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LOAN AGREEMENT

THIS AGREEMENT dated as of the 2nd day of
June, 2004

BETWEEN:

KIRKLAND LAKE GOLD
INC., Suite 300, 570 Granville Street, Vancouver, British
Columbia, Canada

(hereinafter called the
Borrower)

OF THE FIRST PART

AND:

MIDDLEMARCH PARTNERS
LIMITED94, Mount Street London W1K 2SZ England

(hereinafter called the Lender)

OF THE SECOND PART

WHEREAS:

A.                      
The Borrower has requested that the Lender make a loan to the Borrower in the
principal amount of $2,406,250 (the Principal Sum);

B.                      
The Lender has agreed to loan funds to the Borrower on the terms and conditions
hereinafter set forth.

NOW THEREFORE THIS AGREEMENT WITNESSES THATin
consideration of the sum of $1.00 paid by each party to the other (the receipt
of which is hereby acknowledged) the parties hereto mutually covenant and agree
as follows:

1.                      
INTERPRETATION

1.1                     Definitions.
Where used herein or in any amendment hereto each of the following words and
phrases shall have the meanings set forth as follows:

Execution Copy

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| | (a) | Agreement means this Loan Agreement including
      the Schedules hereto together with any amendments hereof.                                                                                                                                                                                                                                                                                                                                                     
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (b) | Bonus Shares has that meaning ascribed to it in
      paragraph 2.1.                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (c) | Capital Lease Obligationmeans an obligation of
      the Borrower to pay rent or other amounts under a lease which is
      classified and accounted for as a capital lease on a balance sheet of the
      Borrower under generally accepted accounting principles and, for purposes
      of this Agreement, the amount of such obligations shall be its capitalized
      amount, determined in accordance with generally accepted accounting
      principles.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (d) | Closing Date means the second business day
      following the day upon which the Exchanges approval to this Agreement has
      been obtained by the Borrower.                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (e) | Converted Interest has that meaning ascribed to
      it in paragraph 2.3.                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (f) | Converted Principal has that meaning ascribed to
      it in paragraph 2.3.                                                                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (g) | Event of Default means any event set forth in
      paragraph 6.1.                                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (h) | Exchange means the Toronto Stock
  Exchange.                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (i) | Exchanges Resale Policy means the Exchanges
      policy imposing a four month restricted resale period on all Shares issued
      from treasury.                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (j) | Indebtednessmeans (without duplication), with
      respect to the Borrower or its subsidiaries at any time, whether recourse
      is to all or a portion of the assets of the Borrower and whether or not
      contingent                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | (iii)                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | (iv)                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | (v)                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | (vi)                                                                                                                                                                                                                                                                                                                                                                                                                                                                

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interest rate or currency exchange
rate risks that would be payable by the Borrower or its subsidiaries if such
agreement were terminated at such time,

| | (vii)  | the maximum amount of every obligation of the type
      referred to in subparagraphs (i) to (vi) that may be available to the
      Borrower or its subsidiaries pursuant to any agreement, whether or not the
      conditions precedent to availability under such agreement have been met,
      and
| | ------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |        |                                                                                                                                                                                                                                                                                                         
| | (viii) | every obligation of the type referred to in subparagraphs
      (i) through (vii) of another person the payment of which, in each case,
      the Borrower or its subsidiaries have guaranteed or are responsible or
      liable for, directly or indirectly, as obligor, guarantor or
    otherwise.  

| | (k) | Loan means the loan of the Principal Sum to be
      made by the Lender to the Borrower in accordance with this
    Agreement.                     
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                      
| | (l) | Maturity Date means the First Maturity Date or,
      if the Borrower so elects and the Lender does not refuse, the Second
      Maturity Date, and
| |     |                                                                                                                                                      
| |     | (i)                                                                                                                                                  
| |     |                                                                                                                                                      
| |     | (ii)                                                                                                                                                 
| |     |                                                                                                                                                      
| | (m) | Principal Sum means the sum of money, in
      Canadian dollars, set out in recital A of this Agreement.                                           
| |     |                                                                                                                                                      
| | (n) | Promissory Note means the promissory note to be
      issued to the Lender in the form attached hereto as Schedule
A.                            
| |     |                                                                                                                                                      
| | (o) | Resale Instrument means Multilateral Instrument
      45-102 Resale of Securitiesof the Canadian Securities
      Administrators.                  
| |     |                                                                                                                                                      
| | (p) | Share means a common share in the capital of the
      Borrower.                                                                                   

1.2                     Number
and Gender. Wherever the singular or the masculine are used herein the same
shall be deemed to include the plural or the feminine or the body politic or
corporate where the context or the parties so require.

