Document:

Klondex Mines Ltd. - Exhibit 4.1 - Filed by newsfilecorp.com

 

 

 

 

Authorized by resolution of the shareholders on: June 14, 2005

Effective Date and Time: October 5, 2005 12:48 pm Pacific Time 

Incorporation number: BC0102408 

KLONDEX MINES LTD. 
(the “Company”) 

ARTICLES 

INDEX 

	PART 	ARTICLE 	SUBJECT 
	  	  	  
	1.
      	INTERPRETATION 
	  	  	  
	  	1.1 	Definitions 
	  	1.2 	Business
      Corporations Act and Interpretation Act Definitions Applicable
      
	  	  	  
	2. 	SHARES
    AND SHARE CERTIFICATES 
	  	  	  
	  	2.1 	Authorized
      Share Structure 
	  	2.2 	Form of Share Certificate 
	  	2.3 	Shareholder
      Entitled to Certificate or Acknowledgment 
	  	2.4 	Delivery by Mail 
	  	2.5 	Replacement of
      Worn Out or Defaced Certificate or Acknowledgement 
		2.6 	Replacement of Lost, Stolen or Destroyed Certificate or
      Acknowledgment 
	  	2.7 	Splitting
      Share Certificates 
	  	2.8 	Certificate Fee 
	  	2.9 	Recognition of
      Trusts 
	  	  	  
	3. 	ISSUE
    OF SHARES 
	  	  	  
	  	3.1 	Directors
      Authorized 
	  	3.2 	Commissions and Discounts 
	  	3.3 	Brokerage
    
	  	3.4 	Conditions of Issue 
	  	3.5 	Share Purchase
      Warrants and Rights 
	  	  	  
	4. 	SHARE
    REGISTERS 
	  	  	  
	  	4.1 	Central
      Securities Register 
	  	4.2 	Closing Register 
	  	  	  
	5.
      	SHARE TRANSFERS 
	  	  	  
	  	5.1 	Registering Transfers 
	  	5.2 	Form of
      Instrument of Transfer 
	  	5.3 	Transferor Remains Shareholder 
	  	5.4 	Signing of
      Instrument of Transfer 

	  	5.5 	Enquiry as
      to Title Not Required 
	  	5.6 	Transfer Fee 
	  	  	  
	6. 	TRANSMISSION OF
    SHARES 
	  	  	  
	  	6.1 	Legal Personal
      Representative Recognized on Death 
	  	6.2 	Rights of
      Legal Personal Representative 
	  	  	  
	7.
      	PURCHASE OF SHARES 
	  	  	  
	  	7.1 	Company
      Authorized to Purchase Shares 
	  	7.2 	Purchase When Insolvent
    
	  	7.3 	Sale and
      Voting of Purchased Shares 
	  	  	  
	8.
      	BORROWING POWERS 
	  	  	  
	  	8.1 	Company
      Authorized to Borrow 
	  	  	  
	9.
      	ALTERATIONS 
	  	  	  
	  	9.1 	Alteration
      of Authorized Share Structure 
	  	9.2 	Special Rights and
      Restrictions 
	  	9.3 	Change of
      Name 
	  	9.4 	Other Alterations 
	  	  	  
	10. 	MEETINGS OF
    SHAREHOLDERS 
	  	  	  
	  	10.1 	Annual General Meetings
    
	  	10.2 	Resolution
      Instead of Annual General Meeting 
	  	10.3 	Calling of Meetings of
      Shareholders 
	  	10.4 	Notice for
      Meetings of Shareholders 
	  	10.5 	Record Date for Notice
    
	  	10.6 	Record Date
      for Voting 
	  	10.7 	Failure to Give Notice and
      Waiver of Notice 
	  	10.8 	Notice of
      Special Business at Meetings of Shareholders 
	  	  	  
	11.
      	PROCEEDINGS AT MEETINGS OF SHAREHOLDERS
    
	  	  	  
	  	11.1 	Special
      Business 
	  	11.2 	Special Majority 
	  	11.3 	Quorum
    
	  	11.4 	One Shareholder May
      Constitute Quorum 
	  	11.5 	Other
      Persons May Attend 
	  	11.6 	Requirement of Quorum
  
	  	11.7 	Lack of
      Quorum 
	  	11.8 	Lack of Quorum at Succeeding
      Meeting 
	  	11.9 	Chair
  
	  	11.10 	Selection of Alternate Chair
      
	  	11.11 	Adjournments
      
	  	11.12 	Notice of Adjourned Meeting
      
	  	11.13 	Decisions by
      Show of Hands or Poll 
	  	11.14 	Declaration of Result
  
	  	11.15 	Motion Need
      Not be Seconded 
	  	11.16 	Casting Vote 
	  	11.17 	Manner of
      Taking Poll 

ii

	  	11.18
      	Demand
      for Poll on Adjournment 
	  	11.19
      	Chair
      Must Resolve Dispute 
	  	11.20
      	Casting
      of Votes 
	  	11.21
      	Demand
      for Poll 
	  	11.22
      	Demand
      for Poll Not to Prevent Continuance of Meeting 
	  	11.23
      	Retention
      of Ballots and Proxies 
	  	  	  
	12.
      	VOTES
    OF SHAREHOLDERS 
	  	  	  
	  	12.1
      	Number
      of Votes by Shareholder or by Shares 
	  	12.2
      	Votes
      of Persons in Representative Capacity 
	  	12.3
      	Votes
      by Joint Holders 
	  	12.4
      	Legal
      Personal Representatives as Joint Shareholders 
	  	12.5
      	Representative
      of a Corporate Shareholder 
	  	12.6
      	Proxy
      Provisions Do Not Apply to All Companies 
	  	12.7
      	Appointment
      of Proxy Holders 
	  	12.8
      	Alternate
      Proxy Holders 
	  	12.9
      	Proxy
      Holder Need Not Be Shareholder 
	  	12.10
      	Deposit
      of Proxy 
	  	12.11
      	Validity
      of Proxy Vote 
	  	12.12
      	Form
      of Proxy 
	  	12.13
      	Revocation
      of Proxy 
	  	12.14
      	Revocation
      of Proxy Must Be Signed 
	  	12.15
      	Production
      of Evidence of Authority to Vote 
	  	  	  
	13.
      	DIRECTORS
    
	  	  	  
	  	13.1
      	First
      Directors; Number of Directors 
	  	13.2
      	Change
      in Number of Directors 
	  	13.3
      	Directors’
      Acts Valid Despite Vacancy 
	  	13.4
      	Qualifications
      of Directors 
	  	13.5
      	Remuneration
      of Directors 
	  	13.6
      	Reimbursement
      of Expenses of Directors 
	  	13.7
      	Special
      Remuneration for Directors 
	  	13.8
      	Gratuity,
      Pension or Allowance on Retirement of Director 
	  	  	  
	14.
      	ELECTION
    AND REMOVAL OF DIRECTORS 
	  	  	  
	  	14.1
      	Election
      at Annual General Meeting 
	  	14.2
      	Consent
      to be a Director 
	  	14.3
      	Failure
      to Elect or Appoint Directors 
	  	14.4
      	Places
      of Retiring Directors Not Filled 
	  	14.5
      	Directors
      May Fill Casual Vacancies 
	  	14.6
      	Remaining
      Directors Power to Act 
	  	14.7
      	Shareholders
      May Fill Vacancies 
	  	14.8
      	Additional
      Directors 
	  	14.9
      	Ceasing
      to be a Director 
	  	14.10
      	Removal
      of Director by Shareholders 
	  	14.11
      	Removal
      of Director by Directors 
	  	  	  
	15.
      	ALTERNATE
    DIRECTORS 
	  	  	  
	  	15.1
      	Appointment
      of Alternate Director 
	  	15.2
      	Notice
      of Meetings 
	  	15.3
      	Alternate
      for More Than One Director Attending Meetings 

iii

	  	15.4
      	Consent
      Resolutions 
	  	15.5
      	Alternate
      Director an Agent 
	  	15.6
      	Revocation
      or Amendment of Appointment of Alternate Director 
	  	15.7
      	Ceasing
      to be an Alternate Director 
	  	15.8
      	Remuneration
      and Expenses of Alternate Director 
	  		  
	16.
      	POWERS
    AND DUTIES OF DIRECTORS 
	  		  
	  	16.1
      	Powers
      of Management 
	  	16.2
      	Appointment
      of Attorney of Company 
	  		  
	17.
      	DISCLOSURE
    OF INTEREST OF DIRECTORS
	  		  
	  	17.1
      	Obligation
      to Account for Profits 
	  	17.2
      	Restrictions
      on Voting by Reason of Interest 
	  	17.3
      	Interested
      Director Counted in Quorum 
	  	17.4
      	Disclosure
      of Conflict of Interest or Property 
	  	17.5
      	Director
      Holding Other Office in the Company 
	  	17.6
      	No
      Disqualification 
	  	17.7
      	Professional
      Services by Director or Officer 
	  	17.8
      	Director
      or Officer in Other Corporations 
	  		  
	18.
      	PROCEEDINGS
    OF DIRECTORS 
	  		  
	  	18.1
      	Meetings
      of Directors 
	  	18.2
      	Voting
      at Meetings 
	  	18.3
      	Chair
      of Meetings 
	  	18.4
      	Meetings
      by Telephone or Other Communications Medium 
	  	18.5
      	Calling
      of Meetings 
	  	18.6
      	Notice
      of Meetings 
	  	18.7
      	When
      Notice Not Required 
	  	18.8
      	Meeting
      Valid Despite Failure to Give Notice 
	  	18.9
      	Waiver
      of Notice of Meetings 
	  	18.10
      	Quorum
      
	  	18.11
      	Validity
      of Acts Where Appointment Defective 
	  	18.12
      	Consent
      Resolutions in Writing 
	  		  
	19.
      	EXECUTIVE
    AND OTHER COMMITTEES 
	  		  
	  	19.1
      	Appointment
      and Powers of Executive Committee 
	  	19.2
      	Appointment
      and Powers of Other Committees 
	  	19.3
      	Obligations
      of Committees 
	  	19.4
      	Powers
      of Board 
	  	19.5
      	Committee
      Meetings 
	  		  
	20.
      	OFFICERS
    
	  	  	  
	  	20.1
      	Directors
      May Appoint Officers 
	  	20.2
      	Functions,
      Duties and Powers of Officers 
	  	20.3
      	Qualifications
      
	  	20.4
      	Remuneration
      and Terms of Appointment 
	  	  	  
	21.
      	INDEMNIFICATION
    
	  	  	  
	  	21.1
      	Definitions
      

iv

	  	21.2
      	Mandatory
      Indemnification of Directors and Former Directors 
	  	21.3
      	Indemnification
      of Other Persons 
	  	21.4
      	Non-Compliance
      with Business Corporations Act 
	  	21.5
      	Company
      May Purchase Insurance 
	  	  	  
	22.
      	DIVIDENDS  
    
	  	  	  
	  	22.1
      	Payment
      of Dividends Subject to Special Rights 
	  	22.2
      	Declaration
      of Dividends 
	  	22.3
      	No
      Notice Required 
	  	22.4
      	Record
      Date 
	  	22.5
      	Manner
      of Paying Dividend 
	  	22.6
      	Settlement
      of Difficulties 
	  	22.7
      	When
      Dividend Payable 
	  	22.8
      	Dividends
      to be Paid in Accordance with Number of Shares 
	  	22.9
      	Receipt
      by Joint Shareholders 
	  	22.10
      	Dividend
      Bears No Interest 
	  	22.11
      	Fractional
      Dividends 
	  	22.12
      	Payment
      of Dividends 
	  	22.13
      	Capitalization
      of Surplus 
	  	  	  
	23.
      	DOCUMENTS,
    RECORDS AND REPORTS  
	  	  	  
	  	23.1
      	Recording
      of Financial Affairs 
	  	23.2
      	Inspection
      of Accounting Records 
	  	  	  
	24.
      	NOTICES  
    
	  	  	  
	  	24.1
      	Method
      of Giving Notice 
	  	24.2
      	Deemed
      Receipt of Mailing 
	  	24.3
      	Certificate
      of Sending 
	  	24.4
      	Notice
      to Joint Shareholders 
	  	24.5
      	Notice
      to Trustees 
	  	  	  
	25.
      	SEAL  
    
	  	  	  
	  	25.1
      	Who
      May Attest Seal 
	  	25.2
      	Sealing
      Copies 
	  	25.3
      	Mechanical
      Reproduction of Seal 

v

ARTICLES 
OF 
KLONDEX MINES LTD.

PART 1 - INTERPRETATION 

1.1      
 Definitions 

In these Articles, unless the context otherwise requires: 

	(1) 	
      “board of directors”, “directors” and “board” mean the
      directors or sole director of the Company for the time being;

	 	 
	(2) 	
      “Business Corporations Act” means the Business
      Corporations Act (British Columbia) from time to time in force and all
      amendments thereto and includes all regulations and amendments thereto
      made pursuant to that Act;

	 	 
	(3) 	
      “legal personal representative” means the personal or
      other legal representative of the shareholder;

	 	 
	(4) 	
      “Notice of Articles” means the notice of articles for the
      Company contained in the Company’s transition application, as amended from
      time to time;

	 	 
	(5) 	
      “registered address” of a shareholder means the
      shareholder’s address as recorded in the central securities
    register;

	 	 
	(6) 	
      “seal” means the seal of the Company, if
  any.

1.2        Business
Corporations Act and Interpretation Act
Definitions Applicable 

The definitions in the Business Corporations Act and the
definitions and rules of construction in the Interpretation Act (British
Columbia), with the necessary changes, so far as applicable, and unless the
context requires otherwise, apply to these Articles as if they were an
enactment. If there is a conflict between a definition in the Business
Corporations Act and a definition or rule in the Interpretation Act
(British Columbia) relating to a term used in these Articles, the definition in
the Business Corporations Act will prevail in relation to the use of the
term in these Articles. If there is a conflict between these Articles and the
Business Corporations Act, the Business Corporations Act will
prevail. 

