**Exhibit 4.23**

 

**GOLD FIELDS LIMITED**

 

 

and

 

 

**BOLIVAR GOLD CORP.**

 

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**ARRANGEMENT AGREEMENT**

 

December 1, 2005

 

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**STIKEMAN ELLIOTT LLP**

 

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**TABLE OF CONTENTS**

 
| **ARTICLE 1  INTERPRETATION**                      |
|---------------------------------------------------------|
|                                                    |   |   |
| Section 1.1                                        | Definitions | 1 |
| Section 1.2                                        | Singular, Plural, etc. | 8 |
| Section 1.3                                        | Deemed Currency | 8 |
| Section 1.4                                        | Headings, etc. | 8 |
| Section 1.5                                        | Date for any Action | 8 |
| Section 1.6                                        | Schedule and Exhibit | 8 |
|                                                    |   |   |
| **ARTICLE 2  THE ARRANGEMENT AND RELATED MATTERS** |
|                                                    |   |   |
| Section 2.1                                        | Implementation Steps by Target | 8 |
| Section 2.2                                        | Interim Order | 10 |
| Section 2.3                                        | Articles of Arrangement | 11 |
| Section 2.4                                        | Information Circular | 11 |
| Section 2.5                                        | Preparation of Filings | 12 |
| Section 2.6                                        | Dissenting Shareholders | 13 |
| Section 2.7                                        | Amendment | 13 |
| Section 2.8                                        | Cancellation of Certain Target Securities | 13 |
| Section 2.9                                        | Withholding | 14 |
|                                                    |   |   |
| **ARTICLE 3  PUBLICITY**                           |
|                                                    |   |   |
| Section 3.1                                        | Publicity and Press Releases | 14 |
|                                                    |   |   |
| **ARTICLE 4  REPRESENTATIONS AND WARRANTIES**      |
|                                                    |   |   |
| Section 4.1                                        | Representations and Warranties of Target | 14 |
| Section 4.2                                        | Representations and Warranties of Parent | 22 |
| Section 4.3                                        | Survival | 23 |
|                                                    |   |   |
| **ARTICLE 5  CONDUCT OF BUSINESS**                 |
|                                                    |   |   |
| Section 5.1                                        | Conduct of Business by Target | 23 |
|                                                    |   |   |
| **ARTICLE 6  COVENANTS**                           |
|                                                    |   |
| Section 6.1                                        | Recommendation of Arrangement | 27 |
| Section 6.2                                        | Covenants Regarding Representations and Warranties | 27 |

 

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| Section 6.3                              | Notice of Changes                                             | 27     |
|-----------------------------------------------|---------------------------------------------------------------|--------|
| Section 6.4                              | Access to Information                                         | 28     |
| Section 6.5                              | Transitional Matters                                          | 29     |
| Section 6.6                              | Other Filings                                                 | 29     |
| Section 6.7                              | Additional Agreements                                         | 29     |
| Section 6.8                              | Mutual Covenants                                              | 30     |
| Section 6.9                              | Pre-Acquisition Reorganizations                               | 30     |
| Section 6.10                             | Proxies Received and Dissent Notices                          | 31     |
| Section 6.11                             | Privacy Matters                                               | 31     |
| Section 6.12                             | Form of Transaction                                      | 33     |
|                                          |                                                          |   |
| **ARTICLE 7  CONDITIONS**                |
|                                          |                                                          |   |
| Section 7.1                              | Mutual Conditions Precedent                                   | 33     |
| Section 7.2                              | Additional Conditions Precedent to the Obligations of  Parent | 33     |
| Section 7.3                              | Additional Condition Precedent to the Obligations of Target   | 35     |
| Section 7.4                              | Satisfaction of Conditions                                    | 35     |
|                                          |                                                          |   |
| **ARTICLE 8  ACQUISITION PROPOSALS**     |
|                                          |                                                          |   |
| Section 8.1                              | Covenants Regarding Non-Solicitation                          | 36     |
| Section 8.2                              | Right to Accept a Superior Proposal                           | 38     |
|                                          |                                                          |   |
| **ARTICLE 9  AMENDMENT AND TERMINATION** |
|                                          |                                                          |   |
| Section 9.1                              | Amendment                                                     | 40     |
| Section 9.2                              | Termination                                                   | 40     |
| Section 9.3                              | Effect of Termination                                         | 42     |
| Section 9.4                              | Termination Fee                                               | 42     |
| Section 9.5                              | Effect of Termination Fee Payment                             | 43     |
| Section 9.6                              | Fees and Expenses                                             | 43     |
| Section 9.7                              | Waiver                                                        | 43     |
| Section 9.8                              | Remedies.                                                     | 44     |
|                                          |                                                          |   |
| **ARTICLE 10  GENERAL**                  |
|                                          |                                                          |   |
| Section 10.1                             | Notices                                                       | 44     |
| Section 10.2                             | Assignment                                                    | 45     |
| Section 10.3                             | Further Assurances                                            | 45     |
| Section 10.4                             | Severability                                                  | 46     |
| Section 10.5                             | Entire Agreement                                              | 46     |
| Section 10.6                             | Counterpart Execution                                         | 46     |

 

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| Section 10.7                      | Governing Law            | 46     |
|----------------------------------------|--------------------------|--------|
| Section 10.8                      | Attornment               | 46     |
| Section 10.9                      | Investigation by Parties | 47     |
|                                   |                     |   |
| **SCHEDULES**                          |
| ** **                             |                     |
| SCHEDULE ”A”            | PLAN OF ARRANGEMENT      |   |
| EXHIBIT ”I” COMMITMENTS |                     |
|                                        |                          |        |  |

 

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**ARRANGEMENT AGREEMENT**

 

**THIS AGREEMENT** is made asof December 1, 2005, between **GOLD FIELDSLIMITED** (**“Parent”**), acompany incorporated under the laws of South Africa, and **BOLIVAR GOLD CORP.** (**“Target”**),a corporation continued under the laws of the Yukon Territory.

 

**RECITALS:**

 

**WHEREAS** Parent proposes toacquire through one or more of its affiliates all of the outstanding securitiesof Target (other than those held by Parent or its Affiliates unless theyotherwise elect);

 

**AND WHEREAS** the Partiesintend to carry out the proposed transaction by way of a plan of arrangementand all related steps under the *BusinessCorporations Act* (Yukon);

 

**NOW THEREFORE** inconsideration of the mutual covenants and agreements herein contained and forother good and valuable consideration, the receipt and sufficiency of which arehereby acknowledged by each of the Parties, the Parties covenant and agree asfollows:

 

# **ARTICLE 1INTERPRETATION**

# ** **

## **Section 1.1**                                   Definitions

 

In thisAgreement, unless there is something in the subject matter or contextinconsistent therewith, the following terms shall have the following meanings,respectively:

 

**“Acquisition Proposal”**means,other than from Parent or a subsidiary of Parent, any merger, amalgamation,statutory arrangement, recapitalization, take-over bid, sale of material assets(or any lease, long-term supply agreement or other arrangement having the sameeconomic effect as a sale of material assets), liquidation, winding-up, sale orredemption of a material number of shares or rights or interests therein orthereto or similar transactions involving Target and/or the TargetSubsidiaries, or a written proposal to do so, excluding the Arrangement;

 

**“Act”** means the *Business Corporations Act* (Yukon) as thesame has been and may hereafter from time to time be amended;

 

**“Affiliate****”** has the meaning ascribed thereto in the Act;

 

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**“Agreement”**, **“this Agreement”**, **“herein”**, **“hereto”**,and **“hereof”** and similarexpressions refer to this Agreement, as the same may be amended or supplementedfrom time to time, together with all schedules and exhibits hereto;

 

**“Arrangement”**means thearrangement under Section 195 of the Act resulting in the direct acquisitionby Parent or one or more subsidiaries of Parent of all of the Target Shares(other than those held by Parent or its Affiliates unless they otherwiseelect), the cancellation of all Target Warrants (other than those held byParent or its Affiliates unless they otherwise elect), the cancellation of allTarget Options and the repayment of the Target Debentures, all on the terms andsubject to the conditions set out in this Agreement and more particularly inthe Plan of Arrangement, subject to any amendments or variations thereto madein accordance with the provisions of this Agreement and the Plan of Arrangementor made at the direction of the Court;

 

**“Arrangement Resolutions”**meansthe special resolutions of the holders of the Outstanding Securities approvingthe Arrangement, such resolutions to be in form and substance acceptable to theParties, acting reasonably;

 

**“Articles of Arrangement”**meansthe articles of arrangement of Target to be filed with the registrar under theAct in connection with the Arrangement;

 

**“Business Day”** means anyday excepting a Saturday or Sunday or a day recognized as a holiday inJohannesburg, South Africa, Toronto, Ontario, or Whitehorse, Yukon Territory;

 

**“Completion Deadline”**means February 28, 2006 or such later date as may be agreed between theParties in writing;

 

**“Confidentiality Agreement”**means the confidentiality agreement between Target and Gold FieldsChile Ltda., a subsidiary of Parent, dated December 13, 2004;

 

**“Court”** means Supreme Court of the Yukon Territory;

 

**“Disclosed Information”**means all information disclosed in writing by each Party to the other (or tothe other’s representatives) in connection with each Party’s due diligencereview process;

 

**“Dissent Rights”** means therights of dissent in favour of the holders of the Target Shares****in respect of the Arrangement as shall bedescribed in the Plan of Arrangement;

 

2

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**“Effective Date”** means thedate upon which the Arrangement becomes effective as established by the date ofissue shown on the certificate issued by the registrar pursuant to the Act;

 

**“Effective Time”** means12:01 a.m. (Whitehorse, Yukon time) on the Effective Date;

 

**“Encumbrance”** includes anymortgage, pledge, assignment, charge, lien, claim, security interest, adverseinterest, other third person interest or encumbrance of any kind, whethercontingent or absolute, and any agreement, option, right or privilege (whetherby law, contract or otherwise) capable of becoming any of the foregoing;

 

**“Final Order”**means theorder of the Court approving the Arrangement as such order may be amended atany time prior to the Effective Date, or, if appealed, then unless such appealis withdrawn or denied, as affirmed;

 

**“GAAP”** means, for thosegenerally accepted accounting principles stated in the Handbook of the CanadianInstitute of Chartered Accountants, such principles so stated;

 

**“Governing Documents****”** means, in respect of each Party, its certificate and articles ofincorporation, as amended, and its by-laws, as amended, and all similarconstating documents;

 

**“Government Authority”**means any foreign, national, provincial, local or state government, anypolitical subdivision or any governmental, judicial, public or statutoryinstrumentality, court, tribunal, agency (including those pertaining to health,safety or the environment), authority, body or entity, or other regulatorybureau, authority, body or entity having legal jurisdiction over the activityor Person in question (including in Canada, Venezuela, Aruba and elsewhere);

 

**“in writing”** means writteninformation including documents, files, software, records and books madeavailable, delivered or produced to one Party by or on behalf of the otherParty;

 

“**including”, “includes”**or similarexpressions are not intended to be limiting and are deemed to be followed bythe expression “without limitation”;

 

**“Information Circular”**meansthe notice of the Target Meeting and the accompanying management informationcircular to be sent to holders of Outstanding Securities in connection with theTarget Meeting;

 

3

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**“Interim Order”**means theinterim order of the Court made pursuant to the application made in accordancewith this Agreement (or any variation of such order);

 

**“Laws”** means all laws,statutes, codes, ordinances, decrees, rules, regulations, by laws, statutoryrules, principles of law, published policies and guidelines, judicial orarbitral or administrative or ministerial or departmental or regulatoryjudgments, orders, decisions, rulings or awards, including general principlesof common and civil law, and terms and conditions of any grant of approval,permission, authority or license of any Government Authority, statutory body orself regulatory authority, and the term **“applicable”**with respect to such Laws and in the context that refers to one or morePersons, means that such Laws apply to such Person or Persons or its or theirbusiness, undertaking, property or securities and emanate from a GovernmentAuthority (or any other Person) having jurisdiction over the aforesaid Personor Persons or its or their business, undertaking, property or securities;

 

**“Lock-up Agreements”**meansthe irrevocable lock-up agreements between Parent and certain of the directorsand officers of Target (holding collectively approximately 1.3% of the TargetShares) executed November 21, 2005, pursuant to which they agree to votetheir Target Securities in favour of the Arrangement;

 

**“Material Adverse Change”,**means any change, effect, event, circumstance or occurrence withrespect to the condition (financial or otherwise), properties, assets,liabilities, obligations (whether absolute, accrued, conditional or otherwise),businesses, operations, results of operations or prospects of Target and its subsidiaries,taken as a whole, that, either alone or together with other such matters, is,or could reasonably be expected to be, material and adverse to the current orfuture business, operations, regulatory status, financial condition or resultsof operations of Target and its subsidiaries taken as a whole;

 

**“Material Adverse Effect”**meansany effect that, either alone or together with other such matters, is, or couldreasonably be expected to be, material and adverse to the condition (financialor otherwise), properties, assets, liabilities, obligations (whether absolute,accrued, conditional or otherwise), businesses, operations, results ofoperations or prospects of Target or any of its subsidiaries;

 

**“material fact****”** has the meaning ascribed thereto in the *Securities Act* (Ontario) as the same has been and mayhereafter from time to time be modified;

 

4

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**“Meeting Date****”** means the date on which the Target Meeting occurs;

 

**“Misrepresentation”**hasthe meaning ascribed thereto in the S*ecuritiesAct*(Ontario);

 

**“Outstanding Securities”**meansthe Target Shares, Target Options and Target Warrants outstanding as of thedate hereof as follows: 111,717,506 Target Shares; 8,949,332 Target Options; 10,936,668 Target Initial Warrants; 19,421,588Target “A” Warrants; and 9,090,910 Target “B”Warrants;

 

**“Party****”** means each of Parent and Target;

 

**“Person”** includes anyindividual, firm, partnership, joint venture, venture capital fund,association, trust, trustee, executor, administrator, legal personalrepresentative, estate, group, body corporate, corporation, unincorporatedassociation or organization, Government Authority, syndicate or other entity,whether or not having legal status;

 

**“Personal Information”**meansinformation about an individual transferred to Parent by Target as a conditionof the Arrangement, but does not include an individual’s name, position name ortitle, business telephone number, business address, business email or businessfax number;

 

**“Personnel Obligations”**meansany obligations or liabilities of a Party or any of its subsidiaries to pay anyamount to its or their officers, directors, employees and consultants forsalary, bonuses under its or their existing bonus arrangements and directors’fees in the ordinary course, in each case in amounts consistent with historicpractices and obligations or liabilities in respect of insurance orindemnification contemplated by this Agreement or arising in the ordinary andusual course of business and, without limiting the generality of the foregoing,Personnel Obligations shall include the obligations of such Party or any of itssubsidiaries to directors, officers, employees and consultants:

 

#### (a)                                  for payments on or in connection with any change in control of such Partypursuant to any change in control agreements, policies or arrangements,including the payments specified herein; and

####  

#### (b)                                 for any special incentive bonus payments and commitments.

####  

**“Plan of Arrangement”**means,in relation to the Arrangement, the plan of arrangement substantially in theform and having the content of Schedule A hereto, together with allamendments or variations thereto made in accordance with the provisions of thisAgreement or made at the direction of the Court in the Final Order;

 

