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CODE OF ETHICS AND TRADING RESTRICTIONS

Introduction

The Companys policy is to conduct its business in accordance
with the highest ethical and legal standards. To assist the Company in achieving
this policy, the Board of Directors has adopted this Code of Ethics and Trading
Restrictions. The Code is designed to deter wrongdoing and to promote:

| | (1) | Honest and ethical conduct, including the ethical
      handling of actual or apparent conflicts of interest;                                                                     
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                   
| | (2) | Full, fair, accurate, timely and understandable
      disclosure in reports and documents that the Company submits to regulatory
      authorities and communicates to the public;
| |     |                                                                                                                                                                                   
| | (3) | Compliance with applicable governmental laws and
      regulations;                                                                                                               
| |     |                                                                                                                                                                                   
| | (4) | Prompt internal reporting of violations of the Code to
      appropriate persons identified in the Code; and                                                                      
| |     |                                                                                                                                                                                   
| | (5) | Accountability for adherence to the
  Code.                                                                                                                                       

The Code applies to all employees, officers, and directors of
the Company and its subsidiaries. Because Hunter Dickinson Services Inc.
(HDSI) employees and officers provide substantial services to the Company, the
Code also applies to all employees, officers and directors of HDSI with respect
to their activities relating to the Company. Depending on the circumstances, it
may also apply to agents and other representatives of the Company. (You as
used in this Code refers to all such persons, as appropriate.) In addition to
your complying with the Code, it is your responsibility to prevent others from
violating these standards if you are in a position to do so. If you are not in a
position to do so, it is your responsibility to bring the matter to the
attention of a member of senior management who is in a position to take
appropriate action, or to the attention of an independent member of the Board of
Directors.

| | 1. | Avoiding Questionable or Illegal
  Practices
| | -- | --------------------------------------------

The Companys policy is to comply with all laws and regulations
that apply to its business, and to avoid any activity that may be regarded as
questionable or unethical. Fraudulent, illegal or unethical acts will not be
tolerated. No action that would otherwise be questionable is permissible simply
because it is customary in a particular location or business.

If you are confronted with a situation that raises an issue
under this policy, ask yourself these questions:

- Is the life, health or safety of anyone, or the environment, endangered by
  the action?
- Is it legal?

---

- Does it feel honest, fair and ethical?
- Does it compromise anyones trust or integrity?
- Would the public disclosure of the activity in any way be embarrassing to
  you, the Company or any other affected employees?

You should be sufficiently familiar with any laws and
regulations and Company policies and procedures that apply to your area of work
and responsibility. That will permit you to recognize possible breaches and to
know when to seek advice. If in doubt, you should discuss the matter with a
member of senior management.

| | 2. | Honesty and Fair Dealing.
| | -- | -------------------------

When representing the Company, it is important that you deal
honestly and fairly with the Companys joint venture partners, suppliers,
customers, professional advisors, competitors, other employees, and anyone else
with whom you have contact in the course of performing your job. You should not
take any advantage of anyone through actions such as manipulation, concealment,
misappropriation or abuse of confidential information, falsification,
misrepresentation of material facts, undue influence or any other unfair dealing
practice. You also should not give any advantage to anyone for reason of
personal relationship, personal benefit or other reasons not involving the best
interest of the Company.

| | 3. | Policy to Prevent the Corruption of Foreign Public
      Officials
| | -- | ------------------------------------------------------------------

Both Canada and the United States have laws making it illegal
to corrupt officials of foreign governments or to engage in certain related
acts. In Canada, the law is entitled Corruption of Foreign Public Officials
Actand in the United States the law is entitled Foreign Corrupt
Practices Act. In the discussion that follows, we have always adopted the
more stringent requirement of the two laws.

Persons to Whom the Laws Apply.
Both laws apply to the Company and its subsidiaries; their employees, officers
and directors; and their agents and representatives. For these purposes, action
by a foreign agent or representative is the equivalent of action by the
Company.

The laws may apply in whole or in part
to foreign companies and joint ventures if a U.S. or Canadian company controls
the foreign company or joint venture or otherwise authorizes, directs or
participates in activity by the foreign company or joint venture. Deciding
whether activities of a foreign company or joint venture are authorized,
directed or participated in by the Company in any particular instance will be an
uncertain exercise with uncertain results. In addition, allegations of illegal
conduct by any company or joint venture in which the Company has a significant
interest can only cause damage to the reputation of the Company. For this
reason, you should assume that any action of any foreign companies and joint
ventures in which the Company has a significant interest, including the actions
of the employees and agents of such foreign companies and joint ventures, will
be attributable to the Company.

---

(b) Prohibition.The laws make
it illegal to offer or provide money or anything of value for the personal
benefit of (i) any foreign government official or any official of a public
international organization (such as the International Monetary Fund, regional
development banks or other multilateral organizations) or (ii) any foreign
political party or its officials or any political candidate for the purpose of:
influencing that official in the exercise of his or her duties (or non-exercise
of those duties); having any such person influence foreign government activity;
or otherwise securing an improper advantage for the purpose of aiding the
Company in obtaining, retaining or directing business. The laws may be violated
if the Company knows, or if it should have been obvious to the Company, that the
payments were made for an illegal purpose.

The laws also apply to indirect
payments, i.e., where the Company offers or provides money or anything of
value to any person with the knowledge that the person will make a payment to a
foreign government official, official of a public international organization,
foreign political party or its officials, or any political candidate for such a
prohibited purpose.

