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Execution Copy

AGENCY AGREEMENT

December 30, 2002

Kirkland Lake Gold Inc. 
  Macassa Mine 
  Kirkland Lake, Ontario 
  P2N 3J7

Dear Sirs:

The undersigned, Octagon Capital Corporation and Fahnestock
  Canada Inc. (the Agents), understand that Kirkland Lake Gold Inc.
  (the Company) proposes to issue and sell up to 2,625,000 common
  shares (individually a "Common Share" and collectively the Common Shares)
  in the capital of the Company subject to the terms and conditions set out below.

Upon and subject to the terms and conditions set forth herein,
  each of the Agents hereby agrees to act, and upon acceptance hereof, the Company
  hereby appoints the Agents, as the Companys exclusive agents to offer
  for sale by way of private placement on a best efforts basis and
  without underwriter liability, up to 2,625,000 Common Shares at a price of $1.80per Common Share for aggregate gross proceeds to the Company of $4,725,000
  (the Offering).

In consideration of the services to be rendered by the Agents
  in connection with the Offering, the Company shall pay to the Agents at Closing
  (as hereinafter defined) a cash commission equal to 8% of the gross proceeds
  realized by the Company in respect of the Offering (the Commission).
  As additional consideration for services rendered, the Company shall grant to
  the Agents Compensation Warrants (as hereinafter defined), which shall be exercisable
  to acquire that number of Warrant Shares (as hereinafter defined) that is equal
  to 15% of the number of Common Shares sold pursuant to the Offering at a price
  of $2.05 per Warrant Share for a period of 18 months following the Closing Date
  (as hereinafter defined). The obligation of the Company to pay the Commission
  and issue the Compensation Warrants to the Agents shall arise at the Closing
  Time (as hereinafter defined) and the Commission shall be fully earned by the
  Agents at that time.

The Agents may form and manage a group of Canadian investment
  dealers (the Dealers) to offer the Common Shares for sale, provided
  that each of the Dealers is duly registered in accordance with applicable Canadian
  Securities Laws and any fees paid or to be paid to the Dealers other than the
  Agents shall be for the account of and paid by the Agents. Notwithstanding the
  foregoing, in the event any of the Purchasers (as hereinafter defined) are resident
  in a jurisdiction outside of Canada, the Agents may include as a Dealer in respect
  of such sale, a registrant from such applicable jurisdiction duly registered
  in accordance with applicable securities laws as an investment dealer (or the
  equivalent thereof) in such jurisdiction.

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DEFINITIONS

In this Agreement, in addition to the terms defined above,
  the following terms shall have the following meanings:

AIFmeans the Companys First Amendment
  to Form 20-F dated December 20, 2002 for the year ended April 30, 2002 and filed
  as its current AIF, as defined in and pursuant to Rule 45-102 (as
  hereinafter defined);

Agreement means the agreement resulting
  from the acceptance by the Company of the offer made hereby, on the terms and
  conditions outlined herein, as the same may from time to time be amended, restated,
  or supplemented;

Business Day means a day which is not a
  Saturday, Sunday or statutory or civic holiday in the City of Toronto, Canada;

Canadian Securities Laws means all applicable
  securities laws in each of the Selling Jurisdictions and the respective rules
  and regulations made thereunder, together with applicable published fee schedules,
  prescribed forms, policy statements, notices, orders, blanket rulings and other
  regulatory instruments of and written interpretations of, and multilateral or
  national instruments adopted by, the Securities Regulators in such provinces,
  all as amended;

Closing means the closing on the Closing
  Date of the transaction of purchase and sale in respect of the Common Shares
  as contemplated by this Agreement and the Subscription Agreements;

Closing Datemeans December 30, 2002 or
  such other date or dates as the Agents and the Company shall agree;

Closing Time means 12:00 noon (Toronto
  time) on the Closing Date or such other time on the Closing Date as the Company
  and the Agents may agree;

Common Sharemeans a common share in the
  capital of the Company;

Companys Auditors means PricewaterhouseCoopers
  LLP, Chartered Accountants, or such other firm of chartered accountants as the
  Company may have appointed or may from time to time appoint as auditors of the
  Company;

Compensation Warrants shall have the meaning
  ascribed thereto in paragraph 12;

Kirkland Lake Propertiesmeans the Macassa,
  Wright-Hargreaves, Lake Shore, Teck-Hughes and Kirkland Lake Gold properties,
  as described in the AIF;

misrepresentation, material fact,
  material change, subsidiary, affiliate,
  associate, and distribution have the respective
  meanings ascribed thereto in the Canadian Securities Laws;

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person shall be broadly interpreted and
  shall include any individual, corporation, partnership, joint venture, association,
  trust or other legal entity;

Purchasers means the persons (which may
  include the Agents) who, as purchasers, acquire Common Shares by duly completing,
  executing and delivering Subscription Agreements and any other required documentation,
  and permitted assignees or transferees of such persons from time to time;

Selling Jurisdictions means the Provinces
  of Ontario, Alberta and British Columbia and such other provinces in Canada
  that are agreed to between the Company and the Agents;

Securities Regulators means the securities
  commissions or other securities regulatory authorities in the Selling Jurisdictions
  or the relevant Selling Jurisdiction as the context so requires;

Subscription Agreements means those subscription
  agreements in the form agreed upon by the Agents and the Company pursuant to
  which Purchasers agree to subscribe for and purchase the Common Shares herein
  contemplated, which agreements are accepted by the Company, in whole or in part,
  and shall include, for greater certainty, all schedules thereto;

subsidiary shall have the meaning ascribed
  thereto in the Canada Business Corporations Act;

Transfer Agent means Pacific Corporate
  Trust Company at its principal offices in the city of Vancouver, British Columbia
  or such other transfer agent duly appointed by the Company from time to time;

TSX-VE means the TSX Venture Exchange;

to the best of the knowledge of the Company
  means to the best of the knowledge of any of the President and Chief Executive
  Officer or the directors of the Company after due inquiry; and

Warrant Shares means the Common Shares
  issuable upon exercise of the Compensation Warrants, and each, individually,
  an Warrant Share.

TERMS AND CONDITIONS

1.           (a)
  Sale on Exempt Basis.The Company understands that the Agents shall offer
  the Common Shares for sale, on a private placement basis, on behalf
  of the Company to Purchasers resident in the Selling Jurisdictions, and those
  jurisdictions outside of Canada which are agreed to by the Company and the Agents,
  provided the sale of the Common Shares to such Purchasers is exempt from any
  prospectus, offering memorandum or registration statement filing or delivery
  requirements of applicable securities laws, and is otherwise in compliance with
  all applicable Canadian Securities Laws and all applicable securities laws of
  such other jurisdictions.

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(b)
  Filings. The Companyundertakes to file, or cause to be filed,
  all forms or undertakings required to be filed by the Company in connection
  with the issue and sale of the Common Shares so that the distribution of the
  Common Shares may lawfully occur without the necessity of filing a prospectus,
  a registration statement or an offering memorandum in Canada, or such other
  jurisdictions where the Common Shares may be lawfully sold, (but on terms that
  will permit Common Shares acquired by the Purchasers in the Selling Jurisdictions
  to be sold by such Purchasers at any time in the Selling Jurisdictions subject
  to, and in compliance with, applicable Canadian Securities Laws), and each of
  the Agents undertakes to use its commercially reasonable best efforts to cause
  Purchasers of Common Shares to complete any forms required by Canadian Securities
  Laws and by the TSX-VE. All fees payable in connection with such filings shall
  be at the expense of the Company.

