Filed by Automated Filing Services Inc. (604) 609-0244 - Kirkland Lake Gold Inc. - Exhibit 4.18






DATED              29
  July 2004 

 

 

 

 

 

 

KIRKLAND LAKE GOLD INC. 

- and - 

CANACCORD CAPITAL (EUROPE) LIMITED 

 

 


_________________________________________

AGENCY
AGREEMENT 
_________________________________________

 

 

 

McCarthy Tétrault
1 Plough Place 
London 
EC4A 1DE 

Tel: +44(0)20 7822 1500 
Fax: +44(0)20 7822 1555 
Email:
www.mccarthy.ca




TABLE OF CONTENTS 

	1. 	DEFINITIONS 	1
      
	 	 	 
	2. 	APPOINTMENT OF AGENT 	4
      
	 	 	 
	3. 	AGENT’S COMPENSATION 	4
      
	 	 	 
	4. 	COMPLIANCE WITH SECURITIES LAWS BY THE CORPORATION 	5
      
	 	 	 
	5. 	DISTRIBUTION AND CERTAIN OBLIGATIONS OF THE AGENT AND THE
      CORPORATION 	5
      
	 	 	 
	6. 	MATERIAL OR SIGNIFICANT CHANGE DURING DISTRIBUTION 	6
      
	 	 	 
	7. 	OTHER COVENANTS, REPRESENTATIONS AND WARRANTIES OF THE CORPORATION
      	7
      
	 	 	 
	8. 	CLOSING MATTERS 	10
      
	 	 	 
	9. 	CONDITIONS 	10
      
	 	 	 
	10. 	ADDITIONAL COVENANTS 	12
      
	 	 	 
	11. 	RIGHTS OF TERMINATION 	12
      
	 	 	 
	12. 	INDEMNIFICATION 	14
      
	 	 	 
	13. 	CONTRIBUTION 	17
      
	 	 	 
	14. 	SEVERABILITY 	18
      
	 	 	 
	15. 	EXPENSES 	18
      
	 	 	 
	16. 	DATA PROTECTION 	18
      
	 	 	 
	17. 	SURVIVAL 	19
      
	 	 	 
	18. 	TIME OF THE ESSENCE 	19
      
	 	 	 
	19. 	GOVERNING LAW AND VENUE 	19
      
	 	 	 
	20. 	CURRENCY 	19
      
	 	 	 
	21. 	NOTICE 	19
      
	 	 	 
	22. 	CONFLICT OF INTEREST 	21
      
	 	 	 
	23. 	THIRD PARTY BENEFICIARIES 	21
      
	 	 	 
	24. 	ENTIRE AGREEMENT 	21
      
	 	 	 
	25. 	ANNOUNCEMENTS 	21
      
	 	 	 
	26. 	COUNTERPARTS/FACSIMILE SIGNATURES 	22
      






AGENCY AGREEMENT 

This Agreement dated as of 29 July 2004 is made 

BETWEEN: 

	(1) 	
      KIRKLAND LAKE GOLD INC. (No 235849-2), a
      corporation incorporated under the Canada Business Corporations Act whose
      principal office is located at Macassa Mine, Highway 66, Kirkland Lake,
      Ontario, Canada (the “Corporation”); and

	 	 
	(2) 	
      CANACCORD CAPITAL (EUROPE) LIMITED (No.
      281497), Brook House, 27 Upper Brook Street, London W1K 7QF, UK
      (“Canaccord Europe” or the “Agent”)



WHEREAS the Agent understands that the Corporation
proposes to raise funds by the issue of Common Shares for cash pursuant to the
placing; 

AND WHEREAS the Corporation wishes to appoint the Agent,
to offer for sale and distribute such Common Shares and the Agent is willing to
accept such appointment and to use its reasonable endeavours to procure
subscribers on the terms and conditions of this Agreement; 

NOW THEREFORE the parties agree as follows: 

	1. 	
      DEFINITIONS

	 	 
	1.1 	
      In this Agreement, the following terms shall have the
      meanings set out below:

	 	 
		
      “Admission” means the admission to trading on AIM
      on 1 July 2004 of all the issued share capital of the Corporation in
      accordance with the AIM Rules;

	 	 
		
      “Admission Document” means the admission document
      dated 25 June 2004 prepared with respect to Admission in accordance with
      the AIM Rules;

	 	 
		
      “Agent's Fee” has the meaning given to it in
      clause 3;

	 	 
		
      “Agreement” means this agreement, as it may be
      amended, modified or supplemented from time to time;

	 	 
		
      “AIM” means the Alternative Investment Market, a
      market operated by London Stock Exchange plc;

	 	 
		
      “AIM Rules” means the AIM Rules for companies
      published by London Stock Exchange plc (as amended from time to
    time);

	 	 
		
      “Auditors” means PricewaterhouseCoopers LLP,
      Chartered Accountants as auditors of the Corporation;

	 	 
		
      “Board” means the board of directors of the
      Corporation;







- 2 - 

“Broker Warrants” means
  warrants to purchase that number of Common Shares (on the basis that one warrant
  gives the right to purchase one Common Share) equal to 5% of the Common Shares
  distributed under the Offering at an exercise price equal to the subscription
  price under the Offering, to be granted at Closing by the Corporation to the
  Agent, such warrants to expire 18 months from the Closing Date;

“Business Day” means a day which
is not a Saturday, a Sunday or a statutory, civic or banking holiday in Alberta,
Ontario or London, England; 

“Canadian Securities Laws”
means, collectively, all applicable securities laws in each of the provinces and
the respective regulations and rules under such laws together with applicable
published policy statements, notices and orders of the securities regulatory
authorities in the provinces and all discretionary decisions, orders or rulings,
if any made by such securities regulatory authorities in connection with the
transactions contemplated hereby; 

“Claim” has the meaning given to
it in clause 12.2; 

“Closing” means the completion
of the issue and sale by the Corporation of the New Shares; 

“Closing Date” means
  30 July 2004, or such other date as the Corporation and the Agent may agree
  in writing;

“Closing Time” means 10 am
(London time)) on the Closing Date or such other time as the Corporation and the
Agent may agree; 

“Common Shares” means the voting
common shares of no par value in the capital of the Corporation; 

"Directed Selling Efforts" means
"directed selling efforts" as defined in Rule 902 of Regulation S; 

“distribution” means
“distribution” or “distribution to the public” as those terms are defined under
Canadian Securities Laws; 

“Financial Information” means,
collectively, the audited financial statements of the Corporation as at and for
the years ended 30 April 2003, 2002 and 2001, together with the notes thereto
and the auditors’ reports thereon, the unaudited interim financial statements of
the Corporation as at and for the nine month periods ended 31 January 2004; 

“FSMA” means the Financial
Services and Markets Act 2000; 

“Indemnified Party” has the
meaning given to it in clause 12.2; 




- 3 - 

“Material Contracts”
means, collectively, the agreements referred to under the subheading
“Material Contracts” in part V of the Admission Document headed “Additional
Information”; 

“New Shares” means the Common
Shares to be allotted and issued by the Corporation pursuant to the Placing;