PART 2 - SHARES AND SHARE CERTIFICATES

2.1       
Authorized Share Structure 

The authorized share structure of the Company consists of
shares of the class or classes and series, if any, described in the Notice of
Articles of the Company as the same may be amended from time to time.

2.2       
Form of Share Certificate 

Each share certificate issued by the Company must comply with,
and be signed as required by, the Business Corporations Act. 

2.3       
Shareholder Entitled to Certificate or Acknowledgment 

Each shareholder is entitled, without charge, to (a) one share
certificate representing the shares of each class or series of shares registered
in the shareholder’s name or (b) a non-transferable written acknowledgment of
the shareholder’s right to obtain such a share certificate, provided that in
respect of a share held jointly by several persons, the Company is not bound to
issue more than one share certificate and delivery of a share certificate for a
share to one of several joint shareholders or to one of the shareholders’ duly
authorized agents will be sufficient delivery to all. 

2.4        Delivery
by Mail 

Any share certificate or non-transferable written
acknowledgment of a shareholder’s right to obtain a share certificate may be
sent to the shareholder by mail at the shareholder’s registered address and
neither the Company nor any director, officer or agent of the Company is liable
for any loss to the shareholder because the share certificate or acknowledgement
is lost in the mail or stolen. 

2.5       
Replacement of Worn Out or Defaced Certificate or Acknowledgement

If the directors are satisfied that a share certificate or a
non-transferable written acknowledgment of the shareholder’s right to obtain a
share certificate is worn out or defaced, they must, on production to them of
the share certificate or acknowledgment, as the case may be, and on such other
terms, if any, as they think fit: 

	(1) 	
      order the share certificate or acknowledgment, as the
      case may be, to be cancelled; and

	 	 
	(2) 	
      issue a replacement share certificate or acknowledgment,
      as the case may be.

2.6       
Replacement of Lost, Stolen or Destroyed Certificate or Acknowledgment

If a share certificate or a non-transferable written
acknowledgment of a shareholder’s right to obtain a share certificate is lost,
stolen or destroyed, a replacement share certificate or acknowledgment, as the
case may be, must be issued to the person entitled to that share certificate or
acknowledgment, as the case may be, if the directors receive: 

	(1) 	
      proof satisfactory to them that the share certificate or
      acknowledgment is lost, stolen or destroyed; and

	 	 
	(2) 	
      any indemnity the directors consider
  adequate.

2.7       
Splitting Share Certificates 

If a shareholder surrenders a share certificate to the Company
with a written request that the Company issue in the shareholder’s name two or
more share certificates, each representing a specified number of shares and in
the aggregate representing the same number of shares as the share certificate so
surrendered, the Company must cancel the surrendered share certificate and issue
replacement share certificates in accordance with that request. 

2.8       
Certificate Fee 

There must be paid to the Company, in relation to the issue of
any share certificate under Articles 2.5, 2.6 or 2.7, the amount determined by
the directors, if any, which must not exceed the amount prescribed under the
Business Corporations Act. 

- 2 -

2.9       
Recognition of Trusts 

Except as required by law or statute or these Articles, no
person will be recognized by the Company as holding any share upon any trust,
and the Company is not bound by or compelled in any way to recognize (even when
having notice thereof) any equitable, contingent, future or partial interest in
any share or fraction of a share or (except as by law or statute or these
Articles provided or as ordered by a court of competent jurisdiction) any other
rights in respect of any share except an absolute right to the entirety thereof
in the shareholder. 

PART 3 - ISSUE OF SHARES 

3.1       
Directors Authorized 

Subject to the Business Corporations Act and the rights
of the holders of issued shares of the Company, the Company may issue, allot,
sell or otherwise dispose of the unissued shares, and issued shares held by the
Company, at the times, to the persons, including directors, in the manner, on
the terms and conditions and for the issue prices (including any premium at
which shares with par value may be issued) that the directors may determine. The
issue price for a share with par value must be equal to or greater than the par
value of the share, if any. 

3.2       
Commissions and Discounts 

The Company may at any time, pay a reasonable commission or
allow a reasonable discount to any person in consideration of that person
purchasing or agreeing to purchase shares of the Company from the Company or any
other person or procuring or agreeing to procure purchasers for shares of the
Company. 

3.3       
Brokerage 

The Company may pay such brokerage fee or other consideration
as may be lawful for or in connection with the sale or placement of its
securities. 

3.4        Conditions
of Issue 

Except as provided for by the Business Corporations Act,
no share may be issued until it is fully paid. A share is fully paid when: 

	(1) 	
      consideration is provided to the Company for the issue of
      the share by one or more of the following:

	 	 	 
		(a) 	
      past services performed for the Company;

		(b) 	
      property; or

		(c) 	
      money; and

	 	 	 
	(2) 	
      the value of the consideration received by the Company
      equals or exceeds the issue price set for the share under Article
    3.1.

3.5        Share
Purchase Warrants and Rights 

Subject to the Business Corporations Act, the Company
may issue share purchase warrants, options and rights upon such terms and
conditions as the directors determine, which share purchase warrants, options
and rights may be issued alone or in conjunction with debentures, debenture
stock, bonds, shares or any other securities issued or created by the Company
from time to time. 

- 3 -

PART 4 - SHARE REGISTERS 

4.1        Central
Securities Register 

As required by and subject to the Business Corporations
Act, the Company must maintain in British Columbia a central securities
register. The directors may, subject to the Business Corporations Act,
appoint an agent to maintain the central securities register. The directors may
also appoint one or more agents, including the agent which keeps the central
securities register, as transfer agent for its shares or any class or series of
its shares, as the case may be, and the same or another agent as registrar for
its shares or such class or series of its shares, as the case may be. The
directors may terminate such appointment of any agent at any time and may
appoint another agent in its place. 

4.2        Closing
Register 

The Company must not at any time close its central securities
register. 

PART 5 - SHARE TRANSFERS 

5.1       
Registering Transfers 

A transfer of a share of the Company must not be registered
unless: 

	(1) 	
      a duly signed instrument of transfer in respect of the
      share has been received by the Company;

	 	 
	(2) 	
      if a share certificate has been issued by the Company in
      respect of the share to be transferred, that share certificate has been
      surrendered to the Company; and

	 	 
	(3) 	
      if a non-transferable written acknowledgment of the
      shareholder’s right to obtain a share certificate has been issued by the
      Company in respect of the share to be transferred, that acknowledgment has
      been surrendered to the Company.

5.2       
Form of Instrument of Transfer 

The instrument of transfer in respect of any share of the
Company must be either in the form, if any, on the back of the Company’s share
certificates or in any other form that may be approved by the directors from
time to time. 

5.3       
Transferor Remains Shareholder 

Except to the extent that the Business Corporations Act
otherwise provides, the transferor of shares is deemed to remain the holder of
the shares until the name of the transferee is entered in a securities register
of the Company in respect of the transfer. 

5.4        Signing
of Instrument of Transfer 

If a shareholder, or his or her duly authorized attorney, signs
an instrument of transfer in respect of shares registered in the name of the
shareholder, the signed instrument of transfer constitutes a complete and
sufficient authority to the Company and its directors, officers and agents to
register the number of shares specified in the instrument of transfer or
specified in any other manner, or, if no number is specified, all the shares
represented by the share certificates or set out in the written acknowledgments
deposited with the instrument of transfer: 

	(1) 	
      in the name of the person named as transferee in that
      instrument of transfer; or

- 4 -

	(2) 	
      if no person is named as transferee in that instrument of
      transfer, in the name of the person on whose behalf the instrument is
      deposited for the purpose of having the transfer
  registered.

5.5       
Enquiry as to Title Not Required 

Neither the Company nor any director, officer or agent of the
Company is bound to inquire into the title of the person named in the instrument
of transfer as transferee or, if no person is named as transferee in the
instrument of transfer, of the person on whose behalf the instrument is
deposited for the purpose of having the transfer registered or is liable for any
claim related to registering the transfer by the shareholder or by any
intermediate owner or holder of the shares, of any interest in the shares, of
any share certificate representing such shares or of any written acknowledgment
of a right to obtain a share certificate for such shares. 

5.6        Transfer
Fee 

There must be paid to the Company, in relation to the
registration of any transfer, the amount, if any, determined by the directors.

PART 6 - TRANSMISSION OF SHARES 

6.1        Legal
Personal Representative Recognized on Death 

In case of the death of a shareholder, the legal personal
representative, or if the shareholder was a joint holder, the surviving joint
holder, will be the only person recognized by the Company as having any title to
the shareholder’s interest in the shares. Before recognizing a person as a legal
personal representative, the directors may require proof of appointment by a
court of competent jurisdiction, a grant of letters probate, letters of
administration or such other evidence or documents as the directors consider
appropriate. 

6.2       
Rights of Legal Personal Representative 

The legal personal representative has the same rights,
privileges and obligations that attach to the shares held by the shareholder,
including the right to transfer the shares in accordance with these Articles,
provided the documents required by the Business Corporations Act and the
directors have been deposited with the Company. 

PART 7 - PURCHASE OF SHARES 

7.1       
Company Authorized to Purchase Shares 

Subject to Article 7.2, the special rights and restrictions
attached to the shares of any class or series and the Business Corporations
Act, the Company may, if authorized by the directors, purchase or otherwise
acquire any of its shares at the price and upon the terms specified in such
resolution. 

7.2        Purchase
When Insolvent 

The Company must not make a payment or provide any other
consideration to purchase or otherwise acquire any of its shares if there are
reasonable grounds for believing that: 

	(1) 	
      the Company is insolvent; or

	 	 
	(2) 	
      making the payment or providing the consideration would
      render the Company insolvent.

- 5 -

7.3       
Sale and Voting of Purchased Shares 

If the Company retains a share redeemed, purchased or otherwise
acquired by it, the Company may sell, gift or otherwise dispose of the share,
but, while such share is held by the Company, it: 

	(1) 	
      is not entitled to vote the share at a meeting of its
      shareholders;

	 	 
	(2) 	
      must not pay a dividend in respect of the share;
    and

	 	 
	(3) 	
      must not make any other distribution in respect of the
      share.

PART 8 - BORROWING POWERS 

8.1       
Company Authorized to Borrow 

The Company, if authorized by the directors, may: 

	(1) 	
      borrow money in the manner and amount, on the security,
      from the sources and on the terms and conditions that they consider
      appropriate;

	 	 
	(2) 	
      issue bonds, debentures and other debt obligations either
      outright or as security for any liability or obligation of the Company or
      any other person and at such discounts or premiums and on such other terms
      as they consider appropriate;

	 	 
	(3) 	
      guarantee the repayment of money by any other person or
      the performance of any obligation of any other person; and

	 	 
	(4) 	
      mortgage, charge, whether by way of specific or floating
      charge, grant a security interest in, or give other security on, the whole
      or any part of the present and future assets and undertaking of the
      Company.

PART 9 - ALTERATIONS 

9.1        Alteration
of Authorized Share Structure 

Subject to Article 9.2, the Business Corporations Act,
and any regulatory or stock exchange requirements applicable to the Company, the
Company may by directors’ resolution: 

	(1) 	
      create one or more classes or series of shares or, if
      none of the shares of a class or series of shares are allotted or issued,
      eliminate that class or series of shares;

	 	 	 
	(2) 	
      increase, reduce or eliminate the maximum number of
      shares that the Company is authorized to issue out of any class or series
      of shares or establish a maximum number of shares that the Company is
      authorized to issue out of any class or series of shares for which no
      maximum is established;

	 	 	 
	(3) 	
      subdivide or consolidate all or any of its unissued, or
      fully paid issued, shares;

	 	 	 
	(4) 	
      if the Company is authorized to issue shares of a class
      of shares with par value:

	 	 	 
		(a) 	
      decrease the par value of those shares; or

	 	 	 
		(b) 	
      if none of the shares of that class of shares are
      allotted or issued, increase the par value of those
  shares;

- 6 -

	(5) 	
      change all or any of its unissued, or fully paid issued,
      shares with par value into shares without par value or any of its unissued
      shares without par value into shares with par value;

	 	 
	(6) 	
      alter the identifying name of any of its shares;
  or

	 	 
	
      (7) 
	
      otherwise alter its shares or authorized share structure
      when required or permitted to do so by the Business Corporations
      Act.

9.2       
Special Rights and Restrictions 

Subject to the Business Corporations Act and any
regulatory or stock exchange requirements applicable to the Company, the Company
may by directors’ resolution: 

	(1) 	
      create special rights or restrictions for, and attach
      those special rights or restrictions to, the shares of any class or series
      of shares, whether or not any or all of those shares have been issued;
      or

	 	 
	(2) 	
      vary or delete any special rights or restrictions
      attached to the shares of any class or series of shares, whether or not
      any or all of those shares have been issued.

9.3        Change
of Name 

The Company may by directors’ resolution authorize an
alteration of its Notice of Articles in order to change its name subject to any
other regulatory or stock exchange requirements applicable to the Company. 

9.4       
Other Alterations 

If the Business Corporations Act does not specify the
type of resolution and these Articles do not specify another type of resolution,
the Company may by directors’ resolution alter these Articles subject to any
other regulatory or stock exchange requirements applicable to the Company.

PART 10 - MEETINGS OF SHAREHOLDERS 

10.1      Annual
General Meetings 

Unless an annual general meeting is deferred or waived in
accordance with the Business Corporations Act, the Company must hold its
first annual general meeting within 18 months after the date on which it was
incorporated or otherwise recognized, and after that must hold an annual general
meeting at least once in each calendar year and not more than 15 months after
the last annual reference date at such time and place as may be determined by
the directors. 

10.2      Resolution
Instead of Annual General Meeting 

If all the shareholders who are entitled to vote at an annual
general meeting consent by a unanimous resolution under the Business
Corporations Act to all of the business that is required to be transacted at
that annual general meeting, the annual general meeting is deemed to have been
held on the date of the unanimous resolution. The shareholders must, in any
unanimous resolution passed under this Article 10.2, select as the Company’s
annual reference date a date that would be appropriate for the holding of the
applicable annual general meeting. 

