Document:

Northern Dynasty Minerals Ltd.: Exhibit 4.2 - Filed by newsfilecorp.com

REGISTRATION RIGHTS AGREEMENT 

     REGISTRATION RIGHTS AGREEMENT (this “Agreement”),
dated as of December __, 2014, by and among Northern Dynasty Minerals Ltd., a
corporation organized under the laws of the Province of British Columbia (the
“Company”), and the undersigned purchasers (each, a “Purchaser,”
and collectively, the “Purchasers”). 

          WHEREAS: 

          A.      In connection with the
Subscription Agreements, dated as of December __, 2014, by and among the Company
and the Purchasers (the “Subscription Agreements”), the Company has
agreed, upon the terms and subject to the conditions set forth in the
Subscription Agreements, to issue and sell to each Purchaser special warrants of
the Company (the “Special Warrants”), each of which Special Warrants is
convertible into one common share of the Company (the “Common Shares”).

          B.      In accordance with the terms
of the Subscription Agreements, the Company has agreed to provide certain
registration rights under the Securities Act of 1933, as amended, and the rules
and regulations thereunder, or any similar successor statute (collectively, the
“Securities Act”), and applicable state securities laws. 

          NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and each
of the Purchasers hereby agree as follows: 

ARTICLE 1 

DEFINITIONS

Capitalized terms used herein and not otherwise defined herein
shall have the respective meanings set forth in the Subscription Agreements. As
used in this Agreement, the following terms shall have the following meanings:

     1.1      “Additional Registration Period” has the meaning set
forth in section 3.1.

     1.2      “Additional Registration Statement” has the meaning
set forth in section 3.1. 

     1.3      “Business Day” means
any day other than Saturday, Sunday or any other day on which commercial banks
in The City of New York or the City of Toronto are authorized or required by law
to remain closed. 

     1.4      “Closing Date” shall have the meaning set forth in
the Subscription Agreements. 

     1.5      “Effective Date” means
the date the Registration Statement has first been declared effective by the
SEC. 

     1.6      “Targeted Effectiveness
Deadline” means the date which is 90 calendar days after the Closing Date.

     1.7      “Targeted Filing Date” means the date which is 30
days after the Closing Date. 

     1.8      “Initial Registration Period” has the meaning set
forth in section 3.1.

     1.9      “Initial Registration Statement” has the meaning set
forth in section 3.1. 

3 

     1.10      “Investor” means a
Purchaser or any transferee or assignee thereof to whom a Purchaser or another
Investor assigns its rights under this Agreement and who agrees to become bound
by the provisions of this Agreement in accordance with Article 9. 

     1.11      “Person” means an
individual, a limited liability company, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization, a government or any
department or agency thereof, or other entity of any kind. 

     1.12      “register,”
“registered,” and “registration” refer to a registration effected
by preparing and filing one or more Registration Statements (as defined below)
in compliance with the Securities Act and pursuant to Rule 415 and the
declaration or ordering of effectiveness of such Registration Statement(s) by
the SEC. 

     1.13      “Registrable
Securities” means (i) the Common Shares issued issuable on exercise of the
Special Warrants, and (ii) any share capital of the Company issued with respect
to such Common Shares as a result of any split, dividend, recapitalization,
exchange or similar event or otherwise. 

     1.14      “Registration
Statement” means a registration statement or registration statements of the
Company filed under the Securities Act covering the Registrable Securities, any
amendments, supplements, and exhibits thereto and any material incorporated by
reference (or deemed to be incorporated by reference) therein, and includes the
Initial Registration Statement and any Additional Registration Statement. 

     1.15      “Required Holders” means the holders of at least
50% of the Registrable Securities. 

     1.16      “Rule 415” means Rule
415 under the Securities Act or any successor rule providing for offering
securities on a continuous or delayed basis. 

     1.17      “SEC” means the United States Securities and
Exchange Commission. 

ARTICLE 2 

REGISTRATION 

     2.1      Mandatory
Registration. The Company shall prepare, and, as soon as practicable but in
no event later than the Targeted Filing Date, file with the SEC the Registration
Statement on Form F-3 covering the resale of all of the Registrable Securities
(the “Initial Registration Statement”). In the event that Form F-3 is
unavailable for such a registration, the Company shall use such other form as is
available for such a registration, subject to the provisions of Section 2.4. The
Initial Registration Statement prepared pursuant hereto shall register for
resale all of the Registrable Securities issuable as of the date the
Registration Statement is initially filed with the SEC. The Registration
Statement shall contain (except if otherwise directed by the Required Holders)
the “Selling Stockholders” and “Plan of Distribution”
sections in substantially the form attached hereto as Exhibit A. The
Company shall use reasonable best efforts to have the Registration Statement
declared effective by the SEC as soon as practicable, but in no event later than
the Targeted Effectiveness Date. By 9:30 a.m. on the Business Day immediately
following the Effective Date, the Company shall file with the SEC in accordance
with Rule 424 under the Securities Act the final prospectus to be used in
connection with sales pursuant to such Registration Statement. The Company shall
keep such Initial Registration Statement continuously effective pursuant to Rule
415 at all times until the second anniversary of this Agreement (the “Initial
Registration Period”). If after the expiry of the Initial Registration
Period, there are one or more Investors that individually (together with such
Investor’s affiliates and any other person with whom they may be deemed to be a
“group” within the meaning of Rule 13d-5 under the US Securities Exchange Act)
are the beneficial owner, as calculated in accordance with Rule 13d-1 of the
Exchange Act, of more than 9.9% of the then issued and outstanding shares of the
Company and the Company has withdrawn any Registration Statement filed within
the Initial Registration Period, then such Investors will have a demand
registration right to cause the Company to file a further Registration Statement
covering the registration of such Registrable Securities then owned by such
Investors (the “Additional Registration Statement”). The Company will
file such Additional Registration Statement within twenty (20) days of written
receipt of a request from an Investor further to this demand registration right
and will maintain the effectiveness of such Additional Registration Statement until the earlier of (i) the date as on which the
Investors may sell all of the Registrable Securities covered by such
Registration Statement without limitation or restriction pursuant to Rule 144
(or any successor thereto) promulgated under the Securities Act without the
requirement for the Company to be in compliance with the current public
information requirements under Rule 144, (ii) the date on which no Investor
(together with such Investor’s affiliates and any other person with whom they
may be deemed to be a “group” within the meaning of Rule 13d-5 under the US
Securities Exchange Act) is the beneficial owner, as calculated in accordance
with Rule 13d-1 of the Exchange Act, of more than 9.9% of the issued and
outstanding shares of the Company, and (iii) the one year anniversary of the
date of effectiveness of the Additional Registration Statement (the
“Additional Registration Period”). If after expiry of the Additional
Registration Period, there remain one or more Investors that individually
(together with such Investor’s affiliates and any other person with whom they
may be deemed to be a “group” within the meaning of Rule 13d-5 under the US
Securities Exchange Act) are the beneficial owner, as calculated in accordance
with Rule 13d-1 of the Exchange Act, of more than 9.9% of the issued and
outstanding shares of the Company and the Company has withdrawn any Additional
Registration Statement filed within the Additional Registration Period, such
Investor or Investors will have one additional demand registration right to
cause the Company to file a further Additional Registration Statement for a
further Additional Registration Period on the equivalent terms for the initial
demand registration right described above in this paragraph. 

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     2.2      Limitation to Registrable
Securities. In no event shall the Company include any securities other than
Registrable Securities on any Registration Statement without the prior written
consent of the Required Holders. 

     2.3      Legal Counsel. Each
Investor may designate legal counsel from time to time to review and oversee at
the expense of such Investor any registration pursuant to this Article 2 (the
“Legal Counsel”). The Company and Legal Counsel shall reasonably
cooperate with each other in performing the Company’s obligations under this
Agreement. 

     2.4      Ineligibility for Form
F-3. In the event that Form F-3 is not available for the registration of the
resale of Registrable Securities hereunder, the Company shall (i) register the
resale of the Registrable Securities on another appropriate form that covers the
resale of all of the Registrable Securities pursuant to the provisions of this
Agreement and (ii) undertake to register the Registrable Securities on Form F-3
as soon as such form is available, provided that the Company shall maintain the
effectiveness of the Registration Statement then in effect until such time as a
Registration Statement on Form F-3 covering the Registrable Securities has been
declared effective by the SEC. 

     2.5      Effect of Failure to
Obtain Effectiveness of Registration Statement. If a Registration Statement
covering all of the Registrable Securities is not declared effective by the SEC
on or before the applicable Targeted Effectiveness Date then the Company shall
continue to use its reasonable best efforts to have it declared effective.

ARTICLE 3 

RELATED OBLIGATIONS 

               At such time as the Company is obligated to file a Registration
Statement with the SEC pursuant to Section 2.1, the Company will use reasonable
best efforts to effect the registration of the Registrable Securities in
accordance with the intended method of disposition thereof and, pursuant
thereto, the Company shall have the following obligations: 

     3.1      Acceleration; Adequate
Disclosure. The Company shall submit to the SEC, within two Business Days
after the Company learns that no review of a particular Registration Statement
will be made by the staff of the SEC or that the staff has no further comments
on a particular Registration Statement, as the case may be, a request for
acceleration of effectiveness of such Registration Statement to a time and date
not later than 48 hours after the submission of such request. The Company shall
keep each Registration Statement continuously effective pursuant to Rule 415 at
all times during the Initial Registration Period and any Additional Registration
Period. The Company shall ensure that each Registration Statement (including any
amendments or supplements thereto and prospectuses contained therein) does not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein, or necessary to make the statements therein (in
the case of prospectuses, in the light of the circumstances in which they were
made) not misleading. 

5 

     3.2      Amendments to Registration
Statement. The Company shall prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to a Registration
Statement and the prospectus used in connection with such Registration
Statement, which prospectus is to be filed pursuant to Rule 424 promulgated
under the Securities Act, as may be necessary to keep such Registration
Statement continuously effective at all times during the Initial Registration
Period and any Additional Registration Period, and, during such period, comply
in all material respects with the provisions of the Securities Act with respect
to the disposition of all Registrable Securities of the Company covered by such
Registration Statement until such time as all of such Registrable Securities
shall have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in such Registration
Statement. In the case of amendments and supplements to a Registration Statement
which are required to be filed pursuant to this Agreement (including pursuant to
this Section 3.2) by reason of the Company filing with or furnishing to the SEC
a report under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), the Company shall have incorporated such report by reference into
such Registration Statement, if applicable, or shall file such amendments or
supplements with the SEC on the same day on which the Exchange Act report is
filed which created the requirement for the Company to amend or supplement such
Registration Statement. The Company shall respond as promptly as reasonably
practicable to any comments received from the SEC with respect to each
Registration Statement or any amendment thereto and, as promptly as reasonably
possible, provide the Investors true and complete copies of all correspondence
from and to the SEC relating to such Registration Statement that pertains to the
Investors as “Selling Stockholders” but not any comments that would result in
the disclosure to the Investors of material and non-public information
concerning the Company. 

     3.3      Review by Legal Counsel;
Information Rights. The Company shall (A) permit Legal Counsel to review and
comment upon (i) a Registration Statement at least three Business Days prior to
its filing with the SEC and (ii) all amendments and supplements to all
Registration Statements (except for Form 20-F, Form 6-K and similar continuous
disclosure reports) at least three Business Days prior to their filing with the
SEC, and (B) not file any Registration Statement or amendment or supplement
thereto in a form to which Legal Counsel reasonably objects. Legal Counsel shall
provide any comments within two Business Days after receipt of a document for
review pursuant to the previous sentence. The Company shall, as promptly as
practicable, furnish to Legal Counsel, without charge, (i) copies of any
correspondence from the SEC or the staff of the SEC to the Company or its
representatives relating to any Registration Statement, (ii) after the same is
prepared and filed with the SEC, one copy of any Registration Statement and any
amendment(s) thereto, including financial statements and schedules, all
documents incorporated therein by reference, if requested by an Investor, and
all exhibits and (iii) upon the effectiveness of any Registration Statement, one
copy of the prospectus included in such Registration Statement and all
amendments and supplements thereto. The Company shall reasonably cooperate with
Legal Counsel in performing the Company’s obligations pursuant to this Article
3. 

     3.4      Prospectus Delivery.
The Company shall, as promptly as practicable, furnish to each Investor whose
Registrable Securities are included in any Registration Statement, without
charge, (i) after the same is prepared and filed with the SEC, at least one copy
of such Registration Statement and any amendment(s) thereto, including financial
statements and schedules, all documents incorporated therein by reference, if
requested by an Investor, all exhibits and each preliminary prospectus, (ii)
upon the effectiveness of any Registration Statement, an electronic copy of the
prospectus included in such Registration Statement and all amendments and
supplements thereto; provided, that the Company shall promptly provide each
Investor with such number of copies of such prospectus as such Investor may
reasonably request and (iii) such other documents, including copies of any
preliminary or final prospectus, as such Investor may reasonably request from
time to time in order to facilitate the disposition of the Registrable
Securities owned by such Investor. 