(c)
  No Offering Memorandum.Neither the Company nor the Agents shall (i)
  provide to prospective Purchasers any document or other material that would
  constitute an offering memorandum or future oriented financial information within
  the meaning of Canadian Securities Laws; or (ii) engage in any form of general
  solicitation or general advertising in connection with the offer and sale of
  the Common Shares, including but not limited to, causing the sale of the Common
  Shares to be advertised in any newspaper, magazine, printed public media, printed
  media or similar medium of general and regular paid circulation, broadcast over
  radio, television or telecommunications, including electronic display, or conduct
  any seminar or meeting relating to the offer and sale of the Common Shares whose
  attendees have been invited by general solicitation or advertising.

2. Covenants.The Company hereby covenants to and with each of the Agents and the Purchasers,
  and their permitted assigns, and acknowledges that each of them is relying on
  such covenants in connection with the offering for sale and purchase of the
  Common Shares, as applicable, that the Company shall:

| | (i)   | for a period of one year after the Closing
        Date, remain a reporting issuer under Canadian Securities Laws in British
        Columbia and Alberta not in default of any requirement of such Canadian
        Securities Laws;                                                
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                      
| | (ii)  | allow the Agents and their respective
        representatives the opportunity to conduct all due diligence which the
        Agents may reasonably require to be conducted prior to the Closing Date;                                                                                
| |       |                                                                                                                                                                                                                                                                                      
| | (iii) | duly execute and deliver the Subscription
        Agreements, the Common Shares and the Compensation Warrants at the Closing
        Time, and comply with and satisfy all terms, conditions and covenants
        therein contained to be complied with or satisfied by the Company;
| |       |                                                                                                                                                                                                                                                                                      
| | (iv)  | use its reasonable best efforts to fulfil
        or cause to be fulfilled, at or prior to the Closing Date, each of the
        conditions set out in paragraph 6;                                                                                                                  
| |       |                                                                                                                                                                                                                                                                                      
| | (v)   | ensure that the Common Shares shall,
        upon issuance in accordance with their terms, be duly issued as fully
        paid and non-assessable securities in the capital of                                                                                                      

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| |        | the Company, and shall have the attributes
        corresponding in all material respects to the description thereof set
        forth in this Agreement and the Subscription Agreements;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (vi)   | ensure that the Compensation Warrants
        shall be duly and validly created, authorized and issued and shall have
        the attributes corresponding in all material respects to the description
        thereof set forth in this Agreement;                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (vii)  | ensure that at all times prior to the
        expiry thereof, sufficient Warrant Shares are allotted and reserved for
        issuance upon the exercise of the Compensation Warrants;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (viii) | ensure that the Common Shares and Warrant
        Shares to be issued in connection with the Offering are listed and posted
        for trading on the TSX-VE;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (ix)   | for a period of 120 days from the Closing
        Date, not issue or announce the issuance of any additional securities
        of the Company without the prior written consent of the Agents, which
        shall not be unreasonably withheld, except in conjunction with: (i) this
        Agreement, (ii) the grant or exercise of stock options to or by employees,
        officers or directors of, or consultants to, the Company and other similar
        issuances pursuant to the policies of the TSX-VE and other existing share
        compensation arrangements of the Company as of the date of this Agreement,
        and (iii) outstanding warrants as of the date of this Agreement; and
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (x)    | maintain the due appointment of the
        Transfer Agent.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

3.           (a)
  Material Changes During Distribution. During the period from the date
  hereof to the completion of the distribution of the Common Shares, the Company
  shall:

| | (i)  | promptly notify the Agents (and, if
        requested by the Agents, confirm such notification in writing) of any
        material change (actual, anticipated, contemplated or threatened, financial
        or otherwise) in the business, affairs, operations, assets, liabilities
        (contingent or otherwise) or capital of the Company; and                                                                                                                                                                                                                        
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (ii) | promptly, and in any event, within any
        applicable time limitation, comply with all applicable filing and other
        requirements under Canadian Securities Laws as a result of such change.
        The Company shall in good faith discuss with the Agents any fact or change
        in circumstances (actual, anticipated, contemplated or threatened, and
        financial or otherwise) which is of such a nature that there is reasonable
        doubt as to whether notice in writing need be given to the Agents pursuant
        to this paragraph 3(a).

(b)
  Press Releases.During the period from the date hereof to the completion
  of the distribution of the Common Shares, subject to applicable law, the Company
  shall obtain prior approval of the Agents as to the content and form of any
  press release, such approval not to be unreasonably withheld or delayed. In
  addition, any press release announcing or otherwise

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referring to this Offering shall include an appropriate legend
  on each page as follows: Not for distribution to U.S. news wire services
  or dissemination in the United States.

4.           (a)
  Representations and Warranties of the Company. The Company represents
  and warrants to each of the Agents and to the Purchasers, and acknowledges that
  each of them is relying upon such representations and warranties in purchasing,
  or offering for purchase on behalf of the Company, Common Shares, that:

| | (i)   | the Company has been duly continued and is validly
        existing under the laws of its jurisdiction of continuance, has all requisite
        corporate power and authority and is duly qualified to carry on its business
        as now conducted and to own its properties and assets and the Company
        has all requisite corporate power and authority to carry out its obligations
        under this Agreement, the Subscription Agreements and the Compensation
        Warrants;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
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| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (ii)  | the Company has nosubsidiaries;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (iii) | all consents, approvals, permits, authorizations
        or filings as may be required under Canadian Securities Laws necessary
        for the execution and delivery of this Agreement, the Subscription Agreements
        and the Compensation Warrants and the issuance of the Common Shares and
        the Warrant Shares and the communication of the transaction contemplated
        hereby, have been made or obtained, as applicable;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (iv)  | each of the execution and delivery of this Agreement
        and the Subscription Agreements, the performance by the Company of its
        obligations hereunder or thereunder, the issue and sale of the Common
        Shares, the creation, issuance, execution and delivery of the Compensation
        Warrants and the issuance of the Warrant Shares, and the consummation
        of the transactions contemplated in this Agreement, do not and will not
        conflict with or result in a breach or violation of any of the terms or
        provisions of, or constitute a default under, (whether after notice or
        lapse of time or both), (A) any statute, rule or regulation applicable
        to the Company including, without limitation, Canadian Securities Laws;
        (B) the constating documents, by-laws or resolutions of the Company which
        are in effect at the date hereof and at the Closing Time; (C) any mortgage,
        note, indenture, contract, agreement, instrument, lease or other document
        to which the Company is a party or by which it is bound; or (D) any judgment,
        decree or order binding the Company or the property or assets of the Company;
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (v)   | the audited consolidated financial statements of
        the Company as at and for the year ended April 30, 2002 and unaudited
        interim consolidated financial statements as at and for the six month
        period ended October 31, 2002 (collectively, the Financial Statements)
        have been prepared in accordance with generally accepted accounting principles
        in Canada consistently applied throughout the period referred to therein
        and present fairly, in all material respects, the financial position (including
        the assets and liabilities, whether absolute, contingent or                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

