Filed by Automated Filing Services Inc. (604) 609-0244 - Northern Dynasty Minerals Ltd.- Exhibit 4.1






EXHIBIT 4.1

SHAREHOLDER RIGHTS PLAN
AGREEMENT

DATED EFFECTIVE AS OF DECEMBER 11, 2006

between

NORTHERN DYNASTY MINERALS LTD.

and

COMPUTERSHARE INVESTOR SERVICES INC.

as Rights Agent




TABLE OF CONTENTS

	ARTICLE 1 - INTERPRETATION 	1 
	     1.1 	Certain Definitions 	1 
	     1.2 	Holder 	11 
	     1.3
      	Acting Jointly or in Concert 	12 
	     1.4 	Application of Statutes, Regulations and Rules 	12 
	     1.5
      	Currency 	12 
	     1.6 	Headings and References 	12 
	     1.7
      	Singular, Plural, etc. 	12 
	  	  	  
	ARTICLE
      2 - THE RIGHTS 	12 
	     2.1 	Legend on Common Share Certificates 	12 
	     2.2
      	Initial Exercise Price: Exercise of Rights: Detachment of
      Rights 	13 
	     2.3 	Adjustments to Exercise Price, Number of Rights 	15 
	     2.4
      	Date on Which Exercise is Effective 	18 
	     2.5 	Execution, Authentication, Delivery and Dating of Rights
      Certificates 	18 
	     2.6
      	Registration, Registration of Transfer and Exchange 	19 
	     2.7 	Mutilated, Destroyed, Lost and Stolen Rights Certificates
      	19 
	     2.8
      	Persons Deemed Owners 	20 
	     2.9 	Delivery and Cancellation of Certificates 	20 
	     2.10
      	Agreement of Rights Holders 	20 
	     2.11 	Rights Certificate Holder Deemed Not a Shareholder 	21 
	  	  	  
	ARTICLE 3 - ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN
      TRANSACTIONS 	21 
	     3.1
      	Flip-in Event 	21 
	  	  	  
	ARTICLE
      4 - THE RIGHTS AGENT 	22 
	     4.1 	General 	22 
	     4.2
      	Merger or Amalgamation or Change of Name of Rights Agent
      	23 
	     4.3 	Duties of Rights Agent 	23 
	     4.4
      	Change of Rights Agent 	24 
	  	  	  
	ARTICLE
      5 - MISCELLANEOUS 	25 
	     5.1 	Redemption and Waiver 	25 
	     5.2
      	Expiration 	26 
	     5.3 	Issuance of New Rights Certificates 	26 
	     5.4
      	Supplements and Amendments 	26 
	     5.5 	Fractional Rights and Fractional Common Shares 	27 
	     5.6
      	Rights of Action 	28 
	     5.7 	Holder of Rights Not Deemed a Shareholder 	28 
	     5.8
      	Non-Canadian or United States Holders 	28 
	     5.9 	Notices 	28 
	     5.10
      	Costs of Enforcement 	29 
	     5.11 	Successors 	29 
	     5.12
      	Benefits of this Agreement 	29 
	     5.13 	Governing Law 	29 
	     5.14
      	Counterparts 	30 
	     5.15 	Severability 	30 
	     5.16
      	Determinations and Actions by the Board of Directors 	30 
	     5.17 	Regulatory Approvals 	30 


- i  -




SHAREHOLDER RIGHTS PLAN AGREEMENT

SHAREHOLDER RIGHTS PLAN AGREEMENT dated effective as of
December 11, 2006 between NORTHERN DYNASTY MINERALS LTD. a corporation
incorporated under the Business Corporations Act (British Columbia) (the
“Corporation”) and COMPUTERSHARE INVESTOR SERVICES INC., a trust
company incorporated under the laws of Canada, as rights agent (the “Rights
Agent”), which term shall include any successor Rights Agent hereunder).

WHEREAS the Board of Directors has determined it advisable and
in the best interests of the Corporation to adopt a shareholder rights plan
agreement (the “Rights Plan”) to ensure, to the extent possible, that all
shareholders of the Corporation are treated fairly in connection with any
take-over offer for the Corporation; and

WHEREAS in order to implement the Rights Plan, the Board of
Directors has authorized the issuance of one right (“Right”):

	(a) 	
      effective at the Record Time (as hereinafter defined) in
      respect of each Common Share (as hereinafter defined) outstanding at the
      Record Time; and

	 	 
	(b) 	
      in respect of each Common Share issued after the Record
      Time and prior to the earlier of the Separation Time (as hereinafter
      defined) and the Expiration Time (as hereinafter
  defined);



WHEREAS the Corporation desires to appoint a Rights Agent to
act on behalf of the Corporation and the holders of Rights, and the Rights Agent
was willing to so act, in connection with the issuance, transfer, exchange and
replacement of Rights Certificates (as hereinafter defined), the exercise of
Rights and other matters referred to herein;

WHEREAS each Right entitles the holder thereof, after the
Separation Time, to purchase securities of the Corporation pursuant to the terms
and subject to the conditions set forth therein; and

WHEREAS the Board of Directors has resolved to seek the
ratification of the Corporation’s shareholders, by way of ordinary resolution
within 180 days of the date hereof, of the adoption of this Rights Plan.

NOW THEREFORE, in consideration of the premises and the
respective agreements set forth herein, the Corporation and the Rights Agent
hereby agree as follows:

ARTICLE 1 - INTERPRETATION

	1.1 	
      Certain Definitions

	 	 	 	 
		
      In this Agreement, unless the context otherwise
      requires:

	 	 	 	 
		(a) 	
      “Acquiring Person” means any Person who is the
      Beneficial Owner of 20% or more of the outstanding Voting Shares;
      provided, however, that the term “Acquiring Person” shall
      not include:

	 	 	 	 
			(i) 	
      the Corporation or any Subsidiary of the Corporation,
      or

	 	 	 	 
			(ii) 	
      an underwriter or member of a banking or selling group
      that acquires Voting Shares from the Corporation in connection with a
      distribution of securities, or

	 	 	 	 
			(iii) 	
      any Person who becomes the Beneficial Owner of 20% or
      more of the outstanding Voting Shares as a result of one or any
      combination of:



- 1 -





	 	(A) 	
      a Voting Share Reduction which, by reducing the number of
      Voting Shares outstanding, increases the percentage of Voting Shares
      Beneficially Owned by such Person to 20% or more of the Voting Shares then
      outstanding,

	 	 	 
	 	(B) 	
      a Permitted Bid Acquisition,

	 	 	 
	 	(C) 	
      an Exempt Acquisition,

	 	 	 
	 	(D) 	
      a Pro-Rata Acquisition, or

	 	 	 
	 	(E) 	
      a Convertible Security
Acquisition,



in each such case, until such time
thereafter as such Person shall become the Beneficial Owner (otherwise than
pursuant to any one or more of a Voting Share Reduction, a Permitted Bid
Acquisition, an Exempt Acquisition, a Pro-Rata Acquisition, or a Convertible
Security Acquisition) of additional Voting Shares constituting more than 1% of
the Voting Shares then outstanding, in which event such Person shall become an
Acquiring Person as of the date and time of acquisition of such additional
Voting Shares; or

	 	(iv) 	
      for a period of 10 days after the Disqualification Date
      (as hereinafter defined), any Person who becomes the Beneficial Owner of
      20% or more of the outstanding Voting Shares as a result of such Person
      becoming disqualified from relying on clauses (vi) or (viii) of the
      definition of Beneficial Owner. In this definition, “Disqualification
      Date” means the first date of public announcement of facts indicating
      that such Person has or is making or has announced an intention to make a
      Take-over Bid alone or by acting jointly or in concert with any other
      Person; or

	 	 	 
	 	(v) 	
      a Person (a “Grandfathered Person”) who is the
      Beneficial Owner of 20% or more of the outstanding Voting Shares as of the
      Record Time; provided, however, that the exemption shall not be applicable
      to any Grandfathered Person in the event that such Grandfathered Person
      shall, after the Record Time, become the Beneficial Owner of additional
      Voting Shares such that its Beneficial Ownership of Voting Shares is
      increased by more than 1% of the number of Voting Shares then outstanding
      (otherwise than pursuant to any one or more of a Voting Share Reduction, a
      Permitted Bid Acquisition, an Exempt Acquisition, a Pro-Rata Acquisition,
      or a Convertible Security Acquisition).




	 	(b) 	
      “Affiliate”, when used to indicate a relationship
      with a specified corporation, means a Person that directly, or indirectly
      through one or more controlled intermediaries, controls, or is controlled
      by, or is under common control with, such specified corporation.

	 	 	 	 
	 	(c) 	
      “Agreement” means this Shareholder Rights Plan
      Agreement as amended and supplemented from time to time.

	 	 	 	 
	 	(d) 	
      “Associate”, when used to indicate a relationship
      with a specified Person, means (i) a spouse of such specified Person, (ii)
      any Person of either sex with whom such specified Person is living in a
      conjugal relationship outside marriage or (iii) any relative of such
      specified Person or of a Person mentioned in clauses (i) or (ii) of this
      definition if that relative has the same residence as the specified
      Person.

	 	 	 	 
	 	(e) 	
      A Person shall be deemed the “Beneficial Owner”
      and to have “Beneficial Ownership” of and to “Beneficially
      Own”, any securities:

	 	 	 	 
	 		(i) 	
      of which such Person or any of such Person’s Affiliates
      or Associates is the owner at law or in equity;



- 2  -





	 	(ii) 	
      as to which such Person or any of such Person’s
      Affiliates or Associates has the right to become owner at law or in equity
      (where such right is exercisable within 60 days, whether or not on
      condition or the happening of any contingency or the making of any
      payment) pursuant to any agreement, arrangement, pledge or understanding,
      including but not limited to any Lock-Up Agreement or similar agreement,
      arrangement or understanding that is not a Permitted Lock-Up Agreement,
      whether or not in writing (other than (x) customary agreements with and
      between underwriters and/or banking group members and/or selling group
      members with respect to a public offering or private placement of
      securities, and (y) pledges of securities in the ordinary course of
      business), or upon the exercise of any Convertible Securities;
  and

	 	 	 
	 	(iii) 	
      which are Beneficially Owned within the meaning of
      clauses (i) or (ii) of this definition by any other Person with which such
      Person is acting jointly or in concert;



provided, however, that a
Person shall not be deemed the “Beneficial Owner”, or to have
“Beneficial Ownership” of, or to “Beneficially Own”, any
security:

	 	(iv) 	
      by reason of such security having been deposited or
      tendered pursuant to a tender or exchange offer or Take-over Bid made by
      such Person or any of such Person’s Affiliates or Associates or any other
      Person referred to in clause (iii) of this definition until the earlier of
      such deposited or tendered security being accepted unconditionally for
      payment or exchange or being taken up and paid for;

	 	 	 	 
	 	(v) 	
      by reason of the holder of such security having agreed to
      deposit or tender such security to a Take-over Bid made by such Person or
      any of such Person’s Affiliates or Associates or any other Person referred
      to in clause (iii) of this definition pursuant to a Permitted Lock-up
      Agreement;

	 	 	 	 
	 	(vi) 	
      by reason of such Person, any of such Person’s Affiliates
      or Associates or any other Person referred to in clause (iii) of this
      definition holding such security, provided that:

	 	 	 	 
	 		(A) 	
      the ordinary business of the Person (in this definition,
      the “Manager”) includes the management of mutual funds or
      investment funds for others (which others may include or be limited to one
      or more employee benefit plans or pension plans) and such security is held
      by the Manager in the ordinary course of such business in the performance
      of such Manager’s duties for the account of any other Person (in this
      definition, a “Client”), including non-discretionary accounts held
      on behalf of a Client by a dealer or broker registered under applicable
      laws;

	 	 	 	 
	 		(B) 	
      the Person (in this definition, a “Trust Company”)
      is licensed to carry on the business of a trust company under applicable
      law and, as such, acts as a trustee or administrator or in a similar
      capacity in relation to the estates of deceased or incompetent Persons
      (each, in this definition, an “Estate Account”) or in relation to
      other accounts (each, in this definition, an “Other Account”) and
      holds such security, and is acting, in the ordinary course of such duties
      for the Estate Account or for such Other Accounts;

	 	 	 	 
	 		(C) 	
      the ordinary business of such Person includes acting as
      an agent of the Crown in the management of public assets (in this
      definition, the “Crown Agent”);

	 	 	 	 
	 		(D) 	
      the Person is an independent Person established by
      statute for purposes that include, and the ordinary business or activity
      of such Person (in this definition, the “Statutory Body”) includes,
      the management of investment funds for employee benefit plans, pension
      plans, insurance plans of various public bodies



- 3  -





	 	 			 and the Statutory Body holds such security for the purposes
        of its activities as such; or

	 	 	 	 	 
	 	 		(E) 	 the Person (in this definition, the “Administrator”)
        is the administrator or trustee of one or more pension funds or plans
        (each, in this definition, a “Plan”) or is a Plan registered
        under the laws of Canada or any province thereof or the corresponding
        laws of the jurisdiction by which such Plan is governed and the Administrator
        or Plan holds such security for the purposes of its activities as such;

	 	 	 	 	 
	 	 		 but only if the Manager, the Trust Company,
        the Crown Agent, the Statutory Body, the Administrator or the Plan, as
        the case may be, is not then making and has not announced a current intention
        to make a Take-over Bid, other than an Offer to Acquire Common Shares
        or other securities pursuant to a distribution by the Corporation or by
        means of ordinary market transactions (including prearranged trades entered
        into in the ordinary course of business of such Person) executed through
        the facilities of a stock exchange or an organized over-the-counter market,
        alone or by acting jointly or in concert with any other Person;

	 	 	 	 	 
	 	 	(vii) 	 because such Person, or any other Person acting
        jointly or in concert with such Person is:

	 	 	 	 	 
	 	 		(A) 	 a Client of the same Manager as another Person on whose
        account the Manager holds such security, or

	 	 	 	 	 
	 	 		(B) 	 an Estate Account or an Other Account of the same Trust
        Company as another Person on whose account the Trust Company holds such
        security, or

	 	 	 	 	 
	 	 		(C) 	 a Plan with the same Administrator as another Plan on
        whose account the Administrator holds such securities, or

	 	 	 	 	 
	 	 	(viii) 	 because such Person, or any other Person acting
        jointly or in concert with such Person, is:

	 	 	 	 	 
	 	 		(A) 	 a Client of a Manager and such security is owned at
        law or in equity by the Manager, or

	 	 	 	 	 
	 	 		(B) 	 an Estate Account or an Other Account of a Trust Company
        and such security is owned at law or in equity by the Trust Company, or

	 	 	 	 	 
	 	 		(C) 	 a Plan and such security is owned at law or in equity
        by the Administrator of the Plan, or

	 	 	 	 	 
	 	 	(ix) 	 because such Person is the registered holder
        of securities as a result of carrying on the business of, or acting as
        nominee for, a securities depository.



