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ANOORAQ RESOURCES CORPORATION



CORPORATE GOVERNANCE POLICIESAND PROCEDURES MANUALNOVEMBER 22, 2007

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|                                                                        
|ANOORAQ RESOURCES CORPORATION                                           
|                                                                        
|(the Company)                                                         
|                                                                        
|Corporate Governance Policies and Procedures Manual
      (the Manual)
|                                                                        
|Amended effective November 22, 2007                                     
|                                                                        
|TABLE OF CONTENTS                                                       

|A.  | CORPORATE GOVERNANCE OVERVIEW AND GUIDELINES                                                  | 4     
|--- | --------------------------------------------------------------------------------------------- | ------
|    |                                                                                               |       
|1.  | DEFINITIONS                                                                                   | 4     
|2.  | DIRECTOR RESPONSIBILITIES                                                                     | 6     
|3.  | DIRECTOR QUALIFICATION STANDARDS                                                              | 8     
|4.  | BOARD MEETINGS                                                                                | 10    
|5.  | BOARD COMMITTEES                                                                              | 10    
|6.  | DIRECTORS ACCESS TO MANAGEMENT AND INDEPENDENT ADVISORS                                      | 11    
|7.  | DIRECTOR COMPENSATION                                                                         | 11    
|8.  | DIRECTOR ORIENTATION AND CONTINUING EDUCATION                                                 | 12    
|9.  | MANAGEMENT EVALUATION AND SUCCESSION AND
      EXECUTIVE COMPENSATION                         | 12    
|10. | ETHICS POLICIES                                                                               | 13    
|11. | ANNUAL PERFORMANCE EVALUATION OF THE BOARD                                                    | 13    
|12. | BOARD INTERACTION WITH SHAREHOLDERS, INSTITUTIONAL
      INVESTORS, THE PRESS, CUSTOMERS, ETC | 13    
|13. | PERIODIC REVIEW OF THE CORPORATE GOVERNANCE GUIDELINES                                        | 14    
|    |                                                                                               |       
|B1 | CORPORATE INFORMATION AND TRADING POLICY                                                      | 15    
|    |                                                                                               |       
|1.  | INTRODUCTION                                                                                  | 15    
|2.  | SCOPE                                                                                         | 15    
|3.  | PUBLIC DISCLOSURE OF MATERIAL INFORMATION                                                     | 15    
|4.  | TRADING BY DIRECTORS, OFFICERS AND EMPLOYEES; INSIDER
      TRADING                           | 18    
|5.  | BLACK OUT PERIODS AND OTHER RESTRICTIONS                                                      | 18    
|6.  | DISCLOSURE OF DIRECTOR AND SENIOR OFFICER TRANSACTIONS                                        | 19    
|7.  | VIOLATIONS                                                                                    | 20    
|8.  | COMPLIANCE OFFICER                                                                            | 20    
|    |                                                                                               |       
|B2 | POLICY TO
      PREVENT THE CORRUPTION OF FOREIGN PUBLIC OFFERING                             | 21    
|    |                                                                                               |       
|1.  | INTRODUCTION                                                                                  | 21    
|2.  | PERSONS TO WHOM THE POLICY APPLIES                                                            | 21    
|3.  | OFFENCES                                                                                      | 21    
|4.  | DEFENSES AND EXCEPTIONS                                                                       | 22    
|5.  | COMPANY POLICY                                                                                | 23    
|6.  | ACCOUTING REQUIREMENTS                                                                        | 24    
|7.  | RED FLAGS                                                                                     | 25    
|8.  | COMPLIANCE OFFICER AND COMPLIANCE PROGRAM                                                     | 25    
|    |                                                                                               |       
|    |                                                                                               |       
|B3 | ETHICS AND
      BUSINESS CONDUCT POLICY FOR DIRECTORS, OFFICERS AND
      **EMPLOYEES**      | **26**
|    |                                                                                               |       
|1.  | CRITERIA FOR ETHICAL DECISION MAKING                                                          | 26    
|2.  | ETHICAL BUSINESS PRACTICES                                                                    | 27    
|3.  | FAIR DEALINGS                                                                                 | 27    
|4.  | CORPORATE OPPORTUNITIES AND DUTY OF
      LOYALTY                                             | 27    
|5.  | CONFLICTS OF INTEREST AND OUTSIDE ACTIVITIES                                                  | 27    
|6.  | ACCEPTING OR GIVING GIFTS                                                                     | 28    

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|7.                                                     |                                                                                                  | DISHONESTY                                        | 29
|------------------------------------------------------ | ------------------------------------------------------------------------------------------------ | ------------------------------------------------- | --
|8.                                                     |                                                                                                  | COMPLIANCE
      WITH LAWS, REGULATIONS AND RULES | 29
|9.                                                     |                                                                                                  | ACCOUNTING
      AND RECORDKEEPING                | 30
|10.                                                    | USE
      OF COMPANY PROPERTY                                                                    | 31                                               
|11.                                                    | PROPRIETARY AND
      CONFIDENTIAL INFORMATION, INTELLECTUAL PROPERTY AND INVENTIONS/DISCOVERIES | 31                                               
|12.                                                    | OUTSIDE
      IDEAS                                                                              | 32                                               
|13.                                                    | CORPORATE
      INFORMATION AND TRADING POLICY                                                   | 33                                               
|14.                                                    | POLICY
      TO PREVENT THE CORRUPTION OF FOREIGN PUBLIC OFFICIALS                               | 33                                               
|15.                                                    | REPORTING
      AND COMPLIANCE PROCEDURES                                                        | 33                                               
|16.                                                    | ADMINISTRATION
      AND DISTRIBUTION; COMPLIANCE OFFICER                                        | 33                                               
|                                                       |                                                                                                  |                                                   |   
|B4
      CORPORATE WATCH AND WHISTLEBLOWER PROTECTION | 35                                                                                              
|                                                       |                                                                                                  |                                                   |   
|1.                                                     |                                                                                                  | PHILOSOPHY                                        | 35
|2.                                                     |                                                                                                  | WHEN
      TO MAKE A REPORT                       | 35
|3.                                                     |                                                                                                  | TO
      WHOM TO MAKE A REPORT                    | 35
|4.                                                     |                                                                                                  | PROHIBITION
      AGAINST RETALITIATION           | 36
|5.                                                     |                                                                                                  | PROCEDURE                                         | 36
|6.                                                     |                                                                                                  | FOLLOW-UP
      AND OUTCOME                       | 37
|7.                                                     |                                                                                                  | GOVERNMENT
      INQUIRY                          | 38
|8.                                                     |                                                                                                  | FAILURE
      TO COMPLY OR FILE A REPORT          | 38
|                                                       |                                                                                                  |                                                   |   
|C1                                                    | AUDIT
      COMMITTEE CHARTER                                                                    | 39                                               
|                                                       |                                                                                                  |                                                   |   
|1.                                                     |                                                                                                  | PURPOSE                                           | 39
|2.                                                     |                                                                                                  | STRUCTURE
      AND OPERATIONS                    | 39
|3.                                                     |                                                                                                  | MEETINGS                                          | 41
|4.                                                     |                                                                                                  | DUTIES                                            | 41
|5.                                                     |                                                                                                  | LIMITATION
      OF AUDIT COMMITTEE'S ROLE        | 46
|                                                       |                                                                                                  |                                                   |   
|EXHIBIT
      I-A INDEPENDENCE REQUIRMENTS             | 47                                                                                              
|                                                       |                                                                                                  |                                                   |   
|EXHIBIT
      I-B FINANCIAL LITERACY REQUIREMENTS      | 54                                                                                              
|                                                       |                                                                                                  |                                                   |   
|EXHIBIT
      I-C FINANCIAL REPORT                     | 55                                                                                              
|                                                       |                                                                                                  |                                                   |   
|C2                                                    | COMPENSATION
      COMMITTEE CHARTER                                                             | 56                                               
|                                                       |                                                                                                  |                                                   |   
|1.                                                     |                                                                                                  | PURPOSE                                           | 56
|2.                                                     |                                                                                                  | STRUCTURE
      AND MEMBERSHIP                    | 57
|3.                                                     |                                                                                                  | PROCEDURES
      AND ADMINISTRATION               | 57
|4.                                                     |                                                                                                  | ADDITIONAL
      POWERS                           | 58
|                                                       |                                                                                                  |                                                   |   
|C3                                                    | NOMINATING
      AND GOVERNANCE COMMITTEE CHARTER                                                | 59                                               
|                                                       |                                                                                                  |                                                   |   
|1.                                                     |                                                                                                  | PURPOSE                                           | 59
|2.                                                     |                                                                                                  | STRUCTURE
      AND MEMBERSHIP                    | 59
|3.                                                     |                                                                                                  | AUTHORITY
      AND RESPONSIBILITIES              | 60
|4.                                                     |                                                                                                  | PROCEDURES
      AND ADMINISTRATION               | 61
|5.                                                     |                                                                                                  | ADDITIONAL
      POWERS                           | 62
|                                                       |                                                                                                  |                                                   |   
|D1                                                    | DIRECTOR
      INDEPENDENCE DEFINITIONS                                                          | 63                                               
|                                                       |                                                                                                  |                                                   |   
|D2                                                    | MATTERS
      REQUIRING BOARD APPROVAL (NON-DELEGATION POLICY)                                   | 66                                               

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A. CORPORATE GOVERNANCE GUIDELINES

The Board of Directors of the Company has adopted the following
Corporate Governance Guidelines (the Guidelines) to assist the Board in the
exercise of its responsibilities. The Board may modify or make exceptions to the
Guidelines from time to time in its discretion and consistent with the duties
and responsibilities owed to the Company and its shareholders. These Guidelines
have been prepared with the intention that they comply with corporate governance
rules established by the applicable regulators and stock exchanges.

|1. | Definitions
|-- | -----------

AMEX means American Stock
Exchange.

Blackout Period is the time
frame when Insiders and Employees and those in a special relationship cannot
trade in Company Securities because of their actual or deemed knowledge of
Undisclosed Material Information.

Board means Board of Directors
of the Company.

CEO means the Chief Executive
Officer of the Company.

CFO means the Chief Financial
Officer of the Company.

Company Securities include
common shares, stock options, and warrants (whether listed or not) of the
Company.

Employeesmeans persons directly
employed by the Company or by HDI and includes the substantially full-time, in
house, consultants of either company.

Executive officer is used herein
for purposes of verbatim reproduction of the rules of the SEC and AMEX and
generally means Senior Officer, but in the event of any doubt as to whether a
person who is a Senior Officer qualifies as an executive officer as contemplated
by such U.S. rules, U.S. legal counsel should be consulted.

HDI means Hunter Dickinson
Inc.a company which provides management services to the Company.

Insider Trading means Trading
while in possession of Undisclosed Material Information.

Insiders is deemed to have the
meaning defined in the Securities Act (British Columbia) but generally
means, for purposes hereof, the Directors and all Senior Officers of the Company
and its subsidiaries and any person that holds 10% or more of the Companys
voting securities.

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Material Fact means, where used
in relation to securities issued or proposed to be issued, a fact that
significantly affects, or could reasonably be expected to significantly affect,
the market price or value of those securities

Material Change means, if used
in relation to the affairs of the Company, a change in the business, operations,
assets or ownership of the Company that would reasonably be expected to have a
significant effect on the market price or value of any of the securities of the
Company, and includes a decision to implement that change made by (a) senior
management of the Company who believe that confirmation of the decision by the
directors is probable, or (b) the directors of the Company.

Material Information is any
information a reasonable investor would consider important in making an
investment decision, and means generally Material Changes and Material Facts.
Some examples include exploration results, earnings information, mergers,
contracts for developments, negotiations concerning contracts or projects,
possible dispositions or acquisitions of significant assets or businesses,
important corporate developments, financings, important personnel changes, and
litigation.

Undisclosed Material Information
is Material Information for which no Public Disclosure has yet been made. At any
time when Material Information has not yet been released to the public, the
Company is under a duty to take precautions to keep the information completely
confidential.

Public Disclosure means
fulfilment of the Companys obligation to disclose Material Information.
Announcements of Material Information are not deemed to have been properly
disseminated or made public until a reasonable period (generally one trading
day) after they have been released to the exchanges, appropriate securities
commissions and distributed electronically through the media and newswire
services, so as to be reasonably accessible to the investing public and to be
reflected in the price of the Company's stock.

Special Relationship - A person
is in a special relationship with the Company if the person

(a) is an Insider, affiliate or
associate of

(i) the Company,

(ii) a person that is proposing to
make a take over bid for the securities of the Company, or

(iii) a person that is proposing

(A) to become a party to a
reorganization, amalgamation, merger, arrangement or similar business
combination with the Company, or

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(B) to acquire a substantial portion
of the property of the Company;

(b) is engaging in or is proposing to
engage in any business or professional activity with or on behalf of the Company
or with or on behalf of a person described in paragraph (a)(ii) or (iii);

(c) is a director, officer or Employee
of the Company or of a person described in paragraph (a)(ii) or (iii) or (b);

(d) knows of a Material Fact or of a
Material Change with respect to the Company, having acquired the knowledge while
in a relationship described in paragraph (a), (b) or (c) with the Company; or

(e) knows of a Material Fact or of a
Material Change with respect to the Company, having acquired the knowledge from
another person at a time when

(i) that other person was in a special
relationship with the Company, whether under this paragraph or any of the
paragraphs (a) to (d) and

(ii) the person that acquired
knowledge of the Material Fact or Material Change from that other person knew or
reasonably ought to have known of the special relationship referred to in
subparagraph (i).

SEC means the U.S. Securities
and Exchange Commission.

Senior Officer means the CEO,
CFO, Chairman, the President (if not the CEO), any Vice-President, the
Secretary, any individual who performs these functions and generally the five
highest paid Employees of the Company.

Trading in Company Securities
includes acquiring options or warrants to acquire Company Securities, purchasing
or selling Company Securities, and the sale of Company Securities arising from
exercising outstanding warrants or stock options, in each case whether directly
or indirectly. Trading does not include exercising Company granted options or
warrants or other rights or convertibles in accordance with their terms.

A Trading Plan is a written
programme entered into by an Insider with a broker, under S.161(b) of the Rules
to the Securities Actand SEC Rule 10b5-1,which Plan may allow
the Insider to trade during a Blackout Period as a consequence of a previously
filed specified periodic sale of shares under the direction of a broker who is
not in a Special Relationship.

|2. | Director Responsibilities
|-- | -------------------------

(f) Oversee Management of the
Company. The principal responsibilities of the directors are to oversee the
management of the Company in the best interests of the Company and its
shareholders. These responsibilities require that the directors attend to the
following:

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- reviewing and approving on a regular basis, and as
  the need arises, fundamental operating, financial, and other strategic
  corporate plans which take into account, among other things, the opportunities
  and risks of the business;
- evaluating the performance of the Company,
  including the use of corporate resources to ensure they are used optimally and
  only for appropriate business purposes;
- evaluating the performance of, and overseeing the
  progress and development of, senior executives and taking appropriate action,
  such as promotion, change in responsibility and termination;
- evaluating the Companys compensation programs;
- implementing senior executive succession plans;
- establishing a corporate environment that promotes
  timely and effective disclosure (including appropriate controls, procedures
  and incentives), fiscal accountability, high ethical standards and compliance
  with all applicable laws and industry and community standards;
- ensuring systems are in place to identify and
  manage the risks faced by the Company;
- complying with disclosure requirements and
  establishing the communications policies of the Company;
- reviewing and deciding upon material transactions
  and commitments;
- developing a corporate governance structure that
  allows and encourages the Board to fulfill its responsibilities;
- providing assistance to the Companys senior
  executives, including guidance on those matters that require Board
  involvement; and
- evaluating the overall effectiveness of the Board
  and its committees.

(g) Exercise Business Judgment.
In discharging their fiduciary duties of care, loyalty and candour, directors
are expected to exercise their business judgment to act in what they reasonably
and honestly believe to be the best interests of the Company and its
shareholders free from personal interests. In discharging their duties, when
appropriate the directors may rely on the Companys senior executives and its
outside advisors, auditors and legal counsel but also should consider second
opinions where circumstances warrant.