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| |        | otherwise) of the Company (on a consolidated basis)
        as at such dates and results of operations of the Company (on a consolidated
        basis) for the periods then ended and there has been no change in accounting
        policies or practices of the Company since April 30, 2002;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
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| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (vi)   | there has been no adverse change to the Company (actual,
        proposed or prospective, whether financial or otherwise) in the business,
        affairs, operations, assets, liabilities (contingent or otherwise) or
        capital of the Company since April 30, 2002, which has not been generally
        disclosed to the public and the business of the Company has been carried
        on in the usual and ordinary course consistent with past practice since
        April 30, 2002to the extent that such past practice is consistent
        with the current business direction of the Company;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (vii)  | all taxes (including income tax, capital tax, payroll
        taxes, employer health tax, workers compensation payments, property
        taxes, custom and land transfer taxes), duties, royalties, levies, imposts,
        assessments, deductions, charges or withholdings and all liabilities with
        respect thereto including any penalty and interest payable with respect
        thereto (collectively, Taxes) due and payable by the Company
        have been paid except for where the failure to pay such taxes would not
        constitute an adverse fact of the Company or result in an adverse change
        to the Company. All tax returns, declarations, remittances and filings
        required to be filed by the Company have been filed with all appropriate
        governmental authorities and all such returns, declarations, remittances
        and filings are complete and accurate and no fact or facts have been omitted
        therefrom which would make any of them misleading except where the failure
        to file such documents would not constitute an adverse fact of the Company
        or result in an adverse change to the Company. No examination of any tax
        return of the Company is, to the best of its knowledge, currently in progress
        and there are no issues or disputes outstanding with any governmental
        authority respecting any taxes that have been paid, or may be payable,
        by the Company, in any case, except where such examinations, issues or
        disputes would not constitute an adverse fact of the Company or result
        in an adverse change to the Company;
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (viii) | the auditors of the Company who audited the consolidated
        financial statements of the Company for the year ended April 30, 2002
        and who provided their audit report thereon are independent public accountants
        as required under applicable Canadian Securities Laws;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (ix)   | there has never been a reportable disagreement (within
        the meaning of National Policy No. 31) with the present or former auditors
        of the Company;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (x)    | as at and immediately prior to the Closing Time,
        except as set forth in Schedule A to this Agreement, no holder
        of outstanding securities of the Company (debt or equity) will be entitled
        to any pre-emptive or any similar rights to subscribe for any of the Common
        Shares or other securities of the Company and no rights, warrants or options
        to acquire, or instruments convertible into or exchangeable for, any shares
        in the capital of the Company (debt or equity) are outstanding;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

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| | (xi)   | there are no pending actions, suits, legal or governmental
        proceedings or inquiries to which the Company or any of its directors
        or officers is a party or to which its property is subject that would
        individually or in the aggregate result in any material adverse change
        in the operation, business or condition of the Company and to the best
        knowledge of the Company, no such actions, suits, proceedings or inquiries
        have been threatened against or are contemplated with respect to the Company,
        or any of its directors or officers, or its properties;                                                                                                                                                                                                                                                       
| | ------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (xii)  | the Company has conducted and is conducting its business
        in compliance with all applicable laws and regulations of each jurisdiction
        in which it carries on business (including, without limitation, all applicable
        Canadian federal, provincial, municipal and local environmental anti-pollution
        and licensing laws, regulations and other lawful requirements of any governmental
        or regulatory body, including, but not limited to relevant exploration
        and exploitation permits and concessions) and has not received a notice
        of non-compliance, or has no knowledge of, or has no reasonable grounds
        to have knowledge of, any facts that could give rise to a notice of non-compliance
        with any such laws, regulations or permits which would have a material
        adverse effect on the Company;
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (xiii) | this Agreement has been duly authorized, executed
        and delivered by the Company and constitutes a valid and binding obligation
        of the Company enforceable against the Company in accordance with its
        terms, except as enforcement thereof may be limited by bankruptcy, insolvency,
        reorganization, moratorium and other laws relating to or affecting the
        rights of creditors generally and except as limited by the application
        of equitable principles when equitable remedies are sought, and by the
        fact that rights to indemnity, contribution and waiver, and the ability
        to sever unenforceable terms, may be limited by applicable law;                                                                                                                                                                     
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (xiv)  | upon the execution and delivery thereof, each of
        the Subscription Agreements and the Compensation Warrants shall constitute
        a valid and binding obligation of the Company and each shall be enforceable
        against the Company in accordance with its terms, except as enforcement
        thereof may be limited by bankruptcy, insolvency, reorganization, moratorium
        and other laws relating to or affecting the rights of creditors generally
        and except as limited by the application of equitable principles when
        equitable remedies are sought, and by the fact that rights to indemnity,
        contribution and waiver, and the ability to sever unenforceable terms,
        may be limited by applicable law;                                                                                                              
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (xv)   | at the Closing Time, all necessary corporate action
        will have been taken by the Company to: (A) validly issue and allot the
        Common Shares as fully paid and non-assessable securities in the capital
        of the Company; (B) validly create, authorize, issue and allot the Compensation
        Warrants; and (C) allot, reserve and authorize the issuance of Warrant
        Shares, as fully paid and non-assessable securities in the capital of
        the Company, upon the due exercise of the Compensation Warrants;                                                                                                                                                                                                                                                                                                                                  

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| | (xvi)   | immediately prior to the Closing Time, the authorized
        capital of the Company consists of an unlimited number of Common Shares
        of which 19,128,027 Common Shares are issued and outstanding as fully
        paid and non-assessable;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | ------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (xvii)  | all information which has been prepared by the Company
        relating to the Company and its business, property and liabilities and
        either publicly disclosed or provided to the Agents, including all financial,
        marketing, sales and operational information provided to the Agents is,
        as of the date of such information, true and correct in all material respects,
        and no fact or facts have been omitted therefrom which would make such
        information misleading and the Company has not been notified by any regulator
        applicable to it, or to its business and properties, that any of its publicly
        disclosed information is not acceptable to such regulator that has not
        been since updated or corrected to the satisfaction of such regulator
        and publicly disseminated; 
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (xviii) | all disclosure filings required to be made by the
        Company pursuant to the Canadian Securities Laws have been made and such
        disclosure and filings were true and accurate as at the respective dates
        thereof, and the Company, has not omitted to disclose changes to any such
        information such that the information previously disclosed would as a
        result thereof now constitute a misrepresentation, and has not filed any
        confidential material change reports and the Company has not been notified
        by any regulator applicable to it, or to its business and properties,
        that any of its publicly disclosed information is not acceptable to such
        regulator that has not been since updated or corrected to the satisfaction
        of such regulator and publicly disseminated;
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (xix)   | the Company is in compliance with all laws respecting
        employment and employment practices, terms and conditions of employment,
        pay equity and wages, except where such non-compliance would not constitute
        a material adverse fact of the Company or result in a material adverse
        change to the Company, and has not and is not engaged in any unfair labour
        practice;                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (xx)    | the Company does not have any loans or other indebtedness
        outstanding which has been made to any of its shareholders, officers,
        directors or employees, past or present, or any person not dealing at
        arms length with the Company;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (xxi)   | the assets of the Company and its business and operations
        are insured against loss or damage with responsible insurers on a basis
        consistent with insurance obtained by reasonably prudent participants
        in comparable businesses, and such coverage is in full force and effect,
        and the Company has not failed to promptly give any notice or present
        any material claim thereunder;                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (xxii)  | the Transfer Agent, at its principal office in the
        City of Vancouver, British Columbia has been duly appointed as transfer
        agent and registrar in respect of the Common Shares;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