1.3                     Headings.
The headings to the articles, paragraphs, subparagraphs or clauses of this
Agreement are inserted for convenience only and shall not affect the
construction hereof.

1.4                    
References. Unless otherwise stated a reference herein to a numbered or
lettered article, paragraph, subparagraph or clause refers to the article,
paragraph, subparagraph or clause bearing that number or letter in this
Agreement. A reference to this Agreement or herein means this Loan Agreement,
including the Schedules hereto, together with any amendments thereof.

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1.5                    
Currency. All dollar amounts expressed herein refer to lawful currency of
Canada.

2.                      
TERMS OF THE LOAN

2.1                    
Loan. The Lender hereby agrees to lend to the Borrower the Principal Sum
and in consideration thereof the Borrower agrees to issue to the Lender, as a
bonus, 60,156 Shares (the Bonus Shares), being that number of Shares
calculated at the rate of 50,000 Shares for each $1,000,000 of the Principal Sum
for each year of the term of the Loan.

2.2                    
Interest. Before and after the Maturity Date and before and after
judgment, the Borrower shall pay interest at a rate of 10% per year on the
amount of the Principal Sum remaining unpaid. Payments of interest shall be made
on the First Maturity Date and on the Second Maturity Date. Interest at such
rate shall accrue daily and be calculated on the basis of the actual number of
days elapsed in a year of 365 days or 366 days, as the case may be. The Borrower
shall pay interest at the aforesaid rate on all overdue interest.

2.3                    
Conversion to Equity. At any time prior to the Maturity Date, the Lender
shall have the right to convert into Shares all or any part of:

| | (a) | the Principal Sum at the rate of $4.40 per Share,
    and                                                                                                                                                                                                                         
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                   
| | (b) | the accrued but unpaid interest on such portion of the
      Principal Sum at that rate equal to the greater of $4.40 per Share or the
      minimum issue price permitted by the Exchange, which conversion of
      interest will be subject to the Exchanges prior
  approval.

The Lender may exercise the right of conversion hereby granted
by delivering notice to the Borrower in the form attached hereto as Schedule B
stipulating the amount of the Principal Sum being converted (Converted
Principal), the accrued but unpaid interest thereon and the amount of such
interest being converted (Converted Interest). Upon receipt of such
notice, the Borrower shall take all necessary action to:

| | (a) | obtain the Exchanges approval to the issue price and
      number of any Shares being issued in respect of Converted
  Interest;                                            
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                              
| | (b) | issue and deliver certificates representing the
      appropriate number of Shares to the Lender in satisfaction of the
      Converted Principal and Converted Interest; and
| |     |                                                                                                                                                                              
| | (c) | pay to the Lender the balance of accrued but unpaid
      interest, but excluding the Converted Interest, on the Converted
      Principal.                                  

2.4                     Withholding
Tax on Shares Issued and Interest Paid. All Shares issued and payments of
interest under this Agreement shall be made to the Lender after the deduction of
all applicable Canadian withholding taxes which the Borrower is required to
retain and remit to the Canadian taxation authorities. For the purposes of
determining the amount to be withheld in respect of issuances of Shares, the
Borrower shall determine the deemed value of the Shares based on an issue

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price of $4.40 per Share or, in respect of Converted Interest,
such higher issue price as is required by the Exchange.

2.5                    
Alteration of Share Capital. In the event of:

| | (a) | any subdivision, consolidation or reclassification of the
      Shares;                                                                                                                                                                                                
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                        
| | (b) | any reorganization of the share capital of the Borrower
      affecting in any manner the Shares;                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                        
| | (c) | the amalgamation of the Borrower with any other company
      or companies; or                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                        
| | (d) | the declaration of a stock dividend or other distribution
      of the assets of the Borrower to the shareholders of the Borrower, other
      than a stock dividend of up to but not in excess of 5% of the number of
      outstanding common shares of the Borrower,

then the number of Shares which may be but are not yet issued
pursuant to the exercise of the Lenders right of conversion at the time when
such event occurs shall be adjusted, if required, so that the Lender will be in
no less favourable position than if the Lender had received, prior to the date
of such event, the Shares it would otherwise be entitled to receive upon
exercise of its rights of conversion.

