third parties' foreseeable and unforeseeable 
consequential damages) incurred as a result of:

(a)       the administration of the trust created hereby; or

(b)       the exercise by the Trustee of any rights hereunder or under the 
Security; which result from or relate, directly or indirectly, to:

          (i)    the presence or release of any contaminants, by any means or
                 for any reason, on the property subject to the Security,
                 whether or not release or presence of the contaminants was
                 under the control, care or management of the Corporation or of
                 a previous owner, or of a tenant;

          (ii)   any contaminant present on or released from any contiguous
                 property to the property subject to the Security; or

          (iii)  the breach or alleged breach of any environmental laws by  the
                 Corporation.

          For purposes of this Section 12.3(2), "liability" shall include (i) 
liability of an Indemnified Party for costs and expenses of abatement and 
remediation of spills and releases of contaminants, (ii) liability of an 
Indemnified Party to a third party to reimburse the third party for bodily 
injuries, property damages and other injuries or damages which the third 
party suffers, including (to the extent, if any, that the Indemnified Party 
is liable therefor) foreseeable and unforeseeable consequential damages 
suffered by the third party and (iii) liability of the Indemnified Party for 
damage to or impairment of the environment.

          SECTION 12.4.  DEPOSIT OF SECURITIES.  The Trustee shall not be 
responsible or liable in any manner whatsoever for the sufficiency, 
correctness, genuineness or validity of any security deposited with it.

          SECTION 12.5.  CHANGE OF NAME.  The Corporation shall not change 
its name or amalgamate with another corporation under a different name 
without giving at least 10 day's prior notice to the Trustee of the new name 
and the date upon which such change of name or amalgamation is to take effect 
and, within five Business Days of the change of name or amalgamation, the 
Corporation shall proved the Trustee with:

(a)       a notarial or certified copy of the articles of amendment or 
articles of amalgamation effecting the change of name; and

(b)       an opinion from legal counsel satisfactory to the Trustee as to the 
correct name of the Corporation and confirming that all appropriate 
registrations, filings or recordings have been made on behalf of the Trustee 
to fully and effectively maintain the perfection and priority of the Security 
created hereby.

<PAGE>

                                      -44-


<PAGE>

                                      -45-

                                   ARTICLE 13
                                 FORM OF BONDS

          SECTION 13.1.  FORM OF BONDS.  The form of the Bonds and the 
related certificate of the Trustee, registration panel and panel for the 
notation of payments on account of principal shall be substantially as 
follows:

No. ........  U.S. $................

                              ROYAL OAK MINES INC.

            (incorporated under the laws of the Province of Ontario)

                                15% DEMAND BONDS

          Royal Oak Mines Inc. (the "CORPORATION"), for value received, 
acknowledges itself indebted and promises to pay to the registered holder on 
demand, or on such earlier date as the principal amount may become due in 
accordance with the Indenture hereinafter mentioned, the sum of - UNITED 
STATES DOLLARS (U.S. $-) and to pay interest on principal sum from this date 
in like money calculated and compounded monthly in arrears and payable on the 
last Business Day of January of 1999 and thereafter on the last Business Day 
of each month in each year at the rate of FIFTEEN (15%) PER CENT PER ANNUM, 
with interest on amounts overdue payable on demand at the same rate and in 
like currency.

          This Bond is one of the U.S. $50 Million 15% Demand Bond of the 
Corporation issued under an Indenture made June 22, 1998 between the 
Corporation and Montreal Trust Company of Canada, as Trustee (which, 
together, with all supplementary instruments is referred to as the 
"INDENTURE").  Terms used in this Bond which are defined in the Indenture 
have the meanings specified in the Indenture.  The Bonds issuable under the 
Indenture are limited to an aggregate principal amount of U.S. $50 million 
outstanding at any time.

          The principal amount of this Bond shall be payable at the principal 
office of Montreal Trust Company of Canada, as Trustee under the Indenture, 
in Vancouver, British Columbia.  Interest on the Bonds and on overdue 
interest shall be paid directly by the Corporation to the registered holder.

<PAGE>

                                      -46-


          Subject to the terms of the Indenture, This Bond and all other 
Bonds now or hereafter certified and issued under the Indenture rank PARI 
PASSU and are secured equally and rateably by the Indenture.  This Bond shall 
not become obligatory for any purpose until certified by or on behalf of the 
Trustee.

          IN WITNESS WHEREOF the Corporation has caused this Bond to be 
executed by its duly authorized officers.

                                        ROYAL OAK MINES INC.