For purposes of this Agreement, the percentage of Voting
  Shares Beneficially Owned by any Person at any time shall be and be deemed to
  be the product determined by the formula:

	100 x  
	A 
	B 
	  	  	  
	 	where:  	A =	the number of votes for the election of all directors
      generally attached to the Voting Shares Beneficially Owned by such Person
      at such time; and 


- 4  -





	 	 	B = 	the number of votes for the election of all directors generally
      attaching to all Voting Shares actually outstanding. 


	 	 	 
	 	Where any Person is deemed to Beneficially Own
      unissued Voting Shares, such Voting Shares shall be deemed to be outstanding
      for the purpose of calculating the percentage of Voting Shares Beneficially
      Owned by such Person, but unissued Voting Shares which another Person may
      be deemed to Beneficially Own shall not be included in the denominator of
      the above formula.
	 	 	 
	 	(f) 	 “Board of Directors” means the board
        of directors for the time being of the Corporation.

	 	 	 
	 	(g) 	 “Business Day” means any day other
        than a Saturday, Sunday or, unless otherwise specified, a day on which
        Canadian chartered banks in the cities of Toronto, Ontario, and Vancouver,
        British Columbia are generally authorized or obligated by law to close.

	 	 	 
	 	(h) 	 “Business Corporations Act (British
        Columbia)” means the Business Corporations Act (BCA),
        S.B.C. 2002, c.57, as amended, and the regulations thereunder, unless
        otherwise specified, as the same exist on the date hereof.

	 	 	 
	 	(i) 	 “Canadian-U.S. Exchange Rate” means,
        on any date, the inverse of the U.S.-Canadian Exchange Rate.

	 	 	 
	 	(j) 	 “Canadian Dollar Equivalent” of any
        amount which is expressed in United States dollars means, on any date,
        the Canadian dollar equivalent of such amount determined by reference
        to the Canadian-U.S. Exchange Rate on such date.

	 	 	 
	 	(k) 	 “Close of Business” on any given date
        means 5:00 p.m. (Toronto time, unless otherwise specified), on such date;
        provided, however, that if such date is not a Business Day, “Close
        of Business” on such date shall mean 5:00 p.m., (Toronto time,
        unless otherwise specified), on the next succeeding Business Day.

	 	 	 
	 	(l) 	 “Common Shares” means the Common Shares
        in the capital of the Corporation.

	 	 	 
	 	(m) 	 “Competing Permitted Bid” means a Take-over
        Bid that:





	 	 	(i) 	 is made after a Permitted Bid or Competing
        Permitted Bid has been made and prior to the expiry of that Permitted
        Bid or Competing Permitted Bid (in this definition, the “Prior
        Bid”);

	 	 	 	 	 
	 	 	(ii) 	 satisfies all components of the definition
        of a Permitted Bid other than the requirements set out in clause (ii)
        of that definition; and

	 	 	 	 	 
	 	 	(iii) 	 contains, and the take-up and payment for
        securities tendered or deposited thereunder are subject to, irrevocable
        and unqualified conditions that no Voting Shares shall be taken-up or
        paid for pursuant to the Competing Permitted Bid:

	 	 	 	 	 
	 			A. 	 prior to the Close of Business (Vancouver time) on a
        date that is not earlier than the later of 35 days after the date of such
        Competing Permitted Bid and the earliest date on which Voting Shares may
        be taken-up or paid for under any Prior Bid in existence at the date of
        such Competing Permitted Bid; and

	 	 	 	 	 
	 			B. 	 then only if, at the time that such Voting Shares are
        first taken-up or paid for, more than 50% of the then outstanding Voting
        Shares held by Independent Shareholders have been deposited or tendered
        pursuant to the Competing Permitted Bid and not withdrawn.



- 5  -





	 	(n) 	 a body corporate is “controlled”
        by another Person if:

	 	 	 	 
			(i) 	 securities entitled to vote in the election of directors
        carrying more than 50% of the votes for the election of directors are
        held, directly or indirectly, by or on behalf of the other Person; and

	 	 	 	 
			(ii) 	 the votes carried by such securities are entitled, if
        exercised, to elect a majority of the board of directors of such body
        corporate,

	 	 	 	 
			 and “controls”, “controlling”
        and “under common control with” shall be interpreted
        accordingly.

	 	 	 	 
	 	(o) 	 “Convertible Securities”
        means at any time:

	 	 	 	 
			(i) 	 any right (contractual or otherwise and regardless of
        whether such right constitutes a security) to acquire Voting Shares from
        the Corporation; and

	 	 	 	 
			(ii) 	 any securities issued by the Corporation from time to
        time (other than the Rights) carrying any exercise, conversion or exchange
        right;

	 	 	 	 
			 which is then exercisable or exercisable within
        a period of 60 days from that time pursuant to which the holder thereof
        may acquire Voting Shares or other securities convertible into or exercisable
        or exchangeable for Voting Shares (in each case, whether such right is
        then exercisable or exercisable within a period of 60 days from that time
        and whether or not on condition or the happening of any contingency).

	 	 	 	 
	 	(p) 	 “Convertible Security Acquisition”
        means the acquisition of Voting Shares upon the exercise of Convertible
        Securities received by a Person pursuant to a Permitted Bid Acquisition,
        an Exempt Acquisition or a Pro-Rata Acquisition.

	 	 	 	 
	 	(q) 	 “Exchange Act of 1934”
        means the Securities Exchange Act of 1934, as amended, of the United
        States of America and the rules and regulations thereunder, unless otherwise
        specified, as the same exist on the date hereof.

	 	 	 	 
	 	(r) 	 “Exempt Acquisition” means
        a Share acquisition (i) in respect of which the Board of Directors has
        waived the application of Section 3.1 pursuant to the provisions of Section
        5.1 hereof, (ii) pursuant to a regular dividend reinvestment or other
        plan of the Corporation made available by it to all holders of Voting
        Shares of a class or series of Voting Shares where such plan permits the
        holder to direct that dividends paid in respect of such Voting Shares
        be applied to the purchase from the Corporation of further securities
        of the Corporation, or (iii) by a Person pursuant to a prospectus or by
        way of private placement, provided that the Person does not thereby acquire
        a greater percentage of Voting Shares, or securities convertible into
        or exchangeable for Voting Shares, than the Person’s percentage of
        Voting Shares Beneficially Owned immediately prior to such acquisition.

	 	 	 	 
	 	(s) 	 “Exercise Price” means, as
        of any date, the price at which a holder may purchase the securities issuable
        upon exercise of one whole Right. Until adjustment thereof in accordance
        with the terms hereof, the Exercise Price shall equal $50.

	 	 	 	 
	 	(t) 	 “Expiration Time” means the
        earliest of: (i) the Termination Time; (ii) the termination of the annual
        meeting of the Corporation in the year 2010 unless at such meeting the
        duration of this Agreement is extended; and (iii) 180 days after the date
        of this Rights Plan if this Rights Plan is not ratified by holders of
        Voting Shares in accordance with the requirements of the Toronto Stock
        Exchange.



- 6  -





	 	(u) 	 “Flip-in Event” means a transaction
        or event that results in a Person becoming an Acquiring Person.

	 	 	 	 
	 	(v) 	 “Fiduciary” means a trust
        company registered under the laws of Canada or any province thereof or
        a portfolio manager registered under the securities legislation of one
        or more provinces of Canada.

	 	 	 	 
	 	(w) 	 “Independent Shareholders”
        means all holders of Common Shares other than (i) any Acquiring Person,
        (ii) any Offeror, (iii) any Affiliate or Associate of any Acquiring Person
        or Offeror, (iv) any Person acting jointly or in concert with any Person
        referred to in clauses (i) or (ii) , and (v) any employee benefit plan,
        deferred profit sharing plan, stock participation plan or trust for the
        benefit of employees of the Corporation or a wholly-owned Subsidiary of
        the Corporation, unless the beneficiaries of such plan or trust direct
        the manner in which such Common Shares are to be voted or direct whether
        the Common Shares are to be tendered to a Take-over Bid.

	 	 	 	 
	 	(x) 	 “Market Price” per security
        of any securities on any date means the average of the daily closing prices
        per security of such securities (determined as described below) on each
        of the 20 consecutive Trading Days through and including the Trading Day
        immediately preceding such date.; provided, however, that if an
        event of a type analogous to any of the events described in Section 2.3
        hereof shall have caused the closing prices used to determine the Market
        Price on any Trading Days not to be fully comparable with the closing
        price on such date (or, if such date is not a Trading Day, on the immediately
        preceding Trading Day), each such closing price so used shall be appropriately
        adjusted in a manner analogous to the applicable adjustment provided for
        in Section 2.3 hereof in order to make it fully comparable with the closing
        price on such date (or, if such date is not a Trading Day, on the immediately
        preceding Trading Day). The closing price per security of any securities
        on any date shall be:

	 	 	 	 
			 (i)
	the closing board lot sale price or, in the case no such sale takes place
      on such date, the average of the closing bid and asked prices for each share
      of such securities as reported by the principal stock exchange in Canada
      on which such shares are listed or posted for trading;
	 	 	 	 
			(ii)	 if such shares are not listed or posted for trading
        on any stock exchange in Canada, the last sale price, regular way, or,
        in case no such sale takes place on such date, the average of the closing
        bid and asked prices, regular way, for each share of such securities as
        reported in the principal consolidated transaction reporting system with
        respect to securities listed or admitted to trading on the principal national
        securities exchange in the United States on which such shares are listed
        or admitted to trading, or

	 	 	 	 
			(iii)	 if for any reason none of such prices is available on
        such day or the securities are not listed or admitted to trading on a
        stock exchange in Canada or a national securities exchange in the United
        States, the last quoted price, or if not so quoted, the average of the
        high bid and low asked prices for each share of such securities in the
        over-the-counter market, as reported by the National Association of Securities
        Dealers, Inc. Automated Quotation System (“NASDAQ”) or
        such other system then in use; or

	 	 	 	 
			(iv)	 if on any such date such shares are not quoted by any
        such organization, the average of the closing bid and asked prices as
        furnished by a professional market maker making a market in such shares
        selected by the Board of Directors of the Corporation; provided, however,
        that if on any such date such shares are not traded in the over-the-counter
        market, the closing price per share of such securities on such date shall
        mean the fair value per share of such securities on such date as determined
        by a nationally or internationally recognized investment dealer or investment
        banker. The Market Price shall be expressed in Canadian dollars and if
        initially determined in respect of any day forming part of the 20 consecutive
        Trading Day period in question in United States



- 7  -





				 dollars, such amount shall be translated into Canadian
        dollars at the Canadian Dollar Equivalent thereof on the relevant Trading
        Day.

	 	 	 	 
	 	(y) 	 “Offer to Acquire” includes:

	 	 	 	 
			(i) 	 an offer to purchase, or a solicitation of an offer
        to sell, Common Shares (including an offer commenced by public announcement
        or advertisement);

	 	 	 	 
			(ii) 	 an acceptance of an offer to sell Common Shares, whether
        or not such offer to sell has been solicited;

	 	 	 	 
			 or any combination thereof, and the Person
        accepting an offer to sell shall be deemed to be making an Offer to Acquire
        to the Person that made the offer to sell.

	 	 	 	 
	 	(z) 	 “Offeror” means a Person
        who is making or has announced a current intention to make a Take- over
        Bid (including a Permitted Bid or Competing Permitted Bid but excluding
        any person referred to in paragraph (vi) of the definition of Beneficial
        Owner) but only so long as the Take- over Bid so announced or made has
        not been withdrawn or terminated or has not expired.

