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AGENCY AGREEMENT

November 14, 2003

Kirkland Lake Gold Inc. 
  Suite 300, 570 Granville Street 
  Vancouver, British Columbia 
  V6C 3P1

Dear Sirs:

The undersigned, Fort House Inc., as lead agent, and Octagon
  Capital Corporation (collectively, the Agents), understand
  that Kirkland Lake Gold Inc. (the Company) proposes to issue
  and sell up to 1,750,000 Common Shares which qualify as flow-through
  shares for purposes of the Income Tax Act (Canada) (the Flow-Through
  Shares) in the capital of the Company on the terms and conditions
  set forth herein.

Upon and subject to the terms and conditions set forth herein,
  the Agents hereby agree 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, up to 1,750,000
  Flow-Through Shares at a price of $4.00 per Flow-Through Share for aggregate
  gross proceeds to the Company of $7,000,000.

In addition, subject to the terms hereof, the Company hereby
  grants to the Agents the option (the Agents Option),
  exercisable by the Agents in full or in part prior to the Closing Time (as hereinafter
  defined) to arrange for the purchase from the Company, up until the Closing
  Time, of up to an additional 175,000 Flow-Through Shares (the Additional
  Shares and, together with the 1,750,000 Flow-Through Shares, the Flow-Through
  Shares) at the Flow-Through Share issue price, on a best efforts basis.

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 5% 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 5% of the number of Flow-Through Shares sold pursuant to the Offering at
  a price of $3.60 per Warrant Share for a period of 24 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 Flow-Through Shares for
  sale, provided that each of the Dealers is duly registered in accordance with
  applicable Canadian Securities Laws (as hereinafter defined) and any fees paid

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or to be paid to the Dealers other than the Agents shall be
  for the account of and paid by the Agents.

DEFINITIONS

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

AIFmeans the Companys Annual Information
  Form dated November 3, 2003 for the year ended April 30, 2003 and filed as its
  current AIF, as defined in and pursuant to Rule 45-102.

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 Exploration Expense or CEE
  means an expense of the nature referred to in paragraphs (f) or (g) of the definition
  of Canadian exploration expense in subsection 66.1(6) of the Tax Act other than
  the cost of acquiring or obtaining the use of seismic data described in paragraph
  66(12.6)(b.1) of the Tax Act or any expenses for prepaid services or rent that
  do not qualify as outlays and expenses for the period as described in the definition
  "expense" in subsection 66(15) of the Tax Act.

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 Flow-Through
  Shares as contemplated by this Agreement and the Subscription Agreements.

Closing Datemeans November 14, 2003 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.

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

Debt Instrumentmeans any loan, bond, debenture,
  promissory note or other instrument evidencing indebtedness (demand or otherwise)
  for borrowed money or other liability.

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Environmental Laws shall have the meaning
  ascribed thereto in paragraph 4(a)(xxxiii).

Financial Statements shall have the meaning
  ascribed thereto in paragraph 4(a)(v).

Flow-Through Mining Expenditure means an
  expense which is a flow-through mining expenditure as defined in
  subsection 127(9) of the Tax Act.

Flow-Through Shares means flow-through
  shares as defined in subsection 66(15) of the Tax Act.

including means including without limitation.

Informationshall have the meaning ascribed
  thereto in paragraph 4(a)(xxi).

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

Material Adverse Effect has the meaning
  ascribed thereto in paragraph 4(a)(iv).

Material Agreementmeans any Debt Instrument,
  contract, commitment, agreement (written or oral), instrument, lease or other
  document to which the Company is a party and which is material to the Company.

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

Offering means the offering of up to $7,700,000
  of Flow-Through Shares pursuant to the Subscription Agreements and this Agreement.

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

Prescribed Formsmeans the forms prescribed
  from time to time under subsection 66(12.7) of the Tax Act and under the applicable
  provision of the Taxation Act(Québec) as described in paragraph
  1.1(b) hereof filed or to be filed by the Company within the prescribed times
  renouncing to the Subscriber the Resource Expenses incurred pursuant to the
  Subscription Agreement and all parts or copies of such forms required by Revenue
  Canada and under the Taxation Act (Québec) as described below
  to be delivered to the Subscriber.

Prescribed Relationship means a relationship
  between the Company and the Subscriber where the Subscriber and the Company
  are related or otherwise do not deal at arms length for purposes of the
  Tax Act.

Purchasers means the persons (which may
  include the Agents) who, as purchasers, acquire Flow-Through Shares by duly
  completing, executing and delivering Subscription Agreements

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and any other required documentation, and permitted assignees
  or transferees of such persons from time to time.

Resource Expense means an expense which
  is CEE, including a Flow-Through Mining Expenditure, which is incurred on or
  after the Closing Date and on or before the Termination Date which may be renounced
  by the Company pursuant to subsection 66(12.6) of the Tax Act with an effective
  date not later than December 31, 2003 and in respect of which, but for the renunciation,
  the Company would be entitled to a deduction from income for income tax purposes.