10.3      Calling of
Meetings of Shareholders 

The directors may, whenever they think fit, call a meeting of
shareholders. 

- 7 -

10.4      Notice for
Meetings of Shareholders 

The Company must send notice of the date, time and location of
any meeting of shareholders, in the manner provided in these Articles, or in
such other manner, if any, as may be prescribed by ordinary resolution (whether
previous notice of the resolution has been given or not), to each shareholder
entitled to attend the meeting, to each director and to the auditor of the
Company, unless these Articles otherwise provide, at least the following number
of days before the meeting: 

	(1) 	
      if and for so long as the Company is a public company, 21
      days;

	 	 
	(2) 	
      otherwise, 10 days.

10.5      Record Date
for Notice 

The directors may set a date as the record date for the purpose
of determining shareholders entitled to notice of any meeting of shareholders.
The record date must not precede the date on which the meeting is to be held by
more than two months or, in the case of a general meeting requisitioned by
shareholders under the Business Corporations Act, by more than four
months. The record date must not precede the date on which the meeting is held
by fewer than: 

	(1) 	
      if and for so long as the Company is a public company, 21
      days;

	 	 
	(2) 	
      otherwise, 10 days.

If no record date is set, the record date is 5 p.m. on the day
immediately preceding the first date on which the notice is sent or, if no
notice is sent, the beginning of the meeting. 

10.6     
Record Date for Voting 

The directors may set a date as the record date for the purpose
of determining shareholders entitled to vote at any meeting of shareholders. The
record date must not precede the date on which the meeting is to be held by more
than two months or, in the case of a general meeting requisitioned by
shareholders under the Business Corporations Act, by more than four
months. If no record date is set, the record date is 5 p.m. on the day
immediately preceding the first date on which the notice is sent or, if no
notice is sent, the beginning of the meeting. 

10.7     
Failure to Give Notice and Waiver of Notice 

The accidental omission to send notice of any meeting to, or
the non-receipt of any notice by, any of the persons entitled to notice does not
invalidate any proceedings at that meeting. Any person entitled to notice of a
meeting of shareholders may, in writing or otherwise, waive or reduce the period
of notice of such meeting. 

10.8     
Notice of Special Business at Meetings of Shareholders 

If a meeting of shareholders is to consider special business
within the meaning of Article 11.1, the notice of meeting must: 

	(1) 	
      state the general nature of the special business;
    and

	 	 	 
	(2) 	
      if the special business includes considering, approving,
      ratifying, adopting or authorizing any document or the signing of or
      giving of effect to any document, have attached to it a copy of the
      document or state that a copy of the document will be available for
      inspection by shareholders:

	 	 	 
		(a) 	
      at the Company’s records office, or at such other
      reasonably accessible location in British Columbia as is specified in the
      notice; and

- 8 -

	 	(b) 	
      during statutory business hours on any one or more
      specified days before the day set for the holding of the
  meeting.

PART 11 - PROCEEDINGS AT MEETINGS OF SHAREHOLDERS 

11.1     
Special Business 

At a meeting of shareholders, the following business is special
business: 

	(1) 	
      at a meeting of shareholders that is not an annual
      general meeting, all business is special business except business relating
      to the conduct of or voting at the meeting;

	 	 	 
	(2) 	
      at an annual general meeting, all business is special
      business except for the following:

	 	 	 
		(a) 	
      business relating to the conduct of or voting at the
      meeting;

	 	 	 
		(b) 	
      consideration of any financial statements of the Company
      presented to the meeting;

	 	 	 
		(c) 	
      consideration of any reports of the directors or
      auditor;

	 	 	 
		(d) 	
      the setting or changing of the number of
  directors;

	 	 	 
		(e) 	
      the election or appointment of directors;

	 	 	 
		(f) 	
      the appointment of an auditor;

	 	 	 
		(g) 	
      the setting of the remuneration of an auditor;

	 	 	 
		(h) 	
      business arising out of a report of the directors not
      requiring the passing of a special resolution or an exceptional
      resolution;

	 	 	 
		(i) 	
      any other business which, under these Articles or the
      Business Corporations Act, may be transacted at a meeting of
      shareholders without prior notice of the business being given to the
      shareholders.

11.2      Special
Majority 

The majority of votes required for the Company to pass a
special resolution at a meeting of shareholders is two-thirds (2⁄3) of the votes
cast on the resolution. 

11.3      Quorum

Subject to the special rights and restrictions attached to the
shares of any class or series of shares, the quorum for the transaction of
business at a meeting of shareholders is one person who is, or who represents by
proxy, one or more shareholders who, in the aggregate, hold at least 5% of the
issued shares entitled to be voted at the meeting. 

- 9 -

11.4      One
Shareholder May Constitute Quorum 

If there is only one shareholder entitled to vote at a meeting
of shareholders: 

	(1) 	
      the quorum is one person who is, or who represents by
      proxy, that shareholder; and

	 	 
	(2) 	
      that shareholder, present in person or by proxy, may
      constitute the meeting.

11.5     
Other Persons May Attend 

The directors, the chief executive officer (if any), the
president (if any), the chief financial officer (if any), the secretary (if
any), the assistant secretary (if any), any lawyer for the Company, the auditor
of the Company and any other persons invited by the directors are entitled to
attend any meeting of shareholders, but if any of those persons does attend a
meeting of shareholders, that person is not to be counted in the quorum and is
not entitled to vote at the meeting unless that person is a shareholder or proxy
holder entitled to vote at the meeting. 

11.6     
Requirement of Quorum 

No business, other than the election of a chair of the meeting
and the adjournment of the meeting, may be transacted at any meeting of
shareholders unless a quorum of shareholders entitled to vote is present at the
commencement of the meeting, but such quorum need not be present throughout the
meeting. 

11.7      Lack
of Quorum 

If, within one-half hour from the time set for the holding of a
meeting of shareholders, a quorum is not present: 

	(1) 	
      in the case of a general meeting requisitioned by
      shareholders, the meeting is dissolved; and

	 	 
	(2) 	
      in the case of any other meeting of shareholders, the
      meeting stands adjourned to the same day in the next week at the same time
      and place.

11.8      Lack
of Quorum at Succeeding Meeting 

If, at the meeting to which the meeting referred to in Article
11.7(2) was adjourned, a quorum is not present within one-half hour from the
time set for the holding of the meeting, the person or persons present and
being, or representing by proxy, one or more shareholders entitled to attend and
vote at the meeting constitute a quorum. 

11.9      Chair

The following individual is entitled to preside as chair at a
meeting of shareholders: 

	(1) 	
      the chair of the board, if any; or

	 	 
	(2) 	
      if the chair of the board is absent or unwilling to act
      as chair of the meeting, the president, if any.

11.10    Selection of Alternate
Chair 

If, at any meeting of shareholders, there is no chair of the
board or president present within 15 minutes after the time set for holding the
meeting, or if the chair of the board and the president are unwilling to act as
chair of the meeting, or if the chair of the board and the president have
advised the secretary, if any, or any director present at the meeting, that they
will not be present at the meeting, the directors present must choose one of
their number or the Company’s solicitor to be chair of the meeting failing which
the shareholders entitled to vote at the meeting who are present in person or by proxy may
choose any person present at the meeting to chair the meeting. 

- 10 -

11.11    Adjournments 

The chair of a meeting of shareholders may, and if so directed
by the meeting must, adjourn the meeting from time to time and from place to
place, but no business may be transacted at any adjourned meeting other than the
business left unfinished at the meeting from which the adjournment took place.

11.12    Notice of Adjourned
Meeting 

It is not necessary to give any notice of an adjourned meeting
or of the business to be transacted at an adjourned meeting of shareholders
except that, when a meeting is adjourned for 30 days or more, notice of the
adjourned meeting must be given as in the case of the original meeting. 

11.13    Decisions by Show of
Hands or Poll 

Subject to the Business Corporations Act, every motion
put to a vote at a meeting of shareholders will be decided on a show of hands
unless a poll, before or on the declaration of the result of the vote by show of
hands, is directed by the chair or demanded by at least one shareholder entitled
to vote who is present in person or by proxy. 

11.14    Declaration of Result

The chair of a meeting of shareholders must declare to the
meeting the decision on every question in accordance with the result of the show
of hands or the poll, as the case may be, and that decision must be entered in
the minutes of the meeting. A declaration of the chair that a resolution is
carried by the necessary majority or is defeated is, unless a poll is directed
by the chair or demanded under Article 11.13, conclusive evidence without proof
of the number or proportion of the votes recorded in favour of or against the
resolution. 

11.15    Motion Need Not be
Seconded 

No motion proposed at a meeting of shareholders need be
seconded unless the chair of the meeting rules otherwise, and the chair of any
meeting of shareholders is entitled to propose or second a motion. 

11.16    Casting Vote 

In case of an equality of votes, the chair of a meeting of
shareholders does not, either on a show of hands or on a poll, have a second or
casting vote in addition to the vote or votes to which the chair may be entitled
as a shareholder. 

11.17    Manner of Taking Poll

Subject to Article 11.18, if a poll is duly demanded at a
meeting of shareholders: 

	(1) 	
      the poll must be taken:

	 	 	 
		(a) 	
      at the meeting, or within seven days after the date of
      the meeting, as the chair of the meeting directs; and

	 	 	 
		(b) 	
      in the manner, at the time and at the place that the
      chair of the meeting directs;

	 	 	 
	(2) 	
      the result of the poll is deemed to be the decision of
      the meeting at which the poll is demanded; and

	 	 	 
	(3) 	
      the demand for the poll may be withdrawn by the person
      who demanded it.

- 11 -

11.18    Demand for Poll on
Adjournment 

A poll demanded at a meeting of shareholders on a question of
adjournment must be taken immediately at the meeting. 

11.19    Chair Must Resolve
Dispute 

In the case of any dispute as to the admission or rejection of
a vote given on a poll, the chair of the meeting must determine the dispute, and
his or her determination made in good faith is final and conclusive. 

11.20    Casting of Votes

On a poll, a shareholder entitled to more than one vote need
not cast all the votes in the same way. 

11.21    Demand for Poll

No poll may be demanded in respect of the vote by which a chair
of a meeting of shareholders is elected. 

11.22    Demand for Poll Not to
Prevent Continuance of Meeting 

The demand for a poll at a meeting of shareholders does not,
unless the chair of the meeting so rules, prevent the continuation of a meeting
for the transaction of any business other than the question on which a poll has
been demanded. 

11.23    Retention of Ballots
and Proxies 

The Company must, for at least three months after a meeting of
shareholders, keep each ballot cast on a poll and each proxy voted at the
meeting, and, during that period, make them available for inspection during
normal business hours by any shareholder or proxyholder entitled to vote at the
meeting. At the end of such three month period, the Company may destroy such
ballots and proxies. 

PART 12 - VOTES OF SHAREHOLDERS 

12.1     
Number of Votes by Shareholder or by Shares 

Subject to any special rights or restrictions attached to any
shares and to the restrictions imposed on joint shareholders under Article 12.3:

	(1) 	
      on a vote by show of hands, every person present who is a
      shareholder or proxy holder and entitled to vote on the matter has one
      vote; and

	 	 
	(2) 	
      on a poll, every shareholder entitled to vote on the
      matter has one vote in respect of each share entitled to be voted on the
      matter and held by that shareholder and may exercise that vote either in
      person or by proxy.

12.2      Votes
of Persons in Representative Capacity 

A person who is not a shareholder may vote at a meeting of
shareholders, whether on a show of hands or on a poll, and may appoint a proxy
holder to act at the meeting, if, before doing so, the person satisfies the
chair of the meeting, or the directors, that the person is a legal personal
representative or a trustee in bankruptcy for a shareholder who is entitled to
vote at the meeting. 

- 12 -

12.3      Votes
by Joint Holders 

If there are joint shareholders registered in respect of any
share: 

	(1) 	
      any one of the joint shareholders may vote at any
      meeting, either personally or by proxy, in respect of the share as if that
      joint shareholder were solely entitled to it; or

	 	 
	(2) 	
      if more than one of the joint shareholders is present at
      any meeting, personally or by proxy, and more than one of them votes in
      respect of that share, then only the vote of the joint shareholder present
      whose name stands first on the central securities register in respect of
      the share will be counted.

12.4      Legal
Personal Representatives as Joint Shareholders 

Two or more legal personal representatives of a shareholder in
whose sole name any share is registered are, for the purposes of Article 12.3,
deemed to be joint shareholders. 

12.5      Representative
of a Corporate Shareholder 

If a corporation, that is not a subsidiary of the Company, is a
shareholder, that corporation may appoint a person to act as its representative
at any meeting of shareholders of the Company, and: 

	(1) 	
      for that purpose, the instrument appointing a
      representative must:

	 	 	 
		(a) 	
      be received at the registered office of the Company or at
      any other place specified, in the notice calling the meeting, for the
      receipt of proxies, at least the number of business days specified in the
      notice for the receipt of proxies, or if no number of days is specified,
      two business days before the day set for the holding of the meeting;
    or

	 	 	 
		(b) 	
      be provided, at the meeting, to the chair of the meeting
      or to a person designated by the chair of the meeting;

	 	 	 
	(2) 	
      if a representative is appointed under this Article
      12.5:

	 	 	 
		(a) 	
      the representative is entitled to exercise in respect of
      and at that meeting the same rights on behalf of the corporation that the
      representative represents as that corporation could exercise if it were a
      shareholder who is an individual, including, without limitation, the right
      to appoint a proxy holder; and

	 	 	 
		(b) 	
      the representative, if present at the meeting, is to be
      counted for the purpose of forming a quorum and is deemed to be a
      shareholder present in person at the meeting.

Evidence of the appointment of any such representative may be
sent to the Company by written instrument, fax or any other method of
transmitting legibly recorded messages. 

12.6     
Proxy Provisions Do Not Apply to All Companies 

Articles 12.7 to 12.15 do not apply to the Company if and for
so long as it is a public company or a pre-existing reporting company which has
the Statutory Reporting Company Provisions (as defined in section 1(1) of the
Business Corporations Act) as part of its Articles or to which the
Statutory Reporting Company Provisions apply. 