“Notice” has the meaning given
to it in clause 21; 

“Offering” means the offering,
on a private placement basis, of up to 3,987,730 New Shares at a price of £1.63
per New Share; 

“Placees” means the persons who
agree conditionally to subscribe for the New Shares pursuant to the Placing;


“Placing” means the placing by
Canaccord Europe of New Shares to Placees in the UK; 

“Placing Letter” means the
placing letter in the form to be agreed between the Corporation and the Agent
and to be entered into between the Placees and the Corporation with respect to
the offering of the New Shares; 

“POS Regs” means the UK
Public Offers of Securities Regulations 1995 (as amended); 

“Public Record” means all
information filed by the Corporation with the securities commission or similar
regulatory authority in the provinces of British Columbia, Alberta and Ontario
including without limitation, and any information filed with any such securities
commission or similar regulatory authority in compliance, or intended
compliance, with any applicable Canadian Securities Laws; 

“Regulation S” means Regulation
S promulgated under the U.S. Securities Act; 

“TSX” means the Toronto Stock
Exchange; 

“UK” means the United Kingdom of
Great Britain and Northern Ireland; 

“United States” means the United
States of America, its territories and possessions, any State of the United
States and the District of Columbia; 

“U.S. Securities Act” means the
United States Securities Act of 1933, as amended; and 

Unless otherwise expressly provided in
this Agreement, words importing only the singular number include the plural and
vice versa and words importing gender include all genders. References to
“sections”, “subsections”, “clauses” or “schedules” are to the appropriate
section, subsection, clause or schedule of or to this Agreement. Any statement,
representation or warranty qualified by reference to the awareness, knowledge,
information or belief of any person or any other similar expression is deemed to
include an additional statement that it has been made with due and careful
consideration after 




- 4 - 

such person has made all reasonable
enquiries and all such investigations as could reasonably be expected to be made
or considered in the context of the Offering. 

	2. 	
      APPOINTMENT OF AGENT

	 	 	 
	2.1 	
      Appointment of Agent. The Corporation hereby
      appoints the Agent as the Corporation’s sole and exclusive agent to effect
      the Offering and the Agent agrees, to act, as the Corporation’s agent for
      such purpose. The Agent agrees to offer the New Shares for sale, as agent
      of the Corporation, directly and through its affiliates, in the manner
      contemplated by and subject to the terms and conditions of this Agreement,
      to the Placees. The Agent will use its reasonable endeavours to procure
      subscribers for the New Shares in the UK pursuant to the Placing Letter
      under appropriate exemptions under the POS Regulations and the Financial
      Services and Markets Act 2000 (Financial Promotions) Order 2001 and only
      in circumstances that are deemed not to be an “offer to the public in the
      United Kingdom” under the POS Regulations.

	 	 	 
	2.2 	
      No Obligation to Purchase. The Agent is acting
      solely as agent in offering the New Shares to potential Placees hereunder,
      and neither the Agent nor its affiliates have any obligation to purchase
      any New Shares.

	 	 	 
	3. 	
      AGENT’S COMPENSATION

	 	 	 
	3.1 	
      In consideration for the Agent’s services hereunder in
      respect of the Offering, the Corporation agrees to:

	 	 	 
		(a) 	
      pay to the Agent a fee of £25,000 in respect of the fee
      payable to the Agent in respect of the Corporation’s listing on AIM under
      the nominated adviser and broker agreement made among the Agent, the
      Corporation and its directors dated 24 June 2004 (the “NOMAD
      Agreement”), to be paid from the proceeds of the Offering at the
      Closing Time;

	 	 	 
		(b) 	
      pay to the Agent a commission equal to 6% of the price of
      each New Share pursuant to the Offering multiplied by the number of New
      Shares subscribed for by Placees;

	 	 	 
		(c) 	
      pay to the Agent the sum of £75,000, in respect of the
      balance of the fee payable to the Agent in respect of the Corporation’s
      listing on AIM under the NOMAD

	 	 	 
			
      Agreement, which may be set-off by the Corporation
      against a corresponding amount of any commissions owing to Canaccord
      pursuant to the Offering, as referred to in clause 3.1 (b) above;
    and

	 	 	 
		(d) 	
      grant and issue the Broker Warrants to the Agent
      (collectively, all such consideration hereinafter referred to as the
      “Agent's Fee”).



The Corporation also agrees to pay the
Agent’s estimated expenses at the Closing Date in accordance with clauses 15
hereof. 




- 5 - 

	4. 	
      COMPLIANCE WITH SECURITIES LAWS BY THE
      CORPORATION

	 	 
	4.1 	
      Canadian Law Matters. The Corporation shall fulfil
      and comply with, to the satisfaction of the Agent, the Canadian Securities
      Laws required to be fulfilled or complied with by the Corporation to
      distribute the New Shares.

	 	 
	4.2 	
      UK Law Matters. The Corporation warrants,
      represents and covenants to the Agent (and acknowledges that the Agent is
      relying on such warranties, representations and covenants) that the
      Corporation undertakes to provide all such information known to it or
      which on reasonable enquiry ought to be known to it and relating to the
      Corporation or otherwise as may reasonably be required by the Agent for
      the purpose of complying with the requirements of law or of the Financial
      Services Authority or of London Stock Exchange plc or the AIM Rules (if
      applicable).

	 	 
	5. 	
      DISTRIBUTION AND CERTAIN OBLIGATIONS OF THE AGENT AND
      THE CORPORATION

	 	 
	5.1 	
      The New Shares will be offered for sale and distributed
      by the Agent outside of Canada and the United States in those
      jurisdictions where they may be lawfully offered for sale, distributed,
      placed or sold and upon the terms and conditions set forth in the Placing
      Letter and this Agreement.

	 	 
	5.2 	
      The Agent shall fulfil and comply with, to the
      satisfaction of the Corporation, the requirements of law or of the
      Financial Services Authority or of London Stock Exchange plc or the AIM
      Rules (if applicable) required to be fulfilled or complied with by the
      Agent to distribute the New Shares.

	 	 
	5.3 	
      The Corporation shall co-operate in all respects with the
      Agent to allow and assist the Agent to participate fully in the
      preparation of the Placing Letter and shall allow the Agent and its
      counsel to conduct all “due diligence” investigations, including without
      limitation, verification, which the Agent may reasonably require to fulfil
      its obligations and to enable the Agent to execute any certificate or
      confirmation required to be executed in such documentation.

	 	 
	5.4 	
      The Corporation shall apply to CRESTco for admission of
      “depository interests” in respect of the New Shares to the “CREST” System
      as participating securities as soon as is reasonably practicable after the
      date hereof and the Corporation undertakes to the Agent not to take
      knowingly and voluntarily any action without the prior consent of the
      Agent (whose consent shall not be unreasonably withheld or delayed)
      between the date hereof and the date of admission of the “depository
      interests” in respect of the New Shares to the CREST System which would or
      would be likely to cause the “depository interests” in respect of the New
      Shares to be disabled in the “CREST” system.