Rule 45-102 means Multilateral Instrument
  45-102  Resale of Securities.

Revenue Canada means the Canada Customs
  and Revenue Agency.

Selling Jurisdictions means the Provinces
  of Ontario and Alberta 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 Flow-Through 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.

Tax Actmeans the Income Tax Act
  (Canada), as amended, re-enacted or replaced from time to time.

Taxes shall have the meaning ascribed thereto
  in paragraph 4(a)(vii).

Termination Date means December 31, 2004.

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 means the Toronto Stock Exchange.

to the best of the knowledge of the Company
  means to the best of the knowledge of any of the Chief Executive Officer or
  Chief Financial Officer of the Company after due inquiry.

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

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Any reference to a word or term defined in the Tax Act shall
  include, for purposes of Québec income taxation, a reference to the equivalent
  word or term, if any, defined in the Taxation Act (Québec) as
  such act may be amended, reenacted or replaced from time to time. Any reference
  to the Tax Act or a provision thereof shall include, for purposes of Québec
  income taxation, a reference to the Taxation Act (Québec) or the
  equivalent provision thereof as such act may be amended, re-enacted or replaced
  from time to time. Any reference to a filing or similar requirement imposed
  under the Tax Act shall include, for purposes of Québec income taxation,
  a reference to the equivalent filing or similar requirement, where applicable,
  under the Taxation Act (Québec) as the Tax Act may be amended,
  re-enacted or replaced from time to time; provided that, if no filing or similar
  requirement is provided under the Taxation Act(Québec), a copy
  of any material filed under the Tax Act shall be filed with the Ministère
  de Revenue du Québec.

TERMS AND CONDITIONS

1. (a)
  Sale on Exempt
  Basis.The Company understands that the Agents shall offer the Flow-Through
  Shares for sale, on a private placement basis, on behalf of the
  Company to Purchasers resident in the Selling Jurisdictions, provided the sale
  of the Flow-Through 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.

(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 Flow-Through Shares so that the distribution of the Flow-Through Shares
  may lawfully occur without the necessity of filing a prospectus, a registration
  statement or an offering memorandum in Canada, (but on terms that will permit
  the Flow-Through 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 Flow-Through Shares to complete any forms required by Canadian
  Securities Laws and the TSX. 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 Flow-Through
  Shares, including causing the sale of the Flow-Through 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 Flow-Through 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

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covenants in connection with the offering for sale and purchase of the Flow-Through Shares, as applicable, that the Company shall:

| | (i)    | for a period of two years after the
        Closing Date, remain a reporting issuer under Canadian Securities Laws
        in British Columbia, Alberta and Ontario 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 Flow-Through 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 Flow-Through Shares
        shall, upon issuance in accordance with their terms, be duly issued as
        fully paid and non-assessable securities in the capital of 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) | use its reasonable best efforts to ensure that the Flow-Through
      Shares and Warrant Shares to be issued in connection with the Offering are
      listed and posted for trading on the TSX;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (ix)   | use its commercially reasonable best
        efforts (including, without limitation, making application to the Securities
        Regulators for all consents, orders and approvals necessary) to qualify
        the distribution of the Flow-Through Shares in the Selling Jurisdictions
        and the distribution of the Agents Warrants in Ontario, to ensure
        that the Flow-Through Shares and the Warrant Shares will not be subject
        to any statutory restricted period (subject to any control person distribution
        restriction) by the holders thereof four months following the Closing
        Date pursuant to Rule 45-102 or applicable securities laws in the Province
        of Quebec, as applicable;