The laws also make it illegal to
possess property or proceeds from property known to have been obtained as a
result of the bribery of a public official or to launder (i.e., deal
with intent to conceal) property or proceeds from property obtained as a result
of the bribery of a public official.

Foreign government-owned corporations
and other instrumentalities are generally treated as if they are governments,
and their employees, officers and directors are treated as government
officials.

(c) Exception to Prohibition.There is an exception in the laws for facilitating payments. Facilitating
payments are payments made to expedite routine governmental action that does
not involve obtaining, retaining or directing business. Example include payments
to (i) secure processing of papers such as visas, work orders and permits, (ii)
induce customs officials to process legally transmitted goods, (iii) obtain
police protection, (iv) obtain installation and maintenance of utility
connections, and (v) induce minor government functionaries (government employees
without discretionary authority over a project or transaction) to complete their
jobs in the manner required and where the situation does not involve the
securing of business.

There are three additional
exceptions:

- It is an affirmative defence if it can be shown
  that the payment was legal under the written laws and regulations of the
  foreign country. As an example, in some foreign countries, the Company may be
  required by law to hire as an agent a national of that country who also is
  connected to the government of that country in some way or other.
- It also is an affirmative defence if it can be
  shown that the payment was a reimbursement of travel, lodging and other
  reasonable and bona fide expenses directly related to the business promotion,
  demonstration or explanation of the Companys business, or the execution or
  performance of a contract with the foreign government. As an example, payment
  of the travel expenses of a foreign government official to visit one of our
  mines, as a part of an effort to promote the Company in that country, would
  fit into this category.

---

- Unconditional gifts having nominal value, when made
  openly and as a social amenity, or as a token of esteem, regard or gratitude
  in accordance with local custom, generally will not be regarded as a bribe.

(d) Company Policy. The
Companys policy is firm and unconditional. Under no circumstances will the
Company ever pay a bribe prohibited by the laws. If you are ever solicited for
such a bribe, or if you become aware of any instance where any Company employee,
officer, director, agent or representative of the Company or its subsidiaries or
its joint ventures proposes to offer such a bribe or is otherwise involved in
such illegal activity, you are to report the matter to your immediate superior,
or directly to the CEO or CFO of the Company. Any employee, officer, director,
agent or representative who participates in any scheme to pay such an illegal
bribe will be terminated immediately.

With respect to payments that fall
within the exceptions noted above:

- No facilitating payments may be made without the
  prior written approval of the CEO.
- No payment that would otherwise be an illegal bribe
  may be made on the basis that it is legal under the written laws and
  regulations of the foreign country without the prior written approval of the
  CEO.
- No payment that would otherwise be an illegal bribe
  may be made on the basis that it is a reimbursement of travel, lodging or
  other reasonable and bona fide expenses directly related to the business
  promotion, demonstration or explanation of the Companys business or the
  execution or performance of a contract with the foreign government without the
  prior written approval of the CEO.
- With respect to unconditional gifts of nominal
  value made openly and as a social amenity, or as a token of esteem, regard or
  gratitude in accordance with local custom, the CEO will establish a monetary
  limit on the value of any such gift. Any gifts with a value in excess of that
  limit must be approved in advance by the CEO.

Accounting Requirements. The
Company and its affiliated foreign companies and joint ventures must:

- Keep financial records which, in reasonable detail,
  accurately and fairly reflect transactions; and
- Maintain a system of internal accounting controls
  sufficient to provide reasonable assurances that (i) transactions are executed
  in accordance with management authorization, (ii) transactions are properly
  recorded as needed to permit preparation of financial statements and to
  maintain accountability for assets, (iii) all assets are recorded on the books
  of the Company and access to assets is only permitted in accordance with
  management authorization, and (iv) periodic auditing is done at reasonable
  intervals and action is taken to resolve discrepancies.

---

As an example, the accounting
provisions require that the Company properly record facilitating payments as
such and prohibit their characterization in some other form. The accounting
provisions also prohibit the Company from maintaining off-record cash slush
funds or cash that may be accessed without senior management authorization.

Things to Look For. The
following is a list of red flags that may indicate the possible existence of
corrupt practices:

- Foreign agent with a poor reputation or with links
  to the government.
- Unusually large commission payments or commission
  payments where the agent does not appear to have provided significant
  services.
- Cash payments, or payments without paper trail or
  compliance with normal internal controls.
- Unusual bonuses to foreign personnel for which
  there is little support.
- Payments to third country accounts.

| | 4. | Corporate Opportunities and Duty of
  Loyalty
| | -- | ---------------------------------------------

You have a duty of loyalty to the Company, which includes a
duty to advance the Companys legitimate interests when the opportunity to do so
arises. Accordingly, you may not use your position or the Companys name,
property, information or good will for personal gain or for the gain of others.
You are further prohibited from taking advantage of an opportunity that is
discovered through the use of any corporate property, information, contacts or
your position with the Company. All such opportunities, actual or perceived,
should be reported to your immediate supervisor.

Business opportunities that come to the employees, officers and
directors of HDSI are dealt with in accordance with the Service Agreement
between the Company and HDSI. The Audit and Risk Committee of the Board of
Directors is charged with the responsibility of reviewing relationships with
HDSI, and it will consider such matters as a part of its periodic review of the
relationship. Directors of the Company who are also directors of HDSI
nevertheless have an overriding fiduciary duty to the Company that is governed
by Canadian law.

Outside directors of the Company may have a variety of other
business relationships involving duties of loyalty. In addition, outside
directors do not, as a general matter, have the same obligation as officers and
employees to bring corporate opportunities to the Company. For these reasons,
the Code does not apply to outside directors of the Company with respect to
issues involving duties of loyalty or corporate opportunities and such
issues, to the extent they arise, are to be resolved directly with the Board of
Directors.