	 	 
	5.5 	
      The Corporation covenants and agrees that the Corporation
      will, as soon as reasonably practicable after execution of this agreement
      but in any event at least three days prior to the Closing Date, submit an
      application form with respect to the New Shares pursuant to Rule 27 of the
      AIM Rules.







- 6 - 

	5.6 	
      The Agent represents, warrants, covenants and agrees that
      neither it nor any person acting on its behalf have made or will make any
      Directed Selling Efforts with respect to the New Shares and acknowledge
      that the New Shares have not been registered under the U.S. Securities Act
      and may not be offered or sold outside the United States except pursuant
      to Rule 904 of Regulation S;

	 	 
	5.7 	
      The Agent hereby represents, warrants and covenants to
      the Corporation that:




	 	(a) 	
      it and each of its affiliates shall use its respective
      reasonable endeavours to solicit subscriptions for and to offer for sale
      or place the New Shares as agent of the Corporation and will do so only,
      to the extent applicable, in compliance with all applicable Canadian
      Securities Laws, UK securities laws and applicable U.S. securities
      laws;

	 	 	 
	 	(b) 	
      it will not, in connection with the Offering, make any
      representation or warranty with respect to the New Shares;

	 	 	 
	 	(c) 	
      it has good and sufficient right and authority to enter
      into this Agreement and complete the transactions to be completed by it
      under this Agreement on the terms and conditions set forth herein;
    and

	 	 	 
	 	(d) 	
      it and each such affiliate is or will be duly qualified
      under applicable securities laws in those jurisdictions in which it will
      act as agent of the Corporation in connection with the Offering as to
      permit it to lawfully fulfil its obligations under this
  Agreement.



The representations and warranties and
covenants of the Agent contained in clauses 5.7(a) to (d) above shall be true
and correct as of the Closing Date, if applicable, with the same force and
effect as if then made by the Agent. 

	6. 	
      MATERIAL OR SIGNIFICANT CHANGE DURING
      DISTRIBUTION

	 	 
	6.1 	
      From the date hereof until completion of the distribution
      of the New Shares the Corporation shall forthwith notify the Agent in
      writing of any material change or significant change (actual, anticipated,
      contemplated, proposed or threatened, financial or otherwise) in the
      business, financial condition, affairs, operations, business prospects,
      assets, liabilities or obligations (contingent or otherwise) or capital of
      the Corporation.

	 	 
	6.2 	
      During the period of distribution of the New Shares, the
      Corporation shall forthwith, and in any event within any applicable time
      limitation, comply, to the reasonable satisfaction of the Agent, with all
      applicable filing and other requirements under Canadian Securities Laws,
      applicable UK securities laws or any other applicable laws as a result of
      such material fact or material change or significant change provided that
      the Corporation shall not file any document without first obtaining the
      approval of the Agent (such approval not to be unreasonably withheld or
      delayed), after consultation with the Agent with respect to the form and
      content thereof. The Corporation shall forthwith in good faith discuss
      with the Agent any fact or change in circumstances (actual,
      anticipated,







- 7 - 

contemplated, proposed or threatened,
financial or otherwise) which is of such a nature that there is reasonable doubt
whether written notice need be given under this section. 

	6.3 	
      The Corporation shall forthwith advise the Agent of and
      provide the Agent with, copies, of any written communications relating
      to:

	 	 	 
		(a) 	
      the issuance by any securities regulatory authority,
      including the TSX, of any order suspending or preventing the use of the
      Placing Letters or any cease-trading or stop order or any halt in trading
      relating to the any securities of the Corporation or the institution or
      threat of any proceedings for that purpose; and

	 	 	 
		(b) 	
      the receipt of any material communication from any
      securities regulatory authority, including the TSX, or other authority
      relating to the Placing Letters or the Offering.



The Corporation shall use its best
efforts to prevent the issuance of any such cease-trading or stop order and, if
issued, shall forthwith take all reasonable steps which it is able to take and
which may be necessary or desirable in order to obtain the withdrawal thereof as
soon as is reasonably practicable. 

	7. 	
      OTHER COVENANTS, REPRESENTATIONS AND WARRANTIES OF THE
      CORPORATION

	 	 	 
	7.1 	
      The Corporation hereby covenants, represents and warrants
      as follows to the Agent and acknowledges that the Agent is relying upon
      such covenants, representations and warranties and covenants in connection
      with its execution and delivery of this Agreement and the performance of
      its obligations hereunder:

	 	 	 
		(a) 	
      the Corporation is a corporation duly incorporated and
      organized and validly existing under the laws of its jurisdiction of
      incorporation, is duly qualified to carry on its business and is in good
      standing in each jurisdiction in which the conduct of its business or the
      ownership, leasing or operation of its property and assets requires such
      qualification, and has all requisite corporate power and authority to
      carry on its business, to own, lease and operate its property and assets
      and to execute, deliver and perform its obligations under this
      Agreement;

	 	 	 
		(b) 	
      the Corporation has conducted and is conducting its
      business in compliance in all material respects with all applicable laws,
      rules and regulations of each jurisdiction in which its business is
      carried on, is current with all filings required to be made in each
      jurisdiction in which its business is carried on, and holds all necessary
      licenses, permits, approvals, consents, certificates, registrations and
      authorisations (whether governmental, regulatory or otherwise) (the
      “Licenses”) to enable its business to be carried on as now
      conducted and its property and assets to be owned, leased and operated,
      and the Licenses are validly existing and in good standing and none of the
      Licenses contains any burdensome term, provision, condition or limitation
      which has or may have a materially adverse effect on the operation of the
      business of the Corporation as now carried on or as proposed to be carried
      on;







- 8 - 

	 	(c) 	
      the authorised capital of the Corporation consists of an
      unlimited number of Common Shares (of which 36,849,708 Common Shares were
      issued and outstanding as fully paid and non-assessable as at the date of
      this agreement);

	 	 	 	 
	 	(d) 	
      no person firm or corporation has any agreement, option,
      right or privilege (whether pre-emptive or contractual) capable of
      becoming an agreement for the purchase, subscription for or issuance of
      any of the issued or unissued securities of the Corporation and no rights,
      warrants or options to acquire, or securities or instruments convertible
      into or exercisable or exchangeable for, any shares in the capital of the
      Corporation, are outstanding except:

	 	 	 	 
	 		(i) 	
      1,310,925 stock options, 3,999,560 common share purchase
      warrants and 96,250 broker warrants to purchase an equal number of Common
      Shares;

	 	 	 	 
	 		(ii) 	
      10% convertible promissory note in the principal amount
      of CDN$ 2,406,250, maturing December 11, 2004 (which may be extended, with
      the lender’s consent, by up to 268 days by issuing the lender 137 Common
      Shares per million dollars of outstanding principal for each day of
      extension up to a maximum of 88,417 shares), the principal of which is
      convertible by the lender into Common Shares at the rate of CDN$ 4.40 per
      share and the accrued interest on which is convertible by the lender into
      common shares at that rate equal to CDN$ 4.40 per share or such higher
      rate required by the TSX; and