- 13 -

12.7      Appointment
of Proxy Holders 

Every shareholder of the Company, including a corporation that
is a shareholder but not a subsidiary of the Company, entitled to vote at a
meeting of shareholders of the Company may, by proxy, appoint one or more (but
not more than five) proxy holders to attend and act at the meeting in the
manner, to the extent and with the powers conferred by the proxy. 

12.8      Alternate
Proxy Holders 

A shareholder may appoint one or more alternate proxy holders
to act in the place of an absent proxy holder. 

12.9      Proxy
Holder Need Not Be Shareholder 

A person appointed as a proxy holder need not be a shareholder.

12.10    Deposit of Proxy

A proxy for a meeting of shareholders must: 

	(1) 	
      be received at the registered office of the Company or at
      any other place specified, in the notice calling the meeting, for the
      receipt of proxies, at least the number of business days specified in the
      notice, or if no number of days is specified, two business days before the
      day set for the holding of the meeting; or

	 	 
	(2) 	
      unless the notice provides otherwise, be provided, at the
      meeting, to the chair of the meeting or to a person designated by the
      chair of the meeting.

A proxy may be sent to the Company by written instrument, fax
or any other method of transmitting legibly recorded messages. 

12.11    Validity of Proxy Vote

A vote given in accordance with the terms of a proxy is valid
notwithstanding the death or incapacity of the shareholder giving the proxy and
despite the revocation of the proxy or the revocation of the authority under
which the proxy is given, unless notice in writing of that death, incapacity or
revocation is received: 

	(1) 	
      at the registered office of the Company, at any time up
      to and including the last business day before the day set for the holding
      of the meeting at which the proxy is to be used; or

	 	 
	(2) 	
      by the chair of the meeting, before the vote is
    taken.

12.12    Form of Proxy 

A proxy, whether for a specified meeting or otherwise, must be
either in the following form or in any other form approved by the directors or
the chair of the meeting: 

[name of company] 
(the “Company”) 

  
    
      The undersigned, being a shareholder of the Company, hereby
        appoints [name] or, failing that person, [name], as proxy holder
        for the undersigned to attend, act and vote for and on behalf of the undersigned
        at the meeting of shareholders of the Company to be held on [month, day,
          year] and at any adjournment of that meeting. 

      Number of shares in respect of which this proxy is given (if no
        number is specified, then this proxy if given in respect of all shares
        registered in the name of the shareholder): ______________

      

    

  

- 14 -

	 	Signed [month, day, year] 
	 	 
	 	[Signature of shareholder] 
	 	 
	 	[Name of shareholder—printed]
  

12.13    Revocation of Proxy

Subject to Article 12.14, every proxy may be revoked by an
instrument in writing that is: 

	(1) 	
      received at the registered office of the Company at any
      time up to and including the last business day before the day set for the
      holding of the meeting at which the proxy is to be used; or

	 	 
	(2) 	
      provided, at the meeting, to the chair of the
    meeting.

12.14    Revocation of Proxy
Must Be Signed 

An instrument referred to in Article 12.13 must be signed as
follows: 

	(1) 	
      if the shareholder for whom the proxy holder is appointed
      is an individual, the instrument must be signed by the shareholder or his
      or her legal personal representative or trustee in bankruptcy;
or

	 	 
	(2) 	
      if the shareholder for whom the proxy holder is appointed
      is a corporation, the instrument must be signed by the corporation or by a
      representative appointed for the corporation under Article
  12.5.

12.15    Production of Evidence
of Authority to Vote 

The chair of any meeting of shareholders may, but need not,
inquire into the authority of any person to vote at the meeting and may, but
need not, demand from that person production of evidence as to the existence of
the authority to vote. 

PART 13 - DIRECTORS 

13.1     
First Directors; Number of Directors 

The first directors are the persons designated as directors of
the Company in the Notice of Articles that applies to the Company when it is
recognized under the Business Corporations Act. There is no requirement
for the directors or shareholders to fix or set the number of directors from
time to time. If the Company is a public company, the Company shall have at
least three directors. If the Company is not a public company, the Company shall
have at least one director. 

13.2      Change
in Number of Directors 

If the number of directors is at any time fixed or set
hereunder: 

	(1) 	
      the shareholders may elect or appoint the directors
      needed to fill any vacancies in the board of directors up to that number;
      or

	 	 
	(2) 	
      if the shareholders do not elect or appoint the directors
      needed to fill any vacancies in the board of directors up to that number
      contemporaneously with the setting of that number, then the directors may
      appoint, or the shareholders may elect or appoint, directors to fill those
      vacancies.

- 15 -

13.3      Directors’
Acts Valid Despite Vacancy 

An act or proceeding of the directors is not invalid merely
because fewer than the number of directors set or otherwise required under these
Articles is in office. 

13.4      Qualifications
of Directors 

A director is not required to hold a share in the capital of
the Company as qualification for his or her office but must be qualified as
required by the Business Corporations Act to become, act or continue to
act as a director. 

13.5      Remuneration
of Directors 

The directors are entitled to the remuneration for acting as
directors, if any, as the directors may from time to time determine. If the
directors so decide, their remuneration, if any, may be determined by the
shareholders. That remuneration may be in addition to any salary or other
remuneration paid to any officer or employee of the Company as such, who is also
a director.

13.6      Reimbursement
of Expenses of Directors 

The Company must reimburse each director for the reasonable
expenses that he or she may incur in and about the business of the Company.

13.7      Special
Remuneration for Directors 

If any director performs any professional or other services for
the Company that in the opinion of the directors are outside the ordinary duties
of a director, or if any director is otherwise specially occupied in or about
the Company’s business, he or she may be paid remuneration fixed by the
directors, or, at the option of that director, fixed by ordinary resolution, and
such remuneration may be either in addition to, or in substitution for, any
other remuneration that he or she may be entitled to receive.

13.8      Gratuity,
Pension or Allowance on Retirement of Director 

Unless otherwise determined by ordinary resolution, the
directors on behalf of the Company may pay a gratuity or pension or allowance on
retirement to any director who has held any salaried office or place of profit
with the Company or to his or her spouse or dependants and may make
contributions to any fund and pay premiums for the purchase or provision of any
such gratuity, pension or allowance. 

PART 14 - ELECTION AND REMOVAL OF DIRECTORS 

14.1     
Election at Annual General Meeting 

At every annual general meeting and in every unanimous
resolution contemplated by Article 10.2: 

	(1) 	
      the shareholders entitled to vote at the annual general
      meeting for the election of directors must elect, or in the unanimous
      resolution appoint, a board of directors consisting of the number of
      directors for the time being set under these Articles; and

	 	 
	(2) 	
      all the directors cease to hold office immediately before
      the election or appointment of directors under paragraph (1), but are
      eligible for re-election or re-appointment.

- 16 -

14.2     
Consent to be a Director 

No election, appointment or designation of an individual as a
director is valid unless: 

	(1) 	
      that individual consents to be a director in the manner
      provided for in the Business Corporations Act;

	 	 
	(2) 	
      that individual is elected or appointed at a meeting at
      which the individual is present and the individual does not refuse, at the
      meeting, to be a director; or

	 	 
	(3) 	
      with respect to first directors, the designation is
      otherwise valid under the Business Corporations
  Act.

14.3      Failure
to Elect or Appoint Directors 

If:

	(1) 	
      the Company fails to hold an annual general meeting, and
      all the shareholders who are entitled to vote at an annual general meeting
      fail to pass the unanimous resolution contemplated by Article 10.2, on or
      before the date by which the annual general meeting is required to be held
      under the Business Corporations Act; or

	 	 
	(2) 	
      the shareholders fail, at the annual general meeting or
      in the unanimous resolution contemplated by Article 10.2, to elect or
      appoint any directors;

then each director then in office continues to hold office
until the earlier of: 

	(3) 	
      the date on which his or her successor is elected or
      appointed; and

	 	 
	(4) 	
      the date on which he or she otherwise ceases to hold
      office under the Business Corporations Act or these
  Articles.

14.4     
Places of Retiring Directors Not Filled 

If, at any meeting of shareholders at which there should be an
election of directors, the places of any of the retiring directors are not
filled by that election, those retiring directors who are not re-elected and who
are asked by the newly elected directors to continue in office will, if willing
to do so, continue in office to complete the number of directors for the time
being set pursuant to these Articles until further new directors are elected at
a meeting of shareholders convened for that purpose. If any such election or
continuance of directors does not result in the election or continuance of the
number of directors for the time being set pursuant to these Articles, the
number of directors of the Company is deemed to be set at the number of
directors actually elected or continued in office. 

14.5     
Directors May Fill Casual Vacancies 

Any casual vacancy occurring in the board of directors may be
filled by the directors. 

14.6      Remaining
Directors Power to Act 

The directors may act notwithstanding any vacancy in the board
of directors, but if the Company has fewer directors in office than the number
set pursuant to these Articles as the quorum of directors, the directors may
only act for the purpose of appointing directors up to that number or of
summoning a meeting of shareholders for the purpose of filling any vacancies on
the board of directors or, subject to the Business Corporations Act, for
any other purpose. 

- 17 -

14.7     
Shareholders May Fill Vacancies 

If the Company has no directors or fewer directors in office
than the number set pursuant to these Articles as the quorum of directors, the
shareholders may elect or appoint directors to fill any vacancies on the board
of directors. 

14.8     
Additional Directors 

Notwithstanding Articles 13.1 and 13.2, between annual general
meetings or unanimous resolutions contemplated by Article 10.2, the directors
may appoint one or more additional directors, but the number of additional
directors appointed under this Article 14.8 must not at any time exceed: 

	(1) 	
      one-third of the number of first directors, if, at the
      time of the appointments, one or more of the first directors have not yet
      completed their first term of office; or

	 	 
	(2) 	
      in any other case, one-third of the number of the current
      directors who were elected or appointed as directors other than under this
      Article 14.8.

Any director so appointed ceases to hold office immediately
before the next election or appointment of directors under Article 14.1(1), but
is eligible for re-election or re-appointment. 

14.9      Ceasing
to be a Director 

A director ceases to be a director when: 

	(1) 	
      the term of office of the director expires;

	 	 
	(2) 	
      the director dies;

	 	 
	(3) 	
      the director resigns as a director by notice in writing
      provided to the Company or a lawyer for the Company; or

	 	 
	(4) 	
      the director is removed from office pursuant to Articles
      14.10 or 14.11.

14.10    Removal of Director by
Shareholders 

The Company may remove any director before the expiration of
his or her term of office by special resolution. In that event, the shareholders
may elect, or appoint by ordinary resolution, a director to fill the resulting
vacancy. If the shareholders do not elect or appoint a director to fill the
resulting vacancy contemporaneously with the removal, then the directors may
appoint or the shareholders may elect, or appoint by ordinary resolution, a
director to fill that vacancy.

14.11    Removal of Director by
Directors 

The directors may remove any director before the expiration of
his or her term of office if: 

	(1) 	
      such director is convicted of an indictable offence;
      or

	 	 
	(2) 	
      such director ceases to be qualified to act as a director
      of a company and does not promptly resign.

- 18 -

PART 15 - ALTERNATE DIRECTORS 

15.1     
Appointment of Alternate Director 

Any director (an “appointor”) may by notice in writing received
by the Company appoint any person (an “appointee”) who is qualified to act as a
director to be his or her alternate to act in his or her place at meetings of
the directors or committees of the directors at which the appointor is not
present unless (in the case of an appointee who is not a director) the directors
have reasonably disapproved the appointment of such person as an alternate
director and have given notice to that effect to his or her appointor within a
reasonable time after the notice of appointment is received by the Company.

15.2      Notice
of Meetings 

Every alternate director so appointed is entitled to notice of
meetings of the directors and of committees of the directors of which his or her
appointor is a member and to attend and vote as a director at any such meetings
at which his or her appointor is not present.

15.3     
Alternate for More Than One Director Attending Meetings 

A person may be appointed as an alternate director by more than
one director, and an alternate director: 

	(1) 	
      will be counted in determining the quorum for a meeting
      of directors once for each of his or her appointors and, in the case of an
      appointee who is also a director, once more in that capacity;

	 	 
	(2) 	
      has a separate vote at a meeting of directors for each of
      his or her appointors and, in the case of an appointee who is also a
      director, an additional vote in that capacity;

	 	 
	(3) 	
      will be counted in determining the quorum for a meeting
      of a committee of directors once for each of his or her appointors who is
      a member of that committee and, in the case of an appointee who is also a
      member of that committee as a director, once more in that capacity;
    and

	 	 
	(4) 	
      has a separate vote at a meeting of a committee of
      directors for each of his or her appointors who is a member of that
      committee and, in the case of an appointee who is also a member of that
      committee as a director, an additional vote in that
  capacity.

15.4      Consent
Resolutions 

Every alternate director, if authorized by the notice
appointing him or her, may sign in place of his or her appointor any resolutions
to be consented to in writing.

15.5     
Alternate Director an Agent 

Every alternate director is deemed to be the agent of his or
her appointor. 

15.6      Revocation
or Amendment of Appointment of Alternate Director 

An appointor may at any time, by notice in writing received by
the Company, revoke or amend the terms of the appointment of an alternate
director appointed by him or her.

15.7     
Ceasing to be an Alternate Director 

The appointment of an alternate director ceases when: 

	(1) 	
      his or her appointor ceases to be a director and is not
      promptly re-elected or re-appointed;

- 19 -

	(2) 	
      the alternate director dies;

	 	 
	(3) 	
      the alternate director resigns as an alternate director
      by notice in writing provided to the Company or a lawyer for the
      Company;

	 	 
	(4) 	
      the alternate director ceases to be qualified to act as a
      director; or

	 	 
	(5) 	
      the term of his appointment expires, or his or her
      appointor revokes the appointment of the alternate
  director.

15.8     
Remuneration and Expenses of Alternate Director 

The Company may reimburse an alternate director for the
reasonable expenses that would be properly reimbursed if he or she were a
director, and the alternate director is entitled to receive from the Company
such proportion, if any, of the remuneration otherwise payable to the appointor
as the appointor may from time to time direct. 