---

| | 5. | Avoiding Conflicts of
Interest
| | -- | ------------------------------

A conflict of interest occurs when your private interests, or
the private interests of your family, interfere, or appear to interfere, in any
way with the best interests of the Company. For these purposes, family would
generally include your parents and grandparents, spouse, children and
grandchildren, siblings, in-laws and other persons who share a residence with
you or another member of your family. You must take care to avoid any direct or
indirect involvement or understanding that might result in such a conflict or
create the appearance of such a conflict. Whether a situation involves a
conflict of interest depends on all of the circumstances. Generally, the Company
would not consider it a conflict of interest if an employees brother or sister
were an officer of a competitor. However, the Company would consider it a
conflict of interest if a Company employee in charge of procurement were to
purchase products or services from a company owned by the employees brother or
sister or from a company owned by a close personal friend of the employee. The
following are examples of conflict of interest situations which generally must
be avoided or which may raise a question:

- Acting as an employee, officer or director of, or a consultant to, a
  competitor or potential competitor of the Company;
- Having a financial interest in or loan from a business which is a joint
  venture partner, optionor or optionee, competitor, customer or supplier of the
  Company or which otherwise does business with the Company (an investment in
  the securities of a publicly traded company normally would not be considered
  to present a conflict of interest unless it represented a material part of
  your savings);
- Placing of Company business with any other company that is directly or
  beneficially owned or controlled by you or by members of your family.

Some conflicts are clear-cut; others are less obvious. In
addition, there may be circumstances where it is necessary or in the best
interests of the Company to have a business relationship with a business or
company in which an employee or officer, or his or her family, may have an
interest. For example, where Company operations are in a remote location, it may
be necessary from time to time to enter into a business relationship with a
business controlled by an employees family members. For these reasons, you must
fully disclose to your supervisor, the CEO or the CFO all circumstances that
could be perceived as involving a conflict of interest between the Company and
you or members of your family. Full disclosure enables the Company to resolve
unclear situations and to ethically handle conflicts of interest before any
difficulty can arise. To the extent a conflict of interest cannot be avoided in
a reasonable fashion, then appropriate procedures will be put in place to ensure
that there is full disclosure and to minimize the involvement of the conflicted
individuals in the relationship giving rise to the conflict.

The Company recognizes that there is a potential for a conflict
of interest inherent in the Companys relationship with HDSI. The Board of
Directors believe that the Company derives substantial benefits on a
cost-effective basis from its continuing relationship with HDSI. The Audit and Risk Committee of the Board of Directors will
periodically (not less than annually) review the service agreement with HDSI and
transactions under such agreement to confirm the fairness to the Company.

---

Outside directors of the Company are not expected to devote
their time and effort solely on behalf of the Company, and they may have a
variety of other business relationships that could give rise to a conflict of
interest. Any such potential conflicts of interest are not subject to the Code
and are to be resolved directly with the Board of Directors.

| | 6. | Giving or Accepting Gifts
| | -- | -------------------------

The giving or accepting of gifts can adversely affect the
Companys reputation for fair dealing and also create conflicts of interest. You
should avoid:

- Giving or offering to give any gift, favour, entertainment, reward, or any
  other thing of value that might influence or appear to influence the judgment
  or conduct of the recipient in the performance of his or her job. This
  includes transactions with government personnel, customers and suppliers. Such
  action may damage the Companys reputation for fair dealing and may be
  illegal.
- Accepting or soliciting a gift, favour, or other thing of value that is
  intended to, or might appear to, influence your decision-making or
  professional conduct. In addition to damaging the Companys reputation for
  fair dealing, receipt of such gifts could interfere with your ability to make
  judgments solely in the best interest of the Company, and thus create the
  appearance of a conflict of interest.

You may give or receive unsolicited gifts or entertainment only
in cases where the gifts or entertainment are of nominal value, are customary to
the industry, will not violate any laws, and will not influence nor appear to
influence the recipients judgment or conduct.

| | 7. | Outside Activities
| | -- | ------------------

Outside activities must not conflict with the proper
performance of your duties.

(a) Other Business Activity.
Full-time employees and officers are expected to devote substantial effort and
attention to the furtherance of the Companys business. In the usual case, this
would make it difficult for you to properly perform your duties while also being
engaged in other business ventures. For this reason, you may not serve as the
proprietor, general partner, officer or director of any other business without
first obtaining the written consent of the CEO or CFO. In the case of family
owned businesses, the CEO or CFO will normally grant such consent if he or she
is satisfied that the involvement in the family business will not conflict with
your duties and will not involve any conflict with the interests of the Company.
In addition, the CEO may grant consent to an officer or employee serving as a
member of the board of directors of another company in special circumstances.
(The Board of Directors will consider any proposal for the CEO or the CFO of the
Company to serve on the board of another entity, other than not-for-profit
entities or family businesses that in no material way compete with the Company
or do any material business with the Company.)

---

This policy does not apply to employees
or officers who are also employees or officers of HDSI with respect to services
performed by them for other companies.

Professional Associations and
Charitable Organizations. The Company encourages employees and officers to
participate in geological, engineering and other professional associations and
activities that do not conflict with their duties for the Company and do not
involve conflicts of interest. The Company also encourages officers and
employees to participate in charitable organizations and activities. However,
you should consult with the CEO or CFO before you undertake any such outside
activities requiring a substantial amount of time. In addition, you should not
accept a position as an officer or director of a professional or charitable
organization without prior consultation with the CEO or CFO, so that they can be
satisfied that your activity on behalf of such organizations cannot be
attributed to the Company.