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**“Regulatory Approval”**means any approval, consent, waiver, permit, order or exemption from anyGovernment Authority having jurisdiction or authority over any Party or thesubsidiary of any Party which is required or advisable to be obtained in orderto permit the Arrangement to be effected and **“RegulatoryApprovals”** means all such approvals, consents, waivers, permits,orders or exemptions;

 

**“Representatives”** means,in respect of a party, its and its subsidiaries’ directors, officers,employees, counsel, financial and other advisers and other authorizedrepresentatives;

 

**“Securities Authorities”**means the appropriate securities commissions, the TSX and similar regulatoryauthorities in Canada and each of the applicable provinces and territoriesthereof;

 

**“subsidiary”** has themeaning ascribed thereto in the Act;

 

** “Superior Proposal”** means any *bona fide*written proposal, other than the Arrangement, by a third party, directly orindirectly, to acquire all or substantially all of the assets of Target (on aconsolidated basis) or more than 50% of the Target Shares, whether by way ofmerger, amalgamation, arrangement, share exchange, take-over bid,recapitalization, sale of assets or otherwise, and that the board of directorsof Target determines in its good faith (based upon the written advice from itsfinancial advisors and outside legal counsel) (a) is reasonably capable ofbeing completed without undue delay, taking into account all legal, financial,regulatory and other aspects of such proposal and the party making suchproposal, (b) is fully financed or is reasonably capable of being fullyfinanced, and (c) would, if consummated in accordance with its terms,results in a transaction more favourable to Target’s shareholders from afinancial point of view than the terms of the Arrangement and provides forconsideration per Target Share that has a value that is greater than theconsideration per Target Share provided under the terms of the Arrangement bymore than 5% (including any adjustment to such terms proposed by Parent ascontemplated by Section 8.2(b));

 

**“Target”** means BolivarGold Corp., a company continued under the laws of the Yukon Territory;

 

**“Target Debentures”**meansthe $26 million principal amount of 6% convertible debentures of Targetmaturing December 5, 2008, convertible into Target Shares at the option ofthe holder at $2.85 per Target Share;

 

**“Target Meeting”** means theextraordinary meeting or meetings of Target Securityholders (including anyadjournment thereof) that is to be convened to

 

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considerand, if deemed advisable, to approve the Resolutions and other matters ofbusiness, as described in the Information Circular;

 

**“Target Options”** means theshare purchase options granted under the Target Stock Option Plan and beingoutstanding and unexercised on the date hereof;

 

**“Target’s Public Documents”**has the meaning ascribed thereto in Section 4.1(q);

 

**“Target Securityholders”**means the Target Shareholders together with the holders of the Target Optionsand Target Warrants;

 

**“Target Shareholder”** meansa registered holder of Target Shares, from time to time, and **“Target Shareholders”** means all of suchholders;

 

**“Target Shares”** means thecommon shares in the capital of Target;

 

**“Target Stock Option Plan”**means the option plan****of Target**;**

 

**“Target Subsidiaries”**means,collectively, each of the subsidiaries of Target;

 

**“Target Warrants”**means,collectively, the Target Initial Warrants, Target “A” Warrants and the Target “B”Warrants;

 

**“Target ‘A’ Warrants”**meansthe outstanding common share purchase warrants of Target expiring August 25,2008, exercisable at $1.75 per Target Share;

 

**“Target ‘B’ Warrants”**meansthe outstanding common share purchase warrants of Target expiring December 22,2009, exercisable at $3.25 per Target Share;

 

**“Target Initial Warrants”**meansthe outstanding common share purchase warrants of Target expiring March 17,2008, exercisable at $1.10 per Target Share;

 

**“Termination Fee”**means **$**12,000,000; and

 

**“Venezuelan Government Mining Law Review”**means the review of the Venezuelan mining laws by the Venezuelangovernment, under which formal licences and permits have been suspended and asa result of which Target is conducting its operations pursuant to oralassurances from Venezuelan government officials.

 

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## **Section 1.2**                                   Singular, Plural, etc.

 

Wordsimporting the singular number include the plural and vice versa and wordsimporting gender include the masculine, feminine and neuter genders.

 

## **Section 1.3**                                   Deemed Currency

 

Unlessotherwise specified, all dollar amounts described in this Agreement areexpressed in Canadian dollars.

 

## **Section 1.4**                                   Headings, etc.

 

Thedivision of this Agreement into Articles and Sections, the provision of a tableof contents hereto and the insertion of the recitals and headings are forconvenience of reference only and shall not affect the construction orinterpretation of this Agreement and, unless otherwise stated, all referencesin this Agreement to Articles and Sections refer to Articles and Sections ofand to this Agreement in which such reference is made.

 

## **Section 1.5**                                   Date for any Action

 

In theevent that any date on which any action is required to be taken hereunder byany of the Parties hereunder is not a Business Day, such action shall berequired to be taken on the next succeeding day that is a Business Day.

 

## **Section 1.6**                                   Schedule and Exhibit

 

Thefollowing Schedule and Exhibit are annexed to this Agreement and is herebyincorporated by reference into this Agreement and forms part hereof:

 

Schedule A­                           Plan of Arrangement

 

Exhibit I- Commitments

 

# **ARTICLE 2THE ARRANGEMENT AND RELATED MATTERS**

 

## **Section 2.1**                                   Implementation Steps by Target

 

Targetcovenants in favour of Parent that Target shall:

 

#### (a)                                  as soon as reasonably practicable, apply to the Court under Section 195 of the Act for the InterimOrder in a manner and form acceptable to Parent, acting reasonably, andthereafter proceed with and diligently seek the Interim Order;

####  

#### (b)                                 convene and after consultation with Parent, as promptly as isreasonably practicable, hold the Target Meeting for the purpose of consideringthe Arrangement Resolutions and for any other purpose as

 

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#### may be set out in theInformation Circular with the prior written consent of Parent;

####  

#### (c)                                  subject to Article 8, except as required for quorum purposes,not postpone or cancel (or propose for adjournment, postponement orcancellation) the Target Meeting without the prior written consent of Parentexcept as required by applicable Laws, a court or Governmental Authority havingjurisdiction, or required in accordance with the terms of the Interim Order,provided that Target shall adjourn the Target Meeting upon the request ofParent;

####  

#### (d)                                 solicit and take all steps necessary to allow Parent and anysubsidiary of Parent designated as a party to the Plan of Arrangement tosolicit from the Target Securityholders proxies in favour of the approval ofthe Arrangement Resolutions and to take all other commercially reasonableactions that are necessary or desirable to secure the approval of theArrangement Resolutions by the Target Securityholders, except to the extentthat Target’s Board of Directors has changed, modified or withdrawn itsrecommendation in accordance with Article 8 of this Agreement, in whichcase Target shall no longer be subject to such obligation to solicit proxies;

####  

#### (e)                                  subject to obtaining such approvals as are required by the InterimOrder, bring an application, as soon as reasonably practicable after the TargetMeeting, before the Court pursuant to Section 195 of the Act for the Final Order in a manner andform acceptable to Parent, acting reasonably, and thereafter proceed with anddiligently pursue the application to the Court for the Final Order in suchform;

####  

#### (f)                                    instruct counsel acting for it to bring the applications referred toin Sections 2.1 (a) and (e) in cooperation with counsel to Parent;

####  

#### (g)                                 subject to obtaining the Final Order and the satisfaction or waiverof the other conditions herein contained in favour of each Party, as soon asreasonably practicable thereafter, send to the registrar under the Act, forendorsement and filing by such registrar, the Articles of Arrangement and suchother documents as may be required in connection therewith under the Act togive effect to the Arrangement;

####  

#### (h)                                 permit Parent and its counsel to review and comment upon drafts ofall material to be filed by Target with the Court or any securities regulatoryauthority in connection with the Arrangement (including the InformationCircular) prior to the service (if applicable) and/or printing and filing ofthat material and give reasonable consideration

 

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#### to such comments.  Target shall also provide to such counsel ona timely basis copies of any notice of appearance or other court documentsserved on Target or its counsel in respect of the application for the Final Orderor any appeal therefrom and of any notice, whether written or oral, received byTarget indicating any intention to appeal the Final Order; and

####  

#### (i)                                     not file any material with the Court in connection with theArrangement or serve any such material, and not send any such material to the registrarunder the Act, for endorsement and filing by the registrar, and not agree tomodify or amend materials so filed or served except as contemplated by thisAgreement or with Parent’s prior written consent, such consent not to beunreasonably withheld.

####  

## **Section 2.2**                                   Interim Order

 

Thenotice of motion for the application for the Interim Order referred to in Section 2.1(a) shallseek that the Interim Order provide:

 

#### (a)                                  for the classes of Persons to whom notice is to be provided inrespect of the Arrangement and the Target Meeting and for the manner in whichsuch notice is to be provided;

####  

#### (b)                                 that the requisite approval for the Arrangement Resolutions shall betwo-thirds of the votes cast on the Arrangement Resolutions by:

####  

##### (i)                                     Target Shareholders present in person or by proxy at the TargetMeeting; and

#####  

##### (ii)                                  the holders of the Target Warrants and Target Options, votingtogether as a single class, on the basis of one vote for each underlying TargetShare,  present in person or by proxy atthe Target Meeting;

#####  

#### (c)                                  that, in all other respects, the terms, restrictions and conditionsof the Governing Documents of Target, including quorum requirements and allother matters, shall apply in respect of the Target Meeting;

####  

#### (d)                                 for the grant of the Dissent Rights in favour only of the holders ofTarget Shares; and

####  

#### (e)                                  for such other matters as Parent may reasonably require subject toobtaining the prior consent of Target, such consent not to be unreasonablywithheld.

####  

#### 10

#### 

####  

## **Section 2.3**                                   Articles of Arrangement

 

#### (a)                                  The Articles of Arrangement shall, with such other matters as arenecessary to effect the Arrangement and subject to the provisions of the Planof Arrangement, consummate the Plan of Arrangement.  The Articles of Arrangement shall be in formsatisfactory to Parent and Target, each acting reasonably.  As set out more particularly in the Plan ofArrangement, the Articles of Arrangement shall provide that the Target Securityholders(other than those held by Parent or its Affiliates unless they otherwise elect)shall receive the following consideration:

####  

##### (i)                                     $3.00 in cash per Target Share;

#####  

##### (ii)                                  $1.90 in cash per Target Initial Warrant;

#####  

##### (iii)                               $1.25 in cash per Target “A” Warrant;

#####  

##### (iv)                              $0.40 in cash per Target “B” Warrant; and

#####  

##### (v)                                 an amount of cash per Target Option equal to the “in-the-money”amount of each Target Option (being $3.00 less the exercise price per TargetOption).

#####  

#### (b)                                 The holders of the Target Debentures shall receive $1,095.25 in cashper $1,000 principal amount of Target Debenture being the amount in cash thatis equal to the “Change of Control Amount” required under Article 7 of theindenture governing the Target Debentures. The above payment is based upon the December 31,2005 interest payment having been made prior to the Effective Time.

####  

#### (c)                                  Parent shall have the right, in its sole discretion, but not theobligation at any time prior to the Effective Time to increase theconsideration payable to any class or classes of Target Securities under theArrangement (including without limitation by adding additional consideration orother forms of consideration).

####  

## **Section 2.4**                                   Information Circular

 

Aspromptly as reasonably practicable with a view to completion of the Arrangementby no later than January 31, 2006, Target, in consultation with theParent, will prepare the Information Circular together with any other documentsrequired by the Act or other Laws in connection with the Arrangement and theTarget Meeting with a view to mailing the Information Circular by no later thanDecember 20, 2005.**** The Information Circular and such otherdocuments and amendments thereto shall be in form and substance satisfactory toParent and its

 

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counsel acting reasonably. Target will file the Information Circular and any other documentationrequired to be filed under applicable Laws in all jurisdictions where theInformation Circular is required to be filed by Target and mail or cause to bemailed the Information Circular and any other documentation required to bemailed under applicable Laws to the Target Shareholders, the directors ofTarget, the auditors of Target and any other required Persons on or before December 20, 2005, except to the extent anydelay beyond such date is due to failure of Parent to comply on a timely basiswith their obligations under Section 2.5(b), all in accordance with theterms of the Interim Order and applicable Laws. Parent will provide such assistance as Target may reasonably request insuch regard.

 

## **Section 2.5**                                   Preparation of Filings

 

#### (a)                                  Each of Parent and Target shall proceed diligently, in aco-ordinated fashion and use its commercially reasonable efforts to co-operatein the preparation of the Information Circular as described in Section 2.4,any exemption applications or orders and any other documents deemed reasonablynecessary by any of them to discharge their respective obligations under theapplicable Laws in connection with the Arrangement.

####  

#### (b)                                 Parent shall furnish to Target and Target shall furnish to Parent,on a timely basis, all information as may be reasonably required to effectuatethe foregoing actions, and each covenants that no information so furnished byit in writing in connection with those actions or otherwise in connection withthe consummation of the Arrangement will contain any Misrepresentation.

####  

#### (c)                                  Each of Parent and Target shall promptly notify the other of themif, at any time before the Effective Time, it becomes aware that theInformation Circular or an application for an order described in Section 2.1,2.2, or 2.5(a) contains a Misrepresentation or that otherwise requires anamendment or supplement to the Information Circular or such application.  In any such event, each of the parties willco-operate in the preparation of a supplement or amendment to the InformationCircular or such other document, as the case may be, that corrects thatMisrepresentation, and Target will cause the same to be distributed to theTarget Securityholders, the directors of Target, the auditors of Target and anyother required Persons and filed as required under applicable law.

####  

#### (d)                                 Target shall ensure that the Information Circular complies with allapplicable Laws and, without limiting the generality of the foregoing, that theInformation Circular does not contain a Misrepresentation

 

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#### (except that this covenant does not speakwith respect to any information relating to or provided by Parent).  Without limiting the generality of the foregoing,Target shall ensure that the Information Circular provides the TargetSecurityholders with information in sufficient detail to permit them to form areasoned judgment concerning the matters to be placed before them at the TargetMeeting.

####  

## **Section 2.6**                                   Dissenting Shareholders

 

RegisteredTarget Shareholders may exercise Dissent Rights with respect to their TargetShares in connection with the Arrangement pursuant to and in the manner setforth in the Plan of Arrangement.  Targetshall give Parent prompt notice of any written notice of a dissent, withdrawalof such notice, and any other instruments served pursuant to such DissentRights and received by Target.

 

## **Section 2.7**                                   Amendment

 

Withoutlimiting the provisions of the Plan of Arrangement, the Plan of Arrangementmay, at any time and from time to time before and after the holding of theTarget Meeting, but not later than the Effective Time, be amended by mutualwritten agreement of the Parties. Without limiting the generality of the foregoing, any such amendmentmay:

 

#### (a)                                  change the time for the performance of any of the obligations oracts of the Parties;

####  

#### (b)                                 waive any inaccuracies or modify any representation or warrantycontained herein or in any document to be delivered pursuant hereto;

####  

#### (c)                                  waive compliance with or modify any of the covenants containedherein or waive or modify the performance of any of the obligations of theParties; and

####  

#### (d)                                 waive compliance with and modify any conditions precedent hereincontained;

####  

provided that, notwithstanding the foregoing, the terms of thisAgreement and the Plan of Arrangement shall not be amended in a mannermaterially prejudicial to the Target Securityholders without the approval ofthe Target Securityholders given in the same manner as required by law for theapproval of the Arrangement or as may be contemplated in the ArrangementResolutions or as may be ordered by the Court.