- 9 -

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| | (xxiii)  | other than the Agents there is no person acting or
        purporting to act at the request or on behalf of the Company, that is
        entitled to any brokerage or finders fee in connection with the
        transactions contemplated by this Agreement;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (xxiv)   | to the best of the knowledge of the Company, the
        Company has full and proper title, free and clear of all defects of title
        and liens, to the mineral licences, concessions and properties in connection
        with all of its properties and/or projects, including, but not limited
        to, the Kirkland Lake Properties, other than royalties payable by the
        Company as described in the AIF;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (xxv)    | the Company is in compliance in all material respects
        with each license and permit held by it and is not in violation of, or
        in default under, the applicable statutes, ordinances, rules, regulations,
        orders or decrees (including, without limitation, Environmental
        Laws" as defined below) of any governmental entities, regulatory agencies
        or bodies having asserting or claiming jurisdiction over it or over any
        part of its operations or assets;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (xxvi)   | the Company (A) is in material compliance with any
        and all applicable foreign, federal, provincial, state and local laws
        and regulations relating to the protection of human health and safety,
        the environment or hazardous or toxic substances or wastes, pollutants
        or contaminants (Environmental Laws), (B) has received all
        permits, licenses or other approvals required of them under applicable
        Environmental Laws to conduct its business (C) is in material compliance
        with all terms and conditions of any such permit, license or approval,
        (D) there have been no past, and there are no pending or threatened claims,
        complaints, notices or requests for information received by the Company
        with respect to any alleged violation of any Environmental Law; and (E)
        no conditions exist at, on or under any property now or previously owned,
        operated or leased by the Company which, with the passage of time, or
        the giving of notice or both, would give rise to liability under any Environmental
        law that, individually or in the aggregate, has or may reasonably be expected
        to have, a material adverse effect on the Company or its business;
| |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (xxvii)  | as required pursuant to Multilateral Instrument 45-102-Resale
        of Securities(Rule 45-102) the AIF is a current
        AIF as defined pursuant to Rule 45-102 in the proper form as required
        pursuant to Rule 45-102, which has been filed in at least one of the jurisdictions
        listed in Appendix B of Rule 45-102 and containing audited financial statements
        for the Companys most recently completed financial year;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (xxviii) | the Company has not made any loans to, or guaranteed
        the obligations of, any person;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (xxix)   | the Company is not aware of any agreements, arrangements
        or understandings among or between any shareholders of the Company with
        respect to the Company or the voting or disposition of Common Shares;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

- 10 -

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| | (xxx)     | all of the Companys issued and outstanding
        Common Shares and Common Shares reserved or allotted for issuance are
        listed and posted for trading on the TSX-VE;                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | --------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (xxxi)    | the Company has not, directly or indirectly, declared
        or paid any dividend or declared or made any other distributions in respect
        of its Common Shares or redeemed, purchased or otherwise acquired any
        of its Common Shares or agreed to any of the foregoing;                                                                                                                                                                                                                                                                                                                                                      
| |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (xxxii)   | no person has any right, agreement or option, present
        or future, contingent or absolute, or any right capable of becoming a
        right, agreement or option, for the purchase or acquisition from the Company
        of any of its undertaking, property or assets;                                                                                                                                                                                                                                                                                                                                                              
| |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (xxxiii)  | the Company has not committed an act of bankruptcy
        nor is it insolvent, proposed a compromise or arrangement to its creditors
        generally, had a petition for a receiving order in bankruptcy filed against
        it, made a voluntary assignment in bankruptcy, taken any proceedings with
        respect to a compromise or arrangement, taken any proceedings to have
        itself declared bankrupt, wound-up or dissolved, taken any proceedings
        to have a receiver appointed to any of its property or had any execution
        or distress become enforceable or become levied upon any of its properties;
| |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (xxxiv)   | the form of certificate representing the Common Shares
        is in proper form under the laws of the jurisdiction of the Company and
        does not conflict with the Companys constating documents and by-laws;                                                                                                                                                                                                                                                                                                                                                                                                                        
| |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (xxxv)    | the Company is the legal and beneficial owner of,
        has good and marketable title to, and possesses all of the assets material
        to its business free and clear of any encumbrances (other than leased
        equipment used in the ordinary course of business);                                                                                                                                                                                                                                                                                                                                                               
| |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (xxxvi)   | the Companys equipment is adequate and sufficient
        for the conduct of the business of the Company as presently conducted;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (xxxvii)  | to the best of the knowledge of the Company, none
        of the directors, officers or principal shareholders of the Company (or
        such shareholders respective principals) is or has ever been subject
        to any regulatory or criminal investigation or proceeding or bankruptcy
        proceeding, in Canada or elsewhere;                                                                                                                                                                                                                                                                                                  
| |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (xxxviii) | none of the principal shareholders, directors, officers,
        partners, employees of, or consultants to, the Company, or any associate
        or affiliate of any of the foregoing, had or has any material interest,
        direct or indirect, in any transaction or any proposed transaction with
        the Company except as publicly disclosed;                                                                                                                                                                                                                                                                                  

- 11 -

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| | (xxxix)   | (A) the Company does not own any real property (Real
        Property) other than, and the only premises which the Company occupies
        as tenant or otherwise (the Material Leased Premises) are
        those, as listed in Schedule B attached to this Agreement,
        which is hereby incorporated by reference. The Company occupies the Real
        Property and the Material Leased Premises and, to the best of the Companys
        knowledge, it has the exclusive right to occupy and use the Real Property
        and Material Leased Premises, and each of the leases pursuant to which
        the Material Leased Premises are occupied is in good standing and in full
        force and effect and the Company is not in default of any covenants, conditions
        or obligations contained therein; (B) the Company has not entered into
        any sublease, license or other agreement granting to any person any right
        to the possession, use, occupancy or enjoyment of the Real Property and
        the Material Leased Premises or any portion thereof other than as indicated
        in Schedule B; (C) the Real Property and the Material Leased
        Premises are, to the best of the Companys knowledge, in compliance
        with the requirements of all insurance companies who have policies covering
        the Real Property and the Material Leased Premises; and (D) all permits,
        approvals and authorizations from all insurance companies and fire rating
        organizations required to have been issued to the Company to enable the
        Real Property and the Material Leased Premises to be lawfully occupied
        and used by the Company are in full force and effect;
| | --------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (xxxx)    | the computer systems owned or leased by the Company,
        including hardware and software, are, to the best of the Companys
        knowledge, free from viruses and similar disabling devices and the Company
        has taken all necessary steps to ensure that such systems are free from
        viruses and similar disabling devices that may be used to access, modify,
        delete, damage or disable such systems;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (xxxxi)   | the Company has no reason to believe and there is
        no indication that the Companys business relationship with its principal
        customers, suppliers and project and/or joint venture partners and/or
        participants will terminate in the next twelve months;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (xxxxii)  | the Company is not a party to or bound by any agreement,
        instrument or commitment, written or oral, which restricts or limits the
        right of the Company to carry on or compete in any business or activity,
        or to solicit business from any person or in any geographical area or
        otherwise;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (xxxxiii) | the proceeds of the Offering shall be used by the
        Company for ongoing development of the Companys mines in the Kirkland
        Lake mining district of Ontario, for resource delineation, for working
        capital purposes and for no other purpose; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (xxxxiv)  | the Company is a qualifying issuer (as
        such term is defined in Rule 45-102).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