PART 16 - POWERS AND DUTIES OF DIRECTORS 

16.1     
Powers of Management 

The directors must, subject to the Business Corporations
Act and these Articles, manage or supervise the management of the business
and affairs of the Company and have the authority to exercise all such powers of
the Company as are not, by the Business Corporations Act or by these
Articles, required to be exercised by the shareholders of the Company. For
clarity, notwithstanding the provisions of section 11.1(2), the directors may
exercise any of those powers contemplated for shareholder approval, if permitted
by the Business Corporations Act, including setting the remuneration of
the Company’s auditors. 

16.2      Appointment
of Attorney of Company 

The directors may from time to time, by power of attorney or
other instrument, under seal if so required by law, appoint any person to be the
attorney of the Company for such purposes, and with such powers, authorities and
discretions (not exceeding those vested in or exercisable by the directors under
these Articles and excepting the power to fill vacancies in the board of
directors, to remove a director, to change the membership of or fill vacancies
in, any committee of the directors, to appoint or remove officers appointed by
the directors and to declare dividends) and for such period, and with such
remuneration and subject to such conditions as the directors may think fit. Any
such power of attorney may contain such provisions for the protection or
convenience of persons dealing with such attorney as the directors think fit.
Any such attorney may be authorized by the directors to sub-delegate all or any
of the powers, authorities and discretions for the time being vested in him or
her. 

PART 17 - DISCLOSURE OF INTEREST OF DIRECTORS 

17.1      Obligation
to Account for Profits 

A director or senior officer who holds a disclosable interest
(as that term is used in the Business Corporations Act) in a contract or
transaction into which the Company has entered or proposes to enter is liable to
account to the Company for any profit that accrues to the director or senior
officer under or as a result of the contract or transaction only if and to the
extent provided in the Business Corporations Act. 

17.2      Restrictions
on Voting by Reason of Interest 

- 20 -

A director who holds a disclosable interest in a contract or
transaction into which the Company has entered or proposes to enter is not
entitled to vote on any directors’ resolution to approve that contract or
transaction, unless all the directors have a disclosable interest in that
contract or transaction, in which case any or all of those directors may vote on
such resolution.

17.3     
Interested Director Counted in Quorum 

A director who holds a disclosable interest in a contract or
transaction into which the Company has entered or proposes to enter and who is
present at the meeting of directors at which the contract or transaction is
considered for approval may be counted in the quorum at the meeting whether or
not the director votes on any or all of the resolutions considered at the
meeting. 

17.4     
Disclosure of Conflict of Interest or Property 

A director or senior officer who holds any office or possesses
any property, right or interest that could result, directly or indirectly, in
the creation of a duty or interest that materially conflicts with that
individual’s duty or interest as a director or senior officer, must disclose the
nature and extent of the conflict as required by the Business Corporations Act. 

17.5     
Director Holding Other Office in the Company 

A director may hold any office or place of profit with the
Company, other than the office of auditor of the Company, in addition to his or
her office of director for the period and on the terms (as to remuneration or
otherwise) that the directors may determine. 

17.6      No
Disqualification 

No director or intended director is disqualified by his or her
office from contracting with the Company either with regard to the holding of
any office or place of profit the director holds with the Company or as vendor,
purchaser or otherwise, and no contract or transaction entered into by or on
behalf of the Company in which a director is in any way interested is liable to
be voided for that reason. 

17.7      Professional
Services by Director or Officer 

Subject to the Business Corporations Act, a director or
officer, or any person in which a director or officer has an interest, may act
in a professional capacity for the Company, except as auditor of the Company,
and the director or officer or such person is entitled to remuneration for
professional services as if that director or officer were not a director or
officer. 

17.8     
Director or Officer in Other Corporations 

A director or officer may be or become a director, officer or
employee of, or otherwise interested in, any person in which the Company may be
interested as a shareholder or otherwise, and, subject to the Business
Corporations Act, the director or officer is not accountable to the Company
for any remuneration or other benefits received by him or her as director,
officer or employee of, or from his or her interest in, such other person. 

- 21 -

PART 18 - PROCEEDINGS OF DIRECTORS 

18.1      Meetings
of Directors 

The directors may meet together for the conduct of business,
adjourn and otherwise regulate their meetings as they think fit, and meetings of
the directors held at regular intervals may be held at the place, at the time
and on the notice, if any, as the directors may from time to time determine.

18.2      Voting
at Meetings 

Questions arising at any meeting of directors are to be decided
by a majority of votes and, in the case of an equality of votes, the chair of
the meeting does have a second or casting vote. 

18.3      Chair
of Meetings 

The following individual is entitled to preside as chair at a
meeting of directors: 

	(1) 	
      the chair of the board, if any, or his or her alternate
      director;

	 	 	 
	(2) 	
      in the absence of the chair of the board, the president,
      if any, if the president is a director (or his or her alternate);
  or

	 	 	 
	(3) 	
      any other director chosen by the directors or, if the
      directors wish, the Company’s solicitor, if:

	 	 	 
		(a) 	
      neither the chair of the board nor the president, if a
      director, is present at the meeting within 15 minutes after the time set
      for holding the meeting;

	 	 	 
		(b) 	
      neither the chair of the board nor the president, if a
      director, is willing to chair the meeting; or

	 	 	 
		(c) 	
      the chair of the board and the president, if a director,
      have advised the secretary, if any, or any other director, that they will
      not be present at the meeting.

18.4     
Meetings by Telephone or Other Communications Medium 

A director may participate in a meeting of the directors or of
any committee of the directors in person or by telephone if all directors
participating in the meeting, whether in person or by telephone or other
communications medium, are able to communicate with each other. A director may
participate in a meeting of the directors or of any committee of the directors
by a communications medium other than telephone if all directors participating
in the meeting, whether in person or by telephone or other communications
medium, are able to communicate with each other and if all directors who wish to
participate in the meeting agree to such participation. A director who
participates in a meeting in a manner contemplated by this Article 18.4 is
deemed for all purposes of the Business Corporations Act and these
Articles to be present at the meeting and to have agreed to participate in that
manner. 

18.5      Calling
of Meetings 

A director may, and the secretary or an assistant secretary of
the Company, if any, on the request of a director must, call a meeting of the
directors at any time.

18.6     
Notice of Meetings 

Other than for meetings held at regular intervals as determined
by the directors pursuant to Article 18.1, reasonable notice of each meeting of
the directors, specifying the place, day and time of that meeting must be given
to each of the directors and the alternate directors by any method set out in
Article 24.1 or orally or by telephone. 

- 22 -

18.7      When
Notice Not Required 

It is not necessary to give notice of a meeting of the
directors to a director or an alternate director if: 

	(1) 	
      the meeting is to be held immediately following a meeting
      of shareholders at which that director was elected or appointed, or is the
      meeting of the directors at which that director is appointed; or

	 	 
	(2) 	
      the director or alternate director, as the case may be,
      has waived notice of the meeting.

18.8      Meeting
Valid Despite Failure to Give Notice 

The accidental omission to give notice of any meeting of
directors to, or the non-receipt of any notice by, any director or alternate
director, does not invalidate any proceedings at that meeting. 

18.9      Waiver
of Notice of Meetings 

Any director or alternate director may send to the Company a
document signed by him or her waiving notice of any past, present or future
meeting or meetings of the directors and may at any time withdraw that waiver
with respect to meetings held after that withdrawal. After sending a waiver with
respect to all future meetings and until that waiver is withdrawn, no notice of
any meeting of the directors need be given to that director and, unless the
director otherwise requires by notice in writing to the Company, to his or her
alternate director, and all meetings of the directors so held are deemed not to
be improperly called or constituted by reason of notice not having been given to
such director or alternate director. 

18.10    Quorum 

The quorum necessary for the transaction of the business of the
directors may be set by the directors and, if not so set, is deemed to be set at
two directors or, if the number of directors is set at one, is deemed to be set
at one director, and that director may constitute a meeting. 

18.11    Validity of Acts Where
Appointment Defective 

Subject to the Business Corporations Act, an act of a
director or officer is not invalid merely because of an irregularity in the
election or appointment or a defect in the qualification of that director or
officer. 

18.12    Consent Resolutions in
Writing 

A resolution of the directors or of any committee of the
directors consented to in writing by all of the directors entitled to vote on
it, whether by signed document, fax, email or any other method of transmitting
legibly recorded messages, is as valid and effective as if it had been passed at
a meeting of the directors or of the committee of the directors duly called and
held. Such resolution may be in two or more counterparts which together are
deemed to constitute one resolution in writing. A resolution passed in that
manner is effective on the date stated in the resolution or on the latest date
stated on any counterpart. A resolution of the directors or of any committee of
the directors passed in accordance with this Article 18.12 is deemed to be a
proceeding at a meeting of directors or of the committee of the directors and to
be as valid and effective as if it had been passed at a meeting of the directors
or of the committee of the directors that satisfies all the requirements of the
Business Corporations Act and all the requirements of these Articles
relating to meetings of the directors or of a committee of the directors. 

- 23 -

PART 19 - EXECUTIVE AND OTHER COMMITTEES 

19.1      Appointment
and Powers of Executive Committee 

The directors may, by resolution, appoint an executive
committee consisting of the director or directors that they consider
appropriate, and this committee has, during the intervals between meetings of
the board of directors, all of the directors’ powers, except:

	(1) 	
      the power to fill vacancies in the board of
    directors;

	 	 
	(2) 	
      the power to remove a director;

	 	 
	(3) 	
      the power to change the membership of, or fill vacancies
      in, any committee of the directors; and

	 	 
	(4) 	
      such other powers, if any, as may be set out in the
      resolution or any subsequent directors’
resolution.

19.2     
Appointment and Powers of Other Committees 

The directors may, by resolution: 

	(1) 	
      appoint one or more committees (other than the executive
      committee) consisting of the director or directors that they consider
      appropriate;

	 	 	 
	(2) 	
      delegate to a committee appointed under paragraph (1) any
      of the directors’ powers, except:

	 	 	 
		(a) 	
      the power to fill vacancies in the board of
    directors;

	 	 	 
		(b) 	
      the power to remove a director;

	 	 	 
		(c) 	
      the power to change the membership of, or fill vacancies
      in, any committee of the directors; and

	 	 	 
		(d) 	
      the power to appoint or remove officers appointed by the
      directors; and

	 	 	 
	(3) 	
      make any delegation referred to in paragraph (2) subject
      to the conditions set out in the resolution or any subsequent directors’
      resolution.

19.3      Obligations
of Committees 

Any committee appointed under Articles 19.1 or 19.2, in the
exercise of the powers delegated to it, must: 

	(1) 	
      conform to any rules that may from time to time be
      imposed on it by the directors; and

	 	 
	(2) 	
      report every act or thing done in exercise of those
      powers at such times as the directors may require.

19.4     
Powers of Board 

The directors may, at any time, with respect to a committee
appointed under Articles 19.1 or 19.2: 

	(1) 	
      revoke or alter the authority given to the committee, or
      override a decision made by the committee, except as to acts done before
      such revocation, alteration or overriding;

	 	 
	(2) 	
      terminate the appointment of, or change the membership
      of, the committee; and

	 	 
	(3) 	
      fill vacancies in the committee.

- 24 -

19.5      Committee
Meetings 

Subject to Article 19.3(1) and unless the directors otherwise
provide in the resolution appointing the committee or in any subsequent
resolution, with respect to a committee appointed under Articles 19.1 or 19.2:

	(1) 	the committee may meet and adjourn as it thinks
      proper; 
	  	     
	(2) 	
      the committee may elect a chair of its meetings but, if
      no chair of a meeting is elected, or if at a meeting the chair of the
      meeting is not present within 15 minutes after the time set for holding
      the meeting, the directors present who are members of the committee may
      choose one of their number to chair the meeting; 

	  	     
	(3) 	
      a majority of the members of the committee constitutes a
      quorum of the committee; and 

	  	     
	(3) 	
      questions arising at any meeting of the committee are
      determined by a majority of votes of the members present, and in case of
      an equality of votes, the chair of the meeting does not have a second or
      casting vote. 

PART 20 - OFFICERS 

20.1      Directors
May Appoint Officers 

The directors may, from time to time, appoint such officers, if
any, as the directors determine and the directors may, at any time, terminate
any such appointment. 

20.2      Functions,
Duties and Powers of Officers 

The directors may, for each officer: 

	(1) 	
      determine the functions and duties of the
  officer;

	 	 
	(2) 	
      entrust to and confer on the officer any of the powers
      exercisable by the directors on such terms and conditions and with such
      restrictions as the directors think fit; and

	 	 
	(3) 	
      revoke, withdraw, alter or vary all or any of the
      functions, duties and powers of the officer.

20.3      Qualifications

No officer may be appointed unless that officer is qualified in
accordance with the Business Corporations Act. One person may hold more
than one position as an officer of the Company. Any person appointed as the
chair of the board or as the managing director must be a director. Any other
officer need not be a director.

20.4      Remuneration
and Terms of Appointment 

All appointments of officers are to be made on the terms and
conditions and at the remuneration (whether by way of salary, fee, commission,
participation in profits or otherwise) that the directors think fit and are
subject to termination at the pleasure of the directors, and an officer may in
addition to such remuneration be entitled to receive, after he or she ceases to
hold such office or leaves the employment of the Company, a pension or
gratuity.

- 25 -

PART 21 - INDEMNIFICATION 

21.1     
Definitions 

In this Article 21: 

	(1) 	
      “eligible penalty” means a judgment, penalty or fine
      awarded or imposed in, or an amount paid in settlement of, an eligible
      proceeding;

	 	 	 
	(2) 	
      “eligible proceeding” means a legal proceeding or
      investigative action, whether current, threatened, pending or completed,
      in which a director, former director or alternate director of the Company
      (an “eligible party”) or any of the heirs and legal personal
      representatives of the eligible party, by reason of the eligible party
      being or having been a director or alternate director of the
    Company:

	 	 	 
		(a) 	
      is or may be joined as a party; or

	 	 	 
		(b) 	
      is or may be liable for or in respect of a judgment,
      penalty or fine in, or expenses related to, the proceeding;

	 	 	 
	(3) 	
      “expenses” has the meaning set out in the Business
      Corporations Act.

