Filed by Automated Filing Services Inc. (604) 609-0244 - Farallon Resources Ltd. - Exhibit 4.02






FARALLON RESOURCES LTD. 
(the “Company”)

2004 SHARE OPTION PLAN

Dated for Reference December 15, 2004

ARTICLE 1
PURPOSE AND INTERPRETATION

Purpose

1.1             
The purpose of this Plan will be to advance the interests of the Company by
encouraging equity participation in the Company through the acquisition of
Common Shares of the Company. It is the intention of the Company that this Plan
will at all times be in compliance with the rules and policies of the The
Toronto Stock Exchange (or “TSX”) (the “TSX Policies”) and any inconsistencies
between this Plan and the TSX Policies whether due to inadvertence or changes in
TSX Policies will be resolved in favour of the latter.

Definitions

1.2              
In this Plan

Affiliate means a company that
is a parent or subsidiary of the Company, or that is controlled by the same
entity as the Company;

Associate has the meaning
assigned by the Securities Act;

Board means the board of
directors of the Company or any committee thereof duly empowered or authorized
to grant options under this Plan;

Change of Control includes
situations where after giving effect to the contemplated transaction and as a
result of such transaction: 

(i)              
any one Person holds a sufficient number of voting shares of the Company or
resulting company to affect materially the control of the Company or resulting
company, or,

(ii)              any
combination of Persons, acting in concert by virtue of an agreement,
arrangement, commitment or understanding, hold in total a sufficient number of
voting shares of the Company or its successor to affect materially the control
of the Company or its successor, 

where such Person or combination of
Persons did not previously hold a sufficient number of voting shares to affect
materially control of the Company or its successor. In the 




- 2 -

absence of evidence to the contrary,
any Person or combination of Persons acting in concert by virtue of an
agreement, arrangement, commitment or understanding, holding more than 20% of
the voting shares of the Company or its successor is deemed to materially affect
the control of the Company or its successor;

Common Shares means common
shares without par value in the capital of the Company providing such class is
listed on the TSX;

Company means the Corporation
named at the top hereof and includes, unless the context otherwise requires, all
of its subsidiaries or affiliates and successors according to law;

Consultant means a Person or
Consultant Company, other than an Employee, Officer or Director that: 

(i)              
provides on an ongoing bona fide basis, consulting, technical, managerial or
like services to the Company or an Affiliate of the Company, other than services
provided in relation to a Distribution;

(ii)              provides
the services under a written contract between the Company or an Affiliate and
the Person or the Consultant Company;

(iii)             in
the reasonable opinion of the Company, spends or will spend a significant amount
of time and attention on the business and affairs of the Company or an Affiliate
of the Company; and

(iv)             has
a relationship with the Company or an Affiliate that enables the Person or
Consultant Company to be knowledgeable about the business and affairs of the
Company;

Consultant Company means for a
Person consultant, a company or partnership of which the Person is an employee,
shareholder or partner;

Directors means the directors of
the Company as may be elected from time to time;

Disinterested Shareholder
Approval means approval by a majority of the votes cast by all the Company’s
shareholders at a duly constituted shareholders’ meeting, excluding votes
attached to shares beneficially owned by Service Providers or their
Associates;

Distribution has the meaning
assigned by the Securities Act, and generally refers to a distribution of
securities by the Company from treasury;

Effective Date for an Option
means the date of grant thereof by the Board;

Employee means: 

(a)              
a Person who is considered an employee under the Income Tax Act (i.e. for whom
income tax, employment insurance and CPP deductions must be made at source);




- 3 -

(b)              
a Person who works full-time for the Company or its subsidiary providing
services normally provided by an employee and who is subject to the same control
and direction by the Company over the details and methods of work as an employee
of the Company, but for whom income tax deductions are not made at source;
or

(c)              
a Person who works for the Company or its subsidiary on a continuing and regular
basis for a minimum amount of time per week providing services normally provided
by an employee and who is subject to the same control and direction by the
Company over the details and methods of work as an employee of the Company, but
for whom income tax deductions need not be made at source;

Exercise Price means the amount
payable per Common Share on the exercise of an Option, as determined in
accordance with the terms hereof; 

Expiry Date means the day on
which an Option lapses as specified in the Option Commitment therefor or in
accordance with the terms of this Plan;