- 12 -

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(b)
  Representations, Warranties and Covenants of the Agents.Each of the
  Agents hereby represents, warrants and covenants to the Company, and acknowledges
  that the Company is relying upon such representations, warranties and covenants,
  that:

| | (i)   | in respect of the offer and sale of
        the Common Shares, the Agents will comply with all Canadian Securities
        Laws and all applicable laws of the jurisdictions outside of Canada in
        which the Agents offer the Common Shares for sale on the Companys
        behalf;                                                                                                                                                                                                                                                                                                                                                     
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (ii)  | the Agents and their respective representatives
        have not engaged in or authorized, and will not engage in or authorize,
        any form of general solicitation or general advertising in connection
        with or in respect of the Common Shares in any newspaper, magazine, printed
        media of general and regular paid circulation or any similar medium, or
        broadcast over radio or television or otherwise or conducted any seminar
        or meeting concerning the offer or sale of the Common Shares whose attendees
        have been invited by any general solicitation or general advertising;
        and
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (iii) | the Agents have not and will not solicit
        offers to purchase or sell the Common Shares so as to require the filing
        of a prospectus, registration statement or offering memorandum with respect
        thereto or the provision of a contractual right of action (as defined
        in Ontario Securities Commission Rule 14-501) under the laws of any jurisdiction
        including, without limitation, the United States of America or any state
        thereof.                                                                                                                                                           

5.           Closing
  Deliveries. The purchase and sale of the Common Shares shall be completed
  at the Closing Time at the offices of the Agent's solicitors, Cassels Brock
  & Blackwell LLP, Scotia Plaza, Suite 2100, 40 King Street West, Toronto,
  Ontario, M5H 3C2, or at such other place as the Agents and the Company may agree
  upon. At or prior to the Closing Time, the Company shall, subject to the provisions
  of Section 6 of this Agreement, duly and validly deliver to the Agents certificates
  in definitive form representing the Common Shares in the names of such Purchasers
  or as indicated in their respective Subscription Agreements, against payment
  at the direction of the Company of the subscription price therefor, in lawful
  money of Canada by certified cheque or bank draft payable at par in the City
  of Toronto. The Agents and the Company may discharge their payment obligations
  under this paragraph 5 by delivery of certified cheques or bank drafts from
  the Agents to the Company equal to the aggregate purchase price for the Common
  Shares less: (i) the Commission; and (ii) the reasonable out-of-pocket costs
  and expenses of the Agents, including the reasonable fees and disbursements
  of counsel to the Agents (to a maximum of $25,000 plus taxes and disbursements).

6.           Closing
  Conditions. Each Purchasers obligation to purchase the Common Shares
  at the

Closing Time shall be conditional upon the fulfilment at or
  before the Closing Time of the following conditions:

|(a) | the Agents shall have received a certificate, dated
        as of the Closing Date, signed by the Chief Executive Officer and the
        Vice President, Corporate Development of the Company, or such other officers
        of the Company as the Agents may agree, certifying for
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

- 13 -

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| | and on behalf of the Company,
        to the best of their knowledge, information and belief, that:
| | ---------------------------------------------------------------------------------------------------
| |                                                                                                    
| | (i)                                                                                                
| |                                                                                                    
| | (ii)                                                                                               
| |                                                                                                    
| | (iii)                                                                                              

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | the Agents shall have received at the
        Closing Time certificates dated the Closing Date, signed by appropriate
        officers of the Company addressed to the Agents and their counsel, with
        respect to the articles and by-laws of the Company, all resolutions of
        the Companys board of directors relating to this Agreement and the
        transactions contemplated hereby and thereby, the incumbency and specimen
        signatures of signing officers of the Company and such other matters as
        the Agents may request;
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|(c) | the Agents shall have received at the
        Closing Time, evidence that all requisite approvals, consents and acceptances
        of the directors, the shareholders, the appropriate regulatory authorities
        and the TSX-VE required to be made or obtained by the Company in order
        to complete the Offering have been obtained by the Company on terms acceptable
        to the Agents;                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|(d) | the Subscription Agreements, the Compensation
        Warrants and the certificates representing the Common Shares shall have
        been executed and delivered by the parties thereto in form and substance
        satisfactory to the Agents and their counsel, acting reasonably;                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|(e) | the Company shall be a "qualifying issuer"
        (as such term is defined in Rule 45-102);                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|(f) | the Common Shares and the Warrant Shares
        shall have been conditionally approved for listing and posting on the
        TSX-VE;                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|(g) | the Agents shall have received favourable
        legal opinions addressed to the Agents, the Purchasers and the Agents
        counsel, in form and substance satisfactory to the Agents counsel,
        dated the Closing Date, from O'Neill & Company, counsel for the Company
        and where appropriate, counsel in the other Selling Jurisdictions, which
        counsel in turn may                                                                                                                                                                 

- 14 -

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| | rely, as to matters of fact,
        on certificates of auditors, public officials and officers of the Company,
        with respect to the following matters:
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                               
| | (i)                                                                                                                                                           
| |                                                                                                                                                               
| | (ii)                                                                                                                                                          
| |                                                                                                                                                               
| | (iii)                                                                                                                                                         
| |                                                                                                                                                               
| | (iv)                                                                                                                                                          
| |                                                                                                                                                               
| | (v)                                                                                                                                                           
| |                                                                                                                                                               
| | (vi)                                                                                                                                                          
| |                                                                                                                                                               
| | (vii)                                                                                                                                                         
| |                                                                                                                                                               
| | (viii)                                                                                                                                                        
| |                                                                                                                                                               
| | (ix)                                                                                                                                                          