 

## **Section 2.8**                                   Cancellation of Certain Target Securities

 

Alloutstanding Target Warrants (other than those held by Parent or its Affiliatesunless they otherwise elect) and Target Options will be cancelled in

 

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accordance with the terms of the Plan of Arrangement.  The Target Debentures shall be repaid inaccordance with the provisions of the indenture governing their terms.

 

## **Section 2.9**                                   Withholding

 

Target,Parent or one or more subsidiaries of Parent, as the case may be, shall beentitled to directly or indirectly deduct and withhold from the amountotherwise payable pursuant to this Agreement or the Plan of Arrangement to anyTarget Securityholder or holder of Target Debentures  such amounts as are required to be deductedand withheld with respect to the making of such payment under the *Income Tax Act* (Canada) or any other provisionof domestic or foreign (whether national, federal, provincial, state, local orotherwise) Law relating to Taxes.  To theextent the amounts are so deducted and withheld and paid to the appropriateGovernment Authority directly or indirectly by Target, Parent or one or moresubsidiaries of Parent, as the case may be, such deducted and withheld amountsshall be treated for all purposes of this Agreement and the Plan of Arrangementas having been paid to the Target Securityholder or holder of Target Debenturesin respect of which such deduction and withholding was made by Target, Parentor one or more subsidiaries of Parent, as the case may be.

 

# **ARTICLE 3PUBLICITY**

 

## **Section 3.1**                                   Publicity and Press Releases

 

So longas this Agreement is in effect, each of the Parties shall advise, consult andcooperate with each other prior to issuing, or permitting any of its directors,officers, employees or agents to issue, any press release or other writtenpublic or private statement to the press with respect to this Agreement and theArrangement contemplated hereby from the date hereof until the EffectiveDate.  The Parties shall not issue anysuch press release or make any such written public or private statement priorto such consultation, except as may be required by applicable Law or byobligations pursuant to any listing agreement with a stock exchange and onlyafter using its reasonable efforts to consult with the other Party taking intoaccount the time constraints to which it is subject as a result of such Law orobligation.

 

# **ARTICLE 4REPRESENTATIONS AND WARRANTIES**

 

## **Section 4.1**                                   Representations and Warranties of Target

 

Targetrepresents and warrants to Parent, and acknowledges that Parent is relying uponsuch representations and warranties, as follows:

 

#### (a)                                  (i) Target has been duly continued and is validly existingunder the laws of the Yukon Territory and is current and up-to-date with all

 

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#### filings required to be made by it in suchjurisdiction; and (ii) the Target Subsidiaries have been duly incorporatedand are validly existing under the applicable laws under which they areorganized, and are current and up-to-date with all filings required to be madeby it in each such jurisdiction, excepting only delays in filings whichindividually and in the aggregate would not result in a Material AdverseEffect;

####  

#### (b)                                 Target has full corporate power, capacity and authority to carry outthe Arrangement and all related matters contemplated herein and to carry outits obligations under this Agreement;

####  

#### (c)                                  This Agreement has been duly authorized, executed and delivered byTarget and is enforceable against Target in accordance with its terms, exceptas enforcement hereof may be limited by bankruptcy, insolvency, reorganization,moratorium or similar laws affecting the rights of creditors generally andexcept that equitable remedies may be granted only in the discretion of a courtof competent jurisdiction;

####  

#### (d)                                 Each of Target and the Target Subsidiaries has all requisitecorporate capacity, power and authority to own its assets, and, other than asnecessitated by the Venezuelan Government Mining Law Review, possesses allmaterial certificates, authority, permits and licenses issued by theappropriate state, provincial, municipal or federal regulatory agencies orbodies necessary to conduct the business as now conducted by it as applicable,and is in compliance in all material respects with such certificates,authorities, permits or licenses.  Otherthan in connection with the Venezuelan Government Mining Law Review, none ofTarget or the Target Subsidiaries has received any notice of proceedingsrelating to the revocation or modification of any such certificate, authority,permit or license which, singly or in the aggregate, if the subject of anunfavourable decision, order, finding or ruling, would materially and adverselyaffect the conduct of the business, operations, financial condition, income orfuture prospects of Target and the Target Subsidiaries taken as a whole.  All effects of the Venezuelan GovernmentMining Law Review on Target up to and including the date hereof have beendisclosed to Parent in the Disclosed Information;

####  

#### (e)                                  The authorized capital of Target, consists of an unlimited number ofTarget Shares of which 111,717,506Target Shares are issued and outstanding at the date hereof;

 

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#### (f)                                    Except as disclosed in Target’s Public Documents, all of the issuedand outstanding securities of the Target Subsidiaries are owned, directly orindirectly, by Target.  Target is not aparty to nor has Target granted any agreement, warrant, option or right orprivilege capable of becoming an agreement, for the purchase, subscription orissuance of any securities of the Target Subsidiaries or securities convertibleinto or exchangeable for any securities of the Target Subsidiaries;

####  

#### (g)                                 Target is not party to and has not granted any agreement, warrant,option or right or privilege capable of becoming an agreement, for thepurchase, subscription or issuance of any Target Shares or securitiesconvertible into or exchangeable for Target Shares (including, for greatercertainty, any shareholder rights plan), other than the agreements, warrantsand options covering an aggregate of 57,521,305Target Shares as follows: 8,949,332 Target Options; 10,936,668 Target Initial Warrants; 19,421,588 Target “A” Warrants; 9,090,910 Target “B”Warrants; and the Target Debentures, convertible into 9,122,807 Target Shares;

####  

#### (h)                                 Target has no associates (as defined in the *Securities Act*(Ontario)) and is not apartner, co-tenant, joint venturer or otherwise a participant in anypartnership joint venture, co-tenancy or other similarly joint owned businessexcept as disclosed in Target’s Public Documents;

####  

#### (i)                                     The entering into and the performance by Target and the TargetSubsidiaries of the Arrangement and all related matters contemplated herein:

####  

##### (i)                                     do not require any consent, approval, authorization or order of anycourt or governmental agency or body, except that which may be required underapplicable securities legislation and the Final Order;

#####  

##### (ii)                                  will not contravene any Law which is binding on Target or the TargetSubsidiaries where such contravention would have a Material Adverse Effect ormaterially impair Target’s ability to complete the transactions contemplated inthis Agreement; and

#####  

##### (iii)                               will not result in the breach of, or be in conflict with, orconstitute a default under, or create a state of facts which, after notice orlapse of time, or both, would constitute a default under any term or provisionof the Governing Documents or resolutions of Target or any mortgage, note,indenture, contract or agreement instrument, lease or other document to which

 

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##### Target is a party, or any judgment, decree ororder or any term or provision thereof, which breach, conflict or default wouldhave a Material Adverse Effect or materially impair Target’s ability tocomplete the transactions contemplated in this Agreement;

#####  

#### (j)                                     Target’s board of directors has (i) received a fairness opinionin respect of the Arrangement from its financial adviser to the effect that theconsideration to be received for the Target Shares under the Arrangement isfair, from a financial point of view, to the Target Shareholders (ii) obtaineda formal valuation in compliance with the requirements of OSC Rule 61-501;(iii) determined unanimously that the terms of the Arrangement are in thebest interests of Target and fair, from a financial point of view, to theTarget Securityholders, and (iv) resolved unanimously to recommend thatthe Target Securityholders accept the Arrangement;

####  

#### (k)                                  There are no legal or governmental proceedings pending or, to theknowledge of Target, contemplated or threatened, to which Target or the TargetSubsidiaries is a party or to which the property of Target or the TargetSubsidiaries is subject which individually and in the aggregate could result ina Material Adverse Effect;

####  

#### (l)                                     Each of Target and each of the Target Subsidiaries has conducted andis conducting its business in compliance with all applicable Laws, including,without limitation, all applicable Tax Laws and all applicable Laws and allGovernment Authority authorizations and instructions, whether in writing ororal, relating to mining and/or mining claims, concessions, licenses or leases,except to the extent necessitated by the Venezuelan Government Mining LawReview and otherwise excepting only non-compliances which individually and inthe aggregate would not result in a Material Adverse Effect. Target has not norhas any of the Target Subsidiaries received any notice of the revocation orcancellation of, or any intention to revoke or cancel, any of the miningclaims, concessions, licenses, leases or other instruments conferring mineralrights in respect of the properties in which Target and any of the TargetSubsidiaries has an interest.  Withoutlimiting the generality of the foregoing, Target and the Target Subsidiarieshave obtained all export and import licences and permits necessary for theoperation of the business of Target and the Target Subsidiaries in Venezuela,have not taken any action which would impair the ability of Target or theTarget Subsidiaries to obtain necessary licences or permits in the future forthe continued operation of such business, and have otherwise taken all stepsnecessary to permit the repatriation of

 

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#### dividends and profits from Venezuela inaccordance with applicable Laws and requirements of all Government Authorities;

####  

#### (m)                               All taxes (including income tax, capital tax, payroll taxes,employer health tax, workers’ compensation payments, property taxes, sales,goods and services, custom and land transfer taxes), duties, royalties, levies,imposts, assessments, deductions, charges or withholdings and all liabilitieswith respect thereto including any penalty and interest payable with respectthereto (collectively, “Taxes**”**) due and payable by Target and the Target Subsidiaries have beentimely paid or withheld and remitted, as the case may be, except for where thefailure to pay or remit such taxes would not result in a Material AdverseEffect. All liabilities for current and future Taxes have been properly accruedand reflected in the Financial Statements or in the financial books and recordsof Target and the Target Subsidiaries. With respect to any period for which Tax Returns (defined below) havenot yet been required to be filed or for which Taxes are not yet due and payable,each of Target and the Target Subsidiaries has only incurred liabilities forTaxes in the ordinary course of business and in a manner and at a levelconsistent with prior periods. All tax returns, reports, elections, estimates,declarations, remittances and filings (collectively, “Tax Returns”) required tobe filed by Target and the Target Subsidiaries have been filed on a timelybasis with all appropriate Government Authorities and all such Tax Returns arecomplete and accurate and no such filing contains a misstatement and no fact orfacts have been omitted therefrom, in either case which would make any of suchfilings misleading except where the such misstatement or omission would notresult in a Material Adverse Effect.  Noaudit, investigation, examination or reassessment of any Tax Return of Targetor any of the Target Subsidiaries is currently contemplated or threatened by aGovernment Authority, or in progress, and there are no audits, investigations,appeals or disputes outstanding with any Government Authority respecting anyTaxes that have been paid, or may be payable, by Target or any of the TargetSubsidiaries, other than in the case of certain non-material assessmentdisputes by Target in the aggregate amount of $100,000, which have been includedin the Disclosed Information.  Except asrelated to the import of certain mining equipment to Venezuela, there are noagreements, waivers or other arrangements with any Government Authorityproviding for an extension of time with respect to the filing of any Tax Returnor the payment of any Tax by Target or any of the Target Subsidiaries, or forany assessment or reassessment of Taxes with respect to Target or any of theTarget Subsidiaries;

 

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#### (n)                                 Except as disclosed to Parent in the Disclosed Information prior tothe date hereof, Target has not implemented any changes to the corporatestructure of the Target Subsidiaries from that disclosed in its AnnualInformation Form for the year ended December 31, 2004 dated March 30,2005;

####  

#### (o)                                 The audited annual financial statements of Target for the year endedDecember 31, 2004 and the notes thereto and the unaudited interimfinancial statements of Target for the period ended September 30, 2005(collectively, the “Financial Statements”) have been prepared in accordancewith Canadian Generally Accepted Accounting Principles, consistently applied,and represent fairly the consolidated financial position of Target as at suchdates, and do not omit to state any material fact that is required by CanadianGenerally Accepted Accounting Principles or by applicable law to be stated orreflected therein or which is necessary to make the statements containedtherein not misleading;

####  

#### (p)                                 There are no material liabilities of Target whether direct,indirect, absolute, contingent or otherwise which are not disclosed orreflected in the Financial Statements except those incurred in the ordinarycourse of business since September 30, 2005 and there has been no MaterialAdverse Change since December 31, 2004 other than has been publiclydisclosed prior to the date hereof;

####  

#### (q)                                 Target’s public documents filed in accordance with applicablesecurities Laws (“Target’s Public Documents”) contain no untrue statement of amaterial fact and do not omit to state any material fact necessary to make thestatements contained therein, in light of the circumstances under which made,not misleading.  Without limiting thegenerality of the foregoing, Target’s announcements on July 15, 2005 and July 17,2005 fully and accurately disclose the current financial arrangements betweenTarget, Ministerio de Industrias Basicas y Mineria and CVG-Ferrominera delOrinoco CA in respect of the Choco 4 and Choco 10 concessions in Venezuela,there are no undisclosed or additional fees, payments or financial arrangementswith any Person in connection with such agreement (except for a US$1.5 millionagency fee, of which US$970,000 remains payable, disclosed to Parent) andTarget has no reason to believe that the formal licence referred to in suchannouncements will not be granted;

####  

#### (r)                                    Except as disclosed in Target’s Public Documents filed prior to November 20,2005, there are no change of control, acceleration, forfeiture or other similarprovisions which would be triggered by the

 

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#### entering into of this Agreement or thecompletion of the Transactions contained in any contractual or regulatoryprovisions of any Governmental Authority including, without limitation, in anymaterial licences, permits, claims, concessions or other properties of theTarget and the Target Subsidiaries;

####  

#### (s)                                  Each of Target and the Target Subsidiaries has good and valid titleto all of its material properties and assets, including without limitation inrespect of all interests, rights, claims, leases, concessions, permits or otherproperty, mineral or proprietary interests in such properties, free and clearof any material claims or Encumbrances, other than as publicly disclosed byTarget prior to November 20, 2005;

####  

#### (t)                                    The cost to Target, on a consolidated basis, of all compensationarrangements, benefit arrangements, severance payments, payments under phantomshare arrangements and all other payments and issuances to directors andofficers of Target in connection with or which may result from the Transactionis accurately and completely set forth in Exhibit ”I” hereto.  The aggregate fees payable by Target to itsfinancial advisors are set out in Exhibit ”I” hereto except for thereasonable fees of financial advisors to the independent committee that may berequired to prepare a valuation under OSC Rule 61-501.  Such fees and disbursements  are to be paid at closing of the Arrangement;

####  

#### (u)                                 Except as disclosed in Exhibit ”I”, there is no Person, firm orcompany acting or purporting to act at the request of Target, who is entitledto any brokerage or finder’s fee in connection with the transactionscontemplated herein;

####  

#### (v)                                 Target and the Target Subsidiaries have no responsibility orobligation to pay any commission, royalty or similar payment to any person withrespect to its property rights in respect of the properties in which they havean interest, other than as disclosed in Target’s Public Documents filed priorto November 20, 2005;

####  

#### (w)                               Except as disclosed to Parent in the Disclosed Information, any andall material agreements pursuant to which Target and each of the TargetSubsidiaries holds any of its material assets are valid and subsistingagreements in full force and effect, enforceable in accordance with theirrespective terms, Target is not nor are any of the Target Subsidiaries indefault of any of the material provisions of any such agreements includingwithout limitation failure to fulfil any payment or work obligation thereundernor has any such default been alleged. Target is not aware of any materialdisputes with respect thereto and

 

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#### such assets are in good standing under theapplicable statutes and regulations of the jurisdictions in which they aresituated, all leases, licenses, concessions, patented and unpatented claimspursuant to which Target and the Target Subsidiaries derive their interest insuch material assets are in good standing and there has been no material defaultunder any such leases, licenses, concessions, patented and unpatented claimsand all real or other property taxes required to be paid with respect to suchassets to the date hereof have been paid;