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| | (x)   | incur or be deemed to incur
        Resource Expenses in an amount equal to the aggregate subscription proceeds
        paid in respect of the Flow-Through Shares, 4/7ths of which shall qualify
        as Flow-Through Mining Expenditures, on or before the Termination Date
        in accordance with the Subscription Agreement and agrees to renounce to
        each Purchaser, with an effective date no later than December 31, 2003,
        pursuant to subsection 66(12.6) of the Tax Act, and, in respect of Resource
        Expenses incurred by the Company in 2004, pursuant to subsection 66(12.66)
        of the Tax Act, Resource Expenses in an amount equal to the aggregate
        subscription price paid in respect of the Flow-Through Shares. For greater
        certainty, the Company may renounce to each Purchaser, with an effective
        date no later than December 31, 2003, either: (i) Resource Expenses deemed
        to be incurred by it in 2003 pursuant to a renunciation to the Company
        by a corporation related to it, for purposes of the Tax Act, of Resource
        Expenses incurred by that corporation in 2003 if the renunciation by that
        corporation to the Company is pursuant to subsection 66(12.6) of the Tax
        Act and has an effective date in 2003; or (ii) Resource Expenses deemed
        to be incurred by it in 2004 pursuant to a renunciation to the Company
        by a corporation related to it, for the purposes of the Tax Act, of Resource
        Expenses incurred by that corporation in 2004 if the renunciation by that
        corporation to the Company is pursuant to subsection 66(12.66) of the
        Tax Act and has an effective date in 2003;
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| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (xi)  | deliver to each Purchaser,
        within the time prescribed by the Tax Act, the relevant Prescribed Forms,
        fully completed and executed, renouncing to the Purchaser Resource Expenses
        in an amount equal to the aggregate subscription price paid in respect
        of the Flow-Through Shares with an effective date of no later than December
        31, 2003, such delivery constituting the authorization of the Company
        to the Purchaser to file such Prescribed Forms with the relevant taxation
        authorities;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (xii) | ensure that the Resource
        Expenses to be renounced by the Company to the Purchasers:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |       | (a) will
        constitute CEE on the effective date of the renunciation;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |       | (b) will
        not include expenses that are "Canadian exploration and development overhead
        expenses" (as defined in the Regulations to the Tax Act for purposes of
        paragraph 66(12.6)(b) of the Tax Act) of the Company or amounts which
        constitute specified expenses for seismic data described in paragraph
        66(12.6)(b.1) of the Tax Act or any expenses for prepaid services or rent
        that do not qualify as outlays and expenses for the period as described
        in the definition of "expense" in subsection 66(15) of the Tax Act;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |       | (c) will
        not include any amount that has previously been renounced by the Company
        to the Purchasers or to any other person;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |       | (d) would
        be deductible by the Company in computing its income for the purposes
        of Part I of the Tax Act but for the renunciation to the Purchasers; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

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| |         | (e) will
      not be subject to any reduction under subsection 66(12.73) of the Tax Act;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (xiii)  | not reduce the amount renounced to the
        Purchasers pursuant to subsection 66(12.6) of the Tax Act;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (xiv)   | refrain from entering into transactions
        or taking deductions which would otherwise reduce its cumulative CEE to
        an extent that would preclude a renunciation of Resource Expenses under
        the Subscription Agreements in an amount equal to the aggregate subscription
        proceeds paid in respect of the Flow-Through Shares;                                                                                                                                                                                                                                                                                                                                                                                                                  
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (xv)    | not be subject to the provisions of
        subsection 66(12.67) of the Tax Act in a manner which impairs its ability
        to renounce Resource Expenses to each Purchaser in an amount equal to
        the aggregate subscription price paid in respect of the Flow-Through Shares
        by each Purchaser;                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (xvi)   | if the Company receives, or becomes
        entitled to receive, any government assistance which is described in paragraph
        (a) of the definition of "excluded obligation" in subsection 6202.1(5)
        of the Regulations to the Tax Act and the receipt of or entitlement to
        receive such government assistance has or will have the effect of reducing
        the amount of CEE validly renounced to a Purchaser hereunder to less than
        the aggregate subscription price paid in respect of the Flow-Through Shares,
        the Company shall remit to such Purchaser the benefit of all amounts received
        or receivable in respect of such government assistance to the extent of
        such reduction;                           
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (xvii)  | use the proceeds of the Offering to
        finance exploration expenditures on its properties in and around Kirkland
        Lake, Ontario;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (xviii) | file with Revenue Canada the form prescribed
        by subsection 66(12.68) of the Tax Act, together with a copy of the form
        of the Subscription Agreement pursuant to which the Flow-Through Shares
        were issued in accordance with and within the time period prescribed by
        the Tax Act;                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (xix)   | if the Company fails to renounce Resource
        Expenses to a Purchaser in an amount equal to the aggregate subscription
        price paid in respect of the Flow-Through Shares with an effective date
        no later than December 31, 2003, or if the amount renounced is reduced
        pursuant to subsection 66(12.73) of the Tax Act (except as a result of
        any amendment to the Tax Act), the Company shall indemnify such Purchaser
        as to and pay in settlement thereof to the Purchaser, an amount equal
        to the amount of any tax payable under the Tax Act (and any corresponding
        provincial tax legislation) by the Purchaser as a consequence of such
        failure to renounce or such reduction, as the case may be;
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (xx)    | keep proper books, records and accounts
        of all Resource Expenses and all transactions affecting the amount of
        Resource Expenses to be renounced to Purchasers;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

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| | (xxi)  | for a period of 180 days from the Closing Date, not
        issue or announce the issuance of any additional equity securities or
        securities convertible into equity securities of the Company without the
        prior written consent of the Agents, which consent 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 and other existing share compensation arrangements
        of the Company as of the date of this Agreement, and (iii) warrants, options,
        convertible loans and other similar securities outstanding as of the date
        of this Agreement; and
| | ------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (xxii) | 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 Closing, 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
  Closing, 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 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, Flow-Through 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
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