Insider means 

(i)              
an insider as defined in the TSX Policies or as defined in securities
legislation applicable to the Company;

(ii)              an
Associate of any person who is an Insider by virtue of §(i) above;

Investor Relations Activities
means generally any activities or communications that can reasonably be seen to
be intended to or be primarily intended to promote the merits or awareness of or
the purchase or sale of securities of the Company;

Listed Shares means the number
of issued and outstanding shares of the Company that have been accepted for
listing on the TSX, but excluding dilutive securities not yet converted into
Listed Shares;

Management Company Employee
means a Person employed by another Person or a corporation providing management
services to the Company which are required for the ongoing successful operation
of the business enterprise of the Company, but excluding a corporation or Person
engaged primarily in Investor Relations Activities;

Market Price means the 5-day
volume weighted average price as calculated by the rules of the TSX company
manual;

Officer means a duly appointed
senior officer of the Company;

Option means the right to
purchase Common Shares granted hereunder to a Service Provider;

Option Commitment means the
notice of grant of an Option delivered by the Company hereunder to a Service
Provider and substantially in the form of Schedule A hereto;




- 4 -

Optioned Shares means Common
Shares that may be issued in the future to a Service Provider upon the exercise
of an Option;

Optionee means the recipient of
an Option hereunder;

Outstanding Shares means at the
relevant time, the number of outstanding Common Shares of the Company from time
to time;

Participant means a Service
Provider that becomes an Optionee;

Person means a company or an
individual;

Plan means this Share Option
Plan, the terms of which are set out herein or as may be amended;

Plan Shares means the total
number of Common Shares which may be reserved for issuance as Optioned Shares
under the Plan as provided in §2.2;

Regulatory Approval means the
approval of the TSX and any other securities regulatory authority that may have
lawful jurisdiction over the Plan and any Options issued hereunder;

Securities Act means the
Securities Act, R.S.B.C. 1996, c. 418, as amended from time to time;

Service Provider means a Person
who is a bona fide Director, Officer, Employee, Management Company Employee or
Consultant, and also includes a company, of which 100% of the share capital is
beneficially owned by one or more Person Service Providers;

Share Compensation Arrangement
means any Option under this Plan but also includes any other stock option, stock
option plan, employee stock purchase plan or any other compensation or incentive
mechanism involving the issuance or potential issuance of Common Shares to a
Service Provider;

Shareholders Approval means
approval by a majority of the votes cast by eligible shareholders at a duly
constituted shareholders’ meeting;

TSX means The Toronto Stock
Exchange and any successor thereto; and

TSX Policies means the rules and
policies of the TSX as amended from time to time.

ARTICLE 2 
SHARE OPTION PLAN

Establishment of Share Option Plan

2.1              
There is hereby established a Share Option Plan to recognize contributions made
by Service Providers and to create an incentive for their continuing assistance
to the Company and its Affiliates.




- 5 -

Maximum Plan Shares

2.2              
The maximum aggregate number of Plan Shares that may be reserved for issuance
under the Plan at any point in time is 10% of the Outstanding Shares at the time
the Plan Shares are reserved for issuance as a result of the grant of an Option,
less any Common Shares reserved for issuance under share options granted under
Share Compensation Arrangements other than this Plan, unless this Plan is
amended pursuant to the requirements of the TSX Policies.

Eligibility

2.3              
Options to purchase Common Shares may be granted hereunder to Service Providers
from time to time by the Board. Service Providers that are corporate entities
will be required to undertake in writing not to effect or permit any transfer of
ownership or option of any of its shares, nor issue more of its shares (so as to
indirectly transfer the benefits of an Option), as long as such Option remains
outstanding, unless the written permission of the TSX and the Company is
obtained.

Options Granted Under the Plan

2.4              
All Options granted under the Plan will be evidenced by an Option Commitment in
the form attached as Schedule A, showing the number of Optioned Shares, the term
of the Option, a reference to vesting terms, if any, and the Exercise Price.

2.5              
Subject to specific variations approved by the Board, all terms and conditions
set out herein will be deemed to be incorporated into and form part of an Option
Commitment made hereunder.