####  

#### (x)                                   The assets of Target and the Target Subsidiaries are insured againstloss or damage on a basis consistent with insurance obtained by reasonablyprudent participants in businesses comparable to the business conducted byTarget;

####  

#### (y)                                 Target and the Target Subsidiaries are in compliance in all materialrespects with environmental Laws and Target does not have any knowledge of, andhas not received any notice of, any material claim, judicial or administrativeproceeding, which may affect either Target or any of the Target Subsidiaries orany of the properties or assets of Target or the Target Subsidiaries, relatingto, or alleging any violation of environmental Laws, Target does not have anyknowledge of, and has not received any notice that Target or any of the TargetSubsidiaries or any of the assets thereof is the subject of any investigation,evaluation, audit or review by any Government Authority to determine whetherany violation of environmental Laws has occurred or is occurring, and neitherTarget nor any of the Target Subsidiaries is subject to any known environmentalliabilities not disclosed in Target’s Public Documents;

####  

#### (z)                                   Other than in respect of the employees of Target or the TargetSubsidiaries employed in Target’s El Callao, Venezuela operations, Target isnot, nor are any of the Target Subsidiaries, bound by or party to anycollective bargaining agreement;

####  

#### (aa)                            Since the date of its continuance Target has not, directly orindirectly, declared or paid any dividend or declared or made any otherdistribution on Target Shares or securities of any class, or, directly orindirectly, redeemed, purchased or otherwise acquired any Target Shares orsecurities or agreed to do any of the foregoing except for payments of interestmade to the holders of the Target Debentures in accordance with the provisions thereof;

####  

#### (bb)                          Except as provided in applicable mining regulations under Venezuelanmining Law and as disclosed in the Target’s Public Documents, none

 

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#### of Target or the Target Subsidiaries is aparty to or bound or affected by any commitment, agreement or documentcontaining any covenant which expressly limits the freedom of Target to competein any line of business, or, to transfer or move any of its assets oroperations or which materially or adversely affects the business practices,operations or condition of Target taken as a whole;

####  

#### (cc)                            Target is not a party to any agreement nor is Target aware of anyagreement which in any manner affects the voting control of any of thesecurities of Target, other than the Lock-Up Agreements; and

####  

#### (dd)                          No representation, warranty or statement of Target in this Agreementcontains or will contain at the Effective Time any untrue statement of amaterial fact or omits or will omit to state any material fact necessary to makethe statements contained herein or therein, in light of the circumstances underwhich made, not misleading.

####  

## **Section 4.2**                                   Representations and Warranties of Parent

 

Parenthereby represents and warrants to Target as follows and acknowledges thatTarget is relying upon these representations and warranties in connection withthe entering into of this Agreement:

 

#### (a)                                  Parent has been duly incorporated and is validly existing under thelaws of South Africa and is current and up-to-date with all filings required tobe made by it in such jurisdiction;

####  

#### (b)                                 Parent has full corporate power, capacity and authority to carry outthe Arrangement and all related matters contemplated herein, and to carry outits obligations under this Agreement;

####  

#### (c)                                  This Agreement has been duly authorized, executed and delivered byParent and is enforceable against Parent in accordance with its terms;

####  

#### (d)                                 The entering into and the performance by Parent of the Arrangementand all related matters contemplated herein:

####  

##### (i)                                     do not require any consent, approval, authorization or order of anycourt or governmental agency or body, except that which may be required underapplicable securities legislation and except as already obtained;

#####  

##### (ii)           will not contravene any Law which isbinding on Parent where such contravention would materially impair the abilityof

 

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#### Parent to complete thetransactions contemplated in this Agreement; and

#####  

##### (iii)                               will not result in the breach of, or be in conflict with, or constitutea default under, or create a state of facts which, after notice or lapse oftime, or both, would constitute a default under any term or provision of theGoverning Documents or resolutions of Parent or any mortgage, note, indenture,contract or agreement instrument, lease or other document to which Parent is aparty, or any judgment, decree or order or any term or provision thereof, whichbreach, conflict or default would materially impair the ability of Parent tocomplete the transactions contemplated in this Agreement;

#####  

#### (e)                                  Adequate financing arrangements have been made to ensure that Parentor any subsidiary of Parent designated as a party to the Plan of Arrangementwill have sufficient funds to take up and pay for all Target Securities subjectto the Plan of Arrangement and to satisfy all other financial obligationsrequired under this Agreement related to the completion of the Arrangement;

####  

#### (f)                                    No representation, warranty or statement of Parent in this Agreementcontains or will contain at the Effective Time any untrue statement of amaterial fact or omits or will omit to state any material fact necessary tomake the statements contained herein or therein, in light of the circumstancesunder which made, not misleading; and

####  

#### **(g)****                                **Parent has no knowledge of any material information concerning thejoint venture exploration projects between Parent and Target or the resultsthereof that has not been disclosed to Target.

####  

## **Section 4.3**                                   Survival

 

Forgreater certainty, the representations and warranties of each of Target andParent contained herein shall survive the execution and delivery of thisAgreement and shall terminate and be extinguished on the earlier of thetermination of this Agreement in accordance with its terms and the EffectiveTime.

 

# **ARTICLE 5CONDUCT OF BUSINESS**

# ** **

## **Section 5.1**                                   Conduct of Business by Target

 

Exceptas required by Law or as is otherwise expressly permitted or specificallycontemplated by this Agreement, Target covenants and agrees that, during theperiod from the date of this Agreement until the earlier of either the

 

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Effective Time or the time that this Agreement is terminated inaccordance with its terms, unless Parent shall otherwise agree in writing:

 

#### (a)                                  it shall, and shall cause the Target Subsidiaries to conductbusiness in, and not take any action except in, the usual and ordinary courseof business and consistent with past practice, and it shall and shall cause theTarget Subsidiaries to use all commercially reasonable efforts to maintain andpreserve its business organization, assets, employees and advantageous businessrelationships;

####  

#### (b)                                 it shall not directly or indirectly do or permit to occur any of thefollowing:

####  

##### (i)                                     amend its Governing Documents;

#####  

##### (ii)                                  declare, set aside or pay any dividend or other distribution orpayment (whether in cash, shares or property) in respect of Target Shares ownedby any Person;

#####  

##### (iii)                               issue, grant, sell or pledge or agree to issue, grant, sell orpledge any Target Shares, or securities convertible into or exchangeable orexercisable for, or otherwise evidencing a right to acquire Target Shares otherthan the issuance of Target Shares upon the exercise of any Target Optionsexpiring prior to the Effective Time;

#####  

##### (iv)                              redeem, purchase or otherwise acquire any of the outstanding TargetShares or other securities including, without limitation, under an issuer bid;

#####  

##### (v)                                 split, combine or reclassify any of its shares;

#####  

##### (vi)                              adopt resolutions or enter into any agreement providing for theamalgamation, merger, consolidation, reorganization, liquidation, dissolutionor any other extraordinary transaction in respect  of itself or any of the Target Subsidiariesor adopt any plan of liquidation;

#####  

##### (vii)                           reduce its stated capital; or

#####  

##### (viii)                        enter into or modify any contract, agreement, commitment orarrangement with respect to any of the foregoing, except as permitted above;

 

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#### (c)                                  it shall not, and it shall cause the Target Subsidiaries not to,other than in the ordinary course of business and consistent with pastpractice, or as required or contemplated by this Agreement, without priorconsultation with and the consent of Parent, directly or indirectly do any ofthe following:

####  

##### (i)                                     sell, pledge, dispose of or encumber any assets;

#####  

##### (ii)                                  acquire (by merger, amalgamation, consolidation or acquisition ofshares or assets) any corporation, partnership or other business organizationor division thereof, or make any investment either by purchase of shares or securities,contributions of capital or property transfer;

#####  

##### (iii)                               acquire any material assets;

#####  

##### (iv)                              incur any indebtedness for borrowed money or any other materialliability or obligation or issue any debt securities or assume, guarantee,endorse or otherwise as an accommodation become responsible for, theobligations of any other individual or entity, or make any loans or advances(except as is necessary to fund the payment of the Termination Fee inaccordance with Section 8.2), other than the Personnel Obligations andfees payable to legal and accounting advisors in the ordinary course and feespayable to legal, accounting, engineering and financial advisors in connectionwith the matters and transactions contemplated by this Agreement;

#####  

##### (v)                                 authorize, recommend or propose any release or relinquishment of anymaterial contractual right;

#####  

##### (vi)                              waive, release, grant or transfer any material rights of value ormodify or change in any material respect any existing license, lease, contract,production sharing agreement, government land concession or other materialdocument;

#####  

##### (vii)                           enter into or terminate any hedges, swaps or other similar financialinstruments or transactions;

#####  

##### (viii)                        enter into any agreements with its directors or officers or theirrespective Affiliates; or

#####  

##### (ix)                                authorize or propose any of the foregoing, or enter into or modifyany contract, agreement, commitment or arrangement to do any of the foregoing;

 

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#### (d)                                 it shall not, and it shall cause the Subsidiaries not to, withoutprior consultation with and the consent of Parent, enter into new commitmentsof a capital expenditure nature or incur any new contingent liabilities otherthan (i) ordinary course expenditures, (ii) expenditures required byLaw, (iii) expenditures made in connection with transactions contemplatedin this Agreement, and (iv) capital expenditures required to prevent theoccurrence of a Material Adverse Effect;

####  

#### (e)                                  notwithstanding, for greater certainty, Section 5.1(c), in nocase shall Target or the Target Subsidiaries create any new PersonnelObligations and, except for payment of existing Personnel Obligations andreasonable directors’ fees to be paid to the directors forming an independentcommittee of Target’s board of directors to oversee the formal valuation to beobtained in connection with the Arrangement, such directors’ fees not to exceed$30,000 in the aggregate,without the written consent of Parent, such consent not to be unreasonablywithheld (from all of which Target shall make appropriate withholdings asrequired by applicable Tax Laws), Target shall not, and it shall cause theTarget Subsidiaries not to:

####  

##### (i)                                     grant to any officer or director an increase in compensation in anyform;

#####  

##### (ii)                                  grant any general salary increase other than in accordance with therequirements of any existing collective bargaining or union contracts;

#####  

##### (iii)                               grant to any other employee any increase in compensation in any formother than routine increases in the ordinary course of business consistent withpast practices;

#####  

##### (iv)                              make any loan to any officer or director;

#####  

##### (v)                                 or take any action with respect to the grant of any severance ortermination pay arising from the Arrangement or the entering into of anyemployment agreement with, any senior officer or director or with respect toany increase of benefits payable under its current severance or termination paypolicies;

#####  

#### (f)                                    it shall not, and it shall cause the Subsidiaries not to, withoutprior consultation with and the consent of Parent, adopt or amend or make anycontribution to any bonus, profit sharing, option, deferred compensation,insurance, incentive compensation, other compensation

 

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#### or other similar plan, agreement, trust, fundor arrangements for the benefit of employees, except as is necessary to complywith the Law or with respect to existing provisions of any such plans,programs, arrangements or agreements; and

####  

#### (g)                                 it shall not, and it shall cause the Subsidiaries not to otherwisetake actions that could reasonably be expected to be prejudicial to Parent’sinterest in the business, property or assets of Target and the Subsidiariesfollowing the Effective Time.

####  

# **ARTICLE 6COVENANTS**

 

## **Section 6.1**                                   Recommendation of Arrangement

 

Theboard of directors of Target shall recommend to the Target Securityholders theapproval of the Arrangement and shall not withdraw, modify or qualify (orpropose to withdraw, modify or qualify) in any manner adverse to Parent suchrecommendation, or take any action or make any statement in connection with theInformation Circular, the Target Meeting or the obtaining of Target Shareholderapproval that is inconsistent with such recommendation, except as expresslypermitted by Article 8.

 

## **Section 6.2**                                   Covenants Regarding Representations and Warranties

 

### (1)                                  Target covenants and agrees that from the date hereof until thetermination of this Agreement it shall not take any action, or fail to take anyaction, which would or may reasonably be expected to result in therepresentations and warranties set out in Section 4.1 being untrue in anymaterial respect.

###  

### (2)                                  Parent covenants and agrees that, from the date hereof until thetermination of this Agreement it shall not take any action, or fail to take anyaction, which would or may reasonably be expected to result in therepresentations and warranties set out in Section 4.2 being untrue in anymaterial respect.

###  

## **Section 6.3**                                   Notice of Changes

 

### (1)                                  From the date hereof until the termination of this Agreement, eachParty shall promptly notify the other Parties in writing of any change in thefacts relating to any representation or warranty set out in Section 4.1 orSection 4.2 hereof, as applicable, which change is or may be of such anature as to render any such representation or warranty misleading or untrue ina material respect.

###  

### (2)                                  From the date hereof until the termination of this Agreement, Targetshall notify Parent in writing of any material fact which arises and whichwould

 

27

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### havebeen required to be stated herein had the fact arisen on or prior to the dateof this Agreement.

###  

### (3)                                  From the date hereof until the termination of this Agreement, Targetshall promptly notify Parent in writing of any material change (actual,anticipated, contemplated or, to the knowledge of Target or any of theSubsidiaries, threatened, financial or otherwise) in the business, affairs,operations, assets, liabilities (contingent or otherwise) or capital of Targetor any of the Target Subsidiaries.

###  

### (4)                                  Each of Target and Parent shall in good faith discuss with the otherany change in the circumstances of Target or any of the Subsidiaries (actual,anticipated, contemplated or, to its knowledge of its or any of theSubsidiaries, threatened, financial or otherwise) which is of such a naturethat there may be a reasonable question as to whether notice need to be givento the other pursuant to this Section 6.3.

###  

## **Section 6.4**                                   Access to Information

 

### (1)                                  Subject to Section 6.4(2) and applicable Laws, uponreasonable notice, Target shall (and shall cause each of the Subsidiaries to)afford Parent’s Representatives access, during normal business hours from thedate hereof and until the earlier of the Effective Date or the termination ofthis Agreement, to its and the Target Subsidiaries’ properties, books,contracts and records as well as to its management personnel, and, during suchperiod, Target shall (and shall cause each of the Subsidiaries to) furnishpromptly to Parent all information concerning the Target’s and the Subsidiaries’businesses, properties and personnel as Parent may reasonably request.

###  

### (2)                                  Parent acknowledges that certain information provided to it under Section 6.4(1) abovewill be non-public and/or proprietary in nature and will be subject to theterms of the Confidentiality Agreement. For greater certainty, the provisions of the Confidentiality Agreementshall survive the termination of this Agreement, provided that theConfidentiality Agreement and Section 6.4(1) shall terminate at theEffective Time notwithstanding anything to the contrary contained therein.

###  

### (3)                                  In the event that Target is provided with any confidentialinformation concerning Parent or its subsidiaries, such information will besubject to obligations of confidentiality on the part of Target identical tothose imposed on Parent under the Confidentiality Agreement,*mutatis mutandis*. Upon reasonable notice,Parent shall afford representatives of Target the opportunity, upon reasonablenotice and during normal business hours from the date hereof and until theearlier of the Effective Date or termination of this

 

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### Agreement,to speak to appropriate management personnel of Parent as Target may reasonablyrequest.