- 9 -

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| |       | carry out its obligations under this Agreement, the
        Subscription Agreements and the Compensation Warrants;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (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 Flow-Through 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 Flow-Through
        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 Debt
        Instrument, Material Agreement, mortgage, note, indenture, contract, agreement,
        instrument, lease or other document to which the Company is a party or
        by which it is bound that would have a material adverse change in the
        operations, business or condition (financial or otherwise) of the Company,
        (a Material Adverse Effect); 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, 2003 and unaudited
        interim consolidated financial statements as at and for the three month
        period ended July 31, 2003 (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 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, 2003;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (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, 2003, which has not been generally
        disclosed to the public and the business of                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

- 10 -

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| |        | the Company has been carried on in the usual and
        ordinary course consistent with past practice since April 30, 2003to 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 have a Material Adverse Effect. 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, 2003
        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;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (xi)   | there is not, in the constating documents, articles
        or in any Debt Instrument, Material Agreement, agreement, mortgage, note,
        debenture, indenture or other instrument or document to which the Company
        is a party, any restriction upon or impediment to, the declaration or
        payment of dividends by the directors of the Company or the payment of
        dividends by the company to the holders of its Common Shares;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (xii)  | there are not any current or, to the Companys
        knowledge, pending actions, suits, legal or governmental proceedings or
        inquiries to which the Company or any of                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

- 11 -

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| |        | its directors or officers is a party or to which
        its property is subject that would individually or in the aggregate result
        in Material Adverse Effect to 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;                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (xiii) | the Company has conducted and is conducting, to the
        best of its knowledge, 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 relevant exploration and exploitation permits and concessions)
        and the Company 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;
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (xiv)  | the Company is not aware of any pending change or
        contemplated change to any applicable law or regulation or governmental
        position that would materially affect the business of the Company or the
        business or legal environment under which the Company operates;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (xv)   | 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;                                                                                                                                                                                                    
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (xvi)  | 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;                                                                                                                                             
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (xvii) | at the Closing Time, all necessary corporate action
        will have been taken by the Company to: (A) validly issue and allot the
        Flow-Through 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

- 12 -

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| |         | securities in the capital of the Company, upon the
        due exercise of the Compensation Warrants;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | ------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (xviii) | immediately prior to the Closing Time, the authorized
        capital of the Company consists of an unlimited number of Common Shares
        of which 28,758,239 Common Shares are issued and outstanding as fully
        paid and non-assessable;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (xix)   | the Company is a reporting issuer, or the equivalent
        thereof, in the provinces of Ontario, British Columbia and Alberta. The
        Company is not currently in default of any requirement of the Canadian
        Securities Laws of such jurisdictions and the Company is not included
        on a list of defaulting reporting issuers maintained by any of the Securities
        Regulators;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (xx)    | the currently issued and outstanding Common Shares
        are listed and posted for trading solely on the TSX and no order ceasing
        or suspending trading in any securities of the Company or the trading
        of any of the Companys issued securities is currently outstanding
        and no proceedings for such purpose are, to the knowledge of the company,
        pending or threatened;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (xxi)   | 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 (collectively, the 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;
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (xxii)  | all disclosure filings and fees required to be made
        and paid by the Company pursuant to the Canadian Securities Laws have
        been made and paid 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;                                                                                                                                                                                                                                                                                                                                                  
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (xxiii) | the Company is, to the best of its knowledge, 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;                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (xxiv)  | 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;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

- 13 -

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| | (xxv)    | 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;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | -------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (xxvi)   | 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 Flow-Through Shares;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (xxvii)  | other than the Agents, there are no
        persons acting or purporting to act at the request or on behalf of the
        Company, that are entitled to any brokerage or finders fee in connection
        with the transactions contemplated by this Agreement;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (xxviii) | neither the Company, nor, to the knowledge
        of the Company, any other person, is in material default in the observance
        or performance of any term or obligation to be performed by it under any
        Material Agreement and no event has occurred which with notice or lapse
        of time or both would constitute such a default;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (xxix)   | the minute books and records of the
        Company which the Company has made available to the Agents and its counsel,
        Cassels Brock & Blackwell LLP, in connection with their due diligence
        investigation of the Company for the periods from their respective dates
        to the date of examination thereof, are all of the minute books and substantially
        all the material records of the Company and contain copies of all material
        proceedings (or certified copies thereof) of the shareholders, the boards
        of directors and all committees of the boards of directors of the Company
        to the date of review of such corporate records and minute books. There
        have been no other material meetings, resolutions or proceedings of the
        shareholders, boards of directors or any committees of the boards of directors
        of the Company to the date of review of such corporate records and minute
        books not reflected in such minute books and other records;                                                                                                                                                                                                                                                                                                                                                            
| |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (xxx)    | the Company holds either freehold title,
        mining leases, mining claims or other conventional property, proprietary
        or contractual interests or rights, recognized in the jurisdiction in
        which the Kirkland Lake Properties are located in respect of the ore bodies
        and minerals located in such properties in which the Company has an interest
        as described in the Information under, to the best of its knowledge, valid,
        subsisting and enforceable title documents or other recognized and enforceable
        agreements or instruments, which are currently sufficient to permit the
        Company to explore the minerals relating thereto, all such property, leases
        or claims and all property, leases or claims in which the Company has
        any interest or right have been to the best of its knowledge, validly
        located and recorded in accordance with all applicable laws and are valid
        and subsisting, the Company currently has all necessary surface rights,
        access rights and other necessary rights and interest relating to the
        properties in which the Company has an interest as described in the Information
        granting the Company the right and ability to explore for minerals, ore
        and metals for development purposes as are appropriate in view of the
        rights

