<PAGE>









                            SECURITIES PURCHASE AGREEMENT


                                       BETWEEN:


                                ROYAL OAK MINES INC.,

                                       - and -

                                        AGENT





                           made the 17th day of April, 1998



<PAGE>


                          T A B L E   O F   C O N T E N T S

<TABLE>
<S>                                                                               <C>
1 - DEFINITIONS AND INTERPRETATION . . . . . . . . . . . . . . . . . . . . . . .  2
     1.1  Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2
     1.2  Monetary References. . . . . . . . . . . . . . . . . . . . . . . . . .  9
     1.3  Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  9
     1.4  Use of Singular and Plural . . . . . . . . . . . . . . . . . . . . . .  9
     1.5  Invalidity of Provisions . . . . . . . . . . . . . . . . . . . . . . .  9
     1.6  References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
     1.7  Generally Accepted Accounting Principles . . . . . . . . . . . . . . . 10
     1.8  Interpretation Not Affected by Headings. . . . . . . . . . . . . . . . 10
     1.9  Computation of Time Periods. . . . . . . . . . . . . . . . . . . . . . 10
     1.10 Day Not A Business Day . . . . . . . . . . . . . . . . . . . . . . . . 10

2 - TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
     2.1  Issuance of Debentures to the Lenders. . . . . . . . . . . . . . . . . 11
     2.2  Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
     2.3  Fees and Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
     2.4  Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

3 - REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . 13
     3.1  Representations and Warranties by the Corporation. . . . . . . . . . . 13
     3.2  Survival Representations and Warranties by the Corporation . . . . . . 26

4 - CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
     4.1  Conditions to the Obligations of the Agent re: the Initial
          Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
     4.2  Conditions to the Obligations of the Agent re: Additional
          Purchase Price Payments. . . . . . . . . . . . . . . . . . . . . . . . 31
     4.3  Waiver or Termination by the Agent . . . . . . . . . . . . . . . . . . 33

5 - CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
     5.1  Closing Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . 33
     5.2  Documents to be Delivered. . . . . . . . . . . . . . . . . . . . . . . 33

6 - GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
     6.1  Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . 34
     6.2  Remedies Cumulative. . . . . . . . . . . . . . . . . . . . . . . . . . 34
     6.3  Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

     <S>                                                                         <C>
     6.4  Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
     6.5  Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
     6.6  Announcements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
     6.7  Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
     6.9  Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . 38
     6.10 Reliance and Non-Merger. . . . . . . . . . . . . . . . . . . . . . . . 38
     6.11 Judgment Currency. . . . . . . . . . . . . . . . . . . . . . . . . . . 38
     6.12 Time of the Essence. . . . . . . . . . . . . . . . . . . . . . . . . . 39
     6.13 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
     6.14 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
     6.15 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

</TABLE>

<PAGE>

                            SECURITIES PURCHASE AGREEMENT

       THIS AGREEMENT is made the 17th day of April, 1998


BETWEEN:


               ROYAL OAK MINES INC., a corporation 
               amalgamated under the laws of the Province 
               of Ontario

               (the "Corporation")

               - and -


               AGENT, as defined herein



       WHEREAS the Corporation carries on business, inter alia, as an owner and
operator of the Kemess South Mine (as hereinafter defined);


       AND WHEREAS the Agent has agreed to cause the Lenders (as hereinafter
defined) to subscribe for and purchase from the Corporation, and the Corporation
has agreed to issue to the Lenders, senior secured debentures of the Corporation
in the aggregate principal amount of One Hundred and Twenty Million United
States Dollars (U.S.$120,000,000) upon and subject to the terms and conditions
hereinafter set out;


       AND WHEREAS the indebtedness of the Corporation to the Lenders under the
Debentures (as hereinafter defined) is being incurred by the Corporation in
connection with the construction, development and operation of the Kemess South
Mine;


       NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
mutual covenants hereinafter contained, the parties hereto agree as follows:

<PAGE>

ARTICLE 1 - DEFINITIONS AND INTERPRETATION

1.1    DEFINITIONS

       In this Agreement, unless the subject matter or context is inconsistent
therewith, the following terms and expressions will have the following meanings:

       (a)     "Additional Purchase Price Payment" and "Additional Purchase
       Price" have the meanings given to such terms, respectively, in Section
       2.2(b) hereof;

       (b)     "Agent" means Trilon Financial Corporation;

       (c)     "Aggregate Additional Purchase Price" means U.S.$30,000,000;

       (d)     "Agreement" means this Securities Purchase Agreement made the
       17th day of April, 1998 between the Corporation and the Agent, including
       all schedules hereto, as it may be amended, modified, restated or
       supplemented from time to time;

       (e)     "APM" means Arctic Precious Metals, Inc., a company incorporated
       under the laws of Nevada;

       (f)     "Associate" has the meaning ascribed thereto in the BUSINESS
       CORPORATIONS ACT (Ontario) and shall include any entity which is an
       Associate of an Associate, and so on;

       (g)     "Audited Financial Statements" means the audited consolidated
       financial statements of the Corporation as at and for the 12 month
       fiscal period ended December 31, 1997, consisting of a balance sheet, an
       income statement and a statement of changes in financial position,
       together with the notes thereto, copies of which have been provided to
       the Agent;

       (h)     "Business Day" means any day other than Saturday, Sunday or any
       statutory holiday in Toronto, Canada;

                                       2
<PAGE>

       (i)     "Change of Control of the Corporation" has the same meaning as is
       given to that term in the Debentures;

       (j)     "Closing Date" means April 30th, 1998 or such other date as the
       Agent and the Corporation may agree upon as the Closing Date;

       (k)     "Closing Time" means 3:00 p.m. (Toronto time) on the Closing Date
       or such other time as the Agent and the Corporation may agree upon as
       the Closing Time;

       (l)     "Common Shares" means the common shares in the capital of the
       Corporation;

       (m)     "Consent" has the meaning as is given to that term in Section
       3.1(g) hereof;

       (n)     "Copperstone Property" has the same meaning as is given to that
       term in the Debentures;

       (o)     "Corporation" means Royal Oak Mines Inc., and includes any
       predecessors or successors of the Corporation;

       (p)     "Debentures" mean the Series A Senior Secured Debentures ("Series
       A Debentures") of the Corporation in the aggregate principal amount of
       U.S.$85,000,000 and the Series B Secured Debentures ("Series B
       Debentures") of the Corporation in the aggregate principal amount of
       U.S.$35,000,000 to be issued to the Lenders pursuant to Section 2.1,
       which debentures are in the forms attached as SCHEDULE A-1 AND A-2
       respectively to this Agreement;

       (q)     "Debt" has the same meaning as is given to that term in the
       Debentures;

                                      3
<PAGE>

       (r)     "Default" has the same meaning as is given to that term in the
       Debentures;

       (s)     "Disclosed Defaults" has the meaning given to such term in
       Section 3.1(f) hereof;

       (t)     "Documents" has the same meaning as is given to that term in the
       Debentures but includes this Agreement, the Royalty Agreement and the
       Royalty Debenture;

       (u)     "Event of Default" has the same meaning as is given to that term
       in the Debentures;

       (v)     "Existing Encumbrances" has the same meaning as is given to that
       term in the Debentures;

       (w)     "Excluded Assets" means the Windy Craggy Property;

       (x)     "generally accepted accounting principles" means the accounting
       principles so described and promulgated by the Canadian Institute of
       Chartered Accountants which are applicable as at the date on which any
       calculation made hereunder is to be effective or as at the date of any
       financial statements referred to herein, as the case may be;

       (y)     "Glencore Agreement" means the letter agreement dated November 5,
       1997 between the Corporation and Glencore Ltd. relating to the sale by
       the Corporation of copper concentrate;

       (z)     "Governmental Body" has the same meaning as is given to that term
       in the Debentures;

       (aa)    "Initial Purchase Price" has the meaning given to such term in
       Section 2.2(a) hereof;

                                      4
<PAGE>

       (bb)    "Intellectual Property" means all trade marks, trade names,
       patents, patent applications, copyrights, trade secrets, logos,
       processes, computer systems and application software which are owned or
       used by, or which relate to the business of, the Corporation or the
       Subsidiaries;

       (cc)    "Interim Financial Statements" means the unaudited consolidated
       financial statements of the Corporation as at and for the 2 month period
       ended February 28, 1998 consisting of a balance sheet, an income
       statement and a statement of changes in financial position together with
       any notes thereto, a copy of which has been provided to the Agent;

       (dd)    "Kemess Mine" means the Kemess North Property and the Kemess
       South Mine;

       (ee)    "Kemess North Property" means all present and future property and
       assets 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
       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 North Property
       site, all operations, exploration and other activities carried on at
       such site and all permits, authorizations, licenses and similar
       approvals relating thereto;

       (ff)    "Kemess South Mine" means all present and future property and
       assets comprising or relating to what is generally referred to as the
       Kemess South Mine property in British Columbia, Canada including,
       without limitation, all mineral claims and leases referred to in
       SCHEDULE B-2 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;

       (gg)    "Kemess Mine Production Date" has the same meaning as is given to
       that term in the Debentures;

                                      5
<PAGE>

       (hh)    "Knowledge" of a party means the best knowledge of the senior
       management of that party (which in the case of the Corporation
       specifically includes but is not limited to the Kemess Mine Project
       Manager, the Kemess Mine Project Director and the Kemess Mine Manager of
       Project Accounting, after having made all reasonable inquiries;

       (ii)    "Lenders" means such Person or Persons who purchase the
       Debentures at the Closing Time or from time to time thereafter;

       (jj)    "Lien" has the same meaning as is given to that term in the
       Debentures;

       (kk)    "Material Authorizations" has the same meaning as is given to
       that term in the Debentures;

       (ll)    "Material Contracts" has the meaning given to that term in
       Section 3.1(x) hereof;

       (mm)    "Material Subsidiaries" means APM and all Subsidiaries each of
       which has total assets exceeding a fair market value of Can.$2,000,000;

       (nn)    "Materiality Threshold" means that the representation, warranty,
       covenant or other obligation in question shall apply only to subject
       matter which individually or in the aggregate is or should reasonably be
       expected, as determined by the Agent and the Lenders, acting reasonably,
       to be material to:

               (i)    the business, property or affairs of the Corporation
               taken as a whole;

               (ii)   the construction, ownership or operation of the Kemess
               Mine or the requirement that the Kemess Mine Production Date
               occur on or before December 31, 1998;

                                      6
<PAGE>

               (iii)  the Lenders, in their capacity as secured creditors of
               the Corporation under the Documents; or

               (iv)   the Agent in its capacity as a party to the Royalty
               Agreement and the Royalty Debenture;