- 15 -

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|    |                                                                                                                                                                                                                 | Securities Laws and no documents are
        required to be filed (other than specified forms accompanied by requisite
        filing fees), proceedings taken or approvals, permits, consents or authorizations
        obtained under the applicable Canadian Securities Laws to permit such
        issuance and sale;                                                                                                                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | (x)                                                                                                                                                                                                             | the issuance of the Warrant Shares upon
        the due exercise of the Compensation Warrants is exempt from the prospectus
        and registration requirements of applicable Canadian Securities Laws subject
        to certain provisos and specified resale restrictions;                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | (xi)                                                                                                                                                                                                            | no other documents will be required
        to be filed, proceedings taken or approvals, permits, consents or authorizations
        obtained under the applicable Canadian Securities Laws in connection with
        the first trade of the Common Shares provided the Common Shares have been
        held for the period of four months following the Closing Date, subject
        to the usual qualifications.                                                                                                                                                        
|    |                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | (xii)                                                                                                                                                                                                           | no other documents will be required
        to be filed, proceedings taken or approvals, permits, consents or authorizations
        obtained under the applicable Canadian Securities Laws in connection with
        the first trade of the Warrant Shares, provided the Compensation Warrants
        and/or Warrant Shares have been held for a period of four months following
        the date of issuance of the Compensation Warrants, subject to the usual
        qualifications.
        (xiii) the Company is a "qualifying issuer" (as defined in Rule 45-102);
|    | (xiv)                                                                                                                                                                                                           | the Common Shares and the Warrant Shares
        have been conditionally approved for listing on the TSX-VE;                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | (xv)                                                                                                                                                                                                            | the Transfer Agent has been duly and
        properly appointed by the Company as the registrar and transfer agent
        of the Common Shares; and                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | (xvi)                                                                                                                                                                                                           | such other matters as the Agents
        legal counsel may reasonably request prior to the Closing Time;                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(h) | the Agents shall have received
        a certificate of compliance or similar certificate with respect to the
        jurisdiction in which the Company is incorporated;                                       
|    |                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(i) | the Agents shall, in their
        sole discretion, be satisfied with its due diligence review with respect
        to the business, assets, financial condition, affairs and prospects of
        the Company;
|    |                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(j) | the Agents shall have received
        certificates as to reporting issuer status from the Securities Regulators
        in the Selling Jurisdictions; and                                                     
|    |                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(k) | such other matters as the
        Agents or their counsel may reasonably require.                                                                                                                              

- 16 -

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7.           Rights
  of Termination

(a)
  Due Diligence Out.In the event that the due diligence investigations
  performed by the Agents and/or their representatives reveal any material information
  or fact not generally known to the public which might, in the Agents sole
  opinion, affect the market price of the Companys Common Shares, quality
  of the investment or marketability of the Offering, the Agents shall be entitled,
  at their sole option and in accordance with subparagraph 7(h) of this Agreement,
  to terminate their obligations under this Agreement (and the obligations of
  the Purchasers arranged by them to purchase Common Shares) by written notice
  to that effect given to the Company any time prior to the Closing Time.

(b)
  Litigation Out.If any inquiry, action, suit, investigation or proceeding,
  whether formal or informal, (including matters of regulatory transgression or
  unlawful conduct) is commenced, announced or threatened in relation to the Company
  or any of the officers or directors of the Company or any of its principal securityholders,
  the Agents shall be entitled, at their sole option and in accordance with subparagraph
  7(h) of this Agreement, to terminate their obligations under this Agreement
  (and the obligations of the Purchasers arranged by them to purchase Common Shares)
  by written notice to that effect given to the Company any time prior to the
  Closing Time.

(c)
  Disaster Out.In the event that prior to the Closing Time, there should
  develop, occur or come into effect any event of any nature, including without
  limitation, terrorism, accident, a new or change in any governmental law or
  regulation, or other condition or major financial occurrence of national or
  international consequence, which, in the sole opinion of the Agents, adversely
  affects, or may adversely affect, the financial markets generally or the business,
  operations, affairs or profitability of the Company, or on the market price
  or value of the Common Shares, the Agents shall be entitled at their sole option,
  in accordance with subparagraph 7(h) of this Agreement, to terminate their obligations
  under this Agreement (and the obligations of the Purchasers arranged by them
  to purchase Common Shares) by written notice to that effect given to the Company
  prior to the Closing Time.

(d)
  Change in Material Fact.In the event that prior to the Closing Time,
  the Agents or the Agents representatives, through their due diligence
  investigations, or otherwise discover or there should occur a material change
  or a change in any material fact or new material fact shall arise, which, in
  the sole opinion of the Agents, has or could be expected to have an adverse
  change or adverse effect on the business, affairs or profitability of the Company
  or on the market price or value of the Common Shares, the Agents shall be entitled,
  at their sole option, in accordance with subparagraph 7(h), to terminate their
  obligations under this Agreement (and the obligations of the Purchasers arranged
  by them to purchase Common Shares) by written notice to that effect given to
  the Company prior to the Closing Time.

(e)
  Market Out.In the event that prior to the Closing Time, the state of
  the Canadian, United States or international financial markets is such that,
  in the sole opinion of the Agents, the Common Shares cannot be profitably marketed,
  the Agents shall be entitled at their sole option, in accordance with subparagraph
  7(h) of this Agreement, to terminate their obligations under this Agreement
  (and the obligations of the Purchasers arranged by it to purchase Common Shares)
  by written notice to that effect given to the Company prior to the Closing Time.

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(f)
  Non-Compliance With Conditions. The Company agrees that all terms, conditions
  and covenants in this Agreement shall be construed as conditions and complied
  with so far as the same relate to acts to be performed or caused to be performed
  by the Company, that it will use its best efforts to cause such conditions to
  be complied with, and any breach or failure by the Company to comply with any
  of such conditions or in the event that any representation or warranty given
  by the Company becomes false and is not rectified as at the Closing Time, shall
  entitle the Agents, at their option, in accordance with subparagraph 7(h), to
  terminate their obligations under this Agreement (and the obligations of the
  Purchasers arranged by them to purchase Common Shares) by written notice to
  that effect given to the Company at or prior to the Closing Time. The Agents
  may waive, in whole or in part, or extend the time for compliance with, any
  terms and conditions without prejudice to its rights in respect of any other
  of such terms and conditions or any other or subsequent breach or non-compliance,
  provided that any such waiver or extension shall be binding upon the Agents
  only if the same is in writing and signed by the Agents.

(g)
  Cease Trade Order.In the event that any order to cease trading in securities
  of the Company is made or threatened by a Securities Regulator, which, in the
  sole opinion of the Agents, operates or could operate to prevent or restrict
  trading in or distribution of the Common Shares in any of the Selling Jurisdictions,
  the Agents shall be entitled, at their option, in accordance with subparagraph
  7(h) of this Agreement, to terminate their obligations under this Agreement
  (and the obligations of the Purchasers arranged by them to purchase Common Shares)
  by written notice to that effect given to the Company prior to the Closing Time.

(h)
  Exercise of Termination Rights. The rights of termination contained in
  subparagraphs 7(a), (b), (c), (d), (e), (f) and (g) may be exercised by the
  Agents and are in addition to any other rights or remedies the Agents may have
  in respect of any default, act or failure to act or non-compliance by the Company
  in respect of any of the matters contemplated by this Agreement or otherwise.
  In the event of any such termination by the Agents, there shall be no further
  liability on the part of the Agents to the Company or on the part of the Company
  to the Agents except in respect of any liability which may have arisen or may
  arise after such termination in respect of acts or omissions prior to such termination
  under paragraphs 8 and 10.

8.           Expenses.
  Whether or not the sale of the Common Shares shall be completed, the Company
  will pay all expenses and fees in connection with the Offering, including, without
  limitation, all expenses of or incidental to the issue, sale or distribution
  of the Common Shares; the fees and expenses of the Company's counsel; all costs
  incurred in connection with the preparation of documents relating to the Offering;
  and all reasonable expenses and fees incurred by the Agents, which shall include
  the reasonable fees (including G.S.T.) and disbursements of the Agents
  counsel (to a maximum of $25,000 plus taxes and disbursements). All reasonable
  fees and expenses incurred by the Agents or on its behalf shall be payable by
  the Company immediately upon receiving an invoice therefor from the Agents,
  and may be deducted from the gross proceeds payable to the Company at the Closing
  Time. Notwithstanding the foregoing, the fees and expenses of the Agents shall
  not be payable by the Company in the event that the Offering is not completed
  due to the material default by the Agents of their obligations under this Agreement.
  For greater certainty, the inability of the Agents to sell the Common Shares
  on

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behalf of the Company shall not be considered a default of
  the Agents pursuant to the terms of this Agreement.