Limitations on Issue

2.6              
Subject to §2.9 no Service Provider can be granted an Option if that Option
would result in the total number of Options, together with all other Share
Compensation Arrangements granted to such Service Provider in the previous 12
months, exceeding 5% of the Listed Shares (unless the Company has obtained
Disinterested Shareholder Approval under §2.9(a)(iii) to do so).

Options Not Exercised

2.7              
In the event an Option granted under the Plan expires unexercised or is
terminated by reason of dismissal of the Optionee for cause or is otherwise
lawfully cancelled prior to exercise of the Option, the Optioned Shares that
were issuable thereunder will be returned to the Plan and will be eligible for
re-issue. For greater certainty options which are exercised thereupon increase
the number available to the Plan by the relevant percentage of outstanding
shares as provided hereunder.

Powers of the Board

2.8              
The Board will be responsible for the general administration of the Plan and the
proper execution of its provisions, the interpretation of the Plan and the
determination of all 




- 6 -

questions arising hereunder. Without limiting the generality of
the foregoing, the Board has the power to

(a)              
allot Common Shares for issuance in connection with the exercise of Options;

(b)              
grant Options hereunder;

(c)              
subject to Regulatory Approval, amend, suspend, terminate or discontinue the
Plan, or revoke or alter any action taken in connection therewith, except that
no general amendment or suspension of the Plan will, without the written consent
of all Optionees, alter or impair any Option previously granted under the Plan
unless as a result of a change in TSX Policies;

(d)              
delegate all or such portion of its powers hereunder as it may determine to one
or more committees of the Board, either indefinitely or for such period of time
as it may specify, and thereafter each such committee may exercise the powers
and discharge the duties of the Board in respect of the Plan so delegated to the
same extent as the Board is hereby authorized so to do; and

(e)              
may in its sole discretion amend this Plan (except for previously granted and
outstanding Options) to reduce the benefits that may be granted to Service
Providers (before a particular Option is granted) subject to the other terms
hereof.

Terms or Amendments Requiring
Disinterested Shareholder Approval

2.9              
The Company will be required to obtain Disinterested Shareholder Approval prior
to any of the following actions becoming effective:

(a)              
the Plan, together with all of the Company’s previously established and
outstanding stock option plans or grants, could result at any time in:

(i)              
the aggregate number of shares reserved for issuance under stock options granted
to Insiders exceeding 10% of the Listed Shares or any increase in the maximum
percentage of the Company’s outstanding shares available under the Plan; or 

(ii)              
the number of Optioned Shares issued to Insiders within a one-year period
exceeding 10% of the Listed Shares; or, 

(iii)             
the issuance to any one Insider , and such Insider’s Associates, within a
12-month period, of a number of shares exceeding 5% of Listed Shares; or

(iv)              
the issuance to any one Optionee, within a 12-month period, of a number of
shares exceeding 5% of Listed Shares; or

(b)              
any change in the Exercise Price and/or the term of an Option previously granted
to an Insider.




- 7 -

ARTICLE 3
TERMS AND CONDITIONS OF OPTIONS

Exercise Price

3.1              
The Exercise Price of an Option will be set by the Board at the time such Option
is allocated under the Plan, and cannot be less than the Market Price.

Term of Option

3.2              
An Option can be exercisable for a maximum of 10 years from the Effective Date.


Option Amendment

3.3              
Subject to §2.9 any proposed amendment to the terms of an Option must be
approved by the TSX prior to the exercise of such Option.

Vesting of Options

3.4              
Vesting of Options is at the discretion of the Board, and will generally be
subject to:

(a)              
the Service Provider remaining employed by or continuing to provide services to
the Company or any of its subsidiaries and Affiliates as well as, at the
discretion of the Board, achieving certain milestones which may be defined by
the Board from time to time or receiving a satisfactory performance review by
the Company or its subsidiary or affiliate during the vesting period; or

(b)              
remaining as a Director of the Company or any of its subsidiaries or Affiliates
during the vesting period.

Vesting of Options Granted for Investor Relations
Activities

3.5              
Options granted to Consultants conducting Investor Relations Activities will
vest:

(a)              
over a period of not less than 12 months as to 25% on the date that is three
months from the date of grant, and a further 25% on each successive date that is
three months from the date of the previous vesting; or

(b)              
such vesting period as the Board may determine.