	 	 	 	 
	 		(iii) 	
      10% convertible loan in the principal amount of CDN
      $1,000,000 maturing 11 February 2005 convertible at a price of CDN $4.00
      per share with interest convertible at a higher of market or CDN $4.00 per
      share, subject to extension on issuance of a further 75,000 Common
      Shares;

	 	 	 	 
	 	(e) 	
      the Corporation has all requisite corporate power and
      authority to:

	 	 	 	 
	 		(i) 	
      execute and deliver this Agreement and the Placing
      Letters (collectively, the “Documents”) and perform its obligations
      thereunder; and

	 	 	 	 
	 		(ii) 	
      issue, sell and deliver the New Shares and the Broker
      Warrants in accordance with the provisions of this Agreement;

	 	 	 	 
	 	(f) 	
      all necessary corporate action has been taken by the
      Corporation to authorise:

	 	 	 	 
	 		(i) 	
      the execution, delivery and performance of the Documents,
      and

	 	 	 	 
	 		(ii) 	
      the issuance, sale and delivery of the New Shares and the
      Broker Warrants in accordance with the provisions of this
  Agreement;

	 	 	 	 
	 	(g) 	
      this Agreement has been duly executed and delivered by
      the Corporation and constitutes a valid and binding obligation of the
      Corporation, enforceable against it in accordance with its terms, except
      as enforcement thereof may be limited by bankruptcy, insolvency,
      reorganisation, moratorium and other laws relating to
or







- 9 - 

affecting the rights of creditors
generally, and except as limited by the application of equitable principles when
equitable remedies are sought and by the fact that rights to indemnity,
contribution and waiver, and the ability to sever unenforceable terms, may be
limited by applicable law; 

	 	(h) 	
      the execution and delivery of the Documents, the issue,
      sale, placing and delivery of the New Shares and the Broker Warrants and
      the performance or the consummation of the transactions contemplated in
      this Agreement, do not and will not conflict with or result in a breach or
      violation of any of the terms or provisions of, or constitute a default
      under (whether after notice or lapse of time or both), any indenture,
      mortgage, deed of trust, loan agreement, license agreement, lease or other
      agreement (written or oral) or instrument, including any Material
      Contract, to which the Corporation is a party or by which any of them is
      bound, or to which any of their property or assets is subject, which
      breach or violation or the consequences thereof would, alone or in the
      aggregate, result in an adverse material change to the Corporation nor
      will such action conflict with or result in any violation of the
      provisions of the articles of incorporation or other constating documents,
      by-laws or resolutions of the Corporation or any statute or any order,
      rule or regulation of any court or governmental agency or body having
      jurisdiction over them or any of their properties which violation or the
      consequences thereof would, alone or in the aggregate, result in an
      adverse material change to the Corporation;

	 	 	 
	 	(i) 	
      other than approval of the TSX and those that have been
      obtained prior to the date hereof and the matters set out in clause (k),
      no consent, approval, authorisation, order, registration or qualification
      of or with any court or governmental agency or regulatory body is required
      for the issue, sale and delivery of the New Shares or the issue and
      delivery of the Broker Warrants or the consummation by the Corporation of
      the transactions contemplated in this Agreement;

	 	 	 
	 	(j) 	
      the New Shares and Broker Warrants to be issued hereunder
      will have each been duly authorized for issuance on or before the Closing
      Date and, upon the New Shares being issued on exercise of the Broker
      Warrants, the New Shares will be validly issued as fully paid and
      non-assessable Common Shares;

	 	 	 
	 	(k) 	
      the currently outstanding Common Shares are listed on the
      TSX and on the Closing Date the TSX will have conditionally approved the
      listing of the New Shares and the Common Shares issuable on the exercise
      of the Broker Warrants;

	 	 	 
	 	(l) 	
      the Corporation will apply the net proceeds from the
      issue and sale of the New Shares, among other things, to provide working
      capital and to continue development of its mining properties;

	 	 	 
	 	(m) 	
      the representations and warranties of the Corporation
      contained in the NOMAD Agreement will be true and correct in all material
      respects as of the Closing Time with the same force and effect as if made
      at and as of the Closing Time after giving effect to the transactions
      contemplated by this Agreement.







- 10 - 

	8. 	
      CLOSING MATTERS

	 	 
	8.1 	
      As soon as practicable after the execution of this
      Agreement, the Agent shall deliver to the Corporation a schedule of
      Placees in respect of the New Shares setting out the names and
      denominations in which the New Shares are to be issued and allotted
      specifying each relevant Placee’s CREST participant ID reference and the
      relevant CREST member account ID reference(s) relating to the CREST member
      account(s) to which each relevant Placee wishes such New Shares to be
      credited (where the New Shares are to be issued in uncertificated form) or
      the registration details for the Placee (where New Shares are to be issued
      in certificated form).

	 	 
	8.2 	
      As soon as practicable following receipt of the schedule
      of Placees pursuant to Clause 8.1 the Company shall allot the New Shares
      to the Placees notified to it by the Agent conditionally upon admission
      and full payment and at the Closing shall deliver to the Agent a certified
      copy of the resolution of the board allotting the New Shares.

	 	 
	9. 	
      CONDITIONS

	 	 
	9.1 	
      The Agent’s obligations hereunder shall be subject to the
      accuracy of the representations and warranties of the Corporation
      contained in this Agreement as of the date of this Agreement and as of the
      Closing Date, the performance by the Corporation of its obligations under
      this Agreement and the following conditions:




	 	(a) 	
      the Agent shall have received at the Closing Time a
      certificate dated the Closing Date, addressed to the Agent and counsel to
      the Agent and signed by the Secretary of the Corporation or another
      officer of the Corporation acceptable to the Agent, with respect to the
      articles of continuation or other constating documents and by-laws of the
      Corporation, all resolutions of the board of directors of the Corporation
      relating to this Agreement and the offering of New Shares contemplated
      hereby, the incumbency and specimen signatures of signing officers of the
      Corporation and with respect to such other matters as the Agent may
      reasonably request;

	 	 	 	 
	 	(b) 	
      the Agent shall have received at the Closing Time a
      certificate or certificates dated the Closing Date, addressed to the Agent
      and signed by each of the Chief Executive Officer and Chief Financial
      Officer of the Corporation or other officers of the Corporation acceptable
      to the Agent, certifying for and on behalf of the Corporation after having
      made due enquiry, that:

	 	 	 	 
	 		(i) 	
      since the respective dates as of which information is
      given in the Public Record (A) there has been no material change (actual,
      anticipated, contemplated, proposed or threatened, whether financial or
      otherwise) in the business, financial condition, affairs, operations,
      business prospects, assets, liabilities or obligations (contingent or
      otherwise) or capital of the Corporation and (B) no transaction has been
      entered into by the Corporation which is material to the Corporation other
      than as disclosed in the Public Record;







- 11 - 

	 	(ii) 	
      there are no contingent liabilities affecting the
      Corporation which are material to the Corporation on a consolidated basis,
      other than as disclosed in the Public Record;

	 	 	 
	 	(iii) 	
      no order, ruling or determination having the effect of
      suspending the issuance, sale, exercise or conversion or ceasing the
      trading of any other securities of the Corporation has been issued or made
      by any court or regulatory authority (including the TSX) and is continuing
      in effect and no proceedings for that purpose have been instituted or are
      pending or, to the knowledge of such officers, contemplated or threatened
      under any Canadian Securities Laws or by any other regulatory
      authority;

	 	 	 
	 	(iv) 	
      the Corporation is a “reporting issuer” not in material
      default under the Canadian Securities Laws applicable to the provinces of
      Alberta, British Columbia and Ontario;

	 	 	 
	 	(v) 	
      the Corporation has complied with and satisfied in all
      material respects the covenants, terms and conditions of this Agreement on
      its part to be complied with and satisfied up to the Closing Time;
    and

	 	 	 
	 	(vi) 	
      the representations and warranties of the Corporation
      contained in this Agreement are true and correct in all material respects
      as of the Closing Time with the same force and effect as if made at and as
      of the Closing Time after giving effect to the transactions contemplated
      by this Agreement.