2.6                    
Repayment on Maturity Date. The Principal Sum shall be repaid, and
accrued but unpaid interest thereon shall be paid, by the Borrower on the
Maturity Date.

2.7                    
Repayment before Maturity Date The Borrower may repay all or any portion
of the Loan any time prior to the Maturity Date but must give the Lender notice
of its intention to do so at least 20 days before the date of such prepayment
during which time the Lender may exercise its right of conversion in accordance
with the terms hereof.

2.8                    
Repayment to be in Cash. All payments of interest and repayments of
principal, unless the Lender elects to convert the same into Shares, shall be
paid in cash by wire transfer, certified cheque, bank draft or solicitors trust
cheque.

2.9                    
Extension of Maturity Date. If the Borrower is not in default of the
terms of this Agreement it may elect to extend the Maturity Date from the First
Maturity Date to the Second Maturity Date by giving notice thereof to the
Lender, at least 20 days before the First Maturity Date. Upon receipt of the
notice from the Borrower, the Lender, in its sole and absolute discretion, may
refuse to extend the First Maturity Date by giving to the Borrower a notice of
refusal within 10 days of receipt of the notice from the Borrower. If the Lender
does not give the Borrower a notice of refusal to extend the Maturity Date, the
Borrower shall issue and deliver to the Lender prior to or on the Maturity Date,
as a bonus for the extension of the Maturity Date, that number of Shares
determined on the basis of 137 Shares per million dollars of the Principal Sum
outstanding for each day of extension (being 50,000 Shares for each $1,000,000
of the Principal Sum for each year extension) desired by the Borrower, up to a
maximum of 88,417 Shares.

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2.10                    Restrictions
on Resale. Any Shares issued pursuant to this Agreement on the Closing Date
or subsequently pursuant to the Lenders exercise of the right of conversion
will be subject to a restricted resale period under the Resale Instrument and
the Exchanges Resale Policy of four months from the Closing Date and thereafter
may be subject to notice or other requirements under the Resale Instrument and
other applicable securities legislation upon disposition. The Lender
acknowledges that legends will be placed upon the certificates representing such
Shares to the effect that the Shares are subject to such hold periods and may
not be traded until expiry thereof except as permitted under the Resale
Instrument, the Exchanges Resale Policy and any other applicable securities
legislation. The Borrower shall be under no obligation to file a prospectus or
other document qualifying the resale of the Shares or do any other act which
would have the effect of reducing or eliminating such restricted resale periods.

3.                      
REPRESENTATIONS AND WARRANTIES

3.1                     Representations.
The Borrower represents and warrants to the Lender, and acknowledges that the
Lender is relying upon such representations and warranties in entering into this
Agreement, as follows:

| | (a) | the Borrower has the capacity to enter into this
      Agreement, and the execution of this Agreement and the completion of the
      transactions contemplated hereby shall not be in violation of the articles
      or by-laws of the Borrower or any agreement to which the Borrower is a
      party;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                           
| | (b) | this Agreement and the Promissory Note have been duly
      authorized and executed by the Borrower and are enforceable against the
      Borrower in accordance with their terms;                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                           
| | (c) | the Borrower has allotted and reserved sufficient Shares
      to satisfy its obligations hereunder; and                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                           
| | (d) | the Borrower does not have any
  subsidiaries.                                                                                                                                                                                                                                                            

3.2                    
Survival. All representations and warranties made hereunder shall survive
the delivery of the Promissory Note and certificates representing the Shares to
the Lender and shall continue in full force and effect for the benefit of the
Lender.

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4.                      
CLOSING ARRANGEMENTS

4.1                    
Conditions Precedent. The Lenders obligation to advance the Principal
Sum to the Borrower shall be subject to the satisfaction of the following
conditions:

| | (a) | the approval of the Exchange and all securities
      regulatory authorities having jurisdiction to this Agreement shall have
      been obtained by the Borrower;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                   
| | (b) | the representations and warranties of the Borrower shall
      be true as of the date hereof and as of the Closing Date; and                                      
| |     |                                                                                                                                                                   
| | (c) | the Borrower shall have complied with all of its
      obligations hereunder.                                                                                     

The foregoing conditions precedent are inserted for the benefit
of the Lender and may be waived in whole or in part by the Lender at any time
prior to closing by delivering to the Borrower written notice to that
effect.