###  

## **Section 6.5**                                   Transitional Matters

 

Targetacknowledges that it is Parent’s intent to assume control of the board ofdirectors, management and operations of Target upon completion of theArrangement.  The existing management andemployees of Target may be replaced at the discretion of Parent upon completionof the Arrangement and the existing board of directors of Target shall tenderletters of resignation upon completion of the Arrangement.  Parent acknowledges that the commitmentsdisclosed in Exhibit ”I” are in full force and effect and agrees to honouror cause to be honoured all such commitments in accordance with theirterms.  The Parties acknowledge, forgreater certainty, that the advisory and M&A fee, the warrant conversionbreak fee and the phantom share payments set out in Exhibit ”I” arepayable and will be paid at closing of the Arrangement.  Parent shall have the right to cause one ormore of its Affiliates to make a loan to Target effective at the Effective Timeto fund the phantom share payments prior to the effective time of thetransactions described in Sections 3.1(e) and (f) of the Plan ofArrangement.

 

## **Section 6.6**                                   Other Filings

 

Targetshall, as promptly as practicable hereafter, prepare and file all filingsrequired under any securities Laws, the rules of the TSX and any otherapplicable Laws relating to the Arrangement and all related matterscontemplated hereby.

 

## **Section 6.7**                                   Additional Agreements

 

Targetshall use commercially reasonable efforts to:

 

#### (a)                                  obtain all necessary waivers, consents and approvals from otherparties to material agreements, leases and other contracts or agreements;

####  

#### (b)                                 defend all lawsuits or other legal proceedings challenging thisAgreement or the consummation of the Arrangement or any other related matterscontemplated hereby;

####  

#### (c)                                  cause to be lifted or rescinded any injunction or restraining orderor other order adversely affecting the ability of the Parties to consummate theArrangement or any other related matters contemplated hereby; and

####  

#### (d)                                 effect all necessary registrations and other filings and submissionsof information requested by Governmental Authorities.

 

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## **Section 6.8**                                   Mutual Covenants

 

Subjectto the terms and conditions of this Agreement and subject to fiduciaryobligations under applicable Laws, each of the Parties agrees to use allcommercially reasonable efforts to take, or cause to be taken, all action andto do, or cause to be done, all things necessary, proper or advisable toconsummate and make effective as promptly as practicable the Arrangement andall related matters contemplated by this Agreement and to cooperate with eachother in connection with the foregoing, including using commercially reasonableefforts:

 

#### (a)                                  to obtain all appropriate Regulatory Approvals;

####  

#### (b)                                 not take any action or permit any of its subsidiaries to take anyaction that would render, or may reasonably be expected to render, anyrepresentation or warranty made by it in this Agreement untrue in any materialrespect at any time prior to the Effective Date or termination of thisAgreement, whichever is first; and

####  

#### (c)                                  to fulfill all conditions and satisfy all provisions of thisAgreement.

####  

Forpurposes of the foregoing, the obligation to use **“commerciallyreasonable efforts”** to obtain waivers, consents and approvals toloan agreements, leases and other contracts shall not include any obligation toagree to a materially adverse modification of the terms of such documents or toprepay or incur additional material obligations to such other Parties.

 

## **Section 6.9**                                   Pre-Acquisition Reorganizations

 

Targetwill agree to effect such reorganization of its business, operations and assetsor such other transactions (each, a **“Pre-acquisitionReorganization”**) as the Parent may reasonably request prior to theEffective Date, and the Plan of Arrangement, if required, shall be modifiedaccordingly. Provided, however, that Target need not effect a Pre-acquisitionReorganization which in the opinion of Target, acting reasonably, (i) wouldrequire Target to obtain the approval of the Target Securityholders in respectof such Pre-Acquisition Reorganization other than at the Target Meeting, (ii) wouldprejudice the Target Securityholders, or (iii) would impede or materiallydelay the consummation of the transactions contemplated hereby or (iv) cannoteither be (A) completed following the approval of the Arrangement by theTarget Securityholders at the Meeting or (B) reversed or unwound withoutresulting in a Material Adverse Effect for Target and the Target Subsidiaries.

 

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## **Section 6.10**                            Proxies Received and Dissent Notices

 

Targetshall advise Parent:

 

#### (a)                                  as reasonably requested, and on a daily basis on each of the lastseven business days prior to the Target Meeting, as to the aggregate tally ofthe proxies and votes received in respect of the Target Meeting; and

####  

#### (b)                                 of any written notice of dissent, withdrawal of such notice, and anyother instruments received by Target pursuant to the Dissent Rights.

####  

## **Section 6.11**                            Privacy Matters

## ** **

#### (a)                                  Parent and Target acknowledge and agree that certain informationprovided by Target to Parent in connection with the transactions contemplatedhereunder constitutes Personal Information (the “Disclosed Personal Information”)which is necessary for the purposes of determining if Parent shall proceed withthe Arrangement, that the disclosure of the Disclosed Personal Informationrelates solely to the carrying on of the business, or the completion of theArrangement and that, as contemplated by the terms of the ConfidentialityAgreement, such Disclosed Personal Information:

####  

##### (i)                                     may not be used for any purpose other than those related to theperformance of this Agreement;

#####  

##### (ii)                                  must be kept strictly confidential and Parent shall ensure thataccess to such Personal Information shall be restricted to thoseRepresentatives of Parent who have a *bona fide* need to have access to such information and shall instruct thoseRepresentatives to protect the confidentiality of such information in a mannerconsistent with Parent’s obligations hereunder; and

#####  

##### (iii)                               upon the expiry or termination of this Agreement, or otherwise uponthe request of Target, Parent shall forthwith cease all use of the DisclosedPersonal Information acquired by Parent in connection with this Agreement andwill return to Target or, at Target s request, destroy in a secure manner theDisclosed Personal Information (and any copies).

#####  

#### (b)                                 In addition to the foregoing obligations contained in theConfidentiality Agreement:

####  

##### (i)            Parent agrees to employ appropriatetechnology and procedures to prevent accidental loss or corruption of such

 

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##### Personal Information, unauthorized input oraccess to the Disclosed Personal Information, or unauthorized or unlawfulcollection, storage, disclosure, recording, copying, alteration, removal,deletion, use or other processing of the Disclosed Personal Information;

#####  

##### (ii)                                  each of Target and Parent agrees to promptly notify the other of allinquiries, complaints, requests for access, and claims of which the Party ismade aware in connection with the Disclosed Personal Information. The Partiesshall fully co-operate with one another, with the persons to whom the DisclosedPersonal Information relates, and any Governmental Entity charged withenforcement of applicable privacy laws, in responding to such inquiries,complaints, requests for access, and claims; and

#####  

##### (iii)                               if the Arrangement is completed Target may disclose additionalPersonal Information of its employees, customers, directors and officers toParent and its Representatives on condition that:

#####  

###### (A)                              Parent and its Representatives must only use or disclose suchPersonal Information for the same purposes for which it was collected, used ordisclosed by Target, and

######  

###### (B)                                the employees, customers, directors, officers and shareholders whosePersonal Information is disclosed are notified that:

######  

(I)                                    the Arrangement has taken place, and

 

(II)                                thepersonal information about them has been disclosed to Parent and itsRepresentatives.

 

#### (c)                                  Without limiting the foregoing, each of Target and Parentacknowledge and agree that their respective disclosure letters and allinformation contained in them is confidential and may not be disclosed to anyPerson other than their Representatives unless (i) such disclosure isrequired under applicable Law, unless such Law permits it to refrain fromdisclosing such information for confidentiality or other reasons or (ii) suchdisclosure is required in order to enforce its rights under this Agreement.

 

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## **Section 6.12**                            Form of Transaction

## ** **

Targetagrees and acknowledges that without limitation of Target’s obligationshereunder in respect of the Arrangement, Parent shall have the right, in itssole discretion, to make directly or through one or more subsidiaries an offer(a “Contemporaneous Offer”) by means of take-over bid circular to TargetSecurityholders to acquire the outstanding Target Securities (or any of them)and the obligations of Target hereunder to co-operate with Parent in connectiontherewith (including without limitation those set forth in Article 8)shall apply to such Contemporaneous Offer provided the consideration offered isnot less than is provided in Section 2.3(a).

 

# **ARTICLE 7CONDITIONS**

# ** **

## **Section 7.1**                                   Mutual Conditions Precedent

## ** **

Therespective obligations of the Parties hereto to complete the Arrangement shallbe subject to the satisfaction, on or before the Effective Date, of thefollowing conditions precedent, each of which may be waived only by the mutualconsent of the Parties:

 

#### (a)                                  the Arrangement Resolutions shall have been approved in accordancewith the Interim Order and the Final Order shall have been obtained on termssatisfactory to the Parent, acting reasonably; and

####  

#### (b)                                 no orders or decrees restricting the Arrangement shall have beenissued, no proceedings in relation to the Arrangement shall have been taken orthreatened, and no other similar legal impediments to the Arrangement shallexist.

####  

## **Section 7.2**                                   Additional Conditions Precedent to the Obligations of Parent

## ** **

Theobligations of Parent and any subsidiary it may designate as a party to thePlan of Arrangement to complete the transactions contemplated by this Agreementshall also be subject to the satisfaction, on or before the Effective Date, ofeach of the following conditions precedent (each of which is for the exclusivebenefit of Parent and any such subsidiary and may be waived by Parent and anyone or more of which, if not satisfied or waived, will relieve Parent and anysuch subsidiary of any obligation under this Agreement):

 

#### (a)                                  the representations and warranties of Target in this Agreement (readas if no such representations and warranties contain a materialityqualification) shall be true and correct in all material respects and thereshall not have been any material breach by Target of any of its covenants orother obligations in this Agreement;

 

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#### (b)                                 Parent shall have determined, in its sole discretion actingreasonably, that there shall have occurred no material change in the business,assets or condition (financial or otherwise) of Target and no property,subsidiary or legal right of any kind of Target or the Target Subsidiariesshall have been lost, impaired or materially adversely affected that might makeit inadvisable for Parent to proceed with the Arrangement, provided thatchanges to the  price of gold, changes toCanadian and United States financial markets or changes to the gold miningindustry generally (and which do not disproportionately affect Target and theTarget Subsidiaries) shall not be considered to constitute such a materialchange;

####  

#### (c)                                  all applicable Regulatory Approvals shall have been obtained onterms and conditions satisfactory to Parent in its sole discretion and allwaiting periods (if any) under applicable Laws shall have terminated orexpired;

####  

#### (d)                                 there shall not be any action taken, any Law enacted, entered,enforced or deemed applicable by any Government Authority or pending orthreatened any suit, action or proceeding by any Government Authority seekingto prohibit or materially limit the ownership or operation by Parent, Target,or any of their respective subsidiaries of any material portion of the businessor assets of Parent, Target or any of their respective subsidiaries or seekingto prohibit or limit the ability of Parent or any of its subsidiaries fromeffectively controlling in any material respect the business or operations ofTarget and the Target Subsidiaries or imposing any condition or restrictionthat in the judgment of Parent, acting reasonably, would be materiallyburdensome to the future operations or business of any business unit of Targetor any of the Target Subsidiaries after the closing of the Transaction;

####  

#### (e)                                  holders of no more than·10% of the Target Shares  shall have exercised Dissent Rights;

####  

#### (f)                                    the Chairman and Chief Executive Officer of Target or anotherofficer satisfactory to Parent shall have certified as to the items inparagraph 7.2(g) below immediately prior to the Effective Date;

####  

#### (g)                                 the Target board and the Target Securityholders shall have adoptedall necessary resolutions and all other necessary corporate actions shall havebeen taken by Target to permit the consummation of the Arrangement;

 

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#### (h)                                 from the date of this Agreement until the date upon which the TargetSecurityholders approve the Arrangement, the board of directors of Target shallnot have withdrawn, modified or changed in a manner adverse to Parent itsrecommendation to Target Securityholders to vote in favour of the Arrangement;

####  

#### (i)                                     Target shall have mailed the Information Circular no later than December 20,2005 and the Effective Time shall occur no later than the Completion Deadline;

####  

#### (j)                                     any Pre-acquisition Reorganizations as referred to in Section 6.9shall have been completed; and

####  

#### (k)                                  without prior consultation with and the consent of Parent, thereshall not have occurred any reorganization of Target and its affiliates andsubsidiaries or any other action or inaction that would have the effect ofpreventing Parent or any subsidiary of Parent party to the Plan of Arrangementfrom obtaining a full tax cost “bump” pursuant to paragraph 88(1)((d) ofthe Income Tax Act (Canada) in respect of shares of Affiliates or subsidiariesand other non-depreciable capital property owned by Target immediately beforethe Effective Time.

####  

## **Section 7.3**                                   Additional Condition Precedent to the Obligations of Target

## ** **

Theobligations of Target to complete the transactions contemplated by thisAgreement shall also be subject to the satisfaction, on or before the EffectiveDate, to the following condition precedent (which is for the exclusive benefitof Target and may be waived by Target and any one or more of which, if notsatisfied or waived, will relieve Target of any obligation under thisAgreement):

 

#### (a)                                  the representations and warranties of Parent in this Agreement (readas if no such representations and warranties contain a materialityqualification) shall be true and correct in all material respects and thereshall not have been any material breach by Parent of any of its covenants orother obligations in this Agreement; and

####  

#### (b)                                 all applicable Regulatory Approvals shall have been obtained and allwaiting periods (if any) under applicable Laws shall have terminated orexpired.

####  

## **Section 7.4**                                   Satisfaction of Conditions

## ** **

Theconditions precedent set out in Sections 7.1, 7.2 and 7.3 shall be conclusivelydeemed to have been satisfied, waived or released at the Effective Time.

 

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# **ARTICLE 8ACQUISITION PROPOSALS**

# ** **

## **Section 8.1**                                   Covenants Regarding Non-Solicitation

## ** **

#### (a)                                  Target shall, and shall direct and cause its Representatives toimmediately cease and cause to be terminated any solicitation, encouragement,activity, discussion or negotiation with any parties that may be ongoing withrespect to an Acquisition Proposal whether or not initiated by Target and inconnection therewith, Target shall request (and exercise all rights it has torequire) the return of information regarding Target and the Target Subsidiariespreviously provided to such parties and shall request (and exercise all rightsit has to require) the destruction of all materials including or incorporatingany confidential information regarding Target and the Target Subsidiaries.