       (oo)    "Mikwam Property" has the same meaning as is given to that term
       in the Debentures;

       (pp)    "Mortgaged Property" has the same meaning as is given to that
       term in the Debentures;

       (qq)    "Payment Certificate" has the meaning given to that term in
       Section 4.2(c) hereof;

       (rr)    "Payment Date" has the meaning given to that term in
       Section 2.2(b) hereof;

       (ss)    "Permitted Encumbrances" has the same meaning as is given to that
       term in the Debentures;

       (tt)    "Permitted Hedging Indebtedness" has the same meaning as is given
       to that term in the Debentures;

       (uu)    "Person" has the same meaning as is given to that term in the
       Debentures;

       (vv)    "Proceeds Conditions" means the conditions precedent in favour of
       the Agent that (i) the Kemess South Mine has produced concentrate over
       the immediately preceding 30 day period, and is able to sustain and
       maintain such production thereafter, of not less than 7500 short tons of
       concentrate yielding mineral content that is acceptable to Glencore Ltd.
       pursuant to the Glencore Agreement (without giving effect to any
       amendments thereof), (ii) at such time the Kemess South Mine accounts
       payable of the Corporation do not exceed 

                                       7
<PAGE>

       U.S.$15,000,000 and (iii) at such time the Kemess South Mine accounts 
       payable of the Corporation are not overdue in accordance with their 
       respective terms;

       (ww)    "Proposed Leaseback Assets" has the same meaning as is given to
       that term in the Debentures;

       (xx)    "Purchase Price" means (i) the Initial Purchase Price plus (ii)
       the aggregate of the Additional Purchase Price Payments, if any;

       (yy)    "Reorganization Undertaking" has the meaning given to that term
       in Section 4.1(1) hereof;

       (zz)    "Royalty Agreement" means the royalty agreement relating to the
       Kemess South Mine, between the Agent and the Corporation in the form
       attached as SCHEDULE C to this Agreement;

       (aaa)   "Royalty Debenture" means the debenture in favour of the Agent
       which, inter alia, secures the Corporation's obligations to the Agent
       pursuant to the Royalty Agreement in form and substance satisfactory to
       the Agent;

       (bbb)   "Sale" has the same meaning as is given to that term in the
       Debentures;

       (ccc)   "Security" has the same meaning as is given to that term in the
       Debentures;

       (ddd)   "Security Documents" has the same meaning as is given to that
       term in the Debentures;

       (eee)   "Senior Secured Debenture Facility" means the senior secured
       debenture facility in the original principal amount of Can.$19,500,000
       and U.S.$30,700,000 provided to the Corporation by DDJ Canadian High
       Yield Fund, Goldman, Sachs & Co. and Mellon Bank;

                                       8
<PAGE>

       (fff)   "Series A Debentures" and "Series B Debentures" have the meanings
       ascribed thereto in Section 1.1(p) hereof;


       (ggg)   "Subordinated Notes" means the outstanding 11% Series B Senior
       Subordinated  Notes of the Corporation due 2006 in the aggregate
       principal amount of U.S.$175,000,000;

       (hhh)   "Subordinated Note Trust Indenture" means the Trust Indenture
       dated as of August 12, 1996 among the Corporation, Kemess Mines Inc. and
       Mellon Bank, F.S.B. relating to the Subordinated Notes, as amended by
       (i) the First Supplemental Indenture dated and effective as of
       December 31, 1997 by and between the Corporation and Chase Manhattan
       Trust Company, National Association, the successor to Mellon Bank,
       F.S.B. as Trustee, (ii) the Second Supplemental Indenture dated and
       effective as of January 31, 1998 by and between the Corporation and
       Chase Manhattan Trust Company, National Association, as Trustee and,
       (iii) such other amendments as may be required in connection with the
       transaction contemplated by this Agreement and the other Documents;

       (iii)   "Subsidiaries" means all of the corporations listed on SCHEDULE E
       and any other corporations or limited liability companies which are or
       hereafter become 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/or 50% or more of the issued and outstanding fully
       participating shares 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; 

       (jjj)   "Taxes" means all taxes of any kind or nature whatsoever
       including, without limitation, income taxes, sales or value-added taxes,
       levies, stamp taxes, royalties, duties, and all fees, deductions,
       compulsory loans and withholdings imposed, levied, collected, withheld
       or assessed as of the date hereof or at any time in the future, by any
       governmental authority of or within Canada or any other jurisdiction
       whatsoever having power to tax, together 

                                       9

<PAGE>

       with penalties, fines, additions to tax and interest thereon; and

       (kkk)   "Windy Craggy Property" means the mineral claims in and around
       Windy Craggy mountain in the Tatshenshini/Alsek region of northwestern
       British Columbia, more particularly described in SCHEDULE F hereto.


1.2    MONETARY REFERENCES

       Any reference in this Agreement to "Canadian dollars" or "Can. $" or
similar terms shall be deemed to be a reference to lawful money of Canada and
any reference in this Agreement to "United States of America dollars", "United
States dollars" or "U.S. $" or similar terms shall be deemed to be a reference
to lawful money of the United States of America.  If no such references are made
with respect to any particular sum or obligation, the sum or obligation in
question shall be deemed to refer to lawful money of Canada.


1.3    GOVERNING LAW

       This Agreement shall be governed by and construed in accordance with the
laws of the Province of Ontario and the laws of Canada applicable therein.  The
Corporation submits to the jurisdiction of the courts of Ontario to determine
all issues whether at law or in equity, arising from this Agreement.


1.4    USE OF SINGULAR AND PLURAL

       Words importing the singular include the plural and vice versa and words
importing gender include all genders.


1.5    INVALIDITY OF PROVISIONS

       Each of the provisions contained in this Agreement is distinct and
severable and a declaration of invalidity, illegality or unenforceability of any
such provision or part thereof by a court of competent jurisdiction shall not
affect the validity or enforceability of any other provision hereof or thereof. 
Without limiting the generality of the foregoing, if any amounts on account of
fees or otherwise payable by the Corporation to the Agent hereunder exceed the
maximum amount recoverable under applicable law, the amounts so payable
hereunder shall be reduced to the maximum amount recoverable under applicable
law.

                                       10
<PAGE>

1.6    REFERENCES

       Except as otherwise specifically provided, reference in this Agreement
to any contract, agreement or any other instrument shall be deemed to include
references to the same as varied, amended, supplemented or replaced from time to
time and reference in this Agreement to any enactment, including without
limitation any statute, law, by-law, regulation, ordinance or order, shall be
deemed to include references to such enactment as re-enacted, amended or
extended from time to time.


1.7    GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

       Unless otherwise specifically provided herein, all accounting terms
shall be applied and construed in accordance with generally accepted accounting
principles consistently applied.


1.8    INTERPRETATION NOT AFFECTED BY HEADINGS

       The division of this Agreement into articles, sections, paragraphs,
subsections and clauses and the insertion of headings are for convenience of
reference only and shall not affect the construction or interpretation of this
Agreement.  The terms "this Agreement", "hereof", "herein", "hereunder" and
similar expressions refer to this Agreement and the schedules hereto and not to
any particular article, section, paragraph, clause or other portion hereof and
include any agreement or instrument supplementary or ancillary hereto.


1.9    COMPUTATION OF TIME PERIODS

       In this Agreement, in the computation of periods of time from a
specified date to a later specified date, unless otherwise expressly stated, the
word "from" means "from and including", and the words "to" and "until" each mean
"to but excluding".


1.10   DAY NOT A BUSINESS DAY

       In the event that any day on or before which any action is required to
be taken hereunder is not a Business Day, then such action shall be required to
be taken at or before the requisite time on the next succeeding day that is a
Business Day.

                                       11
<PAGE>

ARTICLE 2 - TRANSACTIONS

2.1    ISSUANCE OF DEBENTURES TO THE LENDERS

       On the terms and subject to the conditions hereof, at the Closing Time
the Agent will cause the Lenders to purchase from the Corporation and the
Corporation will issue and sell to the Lenders, the Series A Debentures and the
Series B Debentures substantially in the form attached hereto as SCHEDULES A-1
AND A-2 respectively.

2.2    PURCHASE PRICE

       (a)     Subject to compliance with the conditions precedent set forth in
       Section 4.1 hereof and the terms hereof, on the Closing Date, the Agent
       shall cause the Lenders to deliver to the Corporation, on account of the
       purchase price for the Debentures, certified cheques, bank drafts or
       wire transfers in an amount equal to U.S.$90,000,000 (the "Initial
       Purchase Price") less any unpaid fees and expenses payable by the
       Corporation to the Lenders or the Agent pursuant to Section 2.3 hereof. 
       The Corporation hereby irrevocably directs the Lenders to pay such fees
       and expenses to the Agent or the Lenders, as the case may be, on its
       behalf.  The Initial Purchase Price shall be allocated first to the
       Series B Debentures and second, to the Series A Debentures.


       (b)     The Additional Purchase Price shall be paid as hereinafter set
       forth.  Subject to compliance with the conditions precedent set forth in
       Section 4.2 hereof and the terms hereof, on the 5th Business Day
       following the Corporation providing to the Agent a notice in writing
       requesting an Additional Purchase Price Payment, which notice shall set
       out the amount thereof, the Agent shall cause the applicable Lenders to
       deliver to the Corporation a certified cheque, bank draft or wire
       transfer in the amount set forth in such notice (the amount of each such
       payment made by the Lenders under this Section 2.2(b) being referred to
       as an "Additional Purchase Price Payment" and the date of each payment
       to be made hereunder being referred to as a "Payment Date").  The
       aggregate of all Additional Purchase Price Payments hereunder shall be
       the "Additional Purchase Price".  Each Additional Purchase Price Payment
       shall be in a minimum amount equal to the lesser of (i) U.S.$10,000,000
       (and in denominations in excess thereof in multiples of U.S.$100,000.00)
       and (ii) the unpaid portion of the Aggregate Additional Purchase Price. 
       The Corporation hereby irrevocably directs the Lenders to deduct from
       any Additional Purchase Price Payment payable to the Corporation the
       amount of any unpaid fees and expenses payable by the Corporation to the

                                       12
<PAGE>

       Lenders or the Agent pursuant to Section 2.3 hereof and hereby directs
       the Lenders to pay such fees and expenses to the Agent or the Lenders,
       as the case may be, on its behalf.  Notwithstanding anything to the
       contrary contained in this Agreement or any of the Documents, neither
       the Agent nor the Lenders shall have any obligation to make any
       Additional Purchase Price Payments if any of the conditions precedent
       set forth in Section 4.2 hereof shall not have been satisfied within the
       time limited therefor.  For greater certainty, neither the Agent nor the
       Lenders will have any obligation to make any Additional Purchase Price
       Payments on or after August 15, 1998, or which in the aggregate will
       exceed the Agregate Additional Purchase Price.