21.2      Mandatory
Indemnification of Directors and Former Directors 

Subject to the Business Corporations Act, the Company
must indemnify a director, former director or alternate director of the Company
and his or her heirs and legal personal representatives against all eligible
penalties to which such person is or may be liable, and the Company must, after
the final disposition of an eligible proceeding, pay the expenses actually and
reasonably incurred by such person in respect of that proceeding. Each director
and alternate director is deemed to have contracted with the Company on the
terms of the indemnity contained in this Article 21.2. 

21.3     
Indemnification of Other Persons 

Subject to any restrictions in the Business Corporations
Act, the Company may indemnify any person. 

21.4      Non-Compliance
with Business Corporations Act

The failure of a director, alternate director or officer of the
Company to comply with the Business Corporations Act or these Articles
does not invalidate any indemnity to which he or she is entitled under this
Part. 

21.5      Company
May Purchase Insurance 

The Company may purchase and maintain insurance for the benefit
of any person (or his or her heirs or legal personal representatives) who:

	(1) 	
      is or was a director, alternate director, officer,
      employee or agent of the Company;

	 	 
	(2) 	
      is or was a director, alternate director, officer,
      employee or agent of a corporation at a time when the corporation is or
      was an affiliate of the Company;

	 	 
	(3) 	
      at the request of the Company, is or was a director,
      alternate director, officer, employee or agent of a corporation or of a
      partnership, trust, joint venture or other unincorporated
entity;

	 	 
	(4) 	
      at the request of the Company, holds or held a position
      equivalent to that of a director, alternate director or officer of a
      partnership, trust, joint venture or other unincorporated
  entity, against any liability incurred by him or her as such director,
alternate director, officer, employee or agent or person who holds or held such
equivalent position. 

- 26 -

PART 22 - DIVIDENDS 

22.1      Payment
of Dividends Subject to Special Rights 

The provisions of this Article 22 are subject to the rights, if
any, of shareholders holding shares with special rights as to dividends. 

22.2     
Declaration of Dividends 

Subject to the Business Corporations Act, the directors
may from time to time declare and authorize payment of such dividends as they
may deem advisable. 

22.3      No
Notice Required 

The directors need not give notice to any shareholder of any
declaration under Article 22.2. 

22.4      Record
Date 

The directors may set a date as the record date for the purpose
of determining shareholders entitled to receive payment of a dividend. The
record date must not precede the date on which the dividend is to be paid by
more than two months. If no record date is set, the record date is 5 p.m. on the
date on which the directors pass the resolution declaring the dividend. 

22.5      Manner
of Paying Dividend 

A resolution declaring a dividend may direct payment of the
dividend wholly or partly by the distribution of cash or of specific assets or
of fully paid shares or of bonds, debentures or other securities of the Company,
or in any one or more of those ways. 

22.6      Settlement
of Difficulties 

If any difficulty arises in regard to a distribution under
Article 22.5, the directors may settle the difficulty as they deem advisable,
and, in particular, may:

	(1) 	
      set the value for distribution of specific
  assets;

	 	 
	(2) 	
      determine that cash payments in substitution for all or
      any part of the specific assets to which any shareholders are entitled may
      be made to any shareholders on the basis of the value so fixed in order to
      adjust the rights of all parties; and

	 	 
	(3) 	
      vest any such specific assets in trustees for the persons
      entitled to the dividend.

22.7      When
Dividend Payable 

Any dividend may be made payable on such date as is fixed by
the directors. 

22.8     
Dividends to be Paid in Accordance with Number of Shares 

All dividends on shares of any class or series of shares must
be declared and paid according to the number of such shares held. 

- 27 -

22.9      Receipt
by Joint Shareholders 

If several persons are joint shareholders of any share, any one
of them may give an effective receipt for any dividend, bonus or other money
payable in respect of the share. 

22.10    Dividend Bears No
Interest 

No dividend bears interest against the Company. 

22.11    Fractional Dividends

If a dividend to which a shareholder is entitled includes a
fraction of the smallest monetary unit of the currency of the dividend, that
fraction may be disregarded in making payment of the dividend and that payment
represents full payment of the dividend. 

22.12    Payment of Dividends

Any dividend or other distribution payable in cash in respect
of shares may be paid by cheque, made payable to the order of the person to whom
it is sent, and mailed to the address of the shareholder, or in the case of
joint shareholders, to the address of the joint shareholder who is first named
on the central securities register, or to the person and to the address the
shareholder or joint shareholders may direct in writing. The mailing of such
cheque will, to the extent of the sum represented by the cheque (plus the amount
of the tax required by law to be deducted), discharge all liability for the
dividend unless such cheque is not paid on presentation or the amount of tax so
deducted is not paid to the appropriate taxing authority. 

22.13    Capitalization of
Surplus 

Notwithstanding anything contained in these Articles, the
directors may from time to time capitalize any surplus of the Company and may
from time to time issue, as fully paid, shares or any bonds, debentures or other
securities of the Company as a dividend representing the surplus or any part of
the surplus. 

PART 23 - DOCUMENTS, RECORDS AND REPORTS 

23.1     
Recording of Financial Affairs 

The directors must cause adequate accounting records to be kept
to record properly the financial affairs and condition of the Company and to
comply with the Business Corporations Act. 

23.2     
Inspection of Accounting Records 

Unless the directors determine otherwise, or unless otherwise
determined by ordinary resolution, no shareholder of the Company is entitled to
inspect or obtain a copy of any accounting records of the Company. 

- 28 -

PART 24 - NOTICES 

24.1     
Method of Giving Notice 

Unless the Business Corporations Act or these Articles
provides otherwise, a notice, statement, report or other record required or
permitted by the Business Corporations Act or these Articles to be sent
by or to a person may be sent by any one of the following methods: 

	(1) 	
      mail addressed to the person at the applicable address
      for that person as follows:

	 	 	 
		(a) 	
      for a record mailed to a shareholder, the shareholder’s
      registered address;

	 	 	 
		(b) 	
      for a record mailed to a director or officer, the
      prescribed address for mailing shown for the director or officer in the
      records kept by the Company or the mailing address provided by the
      recipient for the sending of that record or records of that
  class;

	 	 	 
		(c) 	
      in any other case, the mailing address of the intended
      recipient;

	 	 	 
	(2) 	
      delivery at the applicable address for that person as
      follows, addressed to the person:

	 	 	 
		(a) 	
      for a record delivered to a shareholder, the
      shareholder’s registered address;

	 	 	 
		(b) 	
      for a record delivered to a director or officer, the
      prescribed address for delivery shown for the director or officer in the
      records kept by the Company or the delivery address provided by the
      recipient for the sending of that record or records of that
  class;

	 	 	 
		(c) 	
      in any other case, the delivery address of the intended
      recipient;

	 	 	 
	(3) 	
      sending the record by fax to the fax number provided by
      the intended recipient for the sending of that record or records of that
      class;

	 	 	 
	(4) 	
      sending the record by email to the email address provided
      by the intended recipient for the sending of that record or records of
      that class; or

	 	 	 
	(5) 	
      physical delivery to the intended
  recipient.

24.2      Deemed
Receipt of Mailing 

A record that is mailed to a person by ordinary mail to the
applicable address for that person referred to in Article 24.1 is deemed to be
received by the person to whom it was mailed on the day, Saturdays, Sundays and
holidays excepted, following the date of mailing. 

24.3     
Certificate of Sending 

A certificate or other document signed by the secretary, if
any, or other officer of the Company or of any other corporation acting in that
behalf for the Company stating that a notice, statement, report or other record
was addressed as required by Article 24.1, prepaid and mailed or otherwise sent
as permitted by Article 24.1 is conclusive evidence of that fact. 

24.4     
Notice to Joint Shareholders 

A notice, statement, report or other record may be provided by
the Company to the joint shareholders of a share by providing the notice to the
joint shareholder first named in the central securities register in respect of
the share. 

- 29 -

24.5     
Notice to Trustees 

A notice, statement, report or other record may be provided by
the Company to the persons entitled to a share in consequence of the death,
bankruptcy or incapacity of a shareholder by: 

	(1) 	
      mailing the record, addressed to them:

	 	 	 
		(a) 	
      by name, by the title of the legal personal
      representative of the deceased or incapacitated shareholder, by the title
      of trustee of the bankrupt shareholder or by any similar description;
      and

	 	 	 
		(b) 	
      at the address, if any, supplied to the Company for that
      purpose by the persons claiming to be so entitled; or

	 	 	 
	(2) 	
      if an address referred to in paragraph (1)(b) has not
      been supplied to the Company, by giving the notice in a manner in which it
      might have been given if the death, bankruptcy or incapacity had not
      occurred.

PART 25 - SEAL 

25.1      Who
May Attest Seal 

Except as provided in Articles 25.2 and 25.3, the Company’s
seal, if any, must not be impressed on any record except when that impression is
attested by the signatures of: 

	(1) 	
      any two directors;

	 	 
	(2) 	
      any officer, together with any director;

	 	 
	(3) 	
      if the Company only has one director, that director;
      or

	 	 
	(4) 	
      any one or more directors or officers or persons as may
      be determined by the directors.

25.2     
Sealing Copies 

For the purpose of certifying under seal a certificate of
incumbency of the directors or officers of the Company or a true copy of any
resolution or other document, despite Article 25.1, the impression of the seal
may be attested by the signature of any director or officer. 

25.3      Mechanical
Reproduction of Seal 

The directors may authorize the seal to be impressed by third
parties on share certificates or bonds, debentures or other securities of the
Company as they may determine appropriate from time to time. To enable the seal
to be impressed on any share certificates or bonds, debentures or other
securities of the Company, whether in definitive or interim form, on which
facsimiles of any of the signatures of the directors or officers of the Company
are, in accordance with the Business Corporations Act or these Articles,
printed or otherwise mechanically reproduced, there may be delivered to the
person employed to engrave, lithograph or print such definitive or interim share
certificates or bonds, debentures or other securities one or more unmounted dies
reproducing the seal and the chair of the board or any senior officer together
with the secretary, treasurer, secretary-treasurer, an assistant secretary, an
assistant treasurer or an assistant secretary-treasurer may in writing authorize
such person to cause the seal to be impressed on such definitive or interim
share certificates or bonds, debentures or other securities by the use of such
dies. Share certificates or bonds, debentures or other securities to which the
seal has been so impressed are for all purposes deemed to be under and to bear
the seal impressed on them. 

- 30 -Klondex Mines Ltd. - Exhibit 4.2 - Filed by newsfilecorp.com

KLONDEX MINES LTD. 

SHARE INCENTIVE PLAN 

Dated for Reference May 9, 2013 

ARTICLE 1 
PURPOSE AND INTERPRETATION 

Purpose 

1.1                         The
purpose of this Plan is to provide for the acquisition of Common Shares by
Participants for the purpose of advancing the interests of the Corporation
through the motivation, attraction and retention of key employees and directors
of the Corporation and to secure for the Corporation and the shareholders of the
Corporation the benefits inherent in the ownership of Common Shares by key
employees and directors of the Corporation, it being generally recognized that
share incentive plans aid in attracting, retaining and encouraging employees and
directors due to the opportunity offered to them to acquire a proprietary
interest in the Corporation. It is the intention of the Corporation that this
Plan will at all times be in compliance with the TSX Policies (as hereinafter
defined) and any inconsistencies between this Plan and the TSX Policies whether
due to inadvertence or changes will be resolved in favour of the TSX Policies.

Definitions 

1.2                        
In this Plan, 

Affiliate has the meaning
assigned thereto in the TSX Manual; 

Associate has the meaning
assigned thereto in the TSX Manual; 

Black-out Period means an
interval of time during which the Corporation has determined that certain
Participants may not trade any securities of the Corporation because they may be
in possession of undisclosed material information pertaining to the Corporation,
or for any other reason prescribed by statute or securities regulation
generally. For greater certainty, a Black-out Period does not include a period
during which a cease trade order is in effect to which the Corporation or in
respect of an Insider, that Insider, is subject; 

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

Calendar Year means the period
January 1 to December 31 in any year; 

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

	 	(i) 	
      any one Person holds a sufficient number of voting shares
      of the Corporation or its successor to affect materially the control of
      the Corporation or its successor, or,

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

- 2 - 

where such Person or combination of
Persons did not previously hold a sufficient number of voting shares to affect
materially the control of the Corporation or its successor. In the absence of
evidence to the contrary, any Person or combination of Persons acting in concert
by virtue of an agreement, arrangement, commitment or understanding, acquiring
or holding more than 20% of the voting shares of the Corporation or its
successor and causing a change of 50% or more of the members of the Board of
Directors in any 14-month period is deemed to affect materially the control of
the Corporation or its successor;

Common Shares means common
shares of the Corporation; 

Compensation Shares means the
total number of Common Shares which may be issued in the future to a Participant
pursuant to the Share Compensation Plan; 

Corporation means Klondex Mines
Ltd. and includes, unless the context otherwise requires, all of its
Subsidiaries and/or Affiliates and successors according to law; 

Director means a director of the
Corporation as may be elected or appointed from time to time; 

Disinterested Shareholder
Approval means approval by a majority of the votes cast by the Corporation’s
shareholders at a duly constituted shareholders’ meeting, excluding votes
attached to Common Shares beneficially owned by Insiders; 

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

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

Employee means:

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

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

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

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

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

Grantee means the recipient of a
Compensation Share hereunder; 

- 3 - 

Insider has the meaning assigned
thereto in the TSX Manual; 

Market Price of the Common
Shares at any relevant date means the volume weighted average Canadian dollar
trading price of the Common Shares on the TSX for the five (5) trading days
prior to that relevant date, calculated by dividing the total value by the total
volume of Common Shares traded (or, if such Common Shares are not then listed
and posted for trading on the TSX, on such stock exchange on which such Common
Shares are listed and posted for trading as may be selected for such purpose by
the Board). In the event that such Common Shares are not listed and posted for
trading on any stock exchange, the Market Price shall be the fair market value
of such Common Shares as determined by the Board in their sole discretion; 