4.2                    
Time of Closing. The closing of the Loan shall take place at 10:00 a.m.
(Vancouver time) on the Closing Date.

4.3                    
Deliveries by the Lender. On the Closing Date the Lender shall deliver or
cause to be delivered to the Borrower:

| | (a) | a certified cheque, bank draft, solicitors trust cheque
      or wire transfer for the Principal Sum payable to the Borrower or the
      Borrowers direction; and
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                     
| | (b) | a duly completed Private Placement Undertaking and
      Questionnaire in the form required by the
Exchange.                                                        

4.4                     Deliveries
by the Borrower. On the Closing Date the Borrower shall deliver to the
Lender:

| | (a) | the Promissory Note, duly executed; and                                                                        
| | --- | ---------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                
| | (b) | certificate(s) evidencing the Bonus Shares duly
      registered in the name of, or as directed by, the
Lender.

5.                      
COVENANTS

5.1                    
Remittance of Withholding Taxes. The Borrower shall remit, as required by
the Canadian taxation authorities, all amounts required to be withheld from
issuances of Shares and payments of interest to the Lender. Should such
authorities refund any amount to the Borrower in respect of such amounts which
it has withheld, the Borrower shall immediately pay such refunds to the
Lender.

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5.2                    
Borrower to obtain Exchange Approval. The Borrower shall use its best
efforts to obtain any approvals from the Exchange required after the Closing
Date, including the Exchanges approval in respect of the issue price of Shares
issued in respect of Converted Interest.

6.                     
 EVENTS OF DEFAULT AND REMEDIES

6.1                     Events
of Default. Any one or more of the following events, whether or not any such
event shall be voluntary or involuntary or be effected by operation of law or
pursuant to or in compliance with any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body, shall
constitute an Event of Default:

| | (a) | if the Borrower defaults in the payment of any monies due
      hereunder as and when the same is due;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (b) | if the Borrower defaults in the observance or performance
      of any other provision hereof;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (c) | if an order is made or a resolution is passed or a
      petition is filed for the liquidation or winding-up of the
  Borrower;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (d) | if the Borrower commits an act of bankruptcy or makes a
      general assignment for the benefit of its creditors or otherwise
      acknowledges its insolvency;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (e) | if the Borrower ceases or demonstrates an intention to
      cease to carry on its business;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (f) | if a receiver or receiver-manager or receiver and manager
      is appointed for any of the Borrowers business; or                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (g) | if a default occurs under any bond, debenture, note or
      other similar instrument under which there may be issued or by which there
      may be secured or evidenced any Indebtedness or Indebtedness the payment
      of which is guaranteed by the Borrower or any of its subsidiaries, whether
      such Indebtedness or guarantee now exits, or is created after the date of
      this Agreement, which default constitutes a failure to pay any portion of
      the principal of or premium, if any, or interest on such Indebtedness when
      due and payable after the expiration of any applicable grace period
      provided in such Indebtedness on the date of such
  default.

6.2                    
Remedies Upon Default. Upon the occurrence of any Event of Default and at
any time thereafter the Lender, in its discretion, may declare this Agreement to
be in default by notice to the Borrower whereupon the Borrower shall have five
business days in which to rectify such Event of Default. At any time thereafter,
provided the Borrower shall not have remedied such Event of Default, the Lender,
in its discretion, may:

| | (a) | declare the Loan and other monies owing by the Borrower
      to the Lender to be immediately due and payable;
and
| | --- | ------------------------------------------------------------------------------------------------------------------

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| | (b) | demand payment from the Borrower and exercise any or all
      of their remedies under this Agreement.
| | --- | ------------------------------------------------------------------------------------------------------

6.3                    
Remedies Non-Exclusive. No remedy conferred on the Lender hereby is
intended to be exclusive. Each and every remedy shall be cumulative and shall be
in addition to every other remedy given hereunder or now or hereafter existing
at law or in equity or by statute or otherwise. The exercise or commencement of
exercise by the Lender of any one or more of such remedies shall not preclude
the simultaneous or later exercise by the Lender of any or all other such
remedies.

6.4                    
Waiver. The Lender may waive any breach by the Borrower of this Agreement
or of any default by the Borrower in the observance or performance of any
covenant or condition required to be observed or performed by the Borrower
hereunder. No failure or delay on the part of the Lender to exercise any right,
power or remedy given herein or by statute or at law or in equity or otherwise
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right preclude any other exercise thereof or the exercise of any other
right, power or remedy, nor shall any waiver by the Lender be deemed to be a
waiver of any subsequent similar or other event.