- 14 -

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| |          | and interests therein of the Company, with only such
        exceptions as do not materially interfere with the use made by the Company
        of the rights or interests so held and each of the proprietary interests
        or rights and each of the documents, agreements and instruments and obligations
        relating thereto referred to above are currently in good standing in the
        name of the Company;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | -------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (xxxi)   | 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, the Kirkland Lake
        Properties and no other property rights are necessary for the conduct
        of the business of the Company as currently conducted or currently contemplated
        to be conducted for the next two years, the Company knows of no claim
        or basis for any claim that might or could adversely affect the right
        thereof to use, transfer or otherwise exploit such property rights, except
        as disclosed in the Information, the Company has no responsibility or
        obligation to pay any commission, royalty, licence fee or similar payment
        to any person with respect to the property rights thereof;                                                                                                                                                                                                                                                                                                                                                                                                          
| |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (xxxii)  | to the best of the Companys knowledge, all
        mining operations on the properties of the Company have been conducted
        in all respects in accordance with good mining and engineering practices
        and all applicable workers compensation and health and safety and
        workplace laws, regulations and policies have been duly complied with,
        except where the failure to conduct operations in such a manner would
        not have a Material Adverse Effect on the Company;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (xxxiii) | the Company is, to the best of its knowledge, 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;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (xxxiv)  | the Company (A) is, to the best of its knowledge,
        in material compliance with any and all applicable foreign, federal, provincial,
        state and local laws, by-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 to the best of its knowledge, received all permits, licenses consents,
        certificates, registrations and other authorizations under applicable
        Environmental Laws (the Environmental Permits)
        necessary for the operation of its projects and properties at the present
        time and each Environmental Permit is valid, subsisting and in good standing
        and the holder of the Environmental Permits is not in default or breach
        of the terms thereof and no proceeding is pending or threatened to revoke
        or limit any Environmental Permit other than any breach or default which
        would not either individually or in the aggregate have a Material Adverse
        Effect on the Company; (C) is, to the best of its knowledge, in material
        compliance with all terms and conditions of any such permit, license or
        approval, (D) confirms that there have been no past, and, to the





- 15 -

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| |           | best of its knowledge, 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 Laws;
        (E) confirms that, to the best of its knowledge, 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 Laws that,
        individually or in the aggregate, has or may reasonably be expected to
        have, a Material Adverse Effect on the Company or its business; (F) to
        the best of its knowledge, has not used, except in material compliance
        with all Environmental Laws or except to the extent that the consequences
        would not have a Material Adverse Effect on the Company, any property
        or facility which it owns or leases or previously owned or leased, to
        generate, manufacture, process, distribute, use, treat, store, dispose
        of, transport or handle any pollutants, contaminants, chemicals or industrial,
        toxic or hazardous wastes or substances ; and (G) except for the Ministry
        of Environment Provincial Officers Order dated August 8, 2003, there
        are no orders or directions relating to environmental matters requiring
        any material work, repairs, construction or capital expenditures to be
        made with respect to any of the assets of the Company, nor has the Company
        received notice of any of the same;
| | --------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (xxxv)    | except as ordinarily or customarily required by applicable
        permits, the Company has not received any notice that it is potentially
        responsible for any domestic or foreign federal, state, provincial, municipal,
        or local clean-up site or corrective action under any Environmental Laws
        that will subject the Company to material expense except for notices of
        incidents for which legal counsel to the Company is of the opinion that
        the Company will not incur any material liability. To the best of the
        Companys knowledge, the Company has not received any request for
        information in connection with any domestic or foreign federal, state,
        provincial, municipal or local inquiries as to disposal sites;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (xxxvi)   | to the best of the Companys knowledge, there
        are no environmental audits, evaluations, assessments, studies or tests
        relating to the Company except for ongoing assessments conducted in the
        ordinary course of business;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (xxxvii)  | as required pursuant to 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 contains
        audited financial statements for the Companys most recently completed
        financial year;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (xxxviii) | the Company has not made any loans to, or guaranteed
        the obligations of, any person;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (xxxix)   | 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;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