2.3    FEES AND EXPENSES

       (a)     The Corporation acknowledges that the Agent and Lenders have
       earned a non-refundable fee of U.S.$2,400,000 (which is payable as to
       U.S.$1,200,000 to the Agent, as to U.S.$840,000.00 to the Lenders
       purchasing Series A Debentures on a pro rata basis, and as to
       U.S.$360,000.00 to the Lenders purchasing Series B Debentures on a pro
       rata basis, which the Corporation will pay on the Closing Date.  The
       Corporation acknowledges and agrees that it will be responsible for and
       will pay such fee whether or not the transactions hereunder are
       completed and even if it is the Agent who terminates its obligations
       under this Agreement pursuant to Section 4.3 hereof, unless such
       termination is as a result of the Agent expressly terminating its
       obligations hereunder solely pursuant to and in reliance on
       Section 4.1(n) hereof, in which event the fee provided for in this
       Section 2.3(a) shall be reduced to U.S.$100,000 which shall thereupon be
       payable upon demand by the Corporation to the Agent.  Any fee payable by
       the Corporation to the Agent under this Section 2.3(a) may be made by
       the Lenders paying the amount of such fees out of the Initial Purchase
       Price in accordance with Section 2.2(a) hereof;

       (b)     The Corporation acknowledges and agrees that on the Closing Date,
       the Agent will have earned and the Corporation will pay to the Agent an
       additional fee, by executing and delivering to the Agent the Royalty
       Agreement; and

       (c)     The Corporation acknowledges and agrees that in addition to the
       fees payable pursuant to Section 2.3(a) and (b) hereof, it will be
       responsible for and will pay or reimburse each of the Agent and the
       Lenders forthwith on demand for all reasonable fees, expenses and other
       out-of-pocket expenses paid or incurred by each of the Agent and the
       Lenders, its representatives and 

                                       13
<PAGE>

       consultants relating to their investigation of the Corporation, the 
       Subsidiaries and their respective businesses, the negotiation, 
       preparation and review of this Agreement and the other Documents and all
       other matters pertaining to the transactions hereby contemplated, 
       including, without limitation, all reasonable fees, expenses and other 
       out-of-pocket expenses paid or incurred by each of the Agent and the 
       Lenders for legal advice and services in connection with such 
       transactions.  The Corporation acknowledges and agrees that it will be 
       responsible for and will pay all such reasonable fees, expenses and 
       other out-of-pocket expenses whether or not the transactions hereunder 
       are completed and even if it is the Agent who terminates this Agreement 
       pursuant to Section 4.3 hereof.  The Agent acknowledges receipt of the 
       sum of U.S.$100,000 and Can.$100,000 on account of the Corporation's 
       obligation under this Section 2.3(c).

2.4    USE OF PROCEEDS

       The Corporation hereby covenants, agrees, represents and warrants with
and to the  Agent and the Lenders that the Corporation will use the proceeds
from the issuance and sale of Debentures to the Lenders:

(a)    to repay all amounts outstanding under the Senior Secured Debenture
       Facility;

(b)    to repay those Kemess South Mine accounts payable of the Corporation
       listed in SCHEDULE G; and

(c)    to fund capital and non-capital expenses of the Corporation in
       connection with the construction, development and operation of the
       Kemess South Mine.

In addition to the foregoing, and until the occurrence of a Default or Event of
Default hereunder:

(d)    the Corporation may use such proceeds for general corporate purposes in
       an amount not to exceed the aggregate of U.S.$20,000,000; and

(e)    to the extent that the amounts referred to in Section 2.4(d) hereof are
       insufficient to satisfy the general corporate purposes of the
       Corporation, and provided that the Proceeds Conditions have then been
       and remain satisfied, the Corporation may then use such proceeds for
       general corporate purposes.


                                       14

<PAGE>

ARTICLE 3 - REPRESENTATIONS AND WARRANTIES

3.1    REPRESENTATIONS AND WARRANTIES BY THE CORPORATION

       The Corporation hereby represents and warrants to the Agent and to the
Lenders as follows and acknowledges that each of the Agent and the Lenders is
relying on such representations and warranties in connection with its entering
into this Agreement, the Lenders's purchase of the Debentures pursuant to this
Agreement, and in entering into the other transactions contemplated by this
Agreement:

       (a)     INCORPORATION AND STATUS OF THE CORPORATION.  The Corporation is
       the successor corporation resulting from the amalgamation on December
       29, 1997 of the former Royal Oak Mines Inc. and Kemess Mines Inc., is
       duly amalgamated and organized under the laws of its jurisdiction of
       incorporation, is in good standing in each jurisdiction where, by reason
       of its business or assets, it is required to be qualified or licensed
       and has, subject to the Materiality Threshold, all powers, licenses,
       franchises and permits required to own its assets and carry on its
       business as the same is presently carried on.

       (b)     POWER AND CAPACITY.  The Corporation has the corporate power to
       enter into each of this Agreement and the other Documents and to do all
       acts and things as are required or contemplated hereunder or thereunder
       to be done, observed and performed by it.

       (c)     DUE AUTHORIZATION, NO CONTRAVENTION.  The entering into and the
       performance by the Corporation of this Agreement, the other Documents
       and the transactions contemplated herein and therein (i) have been duly
       authorized by all necessary corporate action on the part of the
       Corporation and (ii) do not and will not contravene, violate, breach or
       result in any default under the articles, by-laws, constating documents
       or other organizational documents of the Corporation, or, other than the
       Senior Secured Debenture Facility and the Subordinated Note Trust
       Indenture, any agreement to which the Corporation is a party or, subject
       to the Materiality Threshold, any term or provision of any regulatory
       license or permit or any order of any court, governmental authority or
       regulatory body or any law or regulation of any jurisdiction in which
       the Corporation carries on its business.

       (d)     BINDING AGREEMENT.  This Agreement and the other Documents have

                                       15
<PAGE>

       been duly executed and delivered by the Corporation and constitute
       legal, valid and binding obligations enforceable against the Corporation
       in accordance with their terms, subject only to the availability of
       equitable remedies and the effect of bankruptcy, insolvency and similar
       laws affecting the rights of creditors generally.

       (e)     NO PROCEEDINGS.  As of the date of execution of this Agreement,
       except as is disclosed in SCHEDULE H and subject to the Materiality
       Threshold there is no litigation, arbitration or administrative
       proceedings, actions, suits or investigations outstanding, pending or,
       to the Knowledge of the Corporation, threatened against the Corporation
       or any of its properties.  None of the transactions contemplated hereby
       or by the other Documents have been enjoined by any Governmental Body
       and no suit or other proceeding challenging the transactions
       contemplated hereby or by the other Documents has been instituted or, to
       the Knowledge of the Corporation, threatened, and no investigative
       demand on the Corporation or any Subsidiary related to such transactions
       has been made by any Governmental Body and no Governmental Body or
       Person has, to the Knowledge of the Corporation, threatened to take any
       such action.

       (f)     COMPLIANCE WITH APPLICABLE DOCUMENTS AND LAWS.  Except as may be
       expressly set out in SCHEDULE I (the "Disclosed Defaults") (which
       Disclosed Defaults, other than amounts owed to the holders of those
       Existing Encumbrances set out in Part I of SCHEDULE C1 to the
       Debentures, will have been remedied on or before the Closing Date), the
       Corporation is not in violation of, or in default under (and there does
       not exist any event or condition which, after notice or lapse of time or
       both, would constitute such a default under), any term of its articles,
       by-laws, constating documents or other organizational documents, or,
       subject to the Materiality Threshold, under any term of any agreement,
       instrument, judgment, decree, order, statute, injunction, governmental
       regulation, rule or ordinance (including, without limitation, those
       relating to zoning, city planning or similar matters) applicable to the
       Corporation, or to which the Corporation is bound or which may otherwise
       be applicable to any property of the Corporation.

       (g)     NO CONSENTS REQUIRED.  Except as may be expressly set out in
       SCHEDULE J hereto (the "Consents") there are no consents, permits,
       approvals, confirmations and acknowledgements required in order for the
       Corporation to carry out the transactions contemplated hereby and by the
       Documents, provided that the granting of fixed and specific Liens or
       assignments which the 

                                       16
<PAGE>

       Lenders may request following the Closing Date pursuant to its right to 
       do so under the Documents may require consents or approval of other 
       Persons so as not to constitute events of default under any agreements 
       with such Persons.

       (h)     SHARES.  SCHEDULE E sets out the name and jurisdiction of
       incorporation, continuance or amalgamation of the Corporation and each
       Subsidiary, and SCHEDULE K accurately describes the respective
       authorized and issued share capital as of the date hereof of the
       Corporation and each Material Subsidiary.  Other than as disclosed in
       Section 3.1(i) hereof, there are no shareholders' agreements, pooling
       agreements, voting trusts or other similar agreements with respect to
       the ownership or voting of any of the shares of the Corporation or of
       Material Subsidiaries or pursuant to which any person may have any right
       or claim in connection with any existing or past equity interest in the
       Corporation or such Material Subsidiaries.

       (i)     NO OBLIGATION TO ISSUE SHARES.  Except for (i) agreements,
       options, warrants, rights and conversion or other rights granted to
       current or former directors and employees of the Corporation in respect
       of which no more than 10 million Common Shares of the Corporation may be
       acquired, (ii) agreements to issue to the Corporation shares of APM
       (which shares when issued will be subject to the Security and all share
       certificates in respect thereof will, at the request of the Lenders, be
       delivered to the Lenders), and (iii) special warrants and common shares
       which may be issued by the Corporation to its creditors, in lieu of
       partial payment to such creditors, and to other Persons, there are no
       agreements, options, warrants, rights of conversion or other rights
       pursuant to which the Corporation or any of the Subsidiaries is or may
       become obligated to issue any shares or any securities convertible into,
       or exchangeable for, shares.

       (j)     FINANCIAL STATEMENTS.  The Audited Financial Statements and the
       Interim Financial Statements have been prepared in accordance with
       generally accepted accounting principles consistently applied (subject
       to usual year-end adjustments in the case of the Interim Financial
       Statements) and fairly present the financial position of the Corporation
       and the Subsidiaries and the results of their operations at the times
       and for the periods indicated.  The Corporation and each of the
       Subsidiaries has no outstanding liabilities, contingent or otherwise,
       other than those disclosed in the Audited Financial Statements and the
       Interim Financial Statements and other than trade or business
       obligations subsequently incurred in the ordinary course of business,
       which such trade and business obligations are currently in good standing
       in accordance with their respective terms, other than as set forth in
       SCHEDULE L.