	 	 	 	 
	 	(aa) 	 “Permitted Bid” means a Take-over
        Bid which is made by means of a Take-over Bid circular and which also
        complies with the following additional provisions:

	 	 	 	 
			(i) 	 the Take-over Bid shall be made to all holders of Voting
        Shares as registered on the books of the Corporation, other than the Offeror;

	 	 	 	 
			(ii) 	 the Take-over Bid shall contain, and the take-up and
        payment for securities tendered or deposited thereunder shall be subject
        to, an irrevocable and unqualified condition that no Voting Shares shall
        be taken up or paid for pursuant to the Take-over Bid prior to the Close
        of Business (Vancouver time) on a date which is not less than 60 days
        after the date of the Take-over Bid and only if at such date more than
        50% of the Voting Shares held by Independent Shareholders shall have been
        deposited or tendered pursuant to the Take-over Bid and not withdrawn;

	 	 	 	 
			(iii) 	 the Take-over Bid contains an irrevocable and unqualified
        provision that, unless the Take-over Bid is withdrawn, Voting Shares may
        be deposited pursuant to such Take-over Bid at any time during the period
        of time between the date of the Take-over Bid and the date on which Voting
        Shares may be taken up and paid for and that any Voting Shares deposited
        pursuant to the Take-over Bid may be withdrawn until taken up and paid
        for; and

	 	 	 	 
			(iv) 	 the Take-over Bid contains an irrevocable and unqualified
        provision that if, on the date on which Voting Shares may be taken up
        and paid for, more than 50% of the Voting Shares held by Independent Shareholders
        shall have been deposited or tendered pursuant to the Take-over Bid and
        not withdrawn, the Offeror will make a public announcement of that fact
        and the Take-over Bid will remain open for deposits and tenders of Voting
        Shares for not less than 10 Business Days from the date of such public
        announcement.

	 	 	 	 
	 	(bb) 	 “Permitted Bid Acquisition”
        means a Share acquisition made pursuant to a Permitted Bid or Competing
        Permitted Bid.

	 	 	 	 
	 	(cc) 	 “Permitted Lock-Up Agreement”
        means an agreement (the “Lock-up Agreement”) between
        a Person and one or more holders of Voting Shares (each holder referred
        to herein as a “Locked-up Person”), the terms of which
        are publicly disclosed and a copy of which is made available to the public,
        including the Corporation, pursuant to which such holders agree to deposit
        or tender Voting Shares to a Take-over Bid (the “Lock-up Bid”)
        made by the Person or any of such



- 8  -





	 	 	Person’s Affiliates or
        Associates or any other Person referred to in clause (iii) of the definition
        of Beneficial Owner, whether such Lock-up Bid is made before or after
        the Lock-up Agreement is signed, provided that:

	 	 	 	 
	 	 	(i) 	 the Lock-up Agreement permits the Locked-up Person to
        terminate its agreement to deposit or tender to or to not withdraw Voting
        Shares from the Lock-up Bid in the event a “Superior Offer”
        is made to the Locked-up Person. For purposes of this subsection, a “Superior
        Offer” is any Take-over Bid, amalgamation, arrangement or similar
        transaction pursuant to which the cash equivalent value of the consideration
        per share to be received by holders of the Voting Shares under such transaction
        (the “Superior Offer Consideration”) is greater than
        the cash equivalent value per share to be received by holders of Voting
        Shares under the Lock-up Bid (the “Lock-up Bid Consideration”).
        Notwithstanding the foregoing, the Lock-up Agreement may require that
        the Superior Offer Consideration must exceed the Lock-up Bid Consideration
        by a specified percentage before such termination rights take effect,
        provided such specified percentage is not greater than 7%.



	 	 	 
	 	 	For greater clarity, the Lock-up
        Agreement may contain a right of first refusal or require a period of
        delay to give the Person who made the Lock-up Bid an opportunity to match
        a higher price in another Take-over Bid or transaction or similar limitation
        on the Locked-up Person’s right to withdraw Voting Shares from the
        agreement, so long as the limitation does not preclude the exercise by
        the Locked-up Person of the right to withdraw Voting Shares during the
        period of the other Take-over Bid or transaction; and

	 	 	 	 
	 	 	(ii) 	 no “break-up” fees, “top-up”
        fees, penalties, expenses, or other amounts that exceed, in the aggregate,
        the greater of:

	 	 	 	 	 
	 	 		A. 	 2.5% of the Lock-up Bid Consideration payable under
        the Lock-up Agreement to the Locked-up Person; and

	 	 	 	 	 
	 	 		B. 	 one-half of the difference between the Superior Offer
        Consideration payable to the Locked-up Person and the Lock-up Bid Consideration
        the Locked-up Person would have received under the Lock-up Bid,

	 	 	 	 	 
	 	 		 shall be payable pursuant to the Lock-up Agreement
        in the event that the Locked-up Person fails to tender Voting Shares pursuant
        to the Lock-up Bid or withdraws Voting Shares from the Lock-Up Bid in
        order to accept the other Take-over Bid or transaction.





	 	(dd) 	 “Person” includes any individual, firm,
        partnership, association, trust, body corporate, joint venture, syndicate
        or other form of unincorporated organization, government and its agencies
        and instrumentalities or other entity or group (whether or not having
        legal personality) and any successor (by merger, statutory amalgamation
        or arrangement, or otherwise) thereof.

	 	 	 
	 	(ee) 	 “Pro-Rata Acquisition” means the acquisition
        of Voting Shares or securities convertible into or exchangeable for Voting
        Shares (i) as a result of a stock dividend, stock split or other event
        pursuant to which a Person receives or acquires Voting Shares or securities
        convertible into or exchangeable for Voting Shares on the same pro-rata
        basis as all other holders of Voting Shares of the same class or series,
        or (ii) pursuant to the receipt and/or exercise of rights issued by the
        Corporation on a pro-rata basis to all holders of a class or series of
        Voting Shares to subscribe for or purchase Voting Shares or securities
        convertible into or exchangeable for Voting Shares provided that such
        rights are acquired directly from the Corporation and not from any other
        Person, provided that the Person acquiring such Voting Shares does not
        thereby acquire a greater percentage of such Voting Shares, or securities
        convertible into or exchangeable for such Voting Shares, than the Person’s
        percentage of Voting Shares Beneficially Owned immediately prior to such
        acquisition.



- 9  -





	 	(ff) 	 “Record Time” means the close
        of business on December 11, 2006.

	 	 	 	 
	 	(gg) 	 “Redemption Price” has the
        meaning ascribed to that term in subsection 5.1(a) hereof.

	 	 	 	 
	 	(hh) 	 “Regular Periodic Cash Dividends”
        means cash dividends paid at regular intervals in any fiscal year of the
        Corporation to the extent that such cash dividends do not exceed, in the
        aggregate, the greatest of:

	 	 	 	 
			(i) 	 200% of the aggregate amount of cash dividends declared
        payable by the Corporation on its Common Shares in its immediately preceding
        fiscal year;

	 	 	 	 
			(ii) 	 300% of the arithmetic mean of the aggregate amounts
        of cash dividends declared payable by the Corporation on its Common Shares
        in its three immediately preceding fiscal years; and

	 	 	 	 
			(iii) 	 100% of the aggregate consolidated net income of the
        Corporation, before extraordinary items, for its immediately preceding
        fiscal year.

	 	 	 	 
	 	(ii) 	 “Rights Certificate” has
        the meaning ascribed to that term in subsection 2.2(c) hereof.

	 	 	 	 
	 	(jj) 	 “Rights Holders’ Special Meeting”
        means a meeting of the holders of Rights called by the Board of Directors
        and conducted in accordance with the terms hereof.

	 	 	 	 
	 	(kk) 	 “Securities Act of 1933”
        means the Securities Act of 1933, as amended, of the United States
        of America and the rules and regulations thereunder, unless otherwise
        specified, as the same exist on the date hereof.

	 	 	 	 
	 	(ll) 	 “Securities Act (British
        Columbia)” means the Securities Act, R.S.B.C. 1996, Chapter
        418, as amended, and the regulations and rules thereunder, unless otherwise
        specified, as the same exist on the date hereof.

	 	 	 	 
	 	(mm) 	 “Separation Time” means the
        Close of Business (Vancouver time) on the tenth Trading Day after the
        earliest of:

	 	 	 	 
			(i) 	 the Stock Acquisition Date;

	 	 	 	 
			(ii) 	 the date of the commencement of, or first public announcement
        of the intent of any Person (other than the Corporation or any Subsidiary
        of the Corporation) to commence, a Take-over Bid (other than a Permitted
        Bid or a Competing Permitted Bid, as the case may be); and

	 	 	 	 
			(iii) 	 the date upon which a Permitted Bid or Competing Permitted
        Bid ceases to be such;

	 	 	 	 
			 or such later date as may be determined by
        the Board of Directors provided, however, that if any such Take-over Bid
        expires, is cancelled, terminated or otherwise withdrawn prior to the
        Separation Time, such Take-over Bid shall be deemed, for purposes of this
        definition, never to have been made.

	 	 	 	 
	 	(nn) 	 “Shares” means the shares
        in the capital of the Corporation.

	 	 	 	 
	 	(oo) 	 “Stock Acquisition Date”
        means the first date of public announcement (which, for purposes of this
        definition, shall include, without limitation, a report filed pursuant
        to Section 111 of the Securities Act (British Columbia) or Section
        13(d) under the Exchange Act of 1934, as amended from time to time
        and any provision substituted therefor) by the Corporation or an Acquiring
        Person of facts indicating that an Acquiring Person has become such.



- 10  -





	 	(pp) 	 “Subsidiary”:

	 	 	 	 
			A body corporate is a Subsidiary of another body
      corporate if:
	 	 	 	 
			 (i) 
	it is controlled by (A) that other, or (B) that other and one or more
      bodies corporate, each of which is controlled by that other, or (C) two
      or more bodies corporate, each of which is controlled by that other, or
	 	 	 	 
			(ii) 	 it is a Subsidiary of a body corporate that is that
        other’s Subsidiary.

	 	 	 	 
	 	(qq) 	 “Take-over Bid” means an
        Offer to Acquire Voting Shares or securities convertible into Voting Shares,
        where the Voting Shares subject to the Offer to Acquire, together with
        the Voting Shares, if any, into which the securities subject to the Offer
        to Acquire are convertible and the Voting Shares Beneficially Owned by
        the Offeror at the date of the Offer to Acquire constitute, in the aggregate,
        20% or more of the then outstanding Voting Shares.

	 	 	 	 
	 	(rr) 	 “Termination Time” means
        the time at which the right to exercise Rights shall terminate pursuant
        to Section 5.1 hereof.

	 	 	 	 
	 	(ss) 	 “Trading Day”, when used
        with respect to any securities, means a day on which the principal securities
        exchange in Canada on which such securities are listed or admitted to
        trading is open for the transaction of business or, if the securities
        are not listed or admitted to trading on any securities exchange in Canada,
        a day on which the principal securities exchange in the United States
        of America on which such securities are listed or admitted to trading
        is open for the transaction of business, or if the securities are not
        listed or admitted to trading on any securities exchange in Canada or
        the United States of America, a Business Day.

	 	 	 	 
	 	(tt) 	 “U.S.-Canadian Exchange Rate”
        means, on any date:

	 	 	 	 
			 (i) 
	if on such date the Bank of Canada sets an average noon spot rate of exchange
      for the conversion of one United States dollar into Canadian dollars, such
      rate; and
	 	 	 	 
			(ii)	 in any other case, the rate for such date for the conversion
        of one United States dollar into Canadian dollars calculated in the manner
        which shall be determined by the Board of Directors from time to time.

	 	 	 	 
	 	(uu) 	 “U.S. Dollar Equivalent”
        of any amount which is expressed in Canadian dollars means, on any date,
        the United States dollar equivalent of such amount determined by reference
        to the U.S.- Canadian Exchange Rate on such date.

	 	 	 	 
	 	(vv) 	 “Voting Share Reduction”
        means an acquisition or a redemption by the Corporation of Voting Shares.

	 	 	 	 
	 	(ww) 	 “Voting Shares” means, collectively,
        the Common Shares and any other Shares entitled to vote generally for
        the election of directors.




	1.2	
      Holder




     As used in this Agreement, unless
the context otherwise requires, the “holder” when used with reference to
Rights, means the registered holder of such Rights or, prior to the Separation
Time, the associated Common Shares.

- 11  -





	1.3 	
      Acting Jointly or in
Concert



     For purposes of this Agreement, a
Person is acting jointly or in concert with every other person who is a party to
any agreement, to acquire or offer to acquire Voting Shares (other than
customary agreements with and between underwriters and banking group or selling
group members with respect to the distribution of securities pursuant to a
prospectus or by way of private placement and other than pursuant to pledges of
securities in the ordinary course of business).

	1.4 	
      Application of Statutes, Regulations and
    Rules



     Where a statute, regulation or
rule is referred to in a definition or other provision of this Agreement, it
shall be conclusively deemed to have application in the contemplated
circumstances notwithstanding that such statute, regulation or rule might not,
but for the provisions of this Section 1.4, have application for want of
jurisdiction or otherwise.

	1.5 	
      Currency



     All sums of money which are
referred to in this Agreement are expressed in lawful money of Canada, unless
otherwise specified.

	1.6 	
      Headings and References



     The headings of the Articles and
Sections of this Agreement and the Table of Contents are inserted for
convenience and reference only and shall not affect the construction or
interpretation of this Agreement. All references to Articles, Sections and
Exhibits are to articles and sections of and exhibits to, and forming part of,
this Agreement. The words “hereto”, “herein”, “hereof”,
“hereunder”, “this Agreement”, “the Rights Agreement” and
similar expressions refer to this Agreement including the Exhibits, as the same
may be amended, modified or supplemented at any time or from time to time.

	1.7 	
      Singular, Plural, etc.



     In this Agreement, where the
context so admits, words importing the singular number include the plural and
vice versa and words importing gender include the masculine, feminine and neuter
genders.