7.                     
 MISCELLANEOUS

7.1                    
Notices. Any notice required or permitted to be given under this
Agreement shall be in writing and may be given by delivery, mail or telecopier
to the following addresses:

| | Borrower: | Kirkland Lake Gold Inc.           
| | --------- | ----------------------------------
| |           | Suite 300                         
| |           | 570 Granville Street              
| |           | Vancouver, British Columbia       
| |           | V6C 3P1                           
| |           |                                   
| |           | Attention: President              
| |           | Telecopier No. (604) 681-4692     
| |           |                                   
| | Lender:   | Middlemarch Partners Limited      
| |           | 94, Mount Street                  
| |           | London W1K 2SZ                    
| |           | England                           
| |           |                                   
| |           | Attention: Cecilia Kershaw        
| |           | Telecopier No.: (44) 020-7499-3289

Any notice so given shall:

| | (a) | if delivered, be deemed to have been given at the time of
      delivery;                                                                                                                                                                                         
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                   
| | (b) | if mailed, be deemed to have been given on the 10thbusiness day after and excluding the day on which it was so mailed,
      but should there be, at the time of mailing or between the time of mailing
      and the deemed receipt of the notice, a mail
strike,

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slowdown or other labour dispute which
might affect the delivery of such notice by the mails, then such notice shall be
only effective if actually delivered; and

| | (c) | if telecopied, be deemed to have been given or made on
      the first business day following the day on which it was
  sent.
| | --- | -----------------------------------------------------------------------------------------------------------------------------

Any party may give written notice of a change of address in the
aforesaid manner, in which event such notice shall thereafter be given to such
party as above provided at such changed address.

7.2                    
Amendments. Neither this Agreement nor any provision hereof may be
amended, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against whom enforcement of the amendment, waiver,
discharge or termination is sought.

7.3                    
Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties hereto and supersedes all prior agreements and
undertakings, whether oral or written, pertaining to the subject matter
hereof.

7.4                    
Action on Business Day. If the date upon which any act or payment
hereunder is required to be done or made falls on a day which is not a business
day, then such act or payment shall be performed or made on the first business
day next following.

7.5                    
No Merger of Judgment. The taking of a judgment on any covenant contained
herein or on any covenant set forth in any other security for payment of any
indebtedness hereunder or performance of the obligations hereby secured shall
not operate as a merger of any such covenant or affect the Lenders right to
interest at the rate and times provided in this Agreement on any money owing to
the Lender under any covenant herein or therein set forth and such judgment
shall provide that interest thereon shall be calculated at the same rate and in
the same manner as herein provided until such judgment is fully paid and
satisfied.

7.6                    
Severability. If any one or more of the provisions of this Agreement
should be invalid, illegal or unenforceable in any respect in any jurisdiction,
the validity, legality or enforceability of such provision shall not in any way
be affected or impaired thereby in any other jurisdiction and the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.

7.7                    
Legal Fees. Notwithstanding anything in this Agreement to the contrary,
each party shall be responsible for the payment of its own legal fees, and the
Borrower shall be solely responsible for the payment of all fees relating to the
obtaining of all required securities regulatory approvals.

7.8                    
Successors and Assigns. This Agreement shall enure to the benefit of and
be binding upon all parties hereto and their respective heirs, personal
representatives, successors and assigns, as the case may be.

7.9                    
Governing Law. This Agreement shall be governed by and be construed in
accordance with the laws of the Province of British Columbia and the parties
hereto agree to submit

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-11-

to the exclusive jurisdiction of the courts of British Columbia
with respect to any legal proceedings arising from this Agreement.

7.10                   
Counterparts & Delivery. This Agreement may be executed in
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement. This Agreement may be
delivered by telecopier.