                                        Per:  
                                            ---------------------------
                                            Authorized Signing Officer

                                                                             c/s
                                        Per:
                                            ---------------------------
                                            Authorized Signing Officer



                        (FORM OF TRUSTEE'S CERTIFICATE)

     This is one of the U.S. $50 Million 15% Demand Bonds referred to in the 
Indenture within mentioned.

                                        MONTREAL TRUST COMPANY OF
                                        CANADA



                                        Per:
                                            ---------------------------
                                            Authorized Signing Officer


                          (FORM OF REGISTRATION PANEL)

                    (No writing here except by the Trustee)

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
       DATE OF                  NAME AND ADDRESS OF            AUTHORIZED
       REGISTRATION             REGISTERED BONDHOLDER          SIGNATURES
--------------------------------------------------------------------------------
<S>                             <C>                            <C>
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
</TABLE>

<PAGE>

                                      -47-



                  (FORM OF PANEL FOR NOTATION OF PAYMENTS ON
               ACCOUNT OF PRINCIPAL OR REDUCTIONS OF PRINCIPAL)

                       Payments on Account of Principal

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
    AUTHORIZED        AMOUNT PAID      BALANCE OF PRINCIPAL       SIGNATURE
    DATE              OR REDUCED       AMOUNT UNPAID
--------------------------------------------------------------------------------
<S>                   <C>              <C>                        <C>
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
</TABLE>


<PAGE>

                                        -48-

                                      ARTICLE 14
                                      EXECUTION

          SECTION 14.1.  NOTARIAL TRUST DEED.  The Corporation, in conformity
with the laws of the Province of Quebec in which part of the Collateral may at
any time be situate, will execute, in notarial form, a Trust Deed of Hypothec,
Mortgage and Pledge hypothecating, mortgaging, pledging, charging, ceding and
transferring all its undertaking, property and assets situate in the Province of
Quebec as security for the Bonds, such Trust Deed being substantially of the
same tenor and to the same effect as this Indenture, such Trust Deed and this
Indenture constituting and to be read as one and the same instrument.

          SECTION 14.2.  COUNTERPARTS.  This Indenture may be executed in any
number of counterparts and all such counterparts together shall be deemed to
constitute one and the same instrument.

          SECTION 14.3.  FORMAL DATE.  This Indenture may be referred to as
bearing formal date of June 22, 1998 notwithstanding its actual date of
execution.

          IN WITNESS WHEREOF the parties have caused this Indenture to be
executed by their respective duly authorized officers.


                                        ROYAL OAK MINES INC.


                                        Per:  /s/ James H. Wood
                                            -----------------------------
                                            Authorized Signing Officer

                                                                             c/s

                                        Per:
                                            -----------------------------
                                            Authorized Signing Officer


                                        MONTREAL TRUST COMPANY OF
                                        CANADA


                                        Per:  /s/ Robert McKenzie
                                            -----------------------------
                                            Robert McKenzie
                                            Corporate Trust Officer

                                        Per:  /s/ Sean Pigott
                                            -----------------------------
                                            Sean Pigott
                                            Senior Trust Officer
                                            Corporate Trust Services
<PAGE>


                                 ROYAL OAK MINES INC.


                                  NOTICE OF ADDRESS


TO:       MONTREAL TRUST COMPANY OF CANADA, as Trustee

-------------------------------------------------------------------------------


          The undersigned, Royal Oak Mines Inc. (the "CORPORATION") gives notice
to Montreal Trust Company of Canada, pursuant to Section 12.2 of the trust
indenture dated June 22, 1998 (the "INDENTURE") between the Corporation and the
Trustee of its address of record for communications under the Indenture as
follows:

          5501 Lakeview Drive
          Kirkland, Washington
          98033

          Attention:   President
          Telecopier:  (425) 822-3349


          DATED at Toronto this 22nd day of June, 1998.


                                        ROYAL OAK MINES INC.


                                        Per: /s/ James H. Wood
                                             ----------------------------
                                             Authorized Signing Officer


                                        Per:
                                             ----------------------------
                                             Authorized Signing Officer



<PAGE>



                                 ROYAL OAK MINES INC.


                               ORDER OF THE CORPORATION


TO:       MONTREAL TRUST COMPANY OF CANADA, as Trustee


--------------------------------------------------------------------------------


          Royal Oak Mines Inc. (the "CORPORATION"), pursuant to the provisions
of Section 2.2 of the trust indenture dated June 22, 1998 between the
Corporation and you, as trustee, orders you to certify and issue a 15% Demand
Bond in the principal amount of U.S. $15,000,000, to Macquarie Bank Limited of
Level 26, 20 Bond Street, Sydney, N.S.W. Australia and to deliver the same on
this date to the representative of Macquarie Bank Limited at the offices of
Stikeman, Elliott, Suite 5300, Commerce Court West, Toronto, Ontario, without
receiving any consideration for such certification, issuance and delivery.