Officer means a duly appointed
officer of the Corporation; 

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

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

Option Plan means the share
option plan, the terms of which are set out at Article 2 herein or as may
be amended; 

Option Plan Administrator means
the Officer to whom responsibility for the administration of the Option Plan has
been delegated by the Board; 

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

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

Optionee means the recipient of
an Option hereunder; 

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

Participant means a Person
entitled to become an Optionee or Grantee hereunder, namely a Director, Officer,
Employee or Service Provider, or any individual employed by a Service Provider
who is the primary party providing the services, or any personal holding
corporation controlled by a Participant or any registered retirement savings
plans established by a Participant of the Corporation, and any Person engaged to
provide ongoing management or consulting services for the Corporation, whether
or not they have a written employment contract with the Corporation, determined
by the Board as being eligible for participation in the Plan; 

Person has the meaning assigned
thereto in the TSX Manual; 

Plan means this share incentive
plan, the terms of which are set out herein or as may be amended; 

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

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

Service Provider means a Person
engaged by the Corporation to provide services for an initial, renewable or
extendable period of 12 months or more; 

- 4 - 

Share Compensation Arrangement
means a stock option, stock option plan, employee stock purchase plan or any
other compensation or incentive mechanism involving the issuance or potential
issuance of Common Shares to one or more Participants, including a share
purchase from treasury which is financially assisted by the Corporation by way
of a loan, guarantee or otherwise; 

Share Compensation Plan means
the share compensation plan, the terms of which are set out at Article 3 herein
or as may be amended; 

Shareholder Approval means
approval by a majority of the votes cast by the Corporation’s shareholders at a
duly constituted shareholders’ meeting; 

Subsidiary means any company
which is a subsidiary of the Corporation. For the purposes of the Plan, a body
corporate shall be deemed to be a subsidiary of another body corporate if: 

	 	(a) 	
      it is controlled by:

	 	 	 	 
	 		(i) 	
      that other body corporate;

	 	 	 	 
	 		(ii) 	
      that other body corporate and one or more other bodies
      corporate, each of which is controlled by that other body corporate;
    or

	 	 	 	 
	 		(iii) 	
      two or more bodies corporate, each of which is controlled
      by that other body corporate; or

	 	 	 	 
	 	(b) 	
      it is a subsidiary of a body corporate that is a
      subsidiary of that other body corporate;

TSX or Exchange means the Toronto Stock Exchange; 

TSX Manual means the guide for TSX listed companies in
  effect at the date of this Plan, together with any subsequent amendments
thereto; and 

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

Gender, Etc. 

1.3                        
In this Plan, unless the context otherwise requires, words importing the
singular include the plural and vice versa and words importing gender include
all genders. 

ARTICLE 2 
SHARE OPTION PLAN 

Establishment of Share Option Plan 

2.1                         There
is hereby established a share option plan to recognize contributions made by
Participants and to create an incentive for their continuing assistance to the
Corporation. All share options granted by the Corporation under Share
Compensation Arrangements that predate the date of this Option Plan shall be
subject to the provisions of this Option Plan and to the extent legal to do so,
shall be deemed to have been granted under this Option Plan. 

Maximum Option Plan Shares 

2.2                         The
maximum aggregate number of Option Plan Shares that may be reserved for issuance
under the Option Plan at any point in time is 15% of the Outstanding Shares at
the time Option Plan Shares are reserved for issuance as a result of the grant of an Option,
less (i) any Common Shares reserved for issuance under share options granted
under Share Compensation Arrangements other than this Option Plan and (ii) any
Common Shares reserved for issuance under the Share Compensation Plan. 

- 5 - 

Eligibility 

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

Options Granted Under the Plan 

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

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

Restrictions 

2.6                         The
aggregate number of Common Shares reserved for issuance pursuant to all Share
Compensation Arrangements in favour of any one Optionee shall not exceed 5% of
the Outstanding Shares at the time of such grant.

Options Not Exercised 

2.7                        
In the event an Option granted under the Option Plan is exercised, expires
unexercised, or is terminated by reason of dismissal of the Optionee for cause
or is otherwise lawfully cancelled prior to exercise of the Option, the Optioned
Shares that were issuable thereunder will be returned to the Option Plan and
will be eligible for re-issue.

Financial Assistance for Purchase of Common Shares 

2.8                         Subject
to applicable law, the Corporation may, in its sole discretion, arrange for the
Corporation to make loans or provide guarantees for loans by financial
institutions to assist Participants to purchase Common Shares upon the exercise
of an Option so granted and to assist the Participants to pay any income tax
payable upon exercise of an Option. Any loans granted by the Corporation to
assist Participants to purchase Common Shares upon the exercise of an Option
shall be full recourse to the Participant and be secured by the Common Shares
purchased with the proceeds of the loan, and shall be at such rates of interest,
if any, and on such other terms as may be determined by the Corporation. 

2.9                        
The Common Shares may be sold by the Participant at any time provided that an
amount equivalent to the Option Exercise Price per Share sold, or the balance of
the loan, whichever is the lesser, is applied in repayment of the loan. 

Powers of the Option Plan Administrator 

2.10                       The
Option Plan Administrator, subject to the general approval of the Board to
review and amend the actions of the Option Plan Administrator, will be
responsible for the general administration of the Option Plan and the proper
execution of its provisions, the interpretation of the Option Plan and the determination of all questions arising hereunder. Without
limiting the generality of the foregoing, the Option Plan Administrator has the
power to 

- 6 - 

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

	 	 	 
	 	(b) 	
      subject to subsequent ratification by the Board, grant
      Options hereunder as approved by the Board from time to time;

	 	 	 
	 	(c) 	
      change the vesting provisions of an Option granted to a
      Participant that is not an Insider; and

	 	 	 
	 	(d) 	
      take such other action allowable under TSX
    Policies.

The Option Plan Administrator shall also be responsible for
reporting to the TSX that an Option granted, exercised or cancelled as
contemplated in subsection 613(i) of the TSX Manual or any successor provision
thereof. 

2.11                       The
Board may amend or discontinue this Option Plan at any time, provided, however,
that no such amendment may materially and adversely affect any Option rights
previously granted to an Optionee under this Option Plan without the consent of
the Optionee, except to the extent required by law. 

2.12                       Notwithstanding
anything contained to the contrary in this Option Plan or in any resolution of
the Board in implementation thereof, in the event the Corporation proposes to
amalgamate, merge or consolidate with any other corporation (other than with a
wholly-owned Subsidiary of the Corporation) or to liquidate, dissolve or
wind-up, the Corporation shall have the right, upon written notice thereof to
each Optionee holding Options under this Plan, to permit the exercise of all
such Options within the thirty (30) day period next following the date of such
notice and to determine that upon the expiration of such thirty (30) day period,
all rights of Optionees to such Options or to exercise same (to the extent not
theretofore exercised) shall ipso facto terminate and cease to have any
further force or effect whatsoever; and the Board may, by resolution, advance
the date by which any Option may be exercised or, subject to applicable
regulatory provisions, extend the Expiry Date or advance the vesting of any
Option, in the manner to be set forth in such resolution. The Board shall not,
however, be under any obligation to advance or extend the Expiry Date of any
Option or advance the vesting of any Option. 

Nature of Payments 

2.13                      
All Options granted pursuant to the Option Plan are in consideration of services
performed or to be performed for the Corporation. Except to the extent required
under applicable law, any income or gain realized pursuant to Options under the
Plan shall not constitute compensation for purposes of any employee benefit
plans of the Corporation except as may be determined by the Board. 

TERMS AND CONDITIONS OF OPTIONS 

Exercise Price 

2.14                      
The Option Exercise Price per share for Common Shares which are the subject of
any Options shall be fixed by the Option Plan Administrator at the time such
Option is granted, but in any case will be no less than the Market Price. 

Term of Option 

2.15                      
Options can be exercisable for a term of up to a maximum of ten (10) years from
the date the Option is granted, subject to Section 2.28. 

- 7 - 

Option Amendment 

2.16                       An
Option must be outstanding for at least one year before the Corporation may
extend its Expiry Date, subject to the limits contained in Section 2.15. 

Vesting of Options 

2.17                       The
vesting of Options is at the discretion of the Option Plan Administrator, and
will generally be subject to: 

	 	(a) 	
      the Participant remaining employed by or continuing to
      provide services to the Corporation as well as, at the discretion of the
      Option Plan Administrator, achieving certain milestones which may be
      defined by the Board from time to time or receiving a satisfactory
      performance review by the Corporation during the vesting period;
  or

	 	 	 
	 	(b) 	
      remaining as a Director or Officer of the Corporation
      during the vesting period.

Variation of Vesting Periods 

2.18                       At
the time an Option is granted which carries vesting provisions, the Option Plan
Administrator may vary such vesting provisions, subject to Regulatory Approval
and ratification by the Board. 

2.19                       The
vesting as determined by the Option Plan Administrator in accordance with this
Option Plan shall be automatically and immediately accelerated such that all
remaining Options will then be available for exercise upon the occurrence of a
“take over bid” which is a “formal bid”, as those terms are defined under the
Securities Act. 

2.20                      
In the event of a Change of Control occurring, Options granted to Directors,
Officers and Employees which are subject to a vesting provision shall be deemed
to have immediately vested upon the occurrence of the Change of Control. 

2.21                      
In the event of a Director not being nominated for re-election as a Director of
the Corporation, although consenting to act and being under no legal incapacity
which would prevent the Director from being a member of the Board, Options
granted to such Director which are subject to a vesting provision shall be
deemed to have vested on the date of Meeting upon which the Director is not
re-elected. 

Optionee Ceasing to be Director, Employee or Service
Provider 

2.22                       No
Option may be exercised after the Participant has left the employ/office or has
been advised his services are no longer required or his service contract has
expired, subject to the following: 

	 	(a) 	
      in the case of the death of an Optionee, any vested
      Option held by him at the date of death will become exercisable by the
      Optionee’s lawful personal representatives, heirs or executors until the
      earlier of up to one year after the date of death of such Optionee and the
      date of expiration of the term otherwise applicable to such
  Option;

	 	 	 
	 	(b) 	
      Subject to the TSX Policies, and unless approved by the
      Board of Directors, Options granted to any Participant must expire within
      90 days after the date the Optionee ceases to be employed by or provide
      services to the Corporation, or be a Director or Officer, but only to the
      extent that such Optionee was vested in the Option at the date the
      Optionee ceased to be so employed or to provide services to the
      Corporation or be a Director or Officer; and

	 	 	 
	 	(c) 	
      in the case of an Optionee who is an Employee or Service
      Provider being dismissed from employment or service for cause, or an
      employee of a Service Provider whose services
are terminated for cause, such Optionee’s
Options, whether or not vested at the date of dismissal will immediately
terminate without right to exercise same.

- 8 - 

2.23                      
If an Optionee, or in the case of an Option granted to an Optionee who falls
under the definition of Service Provider, an Optionee’s employer, retires,
resigns or is terminated from employment or engagement with the Corporation, the
loss of limitation, if any, pursuant to the Option Commitment with respect to
Options which were not vested at that time or which, if vested, were cancelled,
shall not give rise to any right to damages and shall not be included in the
calculation of or form any part of any severance allowance, retiring allowance
or termination settlement of any kind whatsoever in respect of such Options.

Non Assignable 

2.24                       All
Options will be exercisable only by the Optionee to whom they are granted and
will not be assignable or transferable, except by will or by the laws of
succession of the domicile of the deceased Optionee. No Option granted hereunder
shall be pledged, hypothecated, charged, transferred, assigned or otherwise
encumbered or disposed of, and if any attempt is made to do so, it will
automatically become null and void. 

Adjustment of the Number of Optioned Shares 

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

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

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

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

	 	 	 
	 	(d) 	
      in the event of a capital reorganization,
      reclassification or change of outstanding equity shares (other than a
      change in the par value thereof) of the Corporation, a consolidation,
      merger or amalgamation of the Corporation with or into any other company
      or a sale of the property of the Corporation as or substantially as an
      entirety at any time while an Option is in effect, an Optionee will
      thereafter have the right to purchase and receive, in lieu of the Optioned
      Shares immediately theretofore purchasable and receivable upon the
      exercise of the Option, the kind and amount of shares and other securities
      and property receivable upon such capital reorganization,
      reclassification, change, consolidation, merger, amalgamation or sale
      which the holder of a number of Common Shares equal to the number of
      Optioned Shares immediately theretofore purchasable and receivable upon
      the exercise of the Option would have received as a result thereof. The subdivision
      or consolidation of Common Shares at any time outstanding (whether with or
      without par value) will not be deemed to be a capital reorganization or a
      reclassification of the capital of the Corporation for the purposes of
  this Section 2.25(d);

- 9 - 

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

	 	 	 
	 	(f) 	
      the Corporation will not be required to issue fractional
      shares in satisfaction of its obligations hereunder. Any fractional
      interest in a security that would, except for the provisions of this
      Section 2.25(f), be deliverable upon the exercise of an Option will be
      cancelled and not be deliverable by the Corporation; and

	 	 	 
	 	(g) 	
      if any questions arise at any time with respect to the
      Exercise Price or number of Optioned Shares deliverable upon exercise of
      an Option in any of the events set out in this Section 2.25, such
      questions will be conclusively determined by the Corporation’s Board in
      their sole discretion.

COMMITMENT AND EXERCISE PROCEDURES 

Option Commitment 

2.26                      
Upon grant of an Option hereunder, the Option Plan Administrator will deliver or
will cause to be delivered to the Optionee an Option Commitment detailing the
terms of such Options and upon such delivery the Optionee will be subject to the
Option Plan and have the right to purchase the Optioned Shares at the Exercise
Price set out therein subject to the terms and conditions hereof. 