Political and Government
Affairs. No Company contributions may be made, directly or indirectly, to
any election or issue campaign in any jurisdiction or circumstance that would be
unlawful. Corporate contributions may be made in appropriate cases where and
when permitted by applicable law, but only with the approval of the CEO. Use of
Company equipment, supplies or facilities to support any political party,
candidate or campaign, as well as employee activity during normal business
hours, may constitute a political contribution. You may not engage in any such
activity where it involves Company equipment, supplies or facilities or activity
during normal business hours without the prior approval of the CEO. In addition,
no action which presents, or may appear to present, the position of the Company
with respect to any political or governmental matter may be taken without the
prior approval of the CEO.

The Company encourages employees and
officers, as individuals, to take part in political and governmental affairs to
the extent that such activity does not interfere with the proper performance of
their duties or involve the use of Company assets or a conflict of interest.
However, if you wish to run for public office or hold an appointed public
position, you must confer with the CEO and counsel for the Company to ensure
that the proposed activity is consistent with your duties to the Company and
does not involve a conflict of interest.

The outside directors of the Company are not expected to devote
their full time and effort solely on behalf of the Company and accordingly this
policy does not apply to them.

| | 8. | Accounting and Recordkeeping, Internal Accounting
      Controls and Auditing Matters.
| | -- | --------------------------------------------------------------------------------------

Many employees of the Company, not just accountants and
controllers, participate in the financial control and reporting processes of the
Company. If you have ANY responsibility for any aspect of the Companys
financial activities (for example: processing or approval of payments; creation,
processing or approval of invoices and credit memos; payroll and benefits
decisions; approval of expense reports and other transactions; the estimation of
financial reserves or other claims or the amount of any accrual of deferral; or
the recording of any of the foregoing in the Companys records) and/or the
preparation of the Companys financial statements or other financial reports, you must ensure your involvement complies
with complete and accurate procedures as per established Company practice.

---

(a) Accounting and
Recordkeeping. You may not maintain funds or assets for any improper
purposes or make false or misleading statements in any Company documents,
reports or records. No undisclosed or unrecorded accounts may be established
using the Companys funds or other assets. All accounting records and the
financial reports produced from those records must be kept and presented in
accordance with applicable law, must accurately and fairly reflect in reasonable
detail the Companys assets, liabilities, revenue and expenses and, where
applicable, must be in accordance with generally accepted accounting principles.

Transactions must be supported by
accurate and reasonably detailed documentation and recorded in the proper
account. Best efforts are to be made to record transactions in the proper
accounting time period. To the extent that estimates are necessary, they must be
based on your good faith judgment and be supported by appropriate documentation.
No payment or the related accounting entry may be approved or made with the
intention or understanding that any part of the payment will be used for any
purpose other than that described by the document supporting the entry or
payment.

Internal Accounting Controls.
Internal accounting controls have been established to provide reasonable
assurances that (i) transactions are executed in accordance with management
authorization, (ii) transactions are properly recorded as needed to permit
preparation of financial statements and to maintain accountability for assets,
(iii) all assets are recorded on the books of the Company and access to assets
is only permitted in accordance with management authorization, and (iv) periodic
auditing is done at reasonable intervals and action is taken to resolve
discrepancies. You must comply with all internal control requirements and ensure
that no action is taken to avoid the internal controls requirements.

Auditing. The Company employs a
firm of independent chartered accountants to audit the Companys annual
financial statements. The annual audit has a number of purposes, including (i)
compliance with regulatory requirements, (ii) providing an independent
assessment of whether the Companys financial statements fairly present the
financial condition, results of operations and cash flow of the Company, (iii)
assessment of the accounting principles used and significant estimates made by
the Company in preparing its financial statements, and (iv) assessment of the
Companys system of internal controls over financial reporting as required by
applicable law and regulatory policies. Each employee is responsible for
providing whatever assistance may be required by the auditors. If you receive
inquiries from the Companys independent accountants, you must respond promptly,
fully and accurately.

If you have any concerns as to weaknesses in the Companys
accounting system or in the Companys internal controls; or if you believe that
any instances of fraud,* or incorrect or questionable accounting practices may
have occurred; or if you believe that any instances of fraudulent, incorrect or
questionable practices may have occurred in connection with the annual audit of
the Companys financial statements, you should consult with your immediate
supervisor or with the Companys CEO or CFO. Alternatively, you may
contact the Audit and Risk Committee of the Board of Directors using the
procedures outlined below under the heading Reporting of Possible Violations or
Other Questionable Practices - Procedures to Submit a Report. Those procedures
include a procedure for confidential, anonymous submission of concerns.

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| | 9. | Use of Company Property
| | -- | -----------------------

You are entrusted with the care, management and cost-effective
use of the Companys property and you are not to make use of these resources for
your own personal benefit or for the personal benefit of anyone else. Passwords
are to be kept confidential and use of the computer systems is limited to
authorized business purposes, although occasional personal use of the internet,
e-mail and voice mail will normally be permitted unless your supervisor believes
that this privilege is being abused.

However, in order to protect the Companys interests -
including for example, to ensure that the Companys computers and voice mail are
not being used for improper purposes, such as sexual harassment - the Company
reserves the right to review the contents of the Companys computers, its e-mail
system, and its voice mail system. No employee has a right of personal privacy
with respect to information that is placed in the Companys computers, the
e-mail system, or the voice mail system.