                                       17
<PAGE>

       (k)     PERMITS, COMPLIANCE WITH LAWS.  This section 4.1(k) shall be
       subject to the Materiality Threshold.  The Corporation has all licences,
       permits, approvals and franchises that it requires, or is required to
       have, to own its properties and assets and to carry on its business as
       presently conducted including, without limitation, in respect of the
       construction and development of the Kemess South Mine.  All such
       licences, permits, approvals and franchises are in good standing and,
       except as is disclosed in item 11 of SCHEDULE H, no actions,
       proceedings, investigations or other steps of any kind are in process,
       pending, to the Knowledge of the Corporation threatened, or reasonably
       foreseeable which might result in any such licence, permit, approval or
       franchise being terminated, revoked, withdrawn, suspended or otherwise
       made unavailable to the Corporation for any period of time.  The
       Corporation has applications pending for all additional licences,
       permits, approvals and franchises necessary or desirable for the
       commencement of mining operations at the Kemess Mine in the manner and
       to the full extent contemplated in plans and projections disclosed to
       the Lenders (a list of which  additional licenses are attached hereto as
       SCHEDULE M) and has no reason to believe that any or all such additional
       licences, permits, approvals and franchises will not be granted to
       prevent, impair or interfere with the Kemess Mine Production Date
       occurring on or before December 31, 1998.  Except as is disclosed in
       item 11 of SCHEDULE H, the Corporation is conducting its business in
       compliance with all applicable laws, regulations, by-laws and ordinances
       of each jurisdiction in which its business is carried on, including
       without limitation all laws, regulations, by-laws and ordinances
       relating to mining concessions.

       (l)     NO RESTRICTIONS.  Except as may be provided for in agreements
       between the Province of British Columbia and the Corporation respecting
       economic assistance, copies of which have been provided to the Agent,
       the Corporation is not a party to or bound by any agreement which would
       restrict or limit its right to carry on any business or activity or to
       solicit business from any Person or in any geographical area or
       otherwise to conduct the business of the Corporation.  The Corporation
       is not subject to any legislation or any judgment, order or requirement
       of any court or governmental authority which is not of general
       application to persons carrying on a business similar to the business of
       the Corporation.

       (m)     LIMITATION ON PAYMENT RESTRICTIONS.  Except for restrictions
       contained herein, in the Senior Secured Debenture Facility and in the
       Subordinated Note Trust Indenture, neither the Corporation nor any
       Subsidiary is subject to any 

                                       18
<PAGE>

       consensual restriction on its ability (a) to pay dividends or make any 
       other distributions on its equity securities to, or pay any indebtedness
       owing to, or repurchase or redeem any equity securities from, the 
       holders of such equity securities, the Corporation or any other 
       Subsidiary, (b) to make any loans or advances to the Corporation or any
       other Subsidiary, or (c) to transfer any of its property or assets to 
       the Corporation or any other Subsidiary.

       (n)     NO MATERIAL ADVERSE CHANGES, DAMAGE OR ACCIDENTS.  Since March 1,
       1998, the Corporation has operated its business diligently and only in
       the ordinary course of business and except for the Disclosed Defaults,
       there has not been any material adverse change in the condition
       (financial or otherwise), assets, liabilities, affairs, business or
       operations of the Corporation, any substantial loss of or damage to the
       assets of the Corporation, or any accident (subject to the Materiality
       Threshold) relating to the mines, properties or mining operations of the
       Corporation in which any employee of the Corporation was injured.  For
       greater certainty, since March 1, 1998 the Corporation has not:

               (i)    incurred any liabilities other than in the ordinary
               course of business consistent with past practice;

               (ii)   sold, encumbered, assigned or transferred any assets or
               properties of the Corporation, other than for fair market value,
               to purchasers at arms length to the Corporation and in the
               ordinary course of business consistent with past practice;

               (iii)  created, incurred, assumed or guaranteed any Debt except
               in the ordinary course of business consistent with past practice
               or subjected any of its assets to any Lien except for Existing
               Encumbrances;

               (iv)   changed or amended its governing documents in any
               respect;

               (v)    declared, set aside, paid or made any distributions in
               cash or property on its equity securities including its Common
               Shares;

               (vi)   directly or indirectly redeemed, purchased or otherwise
               acquired any of its equity securities;

                                       19
<PAGE>

               (vii)  other than the resignations of John May, Nancy Deshaw and
               Scott Lampe, suffered any resignation or termination of
               employment of any key officers or directors or become aware of
               any impending resignation or termination of employment of any
               such key officers or directors;

               (viii) except in the ordinary course of its business, or as
               disclosed in writing to the Agent prior to the date hereof,
               materially increased the compensation payable or to become
               payable to any of its officers or directors or materially
               increased any bonus, insurance, pension or other employee benefit
               plan, payment or arrangement made for or with any such officers
               or directors;

               (ix)   materially changed its accounting methods, principles or
               practices; or

               (x)    entered into any agreement or commitment to do any of the
               things described in this section.

       (o)     NO WORK ORDERS.  Except as is disclosed in item 11 of SCHEDULE H
       and subject to the Materiality Threshold, no work orders, directions or
       notices have been issued pursuant to any applicable law relating to the
       business of the Corporation or any part of the Mortgaged Property or
       relating to or pursuant to any environmental matters affecting the
       foregoing and the Corporation has not received any notification from any
       Governmental Body that any work, repairs, construction or capital
       expenditures are required to be made in respect of the Mortgaged
       Property or any part thereof as a condition of continued compliance with
       any applicable law or any Material Authorizations issued thereunder.

       (p)     NO DEFAULT.  Subject to the Materiality Threshold, the
       Corporation is not in default or breach under any material commitment or
       obligation under the terms and conditions relating to any Material
       Authorizations and there exists no state of facts which, after notice or
       the passage of time or both, would constitute such a default or breach
       and there are no proceedings in progress, pending or, to the Knowledge
       of the Corporation, threatened which may result in the revocation,
       cancellation, suspension, non-grant or any adverse 

                                       20
<PAGE>

       modification of any Material Authorization except as is disclosed in 
       item 11 of SCHEDULE H. The Corporation has obtained all Material 
       Authorizations necessary or desirable to carry on all activities 
       currently and previously carried on at the Kemess Mine.
       
       (q)     NON-ARM'S LENGTH TRANSACTIONS.  Except as is described in
       employment agreements and correspondence delivered to the Agent prior to
       the date hereof, the Corporation is not a party to any contract,
       commitment or transaction (including by way of loan) with any officer,
       director or shareholder of the Corporation, any of the Subsidiaries, or
       any of their respective affiliates or associates, other than as
       disclosed in the Audited Financial Statements and the Interim Financial
       Statements and other than employment contracts in the ordinary course of
       business.

       (r)     TAX MATTERS.

               (i)    The Corporation has prepared and filed on a timely basis
               with all appropriate Governmental Bodies all returns with respect
               to Taxes and other documents that it is required to file in
               respect of any Taxes for all fiscal periods ending on or prior to
               the Closing Date and all such returns or other documents are
               correct and complete in all material respects;

               (ii)   The Corporation has paid in full all Taxes due on or
               before the Closing Date and, in the case of Taxes accruing on or
               before the Closing Date that are not due on or before the Closing
               Date, the Corporation will have made adequate provision in its
               books and records and financial statements for such payment; and
               the Corporation does not have any liability for Taxes other than
               those provided for in the Audited Financial Statements and the
               Interim Financial Statements and those arising subsequently in
               the ordinary course of the operation of its business;

               (iii)  The Corporation has withheld from each payment made to
               any of its present or former employees, officers, directors and
               to all persons who are non-residents of the applicable
               jurisdictions all amounts required pursuant to Applicable Law to
               be withheld or remitted and will continue to do so until the
               Closing Date and furthermore has remitted such amounts within the
               applicable periods to the appropriate Governmental Body; the
               Corporation has remitted all Canada Pension Plan 

                                       21
<PAGE>

               contributions, unemployment insurance premiums, employer health 
               taxes and other Taxes payable by it in respect of its employees 
               and has or will have remitted such amounts to the appropriate 
               Governmental Body within the time required under the applicable 
               legislation; and the Corporation has charged, collected and 
               remitted on a timely basis all Taxes as required under applicable
               legislation on any sale, supply, or delivery whatsoever, made by 
               the Corporation;
               
               (iv)   Except for a disputed assessment of fuel taxes payable by
               the Corporation to the government of Canada in the approximate
               amount of Can.$100,000, there are no reassessments of the
               Corporation with respect to Taxes that have been issued and are
               outstanding; no Governmental Body has challenged, disputed or
               questioned the Corporation in respect of Taxes or in respect of
               any returns, filings or other reports filed under any statute
               providing for Taxes; the Corporation has not received any
               indication from any Governmental Body that an assessment or a
               reassessment in respect of the Corporation is proposed; and the
               Corporation has not executed or filed any agreement extending the
               period for assessment, reassessment or collection of any Taxes.

       (s)     NO ENCUMBRANCES.  Each of the Corporation and APM owns and has
       good and marketable title, free and clear of all Liens except Existing
       Encumbrances, to all assets used in connection with its business
       including, without limitation, all assets reflected on the balance sheet
       included in the Audited Financial Statements and the Interim Financial
       Statements or acquired by it after the date of such balance sheet except
       for changes in such assets in the ordinary course of business subsequent
       to that date.  All material operating facilities, equipment and other
       material items of tangible property and assets owned by the Corporation
       are in good operating condition and repair, subject to normal wear and
       maintenance and having regard to their respective ages, are usable in
       the regular and ordinary course of business and conform to all
       Applicable Laws relating to their construction, use and operation,
       except where such failure, individually or in the aggregate, would not
       have a material adverse effect on the Corporation.  The Corporation's
       annual report on Form 10-K for the fiscal year ended December 31, 1997
       filed with the United States Securities And Exchange Commission pursuant
       to the Securities Exchange Act of 1934, as amended contains a complete
       and accurate description of all material property and assets owned by
       the Corporation except that since the date of such annual report, the
       Proposed Leaseback Assets have been sold and leased back by the
       Corporation pursuant to an operating lease.  SCHEDULE 

                                       22
<PAGE>

       N contains a complete and accurate description of all material 
       property and assets owned by the Corporation relating to the Kemess 
       Mine.  Subject to the Materiality Threshold, all equipment or other 
       tangible assets or property situated on the premises of the 
       Corporation, or necessary to the operation of the business of the 
       Corporation, which is leased under a capital lease or under a 
       material operating lease is listed in SCHEDULE O.  Subject to the 
       Materiality Threshold, the Corporation is in compliance with all 
       terms of agreements and arrangements governing the leased items 
       listed in SCHEDULE O.