Optionee Ceasing to be Director, Employee or Service
Provider

3.6              
No Option may be exercised after the Service Provider has left the employ/office
or has been advised his services are no longer required or his service contract
has expired, except as follows:

(a)              
in the case of the death of an Optionee, any vested Option held by him at the
date of death will become exercisable by the Optionee’s lawful personal
representatives, heirs 




- 8 -

or executors until the earlier of one
year after the date of death of such Optionee and the date of expiration of the
term otherwise applicable to such Option;

(b)              
Options granted to any Service Provider must expire within 90 days after the
date the Optionee ceases to be employed with or provide services to the Company,
but only to the extent that such Optionee was vested in the Option at the date
the Optionee ceased to be so employed or to provide services to the Company;


(c)              
Options granted to a Service Provider conducting Investor Relations Activities
must expire within 30 days of the date the Optionee ceases to conduct such
activities, but only to the extent that such Optionee was vested in the Option
at the date the Optionee ceased to conduct such activities, 

(d)              
Options granted to an Optionee other than one conducting Investor Relations
Activities must expire within 90 days after the Optionee ceases to be employed
with or provide services to the Company, but only to the extent that such
Optionee was vested in the Option at the date the Optionee ceased to be so
employed or to provide services to the Company; and

(e)              
in the case of an Optionee being dismissed from employment or service for cause,
such Optionee’s Options, whether or not vested at the date of dismissal will
immediately terminate without right to exercise same.

Non Assignable

3.7              
Subject to §3.10(a), all Options will be exercisable only by the Optionee to
whom they are granted and will not be assignable or transferable.

Adjustment of the Number of Optioned Shares

3.8              
The number of Common Shares subject to an Option will be subject to adjustment
in the events and in the manner following:

(a)              
in the event of a subdivision of Common Shares as constituted on the date
hereof, at any time while an Option is in effect, into a greater number of
Common Shares, the Company will thereafter deliver at the time of purchase of
Optioned Shares hereunder, in addition to the number of Optioned Shares in
respect of which the right to purchase is then being exercised, such additional
number of Common Shares as result from the subdivision without an Optionee
making any additional payment or giving any other consideration therefor;

(b)              
in the event of a consolidation of the Common Shares as constituted on the date
hereof, at any time while an Option is in effect, into a lesser number of Common
Shares, the Company will thereafter deliver and an Optionee will accept, at the
time of purchase of Optioned Shares hereunder, in lieu of the number of Optioned
Shares in respect of which the right to purchase is then being exercised, the
lesser number of Common Shares as result from the consolidation;




- 9 -

(c)              
in the event of any change of the Common Shares as constituted on the date
hereof, at any time while an Option is in effect, the Company will thereafter
deliver at the time of purchase of Optioned Shares hereunder the number of
shares of the appropriate class resulting from the said change as an Optionee
would have been entitled to receive in respect of the number of Common Shares so
purchased had the right to purchase been exercised before such change;

(d)              
in the event of a capital reorganization, reclassification or change of
outstanding equity shares (other than a change in the par value thereof) of the
Company, a consolidation, merger or amalgamation of the Company with or into any
other company or a sale of the property of the Company as or substantially as an
entirety at any time while an Option is in effect, an Optionee will thereafter
have the right to purchase and receive, in lieu of the Optioned Shares
immediately theretofore purchasable and receivable upon the exercise of the
Option, the kind and amount of shares and other securities and property
receivable upon such capital reorganization, reclassification, change,
consolidation, merger, amalgamation or sale which the holder of a number of
Common Shares equal to the number of Optioned Shares immediately theretofore
purchasable and receivable upon the exercise of the Option would have received
as a result thereof. The subdivision or consolidation of Common Shares at any
time outstanding (whether with or without par value) will not be deemed to be a
capital reorganization or a reclassification of the capital of the Company for
the purposes of this §3.12(d);

(e)              
an adjustment will take effect at the time of the event giving rise to the
adjustment, and the adjustments provided for in this Section are cumulative;

(f)              
the Company will not be required to issue fractional shares in satisfaction of
its obligations hereunder. Any fractional interest in a Common Share that would,
except for the provisions of this §3.12(f), be deliverable upon the exercise of
an Option will be cancelled and not be deliverable by the Company; and

(g)              
if any questions arise at any time with respect to the Exercise Price or number
of Optioned Shares deliverable upon exercise of an Option in any of the events
set out in this §3.12, such questions will be conclusively determined by the
Company’s auditors, or, if they decline to so act, any other firm of Chartered
Accountants, in Vancouver, British Columbia (or in the city of the Company’s
principal executive office) that the Company may designate and who will have
access to all appropriate records and such determination will be binding upon
the Company and all Optionees.