You are responsible to ensure that all Company property
assigned to you is maintained in good condition, and you should be able to
account for such equipment. Any disposition of Company property should be for
the benefit of the Company and not for personal benefit.

Company letterhead stationery is to be used only for
correspondence related to the Companys business. Do not use it for personal
correspondence or charitable solicitation.

You are to return all documents and property in your possession
upon termination of your employment for any reason.

__________

*For purposes of the Code, fraud includes any deliberate
misstatements or omissions in connection with preparation or reporting (internal
or external) of financial and/or operating information about the Company,
whether or not material and without regard to whether the employee receives any
personal benefit.

| | 10. | Proprietary Information
| | --- | -----------------------

We want our employees to be well informed about our business,
our plans for the future, and the successes and challenges we have along the
way. In return for this openness, the Company places trust in its employees to
maintain the confidentiality of our proprietary information without need for
court orders or other legal requirement.

---

You are to take all reasonable measures to protect the
confidentiality of proprietary information obtained or created by you, or
otherwise made known to you, in connection with your activities on behalf of the
Company. In addition, you must use proprietary information only for the
Companys legitimate business purposes, and not for your personal benefit or the
benefit of anyone else.

To provide the Company with reasonable protection against
unauthorized disclosure or unauthorized use of its proprietary information, all
employees are required to sign an employment agreement prior to their start with
the Company that includes provisions addressing confidentiality. These
agreements state in part that the Company retains exclusive ownership of all
project information and opportunities arising out of employment or consulting
relationships and any information pertaining to the exploration plans of the
Company.

For these purposes, proprietary information means information
developed or secured for use of the Company in its business, where that
information is not generally known to or otherwise readily available to the
public and members of our industry. Proprietary information includes, without
limitation:

- The Companys ideas, discoveries, projects, data, contact information and
  production processes.
- Information concerning actual or projected expenditures, corporate
  transactions, earnings or operating results or business transactions that has
  not been disclosed by the Company.
- Investor lists, relationships with consultants, contracts, business plans
  and strategies.
- Personnel information.

It is your responsibility to know what information is
proprietary and ensure that you use and disclose it only in the performance of
your duties with the Company. If you are unsure, consider the information to be
confidential until you obtain clarification.

If your employment terminates, you will continue to be bound to
your obligations of confidentiality to the maximum extent permitted by law.

| | 11. | Outside Ideas
| | --- | -------------

The purpose of this policy is to avoid the risk of allegation
of unauthorized use or disclosure of another persons proprietary rights, ideas
or information.

When an idea, prospect, opportunity, or other confidential or
proprietary information is submitted to the Company by an outsider, care must be
taken to ensure that the outsider signs an agreement defining the Companys
rights and obligations before the idea or prospect or information is disclosed
to employees qualified to evaluate it or use it. Outsiders who propose to submit
information should be told to submit the information in writing. Outsiders
should also be told that any submission constitutes their agreement that the
Companys brief review to determine possible interest will not create any
non-use, confidentiality or area of interest agreement or obligation of the Company. If they do not so
agree, they should be told not to submit their information.

---

On its receipt, any such information should be sent to the CEO
or CFO or persons authorized by them to evaluate outside submissions. No one
other than the CEO or CFO and persons authorized by them are to evaluate any
outside submission.

Each written submission will first be reviewed to see if it
purports to impose non-use, confidentiality or area of interest obligations. If
it does, no further review should be made and, unless the CEO upon being
notified otherwise directs, the material should be returned without further
review. If the material does not purport to impose such an obligation, it should
be reviewed briefly to see if it might be of interest. If it is not of interest,
it is to be returned with a letter stating that the information was briefly
reviewed to determine possible interest, that the information is not of
interest, and that the Company has no non-use, confidentiality or area of
interest agreement or obligation to the sender. If the sender was previously so
informed, the letter should also refer to that prior advice. If the material
appears to be of interest, then the Company will need to enter into an
appropriate confidentiality agreement setting out the parties rights and
obligations before any further review or use of the information.

Third party data subject to confidentiality obligations should
be so marked, all confidentiality obligations should be noted on the relevant
document or file, and all such obligations must be strictly adhered to.

| | 12. | Disclosure Policy
| | --- | -----------------

The Company has both legal and ethical obligations to provide
appropriate disclosure of material information, and to ensure that employees and
others do not benefit from having and using undisclosed material information.
Material information is any information that reasonably could be expected to
affect the market for the Companys stock or to influence an investors decision
to buy, sell or hold the stock. The wrongful use of undisclosed material
information may make both the Company and the individual involved liable for
criminal and/or civil penalties and damage awards.

(a) Control of Confidential
Information. All employees have the responsibility to inform senior
management on a timely basis of events or developments that might have a
material effect on the Company. Such information should be communicated to your
superior or to members of senior management.

Strict confidentiality must be
maintained with regard to disclosure of confidential information to persons
within the Company who have no need to know, and to anyone outside of the
Company. Care must be taken when handling confidential correspondence, assay
results, reports, documents, memos and facsimiles. Documents containing
confidential information should be shredded or otherwise destroyed, and not
placed in rubbish bins. Visitors to the offices or work sites of the Company are
not to be left unattended at any time, except in designated safe locations,
e.g.reception area and conference rooms. Discussions by Company
personnel concerning Company business should be confined to Company personnel
only and on a need to know basis, and should never occur in public places such
as elevators or airplanes.