	 	(c) 	
      the Agent shall have received at the Closing Time a legal
      opinion dated the Closing Date, in form and substance satisfactory to
      Canadian counsel to the Agent, addressed to the Agent and the Agent’s
      Canadian and UK counsel, from Canadian counsel to the Corporation, Michael
      F. Provenzano of Northwest Law Group, or other counsel acceptable to the
      Agent, as to the laws of Canada, which counsel in turn may rely upon the
      opinions of local counsel where they deem such reliance proper as to the
      laws other than those of Canada and British Columbia, Alberta and Ontario
      and, as to matters of fact, on certificates of the auditors of the
      Corporation, public officials and officers of the Corporation and
      correspondence between public and stock exchange officials;

	 	 	 
	 	(d) 	
      the Corporation shall have received the conditional
      approval of the TSX to the listing of the New Shares issuable pursuant to
      the offering, subject to compliance with all requirements of the TSX;
      and

	 	 	 
	 	(e) 	
      the Agent not having exercised their right to terminate
      this Agreement pursuant to clause 11.




	9.2 	
      The Corporation agrees with the Agent to use its best
      efforts to procure satisfaction of the conditions contained in this clause
      9 by the times and dates stated therein. Any condition may be waived, in
      whole or in part, and the time of satisfaction of any condition may
    be







- 12 - 

extended, by the Agent (acting in their
absolute discretion and without any obligation to make any such waiver or
extension) by written notice to the Corporation. 

	9.3 	
      If any condition is not satisfied in all respects or
      (where applicable) waived by the Agent or becomes incapable of being
      satisfied (and is not so waived) by the required time (or such later time
      as the Agent and the Corporation may agree), the obligations of the Agent
      under this Agreement and accordingly of the Placees shall cease and
      determine and no party shall have any claim against the others for costs,
      damages, compensation or otherwise except:

	 	 	 
		(a) 	
      in respect of a breach by any party of the terms of this
      Agreement;

	 	 	 
		(b) 	
      the provisions of clauses 3 (with respect to
      reimbursement of the Agent’s reasonable expenses only), 7, 12, 13, 14, 15
      and 16 shall remain in full force and effect; and

	 	 	 
		(c) 	
      the Corporation shall reimburse the Agent for its
      reasonable costs and expenses referred to in clause 3 and clause
  16.

	 	 	 
	10. 	
      ADDITIONAL COVENANTS

	 	 	 
		
      Without the prior written consent of the Agent, such
      consent not to be unreasonably withheld, during the period commencing on
      the date hereof and ending on the day which is 90 days following the
      Closing Date, the Corporation shall not, directly or indirectly, offer,
      sell or issue New Shares or securities convertible into or exercisable or
      exchangeable for New Shares (other than pursuant to options, warrants and
      the convertible which on the date hereof are existing obligations of the
      Corporation and are disclosed in the Financial Information or otherwise
      disclosed herein, or are issued pursuant to the Corporation’s stock option
      plan) or agree to or announce any such offer, sale or issuance, at a price
      per security less than the issue price of the New Shares.

	 	 	 
	11. 	
      RIGHTS OF TERMINATION

	 	 	 
	11.1 	
      Suspension of Trading. If prior to the Closing
      Time, any order to cease or suspend trading in any securities of the
      Corporation, or prohibiting or restricting the distribution of the New
      Shares is made, or proceedings are announced or commenced for the making
      of any such order, by any securities omission or similar regulatory
      authority, and has not been rescinded, revoked or withdrawn, the Agent
      shall be entitled, at its sole option, to terminate its obligations under
      this Agreement by written notice to that effect given to the Corporation
      at any time prior to the Closing Time.

	 	 	 
	11.2 	
      Litigation. If prior to the Closing Time any
      enquiry, action, suit, investigation or other proceeding whether formal or
      informal is commenced, announced or threatened or any order is made by any
      securities commission, stock exchange or any other federal, provincial or
      other governmental authority in relation to the Corporation, or the
      Corporation’s directors and officers in their capacity with the
      Corporation which, in the sole opinion of the Agent, operates to prevent
      or restrict materially the distribution or trading of the New Shares or
      which, in the sole opinion of the Agent, adversely
  impacts







- 13 - 

the marketability of the New Shares in
a material manner, the Agent shall be entitled, at its sole option, to terminate
its obligations under this Agreement by written notice to that effect given to
the Corporation at any time prior to the Closing Time. 

	11.3 	
      Disaster/Market Out. If prior to the Closing Time
      there should develop, occur or come into effect or existence any event,
      action, state condition or occurrence of national or international
      consequence or any action, governmental law or regulation, enquiry or
      other occurrence, whether in any financial market or otherwise, of any
      nature whatsoever which, in the sole opinion of the Agent, materially
      adversely affects or may materially adversely affect the marketability of
      the New Shares, the Canadian, UK, United States or international financial
      markets or the business of the Corporation; or then, in any one or more of
      the foregoing cases, the Agent shall be entitled, at its sole option, to
      terminate its obligations under this Agreement by written notice to that
      effect given to the Corporation at any time prior to the Closing
    Time.

	 	 
	11.4 	
      Material Adverse Change. If prior to the Closing
      Time there should occur or be announced by the Corporation any material
      change or significant change or a change in any material fact contemplated
      by clause 6 which results or, in the sole opinion of the Agent, might
      reasonably be expected to have a significant adverse effect on the market
      price or value of the New Shares, the Agent shall be entitled, at its sole
      option, to terminate its obligations under this Agreement by written
      notice to that effect given to the Corporation at any time prior to the
      Closing Time.

	 	 
	11.5 	
      Due Diligence. If at any time prior to Closing,
      the Agent is not satisfied with the results of any due diligence
      investigations and examinations with respect to the Corporation conducted
      by or on behalf of the Agent then, in any such case, the Agent may, in its
      absolute discretion, by notice in writing to the Corporation received
      prior to Closing, terminate this Agreement.