7.11                    Time.
Time is of the essence of this Agreement.

IN WITNESS WHEREOF the parties hereto have caused this
Agreement to be duly executed and delivered as of the day and year first written
above.

|KIRKLAND LAKE GOLD INC.                        |  | MIDDLEMARCH PARTNERS LIMITED                  
|---------------------------------------------- |  | ----------------------------------------------
|                                               |  |                                               
|Per:                                           |  | Per:                                          
|                                               |  |                                               
|                                               |  |                                               
|Signature                                      |  | Signature                                     
|                                               |  |                                               
|                                               |  |                                               
|Name                           
      Position |  | Name                           
      Position

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SCHEDULE A

PROMISSORY NOTE

FOR
VALUE RECEIVED, Kirkland Lake Gold Inc. (the Borrower) hereby promises to
pay on December !, 2004 (the Maturity Date) to Middlemarch Partners
Limited (the Lender) at 94, Mount Street London W1K 2SZ England or at such
other place as the Lender or the holder hereof may designate, from time to time,
in writing, by draft of, or certified cheque drawn on a Canadian chartered bank
or trust company authorized to carry on and carrying on business in Canada, the
sum of $2,406,250 (the Principal Sum) in lawful money of Canada, with interest
thereon at the rate of 10% per year, calculated and payable not in advance, both
before and after demand, maturity, default and judgment. Interest at such rate
shall accrue daily and be calculated on the basis of the actual number of days
elapsed in a year of 365 days or 366 days, as the case may be. The Borrower
shall pay interest at the aforesaid rate on all overdue interest.

Payment
of the Principal Sum together with accrued but unpaid interest thereon shall be
made on or before the Maturity Date, subject to extension, and may be converted
into common shares of the Borrower, all in accordance with the terms of that
Loan Agreement dated as of June 2, 2004 between the Borrower and the Lender.

The
Borrower waives presentment, demand, notice, protest, notice of protest and
notice of dishonour and all other demands and notices in connection with the
delivery, acceptance, performance, default or enforcement of this Promissory
Note.

This
Promissory Note shall be governed by and interpreted and enforced in accordance
with the laws of the Province of British Columbia and the federal laws of Canada
applicable therein.

IN
WITNESS WHEREOF the Borrower has caused its corporate seal to be affixed
hereunto duly attested to by the hands of its authorized signing officers in
that behalf at Vancouver, British Columbia this ! day of June, 2004.

| | KIRKLAND LAKE GOLD INC.                     |    
| | ------------------------------------------- | ---
| |                                             |    
| |                                             |    
| | Per:
      ________________________________ | C/S
| |                                             |    
| |                                             |    
| | Per:
      ________________________________ |    

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SCHEDULE B

NOTICE OF CONVERSION

|TO: | KIRKLAND LAKE GOLD INC.(the Borrower)
|--- | ---------------------------------------
|    | Suite 300, 570 Granville Street        
|    | Vancouver, British Columbia, V6C 3P1   

The undersigned hereby exercises its right to acquire convert
principal of $ ________________ at the rate of $4.40 per share and accrued but
unpaid interest thereon of $ ________________ (of the total accrued but unpaid
interest of $ ________________) at that rate equal to the greater of $4.40 per
share or such higher rate as may be required by the Toronto Stock Exchange into
common shares and to receive payment by cheque for the balance of the accrued
but unpaid interest of $ ________________ in accordance with the terms of that
Loan Agreement with the Borrower dated as of June 2, 2004.

The certificates for the common shares are to be issued as
follows:

NAME:(please prnt)ADDRESS:


Note:
If further certificates required, please attach (and initial) schedule giving
these particulars.

DATED this _______day of _________________________,
____________.

|                        |  |                    
|----------------------- |  | -------------------
|Signature Guaranteed    |  | Signature of Lender
|(see Instruction no. 2) |  |                    
|                        |  |                    
|                        |  | Name (please print)

Instructions

|1. | The Lender may exercise its right to convert principal
      and interest into common shares by completing this Notice of Conversion
      and delivering it to the Corporation. Certificates for such shares and a
      cheque for the remaining accrued interest, if any, will be made available
      for pick-up or mailed by registered mail forthwith after the exercise of
      such right of conversion.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                   
|2. | If this Notice of Conversion indicates that shares are to
      be issued to a person or persons other than the Lender, the signature of
      the Lender on this Notice must be guaranteed by an authorized officer of a
      chartered bank, trust company or an investment dealer who is a member of a
      recognized stock exchange or Medallion Guaranteed.                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                   
|3. | If this Notice of Conversion is signed by a trustee,
      executor, administrator, curator, guardian, attorney, officer of a
      corporation or any person acting in a judiciary or representative
      capacity, it must be accompanied by evidence of authority to sign
      satisfactory to the Borrower.                                                                                                 

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