- 16 -

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| | (xxxx)     | 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;                                                                                                                                                                                                                                                                                                                                                      
| | ---------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (xxxxi)    | 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;                                                                                                                                                                                                                                                                                                                                                              
| |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (xxxxii)   | 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;
| |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (xxxxiii)  | 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 articles;                                                                                                                                                                                                                                                                                                                                                                                                                       
| |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (xxxxiv)   | 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);                                                                                                                                                                                                                                                                                                                                                               
| |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (xxxxv)    | the Companys equipment is adequate and sufficient
        for the conduct of the business of the Company as presently conducted;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (xxxxvi)   | 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;                                                                                                                                                                                                                                                                                                  
| |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (xxxxvii)  | 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;                                                                                                                                                                                                                                                                                  
| |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (xxxxviii) | (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                                                                                                                                                                                                    

- 17 -

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| |            | 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 and all taxes required to be paid with respect thereto have been
        paid; (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;
| | ---------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (xxxxix)   | 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;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (xxxxx)    | 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 24 months;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (xxxxxi)   | 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;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (xxxxxii)  | the proceeds of the Offering shall be used by the
        Company to finance exploration expenditures on its properties in and around
        Kirkland Lake, Ontario, and for no other purpose;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (xxxxxiii) | upon issue, the Flow-Through Shares will be "flow-through
        shares" as defined in subsection 66(15) of the Tax Act and are not and
        will not be prescribed shares within the meaning of section 6202.1 of
        the regulations to the Tax Act and the applicable provisions of the Taxation
        Act (Québec). The Company does not have and will not have prior
        to the Termination Date a Prescribed Relationship with the Purchasers
        and, if the Purchaser is a partnership, any partner or limited partner
        of the partnership;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

- 18 -

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| | (xxxxxiv)  | the Company is a "principal-business corporation"
        as defined in subsection 66(15) of the Tax Act and will continue to be
        a "principal-business corporation" until such time as all of the Resource
        Expenses required to be renounced under this Agency Agreement and the
        Subscription Agreements have been incurred and validly renounced pursuant
        to the Tax Act;                                                                                                                                                                                                                                                                                                                                            
| | ---------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (xxxxxv)   | the Company has no reason to believe that it will
        be unable to incur, on or after the Closing Date and on or before the
        Termination Date or that it will be unable to renounce to the Purchasers
        effective on or before December 31, 2003, Resource Expenses in an aggregate
        amount equal to the subscription proceeds paid in respect of the Shares
        and the Company has no reason to expect any reduction of such amount by
        virtue of subsection 66(12.73) of the Tax Act;                                                                                                                                                                                                                           
| |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (xxxxxvi)  | the Company has not entered into any agreements or
        made any covenants to any parties that would restrict the Company from
        entering into the Subscription Agreements and agreeing to incur and renounce
        Resource Expenses in accordance with this Agency Agreement and the Subscription
        Agreements nor that would require the prior renunciation to any other
        person of Resource Expenses prior to the renunciation of the aggregate
        subscription price paid in respect of the Shares in favour of the Purchasers
        and the Company has no outstanding obligations to incur and renounce Resource
        Expenses to any persons other than pursuant to the Subscription Agreements;
        and
| |            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (xxxxxvii) | the Company is a qualifying issuer (as
        such term is defined in Rule 45-102).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

(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 Flow-Through Shares, the Agents will comply with all Canadian Securities
        Laws in the selling jurisdictions in which the Agents offer the Flow-Through
        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 Flow-Through 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 Flow-Through 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 Flow-Through Shares so as to require the
        filing of a prospectus, registration statement or offering memorandum
        with respect thereto or the provision of a contractual                                                                                                                                                                                                                                                                                                                                                                                        

- 19 -

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| |  | right of action (as defined in Ontario Securities Commission Rule 14-501)
      under the laws of any jurisdiction.
| |  | -------------------------------------------------------------------------------------------------------------------

5. Closing
  Deliveries. The purchase and sale of the Flow-Through Shares shall be completed
  at the Closing Time at the offices of the Agents 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 Flow-Through 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.

6. Closing
  Conditions. Each Purchasers obligation to purchase the Flow-Through
  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 Chief Financial Officer of the Company, or such other
        officers of the Company as the Agents may agree, certifying for 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                                                                                                                                                                                                                                                                                                                                                                

- 20 -

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|    | authorities and the TSX 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 Flow-Through 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 Flow-Through Shares and the Warrant Shares shall
        have been conditionally approved for listing and posting on the TSX;                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(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 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)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

- 21 -

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| |        | qualification that the enforceability
        of rights of indemnity and contribution may be limited by applicable law;                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (vi)   | all necessary corporate action has been
        taken by the Company to authorize the issuance and sale of the Flow-Through
        Shares, and the Flow-Through Shares have been validly issued as fully
        paid and non-assessable securities in the capital of the Company;                                                                                                                                                                                                                                                                                                               
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (vii)  | the Compensation Warrants have been
        duly and validly created and issued;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (viii) | the Warrant Shares have been reserved,
        authorized and allotted for issuance to the Agents and, upon the due exercise
        of the Compensation Warrants in accordance with the provisions thereof,
        will be validly issued as fully paid and non-assessable securities in
        the capital of the Company;                                                                                                                                                                                                                                                                    
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (ix)   | the issuance and sale by the Company
        of the Flow-Through Shares to the Purchasers and the issuance by the Company
        of the Compensation Warrants to the Agents are exempt from the prospectus
        and registration requirements of applicable Canadian 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 Flow-Through Shares provided the Flow-Through 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 Flow-Through Shares and the Warrant
        Shares have been conditionally approved for listing on the TSX;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

- 22 -

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|    | (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.                                                                                                                        

7. 
    Rights of Termination

(a)      Due
  Diligence Out.If 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, adversely
  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.If 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.