     3.5      Blue Sky Compliance.
The Company shall use reasonable best efforts to (i) register and qualify or
cooperate with the selling Investors in connection with the registration or
qualification (or exemption from the registration or qualification) of
Registrable Securities for the resale by Investors of the Registrable Securities
covered by a Registration Statement under such other securities or “blue sky”
laws of all applicable jurisdictions in the United States, (ii) prepare and file
in those jurisdictions, such amendments (including post-effective amendments)
and supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof during the Initial Registration Period and
any Additional Registration Period, (iii) take such other actions as may be
necessary to maintain such registrations and qualifications in effect at all
times during the Initial Registration Period and any Additional Registration
Period, and (iv) take all other actions reasonably necessary or advisable to
qualify the Registrable Securities for sale in such jurisdictions; provided,
however, that the Company shall not be required in connection therewith or as a
condition thereto to (x) qualify to do business in any jurisdiction where it
would not otherwise be required to qualify but for this Section 3.5, (y) subject
itself to general taxation in any such jurisdiction, or (z) file a general
consent to service of process in any such jurisdiction. The Company shall
promptly notify Legal Counsel and each Investor who holds Registrable Securities
of the receipt by the Company of any notification with respect to the suspension
of the registration or qualification of any of the Registrable Securities for
sale under the securities or “blue sky” laws of any jurisdiction in the United
States or its receipt of notice of the initiation or threatening of any
proceeding for such purpose. 

6 

     3.6      Updates to Prospectus.
The Company shall notify Legal Counsel and each Investor in writing of the
happening of any event, as promptly as practicable after becoming aware of such
event, or the passage of time as a result of which a Registration Statement or
the prospectus included in a Registration Statement, as then in effect, includes
an untrue statement of a material fact or an omission to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading
(provided that in no event shall such notice contain any material non-public
information), and, subject to Section 3.16, promptly prepare a supplement or
amendment to such Registration Statement to correct such untrue statement or
omission and deliver ten (10) copies of such supplement or amendment to Legal
Counsel and each Investor (or such other number of copies as Legal Counsel or
such Investor may reasonably request). The Company shall also promptly notify
Legal Counsel and each Investor in writing (i) when a prospectus or any
prospectus supplement or post-effective amendment has been filed, and when a
Registration Statement or any post-effective amendment has become effective
(notification of such effectiveness shall be delivered to Legal Counsel and each
Investor by facsimile on the same day of such effectiveness and by overnight
mail), (ii) of any request by the SEC or any other federal or state government
authority for amendments or supplements to a Registration Statement or related
prospectus or related information, (iii) of the Company’s reasonable
determination that a post-effective amendment to a Registration Statement would
be appropriate, and (iv) when the SEC notifies the Company whether there will be
a “review” of such Registration Statement and whenever the SEC comments in
writing on any Registration Statement (in which case the Company shall provide
to each of the Investors true and complete copies of all comments that pertain
to the Investors as a “Selling Stockholder” or to the “Plan of Distribution” and
all written responses thereto, but not information that the Company believes
would constitute material and non-public information). The Company shall notify
Legal Counsel and each Investor in writing not more than one Business Day after
(x) the Company becoming aware of the issuance by the SEC or any other federal
or state governmental authority of any stop order suspending the effectiveness
of a Registration Statement covering any or all of the Registrable Securities or
the initiation of any action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened (collectively, “Proceeding”), for
that purpose; or (y) the receipt by the Company of any notification with respect
to the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any Proceeding for such purpose. 

     3.7      Prevention of Suspension
of Effectiveness. The Company shall use commercially reasonable efforts to
prevent the issuance of any stop order or other suspension of effectiveness of a
Registration Statement, or the suspension of the qualification (or exemption
from qualification) of any of the Registrable Securities for sale in any
jurisdiction and, if such an order or suspension is issued, to obtain the
withdrawal of such order or suspension at the earliest possible moment and to
notify Legal Counsel and each Investor who holds Registrable Securities being
sold of the issuance of such order and the resolution thereof or its receipt of
notice of the initiation or threat of any proceeding for such purpose. 

     3.8      Underwriter Status.
If, after the execution of this Agreement, the SEC informs the Company that one
or more of the Investors may be an underwriter of Registrable Securities, the
Company shall not name such Investors as Underwriters without the consent of
such Investors and failing the timely receipt of such consent, such Investor’s
Registrable Securities shall be removed from the Registration Statement. 

     3.9      Confidentiality. The
Company shall hold in confidence and not make any disclosure of information
concerning an Investor provided to the Company unless (i) disclosure of such
information is necessary to comply with federal or state securities laws or
Canadian Securities Laws, (ii) the disclosure of such information is necessary
to avoid or correct a misstatement or omission in any Registration Statement,
(iii) the release of such information is ordered pursuant to a subpoena or other
order from a court or governmental body of competent jurisdiction, or (iv) such
information has been made generally available to the public. The Company agrees
that it shall to the extent lawfully possible, upon learning that
disclosure of such information concerning an Investor is sought in or by a court
or governmental body of competent jurisdiction or through other means, give
prompt written notice to such Investor and allow such Investor, at the
Investor’s expense, to undertake reasonable and appropriate action to prevent
disclosure of, or to obtain a protective order for, such information. 

7 

     3.10      Listing of Registrable
Securities. The Company shall cause all of the Registrable Securities
covered by a Registration Statement to be listed on the Toronto Stock Exchange
and the NYSE MKT and each other securities exchange or automated quotation
system on which securities of the same class or series issued by the Company are
then listed. The Company shall pay all fees and expenses in connection with
satisfying its obligation under this Section 3.10. 

     3.11      Certificates. The
Company shall cooperate with the Investors who hold Registrable Securities being
offered and, to the extent applicable, facilitate the timely preparation and
delivery of certificates (not bearing any restrictive legend) representing the
Registrable Securities to be offered pursuant to a Registration Statement and
enable such certificates to be in such amounts as the Investors may reasonably
request and registered in such names as the Investors may request. 

     3.12      Prospectus Supplements
Requested by Investor. If reasonably requested by an Investor, the Company
shall, as soon as practicable (i) incorporate in a prospectus supplement or
post-effective amendment such information as an Investor reasonably requests to
be included therein relating to the sale and distribution of Registrable
Securities, including, without limitation, information with respect to the
number of Registrable Securities being offered or sold, the purchase price being
paid therefor and any other terms of the offering of the Registrable Securities
to be sold in such offering; (ii) make all required filings of such prospectus
supplement or post-effective amendment after being notified of the matters to be
incorporated in such prospectus supplement or post-effective amendment; and
(iii) supplement or make amendments to any Registration Statement if reasonably
requested by an Investor holding any Registrable Securities. 

     3.13      Compliance with
Regulations. The Company shall otherwise use commercially reasonable efforts
to comply with all applicable rules and regulations of the SEC, the British
Columbia Securities Commission, and all other applicable regulatory authorities
in connection with any registration hereunder, including without limitation Rule
172 under the Securities Act. Further, the Company shall notify the Investors
promptly if the Company no longer satisfies the conditions of Rule 172. 

     3.14      Reporting Issuer
Status. During the Initial Registration Period and any Additional
Registration Period, the Company shall continue to be a “reporting issuer” or
the equivalent thereof in good standing under the applicable Canadian Securities
Laws in each of the provinces of Canada in which it is currently a “reporting
issuer” and shall continue to be in compliance with all applicable Canadian
Securities Laws in all material respects and will make all necessary filings
(including, without limitation, the filing of all continuous disclosure
materials) required to be filed by the Company pursuant to the Canadian
Securities Laws, but will not be required to qualify the Registrable Securities
for sale in Canada. 

     3.15      Confirmation of
Effectiveness to Transfer Agent. Within one Business Day after a
Registration Statement that covers Registrable Securities is ordered effective
by the SEC, the Company shall deliver, and shall cause legal counsel for the
Company to deliver, to the transfer agent for such Registrable Securities (with
copies to the Investors whose Registrable Securities are included in such
Registration Statement) written confirmation that such Registration Statement
has been declared effective by the SEC. 

     3.16      Disclosure Grace
Period. Notwithstanding anything to the contrary herein, at any time after
the Effective Date, the Company may delay the disclosure of material non-public
information concerning the Company the disclosure of which at the time is not,
in the good faith opinion of the Board of Directors of the Company, in the best
interest of the Company and, in the opinion of counsel to the Company, otherwise
required (a “Grace Period”); provided, that the Company shall promptly
(i) notify the Investors in writing of the existence of material non-public
information giving rise to a Grace Period (provided that in each notice the
Company will not disclose the content of such material non-public information to
the Investors) and the date on which the Grace Period will begin, (ii) use
reasonable best efforts to terminate a Grace Period as promptly as practicable,
and (iii) notify the Investors in writing of the date on which the Grace Period
ends; and, provided further, that no Grace Period shall exceed 10 consecutive days and no more than two Grace Periods shall occur
during any 365 day period and the first day of any Grace Period must be at least
two trading days after the last day of any prior Grace Period (each, an
“Allowable Grace Period”). For purposes of determining the length of a
Grace Period above, the Grace Period shall begin on and include the date the
Investors receive the notice referred to in clause (i) and shall end on and
include the later of the date the Investors receive the notice referred to in
clause (ii) and the date referred to in such notice. The provisions of Section
2.5 hereof shall not be applicable during the period of any Allowable Grace
Period. Upon expiration of the Grace Period, the Company shall again be bound by
the first sentence of Section 3.6 with respect to the information giving rise
thereto unless such material non-public information is no longer applicable.
Notwithstanding anything to the contrary, the Company shall cause its transfer
agent to deliver unlegended shares of Common Shares to a transferee of an
Investor in accordance with the terms of the Subscription Agreements in
connection with any sale of Registrable Securities with respect to which an
Investor has entered into a contract for sale prior to the Investor’s receipt of
the notice of a Grace Period and for which the Investor has not yet settled.

8 

     3.17      F-3 Eligibility. The
Company shall use reasonable best efforts to maintain compliance with the
eligibility requirements of Form F-3 so that such form is continuously available
for the registration of the resale of Registrable Securities during the Initial
Registration Period and any Additional Registration Period. 

ARTICLE 4 

OBLIGATIONS OF THE INVESTORS 

     4.1      Information to be Included
in Registration Statement. At least five Business Days prior to the first
anticipated filing date of a Registration Statement other than the Initial
Registration Statement, the Company shall notify each Investor in writing of the
information the Company requires from each such Investor if such Investor elects
to have any of such Investor’s Registrable Securities included in such
Registration Statement. It shall be a condition precedent to the obligations of
the Company to complete the registration pursuant to this Agreement with respect
to the Registrable Securities of a particular Investor that such Investor
furnish to the Company such information regarding itself, the Registrable
Securities held by it and the intended method of disposition of the Registrable
Securities held by it as shall be reasonably required to effect the
effectiveness of the registration of such Registrable Securities and shall
execute such documents in connection with such registration as the Company may
reasonably request.

     4.2      Cooperation. Each
Investor, by such Investor’s acceptance of the Registrable Securities, agrees to
cooperate with the Company as reasonably requested by the Company in connection
with the preparation and filing of any Registration Statement hereunder, unless
such Investor has notified the Company in writing of such Investor’s election to
exclude all of such Investor’s Registrable Securities from such Registration
Statement. 

     4.3      Cease Disposition.
Each Investor agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 3.6, such Investor will
immediately discontinue disposition of Registrable Securities pursuant to any
Registration Statement(s) covering such Registrable Securities until such
Investor’s receipt of notice that the supplemented or amended prospectus
contemplated by Section 3.6 has been filed with the SEC or receipt of notice
that no supplement or amendment is required. Notwithstanding anything to the
contrary, the Company shall cause its transfer agent to deliver unlegended
shares of Common Shares to a transferee of an Investor in accordance with the
terms of the Subscription Agreements in connection with any sale of Registrable
Securities with respect to which an Investor has entered into a contract for
sale prior to the Investor’s receipt of a notice from the Company of the
happening of any event of the kind described in Section 3.6 and for which the
Investor has not yet settled. For the avoidance of doubt, each Investor may
continue to resell any Registrable Securities pursuant to Rule 144 or any other
available exemption from registration. 

     4.4      Prospectus Delivery.
Each Investor covenants and agrees that it will comply with the prospectus
delivery requirements of the Securities Act as applicable to it or an exemption
therefrom in connection with sales of Registrable Securities pursuant to the
Registration Statement. 

ARTICLE 5 

EXPENSES OF REGISTRATION 

9 

               All expenses, other than underwriting discounts and commissions
or as otherwise provided in this Agreement, incurred in connection with
registrations, filings or qualifications pursuant to Articles 2 and 3,
including, without limitation, all registration, listing and qualifications
fees, printer’s and accounting fees, and fees and disbursements of counsel for
the Company shall be paid by the Company. 