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Public Disclosure
Responsibilities. The Company has a variety of disclosure obligations under
laws and stock exchange rules. The Company fulfills those obligations through
regulatory filings, periodic reports to shareholders, press releases, and web
site disclosure. The Company also provides information to shareholders and
others through communications with the media, analysts and others in the
financial community, by way of industry presentations, and in response to
inquiries. In carrying out the Companys disclosure responsibilities:

- The CEO, the CFO, and other members of senior
  management, as appropriate, have the sole responsibility to determine (i)
  whether a particular matter is sufficiently material to the Company to require
  disclosure, and (ii) the content, time and manner of disclosure.
- Company Spokespersons have the exclusive authority
  to speak for the Company with respect to matters of public disclosure. The
  Company Spokespersons consist of the CEO and any other persons who are
  authorized by the CEO, generally or in a specific instance, to speak for the
  Company. NO OTHER PERSONS ARE AUTHORIZED TO COMMUNICATE AS TO
  MATTERS OF PUBLIC DISCLOSURE ON BEHALF OF THE COMPANY.
- It is the responsibility of the Company to ensure
  that that undisclosed material information is disseminated in such a way that
  all members of the public have equal access to the information. Substantial
  security holders and analysts in particular MUST NOT receive preferential
  treatment in the matter of information disclosure. Persons given early access
  to undisclosed material information may not use that information to trade in
  the Companys securities, and they, the Company and the individual who causes
  the early disclosure may be liable for civil and criminal penalties and damage
  awards if there is trading on undisclosed material information.

External Communications and
Inquiries from Analysts, Media and Other Outsiders. Communications intended
for dissemination outside of the Company and concerning the Companys business
must be referred to the CEO or to one of the designated Company Spokespersons
prior to dissemination. This includes presentations to analysts and papers or
presentations to professional groups and others.

All inquiries from the press,
securities analysts, investors and other outsiders concerning the Companys
business and affairs must be referred to one of the designated Company
Spokespersons. This will ensure that information is disclosed consistently and
equitably. Unless specifically authorized, no one is authorized to respond to
such inquiries.

Comments on and Dissemination of
Analysts Reports and Other Media Stories. From time to time, the Company
may be asked to review or comment on analysts reports or other media stories
about the Company. No employee, officer or director is to review or comment on
analysts reports or media stories except an authorized Company Spokesperson, and any such inquiry
should be forwarded to such an authorized person without any comments. If a
Company Spokesperson does review such a report or story, the Company
Spokesperson should review the report or story ONLY for factual information and
limit his/her comments to discussion or correction of facts. Furthermore, no
undisclosed material information is to be communicated in the course of such a
review and comment. If factual correction would result in the disclosure of
undisclosed material information, the Company Spokesperson must take the
necessary steps to ensure that such information is communicated to the public
generally before it is communicated to the particular analyst or other person
making the inquiry.

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Employees, officers or directors of the
Company may be asked to forward or recommend analysts reports or may consider
forwarding analysts reports or media stories about the Company. The forwarding
or recommending of such reports or stories may be regarded as verifying or
validating the information contained in the reports or stories. If any of the
information in the report or story is not accurate, the act of forwarding or
recommending the report or story may constitute the dissemination of false or
misleading information in violation of securities laws. In addition, if any of
the information in the report or story is accurate but has not been generally
disseminated by the Company, the forwarding or recommending of the report or
story may constitute selective disclosure in violation of securities laws.
Finally, copying and dissemination of analysts reports and media stories may
violate copyright laws or the proprietary rights of the authors of the reports
or stories. For these reasons, no employee, officer or director should reproduce
and distribute or otherwise disseminate such reports and stories unless
specifically approved by the CEO. Persons requesting such materials should be
referred to the author or organization that published the material. In addition,
employees, officers and directors should not recommend particular analysts
reports on the Company to any person.

Comments on Rumours and Correction
of Selective Disclosure. Employees, officers and directors must not comment,
whether positively or negatively, on rumours about the Companys business.
Information about such rumours should be reported to the Company Spokespersons.
In general, the Companys policy is not to comment on rumours. If a stock
exchange or securities regulatory authority requests the Company to make a
definitive statement in response to rumours, a Company Spokesperson will
consider the matter in consultation with legal counsel.

If any employee, officer or director
makes an unauthorized or premature disclosure of undisclosed material
information (inadvertently or otherwise), the person responsible for the
disclosure, and any other employee, officer or director learning of it, must
contact the CEO or other Company Spokesperson as soon as possible, and the CEO
and other Company Spokespersons will consider the Companys responsibilities
under applicable law.

| | 13. | Securities Transactions
| | --- | -----------------------

(a) Restrictions on Trading. In
general, employees, officers and directors, and their family members, may trade
in Company securities unless:

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- A Blackout Period (see below) is in place, or
- The person has knowledge of undisclosed material
  information.

If a Blackout Period exists, or if you
have knowledge of undisclosed material information, neither you nor your family
members may trade in Company securities. For purposes of this policy, family
member means your spouse, your minor children, any person substantially
dependent on you for support, and other persons who share a residence with you.
There are two exceptions to this policy: (i) you may exercise any fixed price
option or warrant issued by the Company, BUT you may not sell the security
acquired on exercise of the option or warrant so long as either condition
exists; and (ii) you may sell securities pursuant to a previously existing
Trading Plan entered into with a qualifying broker under Section 161 of the
rules to the Securities Act of British Columbia and pursuant to SEC Rule 10b5-1,
provided that you were not in possession of undisclosed material information
(unless it has since been disclosed) at the time you established the Trading
Plan.