- 23 -

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(d) Change
  in Material Fact. If 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.If 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.

(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, 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 if 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.If 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 Flow-Through 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. Upon any
  such termination by the Agents, there shall be no further liability on the part

- 24 -

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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 Flow-Through 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 Flow-Through 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 and disbursements of the Agents
  counsel (to a maximum of $40,000 exclusive of disbursements and GST).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 if 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 Flow-Through
  Shares on 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 Flow-Through Shares and continue
  in full force and effect for the benefit of the Agents and Purchasers for a
  period of two years after the Closing Date 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 Flow-Through Shares.

10. (a)
  Indemnity.
  The Company (the Indemnitor) hereby agrees to indemnify and hold
  the Agents, (including the syndicate of registered dealers formed by the Agents,
  and/or any of their respective affiliates) and each of the directors, officers,
  employees and shareholders of each of the Agents (hereinafter collectively referred
  to as the "Personnel") harmless from and against any and all expenses, losses
  (other than loss of profits), claims, actions, damages or liabilities, whether
  joint or several (including the aggregate amount paid in reasonable settlement
  of any actions, suits, proceedings or claims), and the reasonable fees and expenses
  of their counsel that may be incurred in advising with respect to and/or defending
  any claim that may be made against the Agents, to which the Agents and/or the
  Personnel may become subject or otherwise involved in any capacity under any
  statute or common law or otherwise insofar as such expenses, losses, claims,
  damages, liabilities or actions arise out of or are based, directly or indirectly,
  upon the performance of professional services rendered to the Indemnitor by
  the Agents and the Personnel hereunder or otherwise in connection with the matters
  referred to in this agreement to which this is attached, provided, however,
  that this indemnity shall not apply to the extent that a court of competent
  jurisdiction in a final judgment that has become non-appealable shall determine
  that:

(i)
      the Agents or the Personnel have been negligent
          or dishonest or have committed any fraudulent act in the course of such
          performance; and


---

(ii)
      the expenses, losses, claims, damages or liabilities,
          as to which indemnification is claimed, were directly caused by the
          negligence, dishonesty or fraud referred to in (i).


If for any reason (other than the occurrence of any of the
  events itemized in (i) and (ii) above), the foregoing indemnification is unavailable
  to the Agents or insufficient to hold them harmless, then the Indemnitor shall
  contribute to the amount paid or payable by the Agents as a result of such expense,
  loss, claim, damage or liability in such proportion as is appropriate to reflect
  not only the relative benefits received by the Indemnitor on the one hand and
  the Agents on the other hand but also the relative fault of the Indemnitor and
  the Agents, as well as any relevant equitable considerations; provided that
  the Indemnitor shall, in any event, contribute to the amount paid or payable
  by the Agents as a result of such expense, loss, claim, damage or liability,
  any excess of such amount over the amount of the fees received by the Agents
  hereunder pursuant to this Agency Agreement.

Each Indemnitor agrees that in case any legal proceeding shall
  be brought against the Indemnitor and/or any of the Agents by any governmental
  commission or regulatory authority or any stock exchange or other entity having
  regulatory authority, either domestic or foreign, shall investigate the Indemnitor
  and/or any of the Agents and any Personnel of the Agents shall be required to
  testify in connection therewith or shall be required to respond to procedures
  designed to discover information regarding, in connection with, or by reason
  of the performance of professional services rendered to the Indemnitor by the
  Agents, the Agents shall have the right to employ their own counsel in connection
  therewith, and the reasonable fees and expenses of such counsel as well as the
  reasonable costs (including an amount to reimburse the Agents for time spent
  by their Personnel in connection therewith) and out-of-pocket expenses incurred
  by their Personnel in connection therewith shall be paid by the Indemnitor as
  they occur. Provided that, notwithstanding the foregoing, the Agents and the
  Personnel shall utilize the Indemnitor's counsel unless in the opinion of any
  of the Agents, based on advice from such Agents counsel, there is an actual,
  potential or apparent conflict between the interests of such parties and the
  interests of the Indemnitor such that joint representation would be inappropriate.