       (t)     MATERIAL INDEBTEDNESS.  SCHEDULE P contains a list of all
       material indebtedness of the Corporation in excess of Can$1,000,000 and
       the identity of the Persons to whom it is owed.  The accounts payable of
       the Corporation listed in SCHEDULE G relate only to the construction,
       development and operation of the Kemess South Mine.

       (u)     SECURITY DOCUMENTS

               (i)    At the Closing Time, the Security Documents and the other
               Documents (other than this Agreement, the Royalty Agreement and
               the Royalty Debenture) will create a valid and enforceable
               security interest and Lien upon the Mortgaged Property securing
               the payment and satisfaction of all obligations of the
               Corporation and APM to the Lenders.  At the Closing Time, such
               security interests will be perfected security interests subject
               to no prior Liens or Liens ranking senior in priority to the
               Liens in favour of the Lenders, except for such Liens in favour
               of the Agent pursuant to the Royalty Agreement and the Royalty
               Debenture and except for such Liens relating to or securing Debt
               of the Corporation not in excess of Can.$10,000,000 as may be
               held by holders of those Existing Encumbrances set out in Part 1
               of SCHEDULE C1 to the Debentures.

               (ii)   At the Closing Time, the Royalty Agreement and the
               Royalty Debenture will create a valid and enforceable security
               interest and Lien upon the Kemess South Mine securing the payment
               and satisfactions of all obligations thereunder of the
               Corporation to the Agent.  At the Closing Time, such security
               interests will be perfected security interests subject to no
               prior Liens or Liens ranking senior in priority to the Liens in
               favour of the Agent, except for such Liens relating to or
               securing Debt of the Corporation not in excess of Can.$10,000,000
               as may be held by holders of those Existing Encumbrances set out
               in Part 1 of SCHEDULE C1 to the Debentures.

                                       23
<PAGE>

       (v)     EMPLOYMENT MATTERS.  Except as is disclosed in SCHEDULE Q, the
       Corporation is not a party to or is not bound by any:

               (i)    written contract or commitment for the employment of any
               employee or officer providing for an annual salary (including
               benefits) of in excess of Can.$200,000 or a payment on
               termination of in excess of six months salary and benefits;

               (ii)   oral contract or commitment for the employment of any
               employee or officer, except for contracts of indefinite hire
               terminable by the Corporation without cause on reasonable notice;

               (iii)  in the case of the Kemess Mine only, contract with or
               commitment to any trade union, council of trade unions, employee
               bargaining agent or affiliated bargaining agent (collectively
               called "labour representatives") and the Corporation has not
               conducted negotiations with respect to any such future contracts
               or commitments; no labour representatives hold bargaining rights
               with respect to any employees of the Corporation relating to the
               Kemess Mine; no labour representatives have applied to have the
               Corporation declared a related employer pursuant to the
               applicable labour legislation; and, to the Knowledge of the
               Corporation, there are no current or threatened attempts to
               organize or establish any trade union or employee association
               with respect to the Kemess Mine project provided, however, that
               the Corporation anticipates that steps may be taken by its
               employees to unionize and negotiate collective bargaining
               agreements for the Kemess Mine at some time in the future; or

               (iv)   except as is disclosed in financial information made
               available to the Agent prior to the date hereof and subject to
               the Materiality Threshold, bonus, pension, multi-employer, profit
               sharing, deferred compensation, retirement, disability, health
               insurance or similar benefit plan, with respect to any of its
               employees or others (including without limitation any agreements
               in respect of employee share ownership plans), other than Canada
               Pension Plan, the Ontario Health Insurance Plan and other similar
               health plans established and administered by any other
               governmental authority or workers' compensation insurance

                                       24
<PAGE>

               provided pursuant to statute.

       Subject to the Materiality Threshold, there is no work stoppage or other
       concerted action, grievance or dispute existing or, to the Knowledge of
       the Corporation, threatened against the Corporation, and there is no
       material complaint, grievance, claim, work order or investigation that
       has been filed, made, commenced or, to the Knowledge of the Corporation,
       threatened against the Corporation pursuant to any human rights,
       occupational health and safety, workers compensation, employment
       standards or pay equity legislation or any similar legislation of any
       jurisdiction in which the Corporation carries on its business.

       (w)     INTELLECTUAL PROPERTY.  The Corporation owns and has good and
       marketable title, free and clear of all Liens except Existing
       Encumbrances, to the Intellectual Property.  The conduct of the business
       of, and the use of the Intellectual Property by the Corporation does not
       infringe, and the Corporation has not received any notice, complaint,
       threat or claim alleging infringement of, any patent, trade mark, trade
       name, copyright, industrial design, trade secret or other propriety
       right of any other Person.  To the Knowledge of the Corporation, the
       Intellectual Property which is not owned by the Corporation is being
       used with the consent of, and in accordance with the consent or licence
       from, the rightful owner thereof.  The Corporation has taken all
       necessary steps to establish, preserve and protect its rights in the
       Intellectual Property which is material to the Corporation.

       (x)     MATERIAL CONTRACTS.  SCHEDULE R contains a complete list of all
       agreements of the Corporation which are material to the Kemess Mine and
       which have not yet been fully performed by the parties thereto,
       including without limitation agreements which relate to construction
       underway or proposed at the Kemess Mine and including, without
       limitation, royalty, refining and shipping agreements (the "Material
       Contracts").  Subject to the Materiality Threshold, and other than the
       Disclosed Defaults (which Disclosed Defaults, other than amounts owed to
       those holders of the Existing Encumbrances set out in Part I of SCHEDULE
       C1 to the Debentures, will have been remedied on or before the Closing
       Date), each of the Material Contracts is in full force and effect
       without amendment, and there has been no default under any of them, or
       under any other material commitment or obligation, by the Corporation
       or, to the Knowledge of the Corporation, any other party, nor has any
       event occurred that, with the giving of notice, lapse of time or any
       other condition subsequent, would constitute a default under or would

                                       25
<PAGE>

       otherwise allow the termination of any Material Contract.

       (y)     MINING CONCESSIONS.  SCHEDULES B-1 AND B-2 contains a complete
       and accurate list of all material mining claims, concessions and leases
       in which the Corporation has an interest relating in any way to the
       Kemess Mine, including, without limitation, all mining claims,
       concessions and leases in respect of which the Corporation has any
       obligation to contribute funds or make payments, other than fees or
       taxes payable in the ordinary course under the regulations governing
       such claims, concessions or leases.  The Corporation is the absolute
       beneficial owner of, and has good and marketable title to, such mining
       claims, concessions and leases in accordance with governing laws and
       regulations, free of all Liens except for such rights as may be held by
       Kemess South Resources Limited Partnership as disclosed in item (a) of
       Part II of SCHEDULE C1 to the Debenture, by the Lenders under the Senior
       Secured Debenture Facility and by the holders of the Existing
       Encumbrances.

       (z)     PRICING, HEDGING PROTECTION.  Subject to the Materiality
       Threshold, SCHEDULE S contains a complete and accurate list and
       description of all hedging or related arrangements to which the
       Corporation is a party or by which it is bound including, without
       limitation, forward sale contracts, options, interest rate swap
       agreements, currency swap agreements, derivative agreements and similar
       arrangements.  None of the hedging or related arrangements entered into
       by the Corporation provides for the granting of (i) any Lien against the
       property, assets and undertaking of the Corporation other than the
       Permitted Encumbrances described in Section (b) of the definition
       thereof, or (ii) production advances or any other disposition of any
       property, assets or undertaking of the Corporation in consideration for
       advance or accelerated payment or other manner of prepayment or payment
       not contemporaneous with delivery other than for the sales of up to
       U.S.$10,000,000 of copper concentrate pursuant to the Glencore
       Agreement.

       (aa)    ENVIRONMENTAL MATTERS.  Except as is disclosed in item 11 of
       SCHEDULE H regarding the sediment concerns at the Kemess South Mine and
       subject to the Materiality Threshold, the Corporation is not in
       violation of any applicable federal, provincial, state, municipal or
       local laws, regulations, orders, governmental decrees or ordinances with
       respect to environmental, health or safety matters (collectively,
       "Environmental Laws") and no actions, proceedings, investigations or
       other steps of any kind are in process, pending, to its Knowledge
       threatened, or reasonably foreseeable with respect to any such existing
       or past violation or alleged violation or other liability whatsoever

                                       26
<PAGE>

       on the part of the Corporation under Environmental Laws.  For greater
       certainty, subject to the same qualifications and without limiting the
       generality of the foregoing:

               (i)    the Corporation has carried on its business and at all
               times has received, handled, used, stored, treated, shipped and
               disposed at all times of all contaminants in compliance with all
               Environmental Laws;

               (ii)   there have been no releases, deposits or discharges, in
               violation of Environmental Laws, of any hazardous or toxic
               substances, materials, pollutants, contaminants or wastes into
               the earth, air or into any river, stream, lake or other body of
               water or into any municipal or other sewer or drain water
               systems;

               (iii)  no orders, directions or notices have been issued
               pursuant to any Environmental Laws relating to the business or
               assets of the Corporation; and

               (iv)   the Corporation has not failed to report to the proper
               Governmental Body the occurrence of any event which is required
               to be so reported by any Environmental Laws.

       (bb)    PLACES OF BUSINESS.  The registered office of the Corporation is
       situated at BCE Place, P.O. Box 747, Suite 2500, 181 Bay Street,
       Toronto, Ontario, Canada M5J 2T7, and the chief executive office of the
       Corporation is situated at 5501 Lakeview Drive, Kirkland, Washington,
       U.S.A. 98033.

                                       27
<PAGE>

       (cc)    ALL MATERIAL INFORMATION SUPPLIED.  The Corporation has provided
       to the Agent all material information relating to the financial
       condition, business and prospects of the Corporation and all information
       provided to the Agent is true, accurate and complete in all material
       respects and omits no material fact necessary to make such information
       not misleading provided, however, that the Corporation is not
       representing and warranting that the financial and operating projections
       made by it will accurately correspond to actual future results
       notwithstanding that they are based on the best information currently
       available to the Corporation.  For greater certainty, all documents
       provided to the Agent in the course of investigating, negotiating and
       preparing the Documents and the property, assets and affairs of the
       Corporation are complete and, subject to the proviso in the immediately
       preceding sentence, accurate in every respect and copies of all such
       documents provided to the Agent conform in every respect to the
       originals thereof.

       (dd)    DEBENTURE COVENANTS.  No event or circumstance has occurred or
       exists which is inconsistent with the covenants and agreements of the
       Corporation set out in the Debentures or which would, immediately or
       with the passage of time or giving of notice or taking of any other
       prerequisite step, constitute a Default or Event of Default thereunder.