####  

#### (b)                                 Subject to Section 8.2, Target agrees that it shall not, andshall not authorize or permit any its Representatives, directly or indirectly,to (i) solicit, initiate, encourage or facilitate, including by way offurnishing information or entering into any form of agreement, arrangement orunderstanding, any inquiries or the making of any proposals regarding anAcquisition Proposal, (ii) participate in any discussions or negotiationsregarding any Acquisition Proposal, (iii) withdraw, modify, qualify orchange in a manner adverse to Parent, or publicly propose to withdraw, modify,qualify or change in a manner adverse to Parent the approval, recommendation ordeclaration of advisability of the board of directors of Target of thetransactions contemplated hereby (it being understood that failing to affirmthe approval or recommendation of the board of directors of Target of thetransactions contemplated hereby after an Acquisition Proposal has beenpublicly announced shall be considered an adverse modification), (iv) approveor recommend any Acquisition Proposal or (v) enter into any agreement,arrangement or understanding related to any Acquisition Proposal or requiringTarget to abandon, terminate or fail to consummate the Arrangement or providingfor the payment of any break, termination or other fees or expenses to anyperson in the event that Target or any of the Target Subsidiaries completes thetransactions contemplated hereby or any other transaction with Parent or any ofits affiliates agreed to prior to any termination of this Agreement.  Notwithstanding the preceding sentence andany other provisions of this Agreement, the board of directors of Target may,prior to the approval of the Arrangement by the Target Securityholders,consider, participate in any discussions or negotiations with, or provide

 

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#### information in accordance with the lastsentence of this paragraph to, any person who has delivered a *bona fide* written Acquisition Proposalwhich was not solicited or encouraged after the date of this Agreement and didnot otherwise result from a breach of this Section 8.1 and that the boardof directors of Target determines in good faith, after consultation with itsfinancial advisors and outside legal counsel, is a Superior Proposal; provided,however, that prior to taking any such action, (i) the board of directorsof Target must receive written advice of outside counsel that it is necessaryfor the board of directors of Target to take such action in order to dischargeproperly its fiduciary duties, and (ii) Target must obtain aconfidentiality agreement from the person making such Acquisition Proposal thatis substantively the same as the Confidentiality Agreement, and on terms nomore favourable to such person than the Confidentiality Agreement including astandstill provision at least as stringent as was contained in theConfidentiality Agreement; provided further that Target shall not commence orparticipate in discussions or negotiations with, or provide information to anyperson who has delivered an unsolicited *bonafide* written Acquisition Proposal until 48 hours after Target shallhave advised Parent of its determination that such Acquisition Proposal would,if completed, constitute a Superior Proposal and of its intention to take such actions.Target shall not consider, negotiate, accept, approve or recommend anAcquisition Proposal or provide information to any person proposing anAcquisition Proposal, in each case after the date of the approval of theArrangement by the Target Securityholders. If Target receives a request formaterial non-public information from a person who has made an unsolicited *bona fide* written Acquisition Proposal andTarget is permitted, as contemplated under the second sentence of this Section 8.1(b),to negotiate the terms of such Acquisition Proposal, then, and only in suchcase, the board of directors of Target may, subject to the execution by suchperson of the confidentiality agreement as described in (ii) above,provide such person with access to information regarding Target; provided thatTarget sends a copy of any such confidentiality agreement to Parent promptlyupon its execution and Parent is provided with a list of, and copies of, theinformation provided to such person and is immediately provided with access tosimilar information to which such person was provided.

####  

#### (c)                                  From and after the date of this Agreement, Target shall promptly(and in any event within 24 hours) notify Parent, at first orally and then inwriting, of any inquiries, proposals or offers relating to or constituting anAcquisition Proposal, or any request for non-public information

 

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#### relating to Target or any of the TargetSubsidiaries. Such notice shall include a description of the terms andconditions of any proposal, inquiry or offer, the identity of the person makingsuch proposal, inquiry or offer and provide such other details of the proposal,inquiry or offer as Parent may reasonably request. Target shall keep Parentfully informed on a prompt basis of the status, including any change to thematerial terms, of any such inquiry, proposal or offer.

####  

#### (d)                                 Nothing contained in Section 6.1 or Section 8.1(b) shallprohibit the board of directors of Target from withdrawing, modifying, qualifyingor changing its recommendation to the Target Securityholders in respect of thetransactions contemplated hereby prior to the approval of the Arrangement bythe Target Securityholders, if the board of directors of Target determines, ingood faith (after receiving written advice of outside counsel) that suchwithdrawal, modification, qualification or change is necessary for the board ofdirectors of Target to act in a manner consistent with its fiduciary duties orapplicable Laws; provided that (i) not less than 48 hours before the boardof directors of Target considers any proposal in respect of any suchwithdrawal, modification, qualification or change, Target shall give Parentwritten notice of such proposal and promptly advise Parent of the proposedconsideration of such proposal, including a summary of the reasons for theproposal withdrawal, modification, qualification or change, a copy of thewritten opinion of outside counsel and all other materials to be presented tothe board of directors of Target in respect of its consideration of suchproposal, and (ii) the foregoing shall not relieve Target from itsobligation to proceed to call and hold the Target Meeting and to hold the voteon the Arrangement Resolutions, except in circumstances where this Agreement isterminated in accordance with the terms hereof.

####  

#### (e)                                  Target shall ensure that its Representatives are aware of theprovisions of this Section 8.1, and it shall be responsible for any breachof this Section 8.1 by such officers, directors, employees, financialadvisors or other advisors or representatives.

####  

## **Section 8.2**                                   Right to Accept a Superior Proposal

## ** **

#### (a)                                  If Target has complied with Section 8.1 with respect thereto,Target may accept, approve, recommend or enter into any agreement, understandingor arrangement in respect of a Superior Proposal prior to the approval of theArrangement by the Target Securityholders and terminate this Agreement if, andonly if (with the exception of a confidentiality agreement the execution ofwhich shall not be subject to

 

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#### the conditions of this Section 8.2), (i) Targethas provided Parent with a copy of the Superior Proposal document, (ii) sevenBusiness Days shall have elapsed from the later of (x) the date Parent receivedwritten notice (a “Section 8.2 Notice”) advising Parent that Target’sboard of directors has resolved, subject only to compliance with this Section 8.2,to accept, approve, recommend or enter into an agreement in respect of suchSuperior Proposal, specifying the terms and conditions of such SuperiorProposal and identifying the person making such Superior Proposal, and (y) thedate Parent received a copy of such Superior Proposal, (iii) Target sboard of directors has determined in good faith (based upon the written opinionof its outside legal counsel) that it is necessary for the board of directorsof Target to take such action in order to discharge properly its fiduciaryduties and thereby withdrawing or modifying its approval or recommendation ofthis Agreement and approving or recommending such Superior Proposal, (iv) suchSuperior Proposal does not provide for the payment of any break, termination orother fees or expenses to the other party in the event that Target or any ofthe Target Subsidiaries completes the transactions contemplated by thisAgreement or any similar other transaction with Parent or any of its affiliatesagreed to prior to any termination of this Agreement, (v) taking intoaccount any revised proposal made by Parent since receipt of the Section 8.2Notice, such Superior Proposal remains a Superior Proposal and the Target boardof directors has again made the determinations referred to in this Section 8.2(a) and(vi) Target has previously or concurrently will have paid to Parent theTermination Fee, if any, payable under Section 9.4. In the event thatTarget provides Parent with a Section 8.2 Notice on a date that is lessthan seven Business Days prior to the Target Meeting, Target shall adjourn theTarget Meeting (without notice on the Arrangement or any related matters) to adate that is not less than five Business Days and not more than 10 BusinessDays after the date of the Section 8.2 Notice.

####  

#### (b)                                 During the seven Business Day period referred to in Section 8.2(a)(ii),Target agrees that Parent shall have the right, but not the obligation, tooffer to amend the terms of this Agreement. The board of directors of Targetwill review any proposal by Parent to amend the terms of this Agreement in goodfaith in order to determine, in its discretion in the exercise of its fiduciaryduties, whether Parent’s amended proposal upon acceptance by Target wouldresult in such Superior Proposal ceasing to be a Superior Proposal. If theboard of directors of Target so determines, it will enter into an amendedagreement with Parent reflecting Parent’s amended proposal. If the board ofdirectors of

 

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#### Target continues to believe, in good faithand after consultation with financial advisors and outside counsel, that suchSuperior Proposal remains a Superior Proposal and therefore rejects Parent’samended proposal, Target may, on termination of this Agreement in accordancewith Section 9.2(c)(iv) and payment of the termination fee as requiredpursuant to Section 9.4, accept, approve, recommend or enter into anagreement, understanding or arrangement in respect of such Superior Proposal.

####  

#### (c)                                  Target also acknowledges and agrees that each successive materialmodification of any Acquisition Proposal shall constitute a new AcquisitionProposal for purposes of Section 8.1 and the requirement under clause (ii) ofSection 8.2(a) to initiate an additional seven Business Day noticeperiod.

####  

# **ARTICLE 9AMENDMENT AND TERMINATION**

# ** **

## **Section 9.1**                                   Amendment

## ** **

ThisAgreement may, at any time and from time to time before or after the holding ofthe Target Meeting but not later than the Effective Time, be amended by mutualwritten consent of the Parties and any such amendment may, without limitation:

 

#### (a)                                  change the time for performance of any of the obligations or acts ofthe Parties, including an extension of the Completion Deadline;

####  

#### (b)                                 waive any inaccuracies or modify any representation or warrantycontained in this Agreement or in any document delivered pursuant hereto;

####  

#### (c)                                  waive compliance with or modify any of the covenants contained inthis Agreement and waive or modify performance of any of the obligations of theParties; and

####  

#### (d)                                 waive compliance with or modify any conditions precedent containedin this Agreement.

####  

## **Section 9.2**                                   Termination

## ** **

#### (a)                                  If any condition contained in Sections 7.1 or 7.2 is not satisfiedat or before the Completion Deadline to the satisfaction of Parent, then Parentmay, by notice to Target terminate this Agreement and the obligations of theParties (except as otherwise herein provided) but

 

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#### without detracting from the rights of Parentarising from any breach by Target but for which the condition would have beensatisfied.

####  

#### (b)                                 If any condition contained in Sections 7.1 or 7.3 is not satisfiedat or before the Completion Deadline to the satisfaction of Target, then Targetmay by notice to Parent terminate this Agreement and the obligations of theParties (except as otherwise herein provided) but without detracting from therights of Target arising from any breach by Parent but for which the conditionwould have been satisfied.

####  

#### (c)                                  This Agreement may:

####  

##### (i)                                     be terminated by the mutual written agreement of Target and Parent(without any action on the part of the Target Securityholders);

#####  

##### (ii)                                  be terminated by either Target or Parent, if there shall be passedany Law that makes consummation of the transactions contemplated by thisAgreement illegal or otherwise prohibited;

#####  

##### (iii)                               be terminated by Parent if (A) the board of directors of Targetshall have failed to recommend in the Information Circular, withdrawn,modified, qualified or changed in a manner adverse to Parent, its approval orrecommendation of the Arrangement or the Arrangement Resolutions (including ascontemplated by Section 8.2) or (B) the board of directors of Targetshall have approved or recommended an Acquisition Proposal;

#####  

##### (iv)                              be terminated by Target in order to enter into a definitive writtenagreement with respect to a Superior Proposal, subject to compliance with Section 8.2and the payment of the Termination Fee required to be paid pursuant to Section 9.4and subject further to Section 9.3;

#####  

##### (v)                                 be terminated by Target or Parent if the approval of the TargetSecurityholders shall not have been obtained by reason of the failure to obtainthe required vote on the Arrangement Resolutions at the Target Meeting;

#####  

##### (vi)          be terminated by Parent if Targetshall have failed to hold the Target Meeting on or before January 27, 2006unless such failure results from:  (A) anadjournment of the Target Meeting for not more than seven Business Days due toits obligation to adjourn the Target Meeting in the circumstances described in Section 8.2;or (B) for reasons beyond the control of Target so long as

 

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#### Target is in compliance with the terms andconditions of this Agreement and it has been and continues to be using allreasonable best efforts to hold the Target Meeting as soon as practicable afterJanuary 27, 2006; or

#####  

##### (vii)                           be terminated by Parent if there is an intentional breach of thecovenants in Article 8 by Target, any of the Target Subsidiaries or any oftheir respective directors, officers, employees, agents, consultants or anyother representative, in each case, prior to the Completion Deadline.

#####  

#### (d)                                 If the Effective Time does not occur on or prior to end of businesson the Completion Deadline, then this Agreement shall terminate.

####  

## **Section 9.3**                                   Effect of Termination

## ** **

If thisAgreement is terminated in accordance with the provisions of Section 9.2,no party shall have any further liability to perform its obligations hereunderexcept for the provisions of this Section 9.3, and Sections 6.4(2),6.4(3), 9.4, 9.5, 9.6 and 9.8, provided that neither the termination of thisAgreement nor anything contained in this Section 9.3 shall relieve anyParty from any liability for any breach by it of this Agreement, including fromany inaccuracy in its representations and warranties and any non-performance byit of its covenants and agreements made herein. Notwithstanding the foregoing,no termination of this Agreement by the Target pursuant to Section 9.2(c)(iv) shallrelieve the Target of its obligations under Article 2, except theobligation of Target to solicit proxies in favour of the Arrangement in Section 2.1(c).

 

## **Section 9.4**                                   Termination Fee

## ** **

If:

 

#### (a)                                  Parent shall terminate this Agreement as a result of any action orinaction of the board of directors of Target pursuant to Section 9.2(c)(iii);

####  

#### (b)                                 Target shall terminate this Agreement in order to enter into adefinitive written agreement with respect to a Superior Proposal pursuant to Section 9.2(c)(iv);

####  

#### (c)                                  either Target or Parent shall terminate this Agreement pursuant to Section 9.2(c)(v) incircumstances where the Arrangement Resolutions have not received the requiredTarget Securityholder approval at the Target Meeting and: (A) a *bona fide* Acquisition Proposal has beenpublicly announced or made by any Person other than Parent prior to the TargetMeeting and not publicly withdrawn more than five

 

42

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#### Business Days prior to the Target Meeting,and (B) Target enters into an agreement with respect to an AcquisitionProposal, or an Acquisition Proposal is consummated, after the date of thisAgreement and prior to the expiration of 12 months following termination ofthis Agreement; or

####  

#### (d)                                 Parent shall terminate this Agreement pursuant to Section 9.2(c)(vi) or(vii),

####  

then in any such case Target shall pay to Parent theTermination Fee in immediately available funds to an account designated byParent. Such payment shall be due (A) in the case of a terminationspecified in clauses (a) or (d) above, within five Business Daysafter written notice of termination by Parent or (B) in case of atermination specified in clause (b) above, on or prior to the terminationof this Agreement or (C) in the case of a termination specified in clause (c) above,at or prior to the earlier of the entering into of the agreement and theconsummation of the transaction referred to therein. Target shall not beobligated to make more than one payment pursuant to this Section 9.4.

 

## **Section 9.5**                                   Effect of Termination Fee Payment

## ** **

Forgreater certainty, the parties hereto agree that if Target pays the TerminationFee to Parent pursuant to the provisions of Section 9.4, Parent shall haveno other remedy for any breach of this Agreement by Target, unless Target makesa claim against Parent for breach of a provision of this Agreement, in whichcircumstances the liability of Target to Parent for damages for claims inrespect of breaches of this Agreement shall be subject to a maximum limit equalto the liability of Parent to Target for damages for claims in respect ofbreaches of this Agreement plus the Termination Fee.

 

## **Section 9.6**                                   Fees and Expenses

## ** **

Subjectto Section 9.4, the Parties shall be responsible for the payment of theirown professional fees (including but not limited to legal, financial advisoryand accounting fees) and other expenses incurred by them in connection with theArrangement.

 

## **Section 9.7**                                   Waiver

## ** **

Target,on the one hand, and Parent, on the other hand, may (i) extend the timefor the performance of any of the obligations or other acts of the other, (ii) waivecompliance with any of the other’s agreements or the fulfillment of anyconditions to its own obligations contained herein or (iii) waiveinaccuracies in any of the other’s representations or warranties containedherein or in any document delivered by the other Party hereto; provided,however, that any such extension or

 

43

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waiver shall be valid only if set forth in an instrument in writingsigned on behalf of such Party.