	 	 
	11.6 	
      Money Laundering Regulations. To ensure compliance
      with the United Kingdom Money Laundering Regulations 2003 (the
      “Regulations”), the Agent may, in its absolute discretion, require
      verification of the identity of the Corporation and any of its officers
      and directors to the extent that the Corporation has not already provided
      it. If at any time prior to the Closing Time the Agent has not received
      verification of identity in order to satisfy, in its reasonable opinion,
      its obligations under the Regulations, the Agent may, in its absolute
      discretion, by notice in writing to the Corporation received prior to
      Closing, terminate this Agreement.

	 	 
	11.7 	
      Non-Compliance with Agreement. The Corporation
      agrees that all terms and conditions of this Agreement (including the
      conditions in clause 9) shall be construed as conditions and complied with
      so far as they relate to acts to be performed or caused to be performed by
      it, that it will use its best efforts to cause such terms and conditions
      to be complied with, and that any breach or failure by it to comply with
      any such conditions shall entitle the Agent to terminate its obligations
      under this Agreement by notice to that effect given to the Corporation at
      or prior to the Closing Time, unless otherwise expressly provided in this
      Agreement. The Agent may waive, in whole or in part, or extend the time
      for compliance with, any terms and conditions without prejudice to its
      rights in respect of







- 14 - 

any other terms and conditions or any
other or subsequent breach or non-compliance, provided that any such waiver or
extension shall be binding upon the Agent only if such waiver or extension is in
writing and signed by the Agent. 

	11.8 	
      Exercise of Termination Rights. The rights of
      termination contained in clause 11 may be exercised by the Agent and are
      in addition to any other rights or remedies the Agent may have in respect
      of any default, act or failure to act or non-compliance by the Corporation
      in respect of any of the matters contemplated by this Agreement or
      otherwise. In the event of any such termination, there shall be no further
      liability or obligation on the part of the Agent to the Corporation or on
      the part of the Corporation to the Agent except in respect of any
      liability or obligation under any of clauses 3 (with respect to
      reimbursement of the Agent’s reasonable expenses only), 7, 12, 13, 14, 15
      and 16 which will remain in full force and effect.

	 	 	 
	12. 	
      INDEMNIFICATION

	 	 	 
	12.1 	
      Claims. No claim shall be made against the Agent,
      its subsidiaries or holding companies or any of its directors, officers,
      employees, partners, shareholders and each other person, if any, directly
      or indirectly controlling the Agent, by the Corporation, its directors (or
      any of them) to recover any damage, loss, liability, cost, charge or
      expense which the Corporation, its directors (or any of them) may suffer
      or incur or claim to have suffered or incurred by reason of or arising out
      of the proper and lawful performance by the Agent or on its behalf of its
      respective obligations and services hereunder provided that such damage,
      loss, liability, cost, charge or expense does not arise from the finally
      judicially determined fraud, negligence or wilful default of the Agent or
      from any breach of this Agreement or any breach of any of the rules of the
      FSA Handbook of Rules and Guidance.

	 	 	 
	12.2 	
      Indemnity Provided by the Corporation. The
      Corporation agrees to indemnify and hold harmless the Agent, its
      subsidiary companies or holding companies and each of its respective
      directors, officers, employees, partners, shareholders and each other
      person, if any, directly or indirectly controlling any of the Agent,
      (collectively, the “Indemnified Parties” and individually, an
      “Indemnified Party”) from and against any and all liabilities
      (joint or several), claims (including shareholder actions, derivative or
      otherwise), actions, losses, costs, damages and expenses, joint or
      several, including the aggregate amount paid in settlement of any action,
      suit, proceeding, investigation or claim and the reasonable fees and
      expenses of their counsel that may be incurred in advising with respect to
      or defending any action, suit, proceeding, investigation or claim that may
      be made or threatened against any Indemnified Party or in enforcing this
      indemnity (collectively, the “Claims” and individually, a
      “Claim”) to which any Indemnified Party may become subject or
      otherwise involved in any capacity insofar as the Claims relate to, are
      caused by, result from, arise out of or are based upon, directly or
      indirectly, or as a consequence of:

	 	 	 
		(a) 	
      any information or statement contained in any certificate
      or other document of the Corporation filed with any securities commission
      or similar regulatory authority







- 15 - 

being or being alleged to contain a
misrepresentation or being or being alleged to be untrue, false or misleading;


	 	(b) 	
      any omission or alleged omission to state in any
      certificate or other document of the Corporation filed or delivered
      pursuant to this Agreement, or otherwise filed with or delivered to any
      securities commission or similar regulatory authority, any fact or
      information (except facts relating solely to the Agent), whether or not
      material, required to be stated in such document or necessary to make any
      statement in such document not misleading in light of the circumstances
      under which it was made;

	 	 	 
	 	(c) 	
      any order made or enquiry, investigation or proceeding,
      whether formal or informal, commenced, announced or threatened by any
      securities regulatory authority or any other competent authority based
      upon any untrue statement or omission or alleged untrue statement or
      alleged omission or any misrepresentation or alleged misrepresentation
      (except a statement, omission or misrepresentation or alleged statement,
      omission or misrepresentation relating solely to the Agent and provided or
      not provided by the Agent, as the case may be) in any certificate or other
      document of the Corporation filed or delivered pursuant to this Agreement,
      or otherwise filed with or delivered to any securities commission or
      similar regulatory authority, or based upon any failure to comply with
      Canadian Securities Laws (other than any failure or alleged failure to
      comply by an Agent);

	 	 	 
	 	(d) 	
      the breach by the Corporation of any representation or
      warranty in this Agreement or the failure of the Corporation to comply
      with any of its obligations under this Agreement;

	 	 	 
	 	(e) 	
      the non-compliance or alleged non-compliance by the
      Corporation with any Canadian Securities Law or any other applicable
      securities law in connection with the Offering and the transactions
      contemplated by this Agreement including the Corporation’s non-compliance
      with any statutory requirement to make any document available for
      inspection;

	 	 	 
	 	(f) 	
      the creation, allotment, issue, transfer, sale, offering
      and delivery of the New Shares pursuant to the provisions of this
      Agreement;

	 	 	 
	 	(g) 	
      any breach or alleged breach of the laws or regulations
      of the UK (including without limitation the FSMA and the rules of the
      Financial Services Authority) or any other country or any stock exchange
      in connection with the Offering or any failure to comply with any relevant
      laws or regulations of such country or stock
exchange;



provided, however, that this indemnity
may not be relied upon by any Indemnified Party in respect of any losses that a
court of competent jurisdiction has determined in a final judgment which has
become non-appealable result from the negligence, wilful misconduct or fraud by
that Indemnified Party (or any member of its group) or their 




- 16 - 

respective directors, officers or
employees or from any breach of this Agreement or any breach of any of the rules
of the FSA Handbook of Rules and Guidance. 

	12.3 	
      Notification of Claims. If any Claim is asserted
      against any Indemnified Party, the Indemnified Party will notify the
      Corporation as soon as possible of the nature of such Claim, but the
      omission to so notify as soon as possible the Corporation will not relieve
      the Corporation from any liability which it may have to any Indemnified
      Party under this section, and the Corporation shall be entitled (but not
      required) to assume the defence of any suit brought to enforce such Claim;
      provided, however, that the defence shall be conducted through legal
      counsel acceptable to the Indemnified Party and that no admission of
      liability or settlement of any such Claim may be made by the Corporation
      or the Indemnified Party without the prior written consent of the other
      parties unless a settlement includes a release of each Indemnified Party
      and the Corporation from any liabilities arising out of such
  Claim.