In addition, while you are in
possession of undisclosed material information, you and your family members must
not trade in the securities of companies that have a significant legal or
financial business relationship, direct or indirect, with the Company (generally
joint venture partners) if the undisclosed material information relates to the
subject matter of that business relationship.

Blackout Period. From time to
time, the CEO or other Company Spokesperson may institute a Blackout Period
because of the existence of undisclosed material information. If a Blackout
Period is instituted, you will be notified, generally by e-mail. Once notified
of the existence of a Blackout Period, except as noted above, you and your
family members may not trade in the Companys securities until you have been
notified that the Blackout Period has been terminated. The existence of a
Blackout Period is itself an item of confidential information that is not to be
disclosed to persons outside of the Company.

Special Considerations in Investing
in Company Securities. You and your family members are urged not to purchase
securities of the Company using borrowed funds in an amount or on terms and
conditions which are not prudent in light of your financial condition. In
addition, careful consideration should be given before pledging Company
securities for a loan because of the potential insider trading liability that
could arise if the lender should seek to sell the securities at a time when
there is undisclosed material information about the Company.

Certain Additional Policies.
These additional policies apply to officers and directors and in regards to
short sales, employees, of the Company.

- No employee, officer or director shall engage in
  short sales of securities of the Company or sales of borrowed securities of
  the Company. For purposes hereof, the short sale of Company shares as a method
  of facilitating the exercise of a valid option granted by the Company shall be
  deemed not to be a short sale for purposes of the aforementioned restriction
  notwithstanding any such sale-against-an-option must be treated as a short
  sale under Canadian securities legislation. Before selling short against an
  option, the holder of the option should bring the proposed transaction to the
  attention of the Companys CEO or CFO so as to ensure the transaction is
  treated properly.

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- No officer or director shall place automatic buy or
  sell orders with brokers except for a Trading Plan entered into with a
  qualifying broker under Section 161 of the rules to the Securities Act of
  British Columbia and pursuant to SEC Rule 10b5-1, provided that you were not
  in possession of undisclosed material information (unless it has since been
  disclosed) at the time you established the Trading Plan.
- No officer or director of the Company shall buy or
  sell equity securities of the Company during the period that begins five
  trading days before and ends one trading day after the public release of
  quarterly and annual results of operation of the Company.

| | 14. | Administration and
Distribution
| | --- | -------------------------------

The Companys Board of Directors, the Audit and Risk Committee,
and the Nominating and Governance Committee have established the standards of
business ethics and conduct contained in the Code, and it is their
responsibility to oversee compliance with the Code. Any change in or waiver of
any provision of the Code shall require approval of the Audit and Risk Committee
or the Nominating and Governance Committee, as applicable, and shall be publicly
disclosed in the time period and manner as required by law or regulation.

The Code is to be distributed to each employee, officer and
director of the Company and to the employees, officers and directors of HDSI. It
will also be made available via the Companys Internet site.

Strict adherence to the Code is vital. Directors will confirm
on an annual basis in connection with the preparation of the Management
Information Circular that they have read and understand the Code of Ethics.
Management will adopt appropriate policies to ensure that officers and employees
are provided with and have read the Code of Ethics. All managers are responsible
for ensuring that employees under their supervision are aware of and understand
the provisions of the Code For clarification or guidance on any point in the
Code, please consult the CEO or CFO.

| | 15. | Reporting of Possible Violations or Other Questionable
      Practices
| | --- | ----------------------------------------------------------------------

The following procedures govern the reporting and treatment of
reports of possible violations of the Code. The Company's Audit and Risk
Committee Charter provides that the Audit and Risk Committee is to establish
procedures for the receipt, retention and treatment of complaints received by
the Company regarding accounting, internal accounting controls or auditing
matters, and the confidential, anonymous submission by employees of concerns
regarding questionable accounting or auditing matters. The Audit and Risk
Committee has adopted these procedures as to complaints and submissions
regarding accounting, internal accounting controls or auditing matters, and the Nominating and Governance Committee has
adopted these procedures as to all other complaints and submissions regarding
the Code.

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(a) When to Make a Report. You
should make a report if you believe that any employee, officer or director of
the Company or HDSI, or any agent or representative of the Company, may have or
is about to engage in any conduct which you believe may be:

- A violation of the Code or any internal policy or
  code of practice,
- A violation or otherwise involve questionable
  practices in connection with accounting, internal accounting controls or
  auditing matters,
- A violation of any law or regulation,
- Corruption, mismanagement or fraud, or
- A danger to the public or danger to worker health
  and safety or the environment.

If you are unsure about the matter but
concerned about the possibility of a violation or questionable practice, you
should nonetheless report the matter. Delays in bringing the information to the
attention of senior management, the Audit and Risk Committee, or the Nominating
and Governance Committee may cause damage, complications, and irreversible
consequences for the Company. Following the steps outlined below will allow the
Company to address the issues and ensure that timely remedial action is
taken.