       (ee)    SUBORDINATED NOTES.  Other than the Disclosed Defaults, the
       Corporation is in compliance with all terms and conditions and
       agreements applicable to the Subordinated Notes, and the Corporation
       will after giving effect to the transactions contemplated by this
       Agreement and the other Documents, be in compliance with all terms and
       conditions and agreements applicable to the Subordinated Notes.  The
       indebtedness under the Debentures, the Royalty Agreement and the Royalty
       Debenture will fully constitute "Permitted Indebtedness" and the
       Security and the Royalty Debenture will in each and every respect
       constitute "Permitted Liens" under the Subordinated Note Trust
       Indenture.  The Corporation has delivered to the Agent complete and
       accurate copies of all agreements and documents relating to the
       Subordinated Notes including, without limitation, the Subordinated Note
       Trust Indenture.  The Subordinated Notes will be at the Closing Date and
       thereafter remain in accordance with their terms, fully subordinated and
       postponed to the obligations of the Corporation to the Agent and the
       Lenders under the Documents, which obligations constitute "Senior
       Indebtedness" under the Subordinated Note Trust Indenture.

                                       28
<PAGE>

       (ff)    SUBSIDIARIES OF THE CORPORATION.  SCHEDULE E contains a list of
       all of the Subsidiaries of the Corporation, including the jurisdiction
       of incorporation, continuance and amalgamation for each such Subsidiary.

       (gg)    PROVINCIAL ECONOMIC ASSISTANCE.  The Province of British Columbia
       has unconditionally and irrevocably advanced to the Corporation
       approximately, Can.$154,000,000 of the previously committed economic
       assistance, compensation and investment.  All such economic assistance,
       compensation and investment is completely and accurately described in
       SCHEDULE T and the Agent has been provided with true, complete and
       accurate copies of all agreements and other documents relating thereto. 
       Except for annual payments of Can.$1,000,000 for each of the 12
       successive years commencing in 1999, as identified in SCHEDULE T, there
       are no further outstanding commitments of economic assistance,
       compensation or investment which remain to be completed and there are no
       commitments, agreements or arrangements with any Governmental Body which
       would be breached or otherwise adversely impacted by the transactions
       contemplated by the Documents or which could in any way preclude,
       hinder, prejudice or delay the exercise of the Lenders's or Agent's
       rights and remedies hereunder and thereunder.

       (hh)    WINDY CRAGGY PROPERTY.  The inability of the Corporation to incur
       expenditures on and maintain in good standing the Windy Craggy Property
       will not result in: (i) any diminution in the amounts of payments from
       the government of British Columbia pursuant to the agreement of June 27,
       1997; (ii) revocation of any permits issued by the government of British
       Columbia in connection with the Kemess Mine; or (iii) any material
       adverse effect on the ability of the Corporation to conduct mining
       operations at, and to maintain good title to, the Kemess Mine; and the
       Windy Craggy Property does not include or in any way comprise to the
       property and assets comprising the Kemess Mine.


3.2    SURVIVAL REPRESENTATIONS AND WARRANTIES BY THE CORPORATION

       The representations and warranties made by the Corporation pursuant to
Section 3.1 hereof will survive the closing of the issuance of the Debentures
and the other transactions provided for herein and, notwithstanding such closing
or any investigation made by or on behalf of the Agent or the Lenders or any
other person or any knowledge of the Agent or the Lenders or any other person,
shall continue in full force and effect for the benefit of the Agent and the
Lenders.

                                       29
<PAGE>

ARTICLE 4 - CONDITIONS

4.1    CONDITIONS TO THE OBLIGATIONS OF THE AGENT RE: THE INITIAL PURCHASE
       PRICE

       Notwithstanding anything herein contained, the obligation of the Agent
to complete the transactions provided for herein and to cause the Lenders to pay
the Initial Purchase Price will be subject to the fulfilment of the following
conditions at or prior to the Closing Time, and the Corporation covenants to use
its best efforts to ensure that such conditions are fulfilled.

       (a)     ACCURACY OF REPRESENTATIONS AND WARRANTIES AND PERFORMANCE OF
       COVENANTS.  The representations and warranties of the Corporation
       contained herein or in any other Document shall be true and accurate at
       the Closing Time.  In addition, the Corporation shall have complied with
       all covenants and agreements herein agreed to be performed or caused to
       be performed by it at or prior to the Closing Time.  At the Closing
       Time, the Corporation shall have delivered to each of the Agent and the
       Lenders certificates in form acceptable to each of the Agent and the
       Lenders confirming the facts with respect to each of the representations
       and warranties, confirming that all such covenants and agreements have
       been performed and confirming that all conditions set forth in this
       Section 4.1 have been satisfied or waived.

       (b)     DEFAULT OR EVENT OF DEFAULT.  No Default or Event of Default
       shall have occurred and be continuing nor shall there be any Default or
       Event of Default which will or will likely occur as a result of the
       transactions contemplated by this Agreement or the Documents.

       (c)     CONSENTS.  The Consents and all other consents, permits,
       agreements, confirmations and acknowledgements, determined by the Agent
       to be required or necessary to be obtained in order to effectively
       complete the transactions contemplated herein, shall have been obtained.

       (d)     LEGAL OPINIONS.  The Agent and the Lenders shall have received
       such legal opinions all in the form and content, and from counsel
       satisfactory to the Agent and the Lenders regarding the validity,
       enforceability and priority of the Documents and the Liens created
       thereby and regarding such other matters as the Agent and the Lenders
       may require to evidence compliance with the terms of the Documents and
       shall have also received any other legal opinions 

                                       30
<PAGE>

       contemplated by the Debentures.

       (e)     SECURITY DOCUMENTS.  The Lenders shall have received duly
       executed and delivered originals of the Security Documents and evidence
       satisfactory to the Agent and the Lenders of the Corporation's
       compliance with the provisions of Article 3 of the Debentures.

       (f)     PAYMENT OF FEES.  The Corporation shall have executed and
       delivered to the Agent the Royalty Agreement and the Royalty Debenture
       which shall have been registered against the Kemess South Mine and in
       all public registries where such registration is necessary or desirable
       to perfect the security interest granted in favour of the Agent, senior
       in priority to all Liens except for such Liens as may be held by holders
       of those Existing Encumbrances set out in Part 1 of SCHEDULE C1 to the
       Debenture, and the Corporation shall have paid to the Agent and the
       Lenders all fees and expenses referred to in Section 2.3, and shall have
       unconditionally waived and released, in form and content satisfactory to
       the Agent, any right to contest the reasonableness of such agreement,
       fees and expenses or otherwise challenge the entitlement of the Agent
       thereto.   Notwithstanding such payment, the Corporation will remain
       liable for any other fees and expenses referred to in Section 2.3 hereof
       which relate to the transactions hereunder but which have not been
       invoiced to, paid or incurred by the Agent or the Lenders as of the
       Closing Date.

       (g)     SUBORDINATED NOTES.  The Corporation shall have delivered to the
       Agent and the Lenders complete and accurate copies of all documents
       relating to the Subordinated Notes.  The Agent and the Lenders shall
       each have received evidence satisfactory to it that the Corporation is
       in compliance with all terms and conditions of the Subordinated Notes
       and that all necessary actions, steps and documents have been taken and
       obtained to ensure that all transactions contemplated by this Agreement
       and the other Documents (including, without limitation, the Royalty
       Agreement and the Reorganization Undertaking) do not breach or
       contravene any such terms or conditions, and have been consented to by
       the holders of the Subordinated Notes.  Each of the Agent and the
       Lenders shall also have received evidence satisfactory to it that the
       obligations of the Corporation in respect of the Subordinated Notes are
       fully subordinated and postponed to its obligations to the Agent and the
       Lenders under the Documents.  

       (h)     SENIOR SECURED DEBENTURE FACILITY.  The Corporation shall have
       delivered to the Agent and the Lenders complete and unconditional
       releases, 

                                       31
<PAGE>

       reconveyances and discharges from the lenders pursuant to the
       Senior Secured Debenture Facility of all indebtedness, liabilities and
       obligations owed by the Corporation or any Subsidiaries to such lenders
       and any and all Liens granted by the Corporation or any of its
       Subsidiaries to secure any such indebtedness, liabilities or obligations
       in exchange for payment to such lenders of an amount not to exceed the
       aggregate of the principal sum of Can.$19,500,000 and U.S.$30,700,000,
       interest thereon pursuant to and in accordance with the Senior Secured
       Debenture Facility and a prepayment amount not to exceed 1% of the
       principal amount being repaid to such lenders.

       (i)     PERFECTION OF SECURITY.  All steps necessary or desirable
       (including without limitation, the registration of the security
       interests created by the Security Documents in all public registries
       where such registration is necessary or desirable to perfect the
       security interest granted in favour of the Agent and the Lenders) shall
       have been taken to constitute the Liens under the Security as valid,
       enforceable and prior ranking to all other Liens, claims and interests
       in the Mortgaged Property except for such Liens relating to or securing
       Debt of the Corporation not in excess of Can.$10,000,000 as may be held
       by holders of those Existing Encumbrances set out in Part 1 of SCHEDULE
       C1 to the Debentures.

       (j)     GOVERNMENT CONSENTS.  The Agent and the Lenders shall have
       received consents and acknowledgements of various agencies and
       departments of the governments of British Columbia and Canada
       substantially in the form attached as SCHEDULE V.

       (k)     RECEIPT OF CLOSING DOCUMENTATION.  All documentation relating to
       the due authorization and completion of the issuance of the Debentures
       provided for herein and the due execution and delivery of all the
       Documents, and all actions and proceedings taken on or prior to Closing
       Time in connection with the performance by the Corporation of its
       obligations hereunder shall be satisfactory to the Agent and the
       Lenders, and the Agent and the Lenders shall have each received copies
       of all such documentation or other evidence as it may reasonably request
       in order to establish the consummation of the transactions contemplated
       hereby and the taking of all corporate proceedings in connection
       therewith in compliance with these conditions, in form and substance
       satisfactory to the Agent and the Lenders.