 

## **Section 9.8**                                   Remedies.

## ** **

Subjectto Section 9.5, the Parties acknowledge and agree that an award of moneydamages would be inadequate for any breach of this Agreement by any Party orits representatives and any such breach would cause the non-breaching Partyirreparable harm. Accordingly, the Parties agree that, in the event of anybreach or threatened breach of this Agreement by one of the Parties, thenon-breaching Party will also be entitled, without the requirement of posting abond or other security, to equitable relief, including injunctive relief andspecific performance. Such remedies will not be the exclusive remedies for anybreach of this Agreement but will be in addition to all other remediesavailable at law or equity to each of the Parties.

 

# **ARTICLE 10GENERAL**

# ** **

## **Section 10.1**                            Notices

## ** **

Allnotices and other communications given or made pursuant hereto shall be inwriting and shall be deemed to have been duly given or made as of the datedelivered or sent if delivered personally or sent by facsimile or sent byprepaid overnight courier to the Parties at the following addresses (or at suchother addresses as shall be specified by the Parties by like notice):

 

if to Parent:**GOLD FIELDS LIMITED**24 St. Andrews Rd.Parktown, Johannesburg, 2193South AfricaAttention:                                         Ian Cockerill Facsimile:                                            (27) 11 484-0682

 

44

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with a copy to:

**STIKEMAN ELLIOTT LLP**5300 Commerce Court West199 Bay StreetToronto, Ontario  M5L 1B9Attention:                      Robert W.A. NichollsFacsimile:                         (416) 947-0866

 

if to Target:

 

**BOLIVAR GOLD CORP.**110 Yonge Street, Suite 1502Toronto, Ontario M5C 1T4 Attention:                      Robert DoyleFacsimile:                         (416) 360-7783

 

with a copy to:

 

**WILDEBOER DELLELCE LLP**Suite 810, P.O. Box 41 First Canadian PlaceToronto, Ontario, M5X 1A9Attention:                      Vaughn MacLellanFacsimile:                         (416) 361-1790

 

## **Section 10.2**                            Assignment

## ** **

Parentmay assign this Agreement or any of the rights, interests or obligationshereunder to an affiliate, provided that in the case of any such assignmentParent shall remain liable for any default by such affiliate and providedfurther that without assigning this Agreement, Parent may stipulate and requirethat the party to the Plan of Arrangement which acquires the Target Securitiesbe such subsidiary of Parent as it shall designate to Target.  Neither this Agreement nor any of the rights,interests or obligations hereunder shall be assigned by Target.

 

## **Section 10.3**                            Further Assurances

## ** **

EachParty hereto shall, from time to time, and at all times hereafter, at therequest of the other Party hereto, but without further consideration, do allsuch further acts and execute and deliver all such further documents andinstruments as

 

45

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shall be reasonably required in order to fully perform and carry outthe terms and intent hereof.

 

## **Section 10.4**                            Severability

## ** **

Wheneverpossible, each provision of this Agreement shall be interpreted in such manneras to be effective and valid under applicable Law. Any provision of thisAgreement that is invalid or unenforceable in any jurisdiction shall beineffective to the extent of such invalidity or unenforceability withoutinvalidating or rendering unenforceable the remaining provisions hereof, andany such invalidity or unenforceability in any jurisdiction shall not invalidateor render unenforceable such provision in any other jurisdiction.

 

## **Section 10.5**                            Entire Agreement

## ** **

ThisAgreement, the agreements and other documents herein referred to and theConfidentiality Agreement constitute the entire agreement between the Partiespertaining to the terms of the Arrangement and supersede all other prioragreements, understandings, negotiations and discussions, whether oral orwritten, between the Parties with respect to the terms of the Arrangement.

 

## **Section 10.6**                            Counterpart Execution

## ** **

ThisAgreement may be executed in one or more counterparts, each of which shall bedeemed to be an original but all of which together shall constitute one and thesame instrument.

 

## **Section 10.7**                            Governing Law

## ** **

ThisAgreement shall be governed by and interpreted in accordance with the Laws ofthe Province of Ontario and the Laws of Canada applicable therein.

 

## **Section 10.8**                            Attornment

## ** **

TheParties hereby irrevocably and unconditionally consent to and submit to thecourts of the Province of Ontario for any actions, suits or proceedings arisingout of or relating to this Agreement or the matters contemplated hereby (andagree not to commence any action, suit or proceeding relating thereto except insuch courts) and further agree that service of any process, summons, notice ordocument by single registered mail to the addresses of the Parties set forth inthis Agreement shall be effective service of process for any action, suit orproceeding brought against either Party in such court. The Parties herebyirrevocably and unconditionally waive any objection to the laying of venue ofany action, suit or proceeding arising out of this Agreement or the matterscontemplated hereby in the courts of the Province of Ontario and hereby furtherirrevocably and unconditionally waive and agree not to plead or claim in anysuch court that any such action, suit or proceeding so brought has been broughtin an inconvenient forum.

 

46

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## **Section 10.9**                            Investigation by Parties

## ** **

Noinvestigations made by or on behalf of either Party or any of their respectiveauthorized agents at any time shall have the effect of waiving, diminishing thescope of or otherwise affecting any representation, warranty or covenant madeby the other Party in or pursuant to this Agreement.

 

**IN WITNESS WHEREOF**,the Parties have caused this Agreement to be executed as of the date firstwritten above by their respective officers thereunto duly authorized.

 
| ** ** | ** ** | **GOLD FIELDS LIMITED** |
|------------|------------|-------------------------|
| ** ** | ** ** | ** **              |   |
| ** ** | ** ** | ** **              |   |
|       |       | By:                     |   /s/ Craig Nelsen |
|       |       |                    |   |
|       |       |                    |   |
| ** ** | ** ** | **BOLIVAR GOLD CORP.**  |
| ** ** | ** ** | ** **              |   |
| ** ** | ** ** | ** **              |   |
|       |       | By:                     |   /s/ Robert Doyle |
|            |            |                         |  |  |

 

47

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**SCHEDULE ”A”**

** **

**FORM OF PLAN OF ARRANGEMENT**

** **

**PLAN OF ARRANGEMENT UNDER SECTION 195OF THE *BUSINESS CORPORATIONS ACT*(YUKON)**

 

# **INTERPRETATION**

# ** **

## **Definitions**

 

In thisPlan of Arrangement, unless there is something in the subject matter or contextinconsistent therewith, the following terms shall have the respective meaningsset out below and grammatical variations of those terms shall have correspondingmeanings:

 

#### “**Acquisitionco**” means38978 Yukon Inc., a corporation exisiting under the laws of the Yukon Territoryand a direct or indirect wholly-owned subsidiary of Parent;

####  

#### “**Affiliate**” has themeaning ascribed thereto in the OSA;

####  

#### “**Arrangement**” means anarrangement under the provisions of section 195 of the YBCA, on the termsand conditions set forth in this Plan of Arrangement and any amendment,variation or supplement thereto made (i) in accordance with Section 9.1of the Arrangement Agreement, (ii) in accordance with Section 6.1 hereof,or (iii) at the direction of the Court in the Final Order;

####  

#### **“Arrangement Agreement**” means the agreement dated December 1, 2005 between Parent andTarget to which this Plan of Arrangement is attached as Schedule ”A”;

####  

#### “**Arrangement Resolutions**” means the special resolutions of the Target Securityholdersapproving the Arrangement in accordance with section 195 of the YBCA andthe provisions of the Interim Order;

####  

#### “**Business Day**” meansany day excepting a Saturday or Sunday or a day recognized as a holiday inJohannesburg, South Africa, Toronto, Ontario, or Whitehorse, Yukon Territory;

####  

#### “**Court**” means theSupreme Court of the Yukon Territory;

 

----

 

#### “**Depositary**” meansEquity Transfer Services Inc., at its delivery address in Toronto at Suite 420,120 Adelaide Street West, Toronto, Ontario M5H 4C3;

####  

#### “**Dissent Rights**” meansthe Dissent Rights in respect of the Arrangement described in Section 4.1;

####  

#### “**Dissenting Shares**”means the Target Shares held by Dissenting Shareholders;

####  

#### “**Dissenting Shareholders**” means holders of Target Shares who have duly and validly exercisedtheir Dissent Rights pursuant to Article 4 and the Interim Order;

####  

#### “**Effective Date**meansthe date upon which the Arrangement becomes effective as established by the dateof issue shown on the certificate issued by the registrar pursuant to the YBCA;

####  

#### “**Effective Time**” means12:01 a.m. (Whitehorse, Yukon time) on the Effective Date;

####  

#### “**Final Order**” means thefinal order of the Court approving the Arrangement as such order may be amendedby the Court at any time prior to the Effective Date or, if appealed, then,unless such appeal is withdrawn or denied, as affirmed or as amended on appeal;

####  

#### “**Government Authority**”has the meaning ascribed to it in the Arrangement Agreement;

####  

#### “**Information Circular**”means the notice of the Target Meeting and accompanying management informationcircular including all schedules and exhibits thereto, to be sent by Target tothe Target Securityholders in connection with the Target Meeting;

####  

#### “**Interim Order**” meansan order of the Court providing for, among other things, the calling andholding of the Target Meeting, as such order may be amended, supplemented orvaried by the Court;

####  

#### “**ITA**” means the *Income Tax Act* (Canada), as amended;

####  

#### **“Letter of Transmittal”** means the respective letters of transmittal to be delivered byTarget to the Target Shareholders, Target Warrantholders and TargetOptionholders, as applicable, and providing for the delivery of the applicableTarget Securities to the Depositary;

 

2

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#### **“Lien”** means any mortgage, hypothec, prior claim, lien, pledge, assignmentfor security, security interest, right of third parties or other charge orencumbrance whatsoever;

####  

#### “**Notice of Dissent**”means a notice of dissent duly and validly given by a Target Shareholderexercising Dissent Rights as contemplated in the Interim Order and as describedin Article 4;

####  

#### “**OSA**” means the *Securities Act* (Ontario) and the rules,regulations and policies made thereunder, as now in effect and as they may beamended from time to time prior to the Effective Date;

####  

#### **“Parent”**means Gold Fields Limited, a company incorporated under the laws ofSouth Africa;

####  

#### “**Plan of Arrangement**”, “**hereof**”, “**herein**”, “**hereunder**” and similarexpressions means this plan of arrangement, including any appendices hereto,and any amendments, variations or supplements hereto made from time to time inaccordance with the terms hereof, the Arrangement Agreement or made at thedirection of the Court in the Final Order;

####  

#### “**Specified Percentage**”means a percentage to be specified by Parent prior to the Effective Date andset out in the Final Order as the percentage of the Target Shares held byTarget Shareholders (other than Parent and its Affiliates, unless theyotherwise elect, and Dissenting Shareholders) to be acquired by Acquisitionco,but in no event being less than 75%;

####  

#### “**Subco**” means GoldFields Guernsey Limited, a corporation existing under the laws of the GuernseyIslands and a direct or indirect wholly-owned subsidiary of Parent;

####  

#### **“Target”** means Bolivar Gold Corp., a company continued under the laws of theYukon Territory;

####  

#### **“Target Debentures”** means the $26 million principal amount of 6% convertible debenturesof Target maturing December 5, 2008, convertible at the option of theholder at $2.85;

####  

#### **“Target Meeting”** means the special meeting or meetings of Target Securityholders(including any adjournment thereof) that is to be convened to consider and, ifdeemed advisable, to approve the Arrangement Resolutions and other matters ofbusiness, as described in the Information Circular;

 

3

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#### **“Target Options”** means the share purchase options granted under the Target StockOption Plan and being outstanding and unexercised on the date hereof;

####  

#### **“Target Optionholder”**means a holder of Target Options, and **“TargetOptionholders”**means all of such holders;

####  

#### **“Target Securities”**means, collectively, the Target Shares, Target Warrants and TargetOptions;

####  

#### **“Target Securityholders”** means the Target Shareholders together with the holders of theTarget Options and Target Warrants;

####  

#### **“Target Shareholder”** means a registered holder of Target Shares, from time to time, and **“Target Shareholders”**means all of such holders;

####  

#### **“Target Shares”** means the common shares in the capital of Target;

####  

#### **“Target Stock Option Plan”** means the option plan of Target;

####  

#### **“Target Subsidiaries”** means, collectively, each of the subsidiaries of Target;

####  

#### **“Target Warrants”** means, collectively, the Target Initial Warrants, Target “A”Warrants and the Target “B” Warrants;

####  

#### **“Target ‘A’ Warrants”** means the outstanding common share purchase warrants of Targetexpiring August 25, 2008, exercisable at $1.75 per Target Share;

####  

#### **“Target ‘B’ Warrants”** means the outstanding common share purchase warrants of Targetexpiring December 22, 2009, exercisable at $3.25 per Target Share;

####  

#### **“Target Initial Warrants”** means the outstanding common share purchase warrants of Targetexpiring March 17, 2008, exercisable at $1.10 per Target Share;

####  

#### **“Target Warrantholder”**means a holder of Target Warrants;

####  

#### **“Taxes”**has the****meaning ascribed thereto in Section 4.1(m) of the ArrangementAgreement; and

####  

#### “**YBCA**” means the *Business Corporations Act* (Yukon) R.S.Y2002, c. 20 including all regulations made thereunder, as amended.

####  

#### 4

#### 

####  

## **InterpretationNot Affected by Headings, etc.**

## ** **

Thedivision of this Plan of Arrangement into Articles, Sections paragraphs andother portions and the insertion of headings are for convenience of referenceonly and shall not affect the construction or interpretation hereof. Unlessotherwise indicated, all references to an “Article”, “Section” or “paragraph”followed by a number and/or a letter refer to the specified Article, Section orparagraph of this Plan of Arrangement.

 

## **Numberand Gender**

## ** **

In thisPlan of Arrangement, unless the context otherwise requires, words used hereinimporting the singular include the plural and vice versa. Words importinggender include all genders.

 

## **Date ofAny Action**

## ** **

In theevent that any date on which any action is required to be taken hereunder byany of the parties hereto is not a Business Day, such action shall be requiredto be taken on the next succeeding day which is a Business Day.

 

## **Time**

## ** **

Timeshall be of the essence in every matter or action contemplated hereunder. Alltimes expressed herein or in the Letters of Transmittal are local time(Whitehorse, Yukon Territory) unless otherwise stipulated herein or therein.

 

## **Currency**

## ** **

Unlessotherwise stated, all references in this Plan of Arrangement to sums of moneyare expressed in lawful money of Canada.

 

# **EFFECT OF THEARRANGEMENT**

# ** **

At theEffective Time, the Arrangement shall be binding upon Target, the TargetSecurityholders, Parent, Acquisitionco and Subco.