Manner of Exercise 

2.27                       An
Optionee who wishes to exercise his Option may do so by delivering to the
Corporation a properly executed written form of notice of exercise in such form
as the Corporation may require, containing such representations and warranties
as the Corporation may require and designating, among other things: 

	 	(a) 	
      the date of exercise and the number of Optioned Shares to
      be purchased;

	 	 	 
	 	(b) 	
      payment of the Exercise Price for each Optioned Share to
      be purchased by certified cheque, wire transfer or bank draft payable to
      the Corporation for the aggregate Exercise Price for the Optioned Shares
      being acquired; or

	 	 	 
	 	(c) 	
      to the extent permitted by applicable law, the delivery
      of irrevocable instructions to a broker to deliver promptly to the
      Corporation the amount required to pay the Exercise Price, provided that
      the full amount of such payment is received by the
  Corporation.

Options Expiring During Blackout Period 

2.28                       Should
the Expiry Date for an Option fall within a Blackout Period, or within nine (9)
Business Days following the expiration of a Blackout Period, such Expiry Date
shall be the tenth (10th) Business Day after the end of the Blackout
Period, such 10th Business Day to be considered the Expiration Date for such
Option for all purposes under the Option Plan. The 10th Business Day period
referred to in this Section 2.28 may not be changed by the Board under any
circumstances. 

- 10 - 

No Options to be Granted During a Black-out Period 

2.29                      
Notwithstanding anything to the contrary herein contained, no Option shall be
granted hereunder during a Black-out Period. If an Option is inadvertently
granted during a Black-out Period, it shall not take effect until the
10th Business Day after the expiry of the Black-out Period and the
Exercise Price shall be the Market Price on such 10th Business Day.

Delivery of Certificate and Hold Periods 

2.30                      
As soon as practicable after receipt of the notice of exercise described in
Section 2.27 and payment in full for the Optioned Shares being acquired, the
Corporation will cause to be delivered a certificate to the Optionee for the
appropriate number of Optioned Shares in either certificate form or at the
election of the Optionee, by way of book entry form pursuant to the instructions
given by the Optionee to the Corporation. Any share certificate, or certificate
in book entry form, issued pursuant to this Section 2.30 will bear a legend
stipulating any resale restrictions required under applicable securities
laws.

ARTICLE 3 
SHARE COMPENSATION PLAN 

Share Compensation Plan 

3.1                        
A share compensation plan is hereby established for Participants.

Participants 

3.2                        
The Board shall have the right to determine, in its sole and absolute
discretion, to issue for no cash consideration to a Participant any number of
Common Shares as a discretionary bonus, an employment inducement or general
compensation subject to such provisions and restrictions as the Board may
determine. 

Maximum Number of Shares 

3.3                        
The maximum number of Common Shares made available for the Share Compensation
Plan shall not exceed 1,288,482. 

Necessary Approvals 

3.4                        
The obligation of the Corporation to issue and deliver any Common Shares in
accordance with the Share Compensation Plan shall be subject to any necessary
approvals of any stock exchange or regulatory authority having jurisdiction over
the securities of the Corporation. If any Common Shares cannot be issued to any
Participant under the Share Compensation Plan for whatever reason, the
obligation of the Corporation to issue such Common Shares shall terminate. 

ARTICLE 4 
GENERAL 

Plan Amendments 

4.1                         The
approval of the Board and the requisite approval from the TSX and the
Corporation’s shareholders shall be required for any of the following amendments
to be made to this Plan: 

	 	(a) 	
      any increase of the percentage of Common Shares reserved
      and issuable under this Option Plan;

- 11 - 

	 	(b) 	
      an increase in the maximum number of Options that may be
      issued to Insiders within any one year period or that are issuable to
      Insiders at any time; and

	 	 	 
	 	(c) 	
      any other amendment that may lead to significant or
      unreasonable dilution in the Corporation’s Outstanding Shares or may
      provide additional benefits to Participants, especially Insiders, at the
      expense of the Corporation and its shareholders.

	 	 	 
	 	(d) 	
      any amendment which would allow the transfer or
      assignment of an Option except in the case of the death of an Optionee as
      contemplated by Section 2.22(a).

4.2                        
The Board may, in its sole discretion, without Shareholder Approval but subject
to receipt of the requisite approval from the TSX, make all other amendments to
the Plan that are not of the type contemplated in Section 4.1 including, 

	 	(a) 	
      amendments of a clerical or typographical
  nature;

	 	 	 
	 	(b) 	
      a change to the vesting provisions of an Option or the
      Option Plan;

	 	 	 
	 	(c) 	
      any change to the definition of “Participant” under this
      Option Plan;

	 	 	 
	 	(d) 	
      any amendment to the financial assistance provisions
      described herein which is more favourable to Participants;

	 	 	 
	 	(e) 	
      a change to the termination provisions of an Option or
      the Option Plan which does not entail an extension beyond the original
      Expiry Date, except as contemplated in Section 4.5;

	 	 	 
	 	(f) 	
      the addition of a cashless exercise feature, payable in
      cash or securities;

	 	 	 
	 	(g) 	
      an amendment to the Exercise Price of an Option held by a
      non-Insider or any cancellation and re-issue of an Option to the same
      Optionee who is a non-Insider at a lower Exercise Price than the Option
      cancelled;

	 	 	 
	 	(h) 	
      an extension of the term of the original Expiry Date of
      an Option except as contemplated in Section 4.5;

	 	 	 
	 	(i) 	
      an addition to, deletion from or alteration of the Option
      Plan or an Option that is necessary to comply with applicable law or the
      requirements of any regulatory authority or stock exchange;

	 	 	 
	 	(j) 	
      an amendment to correct or rectify any ambiguity,
      defective provision, error or omission in the Option Plan or an Option;
      and

	 	 	 
	 	(k) 	
      any other amendment to Options held by non-Insiders not
      otherwise specifically provided for herein.

Employment and Services 

4.3                        
Nothing contained in the Plan will confer upon or imply in favour of any
Optionee or Grantee any right with respect to office, employment or provision of
services with the Corporation, or interfere in any way with the right of the
Corporation to lawfully terminate the Optionee or Grantee's office, employment
or service at any time pursuant to the arrangements pertaining to same.
Participation in the Plan by an Optionee or Grantee is voluntary. 

No Representation or Warranty 

- 12 - 

4.4                         The
Corporation makes no representation or warranty as to the future market value of
Common Shares issued in accordance with the provisions of the Plan or to the
effect of The Income Tax Act (Canada) or any other taxing statute
governing the Options or the Common Shares issuable thereunder or the tax
consequences to an Optionee or Grantee. Compliance with applicable securities
laws as to the disclosure and resale obligations of each Optionee is the
responsibility of each Optionee and Grantee and not the Corporation. 

Effective Date and Continuation of Plan 

4.5                        
This Plan shall come into force and be effective on May 9, 2013, subject to
approval by shareholders. All options granted under the Corporation’s prior
option plan shall continue in full force and effect until their expiry, but
shall be deemed to be granted and governed by the terms of the Option Plan
contained herein. The Plan shall, subject to the requirements of the TSX
regarding Shareholder Approval from time to time, remain in full force and
effect until such time as the Board terminates the Plan, and, in respect of the
Option Plan, for so long thereafter as Options remain outstanding in favour of
any Participant. The Board reserves the right in its absolute discretion to
discontinue the Plan at any time with respect to (i) all Common Shares in
respect of Options which have not yet been granted hereunder, except that such
discontinuance may not alter or impair any Option previously granted to an
Optionee under the Plan; and (ii) all Common Shares reserved for issuance under
the Share Compensation Plan which have not yet been granted hereunder. 

Inability to Obtain Authority 

4.6                        
The inability of the Corporation to obtain Regulatory Approval, which Regulatory
Approval is deemed by the Corporation to be necessary to the lawful issuance of
any Common Shares hereunder, shall relieve the Corporation of any liability in
respect of the failure to issue such Common Shares. 

Insider Participation Limit 

4.7                         The
aggregate number of Common Shares reserved for issuance to Insiders under this
Share Incentive Plan and all Share Compensation Arrangements, in the aggregate,
shall not exceed 10% of the number of Outstanding Shares, and the number of
Common Shares issued to Insiders, within any one year period, under this Share
Incentive Plan and all Share Compensation Arrangements, in the aggregate, shall
not exceed 10% of the Outstanding Shares. 

Reservation of Common Shares 

4.8                         The
Corporation, during the term of this Plan, shall at all times reserve and keep
available such number of Common Shares as shall be sufficient to satisfy the
requirements of the Plan. 

Withholding Tax 

4.9                        
The Corporation shall have the right to make all payments or distributions made
pursuant to the Plan to an Optionee or Grantee, as applicable, net of any
applicable federal taxes required by law to be withheld or paid as a result of
the grant of any Option or Compensation Share, exercise of an Option or any
other event occurring pursuant to this Plan. The Corporation shall have the
right to withhold from such Optionee or Grantee, as applicable, such withholding
taxes as may be required by law, or to otherwise require the Optionee or
Grantee, as applicable, to pay such withholding taxes. If the Optionee or
Grantee, as applicable, shall fail to make such tax payments as are required,
the Corporation shall, to the extent permitted by law, have the right to deduct
any such taxes from any payment of any kind otherwise due to such Optionee or
Grantee or to take such other action as may be necessary to satisfy such
withholding obligations. In satisfaction of the requirement to pay withholding
taxes, the Optionee or Grantee may make a written election, which may be
accepted or rejected in the discretion of the Board, to have withheld a portion
of the Common Shares then issuable to the Optionee or Grantee pursuant to the
Plan, having an aggregate Market Price equal to the withholding taxes. 

- 13 - 

Expenses 

4.10                       All
expenses incurred in connection with the Plan shall be borne by the Corporation.

Compliance with Laws 

4.11                       The
Corporation shall not be obliged to issue any Common Shares upon exercise of
Options or pursuant to the Share Compensation Plan if the issue would violate
any law or regulation or any rule of any governmental authority or stock
exchange. The Corporation shall not be required to issue, register or qualify
for resale any Common Shares issuable pursuant to this Plan pursuant to the
provisions of a prospectus or similar document, provided that the Corporation
shall notify the TSX and any other appropriate regulatory bodies in Canada of
the existence of the Plan and the issuance and exercise of Options and the
issuance of Common Shares under the Share Compensation Plan. 

Governing Laws 

4.12                      
This Plan shall be governed by and interpreted in accordance with the laws of
the Province of British Columbia and the laws of Canada applicable therein. 

Entire Agreement 

4.13                       This
Plan and the Option Commitment set out the entire agreement between the
Corporation and the Participants relative to an Option and supersede all prior
agreements, undertakings and understandings, whether oral or written, save and
except for any contract of employment approved by the Board. 

Termination 

4.14                       The
Board reserves the right in its absolute discretion to terminate the Plan with
respect to all Common Shares in respect of Options and all Common Shares
issuable under the Share Compensation Plan which have not yet been granted
hereunder. 

[END OF DOCUMENT]

SCHEDULE A 

KLONDEX MINES LTD. 

SHARE OPTION PLAN 
OPTION COMMITMENT 

Notice is hereby given that, effective this ________ day of
________________, __________ (the “Effective Date”) KLONDEX MINES LTD.
(the "Corporation") has granted to
___________________________________________ (the “Optionee”), an Option to
acquire ______________ Common Shares (“Optioned Shares”) up to 5:00 p.m.
Vancouver Time on the __________ day of ____________________, __________ (the
“Expiry Date”) at an Exercise Price of Cdn$____________ per Optioned Share
pursuant to the Corporation’s Share Option Plan (the “Plan”), a copy of which is
attached hereto. 

Optioned Shares may be acquired as follows: 

[insert vesting provisions] 

<>[insert hold period when required] 

The grant of the Option evidenced hereby and the Expiry Date
thereof, is made subject to the terms and conditions of the Plan. 

To exercise your Option, deliver a written notice addressed to
the Corporation specifying the number of Optioned Shares you wish to acquire, in
certificate form, or delivering written instructions to the Corporation for
Optioned Shares in non-certificate book entry form, together with a certified
cheque or the equivalent thereof in immediately available funds acceptable to
the Corporation and payable to the Corporation for the aggregate Exercise Price.
A share certificate, or certificate in book entry form, evidencing the Optioned
Shares thereby acquired will be issued to the Optionee by the Corporation’s
transfer agent in accordance with the Plan. 

The Corporation and the Optionee represent that the Optionee
under the terms and conditions of the Plan is a bona fide Service Provider (as
defined in the Plan), entitled to receive Options. 

 

	KLONDEX MINES LTD. 	 
	 	 
	 	 
	 	 
	 	 
	Authorized Signatory 	 

EXERCISE NOTICE 

To:   Klondex Mines Ltd. (the “Corporation”) 

The undersigned hereby irrevocably gives notice, pursuant to
the Corporation’s Stock Option Plan (the “Plan”), of the exercise of the Option
to acquire and hereby subscribes for (cross out inapplicable item): 

[check one] 

	[   ] 	(a) 	all of the Shares; or 
	  	  	  
	[   ] 	(b) 	
      ____________________________of the Shares, which are the
      subject of the Option Certificate attached hereto.

Calculation of total Exercise Price: 

	 	(i) 	number of Shares to be acquired on exercise:
	 
                         
           Shares 
	 	 	 	 
	 	(ii) 	multiplied by the Exercise Price per Share: 	$___________ 
	 	 	 	 
	 		TOTAL EXERCISE PRICE, enclosed herewith: 	$___________ 

The undersigned tenders herewith a certified cheque or bank
draft in an amount equal to the total Exercise Price of the aforesaid Shares, as
calculated above, and directs the Corporation to issue

[check one] 

	[   ] 	
      (a)        a share
      certificate; or

	 	 
	[   ] 	
      (b)        a
      certificate in book entry form,

evidencing said Shares in the name of the undersigned to be
mailed to the undersigned at the following address:

_____________________________________________ 

_____________________________________________ 

 

DATED the ______ day of _____________________, 20___. 

	 	Signature
      of Option Holder 
	 	
	 	  
	 	  
	 	Name of Option Holder (please print) 
	 	 
	 	 
	 	 
	 	SIN

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