       (l)     UNDERTAKING.  The Corporation shall have executed and delivered
       to each 

                                       32
<PAGE>

        of the Agent and the Lenders:

               (i)    an undertaking (the "Reorganization Undertaking") in form
               and substance satisfactory to the Agent and the Lenders to
               forthwith, following receipt of written notice from the Agent,
               cause the Kemess Mine and all Material Contracts to be
               transferred to and assumed by a newly incorporated wholly-owned
               Subsidiary of the Corporation ("Kemess Newco"), cause Kemess
               Newco to assume and guarantee to the Lenders and the Agent all of
               the Corporation's obligations, liabilities and indebtedness under
               or pursuant to the Documents, pledge to the Lenders all of the
               Corporation's shares in the capital of Kemess Newco, provide to
               the Lenders and the Agent such additional security, agreements
               and assurances as each may reasonably request to ensure that the
               Liens in favour of the Lenders and the Agent on such assets are
               valid, enforceable and prior ranking to all other Liens, claims
               and interests in such assets except for such Liens relating to or
               securing Debt of the Corporation not in excess of Can.$10,000,000
               as may be held by holders of those Existing Encumbrances set out
               in Part I of SCHEDULE C1 to the Debentures, and obtain and
               deliver all legal opinions, consents and authorizations required
               in connection with the foregoing.  Such undertaking shall include
               a covenant that, for so long as any Event of Default exists under
               any of the Debentures, no payments or distributions will be made
               from Kemess Newco to the Corporation or any of its Associates
               except with the consent of the Lenders; and

               (ii)   such other undertakings as it may reasonably request
               regarding the taking of actions and delivery of documents
               following the Closing Time necessary or desirable to give effect
               to the terms and conditions of this Agreement and the other
               Documents.

       (m)     NO MATERIAL ADVERSE CHANGE.  There shall have been no material
       adverse change in the financial condition, business and prospects of the
       Corporation and of the Kemess Mine.

       (n)     DUE DILIGENCE.  The Agent shall have been satisfied in its
       absolute discretion with its due diligence review of the Corporation and
       its prospects including, without limitation, in connection with the
       Kemess Mine.

                                       33
<PAGE>

       (o)     TIME FRAME.  All of the conditions set out in this Section 4.1
       shall have been satisfied, each in accordance with the provisions of
       this Agreement, on or prior to April 30, 1998.

       (p)     LENDERS INTER-CREDITOR AGREEMENT.  The Lenders, the Corporation
       and APM shall have entered into an inter-creditor agreement in form and
       substance satisfactory to the Lenders. 

       (q)     PERMITTED HEDGING CREDITOR AGREEMENTS.  The Lenders, the Agent
       and the Corporation shall have entered into (i) an inter-creditor
       agreement with each of the holders of Permitted Hedging Indebtedness if
       and to the extent such holder has been granted the Permitted
       Encumbrances described in Section (b) of the definition thereof at or
       prior to the Closing Time, in form and substance satisfactory to the
       Lenders; and (ii) an agreement with each of the holders of Permitted
       Hedging Indebtedness pursuant to which such holders will agree to deal
       with such indebtedness and with any defaults of the Corporation in form
       and substance satisfactory to the Lenders.


4.2    CONDITIONS TO THE OBLIGATIONS OF THE AGENT RE: ADDITIONAL PURCHASE PRICE
PAYMENTS

       Notwithstanding anything herein contained, the obligation of the Agent
to cause the Lenders to make Additional Purchase Price Payments to the
Corporation will be subject to the fulfilment of the following conditions at or
prior to the Payment Date applicable thereto and the Corporation covenants to
use its best efforts to ensure that such conditions are fulfilled.

       (a)     SATISFACTION OF CONDITIONS SET OUT IN SECTION 4.1.  All of the
       conditions set out in Section 4.1 (other than the conditions set out in
       Section 4.1(n) and (o)) shall have been satisfied and shall remain
       satisfied, provided that the defined terms "Closing Time" or "Closing
       Date" used in any such conditions in Section 4.1 shall for the purposes
       of this Section 4.2(a) be amended to read "Payment Date".

       (b)     DEFAULT OR EVENT OF DEFAULT.  No Default or Event of Default
       shall have occurred and be continuing nor shall there be any Default or
       Event of Default which will or will likely occur as a result of the
       transactions contemplated by this Agreement or the Documents or the
       payment of the Additional Purchase Price Payments.

                                       34
<PAGE>

       (c)     PAYMENT CERTIFICATE.  The Agent and the Lenders shall have
       received two Business Days prior to the Payment Date a certificate (a
       "Payment Certificate") dated as of the applicable Payment Date, in form
       and substance satisfactory to the Agent and the Lenders:

               (i)    certifying either: (1) that there have been no amendments
               or changes to the articles and by-laws of the Corporation since
               the later of the Closing Date and the date of the last Payment
               Certificate, or (2) that attached thereto are true and correct
               copies of all amendments and/or changes to the articles and
               by-laws of the Corporation;

               (ii)   certifying either: (1) that the most recently delivered
               certificate setting forth the names of the directors and officers
               of the Corporation, including sample signatures of such directors
               and officers of the Corporation who have executed any of the
               Documents, is in full force and effect, unamended, or (2) that
               attached thereto is an amended certificate setting forth the
               names of the directors and officers of the Corporation including
               sample signatures of such directors and officers who are
               authorized to execute any Documents;

               (iii)  confirming the truth, accuracy and compliance of and with
               Sections 4.2(a) and 4.2(b) hereof and, to the extent there is any
               non-compliance and/or untruth, specifying such non-compliance
               and/or untruth;

               (iv)   setting forth the proposed use of the proceeds of the
               Additional Purchase Price Payment and specifically tying such
               payment to the cash flow statements delivered to the Lenders
               pursuant to the Debentures; and

               (v)    certifying that the Initial Purchase Price and any
               previous Additional Purchase Price Payments were used in
               accordance with and for the purposes set forth in this Agreement,
               the Debentures and any previously delivered Payment Certificates.

                                       35
<PAGE>

       (d)     NO MATERIAL ADVERSE CHANGE.  There shall have been no material
       adverse change in the financial condition, business and prospects of the
       Corporation and of the Kemess Mine.


       (e)     USE OF ADDITIONAL PURCHASE PRICE PAYMENT.  The proposed use of
       the Additional Purchase Price Payment is in accordance with the
       provisions of this Agreement, the Debentures and the cash flow statement
       delivered to the Lenders pursuant to the Debentures.


       (f)     SECURITY.  The Lenders shall be satisfied that upon and after
       making the Additional Purchase Price Payment the Liens under the
       Security are and will remain valid and enforceable and will rank senior
       in priority to all other Liens, claims and interests in the Mortgaged
       Property securing repayment of the Purchase Price for the Debentures,
       except for such Liens relating to or securing Debt of the Corporation
       not in excess of Can.$10,000,000 as may be held by holders of those
       Existing Encumbrances set out in Part 1 of SCHEDULE C1 to the
       Debentures;


       (g)     TIME FRAME.  All of the conditions set out in this Section 4.2
       shall have been satisfied, each in accordance with the provisions of
       this Agreement, on or prior to August 15, 1998.

                                       36
<PAGE>

4.3    WAIVER OR TERMINATION BY THE AGENT

       Each of the conditions contained in Section 4.1 and Section 4.2 hereof
are inserted for the exclusive benefit of the Agent and may be waived in whole
or in part by the Agent at any time.  The Corporation acknowledges that the
waiver by the Agent of any condition or any part of any condition shall
constitute a waiver only of such condition or such part of such condition, as
the case may be, and shall not constitute a waiver of any covenant, agreement,
representation or warranty made by the Corporation herein that corresponds or is
related to such condition or such part of such condition, as the case may be. 
If any of the conditions contained in Section 4.1 hereof are not fulfilled or
complied with as herein provided, the Agent may, at or prior to the Closing Time
at its option, be released from any and all of its obligations, covenants,
agreements and liabilities pursuant to this Agreement by notice in writing to
the Corporation and in such event the Agent shall be released from all of its
obligations, covenants, agreements and liabilities hereunder and, unless the
condition or conditions which have not been fulfilled are reasonably capable of
being fulfilled or caused to be fulfilled by the Corporation, then the
Corporation shall also be released from all obligations hereunder, except that
the Corporation will remain liable for the payment of all fees and expenses
referred to in Sections 2.3(a) and (c) hereof.  If any of the conditions
contained in Section 4.2 hereof are not fulfilled or complied with as herein
provided, the Agent and the Lenders shall be released from any and all of their
obligations, covenants, agreements and liabilities pursuant to this Agreement
including the obligation of the Agent to cause the Lenders to make any
Additional Purchase Price Payments.


ARTICLE 5 - CLOSING

5.1    CLOSING ARRANGEMENTS

       Subject to the terms and conditions hereof, the transactions
contemplated herein shall be closed at the Closing Time at the offices of
Goodman and Carr or at such other place or places as may be mutually agreed upon
by the Corporation and the Agent.

                                       37
<PAGE>

5.2    DOCUMENTS TO BE DELIVERED

       At or before the Closing Time, the Corporation shall execute, or cause
to be executed, and shall deliver, or cause to be delivered, to the Agent and
the Lenders all payments, documents, instruments and things which are to be
delivered by the Corporation pursuant to the provisions of this Agreement,
including the Debentures, and the Agent shall execute, or cause to be executed,
and shall deliver, or cause to be delivered, to the Corporation all payments and
all documents, instruments and things which the Agent is to deliver or to cause
to be delivered pursuant to the provisions of this Agreement.


ARTICLE 6 - GENERAL PROVISIONS

6.1    FURTHER ASSURANCES

       Each of the Corporation and the Agent hereby covenants and agrees that
at any time and from time to time after the Closing Date it will, upon the
request of the other, do, execute, acknowledge and deliver or cause to be done,
executed, acknowledged and delivered all such further acts, deeds, assignments,
transfers, conveyances and assurances as may be required for the better carrying
out and performance of all the terms of this Agreement including, without
limitation, such further and other security interests as the Agent or the
Lenders may request.


6.2    REMEDIES CUMULATIVE

       The rights and remedies of the parties under this Agreement are
cumulative and in addition to and not in substitution for any rights or remedies
provided by law.  Any single or partial exercise by any party hereto of any
right or remedy for default or breach of any term, covenant or condition of this
Agreement does not waive, alter, affect or prejudice any other right or remedy
to which such party may be lawfully entitled for the same default or breach.

                                       38

<PAGE>

6.3    INDEMNIFICATION

       The Corporation covenants and agrees that it will indemnify and hold
harmless each of the Agent and the Lenders and its members, managers,
shareholders, partners, officers, directors, employees, affiliates, consultants
and agents and their respective successors and assigns, from and after the date
of this Agreement, against any and all losses, damages, assessments, fines,
penalties, adjustments, liabilities, claims, deficiencies, costs, expenses
(including specifically, but without limitation, reasonable legal fees and
expenses and expenditures) with respect to any misrepresentation, breach of
warranty, or nonfulfillment of any agreement or covenant on the part of the
Corporation pursuant to the terms of this Agreement or any other Document or any
misrepresentation in or omission from any schedule, list, certificate, or other
instrument furnished or to be furnished by the Corporation to the Agent or the
Lenders pursuant to the terms of this Agreement or any other Document or with
respect to all actions, suits, proceedings, demands, assessments, adjustments,
costs and expenses incident to any of the foregoing or in connection with the
enforcement of rights hereunder or thereunder, regardless of whether, in the
case of a breach of a representation or a warranty, the Agent or the Lenders
relied on the truth of such representation or warranty or had any knowledge of
any breach thereof.


6.4    NOTICES

       Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be given by facsimile or other means of
electronic communication or by delivery as hereafter provided.  Any such notice
or other communication, if sent by facsimile or other means of electronic
communication, shall be deemed to have been received on the Business Day
following the sending, or, if delivered by hand, shall be deemed to have been
received at the time it is delivered to the applicable address noted below
either to the individual designated below or to an individual at such address
having apparent authority to accept deliveries on behalf of the addressee. 
Notice of change of address shall also be governed by this section.  Notices and
other communications shall be addressed as follows:

                                       39
<PAGE>

       (a)     if to the Corporation:

               Royal Oak Mines Inc.
               c/o Arctic Precious Metals, Inc.
               Royal Oak Mines (U.S.A.) Inc.
               5501 Lakeview Drive
               Kirkland, Washington
               U.S.A. 98033

               Attention:     President
               Facsimile Number:     (425) 822-3349


               with a copy to:

               Lang Michener
               BCE Place, Box 747
               2500 - 181 Bay Street
               Toronto, Ontario

               Attention: William Sheridan and David Thring
               Facsimile Number: (416) 365-1719


       (b)     if to the Agent:

               Trilon Financial Corporation  
               BCE Place
               181 Bay Street
               Suite 4420, P.O. Box 771
               Toronto, Ontario
               M5J 2T3

               Attention: Sam Pollock
               Facsimile Number: (416) 365-9642

                                       40
<PAGE>

               with a copy to:

               Goodman and Carr
               Suite 2300
               200 King Street West
               Toronto, Ontario
               M5H 3W5

               Attention:     Jeffrey Blidner and Lorne Segal
               Facsimile No.: (416) 595-0567


6.5    COUNTERPARTS

       This Agreement may be executed in several counterparts, each of which so
executed shall be deemed to be an original, and such counterparts together shall
constitute but one and the same instrument.

6.6    ANNOUNCEMENTS

       No announcement with respect to this Agreement, including any disclosure
of the identity of the Agent or the Lenders, will be made by any party hereto
without the prior approval of the other party.  The foregoing will not apply to
any announcement by any party required in order to comply with laws pertaining
to timely disclosure, provided that such party consults with the other parties
before making any such announcement.  The Corporation acknowledges and confirms
its rights and obligations under the Confidentiality Agreement entered into
between it and an affiliate of the Agent on February 19, 1998.   The Agent
confirms that it is bound by and is subject to all of the obligations and
entitled to all of the rights of such affiliate under such Confidentiality
Agreement provided that such Confidentiality Agreement is hereby amended to the
extent necessary to enable and permit the Agent to use and disclose any and all
information and documentation in its possession regarding the property, assets
and affairs of the Corporation and the Subsidiaries (i) to any of the Lenders
and (ii) for the purpose of assessing, receiving advice on, exercising,
enforcing or prosecuting its rights and remedies under the Documents or
representing in any proceedings its interests in respect thereof except that,
prior to the occurrence of a Default, the Agent may not publicly disclose
material non-public information and documentation provided to it by the
Corporation regarding hedging arrangements. 

                                       41
<PAGE>

6.7    ASSIGNMENT

       The rights and obligations of the Corporation hereunder shall not be
assignable.  Each of the Agent and the Lenders may, at its discretion, assign
its rights and obligations hereunder or under any of the Documents at any time
(including, without limitation, by the grant or conveyance of participation in
its interests hereunder).  For greater certainty and without limitation, each of
the Lenders may assign its rights in respect of any portion of the Corporation's
obligations under the Debentures, and corresponding rights under the other
Documents and/or the Agent may assign its rights in respect of any portion of
the Corporation's obligations under this Agreement, the Royalty Agreement, and
corresponding rights under the other Documents, and in such event the
Corporation will at the assignor's request execute new documentation, including
new Documents, to and in favour of the assignee substantially in the same form
and content as the assigned documentation, including the Documents.  Each of the
Agent and the Lenders may provide to any proposed assignee or participant such
information concerning the financial position and the operations of the
Corporation and its Subsidiaries as, in its opinion, may be relevant or useful
in connection with this Agreement or any other Document or any portion thereof
proposed to be acquired by such assignee or participant.  Notwithstanding
anything else in this section 6.7, if no Default or Event of Default has
occurred, neither the Agent nor the Lenders may assign this Agreement or the
Documents to any corporation whose principal business is the exploration for or
mining of precious and base metals (other than such Persons in which the Agent
or the Lenders or their respective Associates or affiliates has a direct or
indirect interest which Persons may be an assignee of this Agreement or the
Documents).  Following a Default or an Event of Default, there shall be no
restrictions on the Agent's or the Lenders' ability to assign this Agreement or
any of the Documents.


6.8    RIGHT OF FIRST OPPORTUNITY TO REFINANCE

       If the Corporation determines, at any time within a period of three
years from the date hereof, to refinance the principal amount outstanding
pursuant to the Debentures through the issuance or incurring of any indebtedness
in any manner (other than the issuance or incurring of any indebtedness that is
convertible to or exchangeable for equity of the Corporation), the Corporation
shall offer to the Agent the first right of opportunity to arrange such
financing as is required to refinance the principal amount outstanding pursuant
to the Debentures, on market terms.

                                       42
<PAGE>

6.9    SUCCESSORS AND ASSIGNS

       This Agreement shall be binding upon and enure to the benefit of the
parties hereto and their respective successors and permitted assigns.  Subject
to the last sentence of Section 6.10, nothing herein, express or implied, is
intended to confer upon any person, other than the parties hereto and their
respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.


6.10   RELIANCE AND NON-MERGER

       All covenants, agreements, representations and warranties of the
Corporation made herein or in any other Document or in any certificate or other
document signed by any of its directors or officers and delivered by or on
behalf of any of them pursuant hereto or thereto are material, shall be deemed
to have been relied upon by the Agent and the Lenders notwithstanding any
investigation heretofore or hereafter made by the Agent or the Lenders, or their
respective counsel or any employee or other representative of the Agent or the
Lenders and shall survive the execution and delivery of this Agreement and the
other Documents until the Corporation shall have satisfied and performed all of
its obligations hereunder and thereunder.  Notwithstanding anything to the
contrary herein contained, the Lenders may rely upon all of the representations,
warranties, agreements, covenants and indemnities given by or on behalf of the
Corporation pursuant to this Agreement and upon all of the conditions in favour
of the Agent in this Agreement and may pursue and enforce any and all remedies
resulting from any non-compliance therewith or breach thereof notwithstanding
that the Lenders are not a party to this Agreement.  Nothing contained in this
Agreement shall operate to subordinate the Security provided in favour of the
Lenders or the Agent to or in favour of any Permitted Encumbrances or other
Liens, or to postpone any of the obligations owing by the Corporation to the
Lenders or the Agent to any of the obligations, indebtedness or liabilities owed
by the Corporation to the holders of the Permitted Encumbrances or other Liens.


6.11   JUDGMENT CURRENCY

       If for the purpose of obtaining judgment in any court, it is necessary
to convert an amount due under this Agreement or any other of the Documents or
under any instrument delivered thereunder from a currency in which it is due
(the "Original Currency") into another currency (the "Second Currency") the
parties hereto agree, to the fullest extent permitted by law, that the rate of
exchange used shall be that at which, in accordance with normal banking
procedures, the Agent could purchase the 

                                       43
<PAGE>

Original Currency with the Second Currency on the date two Business Days 
preceding that on which judgment is given.  The obligation of the Corporation 
in respect of any Original Currency due from it to the Agent or the Lenders 
under this Agreement or any other Documents or under any instrument delivered 
thereunder shall, notwithstanding any judgment in the Second Currency, be 
discharged by a payment made to the Agent or the Lenders entitled thereto on 
account thereof in the Second Currency only to the extent that, on the 
Business Day following receipt of such payment in the Second Currency, the 
Agent may, in accordance with normal banking procedures, purchase the 
Original Currency with the amount of the Second Currency so paid; and if the 
amount of the Original Currency which may be so purchased is less than the 
amount originally due in the Original Currency, the Corporation agrees as a 
separate and independent obligation and notwithstanding any such payment or 
judgment to indemnify the Agent and the Lenders against such deficiency.  


6.12   TIME OF THE ESSENCE

       Time shall be of the essence of this Agreement.


6.13   ENTIRE AGREEMENT

       This Agreement, the schedules referred to herein, and the other
Documents constitute the entire agreement between the parties hereto pertaining
to the matters therein set forth and supersede all prior agreements,
representations, warranties, statements, promises, information, arrangements and
understandings, whether oral or written, express or implied, with respect to the
subject matter thereof.  Neither party hereto shall be bound or charged with any
oral or written agreements, representations, warranties, statements, promises,
information, arrangements or understandings not specifically set forth in this
Agreement or the schedules or the other Documents.  The parties hereto further
acknowledge and agree that, in entering into this Agreement and in delivering
the schedules and the other Documents, they have not in any way relied, and will
not in any way rely, upon any oral or written agreements, representations,
warranties, statements, promises, information, arrangements or understandings,
express or implied, not specifically referenced or set forth in this Agreement
or in such schedules or other Documents.

                                       44
<PAGE>

6.14   WAIVER

       Any party hereto which is entitled to the benefits of this Agreement
may, and has the right to, waive any term or condition hereof at any time on or
prior to the Closing Time; provided, however, that such waiver shall be
evidenced by written instrument duly executed on behalf of such party and that
no waiver of any provision shall constitute a waiver of any other provision and
that no waiver will constitute a continuing waiver unless otherwise expressly
provided.


6.15   AMENDMENTS

       No modification or amendment to this Agreement may be made unless agreed
to by the parties hereto in writing.


       IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
under seal as of the day and year first above written.

                                   ROYAL OAK MINES INC.
                                   
                                   By:  /s/ James H. Wood
                                       -------------------------------
                                   Name:  James H. Wood
                                   Title:  Chief Financial Officer
                                   
                                   TRILON FINANCIAL CORPORATION
                                   
                                   By:  /s/ Sam Pollock
                                       -------------------------------
                                   Name:  Sam Pollock
                                          Managing Partner

                                   By:   /s/ Bruce Robertson
                                       -------------------------------
                                   Name:  Bruce Robertson
                                          Vice President

                                       45