ARTICLE 4
COMMITMENT AND EXERCISE
PROCEDURES

Option Commitment

4.1              
Upon grant of an Option hereunder, an authorized officer of the Company will
deliver to the Optionee an Option Commitment detailing the terms of such Options
and upon such delivery the Optionee will be subject to the Plan and have the
right to purchase the Optioned Shares at the Exercise Price set out therein
subject to the terms and conditions hereof.




- 10 -

Manner of Exercise

4.2              
An Optionee who wishes to exercise his Option may do so by delivering

(a)              
a written notice to the Company specifying the number of Optioned Shares being
acquired pursuant to the Option; and

(b)              
cash or a certified cheque payable to the Company for the aggregate Exercise
Price for the Optioned Shares being acquired.

Delivery of Certificate and Hold Periods

4.3              
As soon as practicable after receipt of the notice of exercise described in §4.2
and payment in full for the Optioned Shares being acquired, the Company will
direct its transfer agent to issue a certificate to the Optionee for the
appropriate number of Optioned Shares. Such certificate issued will bear a
legend stipulating any resale restrictions required under applicable securities
laws.

ARTICLE 5 
GENERAL

Employment and Services

5.1              
Nothing contained in the Plan will confer upon or imply in favour of any
Optionee any right with respect to office, employment or provision of services
with the Company, or interfere in any way with the right of the Company to
lawfully terminate the Optionee’s office, employment or service at any time
pursuant to the arrangements pertaining to same. Participation in the Plan by an
Optionee will be voluntary.

No Representation or Warranty

5.2              
The Company makes no representation or warranty as to the future market value of
Common Shares issued in accordance with the provisions of the Plan or to the
effect of the Income Tax Act (Canada) or any other taxing statute
governing the Options or the Common shares issuable thereunder or the tax
consequences to a Service Provider. Compliance with applicable securities laws
as to the disclosure and resale obligations of each Participant is the
responsibility of such Participant and not the Company.

Interpretation

5.3              
The Plan will be governed and construed in accordance with the laws of the
Province of British Columbia.

Continuation of the Plan

5.4              
This Plan will become effective from and after January 1, 2005 (being the date
of acceptance of rolling share option plans by the TSX) (the “Effective Date”),
and will remain in effect until December 31, 2008, or such earlier date that may
be determined by the or Board or as 




- 11 -

many be required pursuant to TSX Policies. The Board reserves
the right, in its absolute discretion, to at any time amend, modify or terminate
the Plan with respect to all Common Shares in respect of Options which have not
yet been granted hereunder. Any amendment to any provision of the Plan will be
subject to any necessary Regulatory Approvals unless the effect of such
amendment is intended to reduce (but not to increase) the benefits of this Plan
to Service Providers.




SCHEDULE A 

SHARE OPTION PLAN 

OPTION COMMITMENT

Notice is hereby given that, effective this ________day of
________________, __________(the “Effective Date”) FARALLON RESOURCES
LTD. (the “Company”) has granted to
___________________________________________(the “Service Provider”) , an Option
to acquire ______________Common Shares (“Optioned Shares”) up to 5:00 p.m.
Vancouver Time on the __________day of 
____________________, __________(the
“Expiry Date”) at a Exercise Price of Cdn$____________per share.

Optioned Shares may be acquired as follows:

____________ In accordance with the vesting provisions
set out in 3.6 of the Plan 

or 

____________ As follows: 

The grant of the Option evidenced hereby is made subject to the
terms and conditions of the Company’s Share Option Plan, the terms and
conditions of which are hereby incorporated herein.

To exercise your Option, deliver a written notice specifying
the number of Optioned Shares you wish to acquire, together with cash or a
certified cheque payable to the Company for the aggregate Exercise Price, to the
Company. A certificate for the Optioned Shares so acquired will be issued by the
transfer agent as soon as practicable thereafter. 

FARALLON RESOURCES LTD.

 

	Authorized Signatory