          DATED at Toronto this 22nd day of June, 1998.


                                        ROYAL OAK MINES INC. 


                                        Per: /s/ James H. Wood
                                             ----------------------------
                                             Authorized Signing Officer


                                        Per:
                                             ----------------------------
                                             Authorized Signing Officer



<PAGE>



                                 ROYAL OAK MINES INC.


                               ORDER OF THE CORPORATION


TO:       MONTREAL TRUST COMPANY OF CANADA, as Trustee


--------------------------------------------------------------------------------


          Royal Oak Mines Inc. (the "CORPORATION"), pursuant to the provisions
of Section 2.2 of the trust indenture dated June 22, 1998 between the
Corporation and you, as trustee, orders you to certify and issue a 15% Demand
Bond in the principal amount of U.S. $21,000,000, to Bankers Trust Company of
130 Liberty Street, New York, New York 10006 and to deliver the same on this
date to the representative of Bankers Trust Company at the offices of Stikeman,
Elliott, Suite 5300, Commerce Court West, Toronto, Ontario, without receiving
any consideration for such certification, issuance and delivery.

          DATED at Toronto this 22nd day of June, 1998.


                                        ROYAL OAK MINES INC. 


                                        Per: /s/ James H. Wood
                                             ----------------------------
                                             Authorized Signing Officer


                                        Per:
                                             ----------------------------
                                             Authorized Signing Officer


<PAGE>


                                 ROYAL OAK MINES INC.


                               ORDER OF THE CORPORATION


TO:       MONTREAL TRUST COMPANY OF CANADA, as Trustee


--------------------------------------------------------------------------------


          Royal Oak Mines Inc. (the "CORPORATION"), pursuant to the provisions
of Section 2.2 of the trust indenture dated June 22, 1998 between the
Corporation and you, as trustee, orders you to certify and issue a 15% Demand
Bond in the principal amount of U.S. $5,000,000, to The Bank of Nova Scotia of
One Financial Place, 1 Adelaide Street East, 9th Floor, Toronto, Ontario and to
deliver the same on this date to the representative of The Bank of Nova Scotia
at the offices of Stikeman, Elliott, Suite 5300, Commerce Court West, Toronto,
Ontario, without receiving any consideration for such certification, issuance
and delivery.

          DATED at Toronto this 22nd day of June, 1998.


                                        ROYAL OAK MINES INC. 


                                        Per: James H. Wood
                                             ----------------------------
                                             Authorized Signing Officer


                                        Per:
                                             ----------------------------
                                             Authorized Signing Officer



<PAGE>



                                 ROYAL OAK MINES INC.


                              CERTIFICATE OF COMPLIANCE


TO:       MONTREAL TRUST COMPANY OF CANADA, as Trustee


--------------------------------------------------------------------------------


          Pursuant to the provisions of Article 1 and Section 2.2 of the
Indenture (as hereinafter defined) the undersigned, James H. Wood, duly
appointed Chief Financial Officer of Royal Oak Mines Inc. (the "CORPORATION"),
certifies for and on behalf of the Corporation and not in my personal capacity,
intending that the same may be relied upon by you without further enquiry, that:
     
(a)       I have read and understand the provisions of the trust indenture dated
June 22, 1998 (the "INDENTURE") between the Corporation and Montreal Trust
Company of Canada (the "TRUSTEE"), as trustee, relating to the issue,
certification and delivery of 15% Demand Bonds (the "BONDS") (defined terms used
herein have the respective meanings ascribed thereto in the Indenture);

(b)       I have examined the order of the Corporation dated June 22, 1998 (the
"ORDER") ordering the Trustee to issue, certify, and deliver Bonds to Bankers
Trust Company, Macquarie Bank Limited and The Bank of Nova Scotia in accordance
with Section 2.2 of the Indenture;

(c)       to the best of my knowledge, after such examination and investigation
as I have deemed necessary with regard to such actions, no further or other
actions are required to be taken by the Corporation or by any other person in
order to enable the Trustee to act in accordance with the Order;

(d)       each of Bankers Trust Company, Macquarie Bank Limited and The Bank of
Nova Scotia is a Hedging Counterparty within the meaning of the Indenture; and

(e)       the Bonds are to be pledged to Bankers Trust Company, Macquarie Bank
Limited and The Bank of Nova Scotia, respectively, to be held as security for
the obligations of the Corporation or an affiliate pursuant to Eligible Hedging
Indebtedness.

          DATED at Toronto this 22nd day of June, 1998.



                                        /s/ James H. Wood
                                        ----------------------------
                                        James H. Wood