Promptly after receipt of notice of the commencement of any
  legal proceeding against the Agents or any of the Personnel or after receipt
  of notice of the commencement of any investigation, which is based, directly
  or indirectly, upon any matter in respect of which indemnification may be sought
  from the Indemnitor, the Agents will notify the Indemnitor in writing of the
  commencement thereof and, throughout the course thereof, will provide copies
  of all relevant documentation to the Indemnitor, will keep the Indemnitor advised
  of the progress thereof and will discuss with the Indemnitor all significant
  actions proposed.

The indemnity and contribution obligations of the Indemnitor
  shall be in addition to any liability which the Indemnitor may otherwise have,
  shall extend upon the same terms and conditions to those of the Agents and the
  Personnel who are not signatories hereto and shall be binding upon and enure
  to the benefit of any successors, assigns, heirs and personal representatives
  of the Indemnitor, the Agents and any of the Personnel of the Agents. The foregoing
  provisions shall

- 26 -

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survive the completion of professional services rendered under
  this Agency Agreement or any termination of the authorization given by this
  Agency Agreement.

(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 Flow-Through 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 Flow-Through Shares shall be offered or sold
  being unavailable in respect of the sale of the Flow-Through 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 5% of the number of Flow-Through Shares
  sold pursuant to the Offering at a price of $3.60 per Warrant Share for a period
  of 24 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 Company hereby confirms that the Agents have a right
  of first refusal to lead any and all equity financings proposed by the Company
  for a period of 18 months commencing on December 30, 2002 and ending on June
  30, 2004, pursuant to an agency agreement between the Company and the Agents
  dated December 30, 2002,

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                     

- 27 -

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|    | 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:              
|    |                                    
|    | Fort House Inc.                    
|    | The Exchange Tower                 
|    | 130 King Street West, Suite 3690   
|    | Toronto, Ontario M5X 1C7           
|    |                                    
|    | Attention: Dennis Wing             
|    | Telecopier: (416) 869-8650         
|    |                                    
|    | Octagon Capital Corporation        
|    | 181 University Avenue, Suite 400   
|    | Toronto, Ontario                   
|    |                                    
|    | Attention: Dennis Chiu             
|    | Telecopier: (416) 368-1982         
|    |                                    
|    | with a copy to:                    
|    |                                    
|    | Cassels Brock & Blackwell LLP      
|    | Suite 2100, Scotia Plaza           
|    | 40 King Street West                
|    | Toronto, ON M5H 3C2                
|    |                                    
|    | Attention: Cam Mingay              
|    | Telecopier: (416) 640-3163         

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

- 28 -

---

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 October 21, 2003. 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 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

- 29 -

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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.

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,

FORT HOUSE INC.

Per: ______________________________
         Authorized Signing Officer

OCTAGON CAPITAL CORPORATION

Per: ______________________________
         Authorized Signing Officer

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

DATEDas of November	, 2003.

KIRKLAND LAKE GOLD INC.

Per: ______________________________
         Authorized Signing Officer

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SCHEDULE A

DETAILS OF OUTSTANDING CONVERTIBLE SECURITIES

KIRKLAND LAKE GOLD INC.

November 14, 2003

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Number ofShares                              
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------
|Current issued and outstanding shares:Stock
      Options:                200,000
      @$1.10 each expiring March 27, 2006                340,000
      @$1.35 each expiring October 3, 2006                  20,500
      @$1.35 each expiring February 6, 2007                106,000
      @$1.60 each expiring April 11, 2007                  75,000
      @$2.05 each expiring May 22, 2007                  35,000
      @$2.45 each expiring June 7, 2007*                549,500
      @$2.20 each expiring January 10, 2008                  67,500
      @$2.80 each expiring August 14, 2008
      *subject provisions in Services Contracts | 28,758,239
      1,393,500                   
|Share Purchase Warrants:                162,500
      @$1.55 each expiring December 14, 2003                750,000
      @$1.60 each expiring March 5, 2004             1,877,500
      @$3.00 each expiring August 8, 2005                                                                                                                                                                                                                                                                                                                                                                                                                              | 2,790,000                                    
|Broker Warrants:                  97,500
      @$1.30 each expiring December 14, 2003                158,750
      @$2.05 each expiring June 30, 2004                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 256,250                                      
|Convertible Loan:
                       $2,187,500
        @ a deemed price of $4.00 per share maturing
                                      June
        11, 2004 plus interest convertible at higher of market or $4.00 per
        share
                       $1,000,000
        convertible @ a deemed price of $4.00 per share  maturing February
        11, 2005 plus interest
                                      convertible
        at a higher of market or $4.00 per share, subject to extension on issuance
        
                                      of
        a further 75,000 shares                                          | 546,875*
      250,000*
      *principal only
|Agents Compensation Option:                100,000
      @$2.35 expiring June 21, 2004                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 100,000                                      
|FULLY DILUTED SHARES:               Excluding
      conversion of interest                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 34,094,864                                   

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SCHEDULE B

DETAILS OF OWNED AND MATERIAL LEASED PREMISES

See attached.

---