	 	 
	12.4 	
      Right of Indemnity in Favour of Others. With
      respect to any Indemnified Party who is not a party to this Agreement, it
      is the intention of the Corporation to constitute the Agent as trustee for
      such Indemnified Party of the rights and benefits of this section and the
      Agent agrees to accept such trust and to hold the rights and benefits of
      this section in trust for and on behalf of such Indemnified
  Party.

	 	 
	12.5 	
      Retaining Counsel. In any Claim, the Indemnified
      Party shall have the right to retain other counsel to act on his or its
      behalf and participate in the defence of such Claim, but the fees and
      expenses of such counsel shall be at the expense of the Indemnified Party
      unless: (i) the Corporation does not assume the defence of the Claim
      within a reasonable period of time of being notified of such Claim; (ii)
      the Corporation and the Indemnified Party shall have mutually agreed to
      the retention of the other counsel; or (iii) the named parties to any such
      Claim (including any added, third or impleaded party) include both the
      Indemnified Party and the Corporation, and in the opinion of counsel to
      the Indemnified Party, the representation of both parties by the same
      counsel would be inappropriate due to the actual or potential conflicting
      interests between them or additional defences are available to an
      Indemnified Party, in each of which cases the Corporation, shall not have
      the right to assume the defence of such suit on behalf of the Indemnified
      Party but shall be liable to pay the reasonable fees and expenses of
      counsel for the Indemnified Party. In no event shall the Corporation be
      required to pay the reasonable fees and expenses of more than one set of
      counsel in any one jurisdiction for all of the Indemnified Parties in
      respect of any particular Claim or related set of Claims.

	 	 
	12.6 	
      Responsibility. Except in respect of statements
      expressly agreed by the Agent in writing, neither the Agent nor any of its
      affiliates or advisers will be responsible to the Corporation or its
      directors for verifying the accuracy or fairness of the information
      published by the Corporation in connection with the Offering.

	 	 
	12.7 	
      Gross Up. All sums payable to the Agent or any of
      its affiliates pursuant to this clause 12 shall be paid free and clear of
      all deductions or withholdings unless the deduction or withholding is
      required by law, in which event the payer shall pay such additional amount
      as will be required to ensure that the net amount received by the relevant
      person







- 17 - 

will equal the full amount which would
have been received by it had such deduction or withholding not been made. If the
United Kingdom Inland Revenue or any other taxing authority in any jurisdiction
brings into any charge for taxation (or into any computation of income, profits
or gains for the purpose of any charge for taxation) any sum payable under any
indemnity contained in this clause 12, the amount so payable shall be increased
by such amount as will ensure that after deduction of the taxation so chargeable
there shall remain a sum equal to the amount that would otherwise be payable
under such indemnity. 

	13. 	
      CONTRIBUTION

	 	 	 
	13.1 	
      Contribution. In order to provide for a just and
      equitable contribution in circumstances in which the indemnity provided in
      clause 12 would otherwise be available in accordance with its terms but
      is, for any reason, unavailable to or unenforceable by the Agent or
      enforceable otherwise than in accordance with its terms or insufficient to
      hold any Indemnified Party harmless, the Corporation (the
      “Indemnifier”) shall contribute to all Claims suffered or incurred
      by any Indemnified Party in such proportion as is appropriate to reflect
      not only the relative benefits received by the Indemnifier on the one hand
      and any Indemnified Party on the other hand from the distribution of the
      New Shares but also the relative fault of the Indemnifier or any
      Indemnified Party as well as any relevant equitable considerations. The
      Indemnifier shall in any event be liable to contribute to the amount paid
      or payable by an Indemnified Party as a result of a Claim, any amounts in
      excess of the Agent’s Fee in the case of the Agent, or any portion of such
      fee actually received by the Indemnified Party. The Agent shall not in any
      event be liable to contribute, in the aggregate, any amounts in excess of
      the Agent’s Fee or any portion of such fee actually received. However, no
      party who has engaged in any fraud, fraudulent misrepresentation, wilful
      misconduct or negligence shall be entitled to claim contribution from any
      person who has not engaged in such fraud, fraudulent misrepresentation,
      wilful misconduct or negligence.

	 	 	 
	13.2 	
      Right of Contribution in Addition to Other Rights.
      The rights to contribution provided in this section shall be in
      addition to and not in derogation of any other right to contribution which
      the Agent may have by statute or otherwise at law.

	 	 	 
	13.3 	
      Calculation of Contribution. If the Corporation
      may be held to be entitled to contribution from the Agent under the
      provisions of any statute or at law, the Corporation shall be limited to
      contribution in an amount not exceeding the lesser of:

	 	 	 
		(a) 	
      the portion of the full amount of the loss or liability
      giving rise to such contribution for which the Agent are responsible, as
      determined under clause 13(1); and

	 	 	 
		(b) 	
      the amount of the aggregate Agent’s Fee actually received
      by the Agent from the Corporation under this Agreement.

	 	 	 
	13.4 	
      Right of Contribution in Favour of Others. With
      respect to any Indemnified Party who is not a party to this Agreement, it
      is the intention of the Corporation to constitute the
  Agent







- 18 - 

as trustee for such Indemnified Party
of the rights and benefits of this section and the Agent agrees to accept such
trust and to hold the rights and benefits of this section in trust for and on
behalf of such Indemnified Party. 

	14. 	
      SEVERABILITY

	 	 	 
		
      If any provision of this Agreement is determined to be
      void or unenforceable in whole or in part, it shall be deemed not to
      affect or impair the validity of any other provision of this Agreement and
      such void or unenforceable provision shall be severable from this
      Agreement.

	 	 	 
	15. 	
      EXPENSES

	 	 	 
	15.1 	
      Whether or not the transactions contemplated by this
      Agreement shall be completed (unless due to the Agent’s fraud, fraudulent
      misrepresentation, wilful misconduct or negligence) all expenses of or
      incidental to the Offering, and all expenses of or incidental to all other
      matters in connection with the transactions set out in this Agreement,
      shall be borne directly by the Corporation including, without
      limitation:

	 	 	 
		(a) 	
      fees and expenses payable in connection with the
      distribution of the New Shares (and any qualification relating thereto),
      the fees relating to listing of the New Shares on any exchange or market,
      all fees and disbursements of counsel to the Corporation, all reasonable
      fees and disbursements of counsel to the Agent, Canadian counsel, UK
      counsel, all fees and expenses of the Auditors, all reasonable direct fees
      and expenses of the Agent relating to the marketing of the New Shares
      (including, without limitation, “road shows”, marketing meetings,
      marketing documentation and institutional investor meetings) and all other
      reasonable out-of-pocket expenses of the Agent including all travel
      expenses in connection with due diligence, marketing meetings and “road
      shows” and all costs incurred in connection with the preparation, printing
      and mailing of certificates representing the New Shares; and

	 	 	 
		(b) 	
      all stamp duty or stamp duty reserve tax and any related
      costs, fines, penalties and interest payable by any Placee or any other
      person in respect of his acquisition of New Shares pursuant to the
      Offering,




		
      provided that any individual expenses anticipated to be
      in excess of £5,000 are to be approved by the Corporation. The incurring
      of legal expenses is herein acknowledged by the Corporation and
      approved.