 

# **ARRANGEMENT**

# ** **

## **TheArrangement**

## ** **

At theEffective Time, without any further act or formality, each of the events setout below shall occur and be deemed to occur, except as otherwise noted in thisSection 3.1,  in the followingsequence:

 

#### Acquisitionco (or one or moreof its Affiliates) will provide the following loans to Target:

 

5

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##### a loan having a principalamount equal to the aggregate amount payable by Target under Section 3.1(b) (the**“Option Payment Loan”**);

#####  

##### a loan having a principalamount equal to the aggregate amount payable by Target under Section 3.1(c) (the**“Warrant Payment Loan”**); and

#####  

##### a loan having a principalamount equal to the aggregate amount payable by Target under Section 3.1(d) (the**“Debenture Payment Loan”**);

#####  

##### the Option Payment Loan, Warrant Payment Loanand Debenture Payment Loan to be evidenced by promissory notes issued by Targetto the lender thereof;

#####  

#### Each Target Option held by aTarget Optionholder that has not been duly exercised prior to the EffectiveTime shall be transferred by the Target Optionholder to Target and shall becancelled by Target and in exchange for such cancellation each TargetOptionholder shall be entitled to receive in respect of each such Target Optionheld an amount of cash from Target equal to the amount, if any, by which $3.00exceeds the exercise price of such Target Option (and, for greater certainty,Target shall withhold any required withholding Taxes);

####  

#### Each Target Warrant held by aTarget Warrantholder (other than Parent and its Affiliates, unless theyotherwise elect, and Dissenting Shareholders) that has not been duly exercisedprior to the Effective Time shall be transferred by the Target Warrantholder toTarget and shall be cancelled by Target and in exchange for such cancellationeach Target Warrantholder shall be entitled to receive in respect of each suchTarget Warrant held an amount of cash from Target as follows:

####  

##### $1.90 per Target InitialWarrant;

#####  

##### $1.25 per Target “A” Warrant;and

#####  

##### $0.40 per Target “B” Warrant;

#####  

#### Target shall repay the TargetDebentures, in the amount of $1,095.25 in cash per $1,000 principal amount perTarget Debenture, being the amount in cash that is equal to the “Change ofControl Amount” required under Article 7 of the indenture (the “**Indenture**”) dated December 4,2003 between Target and Computershare Trust Company of Canada (the “**Debenture Trustee**”)governing the Target Debentures (and, for greater certainty, Target shallwithhold any required withholding Taxes) and the Target Debentures shall becancelled, all in accordance with the provisions of the

####  

#### 6

#### 

####  

#### Indenture. The above repayment amount isbased upon the December 31, 2005 interest payment having been made priorto the Effective Time; and

####  

#### after the completion of theimmediately preceding steps, the Specified Percentage of the Target Shares heldby a Target Shareholder (other than Parent and its Affiliates, unless theyotherwise elect, and Dissenting Shareholders) shall be transferred by theTarget Shareholder to Acquisitionco (free and clear of any Liens) and inexchange therefor each Target Shareholder thereof shall be entitled to receive$3.00 in cash from Acquisitionco for each such Target Share held;

####  

#### simultaneous with the step in Section 3.1(e) above,the remainder of the Target Shares held by a Target Shareholder (other thanParent and its Affiliates, unless they otherwise elect, and DissentingShareholders) shall be transferred by the Target Shareholder to Subco (free andclear of any Liens) and in exchange therefor each Target Shareholder shall beentitled to receive $3.00 in cash from Subco for each such Target Share held;and

####  

#### with respect to each TargetShare (other than Target Shares held by Parent and its Affiliates, unless theyotherwise elect, and the Dissenting Shares):

####  

##### each such Target Shareholdershall cease to be the holder of such share effective at the time of the stepsin Section 3.1(e) and (f) above and such holder’s name shall beremoved from the register of Target Shares with respect to such Target Sharesas of such time; and

#####  

##### Acquisitionco or Subco, as thecase may be, shall be deemed to be the transferee of such share (free and clearof any Liens) effective at the time of the steps in Section 3.1(e) and(f) above and shall be entered in the register of Target Shares as theholder thereof as at such time.

#####  

# **DISSENT RIGHTS**

# ** **

## **DissentRights**

## ** **

ATarget Shareholder may exercise dissent rights (“**Dissent Rights**”) conferred by the Interim Order in connectionwith the Arrangement in the manner set out in the Interim Order, provided theNotice of Dissent is received by Target by no later than 4:00 p.m.(Whitehorse time) on the date which is two Business Days prior to the date ofthe Target Meeting. Without limiting the generality of the foregoing, TargetShareholders who duly exercise such Dissent Rights and who are ultimatelydetermined to be entitled to be paid fair value for their Target Shares shallbe deemed to have transferred such Target Shares, as of the Effective Time,without any further act or formality to Acquisitionco (free and clear of anyLiens) in consideration of a payment of cash by

 

7

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Acquisitionco equal to such fair value as of the day preceding theTarget Meeting. In no case shall Target or Parent be required to recognize suchTarget Shareholders as Target Shareholders at and after the Effective Time, andthe names of such Target Shareholders shall be removed from Target’s registerof Target Shares as of the Effective Time.

 

## **Rightsof Dissenting Shareholders**

## ** **

In theevent a Target Shareholder gives a Notice of Dissent but is not entitled, forany reason, to be paid the fair value of the Target Shares in respect of whichthe Notice of Dissent was given as contemplated in the Interim Order, suchTarget Shareholder shall be deemed to have participated in the Arrangement onthe same basis as a non-dissenting Target Shareholder.

 

# **EFFECT OF ARRANGEMENTAND PAYMENT**

# ** **

## **Effectof Arrangement**

## ** **

Afterthe Effective Time, certificates formerly representing Target Securities (otherthan Target Securities held by Parent and its Affiliates, unless they otherwiseelect, and Dissenting Shareholders) shall represent only the right to receiveany cash payment which the former Target Securityholder is entitled to receivepursuant to Article 3 of this Plan of Arrangement, subject to compliancewith the requirements set forth in this Article 5.

 

## **Payment**

## ** **

#### At or prior to the EffectiveTime, Acquisitionco and Subco shall deposit with the Depositary, for thebenefit of the Target Shareholders (other than Parent and its Affiliates,unless they otherwise elect,), cash in an amount equal to the totalconsideration payable under this Plan of Arrangement for the Target Shares heldby such Target Shareholders. Acquisitionco (or its relevant Affiliate or Affiliates) shall be herebydeemed to have been directed by Target to and shall, not later than theEffective Time, provide to the Depositary, for the benefit of the TargetOptionholders and the Target Warrantholders (other than Parent and itsAffiliates, unless they otherwise elect, and Dissenting Shareholders), cash inan amount equal to the total consideration payable under this Plan ofArrangement for the Target Options and the Target Warrants held by such TargetOptionholders and Target Warrantholders.

####  

#### Subject to Section 5.3,Acquisitionco and Subco shall cause the Depositary, as soon as possiblefollowing the later of the Effective Date and the date of deposit with theDepositary of a duly completed Letter of Transmittal together with certificatesrepresenting the Target Shares to:

 

8

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##### forward or cause to beforwarded by first class mail (postage prepaid) to such Target Shareholder atthe address specified in the Letter of Transmittal; or

#####  

##### if requested by the TargetShareholder in the Letter of Transmittal, make available at the Depositary forpick-up by the Target Shareholder; or

#####  

##### if the Letter of Transmittalneither specifies an address nor contains a request as described in (ii),forward or cause to be forwarded by first class mail (postage prepaid) tothe  Target Shareholder at the address ofsuch Target Shareholder as shown on the applicable register maintained byTarget as at the Effective Time,

#####  

##### a cheque (or other form of immediatelyavailable funds) representing the cash payment payable to such TargetShareholder as determined in accordance with the provisions hereof.

#####  

#### Subject to Section 5.3,Target shall, as soon as possible following the later of the Effective Date andthe date of deposit with the Depositary of a duly completed Letter ofTransmittal together with (A) in the case of Target Options, suchdocumentation as Acquisitionco may reasonably require representing the TargetOptions held by such Target Optionholder, and (B) in the case of TargetWarrants, certificates representing Target Warrants or other documentation asprovided in the Letter of Transmittal, cause the Depositary to:

####  

##### forward or cause to beforwarded by first class mail (postage prepaid) to such Target Securityholderat the address specified in the Letter of Transmittal;

#####  

##### if requested by the TargetSecurityholder in the Letter of Transmittal, make available at the Depositaryfor pick-up by the Securityholder; or

#####  

##### if the Letter of Transmittalneither specifies an address nor contains a request as described in (ii),forward or cause to be forwarded by first class mail (postage prepaid) to theTarget Securityholder at the address of such Target Securityholder as shown onthe applicable register maintained by Target as at the Effective Time,

#####  

##### a cheque (or other form of immediatelyavailable funds) representing the cash payment payable to such TargetSecurityholder as determined in accordance with the provisions hereof.

 

9

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#### No Target Securityholder shallbe entitled to receive any consideration with respect to the Target Securitiesother than the cash payments which they are entitled to receive in accordancewith Article 3 of this Plan of Arrangement and, for greater certainty, noTarget Securityholder will be entitled to receive any interest, dividends,premium or other payment in connection therewith.

####  

#### Until such time as a formerTarget Securityholder complies with the provisions of Sections 5.2(b) or5.2(c), as applicable, the cash payments to which such Target Securityholder isentitled shall, subject to Section 5.3, be delivered to the Depositary to beheld in trust for such Target Securityholder for delivery to the TargetSecurityholder in accordance with the provisions hereof and the Letters ofTransmittal, without interest and net of all applicable withholding and otherTaxes, if any, upon delivery of the applicable Letters of Transmittal and thecertificates representing the Target Securities (or, in the case of TargetOptions, documentation provided)  inaccordance with Section 5.2(b) and Section 5.2(c).

####  

#### Target, Acquisitionco, Subcoand the Debenture Trustee shall be entitled to deduct and withhold from anyamount otherwise payable pursuant to this Plan of Arrangement, the ArrangementAgreement or the Indenture to any Target Securityholder or holder of TargetDebentures, as the case may be, such amounts as are required to be deducted andwithheld with respect to the making of such payment under the ITA or any otherprovision of domestic or foreign Tax legislation.  To the extent amounts are so deducted andwithheld and paid to the appropriate Government Authority by Target, Acquisitionco,Subco or the Debenture Trustee, such deducted and withheld amounts shall betreated for all purposes of this the Plan of Arrangement and the ArrangementAgreement or the Indenture as having been paid to the Target Securityholder orholder of Target Debentures, as the case may be, in respect of which suchdeduction and withholding was made by Target, Acquisitionco, Subco or theDebenture Trustee.

####  

#### Acquisitionco (or its relevantAffiliate or Affiliates) shall be hereby deemed to have been directed by theTarget to and shall, not later than the Effective Time, provide to theDebenture Trustee funds in an amount equal to the Debenture Payment Loanrepresenting the advance of the loan specified in Section 3.1(a)(iii) hereofto the Target, which amount shall be applied by the Debenture Trustee to repaythe Target Debentures in accordance with the provisions of the Indenture.

####  

#### 10

#### 

####  

## **Surrenderof Rights**

## ** **

Anycertificate (or, in the case of Target Options, such other documentation asrequired pursuant to Section 5.2(c)) formerly representing TargetSecurities not duly surrendered on or prior to the sixth anniversary of theEffective Date shall cease to represent a claim or interest of any kind ornature against Target, Acquisitionco, Subco or the Depository by a formerTarget Securityholder.  On such date, allcash to which such former Target Securityholder was entitled shall be deemed tohave been surrendered to Target, Acquisitionco, Subco, as applicable.

 

# **AMENDMENT**

# ** **

## **Amendmentof Plan of Arrangement**

## ** **

#### Target and Parent reserve theright to amend, modify and/or supplement this Plan of Arrangement at any timeand from time to time, provided that any amendment, modification or supplementmust be contained in a written document which is filed with the Court and, ifmade following the Target Meeting, approved by the Court and communicated toTarget Securityholders in the manner required by the Court (if so required).

####  

#### Any amendment, modification orsupplement to this Plan of Arrangement may be proposed by Target or Parent atany time prior to or at the Target Meeting with or without any other priornotice or communication and, if so proposed and accepted by the persons votingat the Target Meeting, shall become part of this Plan of Arrangement for allpurposes.

####  

#### Any amendment, modification orsupplement to this Plan of Arrangement which is approved or directed by theCourt following the Target Meeting shall be effective only if it is consentedto by Target and Parent (acting reasonably).

####  

#### This Plan of Arrangement may bewithdrawn prior to the Effective Time in accordance with the terms of theArrangement Agreement.

####  

#### Notwithstanding the foregoingprovisions of this Section 6.1, no amendment, modification or supplement tothis Plan of Arrangement may be made prior to the Effective Time except inaccordance with the terms of the Arrangement Agreement.

####  

#### 11

#### 

####  

# **FURTHER ASSURANCES**

# ** **

Notwithstandingthat the transactions and events set out herein shall occur and be deemed tooccur in the order set out in this Plan of Arrangement without any further actor formality, each of the parties to the Arrangement Agreement shall make, doand execute, or cause to be made, done and executed, all such further acts,deeds, agreements, transfers, assurances, instruments or documents as mayreasonably be required by any of them in order to document or evidence any ofthe transactions or events set out herein.

 

12

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**EXHIBIT ”I”COMMITMENTS**

 

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| ** **            | ** ** | **Salary** | ** ** | **Severance(1)** | ** ** | **Options** | ** ** | **Price** | ** ** | **Value(2)** | ** ** | **Bonus Units** | ** ** | **Value(2)** | ** ** | **Other(3)** | ** ** |
|-----------------------|------------|------------|------------|------------------|------------|-------------|------------|-----------|------------|--------------|------------|-----------------|------------|--------------|------------|--------------|------------|
| Iacono, Serafino      |       | USD        | 290,000    |             | 870,000    |        | 2,350,000  |      | 1.03       |         | 4,626,000  |            | —     |         |       |         | USD        | 68,110 |   |
| de la Campa, Miguel   |       | USD        | 232,000    |             | 696,000    |        | 2,350,000  |      | 1.03       |         | 4,626,000  |            | 1,425,000  |         | 4,275,000  |         | USD        | 64,688 |   |
| Arata, Jose Francisco |       | USD        | 197,200    |             | 591,600    |        | 1,149,166  |      | 1.24       |         | 2,023,548  |            | 1,150,000  |         | 3,450,000  |         | USD        | 62,635 |   |
| Doyle, Robert         |       | CAD        | 240,000    |             | 720,000    |        | 1,192,500  |      | 1.16       |         | 2,189,350  |            | 450,000    |         | 1,350,000  |         | CAD        | 29,500 |   |
| Volk, Peter           |       | CAD        | 190,000    |             | 570,000    |        | 598,333    |      | 1.18       |         | 1,090,166  |            | 330,000    |         | 990,000    |         | CAD        | 27,000 |   |
| Quesnel, William      |       | CAD        | 150,000    |             | 300,000    |        | 100,000    |      | 2.74       |         | 26,000     |            | 50,000     |         | 150,000    |         | CAD        | 25,000 |   |
| Miranda, Mario        |       | CAD        | 120,000    |             | 120,000    |        | 75,000     |      | 2.00       |         | 75,000     |            | —     |         | —     |         | CAD        | 23,500 |   |
| Subtotal              |       |       |       |             |       | 7,814,999   |       | 1.12      |       | 14,656,064   |       | 3,405,000       |       | 10,215,000   |       |         |       |
| All other staff       |       |       |       |             |       | 1,164,334   |       | 1.48      |       | 1,767,809    |       |            |       |         |       |         |       |
| Total                 |       |       |       |             |       | 8,979,333   |       | 1.17      |       | 16,423,873   |       |            |       |         |       |         |       |

 

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(1) Peremployment agreements, all others as required by law or mutual agreement

(2) CAD

(3) Estimated12-month continuance of health care, pension/insurance/other for namedexecutives

 

**Other obligations:**

 

Advisory fee -2% of transaction value to maximum of C$8.5 million in favor of GMPSecurities/Endeavour Financial

Work fee -C$500,000 payable in connection with warrant conversion program in favor of GMPSecurities

In both casesbefore out-of-pocket expenses and PST/GST as applicable

 

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