ARTICLE 6 

INDEMNIFICATION 

In the event any Registrable Securities are included in a
Registration Statement under this Agreement: 

     6.1      Indemnification by
Company. To the fullest extent permitted by law, the Company will, and
hereby does, indemnify, hold harmless and defend each Investor, the directors,
officers, members, partners, employees, agents, representatives of, and each
Person, if any, who controls any Investor within the meaning of the Securities
Act or the Exchange Act (each, an “Indemnified Person”), against any
losses, claims, damages, liabilities, judgments, fines, penalties, charges,
costs, reasonable attorneys’ fees, amounts paid in settlement or expenses, joint
or several, (collectively, “Claims”) incurred in investigating, preparing
or defending any action, claim, suit, inquiry, proceeding, investigation or
appeal taken from the foregoing by or before any court or governmental,
administrative or other regulatory agency, body or the SEC, whether pending or
threatened, whether or not an indemnified party is or may be a party thereto
(“Indemnified Damages”), to which any of them may become subject insofar
as such Claims (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon: (i) any untrue statement or
alleged untrue statement of a material fact in a Registration Statement or any
post-effective amendment thereto or in any filing made in connection with the
qualification of the offering under the securities or other “blue sky” laws of
any jurisdiction in which Registrable Securities are offered (“Blue Sky
Filing”), or the omission or alleged omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, (ii) any untrue statement or alleged untrue statement of a material
fact contained in any preliminary prospectus if used prior to the effective date
of such Registration Statement, or contained in the final prospectus (as amended
or supplemented, if the Company files any amendment thereof or supplement
thereto with the SEC) or the omission or alleged omission to state therein any
material fact necessary to make the statements made therein, in the light of the
circumstances under which the statements therein were made, not misleading,
(iii) any violation or alleged violation by the Company of the Securities Act,
the Exchange Act, the Canadian Securities Laws, any other law, including,
without limitation, any state securities law, or any rule or regulation
thereunder relating to the offer or sale of the Registrable Securities pursuant
to a Registration Statement or (iv) any violation of this Agreement (the matters
in the foregoing clauses (i) through (iv) being, collectively,
“Violations”). Subject to Section 6.3, the Company shall reimburse the
Indemnified Persons, promptly as such Indemnified Damages are incurred and are
due and payable, for any legal fees or other reasonable expenses incurred by
them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6.1: (i) shall not apply to a Claim by an
Indemnified Person arising out of or based upon a Violation which occurs in
reliance upon and in strict conformity with information furnished in writing to
the Company by such Indemnified Person expressly for use in the Registration
Statement or any amendment thereof or supplement thereto, if such prospectus was
timely made available by the Company to such Indemnified Person pursuant to
Section 3.3; and (ii) shall not apply to amounts paid in settlement of any Claim
if such settlement is effected without the prior written consent of the Company,
which consent shall not be unreasonably withheld or delayed. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of the Indemnified Person and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Article 9. 

     6.2      Indemnification by
Investor. In connection with any Registration Statement in which an Investor
is participating, each such Investor agrees to severally and not jointly
indemnify, hold harmless and defend, to the same extent and in the same manner
as is set forth in Section 6.1, the Company, each of its directors, each of its
officers who signs the Registration Statement and each Person, if any, who
controls the Company within the meaning of the Securities Act or the Exchange
Act (each, an “Indemnified Party”), against any Claim or Indemnified
Damages to which any of them may become subject, under the Securities Act, the
Exchange Act. Canadian Securities Laws or otherwise, insofar as such Claim or
Indemnified Damages arise out of or are based upon any Violation, in each case
to the extent, and only to the extent, that such Violation occurs in reliance
upon and in strict conformity with written information furnished to the
Company by such Investor expressly for use in the Registration Statement or any
amendment thereof or supplement thereto and, subject to Section 6.3, such
Investor will reimburse any legal or other expenses reasonably incurred by an
Indemnified Party in connection with investigating or defending any such Claim;
provided, however, that the indemnity agreement contained in this Section 6.2
and the agreement with respect to contribution contained in Article 7 shall not
apply to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of such Investor, which consent shall not be
unreasonably withheld or delayed; provided, further, however, that the Investor
shall be liable under this Section 6.2 for only that amount of a Claim or
Indemnified Damages as does not exceed the dollar amount of the net proceeds
received by such Investor as a result of the sale of Registrable Securities
pursuant to such Registration Statement. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of such
Indemnified Party and shall survive the transfer of the Registrable Securities
by the Investors pursuant to Article 9. Notwithstanding anything to the contrary
contained herein, the indemnification agreement contained in this Section 6.2
with respect to any preliminary prospectus shall not inure to the benefit of any
Indemnified Party if the untrue statement or omission of material fact contained
in the preliminary prospectus was corrected on a timely basis in the prospectus,
as then amended or supplemented. 

10 

     6.3      Participation;
Cooperation. Promptly after receipt by an Indemnified Person or Indemnified
Party under this Article 6 of notice of the commencement of any action or
proceeding (including any governmental action or proceeding) involving a Claim,
such Indemnified Person or Indemnified Party shall, if a Claim in respect
thereof is to be made against any indemnifying party under this Article 6,
deliver to the indemnifying party a written notice of the commencement thereof,
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnified Person or
the Indemnified Party, as the case may be; provided, however, that an
Indemnified Person or Indemnified Party shall have the right to retain its own
counsel with the fees and expenses of not more than one counsel for such
Indemnified Person or Indemnified Party to be paid by the indemnifying party,
if, in the reasonable opinion of counsel retained by the indemnifying party, the
representation by such counsel of the Indemnified Person or Indemnified Party
and the indemnifying party would be inappropriate due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and any
other party represented by such counsel in such proceeding. In the case of an
Indemnified Person, legal counsel referred to in the proviso of the immediately
preceding sentence shall be selected by the Investors holding at least a
majority in interest of the Registrable Securities included in the Registration
Statement to which the Claim relates. The Indemnified Party or Indemnified
Person shall cooperate fully with the indemnifying party in connection with any
negotiation or defense of any such action or Claim by the indemnifying party and
shall furnish to the indemnifying party all information reasonably available to
the Indemnified Party or Indemnified Person that relates to such action or
Claim. The indemnifying party shall keep the Indemnified Party or Indemnified
Person reasonably apprised at all times as to the status of the defense or any
settlement negotiations with respect thereto. No indemnifying party shall be
liable for any settlement of any action, claim or proceeding effected without
its prior written consent, provided, however, that the indemnifying party shall
not unreasonably withhold, delay or condition its consent. No indemnifying party
shall, without the prior written consent of the Indemnified Party or Indemnified
Person, consent to entry of any judgment or enter into any settlement or other
compromise that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party or Indemnified Person of a
release from all liability in respect to such Claim or litigation, and such
settlement shall not include any admission as to fault on the part of the
Indemnified Party. Following indemnification as provided for hereunder, the
indemnifying party shall be subrogated to all rights of the Indemnified Party or
Indemnified Person with respect to all third parties, firms or corporations
relating to the matter for which indemnification has been made. The failure to
deliver written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of any
liability to the Indemnified Person or Indemnified Party under this Article 6,
except to the extent that the indemnifying party is materially prejudiced in its
ability to defend such action. 

     6.4      Payment of
Indemnification. The indemnification required by this Article 6 shall be
made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or Indemnified Damages
are incurred. 

11 

     6.5      Non-Exclusive Remedy.
The indemnity agreements contained herein shall be in addition to (i) any cause
of action or similar right of the Indemnified Party or Indemnified Person
against the indemnifying party or others, and (ii) any liabilities the
indemnifying party may be subject to pursuant to the law. 

ARTICLE 7 

CONTRIBUTION 

               To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Article 6 to the fullest extent permitted by law; provided, however, that:
(i) no Person involved in the sale of Registrable Securities that is guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) in connection with such sale shall be entitled to contribution
from any Person involved in such sale of Registrable Securities who was not
guilty of fraudulent misrepresentation; and (ii) contribution by any seller of
Registrable Securities shall be limited in amount to the net amount of proceeds
received by such seller from the sale of such Registrable Securities pursuant to
such Registration Statement. 

ARTICLE 8 

REPORTS UNDER THE EXCHANGE ACT

     8.1      With a view to making
available to the Investors the benefits of Rule 144 promulgated under the
Securities Act or any other similar rule or regulation of the SEC that may at
any time permit the Investors to sell securities of the Company to the public
without registration (“Rule 144”), the Company agrees to: 

               (a)      make and keep public
information available, as those terms are understood and defined in Rule 144;

               (b)      file with the SEC in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act so long as the Company remains subject to
such requirements and the filing of such reports and other documents is required
for the applicable provisions of Rule 144; and 

               (c)      furnish to each Investor so
long as such Investor owns Registrable Securities, promptly upon request, (i) a
written statement by the Company, if true, that it has complied with the
reporting requirements of Rule 144, the Securities Act and the Exchange Act, and
(ii) such other information as may be reasonably requested to permit the
Investors to sell such securities pursuant to Rule 144 without registration.

ARTICLE 9 

ASSIGNMENT OF REGISTRATION RIGHTS

               The rights under this Agreement shall be automatically
assignable by the Investors to any transferee of all or any portion of such
Investor’s Registrable Securities if: (i) the Investor agrees in writing with
the transferee or assignee to assign such rights, and a copy of such agreement
is furnished to the Company within a reasonable time after such assignment; (ii)
the Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of (a) the name and address of such transferee or
assignee, and (b) the securities with respect to which such registration rights
are being transferred or assigned; (iii) immediately following such transfer or
assignment the further disposition of such securities by the transferee or
assignee is restricted under the Securities Act or applicable state securities
laws; (iv) at or before the time the Company receives the written notice
contemplated by clause (ii) of this sentence the transferee or assignee agrees
in writing with the Company to be bound by all of the provisions contained
herein; and (v) such transfer shall have been made in accordance with the
applicable requirements of the Subscription Agreements, and in accordance with
all applicable securities laws. 

12 

ARTICLE 10 

AMENDMENT OF REGISTRATION RIGHTS 

               Provisions of this Agreement may be amended and the observance
thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and the Required Holders. Any amendment or waiver effected in accordance with
this Article 10 shall be binding upon each Investor and the Company. No such
amendment shall be effective to the extent that it applies to less than all of
the holders of the Registrable Securities. No consideration shall be offered or
paid to any Person to amend or consent to a waiver or modification of any
provision of any of this Agreement unless the same consideration also is offered
to all of the parties to this Agreement. 

ARTICLE 11 

MISCELLANEOUS 

     11.1      Holders of Record. A
Person is deemed to be a holder of Registrable Securities whenever such Person
owns or is deemed to own of record such Registrable Securities. If the Company
receives conflicting instructions, notices or elections from two or more Persons
with respect to the same Registrable Securities, the Company shall act upon the
basis of instructions, notice or election received from the record owner of such
Registrable Securities. 

     11.2      Notices. Any notices,
consents, waivers or other communications required or permitted to be given
under the terms of this Agreement must be in writing and will be deemed to have
been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt,
when sent by facsimile (provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party); or (iii) one
Business Day after deposit with a nationally recognized overnight delivery
service, in each case properly addressed to the party to receive the same. The
addresses and facsimile numbers for such communications shall be: 

If to the Company:

Northern Dynasty Minerals Ltd.

15th Floor - 1040 West Georgia Street 
Vancouver, BC, Canada V6E 4H1

Fax: (604) 684-8092 
Attention: Trevor Thomas
[TrevorThomas@hdimining.com] 

If to the Purchasers as per Schedule or
as they may notify the Company.

With courtesy copies (which shall not
be required for valid notice) to counsel:

For Company: 
McMillan LLP 
1500
1055 West Georgia Street, 
Vancouver, BC, Canada 
V6E 4N7 
Fax 604 685
7084
Attention: Bernhard Zinkhofer, Esq.(Bernhard.Zinkhofer@mcmillan.ca) 

For Investors: 
Goodmans LLP

Bay Adelaide Centre 
333 Bay Street, Suite 3400 
Toronto, ON M5H 2S7

13 

Attention Bill Gorman, Esq. wgorman@goodmans.ca

and 

Haynes and Boone, LLP 
30
Rockefeller Plaza, 26th Floor 
New York, New York 10112 

Attention: Greg Kramer Esq.,
greg.kramer@haynesboone.com 

If to a Purchaser, to its address and facsimile number set
forth on the Schedule of Purchasers attached hereto, with copies to such
Purchaser’s representatives as set forth on the Schedule of Purchasers, or to
such other address and/or facsimile number and/or to the attention of such other
Person as the recipient party has specified by written notice given to each
other party five days prior to the effectiveness of such change. Written
confirmation of receipt (A) given by the recipient of such notice, consent,
waiver or other communication, (B) mechanically or electronically generated by
the sender’s facsimile machine containing the time, date, recipient facsimile
number and an image of the first page of such transmission or (C) provided by a
courier or overnight courier service shall be rebuttable evidence of personal
service, receipt by facsimile or receipt from a nationally recognized overnight
delivery service in accordance with clause (i), (ii) or (iii) above,
respectively. 

     11.3      No Waiver. Failure of
any party to exercise any right or remedy under this Agreement or otherwise, or
delay by a party in exercising such right or remedy, shall not operate as a
waiver thereof. 

     11.4      Governing Law; Waiver of
Jury Trial. This Registration Rights Agreement shall be governed by and
construed in accordance with the laws of the Province of Ontario and the federal
laws of Canada applicable therein. Each Investor hereby irrevocably attorns to
the non-exclusive jurisdiction of the courts of the Province of Ontario with
respect to any matters arising out of this Registration Rights Agreement .
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY. 

     11.5      Entire Agreement.
This Agreement, the Subscription Agreements and the agreements entered into
pursuant to the Subscription Agreement and the instruments referenced herein and
therein constitute the entire agreement among the parties hereto with respect to
the subject matter hereof and thereof. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein and
therein. This Agreement, the other Transaction Documents and the instruments
referenced herein and therein supersede all prior agreements and understandings
among the parties hereto with respect to the subject matter hereof and thereof.

     11.6      Successors and
Assigns. Subject to the requirements of Article 9, this Agreement shall
inure to the benefit of and be binding upon the permitted successors and assigns
of each of the parties hereto. 

     11.7      Headings. The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof. 

     11.8      Counterparts; Facsimile
Signatures. This Agreement may be executed in identical counterparts, each
of which shall be deemed an original but all of which shall constitute one and
the same agreement. This Agreement, once executed by a party, may be delivered
to the other party hereto by facsimile transmission of a copy of this Agreement
bearing the signature of the party so delivering this Agreement. 

     11.9      Further Assurances; No
Inconsistent Agreements. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as any other party may
reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.
Neither the Company nor any of its subsidiaries (as such term is defined in the
Business Corporations Act (British Columbia)) (the “subsidiaries”)
has entered, as of the date hereof, nor shall the Company or any of the
Subsidiaries, on or after the date hereof, enter into any agreement with respect
to its securities, that would have the effect of impairing the rights granted to
the Investors in this Agreement or otherwise conflicts with the provisions
hereof. 

14 

     11.10      Required Consent.
All consents and other determinations required to be made by the Investors
pursuant to this Agreement shall be made, unless otherwise specified in this
Agreement, by the Required Holders. 

     11.11      Construction. The
language used in this Agreement will be deemed to be the language chosen by the
parties to express their mutual intent and no rules of strict construction will
be applied against any party.

     11.12      No Third Party
Beneficiaries. This Agreement is intended for the benefit of the parties
hereto and their respective permitted successors and assigns, and is not for the
benefit of, nor may any provision hereof be enforced by, any other Person,
except to the extent set forth in Article 6. 

     11.13      Several Liability.
The obligations of each Investor hereunder are several and not joint with the
obligations of any other Investor, and no provision of this Agreement is
intended to confer any obligations on any Investor vis-à-vis any other Investor.
Nothing contained herein, and no action taken by any Investor hereto, shall be
deemed to constitute the Investors as a partnership, an association, a joint
venture or any other kind of entity or group, or create a presumption that the
Investors are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated herein. 

[Signature Page Follows] 

IN WITNESS WHEREOF, each Purchaser and the Company have
caused their respective signature page to this Registration Rights Agreement to
be duly executed as of the date first written above. 

COMPANY: 

NORTHERN DYNASTY MINERALS LTD.

	 	By:            
      __________________________________
	 	 
	 	           
             Name: 
	 	 
	 	           
             Title: 

[Signature Page to Registration Rights Agreement] 

IN WITNESS WHEREOF, each Purchaser and the Company have
caused their respective signature page to this Registration Rights Agreement to
be duly executed as of the date first written above. 

PURCHASER: 

	 	By:            
      __________________________________
	 	 
	 	           
             Name: 
	 	 
	 	           
             Title: 

[Purchaser Signature Page to Registration Rights Agreement] 

SCHEDULE OF PURCHASERS 

	  	Purchaser’s Address 	Purchaser’s Representative’s
  
	  	  	Address, email 
	Purchaser Name 	and Facsimile Number and email
    	  
	  	  	and Facsimile Number

EXHIBIT A 

SELLING STOCKHOLDERS 

For additional information regarding the issuance of the Common
Shares, see “Private Placement of Special Warrants” above. We are registering
the shares of Common Shares in order to permit the selling stockholders to offer
the shares for resale from time to time. Except for the issuance of the Special
Warrants pursuant to the Subscription Agreements and the conversion of these
Special Warrants into Common Shares, the selling stockholders have not had any
material relationship with us within the past three years. 

The table below lists the selling stockholders and other
information regarding the beneficial ownership of the shares of Common Shares by
each of the selling stockholders. The second column lists the number of shares
of Common Shares beneficially owned by each selling stockholder, based on its
ownership of the Special Warrants issued pursuant to the Subscription Agreements
and assuming full conversion of such Special Warrants, as of January ___, 2015.
The third column lists the shares of Common Shares being offered by this
prospectus by the selling stockholders. The fourth column assumes the sale of
all of the shares offered by the selling stockholders pursuant to this
prospectus. The selling stockholders may sell all, some or none of their shares
in this offering. See “Plan of Distribution.” 

	  	  	Maximum Number of 	  
	  	Number of Shares 	Shares 	  
	Name of Selling 	Beneficially Owned Prior 	to be Sold Pursuant to 	Number of Shares 
	Stockholder 	to Offering 	this Prospectus 	Owned After Offering
  

PLAN OF DISTRIBUTION 

We are registering the shares of Common Shares to permit the
resale of these shares of Common Shares by the selling stockholders from time to
time after the date of this prospectus. We will not receive any of the proceeds
from the sale by the selling stockholders of the shares of Common Shares. 

The selling stockholders may sell all or a portion of the
shares of Common Shares beneficially owned by them and offered hereby from time
to time directly or through one or more underwriters, broker-dealers or agents.
If the shares of Common Shares are sold through underwriters or broker-dealers,
the selling stockholders will be responsible for underwriting discounts or
commissions or agent’s commissions. The shares of Common Shares may be sold in
one or more transactions at fixed prices, at prevailing market prices at the
time of the sale, at varying prices determined at the time of sale, or at
negotiated prices. These sales may be effected in transactions, which may
involve crosses or block transactions,

	
  on any national securities exchange or quotation service on which the
  securities may be listed or quoted at the time of sale; 

  
	
  in the over-the-counter market; 

  
	
  in transactions otherwise than on these exchanges or systems or in the
  over-the-counter market; 

  
	
  through the writing of options, whether such options are listed on an
  options exchange or otherwise; 

  
	
  ordinary brokerage transactions and transactions in which the broker-dealer
  solicits purchasers; 

  
	
  block trades in which the broker-dealer will attempt to sell the shares as
  agent but may position and resell a portion of the block as principal to
  facilitate the transaction; 

  
	
  purchases by a broker-dealer as principal and resale by the broker-dealer
  for its account; 

  
	
  an exchange distribution in accordance with the rules of the applicable
  exchange; 

  
	
  privately negotiated transactions; 

  
	
  short sales; 

  
	
  sales pursuant to Rule 144; 

  
	
  broker-dealers may agree with the selling stockholders to sell a specified
  number of such shares at a stipulated price per share; 

  
	
  a combination of any such methods of sale; and 

  
	
  any other method permitted pursuant to applicable law. 

If the selling stockholders effect such transactions by selling
shares of Common Shares to or through underwriters, broker-dealers or agents,
such underwriters, broker-dealers or agents may receive commissions in the form
of discounts, concessions or commissions from the selling stockholders or
commissions from purchasers of the shares of Common Shares for whom they may act
as agent or to whom they may sell as principal (which discounts, concessions or
commissions as to particular underwriters, broker-dealers or agents may be in
excess of those customary in the types of transactions involved). In connection
with sales of the shares of Common Shares or otherwise, the selling stockholders
may enter into hedging transactions with broker-dealers, which may in turn
engage in short sales of the shares of Common Shares in the course of hedging in
positions they assume. The selling stockholders may also sell shares of Common
Shares short and deliver shares of Common Shares covered by this prospectus to
close out short positions and to return borrowed shares in connection with such
short sales. The selling stockholders may also loan or pledge shares of Common
Shares to broker-dealers that in turn may sell such shares. 

The selling stockholders may pledge or grant a security
interest in some or all of the warrants or notes owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell the shares of Common Shares from time to time
pursuant to this prospectus or any amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act of 1933, as
amended, amending, if necessary, the list of selling stockholders to include the
pledgee, transferee or other successors in interest as selling stockholders
under this prospectus. The selling stockholders also may transfer and donate the
shares of Common Shares in other circumstances in which case the transferees,
donees, pledgees or other successors in interest will be the selling beneficial
owners for purposes of this prospectus. 

At the time a particular offering of the shares of Common
Shares is made, a prospectus supplement, if required, will be distributed which
will set forth the aggregate amount of shares of Common Shares being offered and
the terms of the offering, including the name or names of any broker-dealers or
agents, any discounts, commissions and other terms constituting compensation
from the selling stockholders and any discounts, commissions or concessions
allowed or reallowed or paid to broker-dealers. 

Under the securities laws of some states, the shares of Common
Shares may be sold in such states only through registered or licensed brokers or
dealers. In addition, in some states the shares of Common Shares may not be sold
unless such shares have been registered or qualified for sale in such state or
an exemption from registration or qualification is available and is complied
with. 

There can be no assurance that any selling stockholder will
sell any or all of the shares of Common Shares registered pursuant to the
registration statement, of which this prospectus forms a part. 

The selling stockholders and any other person participating in
such distribution will be subject to applicable provisions of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder,
including, without limitation, to the extent applicable, Regulation M of the
Exchange Act, which may limit the timing of purchases and sales of any of the
shares of Common Shares by the selling stockholders and any other participating
person. To the extent applicable Regulation M may also restrict the ability of
any person engaged in the distribution of the shares of Common Shares to engage
in market-making activities with respect to the shares of Common Shares. All of
the foregoing may affect the marketability of the shares of Common Shares and
the ability of any person or entity to engage in market-making activities with
respect to the shares of Common Shares. 

We will pay all expenses of the registration of the shares of
Common Shares pursuant to the registration rights agreements, estimated to be $[
] in total, including, without limitation, Securities and Exchange Commission
filing fees and expenses of compliance with state securities or “blue sky” laws;
provided, however, that a selling stockholder will pay all underwriting
discounts and selling commissions, if any. We will indemnify the selling
stockholders against liabilities, including some liabilities under the
Securities Act, in accordance with the registration rights agreements, or the
selling stockholders will be entitled to contribution. We may be indemnified by
the selling stockholders against civil liabilities, including liabilities under
the Securities Act, that may arise from any written information furnished to us
by the selling stockholder specifically for use in this prospectus, in
accordance with the related registration rights agreements, or we may be
entitled to contribution. 

Once sold under the registration statement, of which this
prospectus forms a part, the shares of Common Shares will be freely tradable
under the Securities Act in the hands of persons other than our affiliates.Northern Dynasty Minerals Ltd.: Exhibit 4.3 - Filed by newsfilecorp.com

UNLESS PERMITTED UNDER THE SECURITIES LEGISLATION, THE
HOLDER OF THESE SPECIAL WARRANT SECURITIES MUST NOT TRADE THEM BEFORE MAY 1,
2015. 

	
      THE SECURITIES REPRESENTED HEREBY AND THE SECURITIES
      ISSUABLE UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE
      UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "U.S.
      SECURITIES ACT") OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED
      STATES. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES
      FOR THE BENEFIT OF THE COMPANY THAT SUCH SECURITIES MAY BE OFFERED,
      SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY; (B) OUTSIDE
      THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER
      THE U.S. SECURITIES ACT; (C) IN ACCORDANCE WITH THE EXEMPTION FROM
      REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144
      THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE
      STATE SECURITIES LAWS; OR (D) IN A TRANSACTION THAT DOES NOT
      REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT AND ANY
      APPLICABLE STATE SECURITIES LAWS, AND, IN THE CASE OF PARAGRAPH (C) OR
      (D), THE SELLER FURNISHES TO THE COMPANY AN OPINION OF COUNSEL OF
      RECOGNIZED STANDING IN FORM AND SUBSTANCE SATISFACTORY TO THE
      COMPANY TO SUCH EFFECT. 

	NORTHERN DYNASTY MINERALS LTD.  
	(INCORPORATED UNDER THE LAWS OF BRITISH COLUMBIA)
    
	SPECIAL WARRANT CERTIFICATE (ISIN NO. CA66510M1133)
      

	CERTIFICATE NO. 	 	                                         
      SPECIAL WARRANTS, 
		 	each of which will be exercised into one
      Underlying Share at no additional cost 
		 

THIS IS TO CERTIFY THAT FOR VALUE RECEIVED 

                                                                                                                                                                                                                                            (hereinafter
referred to as the "Holder") is the registered holder of the number of Special
Warrants specified above. 

Special Warrants are issued subject to the terms and conditions
appended hereto as Schedule "A". This Special Warrant is subject to
deemed (automatic) conversion into Underlying Shares of Northern Dynasty
Minerals Ltd. in certain events and if not earlier exercised on a voluntary or
deemed basis will be automatically converted in any event on the second
anniversary of the issuance date below. 

          IN
WITNESS WHEREOF, the Company has caused this Special Warrant Certificate to
be executed and issued by a duly authorized officer of the Company effective
this 31st day of December, 2014. All Special Warrants will be deemed to be dated
the same date regardless of the actual date of issuance. 

	NORTHERN DYNASTY MINERALS LTD. 
	  	 
	  	 
	Per: 	 
		Authorized Signatory
  

(The Terms and Conditions attached hereto form an integral
part of this Special Warrant Certificate) 

SCHEDULE "A" 

TERMS AND CONDITIONS OF SPECIAL WARRANTS OF NORTHERN DYNASTY
MINERALS LTD. 

	1.
      	CONVERSION
      INTO UNDERLYING SHARES. 	2
      
	2.
      	MANNER
      OF EFFECTING VOLUNTARY CONVERSION 	3
      
	3.
      	CERTAIN
      U.S. SECURITIES LAW MATTERS 	4
      
	4.
      	COVENANTS
      REGARDING RESALE FILINGS, RESERVATION OF SUFFICIENT UNDERLYING SHARES,
      ETC. 	5
      
	5.
      	CAPITAL
      ADJUSTMENTS 	6
      
	6.
      	PARTIAL
      CONVERSION, EXCHANGE AND REPLACEMENT OF CERTIFICATES 	9
      
	7.
      	MEETINGS
      OF SPECIAL WARRANT HOLDERS 	10
      
	8.
      	NOTICE
      	11
      
	9.
      	MISCELLANEOUS
      	12
      
	10.
      	CERTAIN
      DEFINITIONS: 	12
      

	1. 	
      Conversion into Underlying
  Shares.

	 	(a) 	
      Right to Acquire Underlying Shares. Each
      Special Warrant, upon voluntary exercise at any time for up to two years
      from Closing, or upon deemed (automatic) exercise, in each case as
      described below, will entitle the Holder to receive one Underlying Share,
      for no further payment or additional consideration. The Company agrees to
      use reasonable best efforts to qualify the distribution of the Underlying
      Shares by filing the Resale Filings in Canada and the United States
      promptly after Closing and for the U.S. Registration Statement, in
      accordance with the Registration Rights Agreement.

	 	 	 
	 	(b) 	
      Deemed Exercise for non-U.S. Holders under 9.9%.
      Any unexercised Special Warrants held by non-U.S. Persons,
      other than Special Warrants issued to or held by a non-U.S. Person
      holder who, upon exercise of all of its Special Warrants, would be deemed
      to beneficially own together with its affiliates and each other person or
      persons with whom such non-U.S. Person holder may be deemed to be a Group,
      disregarding for this purpose the limitation on conversion described in
      Section 1(f) and any similar limitation on conversion or exercise
      contained in any other Common Stock Equivalent, in each case, held by such
      non-U.S. Person holder and its affiliates and such other person or persons
      with whom such non-U.S. Person holder may be deemed to be a Group, in
      excess of 9.9% of the Company’s then outstanding Shares and who have
      elected to be treated as if they were U.S Persons under 1(c) and 1(f),
      will be deemed to be exercised at 4:00 p.m. (Vancouver time) on the
      earlier of (i) the date that is the sixth business day after the date on
      which the Company obtains a receipt for the Final Prospectus from the
      Securities Commissions qualifying the distribution of the Underlying
      Shares to be issued upon deemed exercise of the Special Warrants (the “CDN
      Qualification Date”) and (ii) the date that is 120 days after
    Closing.

	 	 	 
	 	(c) 	
      Deemed Exercise for Holders over 9.9%. Any
      unexercised Special Warrants held by a U.S. Person holder who, upon
      exercise of its Special Warrants, would be deemed to beneficially own
      together with its affiliates and each other person or persons with whom
      such U.S. Person holder may be deemed to be a Group, disregarding for this
      purpose the limitation on conversion described in Section 1(f) and any
      similar limitation on conversion or exercise contained in any other Common
      Stock Equivalent, in each case, held by such U.S. Person holder and its
      affiliates and such other person or persons with whom such non-U.S. Person
      holder may be deemed to be a Group, in excess of 9.9% of the Company’s
      then outstanding Shares, and non-U.S. Persons who hold such a number of
      Shares and elect to be treated as U.S. Persons, will be deemed to be
      exercised at 4:00 p.m. (Vancouver time) on the Resale Filings Termination
      Date.

3 

	 	(d) 	
      Deemed Exercise for U.S. Persons under
      9.9%. Any unexercised Special Warrants issued to or held by a U.S.
      Person holder who would, upon exercise of its Special Warrants, would be
      deemed to beneficially own together with its affiliates and each other
      person or persons with whom such non-U.S. Person holder may be deemed to
      be a Group, disregarding for this purpose the limitation on conversion
      described in Section 1(f) and any similar limitation on conversion or
      exercise contained in any other Common Stock Equivalent, in each case,
      held by such non-U.S. Person holder and its affiliates and such other
      person or persons with whom such non-U.S. Person holder may be deemed to
      be a Group, less than 9.9% of the Company’s then outstanding Shares, will
      be deemed to be exercised at 4:00 p.m. (Vancouver time) on the date that
      is 180 days after Closing.

	 	 	 
	 	(e) 	
      Voluntary Conversion. Subject to the
      restrictions in Section 1(f), Special Warrants may be voluntarily
      exercised by the Holder at any time prior to their deemed exercise by
      delivery of an exercise form to the Company. In such event the certificate
      representing the Underlying Shares will bear any restrictive legends
      required by applicable Securities Laws.

	 	 	 
	 	(f) 	
      Certain Restrictions on Conversion for U.S.
      Persons. No automatic or deemed conversion will be permitted to
      the extent that would after giving effect to such exercise, the Holder
      (together with the Holder’s affiliates, and any other persons acting as a
      group together with the holder or any of the Holder’s affiliates), would
      beneficially own in excess of the Beneficial Ownership Limitation (as
      defined below). To the extent that the limitation contained in this
      Section 1(f) applies, the determination of whether the Special Warrant is
      exercisable (in relation to other securities owned by the Holder together
      with any affiliates or any person with whom it may be deemed to be a
      Group) and of which portion of this Special Warrant is exercisable shall
      be in the sole discretion of the Holder, and the submission of a notice of
      exercise shall be deemed to be the Holder’s determination that the Special
      Warrant is exercisable in accordance with the terms hereof (in relation to
      other securities owned by the Holder together with any affiliates) and of
      which portion of the Special Warrant is exercisable, in each case subject
      to the Beneficial Ownership Limitation, and the Company shall have no
      obligation to verify or confirm the accuracy of such determination. For
      purposes of this Section 1(f), in determining the number of outstanding
      Shares, a Holder may rely on the number of outstanding Shares as reflected
      in (A) the Company’s most recent report filed with the SEC, (B) a more
      recent public announcement by the Company or (C) a more recent written
      notice by the Company or its transfer agent setting forth the number of
      Shares outstanding. Upon the written or oral request of the Holder, the
      Company shall within two Business Days confirm orally and in writing to
      the Holder the number of Shares then outstanding. The “Beneficial
      Ownership Limitation” shall be 9.9% of the number of Shares outstanding
      immediately after giving effect to the issuance of Underlying Shares
      issuable upon exercise of the Special Warrant. The Holder, upon not less
      than 61 days’ prior notice to the Company, may increase or decrease the
      Beneficial Ownership Limitation provisions of this Section 1(f), provided
      that the Beneficial Ownership Limitation in no event exceeds 19.99% of the
      number of Shares of outstanding immediately after giving effect to the
      issuance of Underlying Shares upon exercise of the Special Warrant held by
      the holder and the provisions of this Section 1(f) shall continue to
      apply. Any such increase or decrease will not be effective until the 61st
      day after such notice is delivered to the Company. The provisions of this
      paragraph shall be construed and implemented in a manner otherwise than in
      strict conformity with the terms of this Section 1(f) to correct this
      paragraph (or any portion hereof) which may be defective or inconsistent
      with the intended Beneficial Ownership Limitation herein contained or to
      make changes or supplements necessary or desirable to properly give effect
      to such limitation.

	2. 	
      Manner of Effecting Voluntary
    Conversion

2.1      Subject to Section 1(f)
above, and prior to the their deemed (automatic) conversion as noted above, the
Holder may voluntarily convert the Special Warrants evidenced by this Special
Warrant Certificate by: 

	 	(a) 	
      duly completing and executing the Voluntary Exercise Form
      attached hereto; and

	 	 	 
	 	(b) 	
      surrendering this Special Warrant Certificate at the
      offices of the Company at 15th Floor, 1040 West Georgia Street, Vancouver,
      BC, V6E 4H1, Attention: Trevor Thomas.

4 

	3. 	
      Certain U.S. Securities Law
  Matters

3.1      Any Special Warrants and
the Underlying Shares acquired by a Holder in the United States will be
considered “restricted securities” within the meaning of Rule 144(a)(3) under
the U.S. Securities Act and may not be offered, sold, pledged, or otherwise
transferred, directly or indirectly, unless: (A) the transfer is to the Company;
(B) the transfer is made outside the United States in accordance with Regulation
S and in compliance with applicable Canadian local laws or regulations; (C) the
transfer is made in compliance with an exemption from registration under the
U.S. Securities Act provided by Rule 144 there under, if available, and in
accordance with applicable state securities laws; (D) in another transaction
that does not require registration under the U.S. Securities Act or any
applicable state securities laws; or (E) pursuant to an effective registration
statement under the U.S. Securities Act, and in each case in accordance with any
applicable state securities laws in the United States, provided that, in the
case of transfers pursuant to (C) or (D) above, the Holder has, prior to such
transfer, furnished to the Company an opinion of counsel or other evidence of
exemption, in either case reasonably satisfactory to the Company. 

3.2      Upon issuance and until
such time as it is no longer required under applicable requirements of the U.S.
Securities Act or applicable state securities laws, all certificates
representing the Special Warrants issued hereunder and any Underlying Shares
issued upon conversion of the Special Warrants, as well as all certificates
issued in exchange for or in substitution of the foregoing, until such time as
is no longer required under the applicable requirements of the U.S. Securities
Act or applicable state securities laws, will bear, on the face of such
certificate, the following legends: 

	
      “THE SECURITIES REPRESENTED HEREBY [IF A SPECIAL
      WARRANT INCLUDE: "AND THE SECURITIES ISSUABLE UPON EXERCISE
      THEREOF"] HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES
      ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”) OR THE SECURITIES LAWS
      OF ANY STATE OF THE UNITED STATES. THE HOLDER HEREOF, BY PURCHASING SUCH
      SECURITIES, AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH SECURITIES MAY
      BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY; (B)
      OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S
      UNDER THE U.S. SECURITIES ACT; (C) IN ACCORDANCE WITH THE EXEMPTION FROM
      REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144
      THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE
      SECURITIES LAWS; OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE
      REGISTRATION UNDER THE U.S. SECURITIES ACT AND ANY APPLICABLE STATE
      SECURITIES LAWS, AND, IN THE CASE OF PARAGRAPH (C) OR (D), THE SELLER
      FURNISHES TO THE COMPANY AN OPINION OF COUNSEL OF RECOGNIZED STANDING IN
      FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY TO SUCH EFFECT.” 

	  
	
      "[FOR CERTIFICATES EVIDENCING UNDERLYING SHARES ONLY:]
      THE PRESENCE OF THIS LEGEND MAY IMPAIR THE ABILITY OF THE HOLDER
      HEREOF TO EFFECT "GOOD DELIVERY" OF THE SECURITIES REPRESENTED HEREBY ON A
      CANADIAN STOCK EXCHANGE. A CERTIFICATE WITHOUT A LEGEND MAY BE OBTAINED
      FROM THE REGISTRAR AND TRANSFER AGENT OF THE COMPANY IN CONNECTION WITH A
      SALE OF THE SECURITIES REPRESENTED HEREBY AT A TIME WHEN THE COMPANY IS A
      "FOREIGN ISSUER" AS DEFINED IN REGULATION S UNDER THE U.S. SECURITIES ACT,
      UPON DELIVERY OF THIS CERTIFICATE, AN EXECUTED DECLARATION AND, IF
      REQUESTED BY THE COMPANY OR THE TRANSFER AGENT, AN OPINION OF COUNSEL OF
      RECOGNIZED STANDING, EACH IN FORM SATISFACTORY TO THE TRANSFER AGENT OF
      THE COMPANY AND THE COMPANY, TO THE EFFECT THAT SUCH SALE OF THE
      SECURITIES REPRESENTED HEREBY IS BEING MADE IN COMPLIANCE WITH RULE 904 OF
      REGULATION S UNDER THE U.S. SECURITIES ACT.”;

provided, that if the Special Warrants
or Underlying Shares are being sold outside the United States in compliance with
the requirements of Rule 904 of Regulation S at a time when the Company is a
"foreign issuer" as defined in Regulation S at the time of sale, the legends set
forth above may be removed by providing an executed declaration to the registrar and transfer
agent of the Company, in substantially the form set forth as Appendix A attached
hereto (or in such other forms as the Company may prescribe from time to time)
and, if requested by the Company or the transfer agent, an opinion of counsel of
recognized standing in form and substance satisfactory to the Company and the
transfer agent to the effect that such sale is being made in compliance with
Rule 904 of Regulation S; and provided, further, that, if any Special Warrants
or Underlying Shares are being sold otherwise than in accordance with Regulation
S and other than to the Company, the legend may be removed by delivery to the
registrar and transfer agent and the Company of an opinion of counsel, of
recognized standing reasonably satisfactory to the Company, that such legend is
no longer required under applicable requirements of the U.S. Securities Act or
state securities laws. The legends set forth above will also be removed (i)
pursuant to section 3.1(E) above (effective registration statement) and (ii) at
such time or times that the Underlying Shares can be sold under Rule 144 without
public information requirements or volume limitations, in either case upon
written request of the Holder made to the Company.

5 

	4. 	
      Covenants Regarding Resale Filings, Reservation of
      Sufficient Underlying Shares, etc.

4.1      The Company shall use
its reasonable best efforts to, within 90 of the Closing Date, i) obtain a
receipt for the Final Prospectus in the Province in which the Special Warrants
have been sold to the Holder (or, if the Holder is not a resident of Canada,
then in the Province of British Columbia) qualifying the distribution of the
Underlying Shares for resale in Canada, and ii) file a U.S. Registration
Statement with the SEC and cause the U.S. Registration Statement to be declared
effective by the SEC qualifying the resale of the Underlying Shares in the
United States.

4.2      The Company agrees with
the Holder that so long as any Special Warrants shall remain outstanding it will
reserve and keep available a sufficient number of Underlying Shares for the
purpose of enabling it to satisfy its obligations to issue the Underlying Shares
issuable upon the conversion of the Special Warrants, as may be adjusted hereby,
and will cause the Underlying Shares from time to time acquired pursuant to the
conversion of the Special Warrants to be duly issued and delivered at no
additional cost in the name of the Holder in accordance with the terms hereof.
The Underlying Shares will be issued as fully paid and non-assessable shares of
the Company, free from all liens, charges and encumbrances. The Company will,
within three (3) business days of the date of conversion or deemed conversion of
the Special Warrants, make available for pick-up or, at the request of the
Holder, mail to the Holder thereof certificates for the Underlying Shares issued
on such conversion at the address specified in the Voluntary Exercise Form.

4.3      For so long as the
Special Warrants remain outstanding, the Company shall use reasonable best
efforts to preserve and maintain its corporate existence and to ensure that the
Underlying Shares outstanding or issuable from time to time upon the conversion
of the Special Warrants are listed and posted for trading on the TSX and NYSE
MKT (or such other exchange on which the Underlying Shares may be listed),
provided that this clause shall not be construed as limiting or restricting the
Company from completing a consolidation, amalgamation, arrangement, takeover bid
or merger that would result in the Underlying Shares ceasing to be listed and
posted for trading on the TSX or NYSE MKT (or such other exchange on which the
Underlying Shares may be listed), so long as the holders of Underlying Shares
receive securities of an entity which is listed on a stock exchange in Canada or
the United States, or cash, or the holders of the Underlying Shares have
approved the transaction in accordance with the requirements of applicable
corporate and securities laws and the policies of the TSX and the NYSE MKT (or
such other exchange on which the Underlying Shares may be listed). In addition,
the Company shall make all requisite filings under applicable securities
legislation necessary to remain a reporting issuer not in default. 

4.4      For so long as the
Special Warrants remain outstanding, subject to the express provisions hereof,
the Company shall carry on and conduct and shall cause to be carried on and
conducted its business in the same manner as heretofore carried on and conducted
and in accordance with industry standards and good business practice, provided,
however, that the Company or any subsidiary of the Company may cease to operate
or may dispose of any business, premises, property, assets or operation if in
the opinion of the directors or officers of the Company or any subsidiary of the
Company, as the case may be, it would be advisable and in the best interests of
the Company or any subsidiary of the Company, as the case may be, to do so, and
subject to the express provisions hereof, it shall do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence, provided, however, that (subject to Section 5 hereof) nothing herein
contained shall prevent the amalgamation, consolidation, merger, sale,
winding-up or liquidation of the Company or any subsidiary of the Company or the
abandonment of any rights and franchises of the Company or any subsidiary of the
Company if, in the opinion of the directors or officers of the Company or any subsidiary of the
Company, as the case may be, it is advisable and in the best interest of the
Company or of such subsidiary of the Company to do so.

6 

4.5      The Company hereby
reconfirms as of the date hereof all of the representations, warranties and
covenants given by the Company in the Subscription Agreement in favour of the
Subscriber (as defined in the Subscription Agreement) as if such
representations, warranties and covenants were made in favour of the Holder as
of the date hereof. 

	5. 	
      Capital Adjustments

5.1      Subject to approval of
the TSX and NYSE MKT (or such other exchange(s) on which the Underlying Shares
may be listed), if at any time after the date hereof and prior to the expiry of
the Special Warrants, and provided that any Special Warrants remain unexercised,
there shall be 

	 	(a) 	
      a reclassification of the Shares, a change in the Shares
      into other shares or securities, or any other capital reorganization of
      the Company other than as described in Section 5.2, or

	 	 	 
	 	(b) 	
      the triggering of a shareholders` rights plan or a
      consolidation, amalgamation, arrangement or merger of the Company with or
      into any other body corporate, trust, partnership or other entity or a
      transfer, sale, conveyance of the property and assets of the Company as an
      entirety or substantially as an entirety to any other body corporate,
      trust, partnership or other entity,

(any of such events being called a “Capital Reorganization”)
any Holders who shall thereafter acquire Underlying Shares pursuant to the
Special Warrant shall be entitled to receive, at no additional cost, and shall
accept in lieu of the number of Underlying Shares to which such Holder was
theretofore entitled to acquire upon such exercise, the aggregate number of
shares, other securities or other property which such Holder should have been
entitled to receive as a result of such Capital Reorganization if, on the
effective date or record date thereof as the case may be, the Holder had been
the registered holder of the number of Underlying Shares to which such Holder
was theretofore entitled to acquire upon exercise of the Special Warrants then
held. The Company shall not carry into effect any action requiring an adjustment
pursuant to which this Section 5.1 unless all necessary steps have been taken so
that the Holder is thereafter entitled to receive such kind and number of
Underlying Shares, other securities or property. If determined appropriate by
the Company acting reasonably, appropriate adjustments shall be made in the
application of the provisions set forth herein with respect to the rights and
interests of the Holder relative to a Capital Reorganization, to the end that
the provisions set forth herein shall correspond as nearly as may be reasonably
possible to the effect of the Capital Reorganization in relation to any shares,
other securities or other property thereafter deliverable upon the conversion of
any Special Warrants. 

5.2      If and whenever at any time
from the date hereof and prior to the expiry of the Special Warrants, the
Company: 

	 	(a) 	
      subdivides, redivides or changes its outstanding Shares
      into a greater number of shares;

	 	 	 
	 	(b) 	
      consolidates, reduces or combines its outstanding Shares
      into a smaller number of shares; or

	 	 	 
	 	(c) 	
      issues Shares or securities exchangeable for or
      convertible to Shares (“convertible securities”) to the holders of all or
      substantially all of the outstanding Shares by way of a stock dividend
      (other than the issue of Shares or convertible securities to such holders
      as Dividends paid in the Ordinary Course);

(any of the above being a “Common
Share Reorganization”), the number of Underlying Shares issuable upon the
exercise of each Special Warrant is adjusted immediately after the effective
date of the Common Share Reorganization or on the record date for the issue of
Shares or convertible securities by way of stock dividend, by multiplying the
number of Underlying Shares previously obtainable on the exercise of a Special
Warrant by the fraction of which: 

	 	(i) 	
      the numerator is the total number of Shares outstanding
      immediately after the effective or record date of the Common Share
      Reorganization, or, in the case of the issuance of exchangeable or
      convertible securities, the total number of Shares
  outstanding immediately after the effective or record date of the Common
Share Reorganization plus the total number of Shares issuable upon conversion or
exchange of such convertible securities; and

7 

	 	(ii) 	
      the denominator is the total number of Shares outstanding
      immediately prior to the applicable effective or record date of such
      Common Share Reorganization;

and the Company shall make such adjustment successively
whenever any event referred to in this Section 5.2 occurs and any such issue of
Shares or convertible securities by way of a stock dividend is deemed to have
occurred on the record date for the stock dividend for the purpose of
calculating the number of outstanding Shares under this Section 5.2. To the
extent that any convertible securities are not converted into or exchanged for
Shares, prior to the expiration thereof, the number of Underlying Shares
obtainable under each Special Warrant shall be readjusted to the number of
Underlying Shares that is then obtainable based upon the number of Shares
actually issued on conversion or exchange of such convertible securities. 

5.3      If and whenever at any time
from the date hereof and prior to the expiry of the Special Warrants, the
Company shall fix a record date for the issue of rights, options or warrants to
all or substantially all of the holders of Shares under which such holders are
entitled, during a period expiring not more than 45 days after the record date
for such issue (“Rights Period”), to subscribe for or acquire Shares at a price
per share to the holder of less than 95% of the Current Market Price for the
Shares on such record date (any of such events being called a “Rights
Offering”), then the number of Underlying Shares obtainable upon the exercise of
each Special Warrant shall be adjusted effective immediately after the end of
the Rights Period to a number determined by multiplying the number of Shares
obtainable upon the exercise thereof immediately prior to the end of the Rights
Period by a fraction: 

	 	(a) 	
      the numerator of which shall be the number of Shares
      outstanding after giving effect to the Rights Offering and including the
      number of Shares actually issued or subscribed for during the Rights
      Period upon exercise of the rights, warrants or options under the Rights
      Offering; and

	 	 	 
	 	(b) 	
      the denominator of which shall be the aggregate of: (A)
      the number of Shares outstanding as of the record date for the Rights
      Offering, and (B) a number determined by dividing (1) the product of the
      number of Shares issued or subscribed during the Rights Period upon the
      exercise of the rights, warrants, or options under the Rights Offering and
      the price at which such Shares are offered by (2) the Current Market Price
      of the Shares as of the record date for the Rights
  Offering.

5.4      If and whenever at any
time from the date hereof and prior to the conversion of the Special Warrants,
the Company shall issue or distribute to all or to substantially all of the
holders of the Shares: 

	 	(a) 	
      securities of the Company including rights, options or
      warrants to acquire shares of any class or securities exchangeable for or
      convertible into or exchangeable into any such shares or property or
      assets and including evidence of its indebtedness; or

	 	 	 
	 	(b) 	
      any property (including cash) or other
  assets,

and if such issuance or distribution does not constitute
Dividends paid in the Ordinary Course, a Common Share Reorganization or a Rights
Offering (any of such non-excluded events being herein called a “Special
Distribution”), the number of Underlying Shares obtainable upon the exercise of
each Special Warrant shall be adjusted effective immediately after the record
date at which the holders of affected Shares are determined for purposes of the
Special Distribution to a number determined by multiplying the number of
Underlying Shares obtainable upon the exercise thereof in effect on such record
date by a fraction: 

	 	(i) 	
      the numerator of which shall be the number of Shares
      outstanding on such record date multiplied by the Current Market Price of
      the Shares on such record date; and

	 	 	 
	 	(ii) 	
      the denominator of which shall be: (A) the product of the
      number of Shares outstanding on such record date and the Current Market
      Price of the Shares on such record date, less (B) the excess, if any, of
      (1) the fair market value on such record date, as determined by action by
      the directors (whose determination shall be conclusive), to the holders of
      the Shares of such securities or property or other assets so issued or
      distributed in the Special Distribution over (2) the fair market value of the
consideration received therefor by the Company from the holders of the Shares,
as determined by action by the directors (whose determination shall be
conclusive), subject to TSX acceptance.

8 

5.5      In case at any time:

	 	(a) 	
      the Company shall pay any dividend payable in stock upon
      its Underlying Shares or make any distribution to the holders of its
      Underlying Shares;

	 	 	 
	 	(b) 	
      the Company shall offer for subscription pro rata to the
      holders of its Underlying Shares any additional shares or stock of any
      class or other rights;

	 	 	 
	 	(c) 	
      the Company shall make any repayment of capital on, or
      distribution of evidences of indebtedness on, any of its assets (excluding
      cash dividends) to the holders of Shares;

	 	 	 
	 	(d) 	
      there shall be any subdivision, consolidation, capital
      reorganization, or reclassification of the capital stock of the Company,
      or merger, amalgamation or arrangement of the Issuer with, or sale of all
      or substantially all of its assets to, another Company; or

	 	 	 
	 	(e) 	
      there shall be a voluntary or involuntary dissolution,
      liquidation or winding-up of the Company,

the Company shall give to the Holder at least twenty days’
prior written notice of the date on which the books of the Company shall close
or a record shall be established for such dividend, distribution, repayment or
subscription rights, or for determining rights to vote with respect to such
subdivision, consolidation, capital reorganization, reclassification, merger,
amalgamation, arrangement, sale, dissolution, liquidation or winding-up, and in
the case of any such subdivision, consolidation, capital reorganization,
reclassification, merger, amalgamation, arrangement, sale, dissolution,
liquidation or winding-up, at least twenty days’ prior written notice of the
date when the same shall take place. Such notice in accordance with the
foregoing clause shall also specify, in the case of any such dividend,
distribution, repayment or subscription rights, the date on which the holders of
Underlying Shares shall be entitled thereto, and such notice in accordance with
the foregoing shall also specify, in the case of any such subdivision,
consolidation, capital reorganization, reclassification, merger, amalgamation,
arrangement, sale, dissolution, liquidation or winding-up, the date on which the
holders of Underlying Shares shall be entitled to exchange their Underlying
Shares for securities or other property deliverable upon such subdivision,
consolidation, capital reorganization, reclassification, merger, amalgamation,
arrangement, sale, dissolution, liquidation or winding-up as the case may be.
Each such written notice shall be given by first class mail, postage prepaid,
addressed to the Holder at its address as shown on the books of the Company. Any
written notice contemplated by this Section 5.5shall only be delivered after the
public announcement of such dividend, distribution, repayment or subscription
rights, or for determining rights to vote with respect to such subdivision,
consolidation, capital reorganization, reclassification, merger, amalgamation,
arrangement, sale, dissolution, liquidation or winding-up. 

5.6      The Company covenants
and agrees that it will not during the period of any notice given under Section
5.5 close its share transfer books or take any other corporate action which
might deprive the Holder of the opportunity to exercise its Special Warrants;
provided that nothing contained in this Section 5.6 will be deemed to affect the
right of the Company to do or take part in any of the things referred to in
Section5.5. 

5.7      The Company shall from
time to time immediately after the occurrence of any event which requires an
adjustment as provided in Section 5.1, 5.2, 5.3 or 5.4, deliver a notice to the
Holder specifying the nature of the event requiring the adjustment, the amount
of the adjustment necessitated thereby, and setting forth in reasonable detail
the method of calculation and the facts upon which the calculation is based. In
the event of a dispute about such calculation, the certificate shall be
supported by a certificate of the auditor appointed in Section 5.8 verifying
such calculation. 

5.8      In case the Company,
after the date hereof, shall take any action affecting any securities of the
Company, other than as previously set out herein, which in the opinion of the
directors would materially affect the rights and interests of the Holder
hereunder, the number of Underlying Shares or other securities which shall be
issuable on the exercise of the Special Warrants shall be adjusted in such
manner, if any, and at such time as the directors, in their sole discretion,
acting reasonably and in good faith, may determine to be equitable in the
circumstances, provided that no such adjustment will be made unless all
necessary regulatory approvals, if any, have been obtained. In the event of any question arising with respect to any adjustment
provided for herein, such question shall be conclusively determined by an
independent firm of Chartered Professional Accountants appointed by the Company
at its sole discretion (who may not be the Company’s auditors) and any such
determination shall be binding upon the Company and the Holder.

9 

5.9      No adjustment shall be made
in respect of any event described herein, other than the events referred to in
Sections 5.2(a) or 5.2(b), if the Holder is entitled to participate in such
event on the same terms, mutatis mutandis, without amendment, as if the
Holder had exercised the Special Warrants prior to or on the effective date or
record date of such event, subject to the written consent of the TSX (or such
other exchange on which the Underlying Shares may be listed). The adjustments
provided for herein are cumulative and such adjustments shall be made
successively whenever an event referred to herein shall occur, subject to the
limitations provided for herein. No adjustment shall be made in the number or
kind of Underlying Shares or other securities which may be acquired on the
exercise of a Special Warrant unless it would result in a change of at least
one-one hundredth of a Common Share or other security. Any adjustment which may
by reason of this paragraph not be required to be made shall be carried forward
and then taken into consideration in any subsequent adjustment. 

5.10     After any adjustment
pursuant to this Section 5, the term “Underlying Shares” where used in this
Special Warrant Certificate is interpreted to mean securities of any class or
classes which, as a result of such adjustment and all prior adjustments pursuant
to this Section 5, the Holder is entitled to receive upon the exercise of his
Special Warrant, and the number of Underlying Shares obtainable in any exercise
made pursuant to a Special Warrant is interpreted to mean the number of
Underlying Shares or other property or securities a Holder is entitled to
receive, as a result of such adjustment and all prior adjustments pursuant this
Section 5, upon the full exercise of a Special Warrant. 

5.11     Notwithstanding any
adjustments provided for herein or otherwise, the Company shall not be required,
upon the exercise of any Special Warrants, to issue fractional Underlying Shares
or other securities in satisfaction of its obligations hereunder and any
fractions shall be eliminated. To the extent that the Holder would otherwise be
entitled to acquire a fraction of a Common Share or other security, such right
may be exercised in respect of such fraction only in combination with other
rights which in the aggregate entitle the Holder to acquire a whole number of
Underlying Shares or other securities. The Company will not pay any cash
compensation to any Holder for the cancellation of fractional shares.

5.12     As a condition
precedent to the taking of any action which requires an adjustment as provided
for herein, including the number of Underlying Shares obtainable upon the
exercise or deemed exercise thereof, the Company shall take any corporate action
which may in its opinion be necessary in order that the Company or any successor
to the Company has unissued and reserved Shares in its authorized capital and
may validly and legally issue as fully paid and non-assessable all the
Underlying Shares and may validly and legally deliver all other securities or
property which the Holder is entitled to receive on the full exercise of the
Special Warrants in accordance with the provisions hereof. 

	6. 	
      Partial Conversion, Exchange and Replacement of
      Certificates

6.1     In the event any of the
Special Warrant Certificates shall be mutilated, lost, destroyed or stolen, the
Company, subject to applicable law, shall, at the expense of the Holder, issue a
new Special Warrant Certificate of like denomination, date and tenor as the one
mutilated, lost, destroyed or stolen in exchange for and in place of and upon
cancellation of such mutilated Special Warrant Certificate, or in lieu of and in
substitution for such lost, destroyed or stolen Special Warrant Certificate, and
the substituted Special Warrant Certificate shall be in a form approved by the
Company and the Holder thereof shall be entitled to the benefits of the original
Special Warrant Certificate and shall rank equally in accordance with its terms
with all other Special Warrant Certificates issued at the same time as the
original Special Warrant Certificate. 

6.2     The registered Holder of
this Special Warrant Certificate may, at any time prior to the voluntary or
deemed exercise of the Special Warrants, upon surrender hereof to the Company,
exchange this Special Warrant Certificate for other Special Warrant Certificates
entitling the Holder to acquire, in the aggregate, the same number of Underlying
Shares as may be acquired under this Special Warrant Certificate. 

10 

6.3     The holding of the
Special Warrants evidenced by this Special Warrant Certificate shall not
constitute the Holder hereof a shareholder of the Company or entitle the Holder
to any right or interest in respect thereof except as expressly provided in this
Special Warrant Certificate. 

6.4     Prior to the conversion
or deemed conversion, the Special Warrants represented by this Special Warrant
Certificate shall be deemed to be surrendered only upon personal delivery hereof
or, if sent by mail or other means of transmission, upon actual receipt thereof
by the Company.

6.5      Following the full conversion
or deemed conversion of this Special Warrant Certificate, this Special Warrant
Certificate will be cancelled and the rights of the Holder hereunder (other than
the right of the Holder to receive certificates representing the Underlying
Shares issued on such conversion which right will survive until the Holder has
received the certificates) will terminate. Immediately after the conversion or
deemed conversion, this Special Warrant Certificate will be cancelled and the
rights of the Holder hereunder (other than the right of the holder to receive
Underlying Shares issued on conversion or deemed conversion of the Special
Warrant Certificate, which rights will survive until the Holder has received the
Underlying Shares) will terminate. 

6.6     Upon the date of
conversion or deemed conversion of these Special Warrants, the person or persons
in whose name or names the Underlying Shares issuable upon exercise of the
Special Warrants are to be issued shall be deemed for all purposes to be the
holder or holders of record of such Underlying Shares and the Company covenants
that it will cause a certificate or certificates representing such Underlying
Shares to be delivered or mailed to the person or persons listed in a register
of Special Warrant holders kept by the Company or, as applicable, at the address
or addresses specified in the Exercise Form (if the same has been provided to
the Company prior to such mailing) within five (5) business days. 

6.7     The registered Holder of
these Special Warrants may acquire any lesser number of Underlying Shares than
the number of Underlying Shares which may be acquired for the Special Warrants
represented by this Special Warrant Certificate. In such event, the holder,
without charge therefor, shall be entitled to receive a new Special Warrant
Certificate for the balance of the Underlying Shares which may be acquired. No
fractional Underlying Shares will be issued. To the extent that the Holder would
otherwise have been entitled to receive, on the conversion or partial conversion
of Special Warrants, a fraction of a Common Share, the Holder may convert that
right in respect of the fraction only in combination with another Special
Warrant(s) that in aggregate entitle the Holder to purchase a whole number of
Underlying Shares. If not so converted, the Company shall not pay any amounts to
the Holder in satisfaction of the right to otherwise have received a fraction of
a Common Share. 

	7. 	
      Meetings of Special Warrant
  Holders

7.1      The registered Holder of this
Special Warrant Certificate may, at any time prior to the conversion or deemed
conversion of these Special Warrants, convene a meeting of the Special Warrant
holders, if the Holder executes a request for a meeting, signed in one or more
counterparts, by Special Warrant holders entitled to acquire in the aggregate
not less than 10% of the aggregate number of Underlying Shares which could be
acquired pursuant to all the Special Warrants then unconverted and outstanding.
At least ten (10) days prior notice of any meeting of Special Warrant holders
shall be given to the Special Warrant holders in the manner provided for below
and to the Company. Such notice shall state the time when and the place where
the meeting is to be held, shall state briefly the general nature of the
business to be transacted thereat and shall contain such information as is
reasonably necessary to enable the Special Warrant holders to make a reasoned
decision on the matter but it shall not be necessary for any such notice to set
out the terms of any resolution to be proposed. Every such meeting shall be held
in the City of Vancouver, British Columbia, or at such other place as may be
approved or determined by the Company. An individual (who need not be a Special
Warrant holder) designated in writing by the Company shall be Chairman of the
meeting and, if no individual is so designated or if the individual so
designated is not present within fifteen (15) minutes from the time fixed for
the holding of the meeting, the Special Warrant holders present in person or by
proxy shall choose an individual present to be Chairman. At any meeting of the
Special Warrant holders, a quorum shall consist of Special Warrant holders
present in person or by proxy and entitled to purchase at least 10% of the
aggregate number of Underlying Shares which could be acquired pursuant to all
the then outstanding Special Warrants, provided that at least two persons
entitled to vote thereat are personally present. No business shall be transacted
at any meeting unless a quorum is present at the commencement of business. The
Chairman of any meeting at which a quorum of the Special Warrant holders is
present may, with the consent of the meeting, adjourn any such meeting and no
notice of such adjournment need be given except such notice, if any, as the
meeting may prescribe. Representatives of the Company may attend any meeting of
the Special Warrant holders but shall have no vote as such unless in their capacity as a Special Warrant
holder or a proxy for a Special Warrant holder. Questions other than those
required to be determined by extraordinary resolution shall be decided by a
majority of the votes cast on the poll. In addition, the Special Warrant holders
at a meeting shall have the power, exercisable from time to time by
extraordinary resolution:

11 

	 	(a) 	
      to amend, alter or repeal any extraordinary resolution
      previously passed or sanctioned by the Special Warrant holders;

	 	 	 
	 	(b) 	
      to direct or authorize a duly appointed representative of
      the Special Warrant holders to enforce any of the covenants on the part of
      the Company contained in this Special Warrant Certificate or to enforce
      any of the rights of the Special Warrant holders in any manner specified
      in such extraordinary resolution or to refrain from enforcing any such
      covenant or right;

	 	 	 
	 	(c) 	
      to waive any default on the part of the Company in
      complying with any provision of this Special Warrant Certificate, either
      unconditionally or on any condition specified in such extraordinary
      resolution;

	 	 	 
	 	(d) 	
      to restrain any Special Warrant holder from taking or
      instituting any suit, action or proceeding against the Company for the
      enforcement of any of the covenants on the part of the Company in this
      Special Warrant Certificate or to enforce any of the rights of the Special
      Warrant holders;

	 	 	 
	 	(e) 	
      to direct any Special Warrant holder who, as such, has
      brought a suit, action or proceeding to stay or discontinue or otherwise
      deal with the same on payment of the costs, charges and expenses
      reasonably and properly incurred by such Special Warrant holder in
      connection therewith;

	 	 	 
	 	(f) 	
      to assent to any change in or omission from the
      provisions contained in this Special Warrant Certificate or any ancillary
      or supplemental instrument which may be agreed to by the Company;
    and

	 	 	 
	 	(g) 	
      to assent to any compromise or arrangement with any
      creditor or creditors or any class or classes of creditors, whether
      secured or otherwise, and with holders of any shares or other securities
      of the Company.

7.2     An extraordinary
resolution is passed by the affirmative vote of Special Warrant holders entitled
to acquire not less than 66T% of the aggregate number of Underlying Shares which
may be acquired pursuant to all the then outstanding Special Warrants
represented at the meeting and voted on the poll on such resolution. Every
resolution and every extraordinary resolution passed in accordance with the
provisions herein at a meeting of the Special Warrant holders shall be binding
on all the Special Warrant holders, whether present at or absent from such
meeting. This Special Warrant Certificate shall be deemed to be amended to take
into account the effect of all such extraordinary resolutions. Such
extraordinary resolutions shall, where applicable, be binding on the Company
which shall give effect thereto accordingly. 

	8. 	
      Notice

8.1     Any notice to the
Company under the provisions of this Special Warrant shall be valid and
effective if delivered to or if given by registered letter, postage prepaid,
addressed to the Company at: 

	 	For the Company: 
	 	  
	 	15th Floor, 1040 West Georgia
      Street, 
	 	Vancouver, BC, V6E 4H1, 
	 	Attention: Trevor Thomas, 
	 	Tel: (604) 684-6365 
	 	Fax: (604) 684-8092 

12 

	 	  
	 	With a cc to: 

	 	 
	 	McMillan LLP 
	 	Royal Centre, 1055 West Georgia Street 
	 	Suite 1500, PO Box 11117 
	 	Vancouver, BC, V6E 4N7 
	 	Attention: Bernhard Zinkhofer 
	 	Tel: (604) 689-9111 
	 	Fax: (604) 685-7084 

and shall be deemed to have been effectively given on the date
of delivery or, if mailed, five (5) days after actual posting of the notice. The
Company may from time to time notify the holders of Special Warrants in writing
of a change of address which thereafter, until changed by like notice, shall be
the address of the Company for all purposes of this Special Warrant. If, by
reason of a strike, lockout or other work stoppage, actual or threatened,
involving postal employees, any notice to be given to the holder hereunder could
reasonably be considered unlikely to reach its destination, such notice shall be
valid and effective only if it is delivered to the named officer or party to
which it is addressed or, if it is delivered to such party at the appropriate
address provided above, by telecopier or other means of prepaid, transmitted and
recorded communication. 

8.2     Any notice to holders of
Special Warrants under the provisions of this Special Warrant shall be valid and
effective if sent by telecopier or email through electronic means, or letter or
circular through the ordinary post addressed to such holders at their post
office addresses appearing on the register of holders of Special Warrants and
shall be deemed to have been effectively given on the date of delivery or, if
mailed, five (5) days following actual posting of notice. If, by reason of a
strike, lockout or work stoppage, actual or threatened, involving postal
employees, any notice to be given to the holder hereunder could reasonably be
considered unlikely to reach its destination, such notice shall be valid and
effective only if it is delivered personally to such holder or if delivered to
the address of such holder contained in the register of Special Warrants
maintained by the Company, by telecopier or other means of prepaid transmitted
and recorded communication. 

8.3      In the event that any day on
or before which any action is required to be taken hereunder is not a business
day in Vancouver, British Columbia, then such action shall be required to be
taken at or before the requisite time on the next succeeding day that is a
business day. 

	9. 	
      Miscellaneous

9.1      This Special Warrant
Certificate shall be construed in accordance with the laws of the Province of
Ontario and shall be treated in all respects as an Ontario contract. 

9.2     Time shall be of the
essence hereof. 

	10. 	
      Certain
Definitions:

10.1      In addition to other terms
defined in the body hereof, the following terms have the meanings defined below:

		(a) 	
      “beneficially own(s)” means to own within the
      meaning of Section 13(d) of the U.S. Exchange Act and the rules and
      regulations of the SEC promulgated thereunder;

	 	 	 
		(b) 	
      “CDN Qualification Date” generally means the date
      a receipt is issued by Canadian securities regulators for the Final
      Prospectus as described in Section 1(b);

	 	 	 
		(c) 	
      “Common Stock Equivalent” means any securities of
      the Company which would entitle the holder thereof to acquire at any time
      Shares, including, without limitation, any debt, preferred stock,
      warrants, options or other instruments convertible into or exercisable or
      exchangeable for Shares;

	 	 	 
		(d) 	
      “Company” means Northern Dynasty Minerals
    Ltd.

	 	 	 
		(e) 	
      “Current Market Price” of a Share at any date
      means the price per share equal to the weighted average price at which the
      Shares have traded during the five (5) consecutive trading days
    ending five days before such date, on the TSX, or, if the Shares are
not listed thereon, on any stock exchange on which such shares are listed as may
be selected for such purpose by the directors or, if such shares are not listed
on any stock exchange, then on such over-the-counter market in Canada as may be
selected for such purpose by the directors, provided further that if the Common
Shares are not then listed on any Canadian stock exchange or traded in the
over-the counter market, then the Current Market Price shall be determined by
such firm of independent Chartered Professional Accountants as may be selected
by the directors of the Company;

13 

	 	(f) 	
      “Dividends paid in the Ordinary Course” means such
      dividends payable in cash (or in securities, property or assets of
      equivalent value) declared payable on a Share in any fiscal year of the
      Company to the extent that such dividends in the aggregate do not exceed
      in amount or value the greater of:

	 	(i) 	
      100% of the aggregate amount or value of the dividends
      declared payable by the Company on the Shares in the period of 12
      consecutive months ended immediately prior to the first day of such fiscal
      year; and

	 	 	 
	 	(ii) 	
      50% of the consolidated net earnings of the Company,
      before extraordinary items and after dividends paid on any and all
      preferred shares of the Company (if any) for the period of 12 consecutive
      months ended immediately prior to the first day of such fiscal year (such
      consolidated net earnings to be as shown in the audited consolidated
      financial statements of the Company for such 12 month period or, if there
      are no audited financial statements in respect of such period, computed in
      accordance with generally accepted accounting principles consistent with
      those applied in the preparation of the most recent audited consolidated
      financial statements of the Company);

and for such purposes the amount of
any dividends paid in other than cash or shares of the Company shall be the fair
market value of such dividends as determined by the directors; 

	 	(g) 	
      “Final Prospectus” means the final prospectus
      qualifying in certain Provinces of Canada the distribution of the Shares
      to be issued upon the voluntary or deemed exercise of the Special
      Warrants;

	 	 	 
	 	(h) 	
      “Group” means a group of beneficial owners within
      the meaning of Section 13(d) of the U.S. Securities Exchange Act and the
      rules and regulations of the SEC promulgated thereunder;

	 	 	 
	 	(i) 	
      “NYSE MKT” means the NYSE MKT Stock
    Exchange;

	 	 	 
	 	(j) 	
      “Registration Rights Agreement” means the
      agreement attached as Schedule “D” to the Subscription Agreement which is
      to be entered into between the Company and each of the Special Warrant who
      is or becomes a U.S. Person;

	 	 	 
	 	(k) 	
      “Resale Filings” means the Final Prospectus and
      the U.S. Registration Statement;

	 	 	 
	 	(l) 	
      “Resale Filings Termination Date” means for each
      holder of Special Warrants the second anniversary of the issuance date
      shown on the first page of the Special Warrant certificate.

	 	 	 
	 	(m) 	
      “SEC” means the United States Securities and
      Exchange Commission;

	 	 	 
	 	(n) 	
      “Securities Commissions” means, collectively, the
      Canadian securities commission or other securities regulatory authority in
      each of the Provinces where a Final Prospectus is filed;

	 	 	 
	 	(o) 	
      “Securities Laws” means the securities laws,
      regulations, rules, and instruments adopted by the securities regulator as
      applicable in each Designated Province and the U.S. Securities Act and the
      U.S. Exchange Act and the rules and regulations of the SEC promulgated
      under the U.S. Securities Act and the U.S. Exchange Act and the policies
      of the TSX and NYSE MKT;

14 

	 	(p) 	
      “Shares” means common shares without par value in
      the capital of the Company of the type listed on the TSX and NYSE
    MKT;

	 	 	 
	 	(q) 	
      “Subscription Agreement means the subscription
      agreement to purchase Special Warrants dated on or about December 31, 2014
      and executed between Northern Dynasty Minerals Ltd. and the original
      holder of the Special Warrants;

	 	 	 
	 	(r) 	
      “TSX” means the Toronto Stock Exchange;

	 	 	 
	 	(s) 	
      “Underlying Shares” means the Shares to be issued
      on the voluntary or deemed exercise of the Special Warrants;

	 	 	 
	 	(t) 	
      “U.S. Exchange Act” means the U.S. Securities
      Exchange Act of 1934, as amended;

	 	 	 
	 	(u) 	
      “U.S. Person” has the meaning ascribed thereto in
      Rule 902(k) of Regulation S promulgated under the U.S. Securities
    Act;

	 	 	 
	 	(v) 	
      “U.S. Registration Statement” means a registration
      statement on Form F-3 or other appropriate securities registration form
      filed with the SEC to permit the resale within the United States of the
      Underlying Shares; and

	 	 	 
	 	(w) 	
      “U.S. Securities Act” the United States
      Securities Act of 1933, as amended.

VOLUNTARY EXERCISE FORM 

	TO: 	NORTHERN DYNASTY MINERALS LTD.
  

          The
undersigned registered holder of the within Special Warrants hereby irrevocably
exercises the right to acquire Underlying Shares of Northern Dynasty Minerals
Ltd. (the "Company") (or such number of other securities or property to which
Special Warrants entitle the undersigned in lieu thereof or in addition thereto)
in accordance with and subject to the provisions of the annexed Special Warrant
Certificate. 

DATED
this         
    day of :___________________________, 201__. 

	Signature Guaranteed
    		Signature
      (Signature of Special Warrantholder to be the same as appears on the face
      of the Special Warrant Certificate) 
	  	 	  
	  	 	  
	  	 	(Name in Full – Please Print)

Notes: 

	(1) 	
      Underlying Shares will be issued in the name of the
      registered holder and delivered to the address of the registered holder as
      it appears on the Special Warrant register unless otherwise
    directed.

Instructions: The registered holder may exercise its
right to receive Underlying Shares by completing this form and surrendering this
form and the Special Warrant Certificate representing the Special Warrants being
exercised to the Company at its office at 15th Floor, 1040 West
Georgia Street, Vancouver, BC V6E 4H1, Attention: Trevor Thomas. Certificates
for Underlying Shares will be made available for pick-up or, at the request of
the holder, delivered or mailed within five (5) business days after the exercise
of the Special Warrants. If the Exercise Form is signed by a Company, executor,
administrator, curator, guardian, attorney, officer of a Company or any person
acting in a fiduciary or representative capacity, the certificate must be
accompanied by evidence of authority to sign satisfactory to the Company. 

The above signed hereby directs that
the said Underlying Shares be issued and registered as 

follows: 

Name(s) in Full:
______________________________________________________________________________________________________________________________________________________________

Address(es) in Full:
___________________________________________________________________________________________________________________________________________________________

(including postal code)
_________________________________________________________________________________________________________________________________________________________

No. of Underlying Shares:___________________________

Note: If further nominees are intended, please attach (and
initial) schedule giving these particulars. 

BY VOLUNTARILY EXCERCISING THIS SPECIAL WARRANT YOU WILL RECEIVE
UNDERLYING SHARES THAT MAY BE SUBJECT TO RESALE RESRICTIONS

16 

APPENDIX A 

FORM OF DECLARATION FOR REMOVAL OF LEGEND 

	TO: 	Northern Dynasty Minerals Ltd. (the "Company")
    
	 	 
	TO: 	Registrar and transfer agent for the shares of
      the Company 

The undersigned (A) acknowledges that the sale of the
securities of the Company to which this declaration relates is being made in
reliance on Rule 904 of Regulation S under the United States Securities Act of
1933, as amended (the "U.S. Securities Act"), and (B) certifies that (1) the
undersigned is not (a) an "affiliate" of the Company (as that term is defined in
Rule 405 under the U.S. Securities Act) (b) a "distributor" as defined in
Regulation S or (c) an affiliate of a distributor; (2) the offer of such
securities was not made to a person in the United States and either (a) at the
time the buy order was originated, the buyer was outside the United States, or
the seller and any person acting on its behalf reasonably believed that the
buyer was outside the United States, or (b) the transaction was executed on or
through the facilities of the Toronto Stock Exchange and neither the seller nor
any person acting on its behalf knows that the transaction has been prearranged
with a buyer in the United States; (3) neither the seller nor any affiliate of
the seller nor any person acting on their behalf has engaged or will engage in
any directed selling efforts in the United States in connection with the offer
and sale of such securities; (4) the sale is bona fide and not for the purpose
of "washing off" the resale restrictions imposed because the securities are
“restricted securities” (as that term is defined in Rule 144(a)(3) under the U.
S. Securities Act); (5) the seller does not intend to replace such securities
with fungible unrestricted securities; and (6) the contemplated sale is not a
transaction, or part of a series of transactions, which, although in technical
compliance with Regulation S, is part of a plan or scheme to evade the
registration provisions of the U. S. Securities Act. Terms used herein have the
meanings given to them by Regulation S under the U.S. Securities Act. 

	Dated                              
      20__. 	X
      
	  	Signature of individual (if Purchaser is
      an individual) 
	 	 
	  	X
      
	  	Authorized signatory (if Purchaser is not
      an individual) 
	  	  
	  	Name of Purchaser (please print) 
	  	  
	  	Name of authorized signatory (please
      print) 
	  	  
	  	Official capacity of authorized signatory
      (please print) 

Affirmation by Seller’s Broker-Dealer 

We have read the foregoing representations of our customer,
_________________________ (the "Seller") dated _______________________, with
regard to the sale, for such Seller’s account, of the _________________
represented by certificate number ______________ of the Company described
therein, and we hereby affirm that, to the best of our knowledge and belief, the
facts set forth therein are full, true and correct.

	Name of Firm 
	 
	 	 
	                 	Name of Firm 
	 	 
	By: 	 
	                 	Authorized Officer 
	 	 
	Dated: 	                                                           20__.

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