ARTICLE 2 - THE RIGHTS


	2.1	
      Legend on Common Share
  Certificates




     Certificates for Common Shares
issued after the Record Time hereof but prior to the Separation Time shall
evidence one Right for each Common Share represented thereby and shall have
impressed, printed, or written thereon or otherwise affixed thereto a legend in
substantially the following form:


  
    “Until the Separation Time (as such term is defined
      in the Rights Agreement referred to below), this certificate also evidences
      and entitles the holder hereof to certain Rights as set forth in a Rights
      Agreement dated effective as of December 11, 2006 (the “Rights Agreement”),
      between Northern Dynasty Minerals Ltd. (the “Corporation”) and
      Computershare Investor Services Inc., as Rights Agent, the terms of which
      are hereby incorporated herein by reference and a copy of which is on file
      and may be inspected during normal business hours at the principal executive
      offices of the Corporation. Under certain circumstances, as set forth in
      the Rights Agreement, such Rights may be amended or redeemed, may expire,
      may become void (if, in certain circumstances, they are “Beneficially
      Owned” by a “Person” who is or becomes an “Acquiring
      Person” or any Person acting jointly or in concert with an Acquiring
      Person or with an “Affiliate” or “Associate” of an “Acquiring
      Person”, as such terms are defined in the Rights Agreement, or a transferee
      thereof) or may be evidenced by separate certificates and may no longer
      be

  



- 12  -





  
    evidenced by this certificate. The Corporation will mail
      or arrange for the mailing of a copy of the Rights Agreement to the holder
      of this certificate without charge within five days after the receipt of
      a written request therefor.”

  



Certificates representing Common Shares that are issued and
outstanding at the Record Time shall evidence one Right for each Common Share
evidenced thereby notwithstanding the absence of a legend in substantially the
foregoing form until the earlier of the Separation Time and the Expiration
Time.

	2.2 	 Initial Exercise Price: Exercise of Rights:
        Detachment of Rights

	 	 	 	 
		(a) 	 Subject to adjustment as herein set forth,
        each Right will entitle the holder thereof, after the Separation Time
        and prior to the Expiration Time, to purchase, for the Exercise Price,
        one Common Share. Notwithstanding any other provision of this Agreement,
        any Rights held by the Corporation or any of its Subsidiaries shall be
        void.

	 	 	 	 
		(b) 	 Until the Separation Time,

	 	 	 	 
			(i) 	 the Rights shall not be exercisable and no Right may
        be exercised, and

	 	 	 	 
			(ii) 	 for administrative purposes, each Right shall be evidenced
        by the certificate for the associated Common Share registered in the name
        of the holder thereof (which certificate shall be deemed to represent
        a Rights Certificate) and shall be transferable only together with, and
        shall be transferred by a transfer of, such associated Common Share.

	 	 	 	 
		(c) 	 After the Separation Time and prior to the
        Expiration Time, the Rights (i) may be exercised and (ii) shall be registered
        and transferable independent of Common Shares. Promptly following the
        Separation Time, the Corporation shall prepare and the Rights Agent shall
        mail to each holder of record of Common Shares as of the Separation Time
        (other than an Acquiring Person, any other Person whose Rights are or
        become void pursuant to the provisions of subsection 3.1(b) hereof and,
        in respect of any Rights Beneficially Owned by such Acquiring Person which
        are not held of record by such Acquiring Person, the holder of record
        of such Rights), at such holder’s address as shown in the records
        of the Corporation (the Corporation hereby agreeing to furnish copies
        of such records to the Rights Agent for this purpose),

	 	 	 	 
			(i) 	 a certificate (a “Rights Certificate”)
        in substantially the form of Exhibit A hereto appropriately completed
        and registered in such holder’s name, representing the number of
        Rights held by such holder at the Separation Time and having such marks
        of identification or designation and such legends, summaries or endorsements
        printed thereon as the Corporation may deem appropriate and as are not
        inconsistent with the provisions of this Agreement, or as may be required
        to comply with any applicable law or with any rule or regulation made
        pursuant thereto or with any rule or regulation of any stock exchange
        or quotation system on which the Rights may from time to time be listed
        or traded, or to conform to usage, and

	 	 	 	 
			(ii) 	 a disclosure statement describing the Rights.

	 	 	 	 
		(d) 	 Rights may be exercised in whole at any time
        or in part from time to time on any Business Day (or other day that is
        not a bank holiday at the place of exercise) after the Separation Time
        and prior to the Expiration Time by submitting to the Rights Agent at
        its office in the City of Vancouver, Canada or at any other office of
        the Rights Agent or any Co-Rights Agent in the cities specified in the
        Rights Certificate or designated from time to time for that purpose by
        the Corporation after consultation with the Rights Agent:

	 	 	 	 
			(i) 	 the Rights Certificate evidencing such Rights with an
        Election to Exercise (an “Election to Exercise”) substantially
        in the form attached to the Rights Certificate, appropriately



- 13  -





				completed and duly executed by the holder or his executors or administrators
      or other personal representatives or his legal attorney duly appointed by
      instrument in writing in form and executed in a manner satisfactory to the
      Rights Agent, and
	 	 	 	 
			(ii) 	 payment by certified cheque or money order payable to
        the order of the Corporation, of a sum equal to the Exercise Price multiplied
        by the number of Rights being exercised and a sum sufficient to cover
        any transfer tax or charge which may be payable in respect of any transfer
        involved in the issuance, transfer or delivery of Rights Certificates
        or the issuance, transfer or delivery of certificates for Common Shares
        in a name other than that of the holder of the Rights being exercised.

	 	 	 	 
	 	(e) 	 Upon receipt of a Rights Certificate accompanied
        by a duly completed and executed Election to Exercise which does not indicate
        that Rights evidenced by such Rights Certificate have become void pursuant
        to subsection 3.1(b) hereof and payment as set forth in subsection 2.2(d)
        above, the Rights Agent (unless otherwise instructed by the Corporation)
        shall thereupon promptly:

	 	 	 	 
			(i) 	 requisition from a transfer agent of the Common Shares
        certificates for the number of Common Shares to be purchased (the Corporation
        hereby irrevocably authorizing its transfer agents to comply with all
        such requisitions),

	 	 	 	 
			(ii) 	 when appropriate, requisition from the Corporation the
        amount of cash to be paid in lieu of issuing fractional Common Shares,

	 	 	 	 
			(iii) 	 after receipt of such certificates, deliver the same
        to or upon the order of the registered holder of such Rights Certificate,
        registered in such name or names as may be designated by such holder together
        with, where applicable, any cash payment in lieu of a fractional interest,
        and

	 	 	 	 
			(iv) 	 tender to the Corporation all payments received on exercise
        of the Rights.

	 	 	 	 
	 	(f) 	 In case the holder of any Rights shall exercise
        less than all the Rights evidenced by such holder’s Rights Certificate,
        a new Rights Certificate evidencing (subject to the provisions of subsection
        5.5(a) hereof) the Rights remaining unexercised will be issued by the
        Rights Agent to such holder or to such holder’s duly authorized assigns.

	 	 	 	 
	 	(g) 	 The Corporation covenants and agrees to:

	 	 	 	 
			(i) 	 take all such action as may be necessary on its part
        and within its powers to ensure that all Shares delivered upon exercise
        of Rights shall, at the time of delivery of the certificates evidencing
        such Shares (subject to payment of the Exercise Price), be duly and validly
        authorized, executed, issued and delivered and be fully paid and non-
        assessable;

	 	 	 	 
			(ii) 	 take all reasonable action as may be necessary on its
        part and within its power to comply with any applicable requirements of
        the Business Corporations Act (British Columbia), the Securities
        Acts or comparable legislation of each of the provinces and territories
        of Canada and the Securities Act of 1933, and the rules and regulations
        thereunder, and any other applicable law, rule or regulation, in connection
        with the issuance and delivery of Rights Certificates and of any securities
        of the Corporation upon exercise of Rights;

	 	 	 	 
			(iii) 	 use its reasonable efforts to cause all Shares of the
        Corporation issued upon exercise of Rights to be listed on the stock exchanges
        on which such Common Shares were traded immediately before the Stock Acquisition
        Date; and



- 14  -





	 	 	(iv) 	 pay when due and payable any and all Canadian and United
        States federal, provincial and state transfer taxes (not including any
        taxes referable to the income or profit of the holder or exercising Person
        or any liability of the Corporation to withhold tax) and charges which
        may be payable in respect of the original issuance or delivery of the
        Rights Certificates or of any Shares of the Corporation issued upon the
        exercise of Rights, provided that the Corporation shall not be required
        to pay any transfer tax or charge - which may be payable in respect of
        any transfer involved in the transfer or delivery of Rights Certificates
        or the issuance or delivery of certificates for securities in a name other
        than that of the holder of the Rights being transferred or exercised.





	2.3 	
      Adjustments to Exercise Price, Number of
    Rights



     Subject to subsection 5.17, the
Exercise Price, the number and kind of securities subject to purchase upon
exercise of each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 2.3.

	 	(a) 	
      If the Corporation shall at any time after the Record
      Time and prior to the Expiration Time:

	 	 	 	 
	 		(i) 	
      declare or pay a dividend on Common Shares payable in
      Common Shares (or other Shares of capital or securities exchangeable for
      or convertible into or giving a right to acquire Common Shares or other
      Shares of capital) otherwise than pursuant to any optional share dividend
      program;

	 	 	 	 
	 		(ii) 	
      subdivide or change the outstanding Common Shares into a
      greater number of Common Shares,

	 	 	 	 
	 		(iii) 	
      consolidate or change the outstanding Common Shares into
      a smaller number of Common Shares, or

	 	 	 	 
	 		(iv) 	
      issue any Common Shares (or other shares of capital or
      securities exchangeable for or convertible into or giving a right to
      acquire Common Shares or other Shares of capital) in respect of, in lieu
      of, or in exchange for, existing Common Shares in a reclassification or
      redesignation of Common Shares, an amalgamation or statutory
      arrangement,



the Exercise Price and the number of Rights outstanding, or, if
the payment or effective date therefor shall occur after the Separation Time,
the securities purchasable upon exercise of Rights shall be adjusted in the
manner set forth below. If an event occurs which would require an adjustment
under both this Section 2.3 and subsection 3.1(a), the adjustment provided for
in this Section 2.3 shall be in addition to, and shall be made prior to, any
adjustment required under subsection 3.1(a) . If the Exercise Price and number
of Rights are to be adjusted,

	 	(x) 	
      the Exercise Price in effect after such adjustment shall
      be equal to the Exercise Price in effect immediately prior to such
      adjustment divided by the number of Common Shares (or other Shares of
      capital) (the “Expansion Factor”) that a holder of one Common Share
      immediately prior to such dividend, subdivision, change, consolidation or
      issuance would hold immediately thereafter as a result thereof (assuming
      the exercise of all such exchange or conversion rights, if any),
  and

	 	 	 
	 	(y) 	
      each Right held prior to such adjustment shall become
      that number of Rights equal to the Expansion
Factor,



and the adjusted number of Rights shall be deemed to be
distributed among the Common Shares with respect to which the original Rights
were associated (if they remain outstanding) and the Shares issued in respect of
such dividend, subdivision, change, consolidation or issuance, so that each such
Common Share (or other whole Share or security exchangeable for or convertible
into a whole Share of capital) shall have exactly one Right associated with
it.

- 15  -




     If the securities purchasable
upon exercise of Rights are to be adjusted, the securities purchasable upon
exercise of each Right after such adjustment shall be the securities that a
holder of the securities purchasable upon exercise of one Right immediately
prior to such dividend, subdivision, change, consolidation or issuance would
hold immediately thereafter as a result thereof. To the extent that any such
rights of exchange, conversion or acquisition are not exercised prior to the
expiration thereof, the Exercise Price shall be readjusted to the Exercise Price
which would then be in effect based upon the number of Common Shares (or
securities convertible into or exchangeable for Common Shares) actually issued
upon the exercise of such rights. If after the Record Time and prior to the
Expiration Time the Corporation shall issue any shares of its authorized capital
other than Common Shares in a transaction of a type described in the first
sentence of this subsection 2.3(a), such shares shall be treated herein as
nearly equivalent to Common Shares as may be practicable and appropriate under
the circumstances and the Corporation and the Rights Agent agree to amend this
Agreement in order to effect such treatment.

     If the Corporation shall at any
time after the Record Time and prior to the Separation Time issue any Common
Shares otherwise than in a transaction referred to in the preceding paragraph,
each such Common Share so issued shall automatically have one new Right
associated with it, which Right shall be evidenced by the certificate
representing such Share.

     (b) If the Corporation shall at
any time after the Record Time and prior to the Separation Time fix a record
date for the making of a distribution to all holders of Common Shares of rights
or warrants entitling them (for a period expiring within 45 days after such
record date) to subscribe for or purchase Common Shares (or securities
convertible into or exchangeable for or carrying a right to purchase or
subscribe for Common Shares) at a price per Common Share (or, in the case of a
security convertible into or exchangeable for or carrying a right to purchase or
subscribe for Common Shares, having a conversion, exchange or exercise price
(including the price required to be paid to purchase such convertible or
exchangeable security or right) per share) that is less than 90% of the Market
Price per Common Share on such record date, the Exercise Price shall be
adjusted. The Exercise Price in effect after such record date shall equal the
Exercise Price in effect immediately prior to such record date multiplied by a
fraction, of which the numerator shall be the number of Common Shares
outstanding on such record date plus the number of Common Shares which the
aggregate offering price of the total number of Common Shares so to be offered
(and/or the aggregate initial conversion, exchange or exercise price of the
convertible or exchangeable securities or rights so to be offered (including the
price required to be paid to purchase such convertible or exchangeable
securities or rights)) would purchase at such Market Price and of which the
denominator shall be the number of shares of Common Shares outstanding on such
record date plus the number of additional Common Shares to be offered for
subscription or purchase (or into which the convertible or exchangeable
securities or rights so to be offered are initially convertible, exchangeable or
exercisable). In case such subscription price may be paid in a consideration
part or all of which shall be in a form other than cash, the value of such
consideration shall be as determined by the Board of Directors. To the extent
that any such rights or warrants are not so issued or, if issued, are not
exercised prior to the expiration thereof, the Exercise Price shall be
readjusted to the Exercise Price which would then be in effect if such record
date had not been fixed or to the Exercise Price which would then be in effect
based upon the number of Common Shares (or securities convertible into or
exchangeable for Common Shares) actually issued upon the exercise of such rights
or warrants, as the case may be. For purposes of this Agreement, the granting of
the right to purchase Common Shares (whether previously unissued, treasury
shares or otherwise) pursuant to any optional dividend reinvestment plan and/or
any Common Share purchase plan providing for the reinvestment of dividends
payable on securities of the Corporation and/or employee stock option, stock
purchase or other employee benefit plan (so long as such right to purchase is in
no case evidenced by the delivery of rights or warrants) shall not be deemed to
constitute an issue of rights or warrants by the Corporation; provided,
however, that, in the case of any dividend reinvestment plan, the right to
purchase Common Shares is at a price per share of not less than 90% of the then
current market price per share (determined as provided in such plan) of the
Common Shares.

     (c) If the Corporation shall at
any time after the Record Time and prior to the Separation Time fix a record
date for the making of a distribution to all holders of Common Shares of
evidences of indebtedness or assets (other than a Regular Periodic Cash Dividend
or a dividend paid in Common Shares) or rights or warrants (excluding those
referred to in subsection 2.3(a) or 2.3(b)), the Exercise Price shall be
adjusted. The Exercise Price in effect after such record date shall, subject to
adjustment as provided in the penultimate sentence of subsection 2.3(b), equal
the Exercise Price in effect immediately prior to such record date less the fair
market value of the

- 16  -




portion of the assets, evidences of indebtedness, rights or
warrants so to be distributed applicable to the securities purchasable upon
exercise of one Right.

     (d) Each adjustment made pursuant
to this Section 2.3 shall be made as of:

	 	(i) 	 the payment or effective date for the applicable dividend,
        subdivision, change, consolidation or issuance in the case of an adjustment
        made pursuant to subsection 2.3(a) above, and

	 	 	 
	 	(ii) 	 the record date for the applicable dividend or distribution,
        in the case of an adjustment made pursuant to subsections 2.3(b) or (c)
        above.



     (e) Anything herein to the
contrary notwithstanding, no adjustment to the Exercise Price shall be required
unless such adjustment would require an increase or decrease of at least 1% in
such Exercise Price; provided, however, that any adjustments which by
reason of this subsection 2.3(e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. Each adjustment
made pursuant to this Section 2.3 shall be calculated to the nearest cent or to
the nearest one ten-thousandth of a Common Share or Right, as the case may be.


     (f) All Rights originally issued
by the Corporation subsequent to any adjustment made to an Exercise Price
hereunder shall evidence the right to purchase, at the adjusted Exercise Price,
the number of Common Shares purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided
herein.

     (g) Unless the Corporation shall
have exercised its election as provided in subsection 2.3(h), upon each
adjustment of an Exercise Price as a result of the calculations made in
subsections 2.3(b) and (c), each Right outstanding immediately prior to the
making of such adjustment shall thereafter evidence the right to purchase, at
the adjusted Exercise Price, that number of Common Shares (calculated to the
nearest one ten-thousandth) obtained by:

	 	(i) 	
      multiplying (A) the number of Common Shares covered by a
      Right immediately prior to this adjustment, by (B) the Exercise Price in
      effect immediately prior to such adjustment of the Exercise Price;
    and

	 	 	 
	 	(ii) 	
      dividing the product so obtained by the Exercise Price in
      effect immediately after such adjustment of the Exercise
  Price.



     (h) The Corporation may elect on
or after the date of any adjustment of an Exercise Price to adjust the number of
Rights, in lieu of any adjustment in the number of Common Shares purchasable
upon the exercise of a Right. Each of the Rights outstanding after the
adjustment in the number of Rights shall be exercisable for the number of Common
Shares for which a Right was exercisable immediately prior to such adjustment.
Each Right held of record immediately prior to such adjustment of the number of
Rights shall become the number of Rights (calculated to the nearest one
ten-thousandth) obtained by dividing the Exercise Price in effect immediately
prior to the adjustment of the Exercise Price by the Exercise Price in effect
immediately after adjustment of the Exercise Price. The Corporation shall make a
public announcement of its election to adjust the number of Rights, indicating
the record date for the adjustment and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Exercise
Price is adjusted or any date thereafter, but, if the Rights Certificates have
been issued, shall be at least 10 calendar days after the date of the public
announcement. If Rights Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this subsection 2.3(h), the Corporation shall,
as promptly as practicable, cause to be distributed to holders of record of
Rights Certificates on such record date, Rights Certificates evidencing the
additional Rights to which such holder shall be entitled as a result of such
adjustment, or, at the option of the Corporation, shall cause to be distributed
to such holders of record in substitution or replacement for the Rights
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Corporation, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Rights Certificates so to be distributed shall be issued, executed
and countersigned

- 17  -




in the manner provided for herein and may bear, at the option
of the Corporation, the adjusted Exercise Price and shall be registered in the
names of the holders of record of Rights Certificates on the record date
specified in the public announcement.

     (i) Irrespective of any
adjustment or change in the securities purchasable upon exercise of the Rights,
the Rights Certificates theretofore and thereafter issued may continue to
express the securities so purchasable which were expressed in the initial Rights
Certificates issued hereunder.

     (j) If, as a result of an
adjustment made pursuant to Section 3.1, the holder of any Right thereafter
Exercised shall become entitled to receive any securities other than Common
Shares, thereafter the number of such other securities so receivable upon
exercise of any Right and the applicable Exercise Price thereof shall be subject
to adjustment from time to time in a manner and on terms as nearly equivalent as
may be practicable to the provisions with respect to the Common Shares contained
in the foregoing subsections of this Section 2.3 and the provisions of this
Agreement with respect to the Common Shares shall apply on like terms to any
such other securities.

     (k) In any case in which this
Section 2.3 shall require that any adjustment in the Exercise Price be made
effective as of a record date for a specified event, the Corporation may elect
to defer until the occurrence of such event the issuance to the holder of any
Right exercised after such record date of the number of Common Shares and other
securities of the Corporation, if any, issuable upon such exercise over and
above the number of Common Shares and other securities of the Corporation, if
any, issuable upon such exercise on the basis of the Exercise Price in effect
prior to such adjustment; provided, however, that the Corporation shall
deliver to such holder a due bill or other appropriate instrument evidencing
such holder’s right to receive such additional Common Shares or other securities
upon the occurrence of the event requiring such adjustment.

     (l) Whenever an adjustment to the
Exercise Price or a change in the securities purchasable upon the exercise of
Rights is made pursuant to this Section 2.3, the Corporation shall promptly:

	 	(i) 	
      prepare a certificate setting forth such adjustment and a
      brief statement of the facts accounting for such adjustment;

	 	 	 
	 	(ii) 	
      file with the Rights Agent and with each transfer agent
      for the Common Shares, a copy of such certificate; and

	 	 	 
	 	(iii) 	
      cause notice of the particulars of such adjustment or
      change to be given to the holders of the Rights.



Failure to file such certificate or to cause such notice to be
given as aforesaid, or any defect therein, shall not affect the validity of any
such adjustment or change.

	2.4 	
      Date on Which Exercise is
  Effective



     Each Person in whose name any
certificate for Shares is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the Shares represented
thereby on, and such certificate shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly submitted (together with a duly
completed Election to Exercise) and payment of the Exercise Price for such
Rights (and any applicable transfer taxes and other charges payable by the
exercising holder hereunder) was made; provided, however, that if the
date of such exercise is a date upon which the relevant Share transfer books of
the Corporation are closed, such Person shall be deemed to have become the
recorded holder of such Shares on, and such certificate shall be dated, the next
succeeding Business Day on which the said Share transfer books of the
Corporation are open.

	2.5 	
      Execution, Authentication, Delivery and Dating of
      Rights Certificates



     (a) The Rights Certificates shall
be executed on behalf of the Corporation by its Chief Executive Officer, Chief
Operating Officer or Chief Financial Officer under its corporate seal reproduced
thereon attested by

- 18  -




its Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Rights Certificates may be manual or
facsimile.

     (b) Rights Certificates bearing
the manual or facsimile signatures of individuals who were at any time the
proper officers of the Corporation shall bind the Corporation, notwithstanding
that such individuals or any of them have ceased to hold such offices prior to
the countersignature and delivery of such Rights Certificates.

     (c) Promptly after the
Corporation learns of the Separation Time, the Corporation shall notify the
Rights Agent of such Separation Time and shall deliver Rights Certificates
executed by the Corporation to the Rights Agent for countersignature, and the
Rights Agent shall countersign (manually or by facsimile signature in a manner
satisfactory to the Corporation) and deliver such Rights Certificates to the
holders of the Rights pursuant to subsection 2.2(c) hereof. No Rights
Certificate shall be valid for any purpose until countersigned by the Rights
Agent in the manner described above.

     (d) Each Rights Certificate shall
be dated the date of countersignature thereof.

	2.6 	
      Registration, Registration of Transfer and
      Exchange



     (a) The Corporation shall cause
to be kept a register (the “Rights Register”) in which, subject to
suchreasonable regulations as it may prescribe, the Corporation shall provide
for the registration and transfer of Rights. The Rights Agent is hereby
appointed “Rights Registrar” for the purpose of maintaining the Rights
Register for the Corporation and registering Rights and transfers of Rights as
herein provided. If the Rights Agent shall cease to be the Rights Registrar, the
Rights Agent shall have the right to examine the Rights Register at all
reasonable times.

     After the Separation Time and
prior to the Expiration Time, upon surrender for registration of transfer or
exchange of any Rights Certificate, and subject to the provisions of subsection
2.6(c) below, the Corporation shall execute, and the Rights Agent shall
countersign and deliver, in the name of the holder or the designated transferee
or transferees, as required pursuant to the holder’s instructions, one or more
new Rights Certificates evidencing the same aggregate number of Rights as did
the Rights Certificate so surrendered.

     (b) All Rights issued upon any
registration of transfer or exchange of Rights Certificates shall be the valid
obligations of the Corporation, and such Rights shall be entitled to the same
benefits under this Agreement as the Rights surrendered upon such registration
of transfer or exchange.

     (c) Every Rights Certificate
surrendered for registration of transfer or exchange shall have the form of
assignment thereon duly completed and endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Corporation or the Rights
Agent, as the case may be, duly executed by the holder thereof or such holder’s
attorney duly authorized in writing. As a condition to the issuance of any new
Rights Certificate under this Section 2.6, the Corporation may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and other expenses (including the reasonable
fees and expenses of its Rights Agent) connected therewith.

     (d) The Corporation shall not be
required to register the transfer or exchange of any Rights after the Rights
have been terminated pursuant to the provisions of this Agreement.

	2.7 	
      Mutilated, Destroyed, Lost and Stolen Rights
      Certificates



     (a) If any mutilated Rights Certificate
  is surrendered to the Rights Agent prior to the Expiration Time, the Corporation
  shall execute and the Rights Agent shall countersign and deliver a new Rights
  Certificate evidencing the same number of Rights as did the Rights Certificate
  so surrendered.

     (b) If there shall be delivered
to the Corporation and the Rights Agent prior to the Expiration Time (i)
evidence to their satisfaction of the destruction, loss or theft of any Rights
Certificate and (ii) such security or indemnity as may be required by them to
save each of them and their respective agents harmless, then, in the absence of
notice to the Corporation or the Rights Agent that such Rights Certificate has
been acquired by a bona

- 19  -




fide purchaser, the Corporation shall execute and upon the
Corporation’s request, the Rights Agent shall countersign and deliver, in lieu
of any such destroyed, lost or stolen Rights Certificate, a new Rights
Certificate evidencing the same number of Rights as did the Rights Certificate
so destroyed, lost or stolen.

     (c) As a condition to the
issuance of any new Rights Certificate under this Section 2.7, the Corporation
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the reasonable fees and expenses of the Rights Agent)
connected therewith.

     (d) Every new Rights Certificate
issued pursuant to this Section 2.7 in lieu of any destroyed, lost or stolen
Rights Certificate shall evidence an original additional contractual obligation
of the Corporation, whether or not the destroyed, lost or stolen Rights
Certificate shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Agreement equally and proportionately with any and all
other Rights duly issued hereunder.

	2.8 	
      Persons Deemed Owners



     Prior to due presentment of a
Rights Certificate (or, prior to the Separation Time, the associated Share
certificate) for registration of transfer, the Corporation, the Rights Agent and
any agent of the Corporation or the Rights Agent may deem and treat the Person
in whose name such Rights Certificate (or, prior to the Separation Time, such
Share certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes whatsoever. As used in this Agreement, unless
the context otherwise requires, the term “holder” of any Rights means the
registered holder of such Rights (or, prior to the Separation Time, the
associated Shares).

	2.9 	
      Delivery and Cancellation of
  Certificates



     All Rights Certificates
surrendered upon exercise or for redemption, registration of transfer or
exchange shall, if surrendered to any Person other than the Rights Agent, be
delivered to the Rights Agent and, in any case, shall be promptly cancelled by
the Rights Agent. The Corporation may at any time deliver to the Rights Agent
for cancellation any Rights Certificates previously countersigned and delivered
hereunder which the Corporation may have acquired in any manner whatsoever, and
all Rights Certificates so delivered shall be promptly cancelled by the Rights
Agent. No Rights Certificates shall be countersigned in lieu of or in exchange
for any Rights Certificates cancelled as provided in this Section 2.9, except as
expressly permitted by this Agreement. The Rights Agent shall destroy all
cancelled Rights Certificates and deliver a certificate of destruction to the
Corporation.

	2.10 	
      Agreement of Rights
Holders



     Every holder of Rights by
accepting the same consents and agrees with the Corporation and the Rights Agent
and with every other holder of Rights that:

     (a) such holder shall be bound by
and subject to the provisions of this Agreement, as amended from time to time in
accordance with the terms hereof, in respect of all Rights held;

     (b) prior to the Separation Time,
each Right shall be transferable only together with, and shall be transferred by
a transfer of, the associated Share;

     (c) after the Separation Time,
the Rights Certificates shall be transferable only on the Rights Register as
provided herein;

     (d) prior to due presentment of a
Rights Certificate (or, prior to the Separation Time, the associated Share
certificate) for registration of transfer, the Corporation, the Rights Agent and
any agent of the Corporation or the Rights Agent may deem and treat the Person
in whose name the Rights Certificate (or, prior to the Separation Time, the
associated Share certificate) is registered as the absolute owner thereof and of
the Rights evidenced thereby (notwithstanding any notations of ownership or
writing on such Rights Certificate or the associated Share

- 20  -




certificate made by anyone other than the Corporation or the
Rights Agent) for all purposes whatsoever, and neither the Corporation nor the
Rights Agent shall be affected by any notice to the contrary;

     (e) such holder has waived all
rights to receive any fractional Right or fractional Share upon exercise of a
Right;

     (f) this Agreement may be
supplemented or amended from time to time pursuant to subsection 5.4(a) or the
last sentence of the penultimate paragraph of subsection 2.3(a) hereof upon the
sole authority of the Board of Directors without the approval of any holder of
Rights.

	2.11 	
      Rights Certificate Holder Deemed Not a
      Shareholder



     No holder of any Rights or Rights
Certificate is entitled, as such holder, to vote, receive dividends or be
considered for any purpose the holder of any Common Share or any other share or
security of the Corporation which may at any time be issuable on the exercise of
the Rights represented thereby, and nothing contained herein or in any Rights
Certificate is to be construed as conferring upon the holder of any Right or
Rights Certificate, as such, any right of a holder of Common Shares or any other
shares or securities of the Corporation or any right to vote at any meeting of
shareholders of the Corporation whether for the election of directors or
otherwise or upon any matter submitted to holders of Common Shares or any other
shares of the Corporation at any meeting thereof, or to give or withhold consent
to any action of the Corporation or to receive notice of any meeting or other
action affecting any holder of Common Shares or any other shares of the
Corporation except as expressly provided herein, or to receive dividends,
distributions or subscription rights, or otherwise, until the Right or Rights
evidenced by Rights Certificates have been duly exercised in accordance with the
terms and provisions hereof.

ARTICLE 3 - ADJUSTMENTS TO THE RIGHTS
IN THE EVENT
OF CERTAIN TRANSACTIONS

	3.1 	
      Flip-in Event



     (a) Subject to the provisions of
Subsection 3.1(b) and Section 5.1 hereof, if prior to the Expiration Time a
Flip-in Event shall occur, each Right shall thereafter constitute, effective at
the Close of Business on the tenth Business Day after the relevant Stock
Acquisition Date, the right to purchase from the Corporation, upon exercise
thereof in accordance with the terms hereof, that number of Common Shares of the
Corporation having an aggregate Market Price on the date of consummation or
occurrence of such Flip-in Event equal to twice the Exercise Price for an amount
in cash equal to the Exercise Price (such right to be appropriately adjusted in
a manner analogous to the applicable adjustment provided for in Section 2.3
hereof in the event that, after such date of consummation or occurrence, an
event of a type analogous to any of the events described in Section 2.3 hereof
shall have occurred with respect to such Common Shares).

     (b) Anything in this Agreement to
the contrary notwithstanding, upon the occurrence of a Flip-In Event, any Rights
that are or were Beneficially Owned on or after the earlier of the Separation
Time and the Stock Acquisition Date by:

	 	(i) 	
      an Acquiring Person (or any Person acting jointly or in
      concert with an Acquiring Person or with an Affiliate or Associate of an
      Acquiring Person), or

	 	 	 
	 	(ii) 	
      a direct or indirect transferee of, or other successor in
      title to, such Rights (a “Transferee”), who becomes a Transferee
      concurrently with or subsequent to the Acquiring Person becoming an
      Acquiring Person, in a transfer, whether or not for consideration, that
      the Board of Directors has determined is part of a plan, understanding or
      scheme of an Acquiring Person (or an Affiliate or Associate of an
      Acquiring Person or any Person acting jointly or in concert with an
      Acquiring Person or an Affiliate or Associate of an Acquiring Person) that
      has the purpose or effect of avoiding the provisions of this subsection
      3.1(b) applicable in the circumstances contemplated in clause (i)
      hereof,



- 21  -




shall thereupon become and be void and any holder of such
Rights (including any Transferee) shall thereafter have no rights whatsoever
with respect to such Rights, whether under any provision of this Agreement or
otherwise. The holder of any Rights represented by a Rights Certificate which is
submitted to the Rights Agent, or any Co-Rights Agent, upon exercise or for
registration of transfer or exchange which does not contain the necessary
certifications set forth in the Rights Certificate establishing that such Rights
are not void under this subsection 3.1(b) shall be deemed to be an Acquiring
Person for the purposes of this subsection 3.1(b) and such rights shall be null
and void.

     (c) From and after the Separation
Time the Corporation shall do all such acts and things as shall be necessary and
within its power to ensure compliance with the provisions of this Section 3.1,
including without limitation, all such acts and things as may be required to
satisfy the requirements of the Business Corporations Act (British
Columbia), the Securities Act (British Columbia) and the securities laws
or comparable legislation in each of the provinces of Canada in respect of the
issue of Common Shares upon the exercise of Rights in accordance with this
Agreement.

     (d) Any Rights Certificate that
represents Rights Beneficially Owned by a Person described in either clauses (i)
or (ii) of subsection 3.1(b) hereof or transferred to any nominee of any such
Person, and any Rights Certificate issued upon the transfer, exchange or
replacement of any other Rights Certificate referred to in this sentence shall
contain the following legend:


  
    “The Rights represented by this Rights Certificate
      were issued to a Person who was an Acquiring Person or an Affiliate or an
      Associate of an Acquiring Person (as such terms are defined in the Rights
      Agreement) or was acting Jointly or in concert with any of them. This Rights
      Certificate and the Rights represented hereby shall become void in the circumstances
      specified in subsection 3.1(b) of the Rights Agreement.” 

  



provided, however, that the Rights Agent shall not be
under any responsibility to ascertain the existence of facts that would require
the imposition of such legend but shall be required to impose such legend only
if instructed to do so by the Corporation or if a holder fails to certify upon
transfer or exchange in the space provided on the Rights Certificate that such
holder is not an Acquiring Person or an Affiliate or Associate thereof or acting
jointly or in concert with any of them.

ARTICLE 4 - THE RIGHTS AGENT

	4.1 	
      General



     (a) The Corporation hereby
appoints the Rights Agent to act as agent for the Corporation and the holders of
Rights in accordance with the terms and conditions hereof, and the Rights Agent
hereby accepts such appointment. The Corporation may from time to time appoint
one or more co-rights agents (each, a “Co-Rights Agent”) as it may deem
necessary or desirable after consultation with the Rights Agent. In such event,
the respective duties of the Rights Agent and any Co-Rights Agent shall be as
the Corporation may determine after consultation with the Rights Agent and
Co-Rights Agent. The Corporation agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time on
demand of the Rights Agent, its reasonable expenses and counsel fees and other
disbursements incurred in the administration and execution of this Agreement and
the exercise and performance of its duties hereunder. The Corporation also
agrees to indemnify the Rights Agent, its officers, directors, employees and
agents for, and to hold them harmless against, any loss, liability, or expense,
incurred without negligence, bad faith or wilful misconduct on the part of the
Rights Agent, its officers, directors, employees or agents, for anything done or
omitted by them in connection with the acceptance and performance of this
Agreement, including legal costs and expenses, which right to indemnification
shall survive the termination of this Agreement or the resignation or removal of
the Rights Agent.

     (b) The Rights Agent shall be
protected from, and shall incur no liability for or in respect of, any action
taken, suffered or omitted by it in connection with its performance of this
Agreement in reliance upon any certificate for Shares, Rights Certificate,
certificate for other securities of the Corporation, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, opinion,

- 22  -




statement, or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons.

     The Corporation shall inform the
Rights Agent in a reasonably timely manner of events which may materially affect
the administration of this Agreement by the Rights Agent and, at any time upon
written request, shall provide to the Rights Agent an incumbency certificate
certifying the then current officers of the Corporation.

	4.2 	
      Merger or Amalgamation or Change of Name of Rights
      Agent



     (a) Any body corporate into which
the Rights Agent or any successor Rights Agent may be merged or amalgamated with
or into, or any body corporate succeeding to the securityholder services
business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such body corporate would be eligible for appointment as a
successor Rights Agent under the provisions of Section 4.4 hereof. In case at
the time such successor Rights Agent succeeds to the agency created by this
Agreement any of the Rights Certificates have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Rights Certificates so countersigned;
and in case at that time any of the Rights Certificates have not been
countersigned, any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Rights Certificates
shall have the full force provided in the Rights Certificates and in this
Agreement.

     (b) In case at any time the name
of the Rights Agent is changed and at such time any of the Rights Certificates
shall have been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates shall not
have been countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name; and in all such
cases such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.

	4.3 	
      Duties of Rights Agent



     The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Corporation and the holders of Rights
Certificates, by their acceptance thereof, shall be bound:

	 	(a) 	
      The Rights Agent may retain and consult with legal
      counsel (who may be legal counsel for the Corporation), and the opinion of
      such counsel will be full and complete authorization and protection to the
      Rights Agent as to any action taken or omitted by it in good faith and in
      accordance with such opinion.

	 	 	 
	 	(b) 	
      Whenever in the performance of its duties under this
      Agreement the Rights Agent deems it necessary or desirable that any fact
      or matter be proved or established by the Corporation prior to taking or
      suffering any action or refraining from taking any action hereunder, such
      fact or matter (unless other evidence in respect thereof be herein
      specifically prescribed) may be deemed to be conclusively proved and
      established by a certificate signed by an individual believed by the
      Rights Agent to be the Chief Executive Officer, Chief Operating Officer,
      Chief Financial Officer or the Secretary of the Corporation and delivered
      to the Rights Agent; and such certificate shall be full authorization to
      the Rights Agent for any action taken, omitted or suffered in good faith
      by it under the provisions of this Agreement in reliance upon such
      certificate.

	 	 	 
	 	(c) 	
      The Rights Agent shall be liable hereunder only for its
      own negligence, bad faith or wilful misconduct.



- 23  -





	 	(d) 	
      The Rights Agent shall not be liable for or by reason of
      any of the statements of fact or recitals contained in this Agreement or
      in the certificates for Shares or the Rights Certificates (except its
      countersignature thereof) or be required to verify the same, but all such
      statements and recitals are and will be deemed to have been made by the
      Corporation only.

	 	 	 
	 	(e) 	
      The Rights Agent shall not be under any responsibility in
      respect of the validity of this Agreement or the execution and delivery
      hereof (except the due authorization, execution and delivery hereof by the
      Rights Agent) or in respect of the validity or execution of any Share
      certificate or Rights Certificate (except its countersignature thereof);
      nor will it be responsible for any breach by the Corporation of any
      covenant or condition contained in this Agreement or in any Rights
      Certificate; nor will it be responsible for any change in the
      exercisability of the Rights (including the Rights becoming void pursuant
      to subsection 3.1(b) hereof) or any adjustment required under the
      provisions of Section 2.3 hereof or responsible for the manner, method or
      amount of any such adjustment or the ascertaining of the existence of
      facts that would require any such adjustment (except with respect to the
      exercise of Rights after receipt of the certificate contemplated by
      Section 2.3 hereof describing any such adjustment); nor will it by any act
      hereunder be deemed to make any representation or warranty is to the
      authorization or reservation of any Shares to be issued pursuant to this
      Agreement or any Rights or as to whether any Shares shall, when issued, be
      duly and validly authorized, executed, issued and delivered and be fully
      paid and non-assessable.

	 	 	 
	 	(f) 	
      The Corporation agrees that it will perform, execute,
      acknowledge and deliver or cause to be performed, executed, acknowledged
      and delivered all such further and other acts, instruments and assurances
      as may reasonably be required by the Rights Agent for the carrying out or
      performing by the Rights Agent of the provisions of this
  Agreement.

	 	 	 
	 	(g) 	
      The Rights Agent is hereby authorized to rely upon and
      directed to accept written instructions with respect to the performance of
      its duties hereunder from any individual believed by the Rights Agent to
      be the Chairman, the President and Chief Executive Officer or any
      Vice-President or the Secretary or any Assistant Secretary or the
      Treasurer or any Assistant Treasurer of the Corporation, and to apply to
      such individuals for advice or instructions in connection with its duties,
      and it shall not be liable for any action taken, omitted or suffered by it
      in good faith in accordance with instructions of any such
    individual.

	 	 	 
	 	(h) 	
      The Rights Agent and any shareholder, director, officer
      or employee of the Rights Agent may buy, sell or deal in Shares, Rights or
      other securities of the Corporation or become pecuniarily interested in
      any transaction in which the Corporation may be interested, or contract
      with or lend money to the Corporation or otherwise act as fully and freely
      as though it were not Rights Agent under this Agreement. Nothing herein
      shall preclude the Rights Agent from acting in any other capacity for the
      Corporation or for any other legal entity.

	 	 	 
	 	(i) 	
      The Rights Agent may execute and exercise any of the
      rights or powers hereby vested in it or perform any duty hereunder either
      itself or by or through its attorneys or agents, and the Rights Agent
      shall not be answerable or accountable for any act, default, neglect or
      misconduct of any such attorneys or agents or for any loss to the
      Corporation resulting from any such act, omission, default, neglect or
      misconduct, provided reasonable care was exercised in the selection and
      continued employment thereof.




	4.4 	
      Change of Rights Agent



     The Rights Agent may resign and
be discharged from its duties under this Agreement upon 60 days’ notice (or such
lesser notice as is acceptable to the Corporation) in writing delivered or
mailed to the Corporation and to each transfer agent of Shares by first class
mall, and mailed or delivered to the holders of the Rights in accordance with
Section 5.9 hereof. The Corporation may remove the Rights Agent upon 30 days’
notice in writing, mailed or delivered to the Rights Agent and to each transfer
agent of the Shares by first class mall, and mailed to the holders of the Rights
in accordance with Section 5.9 hereof. If the Rights Agent should resign or
be

- 24  -




removed or otherwise become incapable of acting, the
Corporation shall appoint a successor to the Rights Agent. If the Corporation
fails to make such appointment within a period of 30 days after such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of any Rights (which
holder shall, with such notice, submit such holder’s Rights Certificate for
inspection by the Corporation), then the holder of any Rights may apply, at the
Corporation’s expense, to any court of competent jurisdiction for the
appointment of a new Rights Agent, Any successor Rights Agent, whether appointed
by the Corporation or by such a court, shall be a body corporate incorporated
under the laws of Canada or a province thereof authorized to carry on the
business of a trust company in the Province of British Columbia. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any such
appointment, the Corporation shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Shares, and mail a
notice thereof in writing to the holders of the Rights. Failure to give any
notice provided for in this Section 4.4, however, or any defect therein, shall
not affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.

ARTICLE 5 - MISCELLANEOUS

	5.1 	
      Redemption and Waiver



     (a) Subject to the prior consent
of the holders of Voting Shares or Rights (obtained as described in Section
5.4(b) or Section 5.4(c)), the Board of Directors may, at any time prior to the
occurrence of a Flip-in Event, elect to redeem all but not less than all of the
then outstanding Rights at a redemption price of $0.0001 per Right appropriately
adjusted in a manner analogous to the applicable adjustment provided for in
Section 2.3 if an event of the type analogous to any of the events described in
Section 2.3 shall have occurred (such redemption price being herein referred to
as the “Redemption Price”).

     (b) The Board of Directors may
waive the application of Section 3.1 in respect of the occurrence of any Flip-in
Event if the Board of Directors has determined within eight Trading Days
following a Stock Acquisition Date that a Person became an Acquiring Person by
inadvertence and without any intention to become, or knowledge that it would
become, an Acquiring Person under this Agreement and if such a waiver is granted
by the Board of Directors, such Stock Acquisition Date is deemed not to have
occurred. Any such waiver pursuant to this subsection 5.1(b) must be on the
condition that such Person has, within 10 days after the foregoing determination
by the Board of Directors or such earlier or later date as the Board of
Directors may determine (the “Disposition Date”), reduced its Beneficial
Ownership of Voting Shares such that the Person is no longer an Acquiring Person
or has entered into a contractual arrangement with the Corporation, acceptable
to the Board of Directors, to do so within 30 days of the date on which the
contractual arrangement is entered into. If the Person remains an Acquiring
Person at the close of business on the Disposition Date, the Disposition Date is
deemed to be the date of occurrence of a further Stock Acquisition Date and
Section 3.1 applies thereto.

     (c) If before the occurrence of a
Flip-in Event a Person acquires, pursuant to a Permitted Bid, a Competing
Permitted Bid or a Take-over Bid in respect of which the Board of Directors of
the Corporation has waived the application of Section 3.1 pursuant to Subsection
5.1(d), any outstanding Common Shares, the Corporation shall, immediately upon
such acquisition and without further formality, redeem the Rights at the
Redemption Price.

     (d) The Board of Directors may,
prior to the occurrence of a Flip-in Event as to which the application of
Section 3.1 has not been waived pursuant to this clause, determine, upon prior
written notice to the Rights Agent, to waive the application of Section 3.1 to
that Flip-in Event provided that the Flip-in Event would occur by reason of a
Take-over Bid made by means of a Take-over Bid circular sent to all holders of
record of Voting Shares and further provided that if the Board of Directors
waives the application of Section 3.1 to such Flip-in Event, the Board of
Directors shall be deemed to have waived the application of Section 3.1 to any
other Flip-in Event occurring by reason of a Take-over Bid made by means of a
Take-over Bid circular sent to all holders of record of Voting Shares

- 25  -




prior to the expiry of any Take-over Bid, as the same may be
extended from time to time, in respect of which a waiver is, or is deemed to
have been, granted under this subsection 5.1(d) .

     (e) If the Rights are redeemed
pursuant to this Agreement, the right to exercise the Rights will thereupon,
without further action and without notice, terminate and the only right
thereafter of the holders of Rights is to receive the Redemption Price.

     (f) Within 10 days after the
Rights are redeemed pursuant to this Agreement, the Corporation shall give
notice of redemption to the holders of the then outstanding Rights by mailing
such notice to all such holders at their last address as they appear upon the
registry books of the Rights Agent or, prior to the Separation Time, on the
registry books of the transfer agent for the Voting Shares. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption must state how the
Redemption Price will be paid.

     (g) Where a Take-over Bid that is
not a Permitted Bid or Competing Permitted Bid is withdrawn or otherwise
terminated after the Separation Time has occurred and prior to the occurrence of
a Flip-in Event, the Board of Directors may elect to redeem all the outstanding
Rights at the Redemption Price.

     (h) Notwithstanding the Rights
being redeemed pursuant to this Section 5.1, all the provisions of this
Agreement shall continue to apply as if the Separation Time had not occurred and
Rights Certificates representing the number of Rights held by each holder of
record of Common Shares as of the Separation Time had not been mailed to each
such holder and for all purposes of this Agreement the Separation Time shall be
deemed not to have occurred and the Rights shall remain attached to outstanding
Voting Shares, subject to and in accordance with the provisions of this
Agreement.

	5.2 	
      Expiration



     No Person shall have any rights
pursuant to this Agreement or any Right after the Expiration Time, except as
provided in Section 4.1 hereof.

	5.3 	
      Issuance of New Rights
  Certificates



     Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Corporation
may, at its option, issue new Rights Certificates evidencing Rights in such form
as may be approved by the Board of Directors to reflect any adjustment or change
in the number or kind or class of Shares purchasable upon exercise of Rights
made in accordance with the provisions of this Agreement.

	5.4 	
      Supplements and Amendments



     (a) At any time, the Corporation
may, by resolution of the Board of Directors, amend this Agreement to correct
any clerical or typographical errors or to maintain the validity of this
Agreement as a result of any changes in applicable legislation or applicable
rules or policies of securities regulatory authorities, and such amendments
shall be in force immediately after such a resolution is passed by the Board of
Directors.

     (b) Prior to the Separation Time,
the Corporation may, by resolution of the Board of Directors, and with the prior
consent of the holders of Voting Shares obtained as set forth below, supplement
or amend this Agreement and the Rights (whether or not such action would
materially adversely affect the interests of the holders of Rights generally).
Such consent is deemed to have been given if the supplement or amendment is
approved by the affirmative vote of a majority of the votes cast by Independent
Shareholders represented in person or by proxy and entitled to be voted at a
meeting of the holders of Voting Shares duly called and held in compliance with
applicable laws and the articles and bylaws of the Corporation.

     (c) After the Separation Time,
the Corporation may, by resolution of the Board of Directors, and with the prior
consent of the holders of Rights obtained as set forth below, supplement or
amend this Agreement and the Rights (whether or not such action would materially
adversely affect the interests of the holders of Rights generally). 

- 26  -




Such consent is deemed to have been given if provided by the
holders of Rights at a Rights Holders’ Special Meeting, which Rights Holders’
Special Meeting is called and held in compliance with applicable laws and
regulatory requirements and, to the extent possible, with the requirements in
the articles and by-laws of the Corporation applicable to meetings of holders of
Voting Shares varied as the Corporation thinks appropriate. Subject to
compliance with any requirements imposed by the foregoing, consent is given if
the proposed supplement or amendment, is approved by the affirmative vote of a
majority of the votes cast by holders of Rights (other than holders of Rights
whose Rights have become void pursuant to subsection 3.1(b)), represented in
person or by proxy at the Rights Holders’ Special Meeting.

     (d) Notwithstanding anything in
this Section 5.4 to the contrary, no such supplement or amendment shall be made
to the provisions of Article 4 except with the written concurrence of the Rights
Agent to such supplement or amendment.

     (e) Any supplement to or
amendment to this Agreement shall require the prior written consent of The
Toronto Stock Exchange.

     (f) Any amendments made by the
Corporation to this Agreement pursuant to subsection 5.4(a) which are required
to maintain the validity of this Agreement as a result of any changes in
applicable legislation or applicable rules or policies of securities regulatory
authorities shall:

	 	(i) 	
      if made before the Separation Time, be submitted to the
      shareholders of the Corporation at the next meeting of shareholders and
      the shareholders may, by a vote of the majority referred to in subsection
      5.4(b), confirm or reject such amendment; and

	 	 	 
	 	(ii) 	
      if made after the Separation Time, be submitted to
      holders of Rights at a meeting to be called for on a date not later than
      immediately following the next meeting of shareholders of the Corporation
      and the holders of Rights may, by a vote of the majority referred to in
      subsection 5.4(c), confirm or reject such
amendment.



Any such amendment shall be effective
from the date of the resolution of the Board of Directors adopting such
amendment, until it is confirmed or rejected in accordance with this subsection
5.4(f) or until it ceases to be effective (as described below) and, where such
amendment is confirmed, it continues in effect in the form so confirmed. If such
amendment is rejected by shareholders or holders of Rights or is not submitted
to shareholders or holders of Rights as required, then such amendment shall
cease to be effective from and after the termination of the meeting at which it
was rejected or to which it should have been but was not submitted or from and
after the date of the meeting of holders of Rights that should have been but was
not held, and no subsequent resolution of the Board of Directors to amend this
Agreement to substantially the same effect shall be effective until confirmed by
shareholders or holders of Rights, as the case may be.

	5.5 	
      Fractional Rights and Fractional Common
    Shares



     (a) The Corporation shall not be
required to issue fractions of Rights or to distribute Right Certificates which
evidence fractional Rights or to pay any amount to a holder of record of Rights
Certificates in lieu of such fractional Rights.

     (b) The Corporation shall not be
required to issue fractions of Common Shares upon exercise of the Rights or to
distribute certificates which evidence fractional Common Shares. In lieu of
issuing fractional Common Shares, the Corporation shall pay to the registered
holders of Right Certificates at the time such Rights are exercised as herein
provided, an amount in cash equal to the same fraction of the Market Price of
one Common Share that the fraction of a Common Share that would otherwise be
issuable upon the exercise of such Right is of a whole Common Share.

- 27  -





	5.6 	
      Rights of Action



     Subject to the terms of this
Agreement, rights of action in respect of this Agreement, other than rights of
action vested solely in the Rights Agent, are vested in the respective holders
of the Rights, and any holder of any Rights, without the consent of the Rights
Agent or of the holder of any other Rights may, on such holder’s own behalf and
for such holder’s own benefit and the benefit of other holders of Rights,
enforce, and may institute and maintain any suit, action or proceeding against
the Corporation to enforce, or otherwise act in respect of, such holder’s right
to exercise such holder’s Rights in the manner provided in such holder’s Rights
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of the obligations of any Person subject to, this Agreement.

	5.7 	
      Holder of Rights Not Deemed a
  Shareholder



     No holder, as such, of any Rights
shall be entitled to vote, receive dividends or be deemed for any purpose the
holder of Common Shares or any other securities which may at any time be
issuable on the exercise of such Rights, nor shall anything contained herein or
in any Rights Certificate be construed to confer upon the holder of any Rights,
as such, any of the rights of a shareholder of the Corporation or any right to
vote for the election of directors or upon any matter submitted to shareholders
at any meeting thereof, or to give or withhold consent to any corporate action,
or to receive notice of meetings or other actions affecting shareholders (except
as provided in Section 5.8 hereof), or to receive dividends or subscription
rights, or otherwise, until such Rights shall have been exercised in accordance
with the provisions hereof.

	5.8 	
      Non-Canadian or United States
  Holders



     If in the opinion of the Board of
Directors (who may rely upon the advice of counsel) any action or event
contemplated by this Agreement would require compliance by the Corporation with
the securities laws or comparable legislation of a jurisdiction outside Canada
or the United States, the Board of Directors may take such actions as it may
deem appropriate to ensure that such compliance is not required, including
without limitation establishing procedures for the issuance to a Canadian
resident Fiduciary of Rights or securities issuable on exercise of Rights, the
holding thereof in trust for the Persons entitled thereto (but reserving to the
Fiduciary or to the Fiduciary and the Corporation, as the Corporation may
determine, absolute investment discretion with respect thereto) and the sale
thereof and remittance of the proceeds of such sale, if any, to the Persons
entitled thereto. In no event has the Corporation or the Rights Agent an
obligation to issue or deliver Rights or securities issuable on exercise of
Rights to Persons who are citizens, residents or nationals of any jurisdiction
other than Canada and the United States, in which jurisdiction such issue or
delivery would be unlawful without registration of the relevant Persons,
securities or issue or delivery for such purposes.

	5.9 	
      Notices



     Any notice, demand or other
communication required or permitted to be given or made by the Rights Agent or
by the holder of any Rights to or on the Corporation or by the Corporation or by
the holder of any Rights to or on the Rights Agent shall be in writing and shall
be well and sufficiently given or made if:

	 	(i) 	
      delivered in person during normal business hours on a
      Business Day and left with the receptionist or other responsible employee
      at the relevant address set forth below; or

	 	 	 
	 	(ii) 	
      except during any general interruption of postal services
      due to strike, lockout or other cause, sent by first-class mail;
  or

	 	 	 
	 	(iii) 	
      sent by telegraph, facsimile or other form of recorded
      electronic communication, charges prepaid and confirmed in writing as
      aforesaid;



- 28  -




if to the Corporation, addressed to it at:

Suite 1020 – 800 West Pender
Street
Vancouver, British Columbia V6C 2V6

Attention: Corporate Secretary
Fax
No. (604) 681-2741

and if to the Rights Agent, addressed to it at:

3rd Floor, 510 Burrard
Street
Vancouver, British Columbia V6C 3B9
Attention: General Manager,
Client Services
Fax No. (604) 661-9401

Notices, demands or other communications required or permitted
to be given or made by the Corporation or the Rights Agent to or on the holder
of any Rights shall be in writing and shall be well and sufficiently given or
made if delivered personally to such holder or delivered or mailed by first
class mail to the address of such holder as it appears on the Rights Register
maintained by the Rights Registrar, or, prior to the Separation Time, in the
register of Shareholders maintained by the transfer agent for the Common
Shares.

     Any notice so given or made shall
be deemed to have been given and to have been received on the day of delivery,
if so delivered; on the third Business Day (excluding each day during which
there exists any general interruption of postal service due to strike, lockout,
or other cause) following the mailing thereof, if so mailed; and on the day of
telegraphing, telecopying or sending of the same by other means of recorded
electronic communication (provided such sending is during the normal business
hours of the addressee on a Business Day and if not, on the first Business Day
thereafter). Each of the Corporation and the Rights Agent may from time to time
change its address for notice by notice to the other given in the manner
aforesaid.

	5.10 	
      Costs of Enforcement



     The Corporation agrees that if
the Corporation fails to fulfill any of its obligations pursuant to this
Agreement, then the Corporation shall reimburse the holder of any Rights for the
costs and expenses (including reasonable legal fees) incurred by such holder and
actions to enforce his rights pursuant to any Rights or this Agreement.

	5.11 	
      Successors



     All the covenants and provisions
of this Agreement by or for the benefit of the Corporation or the Rights Agent
shall bind and inure to the benefit of their respective successors and permitted
assigns hereunder.

	5.12 	
      Benefits of this Agreement



     Nothing in this Agreement shall
be construed to give to any Person other than the Corporation, the Rights Agent
and the holders of the Rights any legal or equitable right, remedy or claim
under this Agreement; but this Agreement shall be for the sole and exclusive
benefit of the Corporation, the Rights Agent and the holders of the Rights.

	5.13 	
      Governing Law



     This Agreement and each Right
issued hereunder shall be deemed to be a contract made under the laws of the
Province of British Columbia and for all purposes shall be governed by and
construed in accordance with the laws of such Province applicable to contracts
to be made and performed entirely within such Province.

- 29  -





	5.14 	
      Counterparts



     This Agreement may be executed in
any number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.

	5.15 	
      Severability



     If any term or provision hereof
or the application thereof to any circumstance shall, in any jurisdiction and to
any extent, be invalid or unenforceable, such term or provision shall be
ineffective as to such Jurisdiction to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable the remaining
terms and provisions hereof or the application of such term or provision to
circumstances other than those as to which it is held invalid or
unenforceable.

	5.16 	
      Determinations and Actions by the Board of
      Directors



     All actions, calculations and
determinations (including all omissions with respect to the foregoing) in
connection with the administration of this Agreement which are done or made by
the Board of Directors, in good faith, shall not subject the Board of Directors
to any liability to the holders of the Rights.

	5.17 	
      Regulatory Approvals



     Any obligation of the Corporation
or action or event contemplated by this Agreement, or any amendment or
supplement to this Agreement, shall be subject to receipt of any requisite
approval or consent from any governmental or regulatory authority having
jurisdiction including The Toronto Stock Exchange while any securities of the
Corporation are listed and posted for trading thereon and for a period of six
months thereafter.

     IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be duly executed as of the date first above
written.

	 	NORTHERN DYNASTY MINERALS LTD.
    
	 	 
	 	By: 	/s/
      Ronald W. Thiessen 
	 	 	 
	 	COMPUTERSHARE INVESTOR SERVICES
      INC. 
	 	 
	 	By: 	/s/
      June Glover 
	 	 	 
	 	By: 	/s/
      Chad Emnace 


- 30  -




EXHIBIT A

[Form of Rights Certificate]

	Certificate No. 	 	Rights 


THE RIGHTS ARE SUBJECT TO REDEMPTION ON
THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES
(SPECIFIED IN THE RIGHTS AGREEMENT), RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING
PERSON OR ANY PERSON ACTING JOINTLY OR IN CONCERT WITH AN ACQUIRING PERSON OR
WITH AN ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT) OR TRANSFEREES OF ANY OF THE FOREGOING WILL BECOME VOID
WITHOUT FURTHER ACTION.

RIGHTS CERTIFICATE

     This certifies that
______________________, or registered assigns, is the registered holder of the
number of Rights set forth above, each of which entitles the registered holder
thereof, subject to the terms, provisions and conditions of a Rights Agreement,
dated effective as of December 11, 2006 (the “Rights Agreement”) between
Northern Dynasty Minerals Ltd., a corporation incorporated under the Business
Corporations Act (British Columbia) (the “Corporation”), and
Computershare Investor Services Inc., as Rights Agent, to purchase from
the Corporation at any time after the Separation Time and prior to the
Expiration Time (as such terms are defined in the Rights Agreement), one fully
paid common share in the capital of the Corporation (a “Common Share”)
(subject to adjustment as provided in the Rights Agreement) at the Exercise
Price referred to below, upon presentation and surrender of this Rights
Certificate with a duly completed and executed Form of Election to Exercise at
the principal office of the Rights Agent in any of the Cities of Toronto or
Vancouver, Canada. The Exercise Price shall initially be $· per right and shall
be subject to adjustment in certain events as provided in the Rights
Agreement.

     This Rights Certificate is
subject to all the terms, provisions and conditions of the Rights Agreement
which terms, provisions and conditions are hereby incorporated herein by this
reference and made a part hereof and to which Rights Agreement reference is
hereby made for a full description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Rights Agent, the
Corporation and the holders of the Rights Certificates. Copies of the Rights
Agreement are on file at the registered office of the Corporation and are
available upon written request. 

     This Rights Certificate, with or
without other Rights Certificates, upon surrender at any office of the Rights
Agent or any Co-Rights Agent designated for such purpose, may be exchanged for
another Rights Certificate or Rights Certificates of like tenor and date
evidencing an aggregate number of Rights equal to the aggregate number of Rights
evidenced by the Rights Certificate or Rights Certificates so surrendered. If
this Rights Certificate shall be exercised in part, the registered holder shall
be entitled to receive, upon surrender hereof, another Rights Certificate or
Rights Certificates for the number of whole Rights not exercised.

     Subject to the provision of the
Rights Agreement, the Rights evidenced by this Certificate may be redeemed by
the Corporation at a redemption price of $0.0001 per Right.

     No fractional Common Shares will
be issued upon the exercise of any Right or Rights evidenced hereby nor will
Rights Certificates be issued for less than one whole Right. In lieu thereof, a
cash payment will be made as provided in the Rights Agreement.

     No holder of this Rights
Certificate, as such, shall be entitled to vote or receive dividends or be
deemed for any purpose the Holder of Common Shares or of any other securities
which may at any time be issuable on the exercise hereof, nor shall anything
contained in the Rights Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a shareholder of the Corporation or
any right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to




any corporate action, or to receive notice of meetings or other
actions affecting shareholders (except as provided in the Rights Agreement), or
to receive dividends or subscription rights, or otherwise, until the Rights
evidenced by this Rights Certificate shall have been exercised as provided in
the Rights Agreement.

     This Rights Certificate shall not
be valid or obligatory for any purpose until it shall have been countersigned by
the Rights Agent.

WITNESS the facsimile signature of the proper officers of the
Corporation and its corporate seal.

Date: _________________________

ATTEST:

NORTHERN DYNASTY MINERALS LTD.

By: _________________________

COMPUTERSHARE INVESTOR SERVICES INC.
	By: 	_________________________
		Authorized Signatory 







[Form of Reverse Side of Rights Certificate]

FORM OF ASSIGNMENT

(To be executed by the registered holder if such
holder
desires to transfer the Rights Certificates.)

	FOR VALUE RECEIVED 	 
	hereby sells, assigns and transfers 
	  
	unto 	 
    	 
    
	 	 	(Please print name and address of
  transferee)


this Rights Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint
_____________________________ Attorney, to transfer the within Rights
Certificate on the books of the within-named Corporation, with full power of
substitution.

Dated: __________________________

	Signature Guaranteed: 	 
	  	 
	                                                                                                                                 	Signature 
	                                                                                                                                 	(Signature must correspond to name as written
      upon the face of this Rights Certificate in every particular, without
      alteration or enlargement or any change whatsoever) 


     Signatures must be medallion
guaranteed by a member firm of a recognized stock exchange in Canada or a
registered national securities exchange in the United States, a member of the
National Association of Securities Dealers, Inc., or a commercial bank or trust
company having an office or correspondent in Canada or the United States.

	 


(To be completed if true)

CERTIFICATION

     The undersigned hereby represents
and certifies, for the benefit of all holders of Rights and Common Shares, that
the Rights evidenced by this Rights Certificate are not, and, to the knowledge
of the undersigned, have not been, Beneficially Owned by an Acquiring Person or
any Person acting jointly or in concert with any Acquiring Person or with any
Affiliate or Associate thereof (all as defined in the Rights Agreement).

	 	Signature
    





 

  

	 


 NOTICE

     In the event the certification
set forth above is not completed in connection with a purported assignment, the
Beneficial Owner of the Rights evidenced by this Rights Certificate will be
deemed to be an Acquiring Person or a Person acting jointly or in concert with
such Acquiring Person or an Affiliate or Associate of such Acquiring Person (all
as defined in the Rights Agreement) and accordingly the Rights evidenced by this
Rights Certificate will be null and void.




[To be attached to each Rights Certificate]

FORM OF ELECTION TO EXERCISE

(To be executed if holder desires to exercise the Rights
Certificate.)

TO:

     The undersigned hereby
irrevocably elects to exercise ________________whole Rights represented by the
attached Rights Certificate to purchase the Shares issuable upon the exercise of
such Rights and requests that certificates for such Shares be issued in the name
of:

 

	 
	Address: 
	 
	 
	 


Social Insurance, Social Security or
Other Taxpayer
Identification Number: ___________________________________________

If such number of Rights shall not be all the whole Rights
evidenced by this Rights Certificate, a new Rights Certificate for the balance
of such whole Rights shall be registered in the name of and delivered to:


	 
	Address: 
	 
	 
	 



Social Insurance, Social Security or
Other Taxpayer
Identification Number: ___________________________________________

Dated: _______________________________________

	Signature Guaranteed: 	 
	  	 
	                                                                                                                                 	Signature 
	                                                                                                                                 	(Signature must correspond to name as written
      upon the face of this Rights Certificate in every particular, without
      alteration or enlargement or any change whatsoever) 


     Signatures must be medallion
guaranteed by a member firm or a recognized stock exchange in Canada or a
registered national securities exchange in the United States, a member of the
National Association of Securities Dealers, Inc., or a commercial bank or trust
company having an office or correspondent in Canada or the United States.



 

  

	 


 (To be completed if true)

CERTIFICATION

     The undersigned hereby
represents, for the benefit of all holders of Rights and Shares, that the Rights
evidenced by this Rights Certificate are not, and, to the knowledge of the
undersigned, have never been, Beneficially Owned by an Acquiring Person or any
Person acting jointly or in concert with any Acquiring Person or with any
Affiliate or Associate thereof (all as defined in the Rights Agreement).


	 	Signature
    



 
	 



NOTICE

     In the event the certification
set forth above is not completed in connection with a purported exercise, the
Beneficial Owner of the Rights evidenced by this Rights Certificate will be
deemed to be an Acquiring Person or a Person acting jointly or in concert with
an Acquiring Person or an Affiliate or Associate of an Acquiring Person (all as
defined in the Rights Agreement) and accordingly will deem the Rights evidenced
by this Rights Certificate will be null and void.