9.           Survival
  of Representations and Warranties. All terms, warranties, representations,
  covenants and agreements herein contained or contained in any documents submitted
  pursuant to this Agreement and in connection with the transactions herein contemplated
  shall survive the purchase and sale of the Common Shares and continue in full
  force and effect for the benefit of the Agents and Purchasers and shall not
  be limited or prejudiced by any investigation made by or on behalf of the Agents
  in connection with the purchase and sale of the Common Shares.

10.           (a)
  Indemnity. The Company hereby agrees to indemnify and hold harmless
  the Agents, the syndicate of registered dealers formed by the Agents and/or
  any of their respective affiliates (collectively, the "Affiliates") and their
  respective directors, officers, employees and shareholders of the Agents and/or
  Affiliates (hereinafter collectively referred to as the "Personnel") to the
  full extent lawful, from and against any actions or claims (collectively Claims),
  including actions by shareholders, and all related damages, liabilities and
  losses, other than lost profits or remuneration or other costs of personnel,
  and including any reasonable amount paid with the consent of the Company, not
  to be unreasonably withheld, to settle a Claim, related or arising out of the
  engagement of the Agents in connection with the Offering, and will reimburse
  the Agents, Affiliates and Personnel hereunder for all expenses (other than
  remuneration or other costs of personnel, or expenses in the nature of overhead
  but including the fees of counsel to the Agents on a solicitor and client basis
  as set forth below) reasonably incurred by the Agents, Affiliates and Personnel
  in connection with investigating, preparing or defending any such Claim, whether
  or not in connection with pending or threatened litigation to which any of the
  Agents, Affiliates or Personnel is a party. The Company will not be responsible
  for any Claims or expenses associate therewith which are finally judicially
  determined to have resulted from the wilful misconduct, bad faith or gross negligence
  of any of the Agents, Affiliates or Personnel. The Company also agrees that
  neither the Agents, Affiliates, Personnel, agent of any of the Agents, Affiliates
  or Personnel, nor any person controlling the Agents, Affiliates or Personnel
  shall have any liability to the Company for or in connection with such the engagement
  of the Agents except as a result of the wilful misconduct, bad faith or gross
  negligence of the Agents, Affiliates or Personnel. This indemnity shall be in
  addition to any rights that the Agents, Affiliates or Personnel may have at
  common law or otherwise.

Promptly after receipt by the Agents, Affiliates or Personnel
  of notice of or the communication of any Claim or of any fact which reasonably
  might give rise to any Claim, the Agents, Affiliates or Personnel shall notify
  the Company in writing of such Claim or facts and the Company shall assume the
  investigation and defence or contestation thereof and shall employ counsel satisfactory
  to the Agents, acting reasonably, and neither the Agents, Affiliates nor Personnel
  shall incur any expense as regards such Claim or facts, including any investigation
  for which the Company would be liable to indemnify without the Companys
  prior written consent which shall not be unreasonably withheld. Notwithstanding
  the above, the Agents shall be entitled to employ counsel separate from counsel
  to the Company or to any other party in such action if the Agents, acting reasonably,
  determine that a conflict of interest exists which makes representation by counsel
  chose by the Company not advisable or that it is likely that such a conflict
  of interest will develop.

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The Company shall not be obliged in any event to pay, as regards
  any particular Claim or series or related Claims, the fees and disbursements
  of more than one counsel in addition to those of its own counsel.

The Agents shall use their reasonable efforts to co-operate
  fully with the Company in the investigation and defence of any Claim or potential
  Claim and to cause any other indemnified party to so cooperate.

(b)
  Right of Indemnity in Favour of Others. With respect to any party who
  may be indemnified by paragraph 10(a) above and is not a party to this Agreement,
  the Agents shall obtain and hold the rights and benefits of this paragraph 10
  in trust for and on behalf of such Indemnified Party.

11.           Advertisements.
  The Company acknowledges that the Agents shall have the right, subject always
  to clauses 1(a) and (c) of this Agreement, at its own expense, to place such
  advertisement or advertisements relating to the sale of the Common Shares contemplated
  herein as the Agents may consider desirable or appropriate and as may be permitted
  by applicable law. The Company and the Agents each agree that they will not
  make or publish any advertisement in any media whatsoever relating to, or otherwise
  publicize, the transaction provided for herein so as to result in any exemption
  from the prospectus and registration requirements of applicable securities legislation
  in any of the provinces of Canada or any other jurisdiction in which the Common
  Shares shall be offered or sold being unavailable in respect of the sale of
  the Common Shares to prospective purchasers.

12.           Compensation
  Warrants.As additionalconsideration for the Agents services
  hereunder, the Company hereby irrevocably and unconditionally agrees to issue
  to the Agents compensation warrants (the Compensation Warrants)
  for no additional consideration, being exercisable to acquire, in the aggregate,
  that number of Warrant Shares equal to 15% of the number of Common Shares sold
  pursuant to the Offering at a price of $2.05 per Warrant Share for a period
  of 18 months following the Closing Date, subject to adjustment in accordance
  with their terms. The Compensation Warrants may be exercised by the Agents at
  any time in whole, or from time to time in part, from the time granted until
  their expiry upon delivering written notice to the Company together with a certified
  cheque or bank draft representing the subscription price for the applicable
  number of Warrant Shares.

13.           Right
  of First Refusal.The Agents shall have a right of first refusal to lead
  any and all equity and/or debt financings proposed by the Company during the
  period commencing from the date hereof and ending on the date that is 30 months
  following December 9, 2002. The Company shall give the Agents written notice
  of any such financings it proposes to undertake setting forth the terms thereof.
  The Agents shall have a period of seven calendar days from the date on which
  notice is provided by the Company to the Agents within which to give written
  notice (the ROFR Notice) to the Company that they will exercise
  the right of first refusal to lead the proposed financing on terms, which are
  no less favourable. In the event that one of the Agents determines not to exercise
  their right of first refusal, the entire right of first refusal shall be exercisable
  by the other Agent by delivery of the ROFR Notice within the required time period.
  If the Agents do not give the ROFR Notice exercising their right of first refusal
  within

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such period, or advise the Company that they will not exercise
  their right of first refusal, the Company shall be entitled to pursue the financing
  on substantially the same terms set forth in the written notice to the Agents,
  provided that if such financing is not completed within a 120-day period following
  the date on which the Company gives the written notice prescribed herein to
  the Agents, the right of first refusal shall apply again in respect of such
  proposed financing.

14.           Notices.
  Unless otherwise expressly provided in this Agreement, any notice or other communication
  to be given under this Agreement (a notice) shall be in writing
  addressed as follows:

|(a) | If to the Company, to it at:                     
|--- | -------------------------------------------------
|    |                                                  
|    | Kirkland Lake Gold Inc.                          
|    | Macassa Mine                                     
|    | Kirkland Lake, Ontario                           
|    | P2N 3J7                                          
|    |                                                  
|    | Attention:            Brian
      Hinchcliffe    
|    | Telecopier:          
      (705) 568-6444       
|    |                                                  
|    | with a copy to:                                  
|    |                                                  
|    | O'Neill & Company                                
|    | Suite 1880 Royal Centre                          
|    | 1055 West Georgia Street                         
|    | Vancouver, British Columbia V6E 3P3              
|    |                                                  
|    | Attention:            Michael
      F. Provenzano
|    | Telecopier:          
      (604) 687-6650       
|    |                                                  
|(b) | If to the Agents, to:                            
|    |                                                  
|    | Octagon Capital Corporation                      
|    | 181 University Avenue, Suite 400                 
|    | Toronto, Ontario                                 
|    |                                                  
|    | Attention:            Oliver
      Meixner       
|    | Telecopier:          
      (416) 368-1982       
|    |                                                  
|    | Fahnestock Canada Inc.                           
|    | The Exchange Tower                               
|    | 130 King Street West, Suite 3690                 
|    | Toronto, Ontario M5X 1C7                         
|    |                                                  
|    | Attention:            Dennis
      Wing          
|    | Telecopier:          
      (416) 869-8650       

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| | with a copy to:                           
| | ------------------------------------------
| |                                           
| | Cassels Brock & Blackwell LLP             
| | Suite 2100, Scotia Plaza                  
| | 40 King Street West                       
| | Toronto, ON M5H 3C2                       
| |                                           
| | Attention:            John
      Vettese  
| | Telecopier:          
      (416) 350-6930

or to such other address as any of the parties may designate by notice given
  to the others.

Each notice shall be personally delivered to the addressee
  or sent by facsimile transmission to the addressee and (i) a notice which is
  personally delivered shall, if delivered on a Business Day, be deemed to be
  given and received on that day and, in any other case, be deemed to be given
  and received on the first Business Day following the day on which it is delivered;
  and (ii) a notice which is sent by facsimile transmission shall be deemed to
  be given and received on the first Business Day following the day on which it
  is sent.

15.           Time
  of the Essence.Time shall, in all respects, be of the essence hereof.

16.           Canadian
  Dollars.All references herein to dollar amounts are to lawful money of
  Canada.

17.           Headings.The headings contained herein are for convenience only and shall not affect
  the meaning or interpretation hereof.

18.           Singular
  and Plural, etc.Where the context so requires, words importing the singular
  number include the plural and vice versa, and words importing gender shall include
  the masculine, feminine and neuter genders.

19.           Entire
  Agreement.This Agreement constitutes the only agreement between the parties
  with respect to the subject matter hereof and shall supersede any and all prior
  negotiations and understandings, including, without limitation, the engagement
  letter effective as of December 9, 2002. This Agreement may be amended or modified
  in any respect by written instrument only.

20.           Severability.The invalidity or unenforceability of any particular provision of this Agreement
  shall not affect or limit the validity or enforceability of the remaining provisions
  of this Agreement.

21.           Governing
  Law.This Agreement shall be governed by and construed in accordance with
  the laws of the Province of British Columbia and the laws of Canada applicable
  therein.

22.           Successors
  and Assigns.The terms and provisions of this Agreement shall be binding
  upon and enure to the benefit of the Company, the Agents and the Purchasers
  and their

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respective executors, heirs, successors and permitted assigns;
  provided that, except as provided herein or in the Subscription Agreements,
  this Agreement shall not be assignable by any party without the written consent
  of the others.

23.           Further
  Assurances. Each of the parties hereto shall do or cause to be done all
  such acts and things and shall execute or cause to be executed all such documents,
  agreements and other instruments as may reasonably be necessary or desirable
  for the purpose of carrying out the provisions and intent of this Agreement.

24.           Effective
  Date. This Agreement is intended to and shall take effect as of the date
  first set forth above, notwithstanding its actual date of execution or delivery.

25.           Language.
  The parties hereby acknowledge that they have expressly required this Agreement
  and all notices, statements of account and other documents required or permitted
  to be given or entered into pursuant hereto to be drawn up in the English language
  only. Les parties reconnaissent avoir expressment demandées que la présente
  Convention ainsi que tont avis, tout étnt de compte et tout autre document
  a être ou pouvant etre donné ou conclu en vertu des dispositions
  des présentes, soient rédigés en langue anglaise seulement.

[INTENTIONALLY BLANK]

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26.           Counterparts.
  This Agreement may be executed in any number of counterparts, by original or
  facsimile signature, each of which so executed shall constitute an original
  and all of which when taken together shall form one and the same agreement.

If the Company is in agreement with the foregoing terms and
  conditions, please so indicate by executing a copy of this Agreement where indicated
  below and delivering the same to the Agents.

Yours very truly,

OCTAGON CAPITAL CORPORATION

Per: ______________________________
                   Authorized
  Signing Officer



FAHNESTOCK CANADA INC.

Per: ______________________________
                   Authorized
  Signing Officer



The foregoing is hereby accepted on the terms and conditions therein set forth.

DATEDas of December ______, 2002.

KIRKLAND LAKE GOLD INC.

Per: ______________________________
                   Authorized
  Signing Officer

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SCHEDULE A

DETAILS OF OUTSTANDING CONVERTIBLE SECURITIES

KIRKLAND LAKE GOLD INC.

December 23, 2002

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Number ofShares
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------
|Current issued and outstanding shares:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 19,128,027     
|Stock Options:                350,000
      @ $1.10 each expiring March 27, 2006                520,000
      @ $1.35 each expiring October 3, 2006                  60,500
      @ $1.35 each expiring February 6, 2007                160,000
      @ $1.60 each expiring April 11, 2007                  20,000
      @ $1.85 each expiring December 29, 2002*                  35,000
      @ $1.96 each expiring February 28, 2003*                  75,000
      @ $2.05 each expiring May 22, 2007                  35,000
      @ $2.45 each expiring June 7, 2003*
      *subject provisions in Services Contracts | 1,255,500      
|Share Purchase Warrants:                800,000@$1.55
      each expiring December 12, 2003             1,416,212@$1.55
      each expiring December 14, 2003                750,000@$1.60
      each expiring March 5, 2004                                                                                                                                                                                                                                                                                                                                                                                                | 2,966,212      
|Broker Warrants:                  60,000
      @ $1.30 each expiring December 12, 2003                330,000
      @ $1.30 each expiring December 14, 2003                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 390,000        
|Special Warrants:                125,000
      @ a deemed price of $2.05 each expiring June 11, 2012                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 125,000        
|Convertible Loan:                $2,500,000
      @ a deemed price of $4.00 per share maturing                June
      11, 2003 plus interest convertible at higher of market or                $4.00
      per share                                                                                                                                                                                                                                                                                                                                                                                                     | 625,000        
|Agents Compensation Option:                100,000
      @ $2.35 expiring June 21, 2004                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 100,000        
|FULLY DILUTED SHARES:               Excluding
      conversion of interest                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 24,589,739     

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SCHEDULE B

DETAILS OF OWNED AND MATERIAL LEASED PREMISES

See attached.



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