	 	 
	16. 	
      DATA PROTECTION

	 	 
		
      The Agent agrees to hold all information it possesses
      relating to the Corporation in accordance with all applicable data
      protection legislation. Notwithstanding the foregoing, the Corporation
      hereby consents to the Agent’s use of such information in order to provide
      the Corporation with information relating to the Agent and its services
      which the Agent deems may be of interest to the
  Corporation.







- 19 - 

	17. 	
      SURVIVAL

	 	 
		
      The representations, warranties, obligations and
      agreements contained in this Agreement and in any certificate delivered
      pursuant to this Agreement or in connection with the offer and sale of the
      New Shares shall survive the offer and sale of the New Shares and shall
      continue in full force and effect unaffected by any subsequent disposition
      of the New Shares by the Agent or a Placee or the termination of the
      Agent’s obligations and shall not be limited or prejudiced by any
      investigation made by or on behalf of the Agent in connection with the
      distribution of the New Shares.

	 	 
	18. 	
      TIME OF THE ESSENCE

	 	 
		
      Time shall be of the essence of this Agreement.

	 	 
	19. 	
      GOVERNING LAW AND VENUE

	 	 
		
      This Agreement shall be governed by and construed in
      accordance with the English law. The parties hereto irrevocably attorn and
      submit to the exclusive jurisdiction of the courts of England with respect
      to any dispute related to this Agreement.

	 	 
	20. 	
      CURRENCY

	 	 
		
      All funds referred to in this Agreement shall be in
      British pounds unless otherwise specified. Any reference to “£” is a
      reference to British pounds sterling, the currency of the UK.

	 	 
	21. 	
      NOTICE

	 	 
	21.1 	
      Unless otherwise expressly provided in this Agreement,
      any notice or other communication to be given under this Agreement (a
      “Notice”) shall be in writing addressed as follows:

	 	 
		
      If to the Corporation, addressed and sent
  to:



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

Attention:        Sandra
  Lee, Corporate Secretary 

  Fax:                   1-604-681-4692





- 20 - 

with a copy to: 

Field Fisher Waterhouse 
35 Vine
Street 
London EC3N 2AA 

Attention:        Anthony
  Brockbank 

  Fax:                   +44
  (0)20 7488 0084 

If to the Agent, addressed and sent to:


Canaccord Capital (Europe) Limited

1st Floor, Brook House 
27 Upper Brook Street 
London, United Kingdom
W1K 7QF 

Attention:        Robin
  Birchall 

  Fax:                   +44
  (0)20 7518 2785 

with a copy to: 

McCarthy Tetrault, Registered Foreign
Lawyers and Solicitors 
1 Plough Place 
London, England, EC4A 1DE 

Attention:        Robert
  J Brant 

  Fax:                   +44
  (0)20 7822 1555 

or to such other address as any of the
persons may designate by Notice given to the others. 

	21.2 	
      Each Notice shall be personally delivered to the
      addressee or sent by fax to the addressee and:

	 	 	 
		(a) 	
      a Notice which is personally delivered shall, if
      delivered on a Business Day, be deemed to be given and received on that
      day and, in any other case, be deemed to be given and received on the
      first Business Day following the day on which it is delivered;
  and

	 	 	 
		(b) 	
      a Notice which is sent by fax shall be deemed to be given
      and received on the first Business Day following the day on which it is
      sent.







- 21 - 

	22. 	
      CONFLICT OF INTEREST

	 	 	 
	22.1 	
      The Corporation:

	 	 	 
		(a) 	
      acknowledges and agrees that the Agent has certain
      statutory obligations as registrant under the Canadian Securities Laws and
      has fiduciary relationships with its respective clients; and

	 	 	 
		(b) 	
      consents to the Agent acting hereunder while continuing
      to act for its clients.



To the extent that the Agent’s
statutory obligations as registrant under the Canadian Securities Laws or
fiduciary relationships with its respective clients conflicts with its
obligations hereunder, the Agent shall be entitled to fulfill its statutory
obligations as registrant under the Canadian Securities Laws and its fiduciary
duties to its clients. Nothing in this Agreement shall be interpreted to prevent
the Agent from fulfilling its statutory obligations as registrant under the
Canadian Securities Laws or to satisfy its fiduciary duties to its clients. 

	23. 	
      THIRD PARTY BENEFICIARIES

	 	 
		
      All of the representations, warranties, covenants and
      agreements of the Corporation herein contained, other than the provisions
      contained in clauses 12 to 15, inclusive, shall also be deemed to be made
      for the benefit of the Placees as if the Placees were also party hereto
      (it being agreed that the Agent is acting for and on behalf of the Placees
      for this purpose and may on behalf of any or all of such Placees take such
      action as may be necessary to enforce or otherwise seek remedies in
      respect of any breach of such representations, warranties and covenants).
      For the avoidance of doubt, the Contracts (Rights of Third Parties) Act
      1999 shall not apply to this Agreement, save for the Indemnified Parties
      as expressly provided for in clause 12.

	 	 
	24. 	
      ENTIRE AGREEMENT

	 	 
		
      This Agreement constitutes the entire agreement between
      the parties hereto with respect to the subject matter hereof.

	 	 
	25. 	
      ANNOUNCEMENTS

	 	 
	25.1 	
      The Corporation shall provide the Agent with a copy of
      all press releases to be issued by the Corporation concerning the Offering
      prior to the issuance thereof, and shall give the Agent an opportunity to
      provide comments on any such press release.

	 	 
	25.2 	
      Notwithstanding the foregoing, nothing contained in this
      section shall prevent the Corporation from issuing a press release
      forthwith in the event that counsel advises that it is necessary in order
      to comply with securities laws or the rules or policies of the
  TSX.







- 22 - 

	26. 	
      COUNTERPARTS/FACSIMILE SIGNATURES

	 	 
		
      This Agreement may be executed by any one or more of the
      parties to this Agreement in any number of counterparts, each of which
      shall be deemed to be an original, but all such counterparts shall
      together constitute one and the same instrument. The transmission by
      facsimile of a copy of the execution page hereof reflecting the execution
      of this Agreement by any party hereto shall be effective to evidence that
      party’s intention to be bound by this Agreement and that party’s agreement
      to the terms, provisions and conditions hereof, all without the necessity
      of having to produce an original copy of such execution page.

	 	 
		
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The foregoing is agreed by the parties as of the date first
mentioned above. 

	 	CANACCORD CAPITAL (EUROPE) LIMITED 
	 	 	 
	 	 	 
	 	By: 	
	 	 	 
	 	 	 
	 	KIRKLAND LAKE GOLD INC. 
	 	 	 
	 	 	 
	 	By: