Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - Kirkland Lake Gold Inc. - Exhibit 4.17

DATED 24 June 2004 

 

 

 

 

(1) CANACCORD CAPITAL (EUROPE) LIMITED 

(2) KIRKLAND LAKE GOLD INC. 

(3) THE DIRECTORS 

 

 

________________________________________

NOMINATED
ADVISER AND BROKER AGREEMENT

________________________________________

 

 

 

 

McCarthy Tétrault 
1 Plough Place 
London EC4A 1DE

United Kingdom 

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

 

 

1 

TABLE OF CONTENTS 

	1.    
       INTERPRETATION 	1
      
	 	 
	2.    
       CONDITION 	2
      
	 	 
	3.     
      TERM 	2
      
	 	 
	4.    
       FEES AND EXPENSES 	4
      
	 	 
	5.     
      DUTIES OF THE NOMINATED ADVISER AND BROKER 	5
      
	 	 
	6.    
       DUTIES AND WARRANTIES OF THE COMPANY AND OF THE DIRECTORS 	5
      
	 	 
	7.     
      ADDITIONAL RIGHTS OF CANACCORD 	10
      
	 	 
	8.    
       INDEMNITY 	10
      
	 	 
	9.     
      ENTIRE AGREEMENT 	10
      
	 	 
	10.   
       ASSIGNMENT 	11
      
	 	 
	11.    
      TERMS AND CONDITIONS 	11
      
	 	 
	12.    
      VARIATION OF TERMS 	11
      
	 	 
	13.    
      COUNTERPARTS AND DELIVERY 	11
      
	 	 
	14.    
      NOTICES 	11
      
	 	 
	15.    
      GOVERNING LAW AND SERVICE OF PROCESS 	12
      
	 	 
	16.    
      THIRD PARTY RIGHTS 	12
      
	 	 
	SCHEDULE
      1 - THE DIRECTORS 	13
      
	 	 
	SCHEDULE
      2 - ADDITIONAL TERMS AND CONDITIONS 	14
      
	 	 
	SCHEDULE
      3 - INDEMNITY 	22
      
	 	 
	SCHEDULE
      4 - THE OFFERING 	25
      

i 

THIS AGREEMENT is dated 24 June 2004 and made 

BETWEEN: 

	(1) 	
      CANACCORD CAPITAL (EUROPE) LIMITED (No. 2814897)
      whose registered office is at Brook House, 27 Upper Brook Street, London
      W1K 7QF, United Kingdom (“Canaccord”);

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

	 	 
	(3) 	
      THE DIRECTORS OF THE COMPANY whose names and
      addresses are set out in Schedule 1 (the
  “Directors”)

BACKGROUND 

	(A) 	
      The Company is applying for admission on AIM, a market
      operated by London Stock Exchange plc (the “London Stock
      Exchange”), of its entire issued and outstanding and to be issued
      share capital.

	 	 
	(B) 	
      Canaccord has agreed, on the terms set out in this
      Agreement to act as nominated adviser and broker to the
  Company.

OPERATIVE PROVISIONS 

	1. 	 INTERPRETATION

	 	 	 
	1.1 	 For the purposes of this Agreement, a reference
        to a statutory provision includes a reference to:

	 	 	 
		(a) 	 a statutory amendment, consolidation or re-enactment;

	 	 	 
		(b) 	 statutory instruments or subordinate legislation or
        orders made under the statutory provision; and

	 	 	 
		(c) 	 statutory provisions of which the statutory provision
        is an amendment, consolidation or re-enactment

	 	 	 
		 but does not include a substituted provision.

	 	 	 
	1.2 	 In this Agreement reference to:

	 	 	 
		(a) 	 a person includes a legal or natural person, partnership,
        trust, company, government or local authority department or other body
        (whether corporate or unincorporated);

	 	 	 
		(b) 	 an individual includes, where appropriate, his personal
        representatives;

1 

	 	(c) 	
      the singular includes a reference to the plural and vice
      versa; and

	 	 	 
	 	(d) 	
      one gender includes all
genders.

	1.3 	
      Unless otherwise stated, a reference to a Clause or
      Schedule is a reference to a clause of, or schedule to, this Agreement and
      a reference to this Agreement includes its Schedules, such Schedules
      forming part of this Agreement.

	 	 	 	 
	1.4 	
      Clause headings in this Agreement and in the Schedules
      are for ease of reference only and do not affect its
  construction.

	 	 	 	 
	2. 	
      CONDITION

	 	 	 	 
	2.1 	
      The obligations of Canaccord under this Agreement are
      conditional upon the admission of the entire issued and outstanding and to
      be issued share capital of the Company to trading on AIM, becoming
      effective (“Admission”) pursuant to Rule 6 of the AIM Rules for
      Companies published from time to time by the London Stock Exchange (the
      “AIM Rules”).

	 	 	 	 
	3. 	
      TERM

	 	 	 	 
	3.1 	
      The Company hereby agrees to retain Canaccord, and
      Canaccord agrees to act, as its nominated adviser and broker for a period
      of one year commencing on the date of Admission (the “Commencement
      Date”).

	 	 	 	 
	3.2 	
      Provided that this Agreement has not been terminated
      prior to the first anniversary of the Commencement Date in accordance with
      the terms hereof, the engagement of Canaccord as the Company’s nominated
      adviser and broker on the terms set out in this Agreement shall continue
      thereafter unless and until terminated by the Company or Canaccord giving
      to the other not less than three months prior written notice. In the case
      of a termination, the Company shall give written notice of termination to
      the other parties to the Agreement.

	 	 	 	 
	3.3 	
      Notwithstanding the foregoing:

	 	 	 	 
		(a) 	
      Canaccord shall be entitled to resign as nominated
      adviser and broker at any time (whereupon this Agreement shall terminate
      automatically with immediate effect) upon written notice to the Company
      if:

	 	 	 	 
			(i) 	
      the Company or any Director (or any other director of the
      Company for the time being) is in material breach of its or his
      obligations under this Agreement or under the AIM Rules or shall fail to
      comply with any other agreement, covenant or undertaking given to
      Canaccord, the London Stock Exchange or any other securities regulatory
      authority in any jurisdiction; or

	 	 	 	 
			(ii) 	
      any representation or warranty made to Canaccord by or on
      behalf of the Company or any of the Directors (or any other director(s) of
      the Company

2

for the time being) in or in
connection with this Agreement is untrue, inaccurate or misleading in any
material respect and that representation or warranty is material in relation to
the business of the Company as a whole; 

	 	(b) 	
      the Company shall be entitled to terminate Canaccord as
      its nominated adviser and broker at any time (whereupon this Agreement
      shall terminate automatically with immediate effect) upon written notice
      to Canaccord if:

	 	 	 	 
	 		(i) 	
      Canaccord is in material breach of its obligations under
      this Agreement or under the AIM Rules or shall fail to comply with any
      other agreement, covenant or undertaking given to the Company or, in
      regard to the Company or this Agreement, to the London Stock Exchange or
      any other securities regulatory authority in any jurisdiction;
or

	 	 	 	 
	 		(ii) 	
      any representation or warranty made to the Company by or
      on behalf of Canaccord in or in connection with this Agreement is untrue,
      inaccurate or misleading in any material respect;

	 	 	 	 
	 	(c) 	
      this Agreement shall terminate automatically with
      immediate effect if:

	 	 	 	 
	 		(i) 	
      the Company becomes insolvent, bankrupt or has any
      dissolution, winding-up, liquidation or receivership order is made in
      respect of it or if the Company files a petition or proposal to take
      advantage of any act of insolvency, or if the Company makes or seeks to
      make any arrangement with its creditors or if an arrangement is made
      pursuant to the Bankruptcy and Insolvency Act (Canada), the
      Winding Up and Restructuring Act (Canada) or the Companies
      Creditors Arrangement Act (Canada);

	 	 	 	 
	 		(ii) 	
      if Canaccord becomes insolvent, bankrupt or has any
      winding up, liquidation, receivership or administration order made in
      respect of it or if notice of intention to appoint an administrator is
      given by Canaccord, its directors or by a qualifying floating charge
      holder (as defined in paragraph 14 of Schedule B1 to the Insolvency Act
      1986), or if Canaccord makes or seeks to make any arrangement with its
      creditors or passes a resolution for its winding up or a petition is
      presented for its winding-up or liquidation;

	 	 	 	 
	 	(d) 	
      this Agreement shall terminate automatically with
      immediate effect if the Company’s shares cease to be admitted to trading
      on AIM;

	 	 	 	 
	 	(e) 	
      Canaccord shall be entitled to resign at its sole
      discretion at any time on not less than 30 days’ prior written notice to
      the Company should it consider its name or reputation to be likely to be
      prejudiced by continuing as the Company’s nominated adviser and/or
      broker.

	3.4 	
      Termination of this Agreement for any reason whatsoever
      pursuant to this Clause 3 shall be without prejudice to and shall not be
      by way of limitation of any claims otherwise available to any party
      arising out of the antecedent breach of any other party. Any of the
      provisions of this Agreement that are expressed to take effect in whole or
      in part on or

3

		
      after termination or are capable of having effect after
      termination shall remain in full force and effect despite termination,
      including but not limited to Clause 4 hereof, paragraphs 4 and 5 of
      Schedule 2 and the indemnity contained in Schedule 3 shall continue in
      full force and effect notwithstanding any such termination.

	 	 
	4. 	
      FEES AND EXPENSES

	 	 
	4.1 	
      The Company shall pay to Canaccord the following
      admission fees (the “Admission Fees”) (plus, if applicable, value
      added tax (“VAT”)):

	 	(a) 	
      A corporate finance fee of £125,000 payable as
      follows:

	 	 	 	 
	 		(i) 	
      £25,000 the receipt of which is hereby acknowledged by
      Canaccord; and

	 	 	 	 
	 		(ii) 	
      if the Company completes a debt or equity financing
      within 12 months of Admission, including for the avoidance of doubt the
      offering of the Company’s common shares on terms substantially similar to
      those set out in Schedule 4 (a “Financing”), the remaining £100,000
      to be paid from the proceeds of the Financing £75,000 of which may be
      set-off against a corresponding amount of any commissions owing to
      Canaccord pursuant to such Financing; or

	 	 	 	 
	 		(iii) 	
      if the Company does not complete a Financing within 12
      months of Admission, the remaining £100,000 will be due 12 months from the
      date of Admission.

	4.2 	
      The Company shall pay to Canaccord for its services under
      this Agreement in respect of the period ending on the first anniversary of
      the Commencement Date, a fee (the “Nomad Fee”) at the annual rate
      of £50,000, which amount shall be payable in two instalments at six
      monthly intervals, the first such instalment to be paid on the
      Commencement Date and the second instalment to be paid six months
      thereafter. In the event of termination of this Agreement, Canaccord shall
      not be liable to repay any part of its Nomad Fee which has been paid in
      advance.

	 	 
	4.3 	
      In addition to the Nomad Fee, Canaccord shall be entitled
      to reimbursement of all costs, charges and expenses, reasonably incurred
      by it in connection with the performance of its services under this
      Agreement and (prior to its termination) the engagement letter dated 4 May
      2004 between the Company and Canaccord in respect of Canaccord’s
      appointment as nominated advisor and broker in connection with the
      Admission (the “Engagement Letter”).

	 	 
	4.4 	
      The Company and Canaccord shall prior to the expiration
      of the first anniversary of the Commencement Date, seek to agree in good
      faith the amount of the Nomad Fee for the next following 12 months
      thereafter, which shall not be less than £50,000 in any event.

	 	 
	4.5 	
      The Admission Fees and all costs, charges and expenses
      referred to in Clauses 4.1, 4.2 and 4.3 shall be payable, in each case, in
      pounds sterling together with VAT, if applicable, in accordance with the
      terms and conditions set out in Schedule 2.

4

	5. 	
      DUTIES OF THE NOMINATED ADVISER AND
  BROKER

	 	 
	5.1 	
      For the period during which Canaccord acts as the
      Company’s nominated adviser and broker, it shall, without prejudice to its
      rights under paragraphs 3 and 6 of Schedule 2, but subject to paragraph
      6.14, release, without delay, to the Company’s Regulatory Information
      Service, all information received from the Company required to be so
      released under the AIM Rules provided that such release is, in form and
      substance, acceptable to Canaccord. Canaccord will also, subject to
      receipt of the relevant documents from the Company and for so long as it
      remains the nominated adviser and broker of the Company, maintain a file
      relating to the Company, available at all times to the London Stock
      Exchange, containing the documents required to be available therein by the
      London Stock Exchange.

	 	 
	5.2 	
      Canaccord will, as the Company’s nominated adviser,
      provide general advice to the Company and the Directors in relation to
      matters concerning the AIM Rules, requirements of the London Stock
      Exchange and the Panel on Takeovers and Mergers and to other matters
      relevant to a company traded on AIM. Canaccord will otherwise carry out
      the responsibilities of nominated adviser as set out in the AIM Rules. Any
      further advice required and requested by the Company from Canaccord in
      relation to any specific transactions or matters over and above the
      foregoing shall be the subject of further specific fees to be agreed in
      advance between the Company and Canaccord in relation to each such
      specific transaction or matter.

	 	 
	5.3 	
      Canaccord will, as the Company’s broker, carry out the
      responsibilities of its broker as set out in the AIM Rules.

	 	 
	5.4 	
      Canaccord will keep confidential all information provided
      to it pursuant to clause 6 in accordance with the provisions set out in
      paragraph 5 of Schedule 2.

	 	 
	6. 	
      DUTIES AND WARRANTIES OF THE COMPANY AND OF THE
      DIRECTORS

	 	 
	6.1 	
      The Directors confirm that they have received copies of
      the AIM Rules setting out, inter alia, the continuing obligations
      of companies whose securities are traded on AIM and that they,
      collectively and individually, accept full responsibility for the
      Company’s compliance with the AIM Rules. The Directors also confirm that
      they will procure that such continuing obligations (from time to time in
      force) will be observed by the Company and will use their best efforts to
      procure such observance by the Directors. The Company will and each
      Director will use its best efforts to procure that any future director of
      the Company undertakes with Canaccord to be bound by the terms of this
      Agreement as though he were a Director at the date of its execution and
      party hereto.

	 	 
		
      Each of the Company and the Directors hereby undertakes
      to forthwith comply subject to applicable corporate and securities laws
      and prudent business judgment with all proper and reasonable directions
      given by Canaccord as a nominated adviser and broker in relation to
      compliance with the AIM Rules. For the avoidance of doubt, the
      obligations

5

		
      of each Director under this Clause 6.1 shall cease to
      have effect upon such Director ceasing to be a Director of the
    Company.

	 	 	 
	6.2 	
      The Directors confirm that Canaccord has advised them as
      to the nature of their responsibilities and obligations as directors of a
      company whose shares are to be admitted to AIM and to ensure compliance by
      the Company with the AIM Rules in accordance with Rule 37 and Schedule 6
      of the AIM Rules. In particular, each of the Directors agrees to disclose
      to the Company all information which it needs in order to comply with the
      requirements of Rule 15 and Schedule 5 of the AIM Rules (notification of
      changes in the interests of directors and significant shareholders in the
      securities of the Company) and each Director agrees not to deal in any
      securities of the Company admitted to trading on AIM (the “AIM
      Securities”) during a “close period” (as defined in the AIM Rules) or
      at any other time if to do so might constitute an offence under the
      Criminal Justice Act 1993 or constitute market abuse under the Financial
      Services and Markets Act 2000.

	 	 	 
	6.3 	
      Each Director undertakes to Canaccord that should he wish
      to dispose of any interest in an AIM Security through AIM during the
      period of time ending on the first anniversary of Admission, such Director
      shall:

	 	 	 
		(a) 	
      not dispose of such interest in AIM Securities through
      AIM without giving Canaccord not less than 1 Business Day’s notice (as
      defined in clause 14.2) in order to maintain an orderly market in its AIM
      Securities; and

	 	 	 
		(b) 	
      offer Canaccord the opportunity to place such AIM
      Securities on terms no less favourable than those terms offered by any
      broker appointed by such Director for the purpose of such disposal. If
      Canaccord does not place such AIM Securities within 3 Business Days then
      such Director shall be permitted to dispose of his interest in the AIM
      Securities in any manner permissible by applicable law.

	 	 	 
	6.4 	
      The Company undertakes with Canaccord that it will and
      each of the Directors (so long as he remains a director of the Company)
      undertakes to procure (insofar as he is able so to do) that the Company
      will at all times during the continuance of this Agreement:

	 	 	 
		(a) 	
      provide Canaccord with such financial information,
      including (without limitation) quarterly unaudited financial statements,
      as it may require, to enable Canaccord to monitor the financial
      performance of the Company and without prejudice to Clause 6.4 (d) below,
      give reasonable advance notice to Canaccord of any proposed announcement
      of profits or losses and dividends in respect of the shares of the
      Company;

	 	 	 
		(b) 	
      provide Canaccord with copies of the audited consolidated
      annual financial statements of the Company, approved by the Directors and
      the auditors for the time being of the Company (the “Accounts”), at
      the same time as they are published in accordance with Canadian securities
      laws and in any event not later than 180 days from the end of the
      financial period to which they relate, together with a draft preliminary
      announcement of such results (the “Results Announcement”) and
      provide Canaccord with copies of the interim results
(the

6

	 		
      “Interims”) within 90 days of the end of the
      relevant period or such shorter period as may be required under Canadian
      securities laws;

	 	 	 
	 	(c) 	
      forthwith upon request, provide Canaccord with complete
      and accurate copies of all papers and other information laid before any
      board meeting and of the minutes of any board meeting;

	 	 	 
	 	(d) 	
      not (nor shall any of its subsidiaries from time to time,
      nor shall any person (other than Canaccord) on its behalf, except as may
      be required by the London Stock Exchange or any other regulatory authority
      or under any applicable laws or by any provision of this Agreement) make
      any public announcement, public statement or public communication (other
      than any trade announcement in the ordinary course of business regarding
      the Company or any subsidiary or associate of the Company and other than
      in relation to the Accounts, Results Announcements and Interims) in
      relation to its business or the market for or value of its securities,
      whether in response to enquiries or otherwise, without first consulting
      with Canaccord about the form and contents of such public announcement,
      public statement or public communication. Any announcement, statement or
      communication which the Company is required to make by the London Stock
      Exchange or any other regulatory authority or under any applicable laws or
      by any provision of this Agreement as aforesaid shall be released as
      expeditiously as required and provided the Company has first used its best
      efforts in the circumstances (i) to consult Canaccord regarding the
      contents thereof, (ii) to provide Canaccord with a draft thereof, if any;
      and (ii) to provide Canaccord with an opportunity to comment on any such
      draft;

	 	 	 
	 	(e) 	
      not enter into any commitment or agreement or arrangement
      or knowingly do or permit to be done on its behalf any other act or thing
      which, in any such case, gives rise to an obligation of the Company to the
      London Stock Exchange or to any other authority by virtue of any law, rule
      or regulation to which the Company is subject, to make any announcement
      regarding the same or which (without prejudice to the generality of the
      foregoing) gives rise to any obligation (whether contingent or otherwise)
      to allot or issue any share or loan capital of the Company or to grant any
      options to acquire shares of the Company or securities exchangeable or
      convertible into shares of the Company or cancellation of shares or
      options, without prior consultation with Canaccord;

	 	 	 
	 	(f) 	
      notify Canaccord in advance of, and discuss with
      Canaccord, any matter which it may be necessary to make known to the
      investing public in order to enable the investing public to appraise the
      position of the Company and to avoid the establishment of a false or
      disorderly market in its securities;

	 	 	 
	 	(g) 	
      forward to Canaccord for comment proofs of all documents
      to be sent to holders of any of the Company’s securities;

	 	 	 
	 	(h) 	
      comply with the AIM Rules and inform Canaccord forthwith
      upon becoming aware of any breach of the AIM Rules by the Company and/or
      any Director or a

7

	 		
      future director of the Company and to request the advice
      and guidance of Canaccord in relation to all matters relevant to the
      Company’s compliance with the AIM Rules;

	 	 	 	 
	 	(i) 	
      ensure that at all times one of the Directors or the
      Company Secretary shall be authorised by the Company and responsible (on
      behalf of the Company) for communicating with Canaccord with regard to all
      matters which are the subject of this Agreement; and

	 	 	 	 
	 	(j) 	
      forward to Canaccord, upon filing with the U.S.
      Securities and Exchange Commission, Canadian securities authorities or the
      Toronto Stock Exchange, any document required to be filed or delivered
      pursuant to Canadian or U.S. securities laws, including, without
      limitation:

	 	 	 	 
	 		(i) 	
      Press releases and material change reports;

	 	 	 	 
	 		(ii) 	
      Directors circulars and proxy solicitation
  forms;

	 	 	 	 
	 		(iii) 	
      Notices of shareholders meetings;

	 	 	 	 
	 		(iv) 	
      Annual information forms;

	 	 	 	 
	 		(v) 	
      Annual Reports;

	 	 	 	 
	 		(vi) 	
      Prospectuses, including short form or shelf
      prospectuses;

	 	 	 	 
	 		(vii) 	
      Annual and interim Financial Statements including
      management’s discussion and analysis accompanying such
  statements;

	6.5 	 Each of the Directors warrants and undertakes to Canaccord
        that the particulars concerning him provided to Canaccord in the director’s
        questionnaire provided by Canaccord (together with the Toronto Stock Exchange
        Personal Information Form attached thereto) are true and accurate in all
        material respects and that there is nothing concerning him which is not
        contained therein and which is or might reasonably be expected to be material
        to be known to Canaccord in acting as nominated adviser and/or broker
        to the Company and that he has provided Canaccord with all information
        (in relation to himself) required to be disclosed by paragraph (f) of
        Schedule 2 of the AIM Rules.

	 	 
	6.6 	 Subject to clause 6.7 below, the Company and each of
        the Directors (in relation to information and documents supplied by him
        and not by any other Director) severally (and not jointly) represent and
        warrant to Canaccord that all information and documents relating to the
        Company disclosed or supplied by that Director or the Company or any agent
        of any of them to Canaccord or its agents during the term of or in the
        course of the negotiations leading up to this Agreement, including without
        limitation the admission document prepared in accordance with the AIM
        Rules with respect to the Admission (the “Admission Document”),
        are true and accurate, and there is no fact not disclosed which would
        render any such information or documents untrue, inaccurate or misleading.

8

	6.7 	
      The Company represents and warrants and each of the
      Directors (in relation to himself and not any other Director) severally
      (and not jointly) represent and warrant to Canaccord that all information
      disclosed or supplied by a Director, in relation to himself, to Canaccord
      or Canaccord’s agents during the term of or in the course of the
      negotiations leading up to this Agreement, including without limitation
      the Admission Document is true and accurate, and that there is no fact not
      disclosed which would render any such information or documents untrue,
      inaccurate or misleading.

	 	 
	6.8 	
      The Company and each of the Directors (in relation to
      himself) shall provide Canaccord with all such information and documents
      as Canaccord may require to enable it to comply with its obligations to
      the London Stock Exchange under Rule 37 of the AIM Rules.

	 	 
	6.9 	
      The Company and each of the Directors (in relation to
      himself) warrant that this Agreement has been duly authorised, executed
      and delivered by the Company and the Directors and is a legally binding
      obligation of them enforceable against them in accordance with its terms,
      subject to bankruptcy and insolvency laws and other laws generally
      affecting the enforceability of creditors’ rights, the availability of the
      equitable remedies of injunction and specific performance and the
      enforceability of rights to indemnity;

	 	 
	6.10 	
      The Company and each of the Directors (in relation to
      himself) warrant that the execution and delivery of this Agreement, the
      fulfilment of its terms by the Company and the Directors do not and will
      not result in a breach of applicable laws of any jurisdiction of the
      articles, by-laws or resolutions of the Company or any agreement or
      instrument to which the Company is a party or by which it is contractually
      bound;

	 	 
	6.11 	
      The Company and the Directors warrant that there are no
      actions, suits, proceedings or inquiries threatened in writing or, to the
      best of their knowledge, pending (and not commenced) in writing against or
      affecting the Company at law or in equity or before or by any federal,
      provincial or state, municipal or other governmental department,
      commission, board, bureau, agency or instrumentality , domestic or
      foreign;

	 	 
	6.12 	
      The Company and the Directors warrant that the Company is
      a “reporting issuer” not in default in the provinces of British Columbia,
      Alberta or Ontario or has equivalent status within the meaning of the
      Securities Act (British Columbia), Securities Act (Alberta)
      and the Securities Act (Ontario);

	 	 
	6.13 	
      The Company and the Directors warrant that the Company
      has complied, in all material respects, with the requirements of
      applicable Canadian and U.S. securities laws.

	 	 
	6.14 	
      Canaccord acknowledges that the Company is subject to
      timely disclosure obligations imposed by the Toronto Stock Exchange and
      Canadian and U.S. securities regulatory authorities and that the Company
      shall be required to comply with the obligations in Clauses 5 and 6 to
      provide information and documentation to Canaccord on a timely basis only
      to the extent that doing so would not cause the Company to breach
      applicable laws and regulations of the Toronto Stock Exchange or any other
      applicable securities

9

		
      regulatory authority. Nothing in the foregoing shall be
      taken to mean that the Company is not bound to comply in full with the AIM
      Rules in a timely manner.

	 	 
	7. 	
      ADDITIONAL RIGHTS OF CANACCORD

	 	 
	7.1 	
      For the period during which Canaccord acts as the
      Company’s nominated adviser and broker, the Company agrees that Canaccord
      shall be notified of all meetings of the board of directors of the Company
      at which any transactions described in Clause 6.4(e) will be considered
      and provided with minutes of all such meetings by the Company as soon as
      practicable thereafter.

	 	 
	7.2 	
      The Company acknowledges that, during the term of this
      Agreement, in relation to any takeover or other corporate activity
      proposed by the Company or any of its subsidiaries from time to time that
      Canaccord will be required to advise the Company in its capacity as
      nominated adviser and broker. The Company also agrees during the term of
      this Agreement to consider appointing (but shall not be bound to appoint)
      Canaccord for other advisory roles in relation to any such takeover or
      other corporate activity.

	 	 
	7.3 	
      The Company agrees, that for the period commencing on 1
      July 2004 and ending on the first anniversary of Admission, in the absence
      of any conflict of interest which would disqualify Canaccord from so
      acting to offer Canaccord the opportunity to act as the Company’s placing
      agent and/or underwriter on any fundraising on terms to be negotiated
      between Canaccord and the Company, whether institutional or from a
      strategic corporate partner and not to appoint any other adviser in
      relation to any proposed fundraising unless the offer shall have been
      first declined by Canaccord. For the avoidance of doubt if Canaccord
      declines the terms of such offer the Company shall not appoint any other
      adviser on terms more favourable than those terms offered to Canaccord
      without first re-offering such new terms to Canaccord. If Canaccord
      accepts an offer from the Company, it reserves the right to introduce
      another placing agent and/or underwriter to assist in any such
      transaction.

	 	 
	8. 	
      INDEMNITY

	 	 
		
      The provisions of Schedule 3 shall apply.

	 	 
	9. 	
      ENTIRE AGREEMENT

	 	 
	9.1 	
      This Agreement and the Schedules set out the entire
      agreement of the parties hereto in relation to the appointment of
      Canaccord as the Company’s nominated adviser and broker.

	 	 
	9.2 	
      All other previous letters or agreements between any of
      the parties hereto relating to the appointment of Canaccord as nominated
      adviser and broker to the Company shall have no further effect (save for
      the Engagement Letter, which shall terminate and have no further effect
      concurrent with Admission).

10

	10. 	
      ASSIGNMENT

	 	 
		
      The Agreement, and the rights and obligations arising
      under it, shall not be assignable nor transferable without the prior
      written agreement of each of the other parties hereto.

	 	 
	11. 	
      TERMS AND CONDITIONS

	 	 
		
      The additional terms and conditions set out in Schedule 2
      of this Agreement shall be incorporated herein and in the event of any
      inconsistency between the terms of this Agreement and the additional terms
      and conditions set out in Schedule 2 this Agreement shall
  prevail.

	 	 
	12. 	
      VARIATION OF TERMS

	 	 
		
      No variation of any provision of this Agreement shall be
      effective unless made in writing and signed on behalf of Canaccord and by
      a director on behalf of the Company and the Directors if such variation
      affects their respective obligations under this Agreement.

	 	 
	13. 	
      COUNTERPARTS AND DELIVERY

	 	 
		
      This Agreement may be entered into in any number of
      counterparts (and by facsimile) and by the parties to it on separate
      counterparts each of which when executed and delivered shall be an
      original, but all the counterparts shall together constitute one and the
      same instrument.

	 	 
	14. 	
      NOTICES

	 	 
	14.1 	
      Any notice or other communication required or authorised
      to be given by any party to another in connection with this Agreement
      shall be in writing.

	 	 
	14.2 	
      Subject to Clause 15 below, any notice or other
      communication to be given hereunder shall either by sent by facsimile
      transmission, by first class post or by registered airmail to the relevant
      address(es) of the relevant party referred to in this Agreement or any
      other address notified for this purpose and shall be conclusively deemed
      to have been given, if sent by facsimile transmission, at the time of
      printout of a transmission report showing that the correct number of pages
      has been sent without error (unless such notice would otherwise be deemed
      to be given on a day which is not a business day (which for the avoidance
      of doubt means a day other than a Saturday or Sunday when banks are open
      for business in the U.K. and Canada, (a “Business Day”)) or after
      5.30 pm (London time) on any Business Day, in which case it shall instead
      be deemed to have been given at 9.00 am (London time) on the next
      following Business Day. If sent by first class post notice shall deemed to
      be given on the third Business Day after the date of posting and in the
      case of registered airmail five Business Days from the date of posting.
      Subject to clause 15, a notice to the Directors or to any of them shall be
      sent to such Director(s) at the

11

		
      principal office of the Company for the time being or
      such other address notified for this purpose pursuant to this Clause
      14.2.

	 	 
	15. 	
      GOVERNING LAW AND SERVICE OF PROCESS

	 	 
	15.1 	
      This Agreement shall be governed by and construed in
      accordance with English Law and the parties hereby irrevocably submit to
      the exclusive jurisdiction of the English courts in connection with any
      matter arising therefrom.

	 	 
	15.2 	
      The Company and each of the Directors irrevocably appoint
      Field Fisher Waterhouse, 35 Vine Street, London EC3N 2AA as their process
      agent to receive on their behalf service of any process in any proceedings
      in England. Such service shall be deemed completed on delivery to Field
      Fisher Waterhouse, marked for the attention of Anthony Brockbank (whether
      or not such process is forwarded to and received by the Company or the
      appropriate Director (as the case may be). If for any reason either such
      process agent ceases to be able or willing to act as process agent, the
      Company and each of the Directors irrevocably agree to appoint a
      substitute process agent acceptable to Canaccord and to deliver to
      Canaccord a copy of the new process agent's acceptance of that appointment
      within 30 days of such acceptance.

	 	 
	15.3 	
      The parties irrevocably consent to any process in a legal
      action or proceedings in connection with this Agreement being served on
      them in accordance with the provisions of this Agreement relating to the
      service of notices. Nothing contained in this Agreement shall affect the
      right to serve process in any other manner permitted by law.

	 	 
	16. 	
      THIRD PARTY RIGHTS

	 	 
		
      Save for the provisions of Schedule 3 (which may be
      enforced by a “Canaccord Associate” as that term is defined in Schedule
      3), no term of this Agreement shall be enforceable under the Contracts
      (Rights of Third Parties) Act 1999 by a person who is not a party, but
      this does not affect any right or remedy of a third party which exists or
      is available apart from under that Act.

EXECUTED and DELIVERED as a Deed by the Company
and under hand by the Directors and Canaccord on the day and year first before
written. 

12

SCHEDULE 1 - THE DIRECTORS 

	Name 
	Address 

	D Harry W Dobson 

	Lylestane Farm 
Lauder, Berwickshire 
TD2
      6QY Scotland 

	Brian A Hinchcliffe 

	62 Flint Avenue 
Larchmont, NY 
USA 10538
      

	Brian E Bayley 

	4143 Ranger Crescent 
North Vancouver, BC
      
Canada V7R 3K8 

	S Paul Kostuik 

	601 – 2288 Bellevue Avenue 
West Vancouver,
      BC 
Canada V7V 1C6 

	George A Milton 

	Feorus 
Kenmare West 
Ireland 

	A Murray Sinclair 

	1937 Knox Road 
Vancouver, BC 
Canada V6T
      1S5 

13

SCHEDULE 2 - ADDITIONAL TERMS AND CONDITIONS 

	1. 	
      Application

	 	 
		
      These are the additional terms and conditions on and
      subject to which Canaccord will provide to the Directors’ and the Company
      the services described in the nominated adviser and broker agreement of
      which these additional terms and conditions form part (the
      “Agreement”). Where there is any conflict between the express terms
      of the main body of the Agreement and these terms and conditions, the main
      body of the Agreement will prevail. References to the “Engagement”
      in this Schedule 2 and in Schedule 3 are references to the engagement of
      Canaccord as the Company’s nominated adviser and broker on the terms and
      conditions set out in the Agreement and (prior to its termination) the
      Engagement Letter.

	 	 
	2. 	
      Canaccord’s Advice

	 	 
		
      The Company agrees that any advice rendered by Canaccord
      is provided solely for the purposes of the Engagement and for the
      Company’s and the Directors’ benefit and may not be used or relied on for
      any other purpose without Canaccord’s prior written consent. No reference
      to Canaccord or to Canaccord’s advice is to be made in any publication
      made by the Company or by any subsidiary or associated company of the
      Company (together the “Group”) or on behalf of any such company,
      without Canaccord’s prior consent unless required by any legal or
      regulatory obligation. Unless it is agreed otherwise Canaccord will not be
      responsible for giving or obtaining specialist advice or services in areas
      which are outside Canaccord’s expertise such as legal (other than
      compliance with the AIM Rules), accounting, taxation or actuarial matters.
      Where specialist advice is obtained by the Company in areas which are
      outside Canaccord’s expertise, Canaccord will be entitled to rely on such
      advice without having any responsibility to verify its accuracy.

	 	 
	3. 	
      Provision of Information

	 	 
		
      The Company agrees that it will provide all information
      concerning the business and affairs of the Group which it reasonably
      believes is relevant to Canaccord for the provision of the services
      pursuant to the Agreement and to provide all such other information as
      Canaccord may reasonably request. The Company undertakes that all
      information so provided will be true, accurate and complete in all
      material respects, will not be misleading, and will not contain any
      material omissions. The Company agrees with Canaccord that Canaccord will
      not be responsible for the verification of any such information and shall
      accept no responsibility for its accuracy. The Company undertakes that
      every statement of opinion or intention therein of the Company will be
      honestly held and fairly based and that if anything occurs within a
      reasonable time thereafter to render any such statement untrue, unfair or
      misleading, it will promptly notify Canaccord and take all such steps as
      Canaccord may reasonably require to correct such statement.

	 	 
		
      The Company will ensure that any financial promotion
      which Canaccord is asked to approve on behalf of the Company for the
      purposes of complying with the Financial

14

		
      Services and Markets Act 2000 and any other document or
      announcement issued to the London Stock Exchange, shareholders or
      otherwise:

	 	 
	3.1 	
      is true, accurate and complete in all material respects
      and is not misleading and all expressions of opinion, intention or
      expectation it contains are made on reasonable grounds, and that there are
      no facts known to the Company the omission of which would make any such
      advertisement, document or announcement misleading; and

	 	 
	3.2 	
      contains all information required by and otherwise
      complies with all applicable laws and regulations.

	 	 
		
      The Company accepts that Canaccord is entitled to require
      the Company to make such modifications or amendments thereto as Canaccord
      considers necessary or desirable or to withhold its approval to, or refuse
      to issue, any such document or announcement in its absolute
    discretion.

	 	 
		
      If requested by Canaccord to do so, the Company shall
      provide such evidence as Canaccord may reasonably require confirming that
      any document or announcement which it is asked to approve or issue is true
      and complete in all material respects and not misleading and complies with
      all applicable law. The Company will be responsible for the accuracy and
      completeness of such document or announcement and shall be responsible for
      verifying the information contained in it.

	 	 
		
      The Company agrees to inform Canaccord of any significant
      steps which the Company or any of its agents or advisers propose to take
      in respect of the Company’s business or the Engagement and will ensure
      that Canaccord is appropriately informed of all material developments in
      relation thereto which arise during the term of the Agreement.

	 	 
	4. 	
      Fee and Expenses

	 	 
		
      In consideration of Canaccord accepting the Engagement
      the Company agrees to pay the Admission Fees, the Nomad Fee, costs,
      charges and expenses referred to in Clause 4 of the main body of the
      Agreement and this Schedule within fourteen days of the date of receipt of
      the invoice in respect thereof, including (without limitation) all
      reasonable out- of-pocket expenses properly incurred by Canaccord
      (including but not limited to travel and hotel expenses), all stamp duty
      and stamp duty reserve tax and any related fines, costs, penalties or
      interest otherwise payable by Canaccord (except on securities transactions
      for its own account or where such arise due to the negligence or default
      of Canaccord), all fees and expenses payable to the London Stock Exchange
      or any other exchange or regulatory body, the reasonable fees and
      out-of-pocket expenses of all legal, accountancy, and other professional
      advisers including the reasonable fees and out-of- pocket expenses of
      Canaccord’s legal advisers and of receiving bankers and registrars, and
      printing, posting and advertising expenses properly incurred by Canaccord.
      Interest will accrue on any overdue amount at the rate of four per cent.
      over the base rate for the time being of Barclays Bank
  plc.

15

		
      The Company will promptly upon request by Canaccord
      reimburse to Canaccord the amount of any such reasonable out-of-pocket
      costs, charges and expenses which Canaccord may have paid on behalf of the
      Company in connection with, or during the course of, the Engagement and
      Canaccord is hereby authorised to deduct from any amounts received or held
      by it on the Company’s behalf the amount(s) of any such reasonable,
      out-of-pocket costs, charges and expenses.

	 	 
		
      Where any such amount is reimbursed to Canaccord, the
      Company will in addition pay to Canaccord in respect of VAT:

	 	 
	4.1 	
      if any reimbursement constitutes part of the
      consideration for any supply of services to the Company, such amount as
      equals any input tax payable by Canaccord in respect of the same costs or
      expenses for which Canaccord is unable to take any credit or make any
      recovery, together with the amount of any VAT for which Canaccord is
      properly liable in respect of that supply, and

	 	 
	4.2 	
      if any costs or expenses constitute disbursements
      incurred by Canaccord as agent on behalf of the Company, any VAT
      thereon.

	 	 
	5. 	
      Confidentiality

	 	 
		
      Each of Canaccord and the Company undertakes to keep
      confidential any information concerning the business, affairs, directors
      or employees of the other which comes into its possession during the
      Engagement and not to use any such information for any purpose other than
      that for which it was provided. This obligation of confidentiality shall
      not apply to information which (a) is or becomes public otherwise than
      through a breach of that obligation (b) is obtained from any third party
      otherwise than in breach of any duty of confidentiality owed by that third
      party or (c) is required to be disclosed by order of any court of
      competent jurisdiction or the requirement of any relevant regulatory body
      or by any applicable law or regulation nor where disclosure is necessary
      in connection with the Engagement. The Company acknowledges and accepts
      that Canaccord or a Canaccord Associate (as defined in Schedule 3) may be
      required or that it may be appropriate for Canaccord or a Canaccord
      Associate to disclose information and deliver documentation relating to
      the Company and the Engagement to governmental or regulatory agencies and
      authorities and expressly authorises any such disclosure and delivery. All
      correspondence or documentation written by or contributed to by Canaccord
      or a Canaccord Associate in relation to the Engagement and in Canaccord’s
      custody or control will remain the sole property of Canaccord.

	 	 
		
      The Company acknowledges and accepts that Canaccord may
      be prohibited from disclosing, or that it may be inappropriate for
      Canaccord to disclose, information to the Company by reason of law or
      duties of confidentiality owed to other persons.

	 	 
		
      Canaccord will not disclose confidential client
      information outside of the Canaccord Group (as defined in paragraph 8
      below) unless required to do so by law or a regulatory authority, to
      facilitate the business you have asked us to undertake or with your
      consent.

16

		
      The information held on the Company and the Directors is
      confidential and will only be disclosed under the terms of the Data
      Protection Act 1998 (the “DPA”). By signing this Agreement, the
      Company and the Directors will be consenting to the transmittal of such
      information outside of the European Union and the European Economic Area
      where that is permitted by the DPA.

	 	 
	6. 	
      Approval of Documents

	 	 
		
      The Company agrees that it will not, and it will procure
      that none of its officers, directors, employees, representatives and
      agents from time to time, subsidiaries, holding company (if any) and each
      of the subsidiaries of such holding company and each of their respective
      officers, directors, employees, representatives and agents from time to
      time (together referred to as “Company Associates”) will, publish
      or permit or procure the publication of any document, statement or
      communication in connection with or relating to the Engagement without the
      prior consent of Canaccord such consent not to be unreasonably withheld or
      delayed. Canaccord will not be responsible for ensuring the truth,
      accuracy, completeness or fairness of any statement or publications made
      by or on behalf of the Company or any of its other advisers in connection
      with the Engagement hereunder, this being the sole responsibility of the
      Company and its directors. Save where such have been issued or approved by
      Canaccord, the Company will ensure that every announcement, public
      statement or document made or published by the Company or any Company
      Associate or on its behalf relating to the Engagement will comply with all
      applicable laws and regulations. If for any reason any such document,
      statement or communication is made without the consent or approval of
      Canaccord the Company acknowledges that Canaccord will be entitled to
      publish any documents, statements or communications as it thinks fit in
      Canaccord’s interests.

	 	 
	7. 	
      Powers of Canaccord

	 	 
		
      The appointment by the Company of Canaccord in connection
      with the Engagement confers on Canaccord all powers, authorities and
      discretion on the Company’s behalf which are necessary for, reasonably
      incidental to, or customary in the provision of the services to be
      provided pursuant to the Engagement. The Company hereby agrees to ratify
      and confirm everything which Canaccord will lawfully and reasonably do in
      the exercise of any powers, authorities and discretions expressly
      conferred upon it for the purposes of the Engagement.

	 	 
	8. 	
      Material Interests

	 	 
		
      Canaccord is part of a group of companies (the
      “Canaccord Group”). This group is involved in a range of investment
      and other financial businesses. Canaccord operates as a separate entity
      within this group, and as such has rules and procedures which prohibit the
      disclosure of confidential information about its clients to other members
      of the Canaccord Group for use in their businesses.

	 	 
		
      The Company accepts that Canaccord, in agreeing to
      provide services to it, does not require any other member of the Canaccord
      Group to restrict its activities in any way nor

17

		
      to provide the Company or Canaccord with any information
      whatsoever about, or derived from, those activities.

	 	 
		
      So far as Canaccord’s own activities are concerned,
      potential conflicts may on occasion arise between its duties to the
      Company and to other of its clients and between its duties to the Company
      and its own interests. Canaccord has established, as permitted under the
      rules of The Financial Services Authority, “Chinese Wall” procedures and
      an independence policy designed to ensure that in providing corporate
      finance services to any particular client, the individuals are insulated
      from information known to individuals working in other
divisions.

	 	 
		
      The Company accepts that Canaccord and any member of the
      Canaccord Group may, for reasons such as are described above, have
      interests or duties which conflict with the Company’s interests and would
      otherwise conflict with the duties owed by Canaccord to the Company.
      Canaccord will be obliged to disregard any such interest when it is acting
      for the Company. The Company also accepts that, in acting for it,
      Canaccord will not be required to disclose to it, nor to use for its
      benefit, any information known to Canaccord which (i) belongs to or is
      confidential to another client of Canaccord or (ii) belongs to or is
      confidential to any other member of the Canaccord Group or (iii) which
      belongs to or is confidential to the Canaccord Group and relates to some
      other part of its business than the provision of corporate finance
      services.

	 	 
	9. 	
      Company’s Money

	 	 
		
      Funds belonging to the Company which come under the
      custody or control of Canaccord during the provisions of its services
      hereunder will unless otherwise agreed with the Company be treated by
      Canaccord as client’s money for the purposes of the Financial Services
      Authority Client Asset Rules where those Rules require Canaccord to do
      so.

	 	 
	10. 	
      Authorisation

	 	 
		
      Except where the Company expressly instructs Canaccord
      otherwise, Canaccord is entitled to assume that instructions (whether or
      not in writing and howsoever communicated) have been properly authorised
      by the Company if they are given or purport to be given by an individual
      or person who is or purports to be and is reasonably believed by Canaccord
      to be a director, employee or authorised agent of the Company.

	 	 
	11. 	
      Legal and Regulatory Requirements

	 	 
		
      The Company undertakes that it has and it will maintain
      all necessary consents and authorisations required by it for Canaccord to
      carry out the Engagement. The Company agrees that it will comply and will
      procure that all Company Associates will comply with all relevant laws and
      regulations in any relevant jurisdiction in relation to the Engagement
      applicable to it and them including, in relation to the United Kingdom, if
      and to the extent so applicable the Companies Acts, the Financial Services
      and Markets Act 2000, the Public Offers of Securities Regulations 1995,
      the Criminal Justice Act 1993, the City Code on Takeovers and Mergers, the
      Substantial Acquisitions Rules, the

18

		
      instructions of the Panel on Take-overs and Mergers and
      the Rules and Regulations of the London Stock Exchange (including the AIM
      Rules).

	 	 	 
		
      The Company undertakes to obtain appropriate advice in
      respect of all laws and regulations which may be applicable to it in the
      UK or any other jurisdiction in connection with the Engagement and to
      communicate such advice to Canaccord if it is or may be relevant to the
      carrying out by Canaccord of its services to the Company.

	 	 	 
		
      In carrying out its obligations to the Company pursuant
      to the Agreement, Canaccord is subject to (as well as the range of
      applicable laws) a number of rules and regulations and the requirements of
      a number of regulators. Particular examples are the rules and regulations
      of the London Stock Exchange, the Panel on Takeovers and Mergers, The
      Financial Services Authority and the Bank of England. The Company agrees
      that Canaccord’s duties to it will not restrict Canaccord’s freedom to
      take all steps which Canaccord considers to be necessary to comply with
      the laws, rules and regulations applicable to Canaccord.

	 	 	 
	12. 	
      Conduct of the Engagement

	 	 	 
	12.1 	
      The Company agrees that it will inform Canaccord in
      advance of any significant steps which the Company or any of its agents or
      advisers propose to take in respect of the Engagement and will ensure that
      Canaccord is fully informed of all material developments which arise
      during the course of the Engagement. In particular the Company will
      consult Canaccord before:

	 	 	 
		(a) 	
      any dealings take place in its securities, or those of
      any company in relation to which Canaccord is advising the Company, by the
      Company, or its Directors and employees and to the extent that it becomes
      aware or should have become aware of any such dealings by its directors or
      employees (and connected persons within the meaning of section 346 of the
      Companies Act 1985); or

	 	 	 
		(b) 	
      any other step is taken by the Company or any member of
      the Group which may have an effect on the terms of, or the conduct of, the
      Engagement.

	 	 	 
	12.2 	
      The Company agrees that it will take all such steps, give
      all such undertakings and do or procure to be done all such things as may
      be necessary to comply with the requirements of the London Stock Exchange
      in connection with, or during the course of, the Engagement.

	 	 	 
	13. 	
      Transactions in Investments

	 	 	 
		
      Any transactions in investments undertaken by Canaccord
      for or on behalf of the Company will be undertaken subject to the Rules of
      the Financial Services Authority and the rules and customs of the exchange
      or market and any clearing house on or through which such transactions are
      undertaken, settled or executed.

19

	14. 	
      Use of Sub-Agents

	 	 
		
      Canaccord may in providing services to the Company
      hereunder employ such sub-agents (including any Canaccord Associate as
      defined in Schedule 3) as it may reasonably determine and on such terms
      and on such conditions as it may reasonably determine and the fees and
      expenses of any such sub-agent will be paid or reimbursed by the Company
      pursuant to paragraph 4 above.

	 	 
	15. 	
      Status of the Company

	 	 
		
      The Company will be treated by Canaccord as an
      intermediate customer (as defined by the Rules of the Financial Services
      Authority) in respect of the Engagement.

	 	 
	16. 	
      Illegality

	 	 
		
      If any part of the Agreement is or becomes or is declared
      illegal, invalid or unenforceable for any reason whatsoever by any court
      of competent jurisdiction, such part will be deemed to be deleted,
      provided always that if any such deletion substantially affects or alters
      the commercial basis of these terms and conditions, the parties will
      negotiate in good faith to amend and modify them as may be necessary or
      desirable in the circumstances.

	 	 
	17. 	
      Amendments

	 	 
		
      These terms and conditions are subject to change at any
      time by Canaccord sending to the Company a written notice describing the
      relevant change(s) and such change(s) will become effective on the date
      specified in the notice, which will be on or after the date on which the
      notice is deemed to be received by the Company. No such change will affect
      any legal rights or obligations which may have previously accrued to or
      been incurred by Canaccord or the Company.

	 	 
	18. 	
      Force Majeure

	 	 
		
      In the event of any failure, interruption or delay in the
      performance of any person’s obligations hereunder resulting from acts,
      events or circumstances not reasonably in that person’s control,
      including, but not limited to, industrial disputes, acts or regulations of
      any governmental or supranational bodies or authorities, breakdown,
      failure or malfunction of any telecommunications or computer services,
      that person will not be liable or have any responsibility of any kind for
      any loss or damage incurred or suffered by any other person as a result
      thereof.

	 	 
	19. 	
      Recording of telephone conversations

	 	 
		
      Canaccord may use voice recording procedures when
      receiving instructions on orders or when giving advice. Such recordings
      will be the sole property of Canaccord and will be kept confidential other
      than to assist in the resolution of any relevant dispute or as required by
      law or other regulatory authority. In either case, where
  reasonably

20

		
      practicable, Canaccord will endeavour to give prior
      notice of such disclosure to the Company.

	 	 
	20. 	
      City directories

	 	 
		
      Unless advised to the contrary, Canaccord may nominate
      the Company for inclusion as a client of Canaccord in reputable
      directories of financial advisory and stockbroking relationships and when
      requested so to do, the Company agrees to consent to its inclusion
      therein.

	 	 
	21. 	
      Money Laundering Regulations

	 	 
	21.1 	
      The Company agrees that it will provide to Canaccord such
      evidence of its identity and that of any Company Associate and any of
      their respective directors, shareholders, promoters and controllers as
      Canaccord may reasonably require in order to comply with Canaccord’s
      obligations under any legislation and regulations against money
      laundering, terrorism and drug trafficking.

	 	 
	21.2 	
      Canaccord may terminate the Engagement if the Company
      fails to comply with any of the provisions of paragraph 22.1 and may at
      any time make such disclosures to any relevant competent authority as
      Canaccord sees fit as a result of any such failure or otherwise if it
      suspects that the Company or any other company or person referred to in
      paragraph 22.1 is involved in money laundering.

21

SCHEDULE 3 - INDEMNITY 

	1. 	
      In consideration of the services to be provided by
      Canaccord in connection with the Engagement the Company (and for the
      avoidance of doubt not the Directors in their personal capacity) hereby
      irrevocably agrees with Canaccord for itself and, on the basis that
      Canaccord shall enjoy an absolute discretion as to the enforcement of any
      claim under this indemnity, as trustee for each and every Canaccord
      Associate (as defined in paragraph 5 below) to indemnify and to hold
      Canaccord and each Canaccord Associate harmless from and against all or
      any losses, charges, expenses, claims, actions, damages, liabilities,
      demands or proceedings whatsoever brought or established against Canaccord
      or any Canaccord Associate by any person, government, governmental agency
      or regulatory body whatsoever and against all losses, costs, charges,
      expenses or taxes which Canaccord or any Canaccord Associate may suffer or
      incur (including but not limited to all such losses, costs, charges or
      expenses suffered or incurred in (i) responding to, disputing or defending
      any claim, action, liability, demand or proceedings as aforesaid
      (including the aggregate amount paid in reasonable settlement of any
      actions, suits, proceedings or claims); (ii) appealing against any
      judgment, award or decision of any court, tribunal, arbitrator or
      regulatory or other authority; (iii) connection with any investigation
      conducted by on or behalf of any authority; (iv) establishing its right to
      be indemnified pursuant to this paragraph; and (v) in seeking advice as to
      any claim, action, liability, demand, proceedings or investigation
      aforesaid) and which in any such case arises, directly or indirectly, out
      of or in connection with:

	 	 
	1.1 	
      any publication, statement or communication not
      containing or being alleged not to contain all information required to be
      stated therein or being alleged to be untrue, inaccurate, incomplete or
      misleading or as having been made negligently or otherwise without the
      required standard of skill and care or reasonableness; or

	 	 
	1.2 	
      the provision by Canaccord or any sub-agent appointed by
      Canaccord of services to the Company or any Company Associate pursuant to
      the Engagement or otherwise arising by reason of or in connection with the
      Engagement; or

	 	 
	1.3 	
      any breach by the Company of any of its obligations
      under, or any of the terms and conditions of, the Agreement; or

	 	 
	1.4 	
      any breach or alleged breach of the laws or regulations
      of any country including any rule or regulation which does not have the
      force of law,

	 	 
		
      and which does not in any such case arise from (i) the
      finally judicially determined fraud, negligence or wilful default of
      Canaccord or the Canaccord Associate concerned; or (ii) a material breach
      by Canaccord or the Canaccord Associate concerned of its duties or
      obligations under the Engagement, the Financial Services and Markets Act
      2000 or the Rules of the Financial Services Authority.

	 	 
	2. 	
      All sums payable to Canaccord or any Canaccord Associate
      under the Agreement will be paid free and clear of all deductions or
      withholdings unless the deduction or withholding is required by law, in
      which event the Company will pay such additional amount as
  will

22

		
      be required to ensure that the net amount received by
      Canaccord or that Canaccord Associate will equal the full amount which
      would have been received by it had no such deduction or withholding been
      made.

	 	 
	3. 	
      If the United Kingdom Inland Revenue or any other taxing
      authority brings into charge to tax any sum payable to Canaccord or any
      Canaccord Associate by way of reimbursement pursuant to the Agreement then
      the amount so payable will be grossed up by such amount as will ensure
      that after deduction of the tax so chargeable there will be left a sum
      equal to the amount that would otherwise be payable hereunder as a result
      of such reimbursement or indemnity.

	 	 
	4. 	
      No claim will be made against Canaccord or any Canaccord
      Associate to recover any loss or damage which the Company may suffer or
      incur by reason of the carrying out by Canaccord of its obligations under
      the Agreement provided that such loss or damage does not arise from the
      finally judicially determined negligence or wilful default of Canaccord or
      the Canaccord Associate concerned.

	 	 
	5. 	
      References herein to “Canaccord Associate(s)” are
      to:

	 	 
	5.1 	
      Canaccord's officers, directors and employees from time
      to time;

	 	 
	5.2 	
      Canaccord’s subsidiaries and holding companies (if any)
      and each of the subsidiaries of any such holding companies and each of
      their respective officers, directors and employees from time to time;
      and

	 	 
	5.3 	
      (to the extent that they are not included in
      sub-paragraphs 5.1 and 5.2 of this paragraph 5) persons connected with
      Canaccord (as such expression is defined in the Rules of The Financial
      Services Authority) as regards any transaction contemplated by the
      Engagement.

	 	 
	6. 	
      If Canaccord or any Canaccord Associate receives notice
      of any claim in connection with the Engagement, Canaccord will, upon
      becoming aware of the same, insofar as may be consistent with the terms of
      any relevant insurance policy, and provided that any action taken as
      hereafter mentioned will not in Canaccord’s view be (i) prejudicial to any
      obligation of confidentiality or other legal obligation which Canaccord or
      any Canaccord Associate owes to any third party; or (ii) against the best
      interests of any Canaccord Associate give written notice to the Company
      and subject to Canaccord and all Canaccord Associates being indemnified to
      Canaccord’s reasonable satisfaction against all liabilities, losses, costs
      and expenses which might be incurred as a result of taking such action as
      hereafter mentioned, Canaccord will, and so far as it is able procure that
      each Canaccord Associate will, give such information in relation to the
      claim, fact or circumstance as the Company may reasonably request and
      (insofar as is practicable in the circumstances) will consult with and
      have regard to the Company’s views expressed in writing in relation
      thereto.

23

	7. 	
      This indemnity is in addition to any rights which
      Canaccord or any Canaccord Associate may have by virtue of any other
      existing or future deed or document or at common law, statute or otherwise
      including, but not limited to, any right of contribution.

	 	 
	8. 	
      This indemnity will be governed by and construed in
      accordance with the laws of England and the Company irrevocably submits to
      the exclusive jurisdiction of the English courts in connection with any
      matter arising therefrom.

24

SCHEDULE 4 - THE OFFERING 

	Issuer: 	
      Kirkland Lake Gold Inc. (the “Company”).

	  	
       

	Agent: 	
      Canaccord Capital (Europe) Limited. 

	  	
       

	Offering: 	
      Placing of New Common Shares, by way of an Institutional
      Placing. 

	  	
       

	Amount: 	
      Up to £10 million on a reasonable endeavours basis, or
      such other amount as agreed between the Company and the Agent. 

	  	
       

	Price: 	
      In the context of the market, as mutually agreed by the
      Company and the Agent. 

	  	
       

	Jurisdiction: 	
      Sales to European investors, under applicable
      regulations. 

	  	
       

	Admission: 	
      The Common Shares of the Company are currently listed on
      the Toronto Stock Exchange in Canada (TSX : KLG). Prior to the Offering,
      the Company intends to admit its shares to trading on the Alternative
      Investment Market, subject to approval by the London Stock Exchange.
    

	  	
       

	Commission: 	
      The Company will pay cash commission of 6.0 per cent. on
      the gross proceeds of the Offering, payable on Closing. The Agent will be
      entitled to broker warrants equal to 5 per cent. of the securities of the
      Company sold pursuant to the Offering. Each broker warrant will entitle
      the holder to acquire one common share of the Company at the Offering
      price for a period of 18 months from Closing. 

	  	
       

	Use of Proceeds: 	
      The proceeds will be used, inter alia, to provide
      working capital for the Company. 

	  	
       

	Syndicate: 	
      As mutually agreed by the Company and Canaccord,
      additional placing agents may be invited to participate in a syndicate to
      place shares in the Company pursuant to the Offering. In the event of a
      syndicate being formed Canaccord will not be required to allocate more
      than 25 per cent. of the shares to be placed to syndicate members.
  

	  	
       

	Closing Date: 	
      31 July 2004 or such other date as mutually agreed by the
      Company and the Agent. 

25

	Signed by 	)	
	duly authorised for and on behalf of 	)	
	CANACCORD CAPITAL (EUROPE) LIMITED 	)	                   ....................................
    
	  	 	  
	  	 	  
	EXECUTED and DELIVERED 	)	
	as a DEED by KIRKLAND LAKE GOLD INC. 	)	
	acting by its duly authorised signatories: 	)	                   ....................................
    
	  	 	           
             Title: 
	  	 	  
	  	 	  
	  	 	                   ....................................
    
	  	 	           
             Title: 

.................................... 
Signed by D Harry W Dobson 

.................................... 
Signed by Brian A
Hinchcliffe 

.................................... 
Signed by Brian E Bayley 

.................................... 
Signed by S Paul Kostuik 

.................................... 
Signed by George A Milton 

.................................... 
Signed by A Murray Sinclair 

26Filed by Automated Filing Services Inc. (604) 609-0244 - Kirkland Lake Gold Inc. - Exhibit 4.18

DATED              29
  July 2004 

 

 

 

 

 

 

KIRKLAND LAKE GOLD INC. 

- and - 

CANACCORD CAPITAL (EUROPE) LIMITED 

 

 

_________________________________________

AGENCY
AGREEMENT 
_________________________________________

 

 

 

McCarthy Tétrault
1 Plough Place 
London 
EC4A 1DE 

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

TABLE OF CONTENTS 

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

AGENCY AGREEMENT 

This Agreement dated as of 29 July 2004 is made 

BETWEEN: 

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

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

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

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

NOW THEREFORE the parties agree as follows: 

	1. 	
      DEFINITIONS

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

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

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

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

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

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

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

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

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

- 2 - 

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

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

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

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

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

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

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

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

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

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

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

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

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

- 3 - 

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

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

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

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

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

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

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

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

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

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

“TSX” means the Toronto Stock
Exchange; 

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

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

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

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

- 4 - 

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

	2. 	
      APPOINTMENT OF AGENT

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

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

	 	 	 
	3. 	
      AGENT’S COMPENSATION

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

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

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

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

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

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

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

- 5 - 

	4. 	
      COMPLIANCE WITH SECURITIES LAWS BY THE
      CORPORATION

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

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

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

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

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

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

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

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

- 6 - 

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

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

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

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

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

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

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

	6. 	
      MATERIAL OR SIGNIFICANT CHANGE DURING
      DISTRIBUTION

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

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

- 7 - 

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

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

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

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

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

	7. 	
      OTHER COVENANTS, REPRESENTATIONS AND WARRANTIES OF THE
      CORPORATION

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

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

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

- 8 - 

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

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

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

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

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

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

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

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

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

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

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

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

- 9 - 

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

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

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

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

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

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

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

- 10 - 

	8. 	
      CLOSING MATTERS

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

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

	 	 
	9. 	
      CONDITIONS

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

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

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

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

- 11 - 

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

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

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

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

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

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

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

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

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

- 12 - 

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

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

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

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

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

	 	 	 
	10. 	
      ADDITIONAL COVENANTS

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

	 	 	 
	11. 	
      RIGHTS OF TERMINATION

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

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

- 13 - 

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

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

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

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

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

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

- 14 - 

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

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

	 	 	 
	12. 	
      INDEMNIFICATION

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

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

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

- 15 - 

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

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

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

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

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

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

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

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

- 16 - 

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

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

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

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

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

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

- 17 - 

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

	13. 	
      CONTRIBUTION

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

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

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

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

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

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

- 18 - 

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

	14. 	
      SEVERABILITY

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

	 	 	 
	15. 	
      EXPENSES

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

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

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

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

	 	 
	16. 	
      DATA PROTECTION

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

- 19 - 

	17. 	
      SURVIVAL

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

	 	 
	18. 	
      TIME OF THE ESSENCE

	 	 
		
      Time shall be of the essence of this Agreement.

	 	 
	19. 	
      GOVERNING LAW AND VENUE

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

	 	 
	20. 	
      CURRENCY

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

	 	 
	21. 	
      NOTICE

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

	 	 
		
      If to the Corporation, addressed and sent
  to:

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

Attention:        Sandra
  Lee, Corporate Secretary 

  Fax:                   1-604-681-4692

- 20 - 

with a copy to: 

Field Fisher Waterhouse 
35 Vine
Street 
London EC3N 2AA 

Attention:        Anthony
  Brockbank 

  Fax:                   +44
  (0)20 7488 0084 

If to the Agent, addressed and sent to:

Canaccord Capital (Europe) Limited

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

Attention:        Robin
  Birchall 

  Fax:                   +44
  (0)20 7518 2785 

with a copy to: 

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

Attention:        Robert
  J Brant 

  Fax:                   +44
  (0)20 7822 1555 

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

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

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

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

- 21 - 

	22. 	
      CONFLICT OF INTEREST

	 	 	 
	22.1 	
      The Corporation:

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

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

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

	23. 	
      THIRD PARTY BENEFICIARIES

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

	 	 
	24. 	
      ENTIRE AGREEMENT

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

	 	 
	25. 	
      ANNOUNCEMENTS

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

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

- 22 - 

	26. 	
      COUNTERPARTS/FACSIMILE SIGNATURES

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

	 	 
		
      [The remainder of this page has been intentionally
      left blank]

- 23 - 

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

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

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