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(h) Understand the Company and its
Business. Directors are expected to become and remain informed about the
Company and its business, properties, risks and prospects.

(i) Establish Effective Systems.
Directors are responsible for determining that effective systems are in place
for the periodic and timely reporting to the Board on important matters
concerning the Company. Directors should also ensure that periodic reviews are
undertaken of the integrity of the Companys internal controls and management
information systems.

(j) Protect Confidentiality and
Proprietary Information. Directors are responsible for establishing policies
that are intended to protect the Companys confidential and proprietary
information and ensure that it is not disclosed to outside parties not
authorized by the Board until it is generally disclosed. Likewise, all
discussions and proceedings of the Board of Directors must be treated as
strictly confidential and privileged to preserve open discussions between
directors and to protect the confidentiality of Board discussions.

(k) Board, Committee and Shareholder
Meetings. Directors are responsible for attending Board meetings and
meetings of committees on which they serve. Directors who reside in or near the
city where the Company holds a meeting of shareholders are expected to attend
such a meeting. They must devote the time needed, and meet as frequently as
necessary, to properly discharge their responsibilities.

(l) Indemnification. The
directors are entitled to Company-provided indemnification through corporate
articles and by-laws, corporate statutes and, where the directors so resolve and
can obtain it, directors and officers liability insurance.

|3. | Director Qualification Standards
|-- | --------------------------------

(m) Independence. The Board will
ensure it has at all times at least the minimum number of the members of the
Board who are independent directors. To be considered independent: (i) a
director must be independent as determined in accordance with all applicable
laws and the rules and regulations of each stock exchange on which the Companys
shares are traded (see Part D-1 hereto); and (ii) in the Boards judgment, the
director must not otherwise have, directly or indirectly, a financial, legal or
other relationship with the Company that would reasonably interfere with the
exercise of independent judgment in carrying out the responsibilities of the
director. The determination of whether a material relationship exists will be
made by the other members of the Board of Directors who are independent.

(n) Size and Skills of Board.
The Board believes a board of 8 to 12 directors, of which at least three are
independent, is an appropriate size given the Companys present circumstances,
but a smaller or larger Board may be appropriate at any given time depending on
circumstances and changes in the Companys business. The Board will also
consider the competencies and skills that the Board, as a whole, should possess
and the competencies and skills of each director.

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(o) Other Directorships. The
Board does not believe that its members should be prohibited or even discouraged
from serving on boards of other organizations, and the Board does not propose
any specific policies limiting such activities providing they do not reduce a
directors effectiveness for the Company. However, the Nominating and Governance
Committee should take into account the nature of and time involved in a
directors service on other boards in evaluating the suitability of individual
directors and in making its recommendations. Service on boards or committees of
other organizations is conditional on compliance with the Companys conflict of
interest policies.

(p) Tenure. The Board does not
believe it should establish director term limits. Term limits could result in
the loss of directors who have been able to develop, over a period of time,
significant insight into the Company and its operations and an institutional
memory that benefits the Board as well as management. As an alternative to term
limits, the Nominating and Governance Committee will review each directors
continuation on the Board annually. This will allow each director the
opportunity to confirm his or her desire to continue as a member of the Board
and allow the Company to replace directors where, upon recommendation of the
Nominating and Governance Committee, the Board makes a determination in that
regard.

(q) Separation of the Offices of
Chairman and CEO. The Board will select a chairman of the Board in a manner
and upon the criteria that the Board deems appropriate at the time of selection.
The Board believes the Chairman of the Board should be independent from
management of the Company and, therefore, the offices of Chairman and CEO will
be separate.

(r) Selection of New Director
Candidates. Except where the Company is legally required by contract, law or
otherwise to provide third parties with the right to nominate directors, the
Nominating and Governance Committee will be responsible for (i) identifying
individuals qualified to become Board members, consistent with criteria approved
by the Board, (ii) recommending to the Board the persons to be nominated for
election as directors at any meeting of shareholders and (iii) recommending to
the Board persons to be elected by the Board to fill any vacancies on the Board.
Any Board member or shareholder of the Company may propose one or more person to
be a director nominee, including a position to be filled by increasing the
number of directors. The Nominating and Governance Committee may also propose
director nominees. The Nominating and Governance Committee will evaluate
proposed nominees and may, in its discretion, conduct personal interviews. If
the Nominating and Governance Committee deems it appropriate, the Committee may
then propose a person or persons which it believes would fulfill Board criteria
for membership. The Nominating and Governance Committees recommendations will
be discussed by the plenary board but the recommendations are not binding upon
it. Following any such recommendation and consideration, the plenary Board may
select one or more such persons to be nominated or elected, as the case may
be.

(s) Extending the Invitation to a
New Director Candidate to Join the Board. An invitation to join the Board
will be extended by the Chairman of the Board when authorized by the Board.

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|4. | Board Meetings
|-- | --------------

(t) Selection of Agenda Items.
The Chairman of the Board shall propose an agenda for each Board meeting. Each
Board member is free to require the inclusion of other agenda items and is
generally free to raise at any Board meeting subjects that are not on the agenda
for that meeting although voting on matters so raised may be deferred to another
meeting to permit proper preparation for a vote on an unscheduled matter
(emergencies excepted).

(u) Frequency and Length of
Meetings. The Chairman of the Board, in consultation with the members of the
Board, will normally determine the frequency and length of Board meetings;
however, the ultimate power in this regard rests with the plenary Board. Special
meetings may be called from time to time as required to address the needs of the
Companys business.

(v) Advance Distribution of
Materials. Information and data that are important to the Boards
understanding of the business to be conducted at a Board or committee meeting
will normally be distributed in writing to the directors reasonably before the
meeting (with a goal of 7 days) and directors should review these materials in
advance of the meeting. The Board acknowledges that certain items to be
discussed at a Board or committee meeting may be of a very time-sensitive nature
and that the distribution of materials on these matters before the meeting may
not be practicable.

(d) Executive Session of Independent
Directors. At least one executive session of independent directors will be
held on an annual basis.

|5. | Board Committees
|-- | ----------------

(w) Key Committees. The Board
will at all times have an Audit Committee, a Compensation Committee and a
Nominating and Governance Committee. Each such committee will have a charter
that has been approved by the Board and will form part of the Governance Manual.
The Board may, from time to time, establish or maintain additional committees or
subcommittees as it deems necessary. The Board may delegate any of its powers to
committees of the Board, except that it may not delegate the powers to fill
Board vacancies, remove a director, change the membership or fill vacancies in a
Board Committee, or remove or appoint officers who are appointed by the Board.

(x) Assignment of Committee
Members. The Nominating and Governance Committee will be responsible for
recommending to the Board the persons to be appointed to each committee of the
Board. All members of the Audit Committee must be "independent" in accordance
with applicable stock exchange regulations. A majority of the members of the
Compensation Committee and the Nominating and Governance Committee must be
independent directors in accordance with the independent director requirements
described in Part D-1 of the Governance Manual.

(y) Committee Charters. The
charters of the Audit Committee, the Compensation Committee and the Nominating
and Governance Committee will set forth the purposes,

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goals and responsibilities of the
committees. The Board will, from time to time as it deems appropriate, review
and reassess the adequacy of each charter, at least annually, and make
appropriate changes. Each charter must address those matters required by
applicable laws and stock exchange rules.

(z) Selection of Agenda Items.
Each committee will appoint a chairman and, in consultation with the committee
members, will develop the committees agenda.

(aa) Frequency of Committee
Meetings. The chairman of each committee, in consultation with the committee
members, will determine the frequency of the committee meetings consistent with
any requirements set forth in the committees charter. Special meetings may be
called by any member from time to time as required to address the needs of the
Companys business and fulfill the responsibilities of the committees.

|6. | Directors Access to Management and
      Independent Advisors
|-- | --------------------------------------------------------------

(a) Access to Officers and
Employees. All directors have at all reasonable times and on reasonable
notice, full and free access to officers and Employees of the Company. Any
meetings or contacts that a director wishes to initiate should normally be
arranged though the CEO or the CFO. The directors will use their judgment to
ensure that any such contact is not disruptive to the business operations of the
Company. The directors will, to the extent appropriate and in accordance with
the Companys ethics and business conduct policy, copy or inform the CEO on any
communication between a director and an officer or Employee of the Company.

(b) Access to Independent
Advisors. The Board and each committee shall have the power to hire and
consult with independent legal, financial or other advisors for the benefit of
the Board or such committee, as they may deem necessary, without consulting or
obtaining the approval of any officer of the Company in advance. Such
independent advisors may be the regular advisors to the Company. The Board or
any such committee is empowered, without further action by the Company, to cause
the Company to pay the appropriate compensation of such advisors as established
by the Board or any such committee.

|7. | Director Compensation
|-- | ---------------------

(a) Role of Board and Compensation
Committee. The form and amount of director compensation will be recommended
by the Compensation Committee and approved by the Board in accordance with the
general principles set forth herein and in the Compensation Committee Charter.
The Compensation Committee will also conduct an annual review of the
compensation of the Companys directors and make recommendations to the
Board.

(b) Form of Compensation. The
Board believes that directors should be provided with incentives to focus on
long-term shareholder value. The Board believes that

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including equity options as part of
director compensation helps align the interest of directors with those of the
Companys shareholders.

(c) Amount of Compensation. The
Company seeks to attract exceptional talent to its Board. Therefore, the
Companys policy is to compensate directors competitively relative to comparable
companies. The Companys management will, from time to time, present a report to
the Compensation Committee comparing the Companys director compensation with
that of comparable companies. The Board believes that it is appropriate for the
Chairman of the Board and the independent director chairmen of committees to
receive additional compensation for their additional duties in these positions.

(d) Director Stock Ownership.
The Board believes that each director should acquire and hold shares of Company
stock in an amount that is meaningful to shareholders and appropriate to each
such director. Therefore, the Board, in consultation with each director, will
establish a target for stock ownership by each director and a time period during
which this target is to be met. In general, stock having a value equal to three
times annual base cash compensation is an appropriate level of ownership, to be
acquired over a period of not more than five years.

(e) Employee Directors.
Directors who are also Employees of the Company may receive additional
compensation for Board or committee service if they are not already compensated
at full industry rates in their capacities as Employees.

|8. | Director Orientation and Continuing
      Education
|-- | ---------------------------------------------------

(a) Director Orientation. The
Companys senior management will conduct orientation programs for new directors.
The orientation programs will include presentations by management to familiarize
new directors with the Companys projects, its strategic plans, its significant
financial, accounting and risk management issues, its compliance programs, its
code of business conduct and ethics, its principal officers, its internal and
independent auditors and its outside legal advisors. In addition, the
orientation program will include a review of the Companys expectations of its
directors in terms of time and effort, a review of the directors fiduciary
duties and visits to Company headquarters and, to the extent practical, the
Companys significant facilities.

(b) Continuing Education. To
enable each director to better perform his or her duties and to recognize and
deal appropriately with issues that arise, the Company will provide the
directors with suggestions to undertake continuing director education, the cost
of which will be borne by the Company.

|9. | Management Evaluation and Succession and
      Executive Compensation
|-- | ---------------------------------------------------------------------

(a) Selection of CEO. The Board
selects the Companys CEO in the manner that it determines to be in the best
interests of the Company. The Board, together with the

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- 13 -

CEO, will develop a clear position
description for the CEO. The Board will also develop the corporate goals and
objectives that the CEO is responsible for meeting.

(b) Evaluation of Senior
Executives. The Compensation Committee will be responsible for overseeing
the evaluation of the CEO. The Compensation Committee will determine the nature
and frequency of the evaluation, supervise the conduct of the evaluation and
prepare an assessment of the performance of the CEO, to be discussed with the
Board. The Board will review the assessment to ensure that the CEO is providing
the best leadership for the Company over the long- and short-term. The
Compensation Committee will also discuss with the Board the recommendations of
the CEO with regards to the compensation of the other senior executives.

(c) Succession of Senior
Executives. The Compensation Committee will be responsible for overseeing an
annual evaluation of executive management succession planning.

(d) Expectations of Management.
The Board will establish, and review on an annual basis, its expectations for
senior management generally.

(e) Executive Compensation.Compensation of the CEO must be determined, or recommended to the Board for
determination, by the Compensation Committee. The CEO must not be present during
voting or deliberations. Compensation for all other officers must be determined,
or recommended to the Board for determination, by the Compensation Committee.

|10. | Ethics Policies
|--- | ---------------

The Board of Directors, on the recommendation of the Nominating
and Governance Committee, will adopt and maintain ethics policies which will
apply to the Companys directors, officers and employees. The ethics policies
will meet the definition of a code of ethics under Item 16.B of SEC Form 20-F,
as amended, and other applicable laws and regulations.

|11. | Annual Performance Evaluation of the
      Board
|--- | ------------------------------------------------

The Nominating and Governance Committee will oversee an annual
self-evaluation of the Board to determine whether it and its committees are
functioning effectively. The Nominating and Governance Committee will determine
the nature of the evaluation, supervise the conduct of the evaluation and
prepare an assessment of the Boards performance. The evaluation will include an
assessment of the contributions of each director. This evaluation will be
discussed by the Board.

|12. | Board Interaction with Shareholders,
      Institutional Investors, the Press, Customers, **etc.**
|--- | --------------------------------------------------------------------------------------------------

---

- 14 -

The Board believes that the CEO and his or her designees should
normally speak for the Company. Individual Board members may, from time to time,
meet or otherwise communicate with various constituencies that are involved with
the Company. It is, however, expected that Board members would do so with the
knowledge of and, absent unusual circumstances or as contemplated by the
committee charters, only at the request of the Companys senior executives.

The Board will give appropriate attention to written
communications that are submitted by shareholders and other interested parties,
and will respond if and as appropriate. Absent unusual circumstances or as
contemplated by the committee charters, the Chairman of the Board will monitor
communications from shareholders and other interested parties, and will provide
copies or summaries of such communications to the other directors as he or she
considers appropriate.

|13. | Periodic Review of the Governance Manual
|--- | ----------------------------------------

The Board will, from time to time, with or without
recommendations of the Nominating and Governance Committee, review and reassess
the adequacy of the Governance Manual and recommend any proposed changes for
approval.

---

- 15 -

B1

CORPORATE INFORMATION AND TRADING POLICY

|1. | Introduction
|-- | ------------

The Company and its Directors, Officers and Employees must
satisfy legal and ethical obligations for proper control over disclosure of
corporate information and the trading of its securities. The Companys
shareholders, its reputation for integrity, the market generally and securities
regulators all require that the Company provide appropriate disclosure of
material information within the requirements of the law. The Company also has
the obligation to ensure that Directors, Officers and Employees and others who
maybe in a special relationship do not inappropriately benefit from having
Undisclosed Material Information.

The wrongful use of Material Undisclosed Information prior to
such information being disseminated generally may make both the Company and the
individuals involved liable for criminal and/or civil penalties and damage
awards.

|2. | Scope
|-- | -----

This policy applies to all Directors, Officers and Employees of
the Company and its subsidiaries and affiliates. It also applies to the
Directors, Officers and Employees of HDI.

It relates to treatment of confidential information and to
disclosures in documents submitted to securities regulators; to written and oral
statements made, including those in the Companys annual and quarterly reports,
news releases, letters to shareholders, media articles, presentations by senior
management; and to information contained on the Companys website and other
electronic communications. It includes oral statements made in meetings and
telephone conversations with reporters, analysts, investors and others,
interviews with the media, as well as speeches, press conferences and conference
calls.

There are a number of capitalized terms used in this Policy.
Refer to the Definitions in the Corporate Governance Guidelines for definitions
of certain of the terms.

|3. | Public Disclosure of Material
      Information
|-- | -----------------------------------------------

Disclosure of Information

Senior Officers have the responsibility to provide, or cause to
be provided, full fair, accurate, timely and understandable disclosure in
reports and documents that the Company files with or submits to securities
regulatory authorities, including the SEC, and in news releases and other public
communications made by the Company. That responsibility includes reviewing
disclosure in their areas of responsibility and bringing material information to
the attention of those persons who have primary and overall responsibility for
ensuring that the Company fulfills its disclosure obligations.

---

- 16 -

Corporate Spokespersons have primary and overall responsibility
to ensure the Public Disclosure of Material Information in the manner and time
required under applicable corporate and securities legislation and applicable
stock exchange requirements, and in accordance with this policy. That includes
disclosure documents filed with regulatory authorities and stock exchanges,
press releases and like disclosures. The Company Spokespersons consist of the
CEO, the CFO and any other persons who are authorized by the CEO, generally or
in a specific instance, to speak for the Company. NO ONE EXCEPT THE COMPANYSPOKESPERSONS ARE AUTHORIZED TO COMMUNICATE AS TO MATTERS OF PUBLIC
DISCLOSURE ON BEHALF OF THE COMPANY.

Shareholders are entitled to receive certain periodic
information as set out in relevant corporate and securities legislation. This
and all other Undisclosed Material Information should be made available to
shareholders only when it is publicly released and after the appropriate
procedures are complied with  as set out in this Policy. This is for both the
Company and the shareholders protection. Substantial security holders and
analysts in particular MUST NOT receive preferential treatment in the matter
of information disclosure. Receipt of Undisclosed Material Information would
restrict their ability to trade, and may make them liable for civil and criminal
penalties if they should trade.

Enquiries

All inquiries, including inquiries from the press, securities
analysts and the general public, must be referred to one of the designated
Corporate Spokespersons. All requests for legally disclosable information will
be considered by the Corporate Spokesperson and, upon approval, will be
disseminated in an equitable, timely manner. Requests from individuals or small
investors must be responded to in the same manner as a request from a large
investor, analyst or the media.

If the Company is invited to review draft analyst reports or
models, the relevant Corporate Spokesperson should review the report ONLY for
factual information and limit his/her comments to discussion or correction of
facts. Furthermore, no undisclosed material information is to be communicated in
the course of such a review and comment. If factual correction would result in
the disclosure of undisclosed material information, the Company Spokesperson
must take the necessary steps to ensure that such information is communicated to
the public generally before it is communicated to the particular analyst or
other person making the inquiry.

Directors, Officers or Employees may be asked to forward or
recommend analysts reports or may consider forwarding analysts reports or
media stories about the Company. The forwarding or recommending of such reports
or stories may be regarded as verifying or validating the information contained
in the reports or stories. If any of the information in the report or story is
not accurate, the act of forwarding or recommending the report or story may
constitute the dissemination of false or misleading information in violation of
securities laws. In addition, if any of the information in the report or story
is accurate but has not been generally disseminated by the Company, the
forwarding or recommending of the report or story may constitute selective
disclosure in violation of securities laws. Finally, analyst reports are
considered proprietary products of the analysts firm. For these reasons, the
Company will only distribute analyst

---

- 17 -

reports to any persons outside the Company only if a Corporate
Spokesperson so directs and the analyst consents.

Control of Confidential Information

Any Employee with knowledge of Undisclosed Material Information
must notify the CEO or CFO if that person has any reason to believe the CEO or
CFO is unaware of such information.

Confidential information, including Undisclosed Material
Information generated from Directors, Officers, Employees and outside
consultants and contractors, and other information gained through confidential
discussions with third parties, must be safeguarded by all Directors, Officers
and Employees. Appropriate office procedures must be followed, including care
when handling confidential correspondence, assay results, reports, documents,
memos and facsimiles. All documents should be disposed for shredding, not placed
in rubbish bins. Third party data should be so marked, all confidentiality
obligations noted on the relevant document or file, and such obligations adhered
to.

Visitors to the offices or work sites of the Company are not to
be left unattended at any time, except in designated safe locations; e.g.,
reception area and the boardroom.

Discussion of Material Information

Discussions by Directors, Officers and Employees concerning
Undisclosed Material Information should be confined to other Directors, Officers
and Employees and Company advisors only, and to as few people as required on a
strictly need to know basis, and should never occur in public places such as
elevators and hallways.

No Director, Officer or Employee may participate in internet
chat rooms or bulletin boards that relate directly or indirectly to the
Company, the Companys business, any industry participant (for example joint
venture participants, suppliers, contractors), or similar entities.

Stock Exchange Obligations

Directors, Officers and Employees must not comment, whether
positively or negatively, on rumours but they should be reported to a Corporate
Spokesperson. In general, the Company's policy is not to comment on rumours. If
a stock exchange requests the Company to make a definitive statement in response
to rumours, a Corporate Spokesperson will consider the matter (in consultation
with legal counsel) and decide whether to make a policy exception.

If any Director, Officer or Employee makes any disclosure of
Undisclosed Material Information (inadvertently or otherwise), the person
responsible for the disclosure or any other Director, Officer or Employee
learning of it must contact a Corporate Spokesperson as soon as possible, and
the Corporate Spokesperson will consider the Companys responsibilities under
applicable law.

Where a Material Change occurs in the affairs of the Company, a
Corporate Spokesperson will decide (in consultation with the Board and legal
counsel if necessary) when Public Disclosure is

---

- 18 -

required or advisable, and, when determined, a news release
will be promptly distributed to the securities regulators, Stock Exchanges and
the media.

Financial Disclosure Procedure

The CEO and CFO shall review all proposed financial disclosures
and recommend a final form of release to the Audit Committee for review and
approval. Upon approval, the release will be provided to the Board where
required and upon the Boards approval shall be disseminated as set out below by
a Corporate Spokesperson.

A Corporate Spokesperson shall prepare, or review, all proposed
general disclosures and shall recommend a final form of release to the Board for
approval. If, following circulation, no comments are received back within the
period requested by the Corporate Spokesperson (normally at least one full
business day except in urgent circumstances), the information will be
disseminated in a timely manner through the usual services. Dissemination will
be only be done by a Corporate Spokesperson, in accordance with regulatory
compliance requirements.

|4. | Trading by Directors, Officers and
      Employees; Insider Trading
|-- | -------------------------------------------------------------------

Unless a Blackout Period is in place (see below), Directors,
Officers and Employees may Trade at any time subject to such persons not having
any Undisclosed Material Information and subject to securities laws
generally.

While in the possession of Undisclosed Material Information,
unless otherwise permitted pursuant to a Trading Plan, Directors, Officers and
Employees must not Trade in Company Securities nor in any securities of
companies that have a significant legal or financial relationship, direct or
indirect, with the Company (generally joint venture partners) in connection with
Undisclosed Material Information. Such Insider Trading is illegal under
applicable securities laws.

|5. | Black Out Periods and Other Restrictions
|-- | ----------------------------------------

Black Out Periods will be determined by Corporate Spokespersons
based on their awareness of the actual or possible existence of Undisclosed
Material Information. Instigation of a general Black Out Period will be
communicated to all Directors, Officers and Employees by e-mail and any other
necessary means. In addition, there may be additional special Blackout Periods
applicable to directors, officers and senior management. The existence of a
Black Out Period is itself confidential and must be kept confidential by all
Directors, Officers and Employees. Once instituted, a Blackout Period will
continue to exist until a Company Spokesperson communicates its termination.

In addition to Black Out Periods instituted due to the
existence of Undisclosed Material Information, Directors and Senior Officers are
subject to the following additional trading restrictions:

---

- 19 -

| | (i)   | Special Blackout. During the period beginning on
      the first day after a financial quarter and continuing until financial
      results are announced for that quarter (or results are announced for the
      year in the case of the fourth financial quarter), no Director or Senior
      Officer may sell, purchase, subscribe, donate, or otherwise engage in any
      transaction in securities of the Company. That includes the acquisition,
      disposition or exercise of any option, but does not include accepting any
      non-transferable stock option from the Company under the Company stock
      option plan.                                                                                                                        
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (ii)  | Short Sales. No Director or Senior Officer shall
      engage in short sales of securities of the Company or sales of borrowed
      securities of the Company. For purposes hereof, the short sale of Company
      shares as a method of facilitating the exercise of an option granted by
      the Company shall be deemed not to be a short sale for purposes of the
      aforementioned restriction notwithstanding that any such sale-
      against-an-option may be treated as a short sale under Canadian securities
      legislation. Before selling short against an option, the holder of the
      option should bring the proposed transaction to the attention of the
      Companys CFO so as to ensure the transaction is treated
  properly.
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (iii) | Trading Plans. No Director or Senior Officer shall
      place automatic buy or sell orders with brokers except for a Trading Plan
      entered into with a qualifying broker under Section 161 of the rules to
      the Securities Act of British Columbia and pursuant to SEC Rule 10b5-1,
      provided that you were not in possession of undisclosed material
      information (unless it has since been disclosed) at the time you
      established the Trading Plan. Furthermore, no trading may take place under
      a Trading Plan during a Special Blackout Period.                                                                                                                                                                              
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (iv)  | Preclearance.No Director or Senior Officer may
      engage in any transaction in the Company's securities unless that person
      first clears the transaction with the Director who has been designated by
      the Board of Directors to monitor and approve such transactions. The
      Chairman, assisted by the Chief Financial Officer, has been designated as
      Director for clearance of transactions.                                                                                                                                                                                                                                                                                                                                            

|6. | Disclosure of Director and Senior Officer
      Transactions
|-- | ------------------------------------------------------------

Directors and Senior Officers are required to disclose their
transactions on SEDI (the online Canadian insider reporting system), within 10
days after the transaction. This is the individual's obligation, not the
Companys, but any Director or Senior Officer may ask the CFO for assistance in
understanding his/her obligations.

In addition, the Company is required to report all Director and
Senior Officer transactions to SENS (the South African insider reporting system)
within 48 hours after the transaction. In order for the Company to be able to
fulfill its obligation, it is imperative that Directors and Officers report all
transaction to the Company's CFO or Vice President, Legal, within 24 hours of
the transaction. For this purpose, a transaction is deemed to have occurred on
the execution date, and not on the settlement date.

---

- 20 -

|7. | Violations
|-- | ----------

Insider Trading is a violation of applicable securities laws.
Securities laws impose severe penalties, including criminal fines, imprisonment
and/or civil penalties calculated on the profit gained or loss avoided.

If any Directors, Officers or Employees disclose Undisclosed
Material Information to any person outside of the Company, and the person
receiving that disclosure directly or indirectly Trades on that information, the
person providing the information and those persons who receive the information
may both be criminally and civilly liable for Insider Trading.

As well, any person with power to influence or control the
direction or management, policies or activities of another person (which may
include directors and individuals in a supervisory position over that other
person) who was aware that a violation was likely to occur and failed to take
appropriate steps to prevent such an act from occurring, may have liability.

Any violation of this Policy may result in the Company taking
appropriate disciplinary actions, up to and including termination of employment,
or a determination not to re-nominate a person as a Director. Reporting of any
improper Insider Trading to enforcement authorities may also be required of the
Company.

|8. | Compliance Officer
|-- | ------------------

The Company has designated Joel Kessler, Vice President, Legal,
tel. 27 11 883-0831 (South Africa), e-mail joel@anooraqresources.co.za, as the
Compliance Officer responsible for day to day implementation of this Policy. The
Compliance Officer is also responsible for responding to any questions any
Employee may have regarding the application of the Policy.

---

- 21 -

B2

POLICY TO PREVENT THE CORRUPTION OF FOREIGN PUBLIC OFFICIALS

|1. | Introduction
|-- | ------------

Both Canada and the United States have laws making it illegal
to corrupt officials of foreign governments or to engage in certain related
acts. In Canada, the law is entitled Corruption of Foreign Public Officials
Act and in the United States the law is entitled Foreign Corrupt
Practices Act. In the discussion that follows, we have always adopted the
more stringent requirement of the two laws.

Many countries have laws concerning the corruption and bribery
of government officials, but oftentimes these laws are applied arbitrarily or
inconsistently. No Director, Officer or Employee, or agent or representation of
the Company may engage in an act permitted or tolerated under local law if that
act is prohibited under Canadian and United States laws. Similarly no such
person may engage in an act permitted under Canadian or United States law if it
is prohibited under local law.

|2. | Persons to Whom the Policy Applies
|-- | ----------------------------------

The Policy applies to the Company and its subsidiaries; their
Directors, Officers and Employees; and their agents and representatives. It also
applies to the Directors, Officers and Employees of HDI. For these purposes,
action by a foreign agent or representative is the equivalent of action by the
Company.

The laws may apply in whole or in part to foreign companies and
joint ventures if a Canadian or United States company controls the foreign
company or joint venture or otherwise authorizes, directs or participates in
activity by the foreign company or joint venture. Deciding whether activities of
a foreign company or joint venture are authorized, directed or participated in
by the Company in any particular instance will be an uncertain exercise with
uncertain results. In addition, allegations of illegal conduct by any company or
joint venture in which the Company has a significant interest can only cause
damage to the reputation of the Company. For this reason, you should assume that
any action of foreign companies and joint ventures in which the Company has a
significant interest, including the actions of the employees and agents of such
foreign companies and joint ventures, will be attributable to the Company. You
should also expect that the laws will apply to actions which violate the law,
regardless of where those actions occur.

|3. | Offences
|-- | --------

| | A. | Offence of Bribery
| | -- | ------------------

The laws make it illegal to offer or provide money or anything
of value

| | (i) | for the personal benefit of:
| | --- | ----------------------------

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- 22 -

| |       | (a)                                                                                        | any foreign government official, or                                                                                                                                          
| | ----- | ------------------------------------------------------------------------------------------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                            |                                                                                                                                                                              
| |       | (b)                                                                                        | any official of a public international organization (such
      as the International Monetary Fund, regional development banks or other
      multilateral organizations), or
| |       |                                                                                            |                                                                                                                                                                              
| |       | (c)                                                                                        | any foreign political party or its officials or any
      political candidate                                                                                                
| |       |                                                                                            |                                                                                                                                                                              
| | (ii)  | for the purpose of:                                                                       
| |       |                                                                                            |                                                                                                                                                                              
| |       | (a)                                                                                        | influencing that official in the exercise of his or her
      duties (or non-exercise of those duties), or                                                                   
| |       |                                                                                            |                                                                                                                                                                              
| |       | (b)                                                                                        | having any such person influence foreign government
      activity, or                                                                                                       
| |       |                                                                                            |                                                                                                                                                                              
| |       | (c)                                                                                        | otherwise securing an improper advantage                                                                                                                                     
| |       |                                                                                            |                                                                                                                                                                              
| | (iii) | for the purpose of aiding the Company in obtaining,
      retaining or directing business.

The laws may be violated if the person knows, or if it should
have been obvious, that the payments were made for an illegal purpose.

The laws also apply to indirect payments, i.e., where
the Company offers or provides money or anything of value to any person with the
knowledge that the person will or is likely to make a prohibited payment, or if
it should have been obvious that such a payment was likely to be made.

| | B. | Offence of Possession of Bribery
      Proceeds
| | -- | -----------------------------------------------

It is illegal to possess property or proceeds obtained from the
bribery of a foreign public official or other person mentioned above. This
applies not only to the money or property used to make a bribe. It also may
apply to profits obtained as a result of the bribe. Consequently, a company that
obtains business through a bribe may have to account for not only the bribe and
be liable to substantial monetary penalties but also may be forced to surrender
all of its profits from such business.

| | C. | Offence of Laundering
| | -- | ---------------------

It is also illegal to "launder", i.e., to deal with intent to
conceal, property or proceeds from property obtained as a result of the bribery
of a foreign public official or other persons mentioned above.

|4. | Defences and Exceptions
|-- | -----------------------
|   |                        
|   | A.                     

It is an affirmative defence if it can be shown that the
payment was legal under the written laws and regulations of the foreign country.
As an example, in some foreign countries, the Company

---

- 23 -

may be required by law to hire as an agent a national of that
country who also is connected to the government of that country in some way or
other. However, there are few countries that have such laws, so the chances of
this exception applying are relatively rare.

| | B. | The Payment was a Reasonable
      Expense
| | -- | ------------------------------------------

It is an affirmative defence if it can be shown that the
payment was a reimbursement of travel, lodging and other reasonable and bona
fide expenses directly related to the business promotion, demonstration or
explanation of the Companys business, or the execution or performance of a
contract with the foreign government. As an example, payment of the travel
expenses of a foreign government official to visit one of our mines, as a part
of an effort to promote the Company in that country, would fit into this
category.

| | C. | Facilitating Payments
| | -- | ---------------------

There is an exception in the laws for facilitating payments.
Facilitating payments are payments made to expedite routine governmental
action that does not involve obtaining, retaining or directing business. They
generally involve payments to induce minor government functionaries (government
employees without discretionary authority over a project or transaction) to
complete their jobs in the manner required and where the situation does not
involve the securing of business. Examples include payments to secure

| | (i)   | the issuance of a permit, licence or other document to
      qualify a person to do business;                                                                                                                                                                                                       
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                     
| | (ii)  | the processing of official documents such as visas or
      work permits;                                                                                                                                                                                                                           
| |       |                                                                                                                                                                                                                                                                                                     
| | (iii) | the provision of services normally offered to the public,
      such as mail pick- up and delivery, telecommunication services and power
      and water supply; and                                                                                                                                
| |       |                                                                                                                                                                                                                                                                                                     
| | (iv)  | the provision of services normally provided as required
      such as police protection, loading and unloading of cargo, the protection
      of perishable products or commodities from deterioration or the scheduling
      of inspections related to contract performance or transit of
  goods.

| | D. | Unconditional and Nominal Gifts
| | -- | -------------------------------

It is generally believed that unconditional gifts having
nominal value, when made openly and as a social amenity, or as a token of
esteem, regard or gratitude in accordance with local custom, generally will not
be regarded as a bribe.

|5. | Company Policy
|-- | --------------

The Companys policy is firm and unconditional. Under no
circumstances will the Company ever pay a bribe prohibited by the laws. If you
are ever solicited for such a bribe, or if you become aware of any instance
where any Director, Officer, Employee, agent or representative of the Company or
its subsidiaries or its joint ventures proposes to offer such a bribe or is
otherwise

---

- 24 -

involved in such illegal activity, you are to report the matter
to your immediate superior, or directly to the CEO, the CFO or the Compliance
Officer of the Company. Any person that participates in any scheme to pay such
an illegal bribe will be terminated immediately.

With respect to payments that fall within the exceptions noted
above under the heading Defences and Exceptions:

- No payment that would otherwise be an illegal bribe may be made on the
  basis that it is was legal under the written laws and regulations of the
  foreign country without the prior written approval of the CEO.
- No payment that would otherwise be an illegal bribe may be made on the
  basis that it is a reimbursement of travel, lodging or other reasonable and
  bona fide expenses directly related to the business promotion, demonstration
  or explanation of the Companys business or the execution or performance of a
  contract with the foreign government without the prior written approval of the
  CEO or CFO.
- No facilitating payments may be made without the prior written approval
  of the CEO.
- With respect to unconditional gifts of nominal value made openly and as a
  social amenity, or as a token of esteem, regard or gratitude in accordance
  with local custom, the CEO will establish a monetary limit on the value of any
  such gift. Any gifts with a value in excess of that limit must be approved in
  advance by the CEO.

If any Employee has any reason to believe that there may have
been, or that there may be, a violation of this Policy, that Employee should
report the possible violation in accordance with the Corporate Watch and
Whistleblower Protection Policy set out at Part B-4 of the Governance Manual. As
an alternative, you may wish to consult with the Compliance Officer identified
in paragraph 8 below.

|6. | Accounting Requirements
|-- | -----------------------

The Company and its affiliated foreign companies and joint
ventures must:

- Keep financial records which, in reasonable detail, accurately and fairly
  reflect transactions; and
- Maintain a system of internal accounting controls sufficient to provide
  reasonable assurances that (i) transactions are executed in accordance with
  management authorization, (ii) transactions are properly recorded as needed to
  permit preparation of financial statements and to maintain accountability for
  assets, (iii) all assets are recorded on the books of the Company and access
  to assets is only permitted in accordance with management authorization, and
  (iv) periodic auditing is done at reasonable intervals and action is taken to
  resolve discrepancies.

---

- 25 -

As an example, the accounting provisions require that the
Company properly record facilitating payments as such and prohibit their
characterization in some other form. The accounting provisions also prohibit the
Company from maintaining off-record cash slush funds or cash that may be
accessed without compliance with normal internal controls relating to
disbursements.

|7. | Red Flags
|-- | ---------

The following is a list of red flags that should alert you to
the potential existence of corrupt practice.

|1.  | Off book accounts                                                                
|--- | ---------------------------------------------------------------------------------
|    |                                                                                  
|2.  | Shell corporations                                                               
|    |                                                                                  
|3.  | Sham transactions                                                                
|    |                                                                                  
|4.  | Independent auditor or internal auditor unable to obtain
      information       
|    |                                                                                  
|5.  | Lack of disclosure to regulatory authorities                                     
|    |                                                                                  
|6.  | Poor reputation of a foreign agent                                               
|    |                                                                                  
|7.  | Commission for a transaction out of line with local
      standards              
|    |                                                                                  
|8.  | Agent refuses to give appropriate
  representations                              
|    |                                                                                  
|9.  | Foreign agent has links to the government                                        
|    |                                                                                  
|10. | Cash payments/lack of paper trail                                                
|    |                                                                                  
|11. | Payments made to third parties or to third country
      accounts                
|    |                                                                                  
|12. | Unusual bonuses paid to foreign personnel for which there
      is little support

|8. | Compliance Officer and Compliance
      Program
|-- | -----------------------------------------------

The Company has designated Joel Kessler, Vice President, Legal,
tel. 27 11 883-0831 (South Africa), e-mail joel@anooraqresources.co.za, as the
Compliance Officer responsible for day to day implementation of this Policy. The
Compliance Officer will work with appropriate counsel, accounting personnel and
others to develop specific procedures, practices and training programs designed
to prevent and detect violations of the Policy. The Compliance Officer is also
responsible for responding to any questions any Employee may have regarding the
application of the Policy and the Compliance Program.

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- 26 -

B3

ETHICS AND BUSINESS CONDUCT POLICY FOR DIRECTORS,
OFFICERS AND EMPLOYEES

The Board of Directors of the Company has adopted the following
Ethics and Business Conduct Policy (the Policy) for all Directors, Officers
and Employees of the Company and all of its subsidiaries. It also applies to the
Directors, Officers and Employees of HDI.

There are a number of capitalized terms used in this Policy.
Refer to the Definitions in the Corporate Governance Guidelines for definitions
of certain of the terms.

Several of the provisions of the Policy are reflected in the
Company's employment agreements.

While there cannot be a specific rule for every situation one
may encounter in a workday, the Board has adopted this Policy to provide certain
principles for the business conduct of the Directors, Officers and Employees. In
addition to this Policy, all personnel are expected to be familiar with and
comply with the Companys other policies and procedures, as well as adhere to
the highest ethical standards in all your business dealings.

A violation of the law, employment agreement or this Policy is
a serious matter. A Director, Officer or Employee that violates a law,
government regulation or this Policy will face appropriate disciplinary action,
which may include demotion or immediate termination of employment for cause.

You should promptly discuss any questions or concerns you may
have about this Policy or the correctness of any past, present or anticipated
conduct with the CEO, the CFO, or the Compliance Officer identified in paragraph
16 below. As described in the Corporate Watch and Whistleblower Protection
Policy, your concerns will be treated in confidence and there will be no
reprisal or adverse affect on you for bringing a matter forward.

The provisions of this Policy may be amended or waived only by
the Companys Board of Directors.

|1. | Criteria for Ethical Decision Making
|-- | ------------------------------------

Before embarking on any course of action, you need to ask
yourself these questions:

- Is the life, health or safety of anyone, or the environment endangered by
  the action?
- Is it legal?
- Does it feel fair and honest?
- Does it compromise anyones trust or integrity?
- Could I justify it to the public?

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- 27 -

|2. | Ethical Business Practices
|-- | --------------------------

Each Director, Officer and Employee is accountable to adhere to
and advocate high standards of honest and ethical conduct as outlined in this
Policy.

|3. | Fair Dealings
|-- | -------------

Deal fairly and honestly with the Companys joint venture
partners, suppliers, professional advisors, competitors, other Directors,
Officers and Employees, and anyone else with whom you have contact in the course
of performing your job. You should not take any advantage of anyone through
actions such as manipulation, concealment, misappropriation or abuse of
confidential information, falsification, misrepresentation of material facts or
any other unfair dealing practice. You also should not give any advantage to
anyone for reason of personal relationship, personal benefit, or other reasons
not involving the best interests of the Company.

The Company requires that all contracts, agreements and other
documents correctly set forth the terms of the underlying business arrangement
and that any such documents are reviewed and approved through established
Company policy and procedures.

|4. | Corporate Opportunities and Duty of
      Loyalty
|-- | -------------------------------------------------

You have a duty of loyalty to the Company, which includes a
duty to advance the Companys legitimate interests when the opportunity to do so
arises. Accordingly, you may not use your position or the Companys name,
property, information or good will for personal gain or for the gain of others.
You are further prohibited from taking advantage of an opportunity that is
discovered through the use of any corporate property, information, contacts or
your position with the Company. All such opportunities, actual or perceived,
should be reported to your immediate supervisor.

Outside directors of the Company may have a variety of other
business relationships involving duties of loyalty. In addition, outside
directors do not have the same obligation as officers and employees to bring
corporate opportunities to the Company. For these reasons, the Policy does not
apply to outside directors of the Company with respect to issues involving
duties of loyalty or corporate opportunities and such issues, to the extent they
arise, are to be resolved directly with the Board of Directors.

|5. | Conflicts of Interest and Outside
      Activities
|-- | --------------------------------------------------

A conflict of interest arises when your private interests, or
the private interest of your family, interfere, or appear to interfere, in any
way, with the interests of the Company. You must take care to ensure that you
identify and avoid any situation of actual or apparent conflict of interest.

Some conflicts are clear-cut; others are less obvious. For that
reason, you must fully disclose to your supervisor or members of the executive
team all circumstances that could be construed or perceived as a conflict of
interest. Full disclosure enables the Company to resolve unclear situations and
create an opportunity to dispose of or ethically handle conflicts of interest
before any difficulty can arise. To the extent a conflict of interest cannot be
avoided in a reasonable fashion then appropriate procedures must be put in place
to minimize the involvement of any

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- 28 -

conflicted individuals in the relationship or interaction,
giving rise to the conflict. Failure to make required disclosures or resolve
conflicts of interest satisfactorily can result in discipline up to and
including termination of employment.

The Company's form of employment agreement prohibits an
Employees employment or engagement in any capacity in any other business
without the prior permission of the Company. This provision broadly addresses
potential conflicts of interest. Specific examples include, but are not limited
to:

- Acting as an employee, director or officer of or a consultant to, a
  competitor or potential competitor of the Company, regardless of the nature of
  the employment or consulting relationship except where the CEO has first
  considered and approved such relationships or activity;
- Holding a substantial financial interest in a business which is a joint
  venture partner, optionor or optionee, competitor or supplier of the Company
  or which otherwise does business with the Company;
- The purchase of merchandise or services for the Company from, or placement
  of other business with, a company directly or beneficially owned or controlled
  by a Director, Officer or Employee, his or her spouse, relative, in-law or
  co-habitant;
- Serving as proprietor, general partner, officer or director of any business
  (except charitable organizations or family businesses that in no way compete
  with the Company or do business with the Company) without first obtaining
  written consent of the CEO.

In the case of Employees who are also Directors, such matters
will be resolved directly with the Board.

Outside directors of the Company are not expected to devote
their time and effort solely on behalf of the Company, and they may have a
variety of other business relationships that could give rise to a conflict of
interest. For this reason, any such potential conflicts of interest are not
subject to the Policy and are to be resolved directly with the Board of
Directors.

|6. | Accepting or Giving Gifts
|-- | -------------------------

The giving or accepting of gifts can adversely affect the
Company's reputation for fair dealing You must avoid:

- Accepting or soliciting a gift, favour, or service that is intended to, or
  might appear to, influence your decision-making or professional conduct.
- Giving or offering to give any gift, gratuity, favour, entertainment,
  reward, or any other thing of value that might influence or appear to
  influence the judgment or conduct of the recipient in the performance of his
  or her job. This includes transactions with government personnel, customers
  and suppliers.

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- 29 -

You may give or receive unsolicited gifts or entertainment only
in cases where the gifts or entertainment are of nominal value, are customary to
the industry, will not violate any laws and will not influence nor appear to
influence the recipients judgment or conduct at his or her employers
business.

Where the matter of gifts involves foreign government
officials, leaders of foreign political parties or leaders of international
organization, also consult the Company's Policy to Prevent the Corruption of
Public Officials, at Part B-2 of the Governance Manual.

|7. | Dishonesty
|-- | ----------

Any act of dishonesty or falsification in connection with the
performance of your duties for the Company will be most severely dealt with. The
Company, as a policy, reports any suspicion of fraud or theft to the applicable
law enforcement agency.

|8. | Compliance with Laws, Regulations and
      Rules
|-- | -------------------------------------------------

You will at all times obey and comply with all federal,
provincial, state and local laws, regulations and ordinances of the countries in
which we operate, including:

- Health and safety laws concerning the workplace;
- Civil rights laws concerning harassment and job discrimination;
- Employment laws concerning payment of minimum wage, overtime requirements,
  child labour and general working conditions;
- Immigration related laws concerning the hiring of legally documented
  workers
- Laws concerning corrupt practices
- Laws concerning the proper maintenance of books, records and internal
  controls
- Laws prohibiting illegal payments, gifts, bribes or kickbacks to
  governmental officials, political parties or others
- Privacy laws
- Environmental laws
- Laws prohibiting misappropriation, unauthorized use, reproduction or
  distribution of any third partys trade secrets, copyrighted information or
  confidential proprietary information
- Antitrust and other laws prohibiting unfair competition or restraint of
  trade
- All other applicable laws

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- 30 -

You are expected to be sufficiently familiar with any laws that
apply to our work, to recognize potential breaches and to know when to seek
legal advice. If in doubt, you should discuss the matter with a Senior Officer.

|9. | Accounting and Recordkeeping
|-- | ----------------------------

Many Employees of the Company, not just accountants and
controllers, participate in the financial control and reporting processes of the
Company. If you have ANY responsibility for any aspect of the Companys
financial activities (including, but not limited to, processing of cash receipts
or processing or approval of payments; creation, processing or approval of
invoices and credit memos; payroll and benefits decisions; approval of expense
reports or any other transactions; or the estimation of reserves or other claims
or the amount of any accrual of deferral; or the recording of any of the
foregoing in the Companys ledgers) and/or the preparation of the Companys
financial statements or other reports, you must ensure your involvement complies
with established Company practices and procedures.

You must not circumvent the Companys systems of internal
management and accounting controls, maintain funds or assets for any improper
purposes or make false or misleading statements in any Company documents,
reports or records. No undisclosed or unrecorded accounts may be established
using the Companys funds or other assets. All accounting records and the
financial reports produced from those records must be kept and presented in
accordance with applicable law, must accurately and fairly reflect in reasonable
detail the Companys assets, liabilities, revenue and expenses, and must be in
accordance with generally accepted accounting principles.

Transactions must be supported by accurate and reasonably
detailed documentation and recorded in the proper account. Best efforts are to
be made to record transactions in the proper accounting time period. To the
extent that estimates are necessary, they must be based on your good faith
judgment and be supported by appropriate documentation. No payment or the
related accounting entry may be approved or made with the intention or
understanding that any part of the payment will be used for any purpose other
than that described by the document supporting the entry or payment.

If you receive inquiries from the Companys independent
auditor, internal auditor or legal counsel, you must respond promptly, fully and
accurately.

If you have any concerns as to weaknesses in the Companys
accounting system or in the Companys internal controls; or if you believe that
any instances of fraud,* or incorrect or questionable accounting practices may
have occurred; or if you believe that any instances of fraudulent, incorrect or
questionable practices may have occurred in connection with the annual audit of
the Companys financial statements, you should consult with your immediate
supervisor

_______

*For purposes of the Policy, fraud includes any deliberate
misstatements or omissions in connection with preparation or reporting (internal
or external) of financial and/or operating information about the Company,
whether or not material and without regard to whether the employee receives any
personal benefit.

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- 31 -

or with the Companys CEO, CFO or Compliance Officer.
Alternatively, you may contact the Audit Committee of the Board of Directors
using the procedures outlined in the Corporate Watch and Whistleblower
Protection Policy, at Part B-4 of the Governance Manual. That Policy includes a
procedure for confidential, anonymous submission of concerns.

|10. | Use of Company Property
|--- | -----------------------

You are entrusted with the care, management and cost-effective
use of the Companys property and you are not to make use of these resources for
your own personal benefit or purposes or for the personal benefit of anyone
else. Passwords are to be kept confidential and use of the computer systems is
limited to authorized business purposes with the exception of limited personal
use of internet, e-mail and voicemail which does not interfere or conflict with
business use. Such occasional personal use will normally be permitted unless
your supervisor believes that this privilege is being abused. However, in order
to protect the Companys interests - including for example, to ensure that the
Companys computers and voice mail are not being used for improper purposes,
such as sexual harassment - the Company reserves the right to review the
contents of the Companys computers, its e-mail system, and its voice mail
system. No employee has a right of personal privacy with respect to information
that is placed in the Companys computers, the e-mail system, or the voice mail
system.

You are to ensure that all Company property assigned to you is
maintained in good condition and you should be able to account for such
equipment. Any dispositions of Company property must be for the benefit of the
Company and not for personal benefit.

You are to return all documents and property in your possession
upon termination of your employment for any reason. You will continue to be
bound to your obligations of confidentiality to the maximum extent required by
law.

|11. | Proprietary and Confidential Information,
      Intellectual Property and Inventions/Discoveries
|--- | ------------------------------------------------------------------------------------------------

We want our Employees to be well informed about our business,
our plans for the future, and the successes and challenges we have along the
way. In return for this openness, the Company places trust in its Employees to
maintain, without need for court orders or other legal requirement, the
confidentiality of our proprietary information and those aspects of our business
that we have not yet shared with shareholders and the general public.

You are to take all reasonable measures to protect the
confidentiality of non-public information about the Company obtained or created
in connection with your activities and to prevent the unauthorized disclosure of
such information unless required by applicable law or regulation. You must use
proprietary information only for the Companys legitimate business purposes, and
not for your personal benefit or the personal benefit of anyone else.

To provide the Company with reasonable protection against
disclosure of property and project opportunities and similar confidential
information, all Employees are required to sign an employment agreement prior to
their start with the Company that includes clauses addressing Confidential
Information. These clauses state in part that the Company retains exclusive

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- 32 -

ownership of all project information and opportunities arising
out of employment or consulting relationship and any information pertaining to
the exploration plans of the Company.

Proprietary and confidential information is any information
about the Company that has not been disclosed to the public and includes,
without limitation:

- The Companys ideas, discoveries, projects, data, contact information and
  production processes
- Information concerning actual or projected expenditures, corporate
  transactions, earnings or operating results or business transactions
- Investor lists, relationship with consultants, contracts, business plans
  and strategies
- Personnel information

It is each Employees responsibility to know what is
confidential or proprietary and to ensure that he or she use it only in the
performance of duties with the Company. If you are unsure, consider the
information to be confidential until you obtain clarification.

|12. | Outside Ideas
|--- | -------------

The purpose of this policy is to avoid the risk of allegation
of unauthorized use or disclosure of another persons proprietary rights, ideas
or information.

When an idea, prospect, opportunity, or other confidential or
proprietary information is submitted to the Company by an outsider, care must be
taken to ensure that the outsider signs an agreement defining the Companys
rights and obligations before the idea or prospect or information is disclosed
to employees qualified to evaluate it or use it. Outsiders who propose to submit
information should be told to submit the information in writing. Outsiders
should also be told that any submission constitutes their agreement that the
Companys brief review to determine possible interest will not create any
non-use, confidentiality or area of interest agreement or obligation of the
Company. If they do not so agree, they should be told not to submit their
information.

On its receipt, any such information should be sent to the CEO
or CFO or persons authorized by them to evaluate outside submissions. No one
other than the CEO or CFO and persons authorized by them are to evaluate any
outside submission.

Each written submission will first be reviewed to see if it
purports to impose non-use, confidentiality or area of interest obligations. If
it does, no further review should be made and unless the CEO upon being notified
otherwise directs, the material should be returned without further review. If
the material does not purport to impose such an obligation, it should be
reviewed briefly to see if it might be of interest. If it is not of interest, it
is to be returned with a letter stating that the information was briefly
reviewed to determine possible interest, that the information is not of
interest, and that the Company has no non-use, confidentiality or area of
interest agreement or obligation to the sender. If the sender was previously so
informed, the

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- 33 -

letter should also refer to that prior advice. If the material
appears to be of interest, then the Company will need to enter into an
appropriate confidentiality agreement setting out the parties rights and
obligations before any further review or use of the information.

Third party data subject to confidentiality obligations should
be so marked, all confidentiality obligations should be noted on the relevant
document or file, and all such obligations must be strictly adhered to.

|13. | Corporate Information and Trading Policy
|--- | ----------------------------------------

The Company's Corporate Information and Trading Policy, set out
as Part B-1 of the Governance Manual, is deemed to be a part of this Ethics and
Business Conduct Policy.

|14. | Policy to Prevent the Corruption of Foreign
      Public Officials
|--- | ------------------------------------------------------------------

The Company's Policy to Prevent the Corruption of Foreign
Public Officials, set out as Part B-2 of the Governance Manual, is deemed to be
a part of this Ethics and Business Conduct Policy.

|15. | Reporting and Compliance Procedures
|--- | -----------------------------------

Every Director, Officer and Employee has the responsibility to
ask questions, seek guidance, report suspected violation and express concern
regarding compliance with this Policy, including but not limited to questionable
accounting, internal accounting control or auditing matters.

Any Director, Officer and Employee who knows or believes that
any other such person or representative of the Company has engaged or is
engaging in conduct that violates applicable law or this Policy has the
responsibility to report such information. The procedures for reporting are set
out in the Corporate Watch and Whistle Blower Protection Policy, in Part B-4 of
the Governance Manual

Failure to comply with the standards outlined in this Policy
will result in disciplinary action including, but not limited to, reprimands,
warnings, probation or suspension without pay, demotions, reductions in salary,
discharge and restitution. Certain violations of this Policy may require the
Company to refer the matter to the appropriate governmental or regulatory
authorities for investigation or persecution. Moreover, any supervisor who
directs or approves of any conduct in violation of this Policy, or who has
knowledge of such conduct and does not immediately report it, also will be
subject to disciplinary action, up to and including discharge.

|16. | Administration and Distribution; Compliance
      Officer
|--- | ---------------------------------------------------------

The Companys Board of Directors, the Audit Committee and the
Nominating and Governance Committee have established the standards of business
conduct contained in this Policy and oversee compliance with this Policy.

The Company has designated Joel Kessler, Vice President, Legal,
tel. 27 11 883-0831 (South Africa), e-mail joel@anooraqresources.co.za, as the
Compliance Officer responsible for day to

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- 34 -

day implementation of this Policy. The Compliance Officer is
also responsible for responding to any questions any Employee may have regarding
the application of the Policy.

This Policy shall be distributed to each Director, Officer and
Employee upon commencement of his or her employment or other relationship with
the Company. It will also be made available via the Companys Intranet site.

Strict adherence to this Policy is vital. All managers are
responsible for ensuring that Employees are aware of and understand the
provisions of the Policy. For clarification or guidance on any point in the
Ethics and Business Conduct Policy, please consult the CEO, the CFO or the
Compliance Officer.

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B4

CORPORATE WATCH AND WHISTLEBLOWER PROTECTION POLICY

|1. | Philosophy
|-- | ----------

This policy sets out the guidelines every Director, Officer and
Employee should follow if he or she is aware of conduct which may constitute a
violation of an internal policy, law, or regulation.

The Company expects all Directors, Officers and Employees to
adhere to internal policies and guidelines as well as all laws and regulations
that apply to the Companys business. When an act of the Company or a Director,
Officer or Employee violates a policy, law or regulation, it needs to be
reported in a timely manner so that issues may be investigated and dealt with as
quickly as possible. Delays in bringing the information to the attention of
senior management may cause damage, complications, and irreversible consequences
for the Company. Following the steps outlined below and ensuring that the
information disclosed is accurate and reliable will allow the Company to address
the issues and ensure that timely remedial action is taken.

|2. | When to Make a Report
|-- | ---------------------

You should make a report under this Policy if you are aware of
information which you reasonably believe demonstrates on the part of any person,
whether in the Company or someone dealing with it:

- A violation of any internal policy or code of practice,
- A violation or questionable practice in connection with accounting,
  internal controls or auditing matters,
- A contravention of any law, rule or regulation,
- Corruption, illegality, mismanagement or fraud, or
- A danger to the public or danger to worker health and safety

|3. | To Whom to Make a Report.
|-- | -------------------------

The Company recommends that you first report to your immediate
supervisor. If your concern relates to that person, if you otherwise are not
comfortable with reporting to your immediate supervisor, or if such reporting
has not resulted in a satisfactory result, the Company recommends that you
report to the CEO, the CFO, or the Compliance Officer. If, for any reason, those
alternatives are not satisfactory, then you should report to an independent
member of the Board of Directors. Matters relating to accounting, internal
accounting controls or auditing matters should be reported to the Chairman of
the Audit Committee. All other matters should be reported to the Chairman of the
Nominating and Governance Committee. Details as to how to make such a report are
discussed below.

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- 36 -

With respect to matters involving the possible violation of
laws or regulations, you also may choose to bring such concerns to an outside
regulatory authority. However, the Company is committed to taking internal
action in response to employee concerns, and would appreciate the opportunity to
do so, if appropriate.

|4. | Prohibition Against Retaliation.
|-- | --------------------------------

The Company welcomes the courage and honesty of an Employee who
voices concern over a particular course of action that he or she genuinely
believes to be unlawful or harmful. Any attempts to intimidate, threaten or
retaliation or harassment based upon a report made by an Employee pursuant to
this Policy is strictly prohibited and will result in disciplinary action up to
and including termination.

However, groundless or unwarranted complaints or disclosures of
a harassing nature  with an ulterior motive or vindictive intent  will not be
tolerated. Appropriate disciplinary measures will be taken if allegations are
initiated for malicious reasons or in bad faith.

|5. | Procedure
|-- | ---------

If you believe wrongdoing or serious misconduct has taken place
or may take place, follow the procedures set out below. Employees are encouraged
to exhaust all internal remedies before taking concerns outside the
organization, unless circumstances make immediate outside assistance, such as
from the police or fire department, necessary. You may make the report orally,
in writing, or by e-mail. All reports will be treated as confidential to the
extent possible, and only revealed on a need-to-know basis or as required by law
or court order.

- Bring the matter to the attention of your immediate supervisor. Any
  supervisor receiving such a report is to immediately bring the matter to the
  attention of the CEO, the CFO, or the Compliance Officer. (See paragraph 16 of
  the Ethics and Business Conduct Policy for Directors, Officers and Employees
  for the name and contact information for the Compliance Officer.)
- Bring the matter to the attention of the CEO, the CFO, or the Compliance
  Officer.
- Bring the matter to the attention of an independent director of the
  Company. Matters relating to accounting, internal accounting controls or
  auditing matters should be reported to the Chairman of the Audit Committee.
  All other matters should be reported to the Chairman of the Nominating and
  Governance Committee. If you are uncertain as to whether the matter should go
  to the Audit Committee or the Nominating and Governance Committee, you may
  choose either one. Contact information for the Chairman of the Audit Committee
  and the Chairman of the Nominating and Governance Committee is as follows:

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- 37 -

| | Chairman of the Audit Committee        | Chairman of the Nominating and      
| | -------------------------------------- | ------------------------------------
| |                                        | Governance Committee                
| |                                        |                                     
| | Name: David Elliott                    | Name: Wayne Kirk                    
| | Address 3111 West 42 Ave               | Address: 6 Morgan Lane              
| | Vancouver, BC V6N 3H1 Canada           | San Rafael, CA 94901 United States  
| | Telephone No. 1-604-267-9694           | Telephone No.: 1-415-457-3841       
| | Fax No.1-604-267-9693                  | Fax No.: 1-415-369-8925             
| | e-mail address davidelliott@hdgold.com | e-mail address: waynekirk@thelen.com

- If you prefer to report on an anonymous basis, call on the Anooraq Hotline
  at 1- 877-874-8416 (Canada). Any calls to this number will be forwarded to the
  Chairman of the Audit Committee for further handling.

|6. | Follow-up and Outcome
|-- | ---------------------

- On receipt of a complaint, the complaint will be reported promptly to the
  Chairman of the Audit Committee if it relates to accounting, internal
  accounting controls or auditing matters, and to the Chairman of the Nominating
  and Governance Committee if it relates to other matters. In the case of an
  oral complaint, the party receiving the complaint is to report it orally and
  also to prepare a written summary for the Chairman of the Audit Committee or
  Nominating and Governance Committee, as applicable.
- The appropriate Committee Chairman will promptly commission the conduct of
  an investigation. At the election of the Committee Chairman, the investigation
  may be conducted by Company personnel, or by outside counsel, accountants or
  other persons employed by the appropriate Committee.
- The identity of a person filing a complaint/report will be treated as
  confidential to the extent possible, and only revealed on a need-to-know basis
  or as required by law or court order.
- On completion of the investigation, an oral and/or written investigative
  report will be provided to the Audit Committee or Nominating and Governance
  Committee, as applicable. If any unlawful, violative or other questionable
  conduct is discovered, the appropriate Committee shall cause to be taken such
  remedial action as the Committee deems appropriate under the circumstances to
  achieve compliance with the applicable law, regulation or policy and to
  otherwise remedy the unlawful, violative or other questionable conduct. The
  Chairman of the appropriate Committee shall prepare, or cause to be prepared,
  a written summary of the remedial action taken.

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- 38 -

- In each case, the written investigative report (or summary of any oral
  report), and a written summary of the remedial action taken in response to the
  investigative report shall be retained along with the original
  complaints/reports by or under the authority of the appropriate Committee
  Chairman for a period of four years after the resolution of the matter.

|7. | Government Inquiry
|-- | ------------------

If an Employee receives an inquiry from a governmental
authority concerning suspected unlawful conduct, the Employee should immediately
direct the inquiry to the CEO, the CFO or the Compliance Officer. In such
circumstances, Employees should take measures to preserve documents and other
items relevant to the investigation. To conceal an offence or to alter or
destroy evidence violates the Companys commitment of conducting its business in
a legal, ethical and credible manner and is strictly prohibited.

|8. | Failure to Comply or File a Report
|-- | ----------------------------------

The Company is committed to complying with all applicable laws,
regulations and policies. Such compliance is only possible if all Directors,
Officers and Employees follow all applicable laws, Company policies and
guidelines. Persons who violate the law or the Companys compliance policies or
knowingly fail to report a violation of law or compliance policy may be subject
to disciplinary action. The nature and extent of the action will be determined
on a case-by-case basis. In reviewing the situation, the following is a partial
list of considerations:

- The nature and severity of the offence
- Whether the persons involved acted reasonably
- The efforts by the persons involved to obtain guidance before the offence
  occurred
- Whether the persons involved reported themselves

Any attempt to intimidate, threaten or retaliate against anyone
who reports suspected harmful or unlawful conduct is also in violation of this
policy, and disciplinary action may result.

Directors, Officers and Employees are encouraged to report
their own wrongdoing or possible wrongdoing. This action will be taken into
account when assessing the appropriate discipline, if any. The Company will
also recognize situations where a person has made an honest mistake while acting
reasonably and in such situations, consider whether corrective action can be
reduced or eliminated.

A violation of this policy may carry severe consequences both
for the Company and the individuals involved. Compliance with this policy is a
condition of office or employment with the Company. A violation of this policy
may be grounds for discipline, up to and including immediate dismissal.

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- 39 -

C1

AUDIT COMMITTEE CHARTER

|1. | Purpose
|-- | -------

This Charter specifies the responsibilities of the Audit
Committee of the Board of Directors (the Board) of the Company and the manner
in which those responsibilities shall be performed, including its structure,
processes and membership requirements.

The primary purpose of the Audit Committee is to assist the
Board in fulfilling its responsibilities to oversee managements financial,
accounting and reporting processes, the Companys system of internal accounting
and financial controls and the Companys compliance with related legal and
regulatory requirements. The Audit Committee shall also review the
qualifications, independence and performance of the public accounting firm
employed by the Company for the purpose of preparing or issuing an audit report
or related work or performing other review or attest services to the Company as
required under applicable laws (the Independent Auditor), and shall approve
the appointment and terms of engagement of and oversee the Companys Independent
Auditor. The Audit Committee shall prepare any reports required by the Audit
Committee under applicable securities regulations. The Audit Committee shall
regularly report its activities to the Board.

The Company shall provide appropriate funding as determined by
the Audit Committee to permit the Audit Committee to perform its duties under
this Charter and to compensate its advisors. The Audit Committee, at its
discretion, has the authority to initiate special investigations, and if
appropriate, hire special legal, accounting or other outside advisors or experts
to assist the Audit Committee to fulfill its duties under this Charter. The
Audit Committee may also perform such other activities consistent with this
Charter, the Companys Bylaws and governing law as the Audit Committee or the
Board deems necessary or appropriate.

The Audit Committees role is one of oversight. The Companys
management is responsible for preparing the Companys financial statements and
providing all required certifications relating to those financial statements.
The Independent Auditor is responsible for auditing those financial statements.
In carrying out its oversight responsibilities, the Audit Committee is relying
on information provided by the Companys management and the Companys
Independent Auditor. The Audit Committee is not responsible for providing any
expert or special assurance nor any guarantee as to the accuracy or completeness
of the Companys financial statements or other public disclosure, nor is the
Audit Committee providing any professional certification as to the work of the
Independent Auditor.

|2. | Structure and Operations
|-- | ------------------------

The Audit Committees composition and qualifications shall meet
the all applicable laws and stock exchange requirements.

---

- 40 -

|A. | Composition
|-- | -----------

The Audit Committee shall be comprised of three or more
members. Each member must be a director of the Company.

|B. | Independence
|-- | ------------

Each member of the Audit Committee will be independent in
accordance with:

| | (a) | Multilateral Instrument MI 52-110  Audit
    Committees,
| | --- | ---------------------------------------------------------
| |     |                                                          
| | (b) | Section 121A of the AMEX Company Guide, and              
| |     |                                                          
| | (c) | Rule 10A-3 of the Exchange Act.                          

attached hereto as Exhibit I-A  Independence Requirements.

|C. | Financial Literacy
|-- | ------------------

Each member of the Audit Committee shall meet experience and
financial literacy requirements required by:

| | (a) | MI 52-110, and                        
| | --- | --------------------------------------
| |     |                                       
| | (b) | Section 121B of the Amex Company
Guide

attached hereto as Exhibit I-B  Financial Literacy
Requirements.

|D. | Financial Expert
|-- | ----------------

At least one member of the Audit Committee will meet the
definition of a financial expert as defined in Item 16.A of SEC Form 20-F
attached hereto as Exhibit I-C - Financial Expert Definition.

|E. | Appointment, Term and Removal
|-- | -----------------------------

The members of the Audit Committee shall be appointed by the
Board taking into account the recommendation of the Nominating and Governance
Committee and shall serve until their successors shall be duly elected and
qualified or their earlier resignation or removal by the Board. Any member of
the Audit Committee may be replaced by the Board.

|F. | Chairman
|-- | --------

Unless a chairman is elected by the full Board, the members of
the Audit Committee may designate a chairman by majority vote of the full Audit
Committee membership.

---

- 41 -

|G. | Sub-Committees
|-- | --------------

The Audit Committee may form and delegate authority to
subcommittees consisting of one or more members when appropriate, including the
authority to grant preapprovals of audit and permitted non-audit services,
provided that decisions of such subcommittee to grant preapprovals shall be
presented to the full Audit Committee at its next scheduled meeting.

|3. | Meetings 
|-- | ---------
|   |          
|A. | Generally

The Audit Committee shall meet with management, the internal
auditor, the general counsel and the Independent Auditor in separate executive
sessions as appropriate. The Audit Committee shall meet with the Independent
Auditor and management to review the Companys financial statements and
financial reports contained in the Companys annual and quarterly reports to be
filed with regulatory agencies and stock exchanges. The Audit Committee may
also, to the extent it deems necessary or appropriate, meet with the Companys
investment bankers or financial analysts who follow the Company.

The Audit Committee may invite to its meetings any director,
any manager of the Company, and any other person whom it deems appropriate to
consult in order to carry out its responsibilities. The Audit Committee may also
exclude from its meetings any person it deems appropriate to exclude in order to
carry out its responsibilities.

|B. | Frequency of Meetings
|-- | ---------------------

The Audit Committee shall meet as often as it determines, but
not less frequently than quarterly.

|C. | Minutes
|-- | -------

The Audit Committee shall maintain written minutes of its
meetings, which minutes will be filed with the minutes of the meetings of the
Board.

|4. | Duties      
|-- | ------------
|   |             
|A. | Introduction

The following functions shall be the common recurring duties of
the Audit Committee in carrying out its purposes outlined in Section 1 of this
Charter. The Audit Committee shall also carry out any other responsibilities and
duties delegated to it by the Board of Directors from time to time.

The Audit Committee, in discharging its oversight role, is
empowered to study or investigate any matter of interest or concern which the
Audit Committee in its sole discretion deems appropriate for study or
investigation by the Audit Committee.

---

- 42 -

The Audit Committee shall be given full access to the Companys
Board of Directors, managers, Employees and Independent Auditor as necessary to
carry out these duties. While acting within the scope of its stated purpose, the
Audit Committee shall have all the authority of the Board of Directors.

|B. | Powers and Responsibilities
|-- | ---------------------------

The Audit Committee will have the following responsibilities
and will be vested with the powers and authorities set forth below in order to
perform and discharge these responsibilities. The Audit Committee shall consult
with management but shall not delegate these responsibilities.

|1. | The Audit Committee shall have the sole authority to
      appoint or replace the Independent Auditor subject, if applicable, to
      shareholder ratification as required by the Companys charter or the laws
      of British Columbia.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|2. | The Audit Committee shall be directly responsible for the
      compensation and oversight of the work of the Independent Auditor
      (including resolution of disagreements between management and the
      Independent Auditor regarding financial reporting) for the purpose of
      preparing or issuing an audit report or related work.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|3. | The Independent Auditor shall report directly to the
      Audit Committee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|4. | The Committee shall approve in advance all audit and
      permitted non-audit services (including the fees and terms thereof) to be
      performed by the Independent Auditor. The Company shall provide for
      appropriate funding, as determined by the Audit Committee, for payment of
      compensation to the Independent Auditor and to any advisors employed by
      the Audit Committee. In considering approval of permitted non-audit
      services, the Audit Committee shall consider whether the providing of such
      services will affect the independence of the Independent Auditor. The
      Audit Committee shall also consider any other factors relevant to
      appointment of the Independent Auditor to perform permitted non-audit
      services, and establish any principles to be applied in making the
      determination.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|5. | The Audit Committee shall have the authority to retain
      independent legal, accounting or other consultants to advise the
      Committee, as it determines to be appropriate to carry out its
    duties.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|6. | The Audit Committee may request any Officer or Employee
      of the Company or the Companys outside counsel or Independent Auditor to
      attend a meeting of the Committee or to meet with any members of, or
      consultants to, the Committee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|7. | The Audit Committee shall make regular reports to the
      Board.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|8. | The Audit Committee shall review and reassess the
      adequacy of this Charter annually and recommend any proposed changes to
      the Board for approval.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|9. | The Audit Committee shall annually review the Audit
      Committees own performance.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

---

- 43 -

|C. | Financial Statement and Disclosure
      Matters
|-- | ------------------------------------------------

The Audit Committee, to the extent it deems necessary or
appropriate, shall:

|1. | Review and discuss with management and the Independent
      Auditor the annual audited financial statements, including disclosures
      made in managements discussion and analysis, and recommend to the Board
      whether the audited financial statements should be filed with applicable
      securities regulatory authorities and included in the Companys annual
      reports.                                                                                     
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|2. | Review and discuss with management and the Independent
      Auditor the Companys quarterly financial statements, including
      disclosures made in managements discussion and analysis, prior to the
      filing of its quarterly financial statements and managements discussion
      analysis with applicable securities regulatory authorities, including the
      results of any Independent Auditor review of the quarterly financial
      statements.             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|3. | Discuss with management and the Independent Auditor
      significant financial reporting issues and judgments made in connection
      with the preparation of the Companys financial statements, including any
      significant changes in the Companys selection or application of
      accounting principles, any major issues as to the adequacy of the
      Companys internal controls, and any special steps adopted in light of
      material control deficiencies.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4. | Annually, and before publication of the annual financial
      statements, review and discuss a report from the Independent Auditor
      on:                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | (a)      All critical accounting
      policies and practices to be used.                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | (b)      All alternative
      treatments of financial information within generally accepted accounting
      principles that have been discussed with management, ramifications of the
      use of such alternative disclosures and treatments, and the treatment
      preferred by the Independent Auditor.                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | (c)      Other material written
      communications between the Independent Auditor and management, such as any
      management letter or schedule of unadjusted differences, the development,
      selection and disclosure of critical accounting estimates, and analyses of
      the effect of alternative assumptions, estimates or GAAP methods on the
      Companys financial statements.                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|5. | Discuss with management the Companys earnings press
      releases, including the use of pro forma or adjusted non-GAAP
      information, as well as financial information and earnings guidance
      provided to analysts and rating agencies. Such discussion may be done
      generally (consisting of discussing the types of information to be
      disclosed and the types of presentations to be made).                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|6. | Discuss with management and the Independent Auditor the
      effect of regulatory and accounting initiatives as well as off-balance
      sheet structures on the Companys financial
statements.                                                                                                                                                                                                                                                                                

---

- 44 -

|7. | Discuss with management the Companys major financial
      risk exposures and the steps management has taken to monitor and control
      such exposures, including the Companys risk assessment and risk
      management policies.                                                                                                                                                                               
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                      
|8. | Discuss with the Independent Auditor the matters required
      to be discussed by Statement on Auditing Standards No. 61 relating to the
      conduct of the audit. In particular, discuss:                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | (a)      The adoption of, or
      changes to, the Companys significant auditing and accounting principles
      and practices as suggested by the Independent Auditor, internal auditor or
      management.                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | (b)      The management letter
      provided by the Independent Auditor and the Companys response to that
      letter.                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | (c)      Any difficulties
      encountered in the course of the audit work, including any restrictions on
      the scope of activities or access to requested information, and any
      significant disagreements with management.                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                      
|9. | Review disclosures made to the Audit Committee by the
      Companys CEO and CFO during their certification process for the annual
      report to the SEC about any significant deficiencies in the design or
      operation of internal controls or material weaknesses therein and any
      fraud involving management or other Employees who have a significant role
      in the Companys internal controls.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                      
|D. | Oversight of the Companys Relationship with the
      Independent Auditor                                                                                                                                                                                                                                                                                                                                           

The Audit Committee will:

|1. | Review and evaluate the experience and qualifications of
      the senior members of the Independent Auditor team.                                                                                                                                                                                                           
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                              
|2. | Obtain and review a report from the Independent Auditor
      at least annually regarding:                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                              
|   | (a)      the Independent
      Auditors internal quality-control procedures;                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                              
|   | (b)     any material issues raised by
      the most recent internal quality-control review, or peer review, of the
      firm, or by any inquiry or investigation by governmental or professional
      authorities within the preceding five years respecting one or more
      independent audits carried out by the firm;
|   |                                                                                                                                                                                                                                                                                                                              
|   | (c)      any steps taken to deal
      with any such issues; and                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                              
|   | (d)      all relationships
      between the Independent Auditor and the Company.                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                              
|3. | Evaluate the qualifications, performance and independence
      of the Independent Auditor, including considering whether the auditors
      quality controls are adequate and the provision of permitted non-audit
      services is compatible with maintaining the
auditors                                             

---

- 45 -

|   | independence, and taking into account the opinions of
      management and the internal auditor.                                                                                                                                          
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                           
|4. | The Audit Committee shall present its conclusions with
      respect to the Independent Auditor to the Board.                                                                                                                             
|   |                                                                                                                                                                                                                                           
|5. | Ensure the rotation of the lead (or coordinating) audit
      partner having primary responsibility for the audit and the audit partner
      responsible for reviewing the audit as required by law.                                     
|   |                                                                                                                                                                                                                                           
|6. | Consider whether, in order to assure continuing auditor
      independence, it is appropriate to adopt a policy of rotating the lead
      audit partner or even the independent auditing firm itself on a regular
      basis.           
|   |                                                                                                                                                                                                                                           
|7. | Recommend to the Board policies for the Companys hiring
      of employees or former employees of the Independent Auditor who were
      engaged on the Companys account participated in any capacity in the audit
      of the Company.
|   |                                                                                                                                                                                                                                           
|8. | Meet with the Independent Auditor prior to the audit to
      discuss the planning and staffing of the audit.                                                                                                                             
|   |                                                                                                                                                                                                                                           
|9. | Confirm that the Independent Auditor is registered and in
      good standing with the Canadian Public Accounting Board and the Public
      Company Accounting Oversight Board.                                                          

|E. | Compliance Oversight
      Responsibilities
|-- | -------------------------------------------

The Audit Committee will:

|1. | Obtain from the Independent Auditor assurance that
      Section 10A(b) of the Securities Exchange Act of 1934 has not been
      implicated.                                                                                                                                                                                 
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                               
|2. | Establish procedures for the receipt, retention and
      treatment of complaints received by the Company regarding accounting,
      internal accounting controls or auditing matters, and the confidential,
      anonymous submission by Employees of concerns regarding questionable
      accounting or auditing matters.
|   |                                                                                                                                                                                                                                                                                                                               
|3. | Discuss with management and the Independent Auditor any
      correspondence with regulators or governmental agencies and any Employee
      complaints or published reports which raise material issues regarding the
      Companys financial statements or accounting policies.                                           
|   |                                                                                                                                                                                                                                                                                                                               
|4. | Discuss with the Companys legal counsel legal matters
      that may have a material impact on the financial statements or the
      Companys compliance policies.                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                               
|F. | Internal Audit.                                                                                                                                                                                                                                                                                                               

---

- 46 -

|1. | The Audit Committee shall have the sole authority to
      appoint or replace the internal auditor.                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|2. | The internal auditor shall report directly to the Audit
      Committee, provided however that for functional and administrative
      purposes the internal auditor shall report to the CFO.                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|3. | The Audit Committee shall be directly responsible for the
      compensation and oversight of the work of the internal auditor, including
      approval of the annual budget of the internal audit department.                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|4. | At least annually, the Audit Committee shall review the
      duties and the qualifications, performance and independence of the
      internal auditor, and approve the internal audit work plan.                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|5. | The Audit Committee shall receive regular reports from
      the internal auditor on the fulfillment of the internal auditor
      responsibilities. The Audit Committee may also request the internal
      auditor provide such additional information and advice as the Audit
      Committee may request.                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|G. | Related Party Transactions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|1. | The Committee shall review for fairness to the Company
      proposed transactions, contracts and other arrangements between the
      Company and its subsidiaries and any related party or affiliate, and make
      recommendations to the Board whether any such transactions, contracts and
      other arrangements should be approved or continued. The foregoing shall
      not include any compensation payable pursuant to any plan, program,
      contract or arrangement subject to the authority of the Companys
      Compensation Committee. 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|2. | As used herein the term related party means any officer
      or director of the Company or any subsidiary, any company controlled by
      any such officer or director, or any shareholder holding a greater than
      10% direct or indirect financial or voting interest in the Company, and
      the term affiliate means any person, whether acting alone or in concert
      with others, that has the power to exercise a controlling influence over
      the Company and its subsidiaries. "Related party" includes Hunter
      Dickinson Inc.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|5. | Limitation of Audit Committees Role                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

While the Audit Committee has the responsibilities and powers
set forth in this Charter, it is not the duty of the Audit Committee to plan or
conduct audits or to determine that the Companys financial statements and
disclosures are complete and accurate and are in accordance with generally
accepted accounting principles and applicable rules and regulations. These are
the responsibilities of management and the independent auditor.

---

- 47 -

EXHIBIT I-A - INDEPENDENCE REQUIREMENTS

Section 1.4 and 1.5 of MI 52-110

Meaning of Independence:

|1.4 | Meaning of Independence
|--- | -----------------------
|    |                        
|    | (1)                    
|    |                        
|    | (2)                    
|    |                        
|    | (3)                    
|    |                        
|    |                        
|    |                        
|    |                        
|    |                        
|    |                        
|    |                        
|    |                        
|    |                        
|    |                        
|    |                        
|    |                        
|    |                        
|    |                        
|    |                        
|    |                        
|    |                        
|    |                        
|    |                        
|    |                        
|    |                        
|    |                        

---

- 48 -

|    |                                      |                                                                                                                                                                                                                                                                                                                                                                                                         | entitys compensation committee; and                                                                                                                                                                                                                           
|--- | ------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                      |                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                
|    |                                      | (f)                                                                                                                                                                                                                                                                                                                                                                                                     | an individual who received, or whose immediate family
      member who is employed as an executive officer of the issuer received,
      more than $75,000 in direct compensation from the issuer during any 12
      month period within the last three years.
|    |                                      |                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                
|    | (4)                                  | Despite subsection (3), an individual will not be
      considered to have a material relationship with the issuer solely
      because:                                                                                                                                                                                                                                                               
|    |                                      |                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                
|    |                                      | (a)                                                                                                                                                                                                                                                                                                                                                                                                     | he or she had a relationship identified in subsection (3)
      if that relationship ended before March 30, 2004; or                                                                                                                                           
|    |                                      |                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                
|    |                                      | (b)                                                                                                                                                                                                                                                                                                                                                                                                     | he or she had a relationship identified in subsection (3)
      by virtue of subsection (8) if that relationship ended before June 30,
      2005.                                                                                                             
|    |                                      |                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                
|    | (5)                                  | For the purposes of clauses (3)(c) and (3)(d), a partner
      does not include a fixed income partner whose interest in the firm that is
      the internal or external auditor is limited to the receipt of fixed
      amounts of compensation (including deferred compensation) for prior
      service with that firm if the compensation is not contingent in any way on
      continued service.
|    |                                      |                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                
|    | (6)                                  | For the purposes of clause (3)(f), direct compensation
      does not include:                                                                                                                                                                                                                                                                                                                         
|    |                                      |                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                
|    |                                      | (a)                                                                                                                                                                                                                                                                                                                                                                                                     | remuneration for acting as a member of the board of
      directors or of any board committee of the issuer, and                                                                                                                                               
|    |                                      |                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                
|    |                                      | (b)                                                                                                                                                                                                                                                                                                                                                                                                     | the receipt of fixed amounts of compensation under a
      retirement plan (including deferred compensation) for prior service with
      the issuer if the compensation is not contingent in any way on continued
      service.                              
|    |                                      |                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                
|    | (7)                                  | Despite subsection (3), an individual will not be
      considered to have a material relationship with the issuer solely because
      the individual or his or her immediate family member                                                                                                                                                                                                           
|    |                                      |                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                
|    |                                      | (a)                                                                                                                                                                                                                                                                                                                                                                                                     | has previously acted as an interim chief executive
      officer of the issuer, or                                                                                                                                                                             
|    |                                      |                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                
|    |                                      | (b)                                                                                                                                                                                                                                                                                                                                                                                                     | acts, or has previously acted, as a chair or vice-chair
      of the board of directors or of any board committee of the issuer on a
      part-time basis.                                                                                                    
|    |                                      |                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                
|    | (8)                                  | For the purpose of section 1.4, an issuer includes a
      subsidiary entity of the issuer and a parent of the issuer.                                                                                                                                                                                                                                                                                 
|    |                                      |                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                
|1.5 | Additional Independence
Requirements

---

- 49 -

| | (1) | Despite any determination made under section 1.4, an
      individual who                                                                                                                                                                                                                                   
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                             
| |     | (a)                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                             
| |     | (b)                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                             
| |     | is considered to have a material relationship with the
      issuer.                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                             
| | (2) | For the purposes of subsection (1), the indirect
      acceptance by an individual of any consulting, advisory or other
      compensatory fee includes acceptance of a fee by:                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                             
| |     | (a)                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                             
| |     | (b)                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                             
| | (3) | For the purposes of subsection (1), compensatory fees do
      not include the receipt of fixed amounts of compensation under a
      retirement plan (including deferred compensation) for prior service with
      the issuer if the compensation is not contingent in any way on continued
      service.

Amex Section 121A

The definition of independent director, as specified in
Section 121A of the AMEX Company Guide, is set forth below:

Independent director means a
person other than an officer or employee of the company. No director qualifies
as independent unless the issuers Board of Directors affirmatively determines
that the director does not have a relationship that would interfere with the
exercise of independent judgment. In addition to the requirements contained in
this Section 121A, directors serving on the audit committee must also comply
with the requirements set forth in Section 121B(2). The following is a
non-exclusive list of persons who shall not be considered independent:

(a) a director who is, or during the
past three years was, employed by the company, other than prior employment as an
interim executive officer (provided the interim employment did not last longer
then one year);

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- 50 -

(b) a director who accepted or has an
immediate family member who accepted any compensation from the company in excess
of $60,000 during any period of twelve consecutive months within the three years
preceding the determination of independence, other than the following:

(1) compensation for board or board
committee service,

(2) payments arising solely from
investments in the companys securities,

(3) compensation paid to an immediate
family member who is an employee (other than an executive officer) of the
company,

(4) compensation received for former
service as an interim executive officer (provided the interim employment did not
last longer than one year),

(5) benefits under a tax-qualified
retirement plan,

(6) non-discretionary compensation,

(7) loans permitted under Section
13(k) of the Exchange Act,

(8) loans from a financial institution
provided that the loans (i) were made in the ordinary course of business, (ii)
were made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with the
general public, (iii) did not involve more than a normal degree of risk or other
unfavourable factors, and (iv) were not otherwise subject to the specific
disclosure requirements of SEC Regulation S-K, Item 404, or

(9) payments from a financial
institution in connection with the deposit of funds or the financial institution
acting in an agency capacity, provided such payments were (i) made in the
ordinary course of business, (ii) made on substantially the same terms as those
prevailing at the time for comparable transactions with the general public, and
(iii) not otherwise subject to the disclosure requirements of SEC Regulation
S-K, Item 404.

(c) a director who is an immediate
family member of an individual who is, or at any time during the past three
years was employed by the company as an executive officer;

(d) a director who is, or has an
immediate family member who is, a partner in, or a controlling shareholder or an
executive officer of, any organization to which the company made, or from which
the company received, payments (other than those arising solely from investments
in the companys securities or payments under non-discretionary charitable
contribution matching programs) that exceed 5% of the organizations
consolidated gross revenues for that year, or $200,000, whichever is more, in
any of the most recent three fiscal years;

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- 51 -

(e) a director who is, or has an
immediate family member who is, employed as an executive officer of another
entity where at any time during the most recent three fiscal years any of the
issuers executive officers served on the compensation committee of such other
entity; or

(f) a director who is, or has an
immediate family member who is, a current partner of the companys outside
auditor, or was a partner or employee of the companys outside auditor who
worked on the companys audit at any time during any of the past three years.

Exchange Act Rule 10A-3

In order to be considered independent for the purposes of Rule
10A-3, a director must meet the following independence standards.

(i) Each member of the audit committee must be a member of the
board of directors of the listed issuer, and must otherwise be independent.

(ii) In order to be considered to be independent, a member of
an audit committee may not, other than in his or her capacity as a member of the
audit committee, the board of directors, or any other board committee:

(A) Accept directly or indirectly any
consulting, advisory, or other compensatory fee from the issuer or any
subsidiary thereof, provided that, unless the rules of the national securities
exchange or national securities association provide otherwise, compensatory fees
do not include the receipt of fixed amounts of compensation under a retirement
plan (including deferred compensation) for prior service with the listed issuer
(provided that such compensation is not contingent in any way on continued
service); or

(B) Be an affiliated person of the
issuer or any subsidiary thereof.

The following definitions apply to the determination of
independence under Rule 10A-3:

|(1) | (i) The term affiliate of, or a
      person affiliated with, a specified person, means a person that directly,
      or indirectly through one or more intermediaries, controls, or is
      controlled by, or is under common control with, the person specified.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                    
|    | (ii) A person will be deemed not to
      be in control of a specified person for purposes of this section if the
      person:                                                                                                                                    
|    |                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                    
|    | (iii)                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                    

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- 52 -

(B) A director who also is an employee
of an affiliate;

(C) A general partner of an affiliate;
and

(D) A managing member of an affiliate.

(iv) For purposes of paragraph(1)(i) of
this section, dual holding companies will not be deemed to be affiliates of or
persons affiliated with each other by virtue of their dual holding company
arrangements with each other, including where directors of one dual holding
company are also directors of the other dual holding company, or where directors
of one or both dual holding companies are also directors of the businesses
jointly controlled, directly or indirectly, by the dual holding companies (and,
in each case, receive only ordinary-course compensation for serving as a member
of the board of directors, audit committee or any other board committee of the
dual holding companies or any entity that is jointly controlled, directly or
indirectly, by the dual holding companies).

(2) In the case of foreign private issuers with a two-tier
board system, the term board of directors means the supervisory or
non-management board.

(3) In the case of a listed issuer that is a limited
partnership or limited liability company where such entity does not have a board
of directors or equivalent body, the term board of directors means the board of
directors of the managing general partner, managing member or equivalent body.

(4) The term control (including the terms controlling,
controlled by and under common control with) means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a person, whether through the ownership of voting securities, by
contract, or otherwise.

(5) The term dual holding companies means two foreign private
issuers that:

(i) Are organized in different national
jurisdictions;

(ii) Collectively own and supervise the
management of one or more businesses which are conducted as a single economic
enterprise; and

(iii) Do not conduct any business other
than collectively owning and supervising such businesses and activities
reasonably incidental thereto.

(6) The term executive officer has the meaning set forth in §
240.3b -7.

(7) The term foreign private issuer has the meaning set forth
in § 240.3b -4(c).

(8) The term indirect acceptance by a member of an audit
committee of any consulting, advisory or other compensatory fee includes
acceptance of such a fee by a spouse, a minor child or stepchild or a child or
stepchild sharing a home with the member or by an entity in which such member is
a partner, member, an officer such as a managing director occupying a comparable
position or executive officer, or occupies a similar position (except limited
partners, non-

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- 53 -

managing members and those occupying similar positions who, in
each case, have no active role in providing services to the entity) and which
provides accounting, consulting, legal, investment banking or financial advisory
services to the issuer or any subsidiary of the issuer.

(9) The terms listed and listing refer to securities listed on
a national securities exchange or listed in an automated inter-dealer quotation
system of a national securities association or to issuers of such
securities.

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- 54 -

EXHIBIT I-B - FINANCIAL LITERACY REQUIREMENTS

MI 52-110

Section 3.1(4) states that each audit committee member must be
financially literate.

Section 1.5 defines the meaning of financial literacy as
follows:

For the purposes of this Instrument, an individual is
financially literate if he or she has the ability to read and understand a set
of financial statements that present a breadth and level of complexity of
accounting issues that are generally comparable to the breadth and complexity of
the issues that can reasonably be expected to be raised by the issuer's
financial statements.

AMEX Section 121B(a(ii))

Each issuer must have an Audit Committee of at least three
members, each of whom:

is able to read and understand fundamental financial
statements, including a company's balance sheet, income statement, and cash flow
statement. Additionally, the Company must certify that it has, and will continue
to have, at least one member of the audit committee who is financially
sophisticated, in that he or she has past employment experience in finance or
accounting, requisite professional certification in accounting, or any other
comparable experience or background which results in the individual's financial
sophistication, including but not limited to being or having been a chief
executive officer, chief financial officer, other senior officer with financial
oversight responsibilities. A director who qualifies as an audit committee
financial expert under Item 401(h) of Regulation S-K, Item 401(e) of Regulation
S-B is presumed to qualify as financially sophisticated.

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- 55 -

EXHIBIT I-C - FINANCIAL EXPERT

For purposes of this Item, an audit committee financial expert
means a person who has the following attributes:

i. An understanding of generally
accepted accounting principles and financial statements;

ii. The ability to assess the general
application of such principles in connection with the accounting for estimates,
accruals and reserves;

iii. Experience preparing, auditing,
analyzing or evaluating financial statements that present a breadth and level of
complexity of accounting issues that are generally comparable to the breadth and
complexity of issues that can reasonably be expected to be raised by the small
business issuer's financial statements, or experience actively supervising one
or more persons engaged in such activities;

iv. An understanding of internal
control over financial reporting; and

v. An understanding of audit committee
functions.

A person shall have acquired such attributes through:

i. Education and experience as a
principal financial officer, principal accounting officer, controller, public
accountant or auditor or experience in one or more positions that involve the
performance of similar functions;

ii. Experience actively supervising a
principal financial officer, principal accounting officer, controller, public
accountant, auditor or person performing similar functions;

iii. Experience overseeing or assessing
the performance of companies or public accountants with respect to the
preparation, auditing or evaluation of financial statements; or

iv. Other relevant experience.

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- 56 -

C2

COMPENSATION COMMITTEE CHARTER

|1. | Purpose
|-- | -------

The purposes and responsibilities of the Compensation Committee
(the Comp Committee) shall be to assist the Board of Directors in carrying out
its responsibilities relating to executive and director compensation. In
furtherance of this purpose, the Comp Committee shall have the following duties,
responsibilities and authority:

(a) To recommend to the Board of
Directors the form and amount of compensation to be paid by the Company to the
directors, including compensation to be paid in consideration of a director
acting on a committee of the Board of Directors. The Comp Committee will review
the compensation of the Companys directors at least annually and from time to
time as deemed appropriate.

(b) To annually review and approve
corporate goals and objectives relating to the compensation of the Companys
executive officers, including the CEO, CFO and other Senior Officers
(collectively, the Officers) if applicable. The Comp Committee will evaluate
the performance of the Officers in light of those goals and review and recommend
to the Board the Officers annual compensation and incentive or equity plan
participation levels and bases of participation. The CEO must not be present
during voting or deliberations of the Comp Committee regarding the compensation
of the CEO. Recommendations of compensation will include salary, bonus, and
other incentive compensation. In evaluating the long-term incentive component of
Officers compensation, the Comp Committee will consider the Companys
performance and relative shareholder return, the values of similar incentive
awards to Officers at comparable companies and the awards given to the Officers
in past years.

(c) To review and recommend to the
Board on an annual basis the evaluation process and compensation structure for
the Companys other Employees.

(d) Based upon input and
recommendations from the Officers, to review the Companys incentive
compensation plans and recommend changes in such plans to the Board of Directors
as needed and to review and submit to the Board of Directors recommendations
concerning new incentive compensation plans.

(e) To administer the Company's stock
option and other equity based compensation plans and determine the grants of
stock options and other equity based compensation.

(f) To prepare and publish any annual
executive compensation report in the Companys annual information form or proxy
statement.

The Comp Committee may also perform such other activities
consistent with this Charter, the Companys Bylaws and governing law as the Comp
Committee or the Board deems necessary or appropriate.

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- 57 -

|2. | Structure and Membership
|-- | ------------------------

(a) Number. The Comp Committee
will consist of three persons unless the Board should from time to time
otherwise determine.

(b) Independence. A majority of
the members of the Comp Committee will be independent as determined under the
Companys Corporate Governance Guidelines.

(c) Chair. Unless the Board
elects a Chair of the Comp Committee, the Comp Committee will elect a Chair by
majority vote.

(d) Compensation. The
compensation of the Comp Committee will be as determined by the Board.

(e) Selection and Removal.
Members of the Comp Committee will be appointed by the Board, upon the
recommendation of the Nominating and Governance Committee. The Board may remove
members from the Comp Committee, with or without cause.

(f) Term. Members of the Comp
Committee will be appointed for one-year terms. Each member will serve until a
replacement for him or her is appointed, or until he or she resigns or is
removed from the Board or the Comp Committee.

|3. | Procedures and Administration
|-- | -----------------------------

(a) Meetings. The Comp Committee
will meet as often as it deems necessary in order to perform its
responsibilities. The Comp Committee will keep minutes of its meetings and any
other records as it will deem appropriate.

(b) Subcommittees. The Comp
Committee may form and delegate authority to one or more subcommittees
(including a subcommittee consisting of one or more members), as it deems
appropriate from time to time under the circumstances.

(c) Reports to the Board. The
Comp Committee will report (orally or otherwise) regularly to the Board
following meetings of the Comp Committee and with respect to such other matters
as are relevant to the Comp Committees discharge of its responsibilities and
will report in writing on request of the Chairman of the Board.

(d) Charter. The Comp Committee
will, from time to time as it deems appropriate, review and reassess the
adequacy of this Charter and recommend any proposed changes to the Board for
approval.

(e) Independent Advisors. The
Comp Committee will have the authority to engage such independent legal and
other advisors as it deems necessary or appropriate to carry out its
responsibilities. Such independent advisors may be regular advisors to the
Company. The Comp Committee is empowered, without further action by the Board,
to

---

- 58 -

cause the company to pay compensation
to such advisors as established by the Comp Committee.

(f) Investigations. The Comp
Committee will have the authority to conduct or authorize investigations into
any matters within the scope of its responsibilities as it will deem
appropriate, including the authority to request any officer, Employee or advisor
of the Company to meet with the Comp Committee or any advisors engaged by the
Comp Committee.

(g) Annual Self-Evaluation. At
least annually, the Comp Committee will evaluate its own performance.

|4. | Additional Powers
|-- | -----------------

The Comp Committee will have such other duties as may be
delegated from time to time by the Board of Directors.

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- 59 -

C3

NOMINATING AND GOVERNANCE COMMITTEE CHARTER

|1. | Purpose
|-- | -------

The purpose of the Nominating and Governance Committee (the
N&G Committee) is to provide support for the stewardship and governance
role of the Board of Directors (the Board) by carrying out responsibilities
delegated to it by the Board from time to time, including:

(a) Identifying individuals qualified
to become Board members, consistent with criteria approved by the Board;

(b) Making recommendations on the
composition of the Board and the persons to be nominated for election as
Directors at meetings of the Shareholders;

(c) Recommending to the Board corporate
governance and ethical policies that should be applicable to the Company, and
monitoring compliance with applicable laws, regulations, and corporate
governance and ethical policies;

(d) Considering questions of
independence and possible conflicts of interest of members of the Board and
Senior Officers and making recommendation regarding such matters, including the
criteria for determining director independence;

(e) Overseeing the annual evaluation of
the Board and its other committees;

(f) Recommending Committee assignments;

(g) Managing Board and committee
succession planning; and

(h) Monitoring appropriate Shareholder
communications.

The N&G Committee will fulfil these responsibilities and
duties primarily by carrying out the activities set out in this Charter. The
N&G Committee may also perform such other activities consistent with this
Charter, the Companys Bylaws and governing law as the N&G Committee or the
Board deems necessary or appropriate.

|2. | Structure and Membership
|-- | ------------------------

(a) Number. The N&G
Committee will consist of three persons unless the Board should from time to
time otherwise determine.

(b) Independence. A majority of
the members of the N&G Committee will be independent as determined under
the Companys Corporate Governance Guidelines.

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- 60 -

(c) Chair. Unless the Board
elects a Chair of the N&G Committee, the N&G Committee will elect a
Chair by majority vote.

(d) Compensation. The
compensation of the N&G Committee will be as determined by the Board, upon
the recommendation of the Compensation Committee.

(e) Selection and Removal.
Members of the N&G Committee will be appointed by the Board, upon the
recommendation of the N&G Committee. The board may remove members of the
N&G Committee from the N&G Committee, with or without cause.

(f) Term. Members of the N&G
Committee will be appointed for one-year terms. Each member will serve until a
replacement for him or her is appointed, or until he or she resigns or is
removed from the Board or the N&G Committee.

|3. | Authority and Responsibilities
|-- | ------------------------------

The N&G Committee will discharge its responsibilities, and
will assess the information provided by the Companys management, in accordance
with its business judgment.

(a) Selection of Director
Nominees. Except where the Company is legally required by contract, bylaw or
otherwise to provide third parties with the right to nominate directors, the
N&G Committee will be responsible for recommending to the Board the nominees
for election as directors at any meeting of shareholders and the persons to be
appointed by the Board to fill any vacancies on the Board. In making its
recommendation on nominees, the N&G Committee will consider the competencies
and skills each new nominee will bring to the Board in light of the
determinations made by the Board as to (a) the criteria and principles to be
applied in the director selection process and (b) the competencies and skills of
each current director.

(b) Criteria for Selecting
Directors. The N&G Committee will recommend to the Board for its
consideration criteria and principles to guide its director selection process.
The N&G Committee will be responsible for reviewing with the Board, on an
annual basis, the requisite skills and criteria for new Board members as well as
the composition and size of the Board as a whole in order to ensure that the
Board has the requisite expertise and that its membership consists of persons
with sufficiently diverse and independent backgrounds. The N&G Committee may
adopt, and periodically review and revise as it deems appropriate, procedures
regarding director candidates proposed by the shareholders.

(c) Search Firms. The N&G
Committee will have the authority to retain and terminate any search firm to be
used to identify director nominees, including the authority to approve the
search firms fees and other retention terms. The N&G Committee is
empowered, without further action by the Board, to cause the Company to pay the
compensation of any search firm engaged by the N&G Committee.

(d) Selection of Committee
Members. The N&G Committee will be responsible for establishing and
recommending the qualifications and criteria for membership on each

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- 61 -

committee of the Board, and for
recommending to the Board the directors to be appointed to each committee of the
Board.

(e) Conflicts. The N&G
Committee will consider questions of independence and possible conflicts of
interest of members of the Board and of Senior Officers and make recommendations
regarding such matters to the Board.

(f) Corporate Governance Guidelines
and Ethics Policies. The N&G Committee will monitor legislation,
regulatory policies and industry best practices dealing with corporate
governance and ethics policies and practices and, from time to time as it deems
appropriate, review and reassess the adequacy of the Companys Corporate
Governance Guidelines and ethics policies, and recommend any proposed changes to
the Board for approval. The N&G Committee will also consider policies
relating to meetings of the Board and separate meetings of independent
directors.

(g) Evaluation of the Board. The
N&G Committee will be responsible for evaluating the Board annually and
overseeing an annual self-evaluation by individual Directors of the Boards
performance to determine whether it and its committees are functioning
effectively. The N&G Committee will determine the nature of the evaluation,
supervise the conduct of the evaluation and prepare an assessment of the Boards
performance, to be discussed with the Board.

(h) Evaluation of Committees.
The N&G Committee will review and make recommendations to the Board
concerning the types, duties, functions, size and operation of committees of the
Board; review and assess annually the adoption and adequacy of charters of all
committees of the Board and make recommendations to the Board for any
improvements to such charters as the N&G Committee deems to be necessary or
appropriate; and conduct an annual review and evaluation of the performance of
each committee (including the N&G Committee) and its members.

|4. | Procedures and Administration
|-- | -----------------------------

(a) Meetings. The N&G
Committee will meet as often as it deems necessary in order to perform its
responsibilities. The N&G Committee will keep minutes of its meetings and
any other records as it will deem appropriate.

(b) Subcommittees. The N&G
Committee may form and delegate authority to one or more subcommittees
(including a subcommittee consisting of one or more members), as it deems
appropriate from time to time under the circumstances.

(c) Reports to the Board. The
N&G Committee will report (orally or otherwise) regularly to the Board
following meetings of the N&G Committee and with respect to such other
matters as are relevant to the N&G Committees discharge of its
responsibilities and will report in writing on request of the Chairman of the
Board.

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- 62 -

(d) Charter. The N&G
Committee will, from time to time as it deems appropriate, review and reassess
the adequacy of this Charter and recommend any proposed changes to the Board for
approval.

(e) Independent Advisors. The
N&G Committee will have the authority to engage such independent legal and
other advisors as it deems necessary or appropriate to carry out its
responsibilities. Such independent advisors may be regular advisors to the
Company. The N&G Committee is empowered, without further action by the
Board, to cause the company to pay compensation to such advisors as established
by the N&G Committee.

(f) Investigations. The N&G
Committee will have the authority to conduct or authorize investigations into
any matters within the scope of its responsibilities as it deems appropriate,
including the authority to request any officer, Employee or advisor of the
Company to meet with the N&G Committee or any advisors engaged by the
N&G Committee.

(g) Annual Self-Evaluation. At
least annually, the N&G Committee will evaluate its own performance.

|5. | Additional Powers
|-- | -----------------

The N&G Committee will have such other duties as may be
delegated from time to time by the Board of Directors.

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- 63 -

D1

DIRECTOR INDEPENDENCE DEFINITIONS

To assist the Board of Directors of the Company in determining
whether a director is independent for purposes other than for the audit
committee (see Audit Committee Charter) the law requires that certain
circumstances pertain. These definitions have been prepared based upon rules
implemented or proposed by certain of the Canadian Securities Regulators, AMEX
and U.S. regulators.

The following persons will not be considered independent for
purposes other than for the Audit Committee:

| | (a) | a director who is, or at any time during the past three
      years was, an employee or executive officer of the Company, any parent or
      subsidiary of the Company or HDI (other than prior service as an interim
      Chief Executive Officer);                                                                                                                                                                                                                                                                                                   
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (b) | a director who has a Family Member, as defined below, who
      is, or at any time during the past three years was, an employee or
      executive officer of the Company, any parent or subsidiary of the Company
      or HDI (other than prior service as an interim Chief Executive
      Officer);                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (c) | a director who received, or who has a Family Member who
      received, direct compensation from the Company, any parent or subsidiary
      of the Company or HDI in excess of the lesser of US$60,000 and CDN$75,000
      during any period of 12 consecutive months within the three years
      proceeding the determination of independence, other than the
    following:                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (d) | a director who has a relationship with the Company, any
      parent or subsidiary of the Company or HDI, as a result of which the
      director may accept, directly or indirectly, any consulting, advisory or
      other compensatory fee from the Company, any parent or subsidiary of the
      Company or HDI, other than remuneration for acting as a member of the
      Board or a Board committee;                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (e) | a director who is, or has a Family Member who is, a
      partner in, or a controlling shareholder or an executive officer of, any
      organization to which the Company, any parent or subsidiary of the Company
      or HDI made, or from which the Company, any parent or subsidiary of the
      Company or HDI received, payments in the current or any of the past three
      fiscal years that exceed 5% of the recipients consolidated gross revenues
      for that year, or US$200,000, whichever is more, other than the
      following:

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- 64 -

| |     | (i)      payments arising solely
      from investments in the Companys securities; or                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     | (ii)      payments under
      non-discretionary charitable contribution matching programs;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (f) | a director who is, or has been, or has a Family Member
      who is, or has been, at any time during the past three years, an executive
      officer of another entity where at any time during the past three years
      any of the current executive officers of the Company served on the
      compensation committee of such other entity;                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (g) | a director who is or has been a partner of, or employed
      by, a current or former external auditor of the Company, unless three
      years has elapsed since the persons relationship with the auditor, or the
      audit relationship, has ended;                                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (h) | a director who has a Family Member who is or has been a
      partner of, or employed by, a current or former external auditor of the
      Company, unless three years have elapsed since the persons relationship
      with the auditor, or the audit relationship, has ended;                                                                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (i) | a director who controls the Company, or a director who is
      either (i) both a director and an employee of, or (ii) an executive
      officer, general partner or managing member of, a company that controls
      the Company or a company that is controlled by a person who also controls
      the Company;                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (j) | a director who is an executive officer of another company
      which is indebted to the Company, or to which the Company is indebted, if
      the total amount of either companys indebtedness to the other is more
      than one percent of the total consolidated assets of the company for which
      he or she serves as an executive officer; or                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (k) | a director who serves as an officer, director or trustee
      of a charitable organization, if the Companys discretionary charitable
      contributions to the organization are more than the greater of US$1
      million or 2% of that organizations total annual charitable
    receipts.                                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (l) | For the purpose hereof, control means the direct or
      indirect ability to direct or cause the direction of the management and
      policies of the Company, whether through ownership of voting securities or
      otherwise. Ownership of at least 10% of the Companys voting shares is a
      material threshold and the Board should examine the circumstances of this
      holding to determine if the shareholder is considered to control the
      Company for the purpose of these guidelines. A person who owns more than
      50% of the Companys voting shares will be considered to control the
      Company.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (m) | The Companys automatic matching of employee charitable
      contributions will not be included in the amount of the Companys
      contributions for the purpose of the test
herein.                                                                                                                                                                                                                                                                                                                                                                                                                                                    

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Family Member means a persons

(i) spouse;

(ii) parent;

(iii) children;

(iv) siblings;

(v) mother or father-in-law;

(vi) son or daughter-in-law;

(vii) brother or sister-in-law; and

(viii) anyone who resides in such
persons home (other than an Employee of the person or Family Member).

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D-2

MATTERS REQUIRING BOARD APPROVAL (NON-DELEGATION POLICY)

This Policy contains guidelines from the Board of Directors to
management of the Company regarding items which must be approved by the Board
and hence are not delegated to management without Board approval. A general
overriding consideration is that the Directors are required under law to manage,
or supervise the management of, the business and affairs of the Company.
Accordingly, even if an action might fall outside these guidelines management
should consider whether the matter, nevertheless, be referred to the Board for
consideration.

The following is a list of items which Senior Officers must
refer to the Board, or an appropriate committee thereof, for consideration.
Under these guidelines, the Threshold Amount is equal to C$1,500,000 and an
Out of Budget Transaction is a transaction that exceeds the Threshold Amount
and that is not otherwise already part of the Companys approved operating
budget.

1. The approval of annual corporate budgets.

2. The approval of all financial information and other
disclosure documents that are required by law to be approved by the Board before
they are released to the public.

3. Allotment of any securities. This includes shares, options,
warrants or other convertible or debt securities, and the payment of a
commission to any person as consideration for purchasing securities of the
Company or providing purchasers for any such securities. Securities may be
issued by Senior Officers where previously allotted by the Board (e.g. exercise
of previously allotted options and warrants upon exercise).

4. Transactions of a fundamental nature such as amalgamations,
mergers, legal partnerships and material acquisitions or dispositions.

5. Agreeing to redeem, purchase or otherwise acquire any
shares.

6. Entering into any agreement or commitment to acquire or
dispose of assets that are material to the Company including, but not limited
to, those that are an Out of Budget Transaction.

7. Entering into, or making a material modification of, any
agreement or commitment to become liable for any indebtedness, including the
granting of a guarantee or similar standby obligation, if (a) the amount of such
indebtedness is an Out of Budget Transaction or (b) any assets of the Company
are made subject to a security interest in an Out of Budget Transaction.

8. Committing to making any capital expenditure which is an Out
of Budget Transaction.

9. Entering into any contract, agreement or commitment out of
the ordinary course of business if such agreement involves a commitment of
financial resources which exceeds the Threshold Amount.

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10. Entering into any agreement with an Insider of the Company
outside of the ordinary course of business.

11. Entering into or amending any agreement with Hunter
Dickinson Inc. (HDI).

12. Terminating, suspending or significantly modifying any
material business activity or business strategy of the Company.

13. Undertaking a new business activity that requires an
allocation of resources that exceed the Threshold Amount.

14. Making any material change to a business or strategic plan
that has been approved by the Board.

15. The initiation or settlement of any legal proceeding
involving a payment that may exceed the Threshold Amount.

16. A change in independent auditor.

17. The hiring or termination of employment, or the
determination of the compensation, of any person who is a Senior Officer of the
Company.

18. Offering any material employment or consulting terms to any
individual or entity which are not customary for the Company. This determination
is to be made by reference to terms of employment or consultancy that have
generally been offered to other Employees or consultants in similar positions or
with similar status.

19. The approval of a request by an officer or Employee of the
Company to serve on the board of another entity, other than not-for-profit
entities or family businesses that in no material way compete with the Company
or do any material business with the Company.

20. Any other matter specified by the Board as requiring its
prior approval.

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