Procedures to Submit a Report.
You may make a report under this procedure in one of the following ways:

- Bring the matter to the attention of your immediate
  supervisor. Any supervisor receiving such a report is to immediately bring the
  matter to the attention of the CEO, the CFO, or other member of senior
  management.
- Bring the matter to the attention of the CEO, the
  CFO, or any other member of senior management.
- Bring the matter to the attention of an independent
  director of the Company. Matters relating to accounting, internal accounting
  controls or auditing matters should be reported to the Chairman of the Audit
  and Risk Committee. All other matters should be reported to the Chairman of
  the Nominating and Governance Committee. If you are uncertain as to whether
  the matter should go to the Audit and Risk Committee or the Nominating and
  Governance Committee, you may choose either one. You may make the report
  orally, in writing, or by e-mail. All reports will be treated as confidential
  to the extent possible, and only revealed on a need-to-know basis or as
  required by law or court order. Contact information for the Chairman of the
  Audit and Risk Committee and the Chairman of the Nominating and Governance
  Committee is as follows:

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| | Chairman of the Audit Committee       | Chairman of the Nominating and   
| | ------------------------------------- | ---------------------------------
| |                                       | Governance Committee             
| |                                       |                                  
| | Name:James Kerr                       | Name:Gordon J. Fretwell          
| | Address:1020  800 West Pender Street | Address:1780 - 400 Burrard Street
| | Vancouver, BC V6C 2V6                 | Vancouver, BC V6C 3A6            
| | Telephone No.604-760-8355             | Telephone No.604-684-1280        
| | Fax No.604-630-0022                   | Fax No.604-684-1288              
| | E-mail address:jamesdkerr@shaw.ca     | E-mail address:gord@fretwell.ca  

- If you prefer to report on an anonymous basis, call
  on the Companys hotline at 1- 877-874-8416. Any calls to this number will be
  forwarded to the Chairman of the Audit and Risk Committee for further
  handling.

With respect to matters involving the
possible violation of laws or regulations, you also may choose to bring such
concerns to an outside regulatory authority. However, the Company is committed
to taking internal action in response to employee concerns, and would appreciate
the opportunity to do so, if appropriate.

| | (c) | Follow-up and Outcome.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     | (i) On receipt of a complaint, the complaint will be
      reported promptly to the Chairman of the Audit and Risk Committee if it
      relates to accounting, internal accounting controls or auditing matters,
      and to the Chairman of the Nominating and Governance Committee if it
      relates to other matters under the Code. In the case of an oral complaint,
      the party receiving the complaint is to report it orally and also to
      prepare a written summary for the Chairman of the Audit and Risk Committee
      or Nominating and Governance Committee, as applicable.             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     | (ii) The appropriate Committee Chairman will promptly
      commission the conduct of an investigation. At the election of the
      Committee Chairman, the investigation may be conducted by Company
      personnel, or by outside counsel, accountants or other persons employed by
      the appropriate Committee.                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     | (iii) The identity of a person filing a complaint will be
      treated as confidential to the extent possible, and only revealed on a
      need-to-know basis or as required by law or court order.                                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     | (iv) On completion of the investigation, an oral and/or
      written investigative report will be provided to management and the Audit
      and Risk Committee or Nominating and Governance Committee, as applicable.
      If any unlawful, violative or other questionable conduct is discovered,
      the appropriate Committee will cause to be taken such remedial action as
      the Committee deems appropriate under the circumstances to achieve
      compliance with the applicable law, regulation or policy and to otherwise
      remedy the unlawful, violative or other questionable
  conduct.

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The Chairman of the appropriate
Committee will prepare, or cause to be prepared, a written summary of the
remedial action taken.

(v) In each case, the written
investigative report (or summary of any oral report), and a written summary of
the remedial action taken in response to the investigative report will be
retained along with the original complaint by or under the authority of the
appropriate Committee Chairman for a period of four years after the resolution
of the matter.

(d) Prohibition Against
Retaliation. The Company welcomes the courage and honesty of an employee who
voices concern over a particular course of action that he or she believes to be
unlawful or harmful. Any attempts to intimidate, threaten, harass or retaliate
against any employee based upon a good faith report made by an employee pursuant
to the Code is strictly prohibited and will result in disciplinary action up to
and including termination of the person responsible for any such intimidation,
threat, harassment or retaliation.

However, groundless or unwarranted
complaints - including those with vindictive intent are not acceptable.
Appropriate disciplinary measures will be taken if allegations are initiated for
malicious reasons or in bad faith.

(e) Governmental or Company
Inquiry. If you receive an inquiry from a governmental authority concerning
suspected unlawful conduct, you should immediately direct the inquiry to your
immediate superior, the CEO, the CFO or other member of senior management. In
such circumstances, you should take measures to preserve documents and other
items relevant to the investigation. To conceal an offence or to alter or
destroy evidence is illegal and may result in criminal prosecution. It also
violates the Companys commitment of conducting its business in a legal and
ethical manner and is strictly prohibited.

If you receive an inquiry from the
Company representative or a Board committee in connection with an investigation
under the Code, you are equally obligated to take measures to preserve documents
and other items relevant to the investigation.

(f) Failure to Comply or File a
Report. The Company is committed to complying with all applicable laws,
regulations and policies. Such compliance is only possible if all employees,
officers and directors ensure that they follow all applicable laws, and Company
policies and guidelines. When in doubt, ask the CEO, CFO or other members of
senior management. Personnel who violate the law or the Companys compliance
policies or knowingly fail to report a violation of law or compliance policy may
be subject to disciplinary action, up to and including dismissal. The nature and
extent of the action will be determined on a case-by-case basis. In reviewing
the situation, the following is a partial list of considerations:

- The nature and severity of the offence.
- Whether the persons involved acted reasonably.

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- The efforts by the persons involved to obtain
  guidance before the offence occurred.
- Whether the persons involved reported themselves.

Personnel are encouraged to report
their own wrongdoing or possible wrongdoing. This action will be taken into
account when assessing the appropriate discipline, if any. The Company will also
recognize situations where a person has made an honest mistake and will take it
into account in deciding the course of action to pursue.

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